EXECUTION
FORD CREDIT AUTO RECEIVABLES LLC
Transferor
FORD MOTOR CREDIT COMPANY
Master Servicer
and
THE CHASE MANHATTAN BANK
Trustee
Ford Credit Auto Loan Master Trust II
POOLING AND SERVICING AGREEMENT
Dated as of September 30, 1997
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitional Provisions . . . . . . . . . . . . . . 24
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables . . . . . . . . . . . . . . . . 25
SECTION 2.02. Acceptance by Trustee . . . . . . . . . . . . . . . . . . 27
SECTION 2.03. Representations and Warranties of the
Transferor Relating to the Transferor
and the Agreement . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.04. Representations and Warranties of the
Transferor Relating to the Receivables . . . . . . . . . . 31
SECTION 2.05. Addition of Accounts . . . . . . . . . . . . . . . . . . . 33
SECTION 2.06. Covenants of the Transferor . . . . . . . . . . . . . . . 36
SECTION 2.07. Removal of Eligible Accounts . . . . . . . . . . . . . . . 39
SECTION 2.08. Removal of Ineligible Accounts . . . . . . . . . . . . . . 41
SECTION 2.09. Transfer of Ineligible Receivables . . . . . . . . . . . . 42
ARTICLE III
Administration and Servicing
of Receivables
SECTION 3.01. Acceptance of Appointment and Other
Matters Relating to the Master Servicer . . . . . . . . . 42
SECTION 3.02. Servicing Compensation . . . . . . . . . . . . . . . . . . 44
SECTION 3.03. Representations, Warranties and Covenants
of the Master Servicer . . . . . . . . . . . . . . . . . . 45
SECTION 3.04. Reports and Records for the Trustee . . . . . . . . . . . 48
SECTION 3.05. Annual Master Servicer's Certificate . . . . . . . . . . . 48
SECTION 3.06. Annual Independent Public Accountants'
Servicing Report . . . . . . . . . . . . . . . . . . . . . 49
SECTION 3.07. Tax Treatment . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 3.08. Notices to Ford Credit . . . . . . . . . . . . . . . . . . 50
SECTION 3.09. Adjustments . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE IV
Rights of Certificateholders and
Allocation and Application of Collections
SECTION 4.01. Rights of Certificateholders . . . . . . . . . . . . . . . 50
SECTION 4.02. Establishment of the Collection Account . . . . . . . . . 51
SECTION 4.03. Allocations and Applications of
Collections and Other Funds . . . . . . . . . . . . . . . 52
SECTION 4.04. Unallocated Principal Collections . . . . . . . . . . . . 54
ARTICLE V
Distributions and Reports to
Certificateholders
SECTION 5.01. Distributions and Reports to Certificateholders . . . . . 54
ARTICLE VI
The Certificates
SECTION 6.01. The Certificates . . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.02. Authentication of Certificates . . . . . . . . . . . . . . 55
SECTION 6.03. New Issuances . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.04. Registration of Transfer and Exchange of
Certificates . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 6.05. Mutilated, Destroyed, Lost or Stolen
Certificates . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 6.06. Persons Deemed Owners . . . . . . . . . . . . . . . . . . 61
SECTION 6.07. Access to List of Registered
Certificateholders' Names and Addresses . . . . . . . . . 62
SECTION 6.08. Book-Entry Certificates . . . . . . . . . . . . . . . . . 62
SECTION 6.09. Notices to Depository . . . . . . . . . . . . . . . . . . 63
SECTION 6.10. Definitive Certificates . . . . . . . . . . . . . . . . . 63
SECTION 6.11. Global Certificate; Exchange Date . . . . . . . . . . . . 64
SECTION 6.12. Meetings of Certificateholders . . . . . . . . . . . . . . 66
ARTICLE VII
Other Matters Relating
to the Transferor
SECTION 7.01. Liability of the Transferor . . . . . . . . . . . . . . . 68
SECTION 7.02. Limitation on Liability of the Transferor . . . . . . . . 68
SECTION 7.03. Transferor Indemnification of the Trust
and the Trustee . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE VIII
Other Matters Relating
to the Master Servicer
SECTION 8.01. Liability of the Master Servicer . . . . . . . . . . . . . 70
SECTION 8.02. Merger or Consolidation of, or Assumption of,
the Obligations of the Master Servicer . . . . . . . . . . 70
SECTION 8.03. Limitation on Liability of the Master
Servicer and Others . . . . . . . . . . . . . . . . . . . 70
SECTION 8.04. Master Servicer Indemnification of the
Trust and the Trustee . . . . . . . . . . . . . . . . . . 71
SECTION 8.05. The Master Servicer Not to Resign . . . . . . . . . . . . 71
SECTION 8.06. Access to Certain Documentation and
Information Regarding the Receivables . . . . . . . . . . 72
SECTION 8.07. Delegation of Duties . . . . . . . . . . . . . . . . . . . 72
SECTION 8.08. Examination of Records . . . . . . . . . . . . . . . . . . 72
SECTION 8.09. Additional Expenses . . . . . . . . . . . . . . . . . . . 72
ARTICLE IX
Early Amortization Events
SECTION 9.01. Early Amortization Events . . . . . . . . . . . . . . . . 73
ARTICLE X
Servicing Defaults
SECTION 10.01. Servicing Defaults . . . . . . . . . . . . . . . . . . . 75
SECTION 10.02. Trustee to Act; Appointment of Successor . . . . . . . . 78
ARTICLE XI
The Trustee
SECTION 11.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . 79
SECTION 11.02. Certain Matters Affecting the Trustee . . . . . . . . . . 82
SECTION 11.03. Trustee Not Liable for Recitals in
Certificates . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 11.04. Trustee May Own Certificates . . . . . . . . . . . . . . 83
SECTION 11.05. The Master Servicer to Pay Trustee's Fees
and Expenses . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 11.06. Eligibility Requirements for Trustee . . . . . . . . . . 83
SECTION 11.07. Resignation or Removal of Trustee . . . . . . . . . . . . 84
SECTION 11.08. Successor Trustee . . . . . . . . . . . . . . . . . . . . 84
SECTION 11.09. Merger or Consolidation of Trustee . . . . . . . . . . . 85
SECTION 11.10. Appointment of Co-Trustee or Separate
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 11.11. Tax Returns . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 11.12. Trustee May Enforce Claims Without
Possession of Certificates . . . . . . . . . . . . . . . 87
SECTION 11.13. Suits for Enforcement . . . . . . . . . . . . . . . . . . 87
SECTION 11.14. Representations and Warranties of Trustee . . . . . . . . 87
SECTION 11.15. Maintenance of Office or Agency . . . . . . . . . . . . . 88
ARTICLE XII
Termination
SECTION 12.01. Termination of Trust . . . . . . . . . . . . . . . . . . 88
SECTION 12.02. Final Distribution . . . . . . . . . . . . . . . . . . . 88
SECTION 12.03. Transferor's Termination Rights . . . . . . . . . . . . . 90
ARTICLE XIII
Miscellaneous Provisions
SECTION 13.01. Amendment . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 13.02. Protection of Right, Title and Interest to Trust . . . . 92
SECTION 13.03. Limitation on Rights of Certificateholders . . . . . . . 93
SECTION 13.04. No Petition . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 13.05. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 13.06. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 13.07. Severability of Provisions . . . . . . . . . . . . . . . 95
SECTION 13.08. Assignment . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 13.09. Certificates Nonassessable and Fully Paid . . . . . . . . 95
SECTION 13.10. Further Assurances . . . . . . . . . . . . . . . . . . . 95
SECTION 13.11. No Waiver; Cumulative Remedies . . . . . . . . . . . . . 96
SECTION 13.12. Counterparts . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 13.13. Third-Party Beneficiaries . . . . . . . . . . . . . . . . 96
SECTION 13.14. Actions by Certificateholders . . . . . . . . . . . . . . 96
SECTION 13.15. Rule 144A Information . . . . . . . . . . . . . . . . . . 96
SECTION 13.16. Action by Trustee . . . . . . . . . . . . . . . . . . . . 96
SECTION 13.17. Merger and Integration . . . . . . . . . . . . . . . . . 97
SECTION 13.18. Headings . . . . . . . . . . . . . . . . . . . . . . . . 97
EXHIBITS
Exhibit A Form of FCAR Certificate
Exhibit B Form of Assignment of
Receivables in Additional
Accounts
Exhibit C Form of Annual Master
Servicer's Certificate
Exhibit D Forms of Legends
Exhibit E Form of Letter of
Representations
Exhibit F Forms of Certificates
for European
Transfer
Exhibit G Forms of Opinions of
Counsel
Exhibit H Form of Reassignment
of Receivables in
Removal Accounts
Exhibit I Form of Receivables
Purchase Agreement
POOLING AND SERVICING AGREEMENT dated as of September 30, 1997, by
and among FORD CREDIT AUTO RECEIVABLES LLC, a Delaware limited liability
company, as Transferor, FORD MOTOR CREDIT COMPANY, a Delaware corporation, as
Master Servicer, and THE CHASE MANHATTAN BANK, a New York corporation, as
Trustee.
In consideration of the mutual agreements herein contained, each
party agrees as follows for the benefit of the other parties and for the
benefit of the Certificateholders and the other Beneficiaries to the extent
provided herein:
ARTICLE I
Definitions
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SECTION 1.01. Definitions. Whenever used in this Agreement, the
-----------
following words and phrases shall have the following meanings:
"Account" shall mean each Initial Account and, from and after the
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related Addition Date, each Additional Account. The term "Account" shall not
apply to any Removal Accounts reassigned or assigned to the Transferor or the
Master Servicer in accordance with the terms of this Agreement.
"Act" shall mean the Securities Act of 1933, as amended.
---
"Addition Date" shall mean, with respect to Additional Accounts,
--------------
the date from and after which such Additional Accounts are to be included as
Accounts pursuant to Section 2.05(c).
"Addition Notice" shall have the meaning specified in Section
----------------
2.05(c).
"Additional Accounts" shall mean each individual wholesale
--------------------
financing account established with a Dealer pursuant to a Floorplan Financing
Agreement, which account is designated pursuant to Section 2.05(a),
2.05(b)(i) or 2.05(b)(ii) to be included as an Account and is identified in
the computer file or microfiche or written list delivered to the Trustee by
the Transferor pursuant to Sections 2.01 and 2.05(d).
"Additional Cut-Off Date" shall mean, with respect to Additional
------------------------
Accounts, the day specified in the Addition Notice delivered with respect to
such Additional Accounts pursuant to Section 2.05(c).
"Adjustment Payment" shall have the meaning specified in Section
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3.09.
"Affiliate" shall mean, with respect to any specified Person, any
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other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any specified 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; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" shall mean, with respect to any Series, the Person so
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designated in the related Supplement.
"Agreement" shall mean this Pooling and Servicing Agreement, as the
---------
same may from time to time be amended, modified or otherwise supplemented,
including, with respect to any Series or Class, the related Supplement.
"Aggregate Available Subordinated Amount" shall mean the sum of the
---------------------------------------
Available Subordinated Amount and the SWAP Available Subordinated Amount.
"Allocable Miscellaneous Payments" shall mean, with respect to any
---------------------------------
Series and for any Collection Period, the product of the amount of
Miscellaneous Payments for such Collection Period and a fraction, the
numerator of which is the Invested Amount for such Series immediately prior
to the following Distribution Date and the denominator of which is the Trust
Invested Amount as of such time.
"Applicants" shall have the meaning specified in Section 6.07.
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"Assignment" shall have the meaning specified in Section 2.05(d).
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"Authorized Newspaper" shall mean any newspaper or newspapers of
---------------------
general circulation in New York City customarily published on each Business
Day, whether or not published on Saturdays, Sundays and holidays.
"Automatic Additional Accounts" shall have the meaning specified in
-----------------------------
Section 2.05(b)(ii).
"Available Subordinated Amount" shall mean, with respect to any
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Series at any time of determination, an amount equal to the available
subordinated amount specified in the related Supplement at such time.
"Bearer Certificates" shall have the meaning specified in Section
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6.01.
"Beneficiary" shall mean any of the holders of the Investor
-----------
Certificates and any Enhancement Provider.
"Benefit Plan" shall have the meaning specified in Section 6.04(c).
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"Book-Entry Certificates" shall mean beneficial interests in the
------------------------
Investor Certificates, ownership and transfers of which shall be made through
book entries by a Depository as described in Section 6.08.
"Business Day" shall mean any day other than (a) a Saturday or a
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Sunday or (b) another day on which banking institutions or trust companies in
the State of Michigan or the State of New York are authorized or obligated by
law, executive order or governmental decree to be closed.
"Cedel" shall mean Cedel Bank, societe anonyme.
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"Certificate" shall mean any of the Investor Certificates or the
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Transferor's Certificates.
"Certificate Owner" shall mean, with respect to a Book-Entry
------------------
Certificate, any person who is a beneficial owner of a Book-Entry
Certificate.
"Certificate Rate" shall mean, with respect to any Series or Class,
----------------
the certificate rate specified therefor in the related Supplement.
"Certificate Register" shall have the meaning specified in Section
---------------------
6.04.
"Certificateholder" or "Holder" shall mean an Investor
----------------- ------
Certificateholder or a Person in whose name any one of the Transferor's
Certificates is registered.
"Certificateholders' Interest" shall have the meaning specified in
----------------------------
Section 4.01.
"Class" shall mean, with respect to any Series, any one of the
-----
classes of Investor Certificates of that Series.
"Closing Date" shall mean, with respect to any Series, the Closing
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Date specified in the related Supplement.
"Collection Account" shall have the meaning specified in Section
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4.02.
"Collection Period" shall mean, with respect to any Distribution
------------------
Date, the calendar month preceding the month in which such Distribution Date
occurs.
"Collections" shall mean, without duplication, all payments by or
-----------
on behalf of Dealers received by the Master Servicer in respect of the
Receivables, in the form of cash, checks, wire transfers or any other form of
payment.
"Common Depositary" shall mean the Person specified in the
-------------------
applicable Supplement, as common depositary for the respective accounts of
any Foreign Clearing Agencies.
"Corporate Trust Office" shall mean the principal office of the
----------------------
Trustee in the City of New York, at which at any particular time its
corporate trust business shall be administered, which office at the date of
the execution of this Agreement is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, Attention: Corporate Trust Department.
"Coupon" shall have the meaning specified in Section 6.01.
------
"Cut-Off Date" shall mean September 30, 1997.
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"Date of Processing" shall mean, with respect to any transaction,
-------------------
the date on which such transaction is first recorded on the Master Servicer's
computer file of accounts (without regard to the effective date of such
recordation).
"Dealer" shall mean a Person engaged generally in the business of
------
purchasing Vehicles from a manufacturer or distributor thereof and holding
such Vehicles for sale or lease in the ordinary course of business.
"Dealer Overconcentration" on any Determination Date shall mean,
-------------------------
with respect to any Dealer or group of affiliated Dealers (as determined in
accordance with the Master Servicer's standard procedures for identifying and
tracking Accounts of affiliated Dealers), the excess of (a) the aggregate
Principal Receivables included in all Accounts of such Dealer or group of
affiliated Dealers, as applicable, as of the last day of the immediately
preceding Collection Period over (b) 2% of the Pool Balance on the last day of
such immediately preceding Collection Period (or such higher percentage of the
Pool Balance (in no event to exceed 4%) as may be approved in writing from
time to time by each Rating Agency subject to such conditions and limitations
as each such Rating Agency may require).
"Defaulted Amount" on any Determination Date shall mean an amount
-----------------
(which shall not be less than zero) equal to (a) the sum for all the Accounts
of the amount of Principal Receivables which became Defaulted Receivables
during the immediately preceding Collection Period minus (b) the full amount
of any such Defaulted Receivables which are subject to reassignment or
assignment to the Transferor or the Master Servicer in accordance with the
terms of this Agreement; provided, however, that, if an Insolvency Event
-------- -------
occurs with respect to the Transferor, the amounts of such Defaulted
Receivables which are subject to reassignment to the Transferor shall not be
included in clause (b) and, if an Insolvency Event occurs with respect to the
Master Servicer, the amount of such Defaulted Receivables which are subject
to assignment to the Master Servicer shall not be included in clause (b).
"Defaulted Receivables" on any Determination Date shall mean (a)
----------------------
all Receivables which are charged off as uncollectible in respect of the
immediately preceding Collection Period in accordance with the Master
Servicer's customary and usual servicing procedures for servicing Dealer
floorplan receivables comparable to the Receivables which have not been sold
to third parties and (b) all Receivables which were Eligible Receivables when
transferred to the Trust on the initial Closing Date or the related Addition
Date or on their respective Transfer Date, which arose in an Account that
thereafter became an Ineligible Account and which remained outstanding for
any six consecutive Determination Dates (inclusive of the Determination Date
on which such determination is being made) after such Account became an
Ineligible Account.
"Definitive Certificates" shall have the meaning specified in
-----------------------
Section 6.08.
"Definitive Euro-Certificates" shall have the meaning specified in
----------------------------
Section 6.11.
"Deposit Date" shall mean each day on which the Master Servicer
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deposits Collections in the Collection Account pursuant to Section 4.03
hereof.
"Depository" shall mean The Depository Trust Company, as initial
----------
Depository, the nominee of which is CEDE & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall at all times be a
"clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York.
"Depository Agreement" shall mean, with respect to any Series or
---------------------
Class, the agreement among the Transferor, the Trustee and the initial
Depository, dated as of the related Closing Date substantially in the form of
Exhibit E.
"Depository Participant" shall mean a broker, dealer, bank or other
----------------------
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date" with respect to any Distribution Date shall
-------------------
mean the day that is two Business Days prior to such Distribution Date.
"Distribution Date" shall mean the fifteenth day of each month or,
-----------------
if such day is not a Business Day, the next succeeding Business Day.
"Distribution Date Statement" shall mean, with respect to any
-----------------------------
Series, a report prepared by the Master Servicer on each Determination Date
for the immediately preceding Collection Period in substantially the form set
forth in the related Supplement.
"Due Date" shall mean the close of business on the last Business
---------
Day of each month.
"Early Amortization Event" shall have the meaning specified in
-------------------------
Section 9.01 and, with respect to any Series, shall also mean any Early
Amortization Event specified in the related Supplement.
"Early Amortization Period" shall mean, with respect to any Series,
-------------------------
the period beginning at the close of business on the Business Day immediately
preceding the day on which the Early Amortization Event is deemed to have
occurred, and in each case ending upon the earlier to occur of (a) the
payment in full to the Investor Certificateholders of such Series of the
Invested Amount with respect to such Series, (b) the Termination Date with
respect to such Series and (c) if such Early Amortization Period has resulted
from the occurrence of an Early Amortization Event described in Section
9.01(a), the end of the first Collection Period during which an Early
Amortization Event would no longer be deemed to exist pursuant to Section
9.01(a), so long as no other Early Amortization Event with respect to such
Series shall have occurred and the scheduled termination of the Revolving
Period with respect to such Series shall not have occurred.
"Eligible Account" shall mean each individual wholesale financing
-----------------
account established with a Dealer pursuant to a Floorplan Financing Agreement
in the ordinary course of business, which, as of the date of determination
with respect thereto: (a) is in favor of a Dealer which is an Eligible
Dealer, (b) is in existence and maintained and serviced by or on behalf of
the Seller or such other Originator of such Account and (c) is an Account in
respect of which no amounts have been charged off as uncollectible or are
classified as past due or delinquent.
"Eligible Deposit Account" shall mean either (a) a segregated
--------------------------
account with an Eligible Institution or (b) a segregated trust account with
the corporate trust department of a depository institution or trust company
organized under the laws of the United States of America or any one of the
states thereof, including the District of Columbia (or any domestic branch of
a foreign bank), having corporate trust powers and acting as trustee for
funds deposited in such account, so long as any of the securities of such
depository institution or trust company shall have a credit rating from each
Rating Agency in one of its generic rating categories which signifies
investment grade.
"Eligible Dealer" shall mean a Dealer, as of the date of
----------------
determination thereof, (a) which is located in the United States of America
(including its territories and possessions), or such other jurisdiction as
shall have been specified by the Seller and as to which the Rating Agency
Condition shall have been satisfied, (b) which has not been identified by the
Master Servicer as being the subject of any voluntary or involuntary
bankruptcy proceeding or voluntary or involuntary liquidation, (c) in which
Ford or any Affiliate thereof does not have an equity investment and (d)
which has not been classified by the Master Servicer as in dealer "status"
(or comparable classification) under the applicable Floorplan Financing
Guidelines by reason of nonpayment or other circumstances evidencing a
general deterioration of financial condition.
"Eligible Institution" shall mean (a) the corporate trust
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department of the Trustee or (b) a depository institution or trust company
organized under the laws of the United States of America or any one of the
states thereof, or the District of Columbia (or any domestic branch of a
foreign bank), which at all times (i) has either (A) a long-term unsecured
debt rating of A2 or better by Moody's and of AAA or better by Standard &
Poor's or such other rating that is acceptable to each Rating Agency, as
evidenced by a letter from such Rating Agency to the Trustee or (B) a
certificate of deposit rating of P-1 by Moody's and A-1+ by Standard & Poor's
or such other rating that is acceptable to each Rating Agency, as evidenced
by a letter from such Rating Agency to the Trustee and (ii) whose deposits
are insured by the FDIC. If so qualified, the Trustee may be considered an
Eligible Institution for the purposes of clause (b) this definition.
"Eligible Investments" shall mean book-entry securities, negotiable
--------------------
instruments or securities represented by Instruments in bearer or registered
form having original or remaining maturities of 30 days or less, but in no
event occurring later than the Distribution Date next succeeding the
Trustee's acquisition thereof, which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws
of the United States of America or any state thereof (or any domestic
branch of a foreign bank) and subject to supervision and examination by
Federal or state banking or depository institution authorities;
provided, however, that at the time of the Trust's investment or
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contractual commitment to invest therein, the commercial paper or other
short-term unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a person or entity other than
such depository institution or trust company) thereof shall have a
credit rating from each of the Rating Agencies in the highest generic
investment category granted thereby;
(c) commercial paper having, at the time of the Trust's investment
or contractual commitment to invest therein, a rating of at least A-1+
by Standard Poor's (or A-1 in the case of any amount on deposit in the
Collection Account up to an amount equal to 20% of the aggregate
Invested Amount at the time of the Trust's investment or contractual
commitment to so invest) and P-1 by Moody's;
(d) investments in money market funds having a rating from each of
the Rating Agencies in the highest generic investment category granted
thereby or otherwise approved in writing thereby;
(e) demand deposits, time deposits and certificates of deposit
which are fully insured by the FDIC and having at the time of the
Trust's investment or contractual commitment to invest therein a credit
rating from each of the Rating Agencies in the highest generic
investment category granted thereby;
(f) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(g) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with (i) a depository institution
or trust company (acting as principal) described in clause (b) or (ii) a
depository institution or trust company the deposits of which are
insured by FDIC and which at the time of the Trust's investment or
contractual commitment to invest in such repurchase obligations, the
commercial paper or other short-term unsecured debt obligations of such
depository institution shall have a credit rating from each of the
Rating Agencies in the highest generic investment category granted
thereby; and
(h) any other investment as may be permitted by each Rating Agency
without reducing or withdrawing the rating of the Certificates of any
Series.
"Eligible Receivable" shall mean each Receivable:
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(a) which was originated or acquired by the Seller in the ordinary
course of business;
(b) which arose under an Eligible Account and is payable in
either United States dollars or such other currency as to which the
Rating Agency Condition shall have been satisfied;
(c) which is owned by the Seller at the time of sale by the Seller
to the Transferor;
(d) which represents the obligation of a Dealer to repay an
advance made to such Dealer to finance the acquisition of Vehicles;
(e) which at the time of creation and, except at the Closing Date
for the initial Series in the case of Receivables in respect of which
the related financed Vehicle has been sold, at the time of transfer to
the Trust is secured by, inter alia, a first priority perfected security
interest in the Vehicle relating thereto;
(f) which was created in compliance in all respects with all
Requirements of Law applicable thereto and pursuant to a Floorplan
Financing Agreement which complies in all respects with all Requirements
of Law applicable to any party thereto;
(g) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any
Governmental Authority required to be obtained, effected or given by the
related Originator, the related Manufacturer, the Seller, or the
Transferor in connection with the creation of such Receivable or the
transfer thereof to the Trust or the execution, delivery and performance
of the related Floorplan Financing Agreement pursuant to which such
Receivable was created, have been duly obtained, effected or given and
are in full force and effect;
(h) as to which at all times following the transfer of such
Receivable to the Trust, the Trust will have good and marketable title
thereto free and clear of all Liens arising prior to the transfer or
arising at any time other than Liens permitted by this Agreement;
(i) which has been the subject of a valid transfer and assignment
from the Transferor to the Trust of all the Transferor's right, title
and interest therein (including any proceeds thereof);
(j) which will at all times be the legal, valid, binding and
assignable payment obligation of the Dealer relating thereto,
enforceable against such Dealer in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in
effect, affecting the enforcement of creditors' rights in general and
except as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity);
(k) which at the time of transfer to the Trust is not subject to
any right of rescission, setoff, counterclaim or any other defense
(including defenses arising out of violations of usury laws) of the
Dealer;
(l) as to which, at the time of transfer of such Receivable to the
Trust, each of the related Manufacturer, the related Originator, the
Seller and the Transferor have satisfied all their respective
obligations with respect to such Receivable required to be satisfied at
such time;
(m) as to which, at the time of transfer of such Receivable to the
Trust, none of the related Manufacturer, the related Originator, the
Seller and the Transferor has taken or failed to take any action which
would impair the rights of the Trust or the Certificateholders therein;
(n) which constitutes "chattel paper" as defined in Article 9 of
the UCC as then in effect in the State of Michigan;
(o) with respect to which the representations set forth in
Sections 2.04(a)(i) and (ii) were correct as of the Transfer Date with
respect thereto;
(p) that was acquired by the Seller from PRIMUS and as to which at
the time of transfer to the Trust and at all times following such
transfer the Manufacturer of the related financed Vehicle (other than
Ford) has not filed a petition commencing a voluntary case under any
chapter of the Federal bankruptcy laws; or filed a petition or answer or
consent seeking reorganization, arrangement, adjustment, or composition
under any other similar applicable Federal law, or consented to the
filing of any such petition, answer, or consent; or appointed, or
consented to the appointment of, a custodian, receiver, liquidator,
trustee, assignee, sequestrator or other similar official in bankruptcy
or insolvency of it or of any substantial part of its property; or made
an assignment for the benefit of creditors, or admitted in writing its
inability to pay its debts generally as they become due; and
(q) that was acquired by the Seller from PRIMUS and as to which at
the time of the transfer to the Trust and at all times following such
transfer, none of the following events have occurred; (i) an order for
relief against the related Manufacturer (other than Ford) shall have
been entered by a court having jurisdiction in the premises under any
chapter of the Federal bankruptcy laws, and such order shall have
continued undischarged or unstayed for a period of 60 days; (ii) a
decree or order by a court having jurisdiction in the premises shall
have been entered approving as properly filed a petition seeking
reorganization, arrangement, adjustment, or composition of such
Manufacturer (other than Ford) under any other similar applicable
Federal law, and such decree or order shall have continued undischarged
or unstayed for period of 120 days; or (iii) a decree or order of a
court having jurisdiction in the premises for the appointment of a
custodian, receiver, liquidator, trustee, assignee, sequestrator, or
other similar official in bankruptcy or insolvency of such Manufacturer
(other than Ford) or of any substantial part of its property, or for the
winding up or liquidation of its affairs, shall have been entered, and
such decree or order shall have remained in force undischarged or
unstayed for a period of 120 days.
"Eligible Master Servicer" shall mean the Trustee or an entity
-------------------------
which, at the time of its appointment as Master Servicer, (a) is legally
qualified and has the capacity to service the Accounts, (b) in the sole
determination of the Trustee, which determination shall be conclusive and
binding, has demonstrated the ability to professionally and competently
service a portfolio of similar accounts in accordance with high standards of
skill and care and (c) is qualified to use the software that is then
currently being used to service the Accounts or obtains the right to use or
has its own software which is adequate to perform its duties under this
Agreement.
"Enhancement" shall mean the rights and benefits provided to the
-----------
Investor Certificateholders of any Series or Class pursuant to any letter of
credit, surety bond, cash collateral account, spread account, guaranteed rate
agreement, maturity liquidity facility, tax protection agreement, interest
rate swap agreement or other similar arrangement. The subordination of any
Series or Class to any other Series or Class or of the Transferor's Interest
to any Series or Class shall be deemed to be an Enhancement.
"Enhancement Agreement" shall mean any agreement, instrument or
----------------------
document governing the terms of any Series Enhancement or pursuant to which
any Series Enhancement is issued or outstanding.
"Enhancement Provider" shall mean the Person providing any
---------------------
Enhancement, other than any Certificateholders (including any holders of the
Transferor's Certificates) the Certificates of which are subordinated to any
Series or Class.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended.
"Euroclear Operator" shall mean ▇▇▇▇▇▇ Guaranty Trust Company of
-------------------
New York, Brussels office, as operator of the Euroclear System.
"Exchange Date" shall mean any date that is after the Series
--------------
Issuance Date, in the case of Definitive EuroCertificates in registered form,
or upon presentation of certification of non-United States beneficial
ownership (as described in Section 6.11), in the case of Definitive
EuroCertificates in bearer form.
"FCAR" shall mean Ford Credit Auto Receivables LLC, a Delaware
----
limited liability company, and its successors in interest to the extent
permitted hereunder.
"FCAR Certificate" shall mean the certificate executed by the
-----------------
Transferor and authenticated by the Trustee, substantially in the form of
Exhibit A.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
----
successor entity thereto.
"Final Maturity Date" shall have the meaning specified in Section
-------------------
12.01.
"Fleet Receivables" shall mean all amounts shown in special
------------------
accounts on the Master Servicer's records as amounts payable by any Dealer
designated by the Seller as a "fleet dealer" in respect of advances made by
the Seller to such Dealer or advances made by Ford or other Originator of
such receivable to such Dealer and purchased by the Seller.
"Floorplan Financing Agreement" shall mean, collectively, the group
-----------------------------
of related agreements between and among the Seller (either as the Originator
of a wholesale financing account or by virtue of assignment of such account
to the Seller by the applicable Originator), the Dealer with respect thereto
and, in the case of new Vehicles, a Vehicle manufacturer or distributor,
pursuant to which (a) the Seller or other applicable Originator agrees to
extend credit to such Dealer to finance used Vehicles and new Vehicles
manufactured by such manufacturer or distributed by such distributor, (b)
such Dealer grants to the applicable Originator a security interest in the
specific Vehicles financed by such Originator, certain other Vehicles,
certain other collateral and the proceeds thereof, (c) such Dealer agrees to
repay advances made by the applicable Originator at the time of Vehicle sale
or lease but in any event such Dealer agrees to repay, in the case of a new
Vehicle as to which Ford Credit is the Originator of the related Receivable,
not less than 90% of each such advance upon the sale or lease of the Vehicle
to which such advance relates and the remaining balance of such advance not
later than the first day of the second calendar month following the month in
which such sale or lease occurs, and (d) the obligations of such Dealer to
repay such advances is evidenced by one or more promissory notes of such
Dealer.
"Floorplan Financing Guidelines" shall mean the written policies
------------------------------
and procedures of the Originator of an Account, as such policies and
procedures may be amended from time to time, (a) relating to the operation of
a floorplan financing business, including the written policies and procedures
for determining the interest rate charged to Dealers, the other terms and
conditions relating to the applicable Originator's wholesale financing
accounts, the creditworthiness of Dealers and the extension of credit to
Dealers, and (b) relating to the maintenance of accounts and collection of
receivables.
"Ford" shall mean Ford Motor Company, a Delaware corporation, and
----
its successors in interest.
"Ford Credit" shall mean Ford Motor Credit Company, a Delaware
------------
corporation, and its successors in interest.
"Foreign Clearing Agency" shall mean Cedel and the Euroclear
------------------------
Operator.
"Global Certificate" shall have the meaning specified in Section
-------------------
6.11.
"Governmental Authority" shall mean the United States of America,
----------------------
or any other jurisdiction applicable to the Transferor, Seller or other
Originator of the Receivables as specified in the related Supplement, any
state, possession, territory or other political subdivision thereof, and any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Incremental Default Amount" on any Determination Date shall mean
--------------------------
(a) the sum of (i) all the Ineligible Receivables which became Defaulted
Receivables during the immediately preceding Collection Period, (ii) the
Overconcentration Default Amount on such Determination Date and (iii) the
Installment Balance Default Amount on such Determination Date minus (b) the
full amount of any such Defaulted Receivables which are subject to a
reassignment or assignment to the Transferor or the Master Servicer in
accordance with the terms of this Agreement (but not less than zero);
provided, however, that, if an Insolvency Event occurs with respect to the
-------- -------
Transferor, the amount of such Defaulted Receivables which are subject to
reassignment to the Transferor shall not be so subtracted and, if an
Insolvency Event occurs with respect to the Master Servicer, the amount of
such Defaulted Receivables which are subject to assignment to the Master
Servicer shall not be so subtracted; provided, further, that the Incremental
-------- -------
Default Amount for any Determination Date shall not exceed the sum of the
Overconcentration Amount, the Installment Balance Amount and the Ineligible
Amount, in each case, on such Determination Date.
"Ineligible Account" shall mean an Account that at the time of
-------------------
determination is not an Eligible Account.
"Ineligible Amount" on any Determination Date shall mean the amount
-----------------
of Ineligible Receivables included in the Trust on such Determination Date
pursuant to Section 2.09.
"Ineligible Receivable" shall mean any Receivable that is not an
----------------------
Eligible Receivable.
"Initial Account" shall mean each individual wholesale financing
---------------
account established with a Dealer pursuant to a Floorplan Financing Agreement
which is identified in the computer file or microfiche or written list
delivered to the Trustee on the first Closing Date by the Transferor pursuant
to Section 2.01.
"Initial Invested Amount" shall mean, with respect to any Series
------------------------
and for any date, an amount equal to the initial invested amount specified in
the related Supplement. The Initial Invested Amount for any Series may be
increased or decreased from time to time as specified in the related
Supplement.
"Insolvency Event" shall mean any event specified in Section
-----------------
9.01(b) or 9.01(c).
"Installment Balance" with respect to any Dealer shall mean the
--------------------
balance outstanding after the initial payment by such Dealer on any
Receivable and not immediately required to be remitted pursuant to the
related Floorplan Financing Agreement and Floorplan Financing Guidelines of
the Seller following the date of sale or lease of the related Vehicle.
"Installment Balance Amount" shall mean, on any Determination Date,
--------------------------
the aggregate amount of Installment Balances on such Determination Date in
respect of which the Seller has not received an offsetting payment from the
related Dealers.
"Installment Balance Default Amount" on any Determination Date
------------------------------------
shall mean the sum for all Installment Balances during the immediately
preceding Collection Period of the amount of Principal Receivables contained
in such Installment Balances which became Defaulted Receivables during such
Collection Period.
"Insurance Proceeds" with respect to an Account shall mean any
-------------------
amounts received by the Master Servicer pursuant to any policy of insurance
which is required to be paid to the applicable Originator pursuant to a
Floorplan Financing Agreement.
"Internal Revenue Code" shall mean the Internal Revenue Code of
---------------------
1986, as amended.
"Invested Amount" shall mean, with respect to any Series and for
---------------
any date, an amount equal to the invested amount specified in the related
Supplement.
"Investment Company Act" shall mean the Investment Company Act of
-----------------------
1940, as amended.
"Investor Certificateholder" shall mean the Person in whose name a
--------------------------
Registered Certificate is registered in the Certificate Register or the
bearer of any Bearer Certificate (or the Global Certificate, as the case may
be) or Coupon.
"Investor Certificates" shall mean any one of the certificates
----------------------
(including the Bearer Certificates, the Registered Certificates or any Global
Certificate) executed by the Transferor and authenticated by or on behalf of
the Trustee, substantially in the form attached to the related Supplement,
other than the Transferor's Certificates.
"Investors' Servicing Fee" shall mean the portion of the Servicing
-------------------------
Fee allocable to the Investor Certificateholders pursuant to the terms of the
Supplements.
"Lien" shall mean any mortgage, deed of trust, pledge,
----
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory
or other), preference, participation interest, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including any conditional sale or other title retention agreement and any
financing lease having substantially the same economic effect as any of the
foregoing.
"Manager" shall mean the lead manager, manager or co-manager or
-------
person performing a similar function with respect to an offering of
Definitive Euro-Certificates.
"Manufacturer" shall mean, with respect to any Receivable, the
------------
Vehicle manufacturer or distributor that entered into the related Floorplan
Financing Agreement.
"Manufacturer Overconcentration" on any Determination Date shall
------------------------------
mean the excess, if any, of (x) the aggregate Principal Receivables included
in the Pool Balance on the last day of the Collection Period immediately
preceding such Determination Date that were acquired by the Seller from all
other Originators and that relate to a particular Manufacturer (other than
Ford) over (y) 30% of the aggregate Principal Receivables on the last day of
such Collection Period that were acquired by the Seller from all other
Originators.
"Master Servicer" shall mean, initially, Ford Credit, in its
----------------
capacity as Master Servicer under this Agreement, and after any Servicing
Transfer, the Successor Master Servicer.
"Miscellaneous Payments" shall mean, with respect to any Collection
----------------------
Period, the sum of (a) Adjustment Payments and Transfer Deposit Amounts on
deposit in the Collection Account on the related Distribution Date and (b)
Unallocated Principal Collections available to be treated as Miscellaneous
Payments pursuant to Section 4.04 on such Distribution Date.
"Monthly Servicing Fee" shall mean, with respect to any Series, the
---------------------
amount specified therefor in the related Supplement.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., or its
-------
successor.
"Non-Principal Collections" shall mean Collections under the
--------------------------
Receivables other than Principal Collections, provided that all Recoveries
shall be Non-Principal Collections.
"Non-Principal Receivables" with respect to any Account shall mean
--------------------------
all amounts billed to the related Dealer in respect of interest and all other
non-principal charges, including certain service fees and handling fees.
"Notice Date" shall have the meaning specified in Section 2.05(c).
-----------
"Officers' Certificate" shall mean (i) with respect to any
-----------------------
corporation, unless otherwise specified in this Agreement, a certificate
signed by (a) the Chairman of the Board, Vice Chairman of the Board,
President or any Vice President and (b) a Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary of such corporation and (ii) with respect to
any limited liability company, unless otherwise specified in this Agreement,
a certificate signed by any manager of such limited liability company.
"Opinion of Counsel" shall mean a written opinion of counsel, who
------------------
may be counsel of the Transferor or Ford Credit and who shall be reasonably
acceptable to the Trustee.
"Originator" shall mean (i) the Seller, in the case of Receivables
----------
originated by it or acquired by it from Ford, (ii) PRIMUS, in the case of
Receivables acquired by the Seller from PRIMUS and (iii) subject to the prior
approval of the Rating Agencies, such other Person as shall have originated
or underwritten Receivables in the ordinary course of its business under
Floorplan Financing Guidelines substantially similar to those applied by the
Seller.
"Overconcentration Amount" on any Determination Date shall mean the
------------------------
sum of (i) the aggregate Dealer Overconcentrations on such Determination
Date, (ii) the aggregate Manufacturer Overconcentrations on such
Determination Date and (iii) the PRIMUS Overconcentration on such
Determination Date.
"Overconcentration Default Amount" on any Determination Date shall
---------------------------------
mean the sum of (i) in the event of any Dealer Overconcentration during the
immediately preceding Collection Period, the lesser of (x) the aggregate
amount of such Principal Receivables which became Defaulted Receivables
during such Collection Period and (y) the aggregate amount of such Dealer
Overconcentrations on such Determination Date, (ii) with respect to those
Principal Receivables relating to a particular Manufacturer as to which there
existed a Manufacturer Overconcentration during the immediately preceding
Collection Period, the lesser of (x) the aggregate amount of such Principal
Receivables which became Defaulted Receivables during such Collection Period
and (y) the aggregate Manufacturer Overconcentrations on such Determination
Date and (iii) in the event of any PRIMUS Overconcentration with respect to
the immediately preceding Collection Period, the lesser of (x) the aggregate
amount of Principal Receivables as to which PRIMUS is the Originator that
became Defaulted Receivables during such Collection Period and (y) the PRIMUS
Overconcentration on such Determination Date.
"Permitted Transaction" shall have the meaning specified in Section
---------------------
2.06(f).
"Person" shall mean any legal person, including any individual,
------
corporation, partnership, association, joint-stock company, trust,
unincorporated organization, governmental entity or other entity of similar
nature.
"Pool Balance" shall mean, as of the time of determination thereof,
------------
the aggregate of Principal Receivables in the Trust at such time.
"PRIMUS" shall mean PRIMUS Automotive Financial Services, Inc., a
------
Delaware corporation, and its successors in interest.
"PRIMUS Overconcentration" shall mean the excess, if any, of (x)
-------------------------
the aggregate Principal Receivables included in the Pool Balance on the last
day of the Collection Period immediately preceding such Determination Date
that were acquired by the Seller from PRIMUS over (y) 30% of the Pool Balance
on the last day of such Collection Period.
"Principal Collections" shall mean Collections of principal under
---------------------
the Receivables reduced by Collections that are reclassified as Non-Principal
Collections pursuant to Section 4.03(e) hereof.
"Principal Receivables" with respect to an Account shall mean
----------------------
amounts shown on the Master Servicer's records as Receivables (other than
such amounts which represent Non-Principal Receivables) payable by the
related Dealer.
"Principal Terms" shall mean, with respect to any Series: (a) the
---------------
name or designation; (b) the initial principal amount (or method for
calculating such amount); (c) the Certificate Rate (or method for the
determination thereof); (d) the payment date or dates and the date or dates
from which interest shall accrue; (e) the method for allocating collections
to Investor Certificateholders; (f) the designation of any Series Accounts
and the terms governing the operation of any such Series Accounts; (g) the
Monthly Servicing Fee and the Investors' Servicing Fee; (h) the issuer and
terms of any form of Enhancement with respect thereto; (i) the terms on which
the Investor Certificates of such Series may be exchanged for Investor
Certificates of another Series, repurchased by the Transferor or remarketed
to other investors; (j) the Termination Date; (k) the number of Classes of
Investor Certificates of such Series and, if more than one Class, the rights
and priorities of each such Class; (l) the extent to which the Investor
Certificates of such Series will be issuable in temporary or permanent global
form (and, in such case, the depositary for such global certificate or
certificates, the terms and conditions, if any, upon which such global
certificate may be exchanged, in whole or in part, for Definitive
Certificates, and the manner in which any interest payable on a temporary or
global certificate will be paid); (m) whether the Investor Certificates of
such Series may be issued in bearer form and any limitations imposed thereon;
(n) the priority of such Series with respect to any other Series; (o) whether
such Series will be part of a group; and (p) any other terms of such Series.
"Purchase Price" shall mean, with respect to any Receivable for any
--------------
date on which such Receivable is to be purchased pursuant to Section 3.03,
(a) an amount equal to the amount payable by the Dealer in respect thereof as
reflected in the records of the Master Servicer as of the date of purchase
plus (b) interest accrued from the end of the last Collection Period in
respect of which interest on such Receivable was billed by the Master
Servicer, at a per annum rate equal to the rate being charged to the Dealer
under the related Floorplan Financing Agreement.
"Rating Agency" shall mean, with respect to any outstanding Series
--------------
or Class, each statistical rating agency selected by the Transferor to rate
the Investor Certificates of such Series or Class, unless otherwise specified
in the Supplement.
"Rating Agency Condition" shall mean, with respect to any action,
-----------------------
that each Rating Agency shall have notified the Transferor, the Master
Servicer and the Trustee in writing that such action will not result in a
reduction or withdrawal of the rating of any outstanding Series or Class with
respect to which it is a Rating Agency, unless otherwise specified in the
Supplement.
"Reassignment" shall have the meaning specified in Section 2.07(c).
------------
"Receivables" shall mean, with respect to an Account, all amounts
-----------
shown on the Master Servicer's records as amounts payable by the related
Dealer from time to time in respect of advances made by the Seller to such
Dealer, or advances or credits made by the related Originator to such Dealer
and acquired by the Seller, in each case to finance Vehicles by such Dealer,
together with the group of writings evidencing such amounts and the security
interest created in connection therewith. Receivables which become Defaulted
Receivables shall not be shown on the Master Servicer's records as amounts
payable (and will cease to be included as Receivables) on the day on which
they become Defaulted Receivables. Receivables which the Seller is unable to
transfer to the Transferor pursuant to the Receivables Purchase Agreement or
which the Transferor is unable to transfer to the Trust as provided in
Section 2.06(b) and Receivables which arise in Designated Accounts from and
after the related Removal Commencement Date shall not be included in
calculating the amount of Receivables. Notwithstanding anything to the
contrary in this Agreement, Fleet Receivables shall not be deemed to be
Receivables for the purposes of this Agreement.
"Receivables Purchase Agreement" shall mean the agreement between
-------------------------------
the Seller and the Transferor, in substantially the form attached hereto as
Exhibit I, dated as of the date hereof, governing the terms and conditions
upon which the Transferor is acquiring the initial Receivables transferred to
the Trust on the Closing Date and all Receivables acquired thereafter, as the
same may from time to time be amended, modified or otherwise supplemented.
"Record Date" shall mean, with respect to any Distribution Date,
------------
the close of business on the day preceding such Distribution Date; provided
that with respect to any Distribution Date for a Series for which Definitive
Certificates have been issued pursuant to Section 6.10, subsequent to the
issuance of such Definitive Certificates the Record Date for such
Distribution Date shall be the last day of the month preceding the month in
which such Distribution Date occurs.
"Recoveries" on any Determination Date shall mean all amounts
----------
received, including Insurance Proceeds, by the Master Servicer during the
Collection Period immediately preceding such Determination Date with respect
to Receivables which have previously become Defaulted Receivables.
"Reference Rate" shall mean, with respect to any Receivable, the
--------------
per annum rate of interest designated from time to time by the applicable
Originator pursuant to the related Floorplan Financing Agreement.
"Registered Certificateholder" shall mean the Holder of a
------------------------------
Registered Certificate.
"Registered Certificates" shall have the meaning specified in
------------------------
Section 6.01.
"Related Documents" shall mean, collectively, the Receivables
------------------
Purchase Agreement and, with respect to any Series, any applicable
Enhancement Agreement.
"Related Security" shall mean, with respect to any Receivable and
----------------
subject to the terms of the Receivables Purchase Agreement, the security
interest granted by or on behalf of the related Dealer with respect thereto,
including a first priority perfected security interest in the related
Vehicle, certain parts inventory, equipment, fixtures, service accounts or
realty with respect to such Dealer and all guarantees of any Receivable.
"Removal Account" shall have the meaning specified in Section
----------------
2.07(b).
"Removal Commencement Date" shall have the meaning specified in
--------------------------
Section 2.07(b).
"Removal Notice" shall have the meaning specified in Section
---------------
2.07(b).
"Required Participation Amount" shall mean, at any time of
--------------------------------
determination, an amount equal to (a) the sum of the amounts for each Series
obtained by multiplying the Required Participation Percentage for such Series
by the Initial Invested Amount for such Series at such time plus (b) the
Trust Aggregate Available Subordinated Amount on the immediately preceding
Determination Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the Distribution Date following such
Determination Date).
"Required Participation Percentage" shall mean, with respect to any
---------------------------------
Series, the percentage specified therefor in the related Supplement.
"Requirements of Law" for any Person shall mean the certificate of
-------------------
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or Governmental Authority, in each case applicable to or binding
upon such Person or to which such Person is subject, whether Federal, state
or local (including usury laws and the Federal Truth in Lending Act).
"Responsible Officer" shall mean the Chairman or any Vice Chairman
-------------------
of the Board of Directors or Trustees of the Trustee, the Chairman or Vice
Chairman of the Executive or Standing Committee of the Board of Directors or
Trustees of the Trustee, the President, any Executive Vice President, Senior
Vice President, and any other officer of the Trustee customarily performing
functions within the corporate trust department 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 that relevant subject.
"Revolving Period" shall mean with respect to any Series, the
-----------------
period specified as such in the related supplement.
"Seller" shall mean Ford Credit.
------
"Series" shall mean any series of Investor Certificates.
------
"Series Account" shall mean any deposit, trust, escrow, reserve or
--------------
similar account maintained for the benefit of the Investor Certificateholders
of any Series or Class, as specified in any Supplement.
"Series Cut-Off Date" shall mean, with respect to any Series, the
-------------------
date specified as such in the related Supplement.
"Series Issuance Date" shall mean, with respect to any Series, the
--------------------
date on which the Investor Certificates of such Series are to be originally
issued in accordance with Section 6.03 and the related Supplement.
"Servicing Default" shall have the meaning specified in Section
-----------------
10.01.
"Servicing Fee" shall have the meaning specified in Section 3.02.
-------------
"Servicing Officer" shall mean any officer of the Master Servicer
------------------
involved in, or responsible for, the administration and servicing of the
Receivables whose name appears on a list of servicing officers furnished to
the Trustee by the Master Servicer as such list may from time to time be
amended.
"Servicing Transfer" shall have the meaning specified in Section
-------------------
10.01.
"Standard & Poor's" shall mean Standard & Poor's Rating Services, a
-----------------
division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or its successor.
"Successor Master Servicer" shall have the meaning specified in
--------------------------
Section 10.02(a).
"Supplement" shall mean, with respect to any Series, a Supplement
----------
to this Agreement, executed and delivered in connection with the original
issuance of the Investor Certificates of such Series pursuant to Section
6.03, and all amendments thereof and supplements thereto.
"Supplemental Certificate" shall have the meaning specified in
------------------------
Section 6.03.
"Tax Opinion" shall mean, with respect to any action, an Opinion of
-----------
Counsel to the effect that, for U.S. Federal income tax purposes (a) such
action will not cause a taxable event with respect to any Investor
Certificateholders and (b) in the case of Section 6.03(b), the Investor
Certificates of the new Series will be characterized as debt or an interest
in a tax partnership (which partnership will not be treated as a result of
issuance of such Certificates as a "publicly traded partnership" within the
meaning of Section 7704 of the Code and applicable Treasury Regulations).
"Termination Date" shall mean, with respect to any Series, the
----------------
termination date specified in the related Supplement.
"Termination Notice" shall have the meaning specified in Section
-------------------
10.01.
"Termination Proceeds" shall have the meaning specified in Section
---------------------
12.02(c).
"Transfer Agent and Registrar" shall have the meaning specified in
----------------------------
Section 6.04.
"Transfer Date" shall have the meaning specified in Section 2.01.
-------------
"Transfer Deposit Amount" shall mean, with respect to any
-------------------------
Receivable reassigned or assigned to the Transferor or the Master Servicer,
as applicable, pursuant to Section 2.04(c) or Section 3.03(c), the amounts
specified in such Sections.
"Transferor" shall mean Ford Credit Auto Receivables LLC, a
----------
Delaware limited liability company.
"Transferor's Certificates" shall mean, collectively, the FCAR
--------------------------
Certificate and any outstanding Supplemental Certificates.
"Transferor's Interest" shall have the meaning specified in Section
---------------------
4.01.
"Transferor's Participation Amount" shall mean, at any time of
----------------------------------
determination, an amount equal to the Pool Balance at such time minus the
aggregate Invested Amounts for all outstanding Series at such time.
"Trust" shall mean the Ford Credit Auto Loan Master Trust II
-----
created by this Agreement, the corpus of which shall consist of the Trust
Assets.
"Trust Assets" shall have the meaning specified in Section 2.01.
------------
"Trust Aggregate Available Subordinated Amount" shall mean the sum
----------------------------------------------
of the aggregate available subordinated amounts for all outstanding Series at
such time, as specified in the related Supplement.
"Trust Available Subordinated Amount" shall mean, at any time of
------------------------------------
determination, the sum of the Available Subordinated Amounts, if any, for all
outstanding Series at such time.
"Trustee" shall mean The Chase Manhattan Bank, or its successor in
-------
interest, or any successor trustee appointed as herein provided.
"Trust Incremental Subordinated Amount" on any Determination Date
--------------------------------------
shall mean the excess, if any, of (a) the sum of the Overconcentration
Amount, the Installment Balance Amount and the Ineligible Amount, in each
case, on such Determination Date over (b) the Incremental Default Amount for
such Determination Date.
"Trust Invested Amount" shall mean, at any time of determination,
---------------------
the sum of the Invested Amounts for all outstanding Series at such time.
"Trust Termination Date" shall have the meaning specified in
-----------------------
Section 12.01.
"UCC" shall mean the Uniform Commercial Code, as amended from time
---
to time, as in effect in any specified jurisdiction.
"Unallocated Principal Collections" shall have the meaning
------------------------------------
specified in Section 4.04.
"Used Vehicle" shall mean any Vehicle held for sale by a Dealer
------------
that is determined to be a "used" Vehicle in accordance with the Master
Servicer's standard wholesale servicing practices.
"Vehicle" shall mean an automobile or light-duty truck.
-------
"Vice President" when used with respect to the Master Servicer
---------------
shall mean any vice president whether or not designated by a number or word
or words added before or after the title "vice president".
SECTION 1.02. Other Definitional Provisions. (a) All terms
------------------------------
defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless
otherwise defined therein.
(b) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate
or other document to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting principles. To
the extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document
shall control.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section,
Schedule and Exhibit references contained in this Agreement are references to
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term "including" shall mean "including without
limitation".
(d) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
ARTICLE II
Conveyance of Receivables
-------------------------
SECTION 2.01. Conveyance of Receivables. By execution of this
--------------------------
Agreement, the Transferor does hereby transfer, assign, set over and
otherwise convey, without recourse (except as expressly provided herein), to
the Trust for the benefit of the Certificateholders and the other
Beneficiaries on the first Closing Date, in the case of the Initial Accounts,
and on the applicable Addition Date, in the case of Additional Accounts, (a)
all of its right, title and interest in, to and under the Receivables in each
Account and all Related Security with respect thereto owned by the Transferor
at the close of business on the Cut-Off Date, in the case of the Initial
Accounts, and on the applicable Additional Cut-Off Date, in the case of
Additional Accounts, and all monies due or to become due and all amounts
received with respect thereto and all proceeds (including "proceeds" as
defined in Section 9-306 of the UCC as in effect in the State of Michigan and
Recoveries) thereof and (b) all of the Transferor's rights, remedies, powers
and privileges with respect to such Receivables under the Receivables
Purchase Agreement. As of each Business Day prior to the earlier of (i) the
occurrence of an Early Amortization Event specified in Section 9.01(b), (c),
(d) or (e) and (ii) the Trust Termination Date, on which Receivables are
created in the Accounts (a "Transfer Date"), the Transferor does hereby
--------------
transfer, assign, set over and otherwise convey, without recourse (except as
expressly provided herein), to the Trust for the benefit of the
Certificateholders and the other Beneficiaries, all of its right, title and
interest in, to and under the Receivables in each Account (other than any
Receivables created in any Removal Account from and after the applicable
Removal Commencement Date) and all Related Security with respect thereto
owned by the Transferor at the close of business on such Transfer Date and
not theretofore conveyed to the Trust, all monies due or to become due and
all amounts received with respect thereto and all proceeds (including
"proceeds" as defined in Section 9-306 of the UCC as in effect in the State
of Michigan) and Recoveries thereof. Such property, together with all monies
on deposit in, and Eligible Investments credited to, the Collection Account
or any Series Account, any Enhancements and the Related Security with respect
to the Receivables shall collectively constitute the assets of the Trust (the
"Trust Assets"). The foregoing transfer, assignment, set-over and conveyance
------------
and any subsequent transfers, assignments, set-overs and conveyances do not
constitute, and are not intended to result in, the creation or an assumption
by the Trust, the Trustee, any Agent or any Beneficiary of any obligation of
the Master Servicer, the Transferor, the Seller, Ford, PRIMUS, any other
Originator or any other Person in connection with the Accounts, the
Receivables or under any agreement or instrument relating thereto, including
any obligation to any Dealers.
In connection with such transfers, the Transferor agrees to record
and file, at its own expense, a financing statement on form UCC-1 or any
other applicable form (and continuation statements when applicable) with
respect to the Receivables now existing and hereafter created for the sale of
chattel paper (as defined in Section 9-105 of the UCC as in effect in the
State of Michigan or, if applicable, in the corresponding Section of the UCC
as may be in effect in such other jurisdiction where either the Transferor's
or the Seller's chief executive offices or books and records relating to the
Receivables are located) meeting the requirements of applicable law in such
manner and in such jurisdictions as are necessary to perfect the sale and
assignment of the Receivables and the Related Security to the Trust, and to
deliver a file-stamped copy of such financing statements or other evidence of
such filing to the Trustee on or prior to the first Closing Date, in the case
of the Initial Accounts, and (if any additional filing is so necessary) the
applicable Addition Date, in the case of Additional Accounts. The Trustee
shall be under no obligation whatsoever to file such financing statement, or
a continuation statement to such financing statement, or to make any other
filing under applicable law in connection with such transfers.
In connection with such transfers, the Transferor further agrees,
at its own expense, on or prior to the first Closing Date, in the case of the
Initial Accounts, the applicable Addition Date, in the case of Additional
Accounts, and the applicable Removal Commencement Date, in the case of
Removal Accounts, (a) to cause the Seller to indicate in its computer files
as required by the Receivables Purchase Agreement, that the Receivables
created in connection with the Accounts (other than Removal Accounts) have
been transferred, and the Related Security assigned, to the Transferor in
accordance with the Receivables Purchase Agreement and sold to the Trust
pursuant to this Agreement for the benefit of the Certificateholders and the
other Beneficiaries and (b) to deliver to the Trustee (or cause the Seller to
do so) a computer file or microfiche or written list containing a true and
complete list of all such Accounts (other than Removal Accounts) specifying
for each such Account, as of the Cut-Off Date, in the case of the Initial
Accounts, and the applicable Additional Cut-Off Date, in the case of
Additional Accounts, (i) its account number, (ii) the aggregate amount of
Receivables outstanding in such Account and (iii) the aggregate amount of
Principal Receivables in such Account. Such file or list, as supplemented
from time to time to reflect Additional Accounts and Removal Accounts, shall
be marked as Schedule 1 to this Agreement and is hereby incorporated into and
made a part of this Agreement. The Trustee shall be under no obligation
whatsoever to verify the accuracy or completeness of the information
contained in Schedule 1 from time to time.
SECTION 2.02. Acceptance by Trustee. (a) The Trustee hereby
----------------------
acknowledges its acceptance, on behalf of the Trust, of all right, title and
interest previously held by the Transferor to the property, now existing and
hereafter created, conveyed to the Trust pursuant to Section 2.01 and
declares that it shall maintain such right, title and interest, upon the
trust herein set forth, for the benefit of the Certificateholders and the
other Beneficiaries. The Trustee further acknowledges that, prior to or
simultaneously with the execution and delivery of this Agreement, the
Transferor delivered to the Trustee the computer file or microfiche or
written list relating to the Initial Accounts described in the last paragraph
of Section 2.01.
(b) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
SECTION 2.03. Representations and Warranties of the Transferor
---------------------------------------------------
Relating to the Transferor and the Agreement. The Transferor hereby
-------------------------------------------------
represents and warrants to the Trust and to the Trustee as of each Closing
Date that:
(a) Organization and Good Standing. The Transferor is a limited
------------------------------
liability company duly formed and validly existing and in good standing
under the law of the State of Delaware and has, in all material
respects, full power, authority and legal right to own its properties
and conduct its business as such properties are presently owned and such
business is presently conducted, and to execute, deliver and perform its
obligations under this Agreement and to execute and deliver to the
Trustee pursuant hereto the Certificates.
(b) Due Qualification. The Transferor is duly qualified to do
------------------
business and, where necessary, is in good standing as a foreign limited
liability company (or is exempt from such requirement) and has obtained
all necessary licenses and approvals in each jurisdiction in which the
conduct of its business requires such qualification except where the
failure to so qualify or obtain licenses or approvals would not have a
material adverse effect on its ability to perform its obligations
hereunder.
(c) Due Authorization. The execution and delivery of this
------------------
Agreement and the applicable Supplement and the Related Documents and
the execution and delivery to the Trustee of the Certificates by the
Transferor and the consummation of the transactions provided for or
contemplated by this Agreement and the applicable Supplement and the
Related Documents, have been duly authorized by the Transferor by all
necessary action on the part of the Transferor.
(d) No Conflict. The execution and delivery of this Agreement,
-----------
the applicable Supplement, the Related Documents and the Certificates,
the performance of the transactions contemplated by this Agreement and
the applicable Supplement and the Related Documents and the fulfillment
of the terms hereof and thereof, will not conflict with, result in any
breach of any of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a material default
under, any indenture, contract, agreement, mortgage, deed of trust, or
other instrument to which the Transferor is a party or by which it or
its properties are bound.
(e) No Violation. The execution and delivery of this Agreement,
------------
the applicable Supplement, the Related Documents and the Certificates,
the performance of the transactions contemplated by this Agreement and
the applicable Supplement and the Related Documents and the fulfillment
of the terms hereof and thereof applicable to the Transferor, will not
conflict with or violate any material Requirements of Law applicable to
the Transferor.
(f) No Proceedings. There are no proceedings or, to the best
---------------
knowledge of the Transferor, investigations pending or threatened
against the Transferor before any Governmental Authority (i) asserting
the invalidity of this Agreement, the applicable Supplement, any of the
Related Documents or the Certificates, (ii) seeking to prevent the
issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement and the applicable
Supplement or the Related Documents, (iii) seeking any determination or
ruling that, in the reasonable judgment of the Transferor, would
materially and adversely affect the performance by the Transferor of its
obligations under this Agreement and the applicable Supplement or the
Related Documents, (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Agreement and the applicable Supplement, the Related Documents or the
Certificates or (v) seeking to affect adversely the income tax
attributes of the Trust under the United States Federal, or any other
applicable state, local or foreign jurisdiction's, income, single
business or franchise tax systems.
(g) All Consents Required. All appraisals, authorizations,
-----------------------
consents, orders, approvals or other actions of any Person or of any
governmental body or official required in connection with the execution
and delivery of this Agreement, the applicable Supplement, the Related
Documents and the Certificates, the performance of the transactions
contemplated by this Agreement, the applicable Supplement and any of the
Related Documents, and the fulfillment of the terms hereof and thereof,
have been obtained.
(h) Enforceability. This Agreement and the applicable Supplement
--------------
and the Related Documents each constitutes a legal, valid and binding
obligation of the Transferor enforceable against the Transferor in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the enforcement
of creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or in equity).
(i) Record of Accounts. As of the first Closing Date, in the case
------------------
of the Initial Accounts, as of the applicable Addition Date, in the case
of the Additional Accounts, and, as of the applicable Removal
Commencement Date, in the case of Removal Accounts, Schedule 1 to this
Agreement is an accurate and complete listing in all material respects
of all the Accounts as of the Cut-Off Date, the applicable Additional
Cut-Off Date or the applicable Removal Commencement Date, as the case
may be, and the information contained therein with respect to the
identity of such Accounts and the Receivables existing thereunder is
true and correct in all material respects as of the Cut-Off Date, such
applicable Additional Cut-Off Date or such Removal Commencement Date, as
the case may be.
(j) Valid Transfer. This Agreement or, in the case of Additional
--------------
Accounts, the related Assignment constitutes a valid transfer and
assignment to the Trust of all right, title and interest of the
Transferor in the related Receivables and the Related Security and the
proceeds thereof and all of the Transferor's rights, remedies, powers
and privileges with respect to the Receivables under the Receivables
Purchase Agreement and, upon the filing of the financing statements
described in Section 2.01 with the Secretary of State of the State of
Michigan and, in the case of the Additional Receivables hereafter
created and the proceeds thereof, upon the creation thereof, the Trust
shall have a first priority perfected ownership interest in such
property, except for Liens permitted under Section 2.06(a). Except as
otherwise provided in this Agreement, neither the Transferor nor any
Person claiming through or under the Transferor has any claim to or
interest in the Trust Assets.
The representations and warranties set forth in this Section 2.03
shall survive the transfer and assignment of the Receivables to the Trust and
the issuance of the Certificates. Upon discovery by the Transferor, the
Master Servicer, any Agent or the Trustee of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other parties, any Agent and to any Enhancement
Providers.
In the event of any breach of any of the representations and
warranties set forth in this Section 2.03 having a material adverse effect on
the interests of the Investor Certificateholders, then either the Trustee or
the Holders of Investor Certificates evidencing not less than a majority in
aggregate unpaid principal amount of all outstanding Investor Certificates,
by notice then given in writing to the Transferor (and to the Trustee, any
Enhancement Providers and the Master Servicer if given by the Investor
Certificateholders), may direct the Transferor to purchase the
Certificateholders' Interest within 60 days of such notice (or within such
longer period as may be specified in such notice), and the Transferor shall
be obligated to make such purchase on a Distribution Date occurring within
such 60-day period on the terms and conditions set forth below; provided,
--------
however, that no such purchase shall be required to be made if, by the end of
-------
such 60-day period (or such longer period as may be specified), the
representations and warranties set forth in this Section 2.03 shall be
satisfied in all material respects, and any material adverse effect on the
Certificateholders' Interest caused thereby shall have been cured.
The Transferor shall deposit in the Collection Account in
immediately available funds on the Business Day preceding such Distribution
Date, in payment for such purchase, an amount equal to the sum of the amounts
specified therefor with respect to each outstanding Series in the related
Supplement. Notwithstanding anything to the contrary in this Agreement, such
amounts shall be distributed to the Investor Certificateholders on such
Distribution Date in accordance with Article IV and the terms of each
Supplement. If the Trustee or the Investor Certificateholders give notice
directing the Transferor to purchase the Certificateholders' Interest as
provided above, the obligation of the Transferor to purchase the
Certificateholders' Interest pursuant to this Section 2.03 shall constitute
the sole remedy respecting an event of the type specified in the first
sentence of this Section 2.03 available to the Investor Certificateholders
(or the Trustee on behalf of the Investor Certificateholders).
SECTION 2.04. Representations and Warranties of the Transferor
---------------------------------------------------
Relating to the Receivables. (a) Representations and Warranties. The
----------------------------- -------------------------------
Transferor hereby represents and warrants to the Trust that:
(i) Each Receivable and all Related Security existing on the first
Closing Date or, in the case of Additional Accounts, on the applicable
Addition Date, and on each Transfer Date, has been conveyed to the Trust
free and clear of any Lien.
(ii) With respect to each Receivable and all Related Security
existing on the first Closing Date or, in the case of Additional
Accounts, on the applicable Addition Date, and on each Transfer Date,
all consents, licenses, approvals or authorizations of or registrations
or declarations with any Governmental Authority required to be obtained,
effected or given by the Seller in connection with the conveyance of
such Receivable or Related Security to the Trust have been duly
obtained, effected or given and are in full force and effect.
(iii) On the Cut-Off Date and each Closing Date, each Initial
Account is an Eligible Account and, in the case of Additional Accounts,
on the applicable Additional Cut-Off Date and each subsequent Closing
Date, each such Additional Account is an Eligible Account.
(iv) On the first Closing Date, in the case of the Initial
Accounts, and, in the case of the Additional Accounts, on the applicable
Additional Cut-Off Date, and on each Transfer Date, each Receivable
conveyed to the Trust on such date is an Eligible Receivable or, if such
Receivable is not an Eligible Receivable, such Receivable is conveyed to
the Trust in accordance with Section 2.09.
(b) Notice of Breach. The representations and warranties set
-----------------
forth in this Section 2.04 shall survive the transfer and assignment of the
Receivables to the Trust and the issuance of the Certificates. Upon
discovery by the Transferor, the Master Servicer, any Agent or the Trustee of
a breach, of any of the representations and warranties set forth in this
Section 2.04, the party discovering such breach shall give prompt written
notice to the other parties and to any Enhancement Providers.
(c) Reassignment. In the event any representation or warranty
------------
under Section 2.04(a) is not true and correct as of the date specified
therein with respect to any Receivable or Account and such breach has a
material adverse effect on the Certificateholders' Interest in any such
Receivable or Account, then, within 30 days (or such longer period as may be
agreed to by the Trustee) of the earlier to occur of the discovery of any
such event by the Transferor or the Master Servicer, or receipt by the
Transferor or the Master Servicer of written notice of any such event given
by the Trustee, any Agent or any Enhancement Providers, the Transferor shall
accept a reassignment of such Receivable or, in the case of such an untrue
representation or warranty with respect to an Account, all Receivables in
such Account, on the Determination Date immediately succeeding the day of
such discovery or notice on the terms and conditions set forth in the next
succeeding paragraph; provided, however, that no such reassignment shall be
-------- -------
required to be made with respect to such Receivable if, by the end of such
30-day period (or such longer period as may be agreed to by the Trustee), the
breached representation or warranty shall then be true and correct in all
material respects and any material adverse effect caused thereby shall have
been cured.
The Transferor shall accept a reassignment of each such Receivable
by directing the Master Servicer to deduct, subject to the next sentence, the
principal amount of such Receivables from the Pool Balance on or prior to the
end of the Collection Period in which such reassignment obligation arises.
If, following such deduction, the Transferor's Participation Amount would be
less than the Trust Available Subordinated Amount on the immediately
preceding Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the Distribution Date
following such Determination Date), then not later than 12:00 noon on the day
on which such reassignment occurs, the Transferor shall deposit in the
Collection Account in immediately available funds the amount (the "Transfer
--------
Deposit Amount") by which the Transferor's Participation Amount would be less
--------------
than such Trust Available Subordinated Amount (up to the principal amount of
such Receivables); provided that if the Transfer Deposit Amount is not
--------
deposited as required by this sentence, then the principal amounts of such
Receivables shall only be deducted from the Pool Balance to the extent that
the Transferor's Participation Amount is not reduced below the Trust
Available Subordinated Amount and the Receivables the principal amounts of
which have not been so deducted shall not be reassigned to the Transferor and
shall remain part of the Trust. Upon reassignment of any such Receivable,
but only after payment by the Transferor of the Transfer Deposit Amount, if
any, the Trust shall automatically and without further action be deemed to
transfer, assign, set over and otherwise convey to the Transferor, without
recourse, representation or warranty, all the right, title and interest of
the Trust in and to such Receivable, all Related Security and all moneys due
or to become due with respect thereto and all proceeds thereof. The Trustee
shall execute such documents and instruments of transfer or assignment and
take such other actions as shall reasonably be requested by the Transferor to
effect the conveyance of such Receivables pursuant to this Section. The
obligation of the Transferor to accept a reassignment of any such Receivable
and to pay any related Transfer Deposit Amount shall constitute the sole
remedy respecting the event giving rise to such obligation available to
Certificateholders (or the Trustee on behalf of Certificateholders).
SECTION 2.05. Addition of Accounts. (a) If, as of the close of
--------------------
business on the last day of any Collection Period, (i) the Pool Balance on
such day is less than the Required Participation Amount as of the following
Distribution Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on such Distribution Date), or (ii) the
result obtained by multiplying (x) the Transferor's Participation Amount as
of the following Distribution Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on such Distribution
Date), by (y) the percentage equivalent of the portion of the Transferor's
Interest represented by the FCAR Certificate is less than 2% of the Pool
Balance on such last day, then the Transferor shall, within 10 Business Days
following the end of such Collection Period, designate and transfer to the
Trust the Receivables (and the related Security) of additional Eligible
Accounts of the Transferor to be included as Accounts in a sufficient amount
such that after giving effect to such addition (i) the Pool Balance as of the
close of business on the Addition Date is at least equal to such Required
Participation Amount and (ii) the result obtained by multiplying (x) such
Transferor's Participation Amount by (y) the percentage equivalent of the
portion of the Transferor's Interest represented by the FCAR Certificate, is
at least equal to 2% of such Pool Balance, as the case may be. The
Transferor shall satisfy the conditions specified in Section 2.05(d) in
designating such Additional Accounts and conveying the related Receivables to
the Trust. The failure of the Transferor to transfer Receivables to the
Trust as provided in this paragraph solely as a result of the unavailability
of a sufficient amount of Eligible Receivables shall not constitute a breach
of this Agreement; provided, however, that any such failure will nevertheless
-------- -------
result in the occurrence of an Early Amortization Event described in Section
9.01(a).
(b)(i) The Transferor may from time to time, at its sole
discretion, subject to the conditions specified in paragraph (d) below,
voluntarily designate additional Eligible Accounts to be included as Accounts
and transfer to the Trust the Receivables (and the related Security) of such
Additional Accounts.
(ii) Notwithstanding the conditions specified in clauses (vi),
(viii) and (ix) of paragraph (d) of this Section 2.05, the
Transferor may from time to time, at its sole discretion, and
subject only to the limitations specified in this clause (ii) and
clauses (i) through (v) and (vii) of Section 2.05(d), voluntarily
designate Additional Accounts (such Additional Accounts as are
designated in accordance with the provisions described in this
clause (ii) collectively being referred to hereinafter as
"Automatic Additional Accounts"). Unless the Rating Agencies shall
-----------------------------
otherwise have consented in writing, neither the number of
Automatic Additional Accounts nor the aggregate amount of Principal
Receivables included in such Automatic Additional Accounts as of
any related Additional Cut-Off Date that are designated with
respect to any calendar quarter shall exceed 10% of the number of
Accounts or 10% of the Pool Balance, respectively, as of the first
day of such calendar quarter, and neither the number of Automatic
Additional Accounts nor the aggregate amount of Principal
Receivables included in such Automatic Additional Accounts as of
any related Additional Cut-Off Dates that are designated during any
twelve-month period commencing in October of any year shall exceed
20% of the number of Accounts or 20% of the Pool Balance,
respectively, as of the first day of such twelve-month period. On
or before January 31, April 30, July 31 and October 31 of each
calendar year, to the extent applicable, the Transferor shall have
delivered notice to each applicable Rating Agency with respect to
the addition of all Automatic Additional Accounts included as
Accounts during the three consecutive Collection Periods ending in
the calendar month prior to such date. On or before January 31 and
July 31 of each calendar year, to the extent applicable, the
Transferor shall have delivered to the Trustee, each Rating Agency
and any Enhancement Provider an Opinion of Counsel with respect to
the Automatic Additional Accounts included as Accounts during the
preceding sixth-month period confirming the validity and perfection
of each transfer of such Automatic Additional Accounts; provided,
--------
however, that for any period during which the long-term unsecured
-------
debt rating of the Seller by Standard & Poor's shall be at least
BBB- and not more than BBB+, such Opinion of Counsel (to the extent
applicable) shall be delivered on or before the end of each
calendar quarter with respect to Automatic Additional Accounts
included as Accounts during such calendar quarter, and for any
period during which such rating is less than BBB-, such Opinion of
Counsel (to the extent applicable) shall be delivered on or before
the end of each calendar month with respect to the Automatic
Additional Accounts included as Accounts during such calendar
month. If such Opinion of Counsel with respect to any Automatic
Additional Accounts is not so received, then Trustee shall reassign
such Automatic Additional Accounts to the Transferor.
(c) Receivables and Related Security from such Additional Accounts
shall be sold to the Trust effective on a date (the "Addition Date")
-------------
specified in a written notice provided by the Transferor (or the Master
Servicer on its behalf) to the Trustee, the Rating Agencies, any Agent and
any Enhancement Providers specifying the Additional Cut-Off Date and the
Addition Date for such Additional Accounts (the "Addition Notice") on or
---------------
before the fifth Business Day but not more than the 30th day prior to the
related Addition Date (the "Notice Date").
-----------
(d) The Transferor shall be permitted to convey to the Trust the
Receivables and all Related Security related thereto in any Additional
Accounts designated by the Transferor as such pursuant to Section 2.05(a) or
(b) only upon satisfaction of each of the following conditions on or prior to
the related Addition Date:
(i) the Transferor shall have provided the Trustee, any Agent, the
Rating Agencies and any Enhancement Providers with a timely Addition
Notice;
(ii) such Additional Accounts shall all be Eligible Accounts;
(iii) the Transferor shall have delivered to the Trustee a duly
executed written assignment (including an acceptance by the Trustee) in
substantially the form of Exhibit B (the "Assignment") and the computer
----------
file or microfiche or written list required to be delivered pursuant to
Section 2.01;
(iv) the Transferor shall, to the extent required by Section 4.03,
have deposited in the Collection Account all Collections with respect to
such Additional Accounts since the Additional Cut-Off Date;
(v) (A) no selection procedures reasonably believed by the
Transferor to be adverse to the interests of the Beneficiaries were used
in selecting such Additional Accounts; (B) the list of Additional
Accounts delivered pursuant to clause (iii) above is true and correct in
all material respects as of the Additional Cut-Off Date and (C) as of
each of the Notice Date and the Addition Date, neither the Seller nor
the Transferor was insolvent nor will either of them have been made
insolvent by such transfer nor are any of them aware of any pending
insolvency;
(vi) the Rating Agency Condition shall have been satisfied with
respect to such addition;
(vii) the addition of the Receivables arising in such Additional
Accounts shall not result in the occurrence of an Early Amortization
Event;
(viii) the Transferor shall have delivered to the Trustee and any
Enhancement Providers a certificate of a Vice President or more senior
officer confirming (A) the items set forth in paragraphs (ii) through
(vii) above and (B) that the Transferor reasonably believes that the
addition of the Receivables arising in such Additional Accounts will not
result in the occurrence of an Early Amortization Event; and
(ix) on or before each Addition Date, the Transferor shall have
delivered to the Trustee, each applicable Rating Agency and any
Enhancement Providers (A) an Opinion of Counsel with respect to the
Receivables in the Additional Accounts substantially in the form of
Exhibit G-2 and (B) except in the case of an addition required by
Section 2.05(a), a Tax Opinion with respect to such addition.
(e) The Transferor hereby represents and warrants as of the
applicable Addition Date as to the matters set forth in Section 2.05(d)(v).
Upon discovery by the Transferor, the Master Servicer, any Agent, the Trustee
or any Enhancement Providers of a breach of the foregoing representations and
warranties, the party discovering the breach shall give prompt written notice
to the other parties, to any Agent and to any Enhancement Providers.
SECTION 2.06. Covenants of the Transferor. The Transferor hereby
----------------------------
covenants that:
(a) No Liens. Except for the conveyances hereunder or as provided
--------
in Section 6.03(c), the Transferor will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer
to exist any Lien on, any Receivable or any Related Security, whether
now existing or hereafter created, or any interest therein, or the
Transferor's rights, remedies, powers or privileges with respect to the
Receivables under the Receivables Purchase Agreement, or the
Transferor's Interest or the Transferor's Certificates and the
Transferor shall defend the right, title and interest of the Trust in,
to and under the Receivables and the Related Security, whether now
existing or hereafter created, and such rights, remedies, powers and
privileges, against all claims of third parties claiming through or
under the Seller.
(b) Account Allocations. In the event that the Transferor is
-------------------
unable for any reason to transfer Receivables to the Trust, then the
Transferor agrees that it shall allocate, after the occurrence of such
event, payments on each Account with respect to the principal balance of
such Account first to the oldest principal balance of such Account and
to have such payments applied as Collections in accordance with the
terms of this Agreement. The parties hereto agree that Non-Principal
Receivables, whenever created, accrued in respect of Principal
Receivables which have been conveyed to the Trust shall continue to be a
part of the Trust notwithstanding any cessation of the transfer of
additional Principal Receivables to the Trust and Collections with
respect thereto shall continue to be allocated and paid in accordance
with the terms of this Agreement.
(c) Delivery of Collections. In the event that the Transferor,
------------------------
the Seller or any Affiliate thereof receives payments in respect of
Receivables, the Transferor and the Seller agree to pay or cause to be
paid to the Master Servicer or any Successor Master Servicer all
payments received thereby in respect of the Receivables as soon as
practicable after receipt thereof, but in no event later than two
Business Days after the receipt by the Transferor, the Seller or any
Affiliate thereof.
(d) Notice of Liens. The Transferor shall notify the Trustee
----------------
promptly after becoming aware of any Lien on any Receivable other than
the conveyances hereunder.
(e) Compliance with Law. The Transferor hereby agrees to comply in
-------------------
all material respects with all Requirements of Law applicable to the
Transferor.
(f) Activities of the Transferor. The Transferor will not engage
----------------------------
in any business or activity of any kind or enter into any transaction
other than (i) the businesses, activities and transactions contemplated
and authorized by this Agreement or the Related Documents, (ii)
acquiring, selling, holding, assigning, pledging and otherwise dealing
with wholesale and retail receivables or leases arising out of the sale
or lease of motor vehicles, farm or industrial equipment and related
activities and transactions, (iii) transferring such receivables to
trusts pursuant to a pooling and servicing agreement or similar
agreement or arrangement, (iv) authorizing, selling and delivering any
class of certificates or other securities of any such trust, (v)
acquiring from Ford Credit or any Affiliate thereof certificates issued
by one or more trusts to which Ford Credit or any Affiliate thereof
transferred receivables, (vi) issuing, selling, authorizing and
delivering one or more series and classes of bonds, notes or other
evidences of indebtedness secured or collateralized by one or more pools
of receivables or by certificates of any class issued by one or more
trusts established by Ford Credit or any Affiliate thereof
(collectively, the "Notes"), provided that the Transferor shall have no
-----
liability under any Notes except to the extent of the one or more pools
of receivables or the certificates securing or collateralizing such
Notes, (vii) holding and enjoying all of the rights and privileges of
any certificates issued by the trusts to the Transferor under the
related agreements and holding and enjoying all of the rights and
privileges of any class of any series of Notes, including any class of
Notes or certificates which may be subordinate to any other class of
Notes or certificates, respectively, (viii) performing its obligations
under the agreements and any indenture or other agreement (each, an
"Indenture") pursuant to which any Notes are issued, (ix) engaging in
---------
any activity and exercising any powers permitted to limited liability
companies under the laws of the State of Delaware that are related or
incidental to the foregoing and necessary, convenient or advisable to
accomplish the foregoing, and (x) any other activity in connection with
which the Rating Agency Condition has been satisfied (such businesses,
activities and transactions, collectively, "Permitted Transactions").
----------------------
(g) Indebtedness. The Transferor will not create, incur or assume
------------
any indebtedness or issue any securities or sell or transfer any
receivables to a trust or other Person which issues securities in
respect of any such receivables, unless (i) any such indebtedness or
securities have no recourse to any assets of the Transferor other than
the specified assets to which such indebtedness or securities relate and
(ii) the Rating Agency Condition shall have been satisfied in connection
therewith prior to the incurrence or issuance thereof.
(h) Guarantees. The Transferor will not become or remain liable,
----------
directly or contingently, in connection with any indebtedness or other
liability of any other Person, whether by guarantee, endorsement (other
than endorsements of negotiable instruments for deposit or collection in
the ordinary course of business), agreement to purchase or purchase,
agreement to supply or advance funds, or otherwise, except in connection
with Permitted Transactions and unless the Rating Agency Condition shall
have been satisfied with respect thereto.
(i) Investments. The Transferor will not make or suffer to exist
-----------
any loans or advances to, or extend any credit to, or make any
investments (by way of transfer of property, contributions to capital,
purchase of stock or securities or evidences of indebtedness,
acquisition of the business or assets, or otherwise) in, any Affiliate,
unless prior thereto the Rating Agency Condition shall have been
satisfied with respect thereto; provided, however, that the Transferor
-------- -------
shall not be prohibited under this Section 2.06(i) from causing a
distribution of cash to its member (or, if applicable, to its members in
proportion to their respective percentage interests).
(j) Stock; Merger. The Transferor will not enter into any
--------------
transaction of merger or consolidation unless (A) the surviving Person
of such merger or consolidation assumes all of the Transferor's
obligations under this Agreement, (B) the Transferor shall have given
the Rating Agencies and the Trustee at least 10 days' prior notice and
the Rating Agency Condition shall have been satisfied with respect to
such transaction and (C) such merger or consolidation does not conflict
with any provisions of the Certificate of Formation of the Transferor,
or (ii) terminate, liquidate or dissolve itself (or suffer any
termination, liquidation or dissolution), or (iii) acquire or be
acquired by any Person, or (iv) otherwise make (or suffer) any material
change in the organization of or method of conducting its business.
(k) Agreements. The Transferor will not become a party to, or
----------
permit any of its properties to be bound by, any indenture, mortgage,
instrument, contract, agreement, lease or other undertaking, except this
Agreement, the Related Documents and any document relating to a
Permitted Transaction, or amend or modify its Certificate of Formation
or cancel, terminate, amend, supplement, modify or waive any of the
provisions of the Receivables Purchase Agreement or any of the other
Related Documents or request, consent or agree to or suffer to exist or
permit any such cancellation, termination, amendment, supplement,
modification or waiver unless, in any such case, the Rating Agency
Condition shall have been satisfied with respect thereto.
SECTION 2.07. Removal of Eligible Accounts. (a) On each
------------------------------
Determination Date the Transferor shall have the right to remove Accounts,
including all amounts then held by the Trust or thereafter received by the
Trust in respect of the Accounts being removed, from the Trust in the manner
prescribed in Section 2.07(b).
(b) To remove Accounts, including all amounts then held by the
Trust or thereafter received by the Trust in respect of the Accounts being
removed, the Transferor (or the Master Servicer on its behalf) shall take the
following actions and make the following determinations:
(i) not less than five Business Days prior to the Removal
Commencement Date, furnish to the Trustee, any Agent, any Enhancement
Providers and the Rating Agencies a written notice (the "Removal
-------
Notice") specifying the Determination Date (which may be the
------
Determination Date on which such notice is given) on which removal of
the Receivables of one or more Accounts (the "Removal Accounts") will
-----------------
occur (a "Removal Commencement Date");
-------------------------
(ii) from and after such Removal Commencement Date, cease to
transfer to the Trust any and all Receivables arising in such Removal
Accounts;
(iii) represent and warrant that the removal of any such Eligible
Account on any Removal Commencement Date shall not, in the reasonable
belief of the Transferor, cause an Early Amortization Event to occur or
cause the Pool Balance to be less than the Required Participation
Amount;
(iv) represent and warrant that no selection procedures reasonably
believed by the Transferor to be adverse to the interests of the
Beneficiaries were utilized in selecting the Accounts to be removed;
(v) represent and warrant that the Rating Agency Condition shall
have been satisfied with respect to such removal;
(vi) deliver to the Trustee, each Rating Agency, any Agent and any
Enhancement Providers a Tax Opinion, dated the Removal Commencement
Date, with respect to such removal;
(vii) on or before the related Removal Commencement Date, deliver to
the Trustee, any Agent and any Enhancement Providers an Officers'
Certificate confirming the items set forth in clauses (iii) through (v)
above and confirming that the Transferor reasonably believes that the
removal of the Removal Accounts will not result in the occurrence of an
Early Amortization Event; the Trustee may conclusively rely on such
Officers' Certificate and shall have no duty to make inquiries with
regard to the matters set forth therein and shall incur no liability in
so relying; and
(viii) on or before the fifth Business Day after the Removal
Commencement Date, furnish to the Trustee a computer file, microfiche
list or other list of the Removal Accounts that were removed on the
Removal Commencement Date, specifying for each Removal Account as of the
date of the Removal Notice its number, the aggregate amount outstanding
in such Removal Account and the aggregate amount of Principal
Receivables therein and represent that such computer file, microfiche
list or other list of the Removal Accounts is true and complete in all
material respects.
No Accounts shall be so removed unless the Rating Agency Condition shall have
been satisfied with respect to such removal.
(c) Any Principal Receivables arising in a Removal Account after
the Removal Commencement Date shall be the subject of the Reassignment
referred to in Section 2.07(d) and shall therefore not be included in the
Trust, and Collections in respect of the Receivables in such Eligible Account
shall be allocated as follows: (i) Principal Collections shall be allocated
first to the oldest outstanding principal balance of such Receivables and
(ii) Defaulted Receivables and Non-Principal Collections in respect of such
Eligible Account shall be allocated to the Trust on the basis of the ratio of
the Principal Receivables owned by the Trust in such Ineligible Account on
the related Business Day to the total amount of Principal Receivables in such
Ineligible Account on such Business Day, and the remainder of such Principal
Collections, Defaulted Receivables and Non-Principal Collections shall be
allocated to the Transferor.
(d) Subject to Section 2.07(b), on the Removal Commencement Date
with respect to any such Removal Account, such Removal Account shall be
deemed removed from the Trust for all purposes. After the Removal
Commencement Date and upon the written request of the Master Servicer, the
Trustee shall deliver to the Transferor a reassignment in substantially the
form of Exhibit H (the "Reassignment").
------------
SECTION 2.08. Removal of Ineligible Accounts. (a) On the fifth
-------------------------------
Business Day after any date on which an Account becomes an Ineligible Account
(such fifth Business Day shall be deemed to be the Removal Commencement Date)
the Transferor shall commence removal of the Receivable of such Ineligible
Account in the manner prescribed in Section 2.08(b).
(b) With respect to each Account that becomes an Ineligible
Account, the Transferor (or the Master Servicer on its behalf) shall take the
following actions and make the following determinations:
(i) furnish to the Trustee, any Agent and any Enhancement
Providers a Removal Notice specifying the Removal Commencement Date and
the Ineligible Accounts to be removed;
(ii) from and after such Removal Commencement Date, cease to
transfer to the Trust any and all Receivables arising in such Removal
Accounts; and
(iii) within five Business Days after the Removal Commencement Date,
amend Schedule 1 by delivering to the Trustee a computer file or
microfiche or written list containing a true and complete list of the
Removal Accounts specifying for each such Account, as of the Removal
Commencement Date, its account number, the aggregate amount of
Receivables outstanding in such Account and the Designated Balance.
(c) On the Removal Commencement Date with respect to any such Account
to be removed, all Collections in respect of such Account thereafter shall be
allocated in accordance with the terms set forth in Section 2.07(c) and such
Account shall be deemed a Removal Account. After the Removal Commencement
Date and upon the written request of the Master Servicer, the Trustee shall
deliver to the Transferor a Reassignment.
SECTION 2.09. Transfer of Ineligible Receivables. The Transferor
----------------------------------
shall transfer to the Trust on each Transfer Date any and all Receivables
arising in any Eligible Accounts that are Ineligible Receivables, provided
--------
that (a) on the Cut-Off Date or, in the case of Receivables arising in
Additional Accounts, on the related Additional Cut-Off Date, and on the
applicable Transfer Date, the Account in which such Receivables arise is an
Eligible Account and (b) the Incremental Subordinated Amount is adjusted in
accordance with the definition of Incremental Subordinated Amount as defined
in the related Supplement.
ARTICLE III
Administration and Servicing
----------------------------
of Receivables
--------------
SECTION 3.01. Acceptance of Appointment and Other Matters Relating
----------------------------------------------------
to the Master Servicer. (a) The Master Servicer shall service and
----------------------
administer the Receivables, shall collect payments due under the Receivables
and shall charge-off as uncollectible Receivables, all in accordance with its
customary and usual servicing procedures for servicing wholesale receivables
comparable to the Receivables which the Master Servicer services for its own
account and in accordance with the applicable Floorplan Financing Guidelines.
The Master Servicer shall have full power and authority, acting alone or
through any party properly designated by it hereunder, to do any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing and
subject to Section 10.01, the Master Servicer is hereby authorized and
empowered, unless such power and authority is revoked by the Trustee on
account of the occurrence of a Servicing Default pursuant to Section 10.01,
(i) to instruct the Trustee to make withdrawals and payments from the
Collection Account and any Series Account as set forth in this Agreement,
(ii) to instruct the Trustee to take any action required or permitted under
any Enhancement, (iii) to execute and deliver, on behalf of the Trust for the
benefit of the Certificateholders and the other Beneficiaries, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the
Receivables and, after the delinquency of any Receivable and to the extent
permitted under and in compliance with applicable Requirements of Law, to
commence enforcement proceedings with respect to such Receivables, (iv) to
make any filings, reports, notices, applications, registrations with, and
seek any consents or authorizations from, the Securities and Exchange
Commission and any State securities authority on behalf of the Trust as may
be necessary or advisable to comply with any Federal or State securities laws
or reporting requirement, and (v) to delegate certain of its servicing,
collection, enforcement and administrative duties hereunder with respect to
the Accounts and the Receivables to any Person who agrees to conduct such
duties in accordance with the applicable Floorplan Financing Guidelines and
this Agreement; provided, however, that the Master Servicer shall notify the
-------- -------
Trustee, the Rating Agencies, any Agent and any Enhancement Providers in
writing of any such delegation of its duties which is not in the ordinary
course of its business, that no delegation will relieve the Master Servicer
of its liability and responsibility with respect to such duties and that the
Rating Agency Condition shall have been satisfied with respect to any such
delegation. The Trustee shall furnish the Master Servicer with any powers of
attorney and other documents reasonably necessary or appropriate to enable
the Master Servicer to carry out its servicing and administrative duties
hereunder.
(b) In the event that the Transferor is unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement then, in any such event, the Master Servicer agrees (i) to give
prompt written notice thereof to the Trustee, any Enhancement Providers, any
Agent and each Rating Agency and (ii) that it shall in any such event
allocate after the occurrence of such event, payments on each Account with
respect to the principal balance of such Account first to the oldest
principal balance of such Account, and to have such payments applied as
Collections in accordance with Section 4.02. The parties hereto agree that
Non-Principal Receivables, whenever created, accrued in respect of Principal
Receivables which have been conveyed to the Trust shall continue to be a part
of the Trust notwithstanding any cessation of the transfer of additional
Principal Receivables to the Trust and Collections with respect thereto shall
continue to be allocated and paid in accordance with the terms of this
Agreement.
(c) The Master Servicer shall not, and any Successor Master
Servicer shall not be obligated to, use separate servicing procedures,
offices, employees or accounts for servicing the Receivables from the
procedures, offices, employees and accounts used by the Master Servicer in
connection with servicing other wholesale receivables.
(d) The Master Servicer shall comply with and perform its
servicing obligations with respect to the Accounts and Receivables in
accordance with the applicable Floorplan Financing Agreements relating to the
Accounts and the applicable Floorplan Financing Guidelines, except insofar as
any failure to so comply or perform would not materially and adversely affect
the rights of the Trust or any of the Beneficiaries. Subject to compliance
with all Requirements of Law, the Master Servicer may change the terms and
provisions of any of the Floorplan Financing Agreements or its Floorplan
Financing Guidelines in any respect (including the calculation of the amount
or the timing of charge-offs and the rate of the finance charge assessed
thereon), only if (i) as a result of such change, in the reasonable judgment
of the Master Servicer no Early Amortization Event will occur at any time and
none of the Enhancement Providers, if any, or the Certificateholders shall be
adversely affected, (ii) such change is made applicable to the comparable
segment of wholesale accounts owned or serviced by the Master Servicer which
have characteristics the same as, or substantially similar to, the Accounts
which are the subject of such change and (iii) in the case of a reduction in
the rate of such finance charges, the Master Servicer does not reasonably
expect any such reduction to result in the weighted average of the Reference
Rates applicable to the Receivables (net of the applicable Servicing Fee) for
any Collection Period being less than the weighted average of the sum of the
Certificate Rates (in the case of a Series with a fixed Certificate rate and
a swap agreement, the floating rate payable by the Trust under the swap
agreement) and the Servicing Fee Rates for all outstanding Series for the
related Interest Period (each such term as defined in the related
Supplement). For purposes of clause (iii) of the preceding sentence, so long
as the Reference Rate is in fact based on the prime rate of one or more banks
(which bank or banks may change from time to time), downward fluctuations in
the Reference Rate shall not be deemed to be a reduction in the rate of such
finance charges; provided that a reduction in the margin added to such
Reference Rate to determine the finance charge would be a reduction in such
finance charge.
SECTION 3.02. Servicing Compensation. As full compensation for
----------------------
its servicing activities hereunder and reimbursement for its expenses as set
forth in the immediately following paragraph, the Master Servicer shall be
entitled to receive the Servicing Fee on each Distribution Date on or prior
to the Trust Termination Date payable in arrears. The "Servicing Fee" shall
be the aggregate of the Monthly Servicing Fees specified in the Supplements.
The Servicing Fee shall be payable to the Master Servicer solely to the
extent amounts are available for payment in accordance with the terms of the
Supplements.
The Master Servicer's expenses include the amounts due to the
Trustee pursuant to Section 11.05 and the reasonable fees and disbursements
of independent accountants and all other expenses incurred by the Master
Servicer in connection with its activities hereunder, and including all other
fees and expenses of the Trust not expressly stated herein to be for the
account of the Certificateholders. The Master Servicer shall be required to
pay such expenses for its own account, and shall not be entitled to any
payment therefor other than the Servicing Fee. The Master Servicer will be
solely responsible for all fees and expenses incurred by or on behalf of the
Master Servicer in connection herewith and the Master Servicer will not be
entitled to any fee or other payment from, or claim on, any of the Trust
Assets (other than the Servicing Fee).
SECTION 3.03. Representations, Warranties and Covenants of the
------------------------------------------------
Master Servicer. (a) Ford Credit, as Master Servicer, hereby makes, and any
---------------
Successor Master Servicer by its appointment hereunder shall make, on each
Closing Date (and on the date of any such appointment) the following
representations, warranties and covenants:
(i) Organization and Good Standing. Such party is a corporation
------------------------------
duly organized, validly existing and in good standing under the
applicable laws of the state of its incorporation and has, in all
material respects, full corporate power, authority and legal rights to
own its properties and conduct its wholesale receivable servicing
business as such properties are presently owned and as such business is
presently conducted, and to execute, deliver and perform its obligations
under this Agreement and the applicable Supplement.
(ii) Due Qualification. Such party is duly qualified to do
-----------------
business and is in good standing as a foreign corporation (or is exempt
from such requirements) and has obtained all necessary licenses and
approvals in each jurisdiction in which the servicing of the Receivables
as required by this Agreement requires such qualification, except where
the failure to so qualify or obtain licenses or approvals would not have
a material adverse effect on its ability to perform its obligations
hereunder.
(iii) Due Authorization. The execution, delivery, and performance
-----------------
of this Agreement and the applicable Supplement has been duly authorized
by such party by all necessary corporate action on the part thereof.
(iv) Binding Obligation. This Agreement and the applicable
------------------
Supplement constitutes a legal, valid and binding obligation of such
party, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in
effect, affecting the enforcement of creditors' rights and except as
such enforceability may be limited by general principles of equity
(whether considered in a proceeding at law or in equity).
(v) No Violation. The execution and delivery of this Agreement
------------
and the applicable Supplement by such party, the performance of the
transactions contemplated by this agreement and the applicable
Supplement and the fulfillment of the terms hereof and thereof
applicable to such party will not conflict with, violate, result in any
breach of any of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a material default
under, any Requirement of Law applicable to such party or any indenture,
contract, agreement, mortgage, deed of trust, or other instrument to
which such party is a party or by which it is bound.
(vi) No Proceedings. There are no proceedings or, to the best
--------------
knowledge of such party, investigations, pending or threatened against
such party before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality seeking to prevent the
issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement and the applicable
Supplement, seeking any determination or ruling that, in the reasonable
judgment of such party, would materially and adversely affect the
performance by such party of its obligations under this Agreement and
the applicable Supplement, or seeking any determination or ruling that
would materially and adversely affect the validity or enforceability of
this Agreement and the applicable Supplement.
(vii) Compliance with Requirements of Law. Such party shall duly
-----------------------------------
satisfy all obligations on its part to be fulfilled under or in
connection with the Receivables and the Accounts, will maintain in
effect all qualifications required under Requirements of Law in order to
service properly the Receivables and the Accounts and will comply in all
material respects with all Requirements of Law in connection with
servicing the Receivables and the Accounts the failure to comply with
which would have a material adverse effect on the interests of
Beneficiaries.
(viii) No Rescission or Cancellation. Such party shall not permit
-----------------------------
any rescission or cancellation of a Receivable except as ordered by a
court of competent jurisdiction or other Governmental Authority.
(ix) Protection of Beneficiaries Rights. Such party shall take no
----------------------------------
action, nor omit to take any action, which would impair the rights of
Beneficiaries in the Receivables nor shall it reschedule, revise or
defer payments due on any Receivable except in accordance with the
applicable Floorplan Financing Guidelines.
(x) Master Servicer Concentration Account. The Master Servicer
-------------------------------------
maintains deposit accounts (collectively, the "Concentration Account")
---------------------
into which it shall deposit all amounts paid by the Dealers under
Floorplan Financing Agreements. The Master Servicer agrees (i) that it
will not change this method of collection without the prior written
consent of any Enhancement Providers and any Agents; (ii) with respect
to amounts deposited into the Concentration Account in respect of a
particular day, that it will not transfer such amounts from the
Concentration Account until the Master Servicer has posted all
Collections in respect of the Receivables for such day and (iii)
concurrently with the transfer of amounts from the Concentration Account
in respect of a particular day, the Master Servicer will make the
deposits and transfers required by the terms of this Agreement for such
day.
(xi) Negative Pledge. Except for the conveyance hereunder to the
---------------
Trustee, the Master Servicer will not sell, pledge, assign or transfer
to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on, any Receivable sold and assigned to the Trust, whether now
existing or hereafter created, or any interest therein, and the Master
Servicer shall defend the rights, title and interest of the Trust in, to
and under any Receivable sold and assigned to the Trust, whether now
existing or hereafter created, against all claims of third parties
claiming through or under the Transferor or the Master Servicer.
(b) Notice of Breach. The representations and warranties set
----------------
forth in this Section 3.03 shall survive the transfer and assignment of the
Receivables to the Trust and the issuance of the Certificates. Upon
discovery by the Transferor, the Master Servicer or the Trustee of a breach
of any of the representations and warranties set forth in this Section 3.03,
the party discovering such breach shall give prompt written notice to the
other parties and to any Enhancement Providers.
(c) Purchase. In the event any representation or warranty under
--------
Section 3.03(a) (vii), (viii) or (ix) is not true and correct in any material
respect as of the date specified therein with respect to any Receivable or
Account and such breach has a material adverse effect on the
Certificateholders' Interest in such Receivable, then, within 30 days (or
such longer period as may be agreed to by the Trustee) of the earlier to
occur of the discovery of any such event by the Transferor or the Master
Servicer, or receipt by the Transferor or the Master Servicer of written
notice of any such event given by the Trustee or any Enhancement Providers,
the Master Servicer shall purchase such Receivable or, in the case of an
untrue representation with respect to an Account, all Receivables in such
Account, on the Determination Date immediately succeeding the expiration of
such 30-day period on the terms and conditions set forth in the next
succeeding paragraph; provided, however, that no such purchase shall be
-------- -------
required to be made with respect to such Receivable if, by the end of such
30-day period (or such longer period as may be agreed to by the Trustee) the
breached representation or warranty shall then be true and correct in all
material respects and any material adverse effect caused thereby shall have
been cured. The Master Servicer shall effect such purchase by depositing in
the Collection Account in immediately available funds an amount equal to the
Purchase Price of such Receivable. Any such deposit of such Purchase Price
into the Collection Account shall be considered a Transfer Deposit Amount and
shall be applied in accordance with the terms of this Agreement.
Upon each such payment of such Purchase Price, the Trust shall
automatically and without further action be deemed to transfer, assign, set
over and otherwise convey to the Master Servicer, without recourse,
representation or warranty, all right, title and interest of the Trust in and
to such Receivables, all monies due or to become due with respect thereto and
all proceeds thereof and the related Security. The Trustee shall execute
such documents and instruments of transfer or assignment and take such other
actions as shall be reasonably requested by the Master Servicer to effect the
conveyance of any such Receivables pursuant to this Section. The obligation
of the Master Servicer to purchase such Receivables, and to make the deposits
required to be made to the Collection Account as provided in the preceding
paragraph, shall constitute the sole remedy respecting the event giving rise
to such obligation available to Certificateholders or the Trustee on behalf
of Certificateholders.
SECTION 3.04. Reports and Records for the Trustee. On or before
-----------------------------------
each Distribution Date, with respect to each outstanding Series, the Master
Servicer shall deliver to any Enhancement Providers, the Rating Agencies, the
Trustee and each Investor Certificateholder a Distribution Date Statement for
such Distribution Date substantially in the form set forth in the related
Supplement.
SECTION 3.05. Annual Master Servicer's Certificate. The Master
------------------------------------
Servicer will deliver to the Rating Agencies, the Trustee, any Agent and any
Enhancement Providers on or before April 30 of each calendar year, beginning
with April 30, 1999, an Officers' Certificate substantially in the form of
Exhibit C stating that (a) a review of the activities of the Master Servicer
during the preceding calendar year and of its performance under this
Agreement was made under the supervision of the officer signing such
certificate and (b) to the best of such officer's knowledge, based on such
review, the Master Servicer has performed in all material respects its
obligations under this Agreement throughout such year, or, if there has been
a material default in the performance of any such obligation, specifying each
such default known to such officer and the nature and status thereof. A copy
of such certificate may be obtained by any Investor Certificateholder by a
request in writing to the Trustee addressed to the Corporate Trust Office.
SECTION 3.06. Annual Independent Public Accountants' Servicing
------------------------------------------------
Report. The Master Servicer shall cause a firm of independent certified
------
public accountants, who may also render other services to the Master Servicer
or to the Transferor, to deliver to the Trustee, the Rating Agencies, each
Agent and each Enhancement Provider on or before April 30 of each year,
beginning April 30, 1998, a report addressed to the Board of Directors of the
Master Servicer and to the Trustee, to the effect that such firm has examined
the financial statements of the Master Servicer or, if applicable, the parent
corporation of the Master Servicer, and issued its report thereon and that
such examination: (a) was made in accordance with generally accepted
auditing standards, and accordingly included such tests of the accounting
records and such other auditing procedures as such firm considered necessary
in the circumstances, (b) included tests relating to wholesale receivables
(including financing arrangements with automobile dealers to finance their
automobile and light-duty truck inventory) serviced for others in accordance
with generally accepted auditing standards and (c) except as described in the
report, disclosed no exceptions or errors in the records relating to
wholesale receivables (including financing arrangements with automobile
dealers to finance their automobile and light-duty truck inventory) serviced
for others that, in the firm's opinion, generally accepted auditing standards
requires such firm to report. A copy of such report may be obtained by any
Investor Certificateholder by a request in writing to the Trustee addressed
to the Corporate Trust Office.
SECTION 3.07. Tax Treatment. The Transferor has entered into this
-------------
Agreement and the Investor Certificates have been (or will be) issued with
the intention that the Investor Certificates will qualify under applicable
tax law as indebtedness secured by the Receivables. The Transferor, each
Beneficiary and each Certificateholder and Certificate Owner, by the
acceptance of its Certificate or Book-Entry Certificate, as applicable,
agrees to treat the Investor Certificates as indebtedness secured by the
Receivables for United States Federal income taxes, and any other income and
franchise taxes, or any other taxes imposed on or measured by income of any
applicable state, local or foreign jurisdiction.
SECTION 3.08. Notices to Ford Credit. In the event Ford Credit is
----------------------
no longer acting as Master Servicer, any Successor Master Servicer appointed
pursuant to Section 10.02 shall deliver or make available to Ford Credit, as
the case may be, each certificate and report required to be prepared,
forwarded or delivered thereafter pursuant to Sections 3.04, 3.05 or 3.06.
SECTION 3.09. Adjustments. (a) If the Master Servicer adjusts
-----------
downward the amount of any Principal Receivable because of a rebate, refund,
credit adjustment or billing error to a Dealer, or because such Receivable
was created in respect of a Vehicle which was refused or returned by a
Dealer, then, in any such case, the Transferor's Participation Amount will be
automatically reduced by the amount of the adjustment. Furthermore, if
following such a reduction the Transferor's Participation Amount would be
less than the Trust Aggregate Available Subordinated Amount on the
immediately preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date following such Determination Date), then the Transferor
shall be required to pay an amount equal to such deficiency (up to the amount
of such adjustment) into the Collection Account on the Business Day on which
such adjustment or reduction occurs (each such payment an "Adjustment
----------
Payment").
-------
(b) If (i) the Master Servicer makes a deposit into the Collection
Account in respect of a Collection of a Receivable and such Collection was
received by the Master Servicer in the form of a check which is not honored
for any reason or (ii) the Master Servicer makes a mistake with respect to
the amount of any Collection and deposits an amount that is less than or more
than the actual amount of such Collection, the Master Servicer shall
appropriately adjust the amount subsequently deposited into the Collection
Account to reflect such dishonored check or mistake. Any Receivable in
respect of which a dishonored check is received shall be deemed not to have
been paid.
ARTICLE IV
Rights of Certificateholders and
--------------------------------
Allocation and Application of Collections
-----------------------------------------
SECTION 4.01. Rights of Certificateholders. The Investor
----------------------------
Certificates shall represent fractional undivided interests in the Trust,
which, with respect to each Series, shall consist of the right to receive, to
the extent necessary to make the required payments with respect to the
Investor Certificates of such Series at the times and in the amounts
specified in the related Supplement, the portion of Collections allocable to
Investor Certificateholders of such Series pursuant to this Agreement and
such Supplement, funds on deposit in the Collection Account allocable to
Certificateholders of such Series pursuant to this Agreement and such
Supplement, funds on deposit in any related Series Account and funds
available pursuant to any related Enhancement (collectively, with respect to
all Series, the "Certificateholders' Interest"), it being understood that the
----------------------------
Investor Certificates of any Series or Class shall not represent any interest
in any Series Account or Enhancement for the benefit of any other Series or
Class. The Transferor's Certificate shall represent the ownership interest
in the remainder of the Trust Assets not allocated pursuant to this Agreement
or any Supplement to the Certificateholders' Interest, including the right to
receive Collections with respect to the Receivables and other amounts at the
times and in the amounts specified in this Agreement or in any Supplement to
be paid to the Transferor on behalf of all holders of the Transferor's
Certificates (the "Transferor's Interest"); provided, however, that the
--------------------- -------- -------
Transferor's Certificates shall not represent any interest in the Collection
Account, any Series Account or any Enhancement, except as specifically
provided in this Agreement or any Supplement.
SECTION 4.02. Establishment of the Collection Account. The Master
---------------------------------------
Servicer, for the benefit of the Certificateholders and the other
Beneficiaries, shall cause to be established and maintained in the name of
the Trust an Eligible Deposit Account bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Certificateholders and the other Beneficiaries (the "Collection Account").
------------------
The Trustee shall possess all right, title and interest in all funds from
time to time on deposit in, and all Eligible Investments credited to, the
Collection Account and in all proceeds thereof. The Collection Account shall
be under the sole dominion and control of the Trustee for the benefit of the
Certificateholders and the other Beneficiaries. If, at any time, the
Collection Account ceases to be an Eligible Deposit Account, the Master
Servicer shall establish a substitute Eligible Deposit Account as the
Collection Account, instruct the Trustee to transfer any cash and/or any
Eligible Investments to such new Collection Account and, from the date any
such substitute account is established, such account shall be the Collection
Account. Neither the Transferor nor the Master Servicer, nor any person or
entity claiming by, through or under the Transferor or Master Servicer, shall
have any right, title or interest in, or any right to withdraw any amount
from, the Collection Account. Pursuant to the authority granted to the
Master Servicer in Section 3.01, the Master Servicer shall have the power,
revocable by the Trustee, to instruct the Trustee to make withdrawals and
payments from the Collection Account for the purposes of carrying out the
Master Servicer's or Trustee's duties specified in this Agreement.
All Eligible Investments shall be held by the Trustee for the
benefit of the Certificateholders and the other Beneficiaries. Funds on
deposit in the Collection Account shall at the direction of the Master
Servicer be invested by the Trustee solely in Eligible Investments that will
mature so that such funds will be available at the close of business on or
before the Business Day next preceding the following Distribution Date (or on
or before 10:00 a.m. on such following Distribution Date in the case of
Eligible Investments in respect of which the Trustee is the obligor). As of
each Determination Date, all interest and other investment earnings (net of
losses and investment expenses) on funds on deposit in the Collection Account
received on such Determination Date shall be credited to the Collection
Account. Schedule 2, which is hereby incorporated into and made part of this
Agreement, identifies the Collection Account by setting forth the account
number of such account, the account designation of such account and the name
of the Institution with which such account has been established. If a
substitute Collection Account is established pursuant to this Section 4.02,
the Master Servicer shall provide to the Trustee an amended Schedule 2,
setting forth the relevant information for such substitute Collection
Account.
SECTION 4.03. Allocations and Applications of Collections and
-----------------------------------------------
Other Funds. (a) Except as otherwise provided in Section 4.03(b), the
-----------
Master Servicer shall deposit Collections into the Collection Account as
promptly as possible after the Date of Processing of such Collections, but in
no event later than the second Business Day after such Date of Processing.
(b) Notwithstanding anything in this Agreement to the contrary,
for so long as (i) Ford Credit remains the Master Servicer hereunder, (ii) no
Servicing Default has occurred and is continuing and (iii) (x) Ford Credit is
a wholly owned subsidiary of Ford and Ford Credit maintains a short-term
rating of at least A-1 by Standard & Poor's and P-1 by Moody's (and for five
Business Days following any reduction of either such rating), (y) Ford Credit
arranges for and maintains a letter of credit or other form of Enhancement in
respect of the Master Servicer's obligations to make deposits of collections
on the Receivables in the Collection Account that is acceptable in form and
substance to each Rating Agency and any Agents or (z) Ford Credit otherwise
obtains the Rating Agency confirmations described below, then, subject to any
limitations in the confirmations described below, the Master Servicer need
not make the daily deposits of Collections into the Collection Account as
provided in Section 4.03(a), but may make a single deposit into the
Collection Account in same-day or next-day funds not later than 12:00 noon,
New York City time, on the Business Day immediately preceding the
Distribution Date in a net amount equal to the amount which would have been
on deposit with respect to the immediately preceding Collection Period in the
Collection Account; provided, however, that prior to ceasing daily deposits as
-------- -------
described above the Rating Agency Condition shall have been satisfied.
(c) Subject to Section 4.04, but notwithstanding anything else in
this Agreement to the contrary, with respect to any Collection Period,
whether the Master Servicer is required to make deposits of Collections
pursuant to paragraph (a) or (b) above, (i) the Master Servicer will only be
required to deposit Collections into the Collection Account up to the
aggregate amount of Collections required to be deposited into all Series
Accounts or, without duplication, distributed on the related Distribution
Date to all Investor Certificateholders, to each Agent or to each Enhancement
Provider pursuant to the terms of any Supplement or Enhancement Agreement and
(ii) if at any time prior to such Distribution Date the amount of Collections
deposited in the Collection Account exceeds the amount required to be
deposited pursuant to clause (i) above, the Master Servicer will be permitted
to withdraw the excess from the Collection Account.
(d) Collections of Non-Principal Receivables and Principal
Receivables, Defaulted Receivables and Miscellaneous Payments will be
allocated to each Series from and after the related Series Cut-Off Date as
specified in the related Supplement, and amounts so allocated to any Series
will not, except as specified in the related Supplement, be available to the
Investor Certificateholders of any other Series. Allocations thereof between
the Certificateholders' Interest and the Transferor's Interest, among the
Series in any group and among the Classes in any Series shall be set forth in
the related Supplement or Supplements.
(e) Upon at least ten days' prior written notice to the Master
Servicer, the Trustee and each applicable Rating Agency for any outstanding
Series of Certificates, the Transferor may at any time designate a percentage
of the amount of Collections arising in the Accounts on and after the date of
such designation that would otherwise be classified as Principal Collections
to be reclassified as Non-Principal Collections, provided that such
reclassification will become effective on the date of such designation only
if (i) an Officer's Certificate of the Transferor is delivered to the Trustee
certifying that in the reasonable belief of the Transferor such
reclassification of Collections would not cause an Early Amortization Event
or otherwise have a material adverse effect on the Certificateholders of any
Series, (ii) written notice of such designation shall have been delivered to
Moody's (in any case where ▇▇▇▇▇'▇ is an applicable Rating Agency) and (iii)
the Rating Agency Condition shall have been satisfied solely with respect to
Standard & Poor's (in any case where Standard & Poor's is the applicable
Rating Agency).
SECTION 4.04. Unallocated Principal Collections. On each
---------------------------------
Distribution Date, (a) the Master Servicer shall allocate Excess Principal
Collections (as described below) to each Series as set forth in the related
Supplement and (b) the Master Servicer shall instruct the Trustee to withdraw
from the Collection Account and pay to the Transferor (i) an amount equal to
the excess, if any, of (x) the aggregate amount for all outstanding Series of
Collections of Principal Receivables which the related Supplements specify
are to be treated as "Excess Principal Collections" in connection with such
Distribution Date over (y) the aggregate amount for all outstanding Series
which the related Supplements specify are "Principal Shortfalls" with respect
to such Distribution Date and, without duplication, (ii) the aggregate amount
for all outstanding Series of that portion of Principal Collections which the
related Supplements specify are to be allocated and paid to the Transferor
with respect to such Distribution Date; provided, however, that, in the case
-------- -------
of clauses (i) and (ii), such amounts shall be paid to the Transferor only if
the Transferor's Participation Amount for such Distribution Date (determined
after giving effect to any Principal Receivables transferred to the Trust on
such date) exceeds the Trust Available Subordinated Amount for the
immediately preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on such
Distribution Date). The amount held in the Collection Account as a result of
the proviso in the preceding sentence ("Unallocated Principal Collections")
---------------------------------
shall be paid to the Transferor at the time the Transferor's Participation
Amount exceeds the Trust Available Subordinated Amount for the immediately
preceding Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the Distribution Date
immediately following such Determination Date); provided, however, that any
-------- -------
Unallocated Principal Collections on deposit in the Collection Account at any
time during which any Series is in its amortization period, accumulation
period or Early Amortization Period shall be deemed to be "Miscellaneous
Payments" and shall be allocated and distributed in accordance with Section
4.03 and the terms of each Supplement.
ARTICLE V
Distributions and Reports to
----------------------------
Certificateholders
------------------
SECTION 5.01. Distributions and Reports to Certificateholders.
-----------------------------------------------
Distributions shall be made to, and reports shall be provided to,
Certificateholders as set forth in the applicable Supplement.
ARTICLE VI
The Certificates
----------------
SECTION 6.01. The Certificates. The Investor Certificates of any
----------------
Series or Class may be issued in bearer form ("Bearer Certificates") with
-------------------
attached interest coupons and one or more special coupons (collectively, the
"Coupons") pursuant to Section 6.11, or in fully registered form ("Registered
------- ----------
Certificates") and shall be substantially in the form of the exhibits with
------------
respect thereto attached to the applicable Supplement. The FCAR Certificate
will be issued in registered form, substantially in the form of Exhibit A,
and shall upon issue, be executed and delivered by the Transferor to the
Trustee for authentication and redelivery as provided in Section 6.02.
Except as otherwise provided in any Supplement, Bearer Certificates shall be
issued in minimum denominations of $5,000, $50,000 and $100,000 and
Registered Certificates shall be issued in minimum denominations of $1,000
and in integral multiples of $1,000 in excess thereof. If specified in any
Supplement, the Investor Certificates of any Series or Class shall be issued
upon initial issuance as a single certificate evidencing the aggregate
original principal amount of such Series or Class as described in Section
6.11. The FCAR Certificate shall be a single certificate and shall initially
represent the entire Transferor's Interest. Each Certificate shall be
executed by manual or facsimile signature on behalf of the Transferor by one
of its duly appointed managers. Certificates bearing the manual or facsimile
signature of the individual who was, at the time when such signature was
affixed, authorized to sign on behalf of the Transferor shall not be rendered
invalid, notwithstanding that such individual ceased to be so authorized
prior to the authentication and delivery of such Certificates or does not
hold such office at the date of such Certificates. No Certificates shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by or on behalf of the
Trustee by the manual signature of a duly authorized signatory, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. Bearer Certificates shall be dated the Series Issuance Date. All
Registered Certificates and Transferor's Certificates shall be dated the date
of their authentication.
SECTION 6.02. Authentication of Certificates. The Trustee shall
------------------------------
authenticate and deliver the Investor Certificates of each Series and Class
that are issued upon original issuance to or upon the order of the Transferor
against payment to the Transferor of the purchase price therefor. The
Trustee shall authenticate and deliver the FCAR Certificate to the Transferor
simultaneously with its delivery of the Investor Certificates of the first
Series to be issued hereunder. If specified in the related Supplement for
any Series or Class, the Trustee shall authenticate and deliver outside the
United States the Global Certificate that is issued upon original issuance
thereof.
SECTION 6.03. New Issuances. (a) The Transferor may from time to time
-------------
direct the Trustee, on behalf of the Trust, to issue one or more new Series
of Investor Certificates pursuant to a Supplement. The Investor Certificates
of all outstanding Series shall be equally and ratably entitled as provided
herein to the benefits of this Agreement without preference, priority or
distinction, all in accordance with the terms and provisions of this
Agreement and the applicable Supplement except, with respect to any Series or
Class, as provided in the related Supplement.
(b) On or before the Series Issuance Date relating to any new Series,
the parties hereto will execute and deliver a Supplement which will specify
the Principal Terms of such new Series. The terms of such Supplement may
modify or amend the terms of this Agreement solely as applied to such new
Series. The obligation of the Trustee to issue the Investor Certificates of
such new Series and to execute and deliver the related Supplement is subject
to the satisfaction of the following conditions:
(i) on or before the fifth Business Day immediately preceding the
Series Issuance Date, the Transferor shall have given the Trustee, the
Master Servicer, each Rating Agency, any Agent and any Enhancement
Provider written notice of such issuance and the Series Issuance Date;
(ii) the Transferor shall have delivered to the Trustee the related
Supplement, in form satisfactory to the Trustee, executed by each party
hereto other than the Trustee;
(iii) the Transferor shall have delivered to the Trustee any related
Enhancement Agreement executed by each of the parties thereto, other
than the Trustee;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such issuance;
(v) such issuance will not result in the occurrence of an Early
Amortization Event and the Transferor shall have delivered to the
Trustee, any Agent and any Enhancement Provider a certificate of one of
its duly appointed managers, dated the Series Issuance Date, to the
effect that the Transferor reasonably believes that such issuance will
not result in the occurrence of an Early Amortization Event and is not
reasonably expected to result in the occurrence of an Early Amortization
Event at any time in the future;
(vi) the Transferor shall have delivered to the Trustee and any
Enhancement Provider a Tax Opinion, dated the Series Issuance Date, with
respect to such issuance; and
(vii) the result obtained by multiplying (x) the Transferor's
Participation Amount by (y) the percentage equivalent of the portion of
the Transferor's Interest represented by the FCAR Certificate, shall not
be less than 2% of the Pool Balance, in each case as of the Series
Issuance Date, and after giving effect to such issuance.
Upon satisfaction of the above conditions, the Trustee shall execute the
Supplement and issue to the Transferor the Investor Certificates of such
Series for execution and redelivery to the Trustee for authentication.
(c) The Transferor may surrender the FCAR Certificate to the Trustee in
exchange for a newly issued FCAR Certificate and a second certificate (a
"Supplemental Certificate"), the terms of which shall be defined in a
------------------------
supplement to this Agreement (which Supplement shall be subject to Section
13.01 hereof to the extent that it amends any of the terms of this
Agreement), to be delivered to or upon the order of the Transferor (or the
holder of a Supplemental Certificate, in the case of the transfer or exchange
thereof, as provided below), upon satisfaction of the following conditions:
(i) the result obtained by multiplying (x) the Transferor's
Participation Amount by (y) the percentage equivalent of the portion of
the Transferor's Interest represented by the FCAR Certificate, shall not
be less than 2% of the Pool Balance, in each case as of the date of, and
after giving effect to, such exchange;
(ii) the Rating Agency Condition shall have been satisfied with
respect such exchange (or transfer or exchange as provided below); and
(iii) the Transferor shall have delivered to the Trustee, any Agent
and any Enhancement Provider a Tax Opinion, dated the date of such
exchange (or transfer or exchange as provided below), with respect
thereto.
The FCAR Certificate will at all times be beneficially owned by the
Transferor. Any Supplemental Certificate may be transferred or exchanged
only upon satisfaction of the conditions set forth in clauses (ii) and (iii)
above.
SECTION 6.04. Registration of Transfer and Exchange of Certificates.
-----------------------------------------------------
(a) The Trustee shall cause to be kept at the office or agency to be
maintained in accordance with the provisions of Section 11.16 a register (the
"Certificate Register") in which, subject to such reasonable regulations as
--------------------
it may prescribe, a transfer agent and registrar (which shall initially be
the Trustee) (the "Transfer Agent and Registrar") shall provide for the
----------------------------
registration of the Registered Certificates and of transfers and exchanges of
the Registered Certificates as herein provided. The Transfer Agent and
Registrar shall initially be the Trustee and any co-transfer agent and co-
registrar chosen by the Transferor and acceptable to the Trustee. So long as
any Investor Certificates are outstanding, the Transferor shall maintain a
co-transfer agent and co-registrar in New York City. Any reference in this
Agreement to the Transfer Agent and Registrar shall include any co-transfer
agent and co-registrar unless the context requires otherwise.
Subject to paragraph (c) below, upon surrender for registration of
transfer of any Registered Certificate at any office or agency of the
Transfer Agent and Registrar maintained for such purpose, one or more new
Registered Certificates (of the same Series and Class) in authorized
denominations of like aggregate fractional undivided interests in the
Certificateholders' Interest shall be executed, authenticated and delivered,
in the name of the designated transferee or transferees.
At the option of a Registered Certificateholder, Registered Certificates
(of the same Series and Class) may be exchanged for other Registered
Certificates of authorized denominations of like aggregate fractional
undivided interests in the Certificateholders' Interest, upon surrender of
the Registered Certificates to be exchanged at any such office or agency;
Registered Certificates, including Registered Certificates received in
exchange for Bearer Certificates, may not be exchanged for Bearer
Certificates. At the option of the Holder of a Bearer Certificate, subject
to applicable laws and regulations, Bearer Certificates may be exchanged for
other Bearer Certificates or Registered Certificates (of the same Series and
Class) of authorized denominations of like aggregate fractional undivided
interests in the Certificateholders' Interest, upon surrender of the Bearer
Certificates to be exchanged at an office or agency of the Transfer Agent and
Registrar located outside the United States. Each Bearer Certificate
surrendered pursuant to this Section shall have attached thereto all
unmatured Coupons; provided that any Bearer Certificate, so surrendered after
the close of business on the Record Date preceding the relevant payment date
or distribution date after the expected final payment date need not have
attached the Coupon relating to such payment date or distribution date (in
each case, as specified in the applicable Supplement).
The preceding provisions of this Section notwithstanding, the Trustee or
the Transfer Agent and Registrar, as the case may be, shall not be required
to register the transfer of or exchange any Certificate for a period of 15
days preceding the due date for any payment with respect to the Certificate.
Whenever any Investor Certificates are so surrendered for exchange, the
Transferor shall execute, the Trustee shall authenticate and the Transfer
Agent and Registrar shall deliver (in the case of Bearer Certificates,
outside the United States) the Investor Certificates which the Investor
Certificateholder making the exchange is entitled to receive. Every Investor
Certificate presented or surrendered for registration of transfer or exchange
shall be accompanied by a written instrument of transfer in a form
satisfactory to the Trustee or the Transfer Agent and Registrar duly executed
by the Investor Certificateholder or the attorney-in-fact thereof duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Investor Certificates, but the Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any such transfer or exchange.
All Investor Certificates (together with any Coupons) surrendered for
registration of transfer and exchange or for payment shall be canceled and
disposed of in a manner satisfactory to the Trustee. The Trustee shall
cancel and destroy any Global Certificate upon its exchange in full for
Definitive Euro-Certificates and shall deliver a certificate of destruction
to the Transferor. Such certificate shall also state that a certificate or
certificates of a Foreign Clearing Agency to the effect referred to in
Section 6.11 was received with respect to each portion of the Global
Certificate exchanged for Definitive Euro-Certificates.
The Transferor shall execute and deliver to the Trustee Bearer
Certificates and Registered Certificates in such amounts and at such times as
are necessary to enable the Trustee to fulfill its responsibilities under
this Agreement and the Certificates.
(b) The Transfer Agent and Registrar will maintain at its expense in
each of the Borough of Manhattan, The City of New York, an office or agency
where Investor Certificates may be surrendered for registration of transfer
or exchange (except that Bearer Certificates may not be surrendered for
exchange at any such office or agency in the United States).
(c)(i) Registration of transfer of Investor Certificates containing a
legend to the effect set forth on Exhibit D-1 shall be effected only if such
transfer is made pursuant to an effective registration statement under the
Act, or is exempt from the registration requirements under the Act. In the
event that registration of a transfer is to be made in reliance upon an
exemption from the registration requirements under the Act, the transferor or
the transferee shall deliver, at its expense, to the Transferor, the Master
Servicer and the Trustee, an investment letter from the transferee,
substantially in the form attached to the applicable Supplement, and no
registration of transfer shall be made until such letter is so delivered.
Investor Certificates issued upon registration or transfer of, or
Investor Certificates issued in exchange for, Investor Certificates bearing
the legend referred to above shall also bear such legend unless the
Transferor, the Master Servicer, the Trustee and the Transfer Agent and
Registrar receive an opinion of counsel, satisfactory to each of them, to the
effect that such legend may be removed.
Whenever an Investor Certificate containing the legend referred to above
is presented to the Transfer Agent and Registrar for registration of
transfer, the Transfer Agent and Registrar shall promptly seek instructions
from the Master Servicer regarding such transfer and shall be entitled to
receive and conclusively rely upon instructions signed by a Servicing Officer
prior to registering any such transfer. The Transferor hereby agrees to
indemnify the Transfer Agent and Registrar and the Trustee and to hold each
of them harmless against any loss, liability or expense incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by them in relation to any such instructions
furnished pursuant to this clause (i).
(ii) Registration of transfer of Investor Certificates containing a
legend to the effect set forth on Exhibit D-2 shall be effected only if such
transfer is made to a Person which is not an employee benefit plan, trust or
account, including an individual retirement account, that is subject to ERISA
or that is described in Section 4975(e)(1) of the Code or an entity whose
underlying assets include plan assets by reason of a plan's investment in
such entity (a "Benefit Plan"). By accepting and holding any such Investor
------------
Certificate, an Investor Certificateholder shall be deemed to have
represented and warranted that it is not a Benefit Plan. By acquiring any
interest in a Book-Entry Certificate, a Certificate Owner shall be deemed to
have represented and warranted that it is not a Benefit Plan.
SECTION 6.05. Mutilated, Destroyed, Lost or Stolen Certificates. If
-------------------------------------------------
(a) any mutilated Certificate (together, in the case of Bearer Certificates,
with all unmatured Coupons (if any) appertaining thereto) is surrendered to
the Transfer Agent and Registrar, or the Transfer Agent and Registrar
receives evidence to its satisfaction of the destruction, loss or theft of
any Certificate and (b) there is delivered to the Transfer Agent and
Registrar and the Trustee such security or indemnity as may be required by
them to save each of them harmless, then, in the absence of notice to the
Trustee that such Certificate has been acquired by a bona fide purchaser, the
Transferor shall execute, the Trustee shall authenticate and the Transfer
Agent and Registrar shall deliver (in the case of Bearer Certificates,
outside the United States), in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
aggregate fractional undivided interest. In connection with the issuance of
any new Certificate under this Section, the Trustee or the Transfer Agent and
Registrar may require the payment by the Certificateholder of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses
of the Trustee and Transfer Agent and Registrar) connected therewith. Any
duplicate Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 6.06. Persons Deemed Owners. The Trustee, the Transfer Agent
---------------------
and Registrar and any agent of any of them may (a) prior to due presentation
of a Registered Certificate for registration of transfer, treat the Person or
Persons in whose name any Registered Certificate is registered as the owner
of such Registered Certificate for the purpose of receiving distributions
pursuant to the terms of the applicable Supplement and for all other purposes
whatsoever, and (b) treat the bearer of a Bearer Certificate or Coupon as the
owner of such Bearer Certificate or Coupon for the purpose of receiving
distributions pursuant to the terms of the applicable Supplement and for all
other purposes whatsoever; and, in any such case, neither the Trustee, the
Transfer Agent and Registrar nor any agent of any of them shall be affected
by any notice to the contrary. Notwithstanding the foregoing, in determining
whether the Holders of the requisite Investor Certificates have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, Certificates owned by the Transferor, the Master Servicer, any
other holder of a Transferor's Certificate or any Affiliate thereof, shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Certificates which a Responsible Officer of the Trustee knows to be so owned
shall be so disregarded. Certificates so owned which have been pledged in
good faith shall not be disregarded and may be regarded as outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so
to act with respect to such Certificates and that the pledgee is not the
Transferor, the Master Servicer, any other holder of a Transferor's
Certificate or any Affiliate thereof.
SECTION 6.07. Access to List of Registered Certificateholders' Names
------------------------------------------------------
and Addresses. The Trustee will furnish or cause to be furnished by the
-------------
Transfer Agent and Registrar to the Master Servicer, within five business
days after receipt by the Trustee of a request therefor, a list in such form
as the Master Servicer may reasonably require, of the names and addresses of
the Registered Certificateholders. If three or more holders of Investor
Certificates (the "Applicants") apply to the Trustee, and such application
----------
states that the Applicants desire to communicate with other Investor
Certificateholders with respect to their rights under this Agreement or any
Supplement or under the Investor Certificates and is accompanied by a copy of
the communication which such Applicants propose to transmit, then the
Trustee, after having been indemnified to its reasonable satisfaction by such
Applicants for its costs and expenses, shall afford or shall cause the
Transfer Agent and Registrar to afford such Applicants access during normal
business hours to the most recent list of Registered Certificateholders of
such Series or all outstanding Series, as applicable, held by the Trustee,
within five Business Days after the receipt of such application. Such list
shall be as of a date no more than 45 days prior to the date of receipt of
such Applicants' request.
Every Registered Certificateholder, by receiving and holding a
Registered Certificate, agrees with the Trustee that neither the Trustee, the
Transfer Agent and Registrar, nor any of their respective agents, shall be
held accountable by reason of the disclosure of any such information as to
the names and addresses of the Registered Certificateholders hereunder,
regardless of the sources from which such information was derived.
SECTION 6.08. Book-Entry Certificates. Unless otherwise specified in
-----------------------
the related Supplement for any Series or Class, the Investor Certificates,
upon original issuance, shall be issued in the form of one or more
typewritten Investor Certificates representing the Book-Entry Certificates,
to be delivered to the Depository, by, or on behalf of, the Transferor. The
Investor Certificates shall initially be registered on the Certificate
Register in the name of the Depository or its nominee, and no Certificate
Owner will receive a definitive certificate representing such Certificate
Owner's interest in the Investor Certificates, except as provided in Section
6.10. Unless and until definitive, fully registered Investor Certificates
("Definitive Certificates") have been issued to the applicable Certificate
-----------------------
Owners pursuant to Section 6.10 or as otherwise specified in any such
Supplement:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Transferor, the Master Servicer and the Trustee may deal
with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized
representatives of the respective Certificate Owners;
(c) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this
Section shall control; and
(d) the rights of the respective Certificate Owners shall be
exercised only through the Depository and the Depository Participants
and shall be limited to those established by law and agreements between
such Certificate Owners and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 6.10, the
Depository will make book-entry transfers among the Depository
Participants and receive and transmit distributions of principal and
interest on the related Investor Certificates to such Depository
Participants.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Investor
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of Investor Certificates, such direction or consent may be
given by Certificate Owners (acting through the Depository and the Depository
Participants) owning Investor Certificates evidencing the requisite
percentage of principal amount of Investor Certificates.
SECTION 6.09. Notices to Depository. Whenever any notice or other
---------------------
communication is required to be given to Investor Certificateholders of any
Series or Class with respect to which Book-Entry Certificates have been
issued, unless and until Definitive Certificates shall have been issued to
the related Certificate Owners, the Trustee shall give all such notices and
communications to the applicable Depository.
SECTION 6.10. Definitive Certificates. If Book-Entry Certificates have
-----------------------
been issued with respect to any Series or Class and (a) the Transferor
advises the Trustee that the Depository is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement with
respect to such Series or Class and the Trustee or the Transferor is unable
to locate a qualified successor, (b) the Transferor, at its option, advises
the Trustee that it elects to terminate the book-entry system with respect to
such Series or Class through the Depository or (c) after the occurrence of a
Servicing Default, Certificate Owners of such Series or Class evidencing not
less than 50% of the aggregate unpaid principal amount of such Series or
Class advise the Trustee and the Depository through the Depository
Participants that the continuation of a book-entry system with respect to the
Investor Certificates of such Series or Class through the Depository is no
longer in the best interests of the Certificate Owners with respect to such
Certificates, then the Trustee shall notify all Certificate Owners of such
Certificates, through the Depository, of the occurrence of any such event and
of the availability of Definitive Certificates to Certificate Owners
requesting the same. Upon surrender to the Trustee of any such Certificates
by the Depository, accompanied by registration instructions from the
Depository for registration, the Trustee shall authenticate and deliver such
Definitive Certificates. Neither the Transferor nor the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of such Definitive Certificates all references herein to obligations
imposed upon or to be performed by the Depository shall be deemed to be
imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of such Definitive Certificates as Investor Certificateholders
hereunder.
SECTION 6.11. Global Certificate; Exchange Date. (a) If specified in
---------------------------------
the related Supplement for any Series or Class, the Investor Certificates
will initially be issued in the form of a single temporary global Certificate
(the "Global Certificate") in bearer form, without interest coupons, in the
------------------
denomination of the entire aggregate principal amount of such Series or Class
and substantially in the form set forth in the exhibit with respect thereto
attached to the related Supplement. The Global Certificate will be
authenticated by the Trustee upon the same conditions, in substantially the
same manner and with the same effect as the Definitive Certificates. The
Global Certificate may be exchanged as described below for Bearer or
Registered Certificates in definitive form (the "Definitive Euro-
----------------
Certificates").
------------
(b) The Manager shall, upon its determination of the date of completion
of the distribution of the Investor Certificates of such Series or Class, so
advise the Trustee, the Transferor, the Common Depositary, and each Foreign
Clearing Agency forthwith. Without unnecessary delay, but in any event not
prior to the Exchange Date, the Transferor will execute and deliver to the
Trustee at its London office or its designated agent outside the United
States definitive Bearer Certificates in an aggregate principal amount equal
to the entire aggregate principal amount of such Series or Class. All Bearer
Certificates so issued and delivered will have Coupons attached. The Global
Certificate may be exchanged for an equal aggregate principal amount of
Definitive Euro-Certificates only on or after the Exchange Date. A United
States institutional investor may exchange the portion of the Global
Certificate beneficially owned by it only for an equal aggregate principal
amount of Registered Certificates bearing the applicable legend set forth in
the form of Registered Certificate attached to the related Supplement and
having a minimum denomination of $500,000, which may be in temporary form if
the Transferor so elects. The Transferor may waive the $500,000 minimum
denomination requirement if it so elects. Upon any demand for exchange for
Definitive Euro-Certificates in accordance with this paragraph, the
Transferor shall cause the Trustee to authenticate and deliver the Definitive
Euro-Certificates to the Holder (x) outside the United States, in the case of
Bearer Certificates, and (y) according to the instructions of the Holder, in
the case of Registered Certificates, but in either case only upon
presentation to the Trustee of a written statement substantially in the form
of Exhibit F-1 with respect to the Global Certificate or portion thereof
being exchanged, signed by a Foreign Clearing Agency and dated on the
Exchange Date or a subsequent date, to the effect that it has received in
writing or by tested telex a certification substantially in the form of (i)
in the case of beneficial ownership of the Global Certificate or a portion
thereof being exchanged by a United States institutional investor pursuant to
the second preceding sentence, the certificate in the form of Exhibit F-2
signed by the Manager which sold the relevant Certificates or (ii) in all
other cases, the certificate in the form of Exhibit F-3, the certificate
referred to in this clause (ii) being dated on the earlier of the first
actual payment of interest in respect of such Certificates and the date of
the delivery of such Certificate in definitive form. Upon receipt of such
certification, the Trustee shall cause the Global Certificate to be endorsed
in accordance with paragraph (d) below. Any exchange as provided in this
Section shall be made free of charge to the holders and the beneficial owners
of the Global Certificate and to the beneficial owners of the Definitive
Euro-Certificates issued in exchange, except that a person receiving
Definitive Euro-Certificates must bear the cost of insurance, postage,
transportation and the like in the event that such person does not receive
such Definitive Euro-Certificates in person at the offices of a Foreign
Clearing Agency.
(c) The delivery to the Trustee by a Foreign Clearing Agency of any
written statement referred to above may be relied upon by the Transferor and
the Trustee as conclusive evidence that a corresponding certification or
certifications has or have been delivered to such Foreign Clearing Agency
pursuant to the terms of this Agreement.
(d) Upon any such exchange of all or a portion of the Global
Certificate for a Definitive Euro-Certificate or Certificates, such Global
Certificate shall be endorsed by or on behalf of the Trustee to reflect the
reduction of its principal amount by an amount equal to the aggregate
principal amount of such Definitive Euro-Certificate or Certificates. Until
so exchanged in full, such Global Certificate shall in all respects be
entitled to the same benefits under this Agreement as Definitive
Euro-Certificates authenticated and delivered hereunder except that the
beneficial owners of such Global Certificate shall not be entitled to receive
payments of interest on the Certificates until they have exchanged their
beneficial interests in such Global Certificate for Definitive
Euro-Certificates.
SECTION 6.12. Meetings of Certificateholders. (a) If at the time any
------------------------------
Bearer Certificates are issued and outstanding with respect to any Series or
Class to which any meeting described below relates, the Master Servicer or
the Trustee may at any time call a meeting of Investor Certificateholders of
any Series or Class or of all Series, to be held at such time and at such
place as the Master Servicer or the Trustee, as the case may be, shall
determine, for the purpose of approving a modification of or amendment to, or
obtaining a waiver of any covenant or condition set forth in, this Agreement,
any Supplement or the Investor Certificates or of taking any other action
permitted to be taken by Investor Certificateholders hereunder or under any
Supplement. Notice of any meeting of Investor Certificateholders, setting
forth the time and place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be given in accordance with
Section 13.05, the first mailing and publication to be not less than 20 nor
more than 180 days prior to the date fixed for the meeting. To be entitled
to vote at any meeting of Investor Certificateholders a person shall be (i) a
Holder of one or more Investor Certificates of the applicable Series or Class
or (ii) a person appointed by an instrument in writing as proxy by the Holder
of one or more such Investor Certificates. The only persons who shall be
entitled to be present or to speak at any meeting of Investor
Certificateholders shall be the persons entitled to vote at such meeting and
their counsel and any representatives of the Transferor, the Master Servicer
and the Trustee and their respective counsel.
(b) At a meeting of Investor Certificateholders, persons entitled to
vote Investor Certificates evidencing a majority of the aggregate unpaid
principal amount of the applicable Series or Class or all outstanding Series,
as the case may be, shall constitute a quorum. No business shall be
transacted in the absence of a quorum, unless a quorum is present when the
meeting is called to order. In the absence of a quorum at any such meeting,
the meeting may be adjourned for a period of not less than 10 days; in the
absence of a quorum at any such adjourned meeting, such adjourned meeting may
be further adjourned for a period of not less than 10 days; at the
reconvening of any meeting further adjourned for lack of a quorum, the
persons entitled to vote Investor Certificates evidencing at least 25% of the
aggregate unpaid principal amount of the applicable Series or Class or all
outstanding Series, as the case may be, shall constitute a quorum for the
taking of any action set forth in the notice of the original meeting. Notice
of the reconvening of any adjourned meeting shall be given as provided above
except that such notice must be given not less than five days prior to the
date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage of
the aggregate principal amount of the outstanding applicable Investor
Certificates which shall constitute a quorum.
(c) Any Investor Certificateholder who has executed an instrument in
writing appointing a person as proxy shall be deemed to be present for the
purposes of determining a quorum and be deemed to have voted; provided that
such Investor Certificateholder shall be considered as present or voting only
with respect to the matters covered by such instrument in writing. Subject
to the provisions of Section 13.01, any resolution passed or decision taken
at any meeting of Investor Certificateholders duly held in accordance with
this Section shall be binding on all Investor Certificateholders whether or
not present or represented at the meeting.
(d) The holding of Bearer Certificates shall be proved by the
production of such Bearer Certificates or by a certificate, satisfactory to
the Master Servicer, executed by any bank, trust company or recognized
securities dealer, wherever situated, satisfactory to the Master Servicer.
Each such certificate shall be dated and shall state that on the date thereof
a Bearer Certificate bearing a specified serial number was deposited with or
exhibited to such bank, trust company or recognized securities dealer by the
person named in such certificate. Any such certificate may be issued in
respect of one or more Bearer Certificates specified therein. The holding by
the person named in any such certificate of any Bearer Certificate specified
therein shall be presumed to continue for a period of one year from the date
of such certificate unless at the time of any determination of such holding
(i) another certificate bearing a later date issued in respect of the same
Bearer Certificate shall be produced, (ii) the Bearer Certificate specified
in such certificate shall be produced by some other person or (iii) the
Bearer Certificate specified in such certificate shall have ceased to be
outstanding. The appointment of any proxy shall be proved by having the
signature of the person executing the proxy guaranteed by any bank, trust
company or recognized securities dealer satisfactory to the Trustee.
(e) The Trustee shall appoint a temporary chairman of the meeting. A
permanent chairman and a permanent secretary of the meeting shall be elected
by vote of the holders of Investor Certificates evidencing a majority of the
aggregate unpaid principal amount of Investor Certificates of the applicable
Series or Class or all outstanding Series, as the case may be, represented at
the meeting. No vote shall be cast or counted at any meeting in respect of
any Investors Certificate challenged as not outstanding and ruled by the
chairman of the meeting to be not outstanding. The chairman of the meeting
shall have no right to vote except as an Investor Certificateholder or proxy.
Any meeting of Investor Certificateholders duly called at which a quorum is
present may be adjourned from time to time, and the meeting may be held as so
adjourned without further notice.
(f) The vote upon any resolution submitted to any meeting of Investor
Certificateholders shall be by written ballot on which shall be subscribed
the signatures of Investor Certificateholders or proxies and on which shall
be inscribed the serial number or numbers of the Investor Certificates held
or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of
Investor Certificateholders shall be prepared by the secretary of the meeting
and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one
or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was published as provided
above. The record shall be signed and verified by the permanent chairman and
secretary of the meeting and one of the duplicates shall be delivered to the
Master Servicer and the other to the Trustee to be preserved by the Trustee,
the latter to have attached thereto the ballots voted at the meeting. Any
record so signed and verified shall be conclusive evidence of the matters
therein stated.
ARTICLE VII
Other Matters Relating
----------------------
to the Transferor
-----------------
SECTION 7.01. Liability of the Transferor. The Transferor shall
---------------------------
be liable for all obligations, covenants, representations and warranties of
the Transferor arising under or related to this Agreement. Except as
provided in the preceding sentence, the Transferor shall be liable only to
the extent of the obligations specifically undertaken by it in its capacity
as Transferor hereunder.
SECTION 7.02. Limitation on Liability of the Transferor. Subject to
-----------------------------------------
Sections 7.01 and 7.03, neither the Transferor nor any of the directors,
members, managers, officers, employees or agents of the Transferor in its
capacity as Transferor shall be under any liability to the Trust, the
Trustee, the Certificateholders or any other Person for any action taken or
for refraining from the taking of any action in the capacity as Transferor
pursuant to this Agreement whether arising from express or implied duties
under this Agreement; provided, however, that this provision shall not
-------- -------
protect the Transferor or any such person against any liability which would
otherwise be imposed by reason of wilful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Transferor and any director, member,
manager, officer, employee or agent of the Transferor may rely in good faith
on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder.
SECTION 7.03. Transferor Indemnification of the Trust and the Trustee.
-------------------------------------------------------
The Transferor shall indemnify and hold harmless the Trust, for the benefit
of the Certificateholders and the other Beneficiaries, and the Trustee from
and against any loss, liability, expense, damage or injury suffered or
sustained by reason of any acts, omissions or alleged acts or omissions
arising out of activities of the Trust or the Trustee pursuant to this
Agreement, including any judgment, award, settlement, reasonable attorneys'
fees and other costs or expenses incurred in connection with the defense of
any actual or threatened action, proceeding or claim; provided, however, that
-------- -------
the Transferor shall not indemnify the Trust or the Trustee if such acts,
omissions or alleged acts or omissions constitute fraud, gross negligence,
breach of fiduciary duty or wilful misconduct by the Trustee; and provided
--------
further that the Transferor shall not indemnify the Trust, Trustee or the
-------
Certificateholders or any other Beneficiaries for any liabilities, cost or
expense of the Trust with respect to any action taken by the Trustee at the
request of any such Certificateholders or other Beneficiaries to the extent
the Trustee is fully indemnified by such Certificateholders or other
Beneficiaries with respect to such action or with respect to any Federal,
state or local income or franchise taxes (or any interest or penalties with
respect thereto) required to be paid by the Trust or any Certificateholder or
other Beneficiary in connection herewith to any taxing authority. Subject to
Section 7.01, any indemnification pursuant to this Section shall only be from
(i) the excess of the Transferor's Interest for any date of determination
over the Required Participation Amount as of such date and (ii) any other
assets of the Transferor not pledged to third parties or otherwise encumbered
in a manner permitted by the Transferor's Certificate of Formation and shall
only be made after payment in full of any amounts that the Transferor is
obligated to deposit in the Collection Account pursuant to this Agreement.
Any indemnification under this Article VII shall survive the termination of
this Agreement.
ARTICLE VIII
Other Matters Relating
----------------------
to the Master Servicer
----------------------
SECTION 8.01. Liability of the Master Servicer. The Master Servicer
--------------------------------
shall be liable under this Article VIII only to the extent of the obligations
specifically undertaken by the Master Servicer in its capacity as Master
Servicer.
SECTION 8.02. Merger or Consolidation of, or Assumption of, the
-------------------------------------------------
Obligations of the Master Servicer. The Master Servicer shall not
----------------------------------
consolidate with or merge into any other corporation or convey or transfer
its properties and assets substantially as an entirety to any Person, unless:
(a) the corporation formed by such consolidation or into which the
Master Servicer is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Master Servicer substantially
as an entirety shall be a corporation organized and existing under the
laws of the United States of America or any State or the District of
Columbia and, if the Master Servicer is not the surviving entity, such
corporation shall assume, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, the
performance of every covenant and obligation of the Master Servicer
hereunder; and
(b) the Master Servicer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer comply with this Section
8.02 and that all conditions precedent herein provided for relating to
such transaction have been complied with.
SECTION 8.03. Limitation on Liability of the Master Servicer and
--------------------------------------------------
Others. Except as provided in Section 8.04, neither the Master Servicer nor
------
any of the directors or officers or employees or agents of the Master
Servicer, shall be under any liability to the Trust, the Trustee, the
Certificateholders or any other Person for any action taken or for refraining
from the taking of any action in its capacity as Master Servicer pursuant to
this Agreement; provided, however, that this provision shall not protect the
-------- -------
Master Servicer or any such person against any liability which would
otherwise be imposed by reason of wilful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Master Servicer and any director or
officer or employee or agent of the Master Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Master Servicer shall
not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Receivables in
accordance with this Agreement which in its reasonable opinion may involve it
in any expense or liability.
SECTION 8.04. Master Servicer Indemnification of the Trust and the
----------------------------------------------------
Trustee. The Master Servicer shall indemnify and hold harmless the Trust,
-------
for the benefit of the Certificateholders and the other Beneficiaries, and
the Trustee, from and against any loss, liability, expense, damage or injury
suffered or sustained by reason of any acts, omissions or alleged acts or
omissions arising out of activities of the Master Servicer, the Trust or the
Trustee pursuant to this Agreement, including any judgment, award,
settlement, reasonable attorneys' fees and other costs or expenses incurred
in connection with the defense of any actual or threatened action, proceeding
or claim; provided, however, that the Master Servicer shall not indemnify the
-------- -------
Trust or the Trustee if such acts, omissions or alleged acts or omissions
constitute fraud, gross negligence, breach of fiduciary duty or wilful
misconduct by the Trustee; and provided further that the Master Servicer
-------- -------
shall not indemnify the Trust, the Trustee or the Certificateholders or the
other Beneficiaries for any liabilities, cost or expense of the Trust with
respect to any action taken by the Trustee at the request of the
Certificateholders or any other Beneficiaries to the extent the Trustee is
fully indemnified by such Certificateholders or other Beneficiaries with
respect to such action or with respect to any Federal, state or local income
or franchise taxes (or any interest or penalties with respect thereto)
required to be paid by the Trust or the Certificateholders or the other
Beneficiaries in connection herewith to any taxing authority. Any
indemnification under this Article VIII shall survive the termination of this
Agreement and the resignation and removal of the Trustee.
SECTION 8.05. The Master Servicer Not to Resign. The Master Servicer
---------------------------------
shall not resign from the obligations and duties hereby imposed on it except
upon determination that (a) the performance of its duties hereunder is no
longer permissible under applicable law and (b) there is no reasonable action
which the Master Servicer could take to make the performance of its duties
hereunder permissible under applicable law. Any such determination
permitting the resignation of the Master Servicer shall be evidenced as to
clause (a) above by an Opinion of Counsel to such effect delivered to the
Trustee. No such resignation shall become effective until the Trustee or a
Successor Master Servicer shall have assumed the responsibilities and
obligations of the Master Servicer in accordance with Section 10.02 hereof.
If the Trustee is unable within 120 days of the date of such determination to
appoint a Successor Master Servicer, the Trustee shall serve as Successor
Master Servicer hereunder.
SECTION 8.06. Access to Certain Documentation and Information Regarding
---------------------------------------------------------
the Receivables. The Master Servicer shall provide to the Trustee access to
---------------
the documentation regarding the Accounts and the Receivables in such cases
where the Trustee is required in connection with the enforcement of the
rights of the Certificateholders, or by applicable statutes or regulations to
review such documentation, such access being afforded without charge but only
(a) upon reasonable request, (b) during normal business hours, (c) subject to
the Master Servicer's normal security and confidentiality procedures and (d)
at offices designated by the Master Servicer. Nothing in this Section 8.06
shall derogate from the obligation of the Transferor, the Trustee or the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Dealers and the failure of the Master Servicer to
provide access as provided in this Section 8.06 as a result of such
obligation shall not constitute a breach of this Section 8.06.
SECTION 8.07. Delegation of Duties. Subject to Section 3.01, in the
--------------------
ordinary course of business, the Master Servicer may at any time delegate any
duties hereunder to any Person who agrees to conduct such duties in
accordance with the Floorplan Financing Guidelines and this Agreement. The
Master Servicer shall give prompt written notice of any such delegation of a
material function to the Rating Agencies, any Agent and any Enhancement
Providers. Such delegation shall not relieve the Master Servicer of its
liability and responsibility with respect to such duties, and shall not
constitute a resignation within the meaning of Section 8.05 and written
notice shall have been delivered to each applicable Rating Agency with
respect to such delegation prior to such delegation.
SECTION 8.08. Examination of Records. The Transferor and the Master
----------------------
Servicer shall indicate generally in its computer files or other records that
the Receivables arising in the Accounts have been conveyed to the Trust
pursuant to this Agreement for the benefit of the Certificateholders and the
other Beneficiaries. The Transferor and the Master Servicer shall, prior to
the sale or transfer to a third party of any receivable held in its custody,
examine its computer and other records to determine that such receivable is
not a Receivable.
SECTION 8.09. Additional Expenses. The Master Servicer covenants and
-------------------
agrees to pay from time to time such reasonable costs, fees and expenses as
may be incurred by third parties designated by the Transferor in connection
with the provisions of services directly or indirectly to the Trust or
otherwise in connection with the facilitation of an offering of the
Certificates of one or more Classes issued hereunder, subject in each case to
written notice having been delivered to each applicable Rating Agency prior
to the incurrence of such expense by the Master Servicer.
ARTICLE IX
Early Amortization Events
-------------------------
SECTION 9.01. Early Amortization Events. If any one of the following
-------------------------
events shall occur:
(a) a failure by the Transferor to convey Receivables in
Additional Accounts to the Trust within five Business Days after the day
on which it is required to convey such Receivables pursuant to this
Agreement;
(b) the Transferor or the Seller shall file a petition commencing
a voluntary case under any chapter of the Federal bankruptcy laws; or
the Transferor or the Seller shall file a petition or answer or consent
seeking reorganization, arrangement, adjustment, or composition under
any other similar applicable Federal law, or shall consent to the filing
of any such petition, answer, or consent; or the Transferor or the
Seller shall appoint, or consent to the appointment of, a custodian,
receiver, liquidator, trustee, assignee, sequestrator or other similar
official in bankruptcy or insolvency of it or of any substantial part of
its property; or the Transferor or the Seller shall make an assignment
for the benefit of creditors, or shall admit in writing its inability to
pay its debts generally as they become due;
(c) any order for relief against the Transferor or the Seller
shall have been entered by a court having jurisdiction in the premises
under any chapter of the Federal bankruptcy laws, and such order shall
have continued undischarged or unstayed for a period of 60 days; or a
decree or order by a court having jurisdiction in the premises shall
have been entered approving as properly filed a petition seeking
reorganization, arrangement, adjustment, or composition of the
Transferor or the Seller under any other similar applicable Federal law,
and such decree or order shall have continued undischarged or unstayed
for a period of 120 days; or a decree or order of a court having
jurisdiction in the premises for the appointment of a custodian,
receiver, liquidator, trustee, assignee, sequestrator, or other similar
official in bankruptcy or insolvency of the Transferor or the Seller or
of any substantial part of its property or for the winding up or
liquidation of its affairs, shall have been entered, and such decree or
order shall have remained in force undischarged or unstayed for a period
of 120 days;
(d) Ford shall file a petition commencing a voluntary case under
any chapter of the Federal bankruptcy laws; or Ford shall file a
petition or answer or consent seeking reorganization, arrangement,
adjustment, or composition under any other similar applicable Federal
law, or shall consent to the filing of any such petition, answer, or
consent; or Ford shall appoint, or consent to the appointment of, a
custodian, receiver, liquidator, trustee, assignee, sequestrator or
other similar official in bankruptcy or insolvency of it or of any
substantial part of its property; or Ford shall make an assignment for
the benefit of creditors, or shall admit in writing its inability to pay
its debts generally as they become due;
(e) any order for relief against Ford shall have been entered by a
court having jurisdiction in the premises under any chapter of the
Federal bankruptcy laws, and such order shall have continued
undischarged or unstayed for a period of 60 days; or a decree or order
by a court having jurisdiction in the premises shall have been entered
approving as properly filed a petition seeking reorganization,
arrangement, adjustment, or composition of Ford under any other similar
applicable Federal law, and such decree or order shall have continued
undischarged or unstayed for period of 120 days; or a decree or order of
a court having jurisdiction in the premises for the appointment of a
custodian, receiver, liquidator, trustee, assignee, sequestrator, or
other similar official in bankruptcy or insolvency of Ford or of any
substantial part of its property, or for the winding up or liquidation
of its affairs, shall have been entered, and such decree or order shall
have remained in force undischarged or unstayed for a period of 120
days;
(f) failure on the part of the Transferor, the Master Servicer or
the Seller, as applicable, (i) to make any payment or deposit (including
any Transfer Deposit Amount or Adjustment Payment) required by the terms
of this Agreement or the applicable Receivables Purchase Agreement on or
before the date occurring two Business Days after the date such payment
or deposit is required to be made herein, or (ii) with respect to any
Series, to deliver a Distribution Date Statement within five Business
Days of the day such item is due to be delivered under this Agreement,
or (iii) duly to observe or perform in any material respect the covenant
of the Transferor set forth in Section 2.06(a) or (iv) duly to observe
or perform in any material respect any other covenants or agreements of
the Transferor or the Master Servicer, as the case may be, set forth in
this Agreement or the Receivables Purchase Agreement, which failure in
the case of this clause (iv) continues unremedied for a period of 45
days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Transferor by the
Trustee or any Enhancement Provider;
(g) any representation or warranty made by the Seller in the
Receivables Purchase Agreement or the Transferor in this Agreement or
any information contained in a computer file or microfiche or written
list required to be delivered by the Transferor pursuant to Section
2.01, 2.05, 2.07 or 2.08, (i) shall prove to have been incorrect in any
material respect when made or when delivered, and shall continue to be
incorrect in any material respect for a period of 60 days after the date
on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Transferor by the Trustee and
(ii) as a result of such incorrectness the interests of the Holders of
the Investor Certificates are materially and adversely affected;
provided, however, that an Early Amortization Event shall not be deemed
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to have occurred under this paragraph if the Transferor has repurchased
the related Receivable or all such Receivables, if applicable, during
such period in accordance with the provisions of this Agreement; or
(h) the Trust or the Transferor shall become an "investment
company" within the meaning of the Investment Company Act;
then, subject to applicable law, and after the applicable grace period, if
any, an amortization event (an "Early Amortization Event") shall occur
------------------------
without any notice or other action on the part of the Trustee, any Agent, the
Certificateholders or any other Beneficiary, immediately upon the occurrence
of such event.
ARTICLE X
Servicing Defaults
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SECTION 10.01. Servicing Defaults. If any one of the following events
------------------
(a "Servicing Default") shall occur and be continuing with respect to the
-----------------
Servicer:
(a) any failure by the Master Servicer to make any payment,
transfer or deposit or to give instructions or to give notice to the
Trustee to make such payment, transfer or deposit or to give notice to
the Trustee as to any action to be taken under any Enhancement Agreement
on or before the date occurring five days after the date such payment,
transfer or deposit or such instruction or notice is required to be made
or given, as the case may be, under the terms of this Agreement;
(b) failure on the part of the Master Servicer duly to observe or
perform any other covenants or agreements of the Master Servicer set
forth in this Agreement which has a material adverse effect on the
Investor Certificateholders of any Series, which continues unremedied
for a period of 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Master Servicer by the Trustee; or the Master Servicer shall delegate
its duties under this Agreement, except as permitted by Sections 3.01
and 8.07;
(c) any representation, warranty or certification made by the
Master Servicer in this Agreement or in any certificate delivered
pursuant to this Agreement shall prove to have been incorrect when made,
which has a material adverse effect on the rights of the Investor
Certificateholders of any Series and which material adverse effect
continues for a period of 60 days after the date on which written notice
thereof, requiring the same to be remedied, shall have been given to the
Master Servicer by the Trustee;
(d) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator or other similar official in any
bankruptcy, insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Master Servicer
or of or relating to all or substantially all of its property, or a
decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator or
receiver or liquidator or other similar official in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Master Servicer and such decree or order
shall have remained in force undischarged or unstayed; or the Master
Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
bankruptcy, insolvency or reorganization statute, make any assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations; then, in the event of any Servicing Default, so long as the
Servicing Default shall not have been remedied, the Trustee, by notice
then given in writing to the Master Servicer (a "Termination Notice"),
------------------
may terminate all but not less than all of the rights and obligations
(other than its obligations that have accrued up to the time of such
termination) of the Master Servicer as Master Servicer under this
Agreement and in and to the Receivables and the proceeds thereof. After
receipt by the Master Servicer of a Termination Notice, and on the date
that a Successor Master Servicer shall have been appointed by the
Trustee pursuant to Section 10.02, all authority and power of the Master
Servicer under this Agreement shall pass to and be vested in a Successor
Master Servicer (a "Servicing Transfer") and, without limitation, the
------------------
Trustee is hereby authorized and empowered (upon the failure of the
Master Servicer to cooperate) to execute and deliver, on behalf of the
Master Servicer, as attorney-in-fact or otherwise, all documents and
other instruments upon the failure of the Master Servicer to execute or
deliver such documents or instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of
such Servicing Transfer. The Master Servicer agrees to cooperate with
the Trustee and such Successor Master Servicer in effecting the
termination of the responsibilities and rights of the Master Servicer to
conduct servicing hereunder, including the transfer to such Successor
Master Servicer of all authority of the Master Servicer to service the
Receivables provided for under this Agreement, including all authority
over all Collections which shall on the date of transfer be held by the
Master Servicer for deposit, or which have been deposited by the Master
Servicer, in the Collection Account, or which shall thereafter be
received with respect to the Receivables, and in assisting the Successor
Master Servicer. The Master Servicer shall promptly transfer its
electronic records relating to the Receivables to the Successor Master
Servicer in such electronic form as the Successor Master Servicer may
reasonably request and shall promptly transfer to the Successor Master
Servicer all other records, correspondence and documents necessary for
the continued servicing of the Receivables in the manner and at such
times as the Successor Master Servicer shall reasonably request. To the
extent that compliance with this Section 10.01 shall require the Master
Servicer to disclose to the Successor Master Servicer information of any
kind which the Master Servicer reasonably deems to be confidential, the
Successor Master Servicer shall be required to enter into such customary
licensing and confidentiality agreements as the Master Servicer shall
deem necessary to protect its interest.
Notwithstanding the foregoing, a delay in or failure of performance
under Section 10.01(a) for a period of 10 Business Days or under Section
10.01(b) or (c) for a period of 60 Business Days, shall not constitute a
Servicing Default if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Master Servicer and such delay
or failure was caused by an act of God or the public enemy, acts of
declared or undeclared war, public disorder, rebellion or sabotage,
epidemics, landslides, lightning, fire, hurricanes, earthquakes, floods
or similar causes. The preceding sentence shall not relieve the Master
Servicer from using its best efforts to perform its respective
obligations in a timely manner in accordance with the terms of this
Agreement and the Master Servicer shall provide the Trustee, any Agents,
any Enhancement Providers, the Transferor and the Certificateholders
with an Officers' Certificate giving prompt notice of such failure or
delay by it, together with a description of its efforts so to perform
its obligations. The Master Servicer shall immediately notify the
Trustee in writing of any Servicing Default.
SECTION 10.02. Trustee to Act; Appointment of Successor. (a) On
----------------------------------------
and after the receipt by the Master Servicer of a Termination Notice pursuant
to Section 10.01, the Master Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by the Trustee in writing or, if no such date
is specified in such Termination Notice, or otherwise specified by the
Trustee, until a date mutually agreed upon by the Master Servicer and
Trustee. The Trustee shall as promptly as possible after the giving of a
Termination Notice appoint an Eligible Master Servicer as a successor
servicer (the "Successor Servicer"), subject to the consent of any
------------------
Enhancement Providers and any Agents, which consent shall not be unreasonably
withheld, and such Successor Master Servicer shall accept its appointment by
a written assumption in a form acceptable to the Trustee. In the event that
a Successor Master Servicer has not been appointed or has not accepted its
appointment at the time when the Master Servicer ceases to act as Master
Servicer, the Trustee without further action shall automatically be appointed
the Successor Master Servicer. The Trustee may delegate any of its servicing
obligations to an affiliate or agent in accordance with Sections 3.01 and
8.07. Notwithstanding the above, the Trustee shall, if it is legally unable
so to act, petition a court of competent jurisdiction to appoint any
established institution having a net worth of not less than $100,000,000 and
whose regular business includes the servicing of wholesale receivables as the
Successor Master Servicer hereunder. The Trustee shall immediately give
notice to the Rating Agencies, any Enhancement Providers, any Agents and the
Certificateholders upon the appointment of a Successor, any Agents Master
Servicer.
(b) Upon its appointment, the Successor Master Servicer shall be the
successor in all respects to the Master Servicer with respect to servicing
functions under this Agreement and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the
Master Servicer by the terms and provisions hereof (except that the Successor
Master Servicer shall not be liable for any liabilities incurred by the
predecessor Servicer), and all references in this Agreement to the Master
Servicer shall be deemed to refer to the Successor Master Servicer. Any
Successor Master Servicer, by its acceptance of its appointment, will
automatically agree to be bound by the terms and provisions of any
Enhancement Agreement.
(c) In connection with any Termination Notice, the Trustee will review
any bids which it obtains from Eligible Servicers and shall be permitted to
appoint any Eligible Master Servicer submitting such a bid as a Successor
Master Servicer for servicing compensation not in excess of the Servicing Fee
(provided that if all such bids exceed the Servicing Fee the Transferor at
its own expense shall pay when due the amount of any compensation in excess
of the Servicing Fee); provided, however, that the Transferor shall be
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responsible for payment of the Transferor's portion of the Servicing Fee as
determined pursuant to this Agreement and all other amounts in excess of the
Investors' Servicing Fee, and that no such monthly compensation paid out of
Collections shall be in excess of the Investors' Servicing Fee permitted to
the Master Servicer. The holders of the Transferor's Certificates agree that
if Ford Credit (or any Successor Servicer) is terminated as Master Servicer
hereunder, the portion of Collections to be paid to the Transferor shall be
reduced by an amount sufficient to pay Transferor's share of the compensation
of the Successor Master Servicer.
(d) All authority and power granted to the Successor Master Servicer
under this Agreement shall automatically cease and terminate upon termination
of the Trust pursuant to Section 12.01, and shall pass to and be vested in
the Transferor and, without limitation, the Transferor is hereby authorized
and empowered to execute and deliver, on behalf of the Successor Master
Servicer, as attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing rights. The
Successor Master Servicer agrees to cooperate with the Transferor in
effecting the termination of the responsibilities and rights of the Successor
Master Servicer to conduct servicing on the Receivables. The Successor
Master Servicer shall transfer its electronic records relating to the
Receivables to the Transferor in such electronic form as the Transferor may
reasonably request and shall transfer all other records, correspondence and
documents to the Transferor in the manner and at such times as the Transferor
shall reasonably request. To the extent that compliance with this Section
10.02 shall require the Successor Master Servicer to disclose to the
Transferor information of any kind which the Successor Master Servicer deems
to be confidential, the Transferor shall be required to enter into such
customary licensing and confidentiality agreements as the Successor Master
Servicer shall deem necessary to protect its interests.
ARTICLE XI
The Trustee
-----------
SECTION 11.01. Duties of Trustee. (a) The Trustee, prior to the
-----------------
occurrence of a Servicing Default of which it has knowledge and after the
curing of all Servicing Defaults which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in
this Agreement. If a Servicing Default to the knowledge of a Responsible
Officer of the Trustee has occurred (which has not been cured or waived), the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they substantially conform to the requirements of this Agreement.
(c) Subject to Section 11.01(a), no provision of this Agreement shall
be construed to relieve the Trustee from liability for its own grossly
negligent action, its own grossly negligent failure to act or its own wilful
misconduct; provided, however, that:
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(i) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be charged with knowledge of any
Servicing Default or the failure by the Master Servicer to comply with
the obligations of the Master Servicer referred to in Section 10.01(a)
and (b) unless a Responsible Officer of the Trustee obtains actual
knowledge of such failure; and
(iii) the Trustee shall not be charged with knowledge of an Early
Amortization Event unless a Responsible Officer of the Trustee obtains
actual knowledge thereof.
(d) The Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers, if there
is reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it, and none of the provisions contained in this Agreement shall in any
event require the Trustee to perform, or be responsible for the manner of
performance of, any obligations of the Master Servicer under this Agreement
except during such time, if any, as the Trustee shall be the successor to,
and be vested with the rights, duties, powers and privileges of, the Master
Servicer in accordance with the terms of this Agreement. Notwithstanding the
prior sentence, the Trustee when acting as successor Master Servicer, is
still entitled to indemnification under Sections 7.03 and 8.04.
(e) Except as expressly provided in this Agreement, the Trustee shall
have no power to vary the corpus of the Trust including the power to (i)
accept any substitute obligation for a Receivable initially assigned to the
Trust under Section 2.01 or 2.05, (ii) add any other investment, obligation
or security to the Trust or (iii) withdraw from the Trust any Receivables.
(f) In the event that the Transfer Agent and Registrar shall fail to
perform any obligation, duty or agreement in the manner or on the day
required to be performed by the Transfer Agent and Registrar, as the case may
be, under this Agreement, the Trustee shall be obligated promptly upon the
actual knowledge of a Responsible Officer of the Trustee to perform such
obligation, duty or agreement in the manner so required.
(g) If the Transferor has agreed to transfer any of its wholesale
receivables (other than the Receivables) to another Person, then upon the
written request of the Transferor, the Trustee will enter into such inter-
creditor agreements with the transferee of such receivables as are customary
and necessary to identify separately the rights of the Trust and such other
Person in the Transferor's wholesale receivables; provided, however, that the
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Trustee shall not be required to enter into any inter-creditor agreement
which could, in the sole opinion of the Trustee, adversely affect the
interests of the Investor Certificateholders or the Trustee and, upon the
request of the Trustee, the Transferor will deliver an Opinion of Counsel on
any matters relating to such inter-creditor agreement, reasonably requested
by the Trustee.
(h) Notwithstanding any other provision contained herein, the Trustee
is not acting as, and shall not be deemed to be, a fiduciary for any
Enhancement Provider in its capacity as such or as a Beneficiary, and the
Trustee's sole responsibility with respect to said parties shall be to
perform those duties with respect to said parties as are specifically set
forth herein and no implied duties or obligations shall be read into this
Agreement against the Trustee with respect to any such party.
SECTION 11.02. Certain Matters Affecting the Trustee. Except as
-------------------------------------
otherwise provided in Section 11.01:
(a) the Trustee may rely on and shall be protected in acting on,
or in refraining from acting in accord with, any resolution, Officers'
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented to it pursuant to this Agreement by
the proper party or parties;
(b) the Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation hereunder or in relation hereto, at the
request, order or direction of any of the Certificateholders, pursuant
to the provisions of this Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred
therein or thereby;
(d) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(e) the Trustee shall not be bound to make any investigation into
the facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document;
(f) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys or a custodian, and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent, attorney
or custodian appointed with due care by it hereunder; and
(g) except as may be required by Section 11.01(a) hereof, the
Trustee shall not be required to make any initial or periodic
examination of any documents or records related to the Receivables or
the Accounts for the purpose of establishing the presence or absence of
defects, the compliance by the Transferor with its representations and
warranties or for any other purpose.
SECTION 11.03. Trustee Not Liable for Recitals in Certificates. The
-----------------------------------------------
Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates (other than the certificate of
authentication on the Certificates). Except as set forth in Section 11.14,
the Trustee makes no representations as to the validity or sufficiency of
this Agreement or of the Certificates (other than the certificate of
authentication on the Certificates) or of any Receivable or related document
or any security interest of the Trust therein. The Trustee shall not be
accountable for the use or application by the Transferor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Transferor in respect of the Receivables
or deposited in or withdrawn from the Collection Account or any Series
Account.
SECTION 11.04. Trustee May Own Certificates. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the
Trustee.
SECTION 11.05. The Master Servicer to Pay Trustee's Fees and Expenses.
------------------------------------------------------
The Master Servicer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to receive, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trust hereby created and in the exercise and
performance of any of the power and duties hereunder of the Trustee, and,
subject to Section 8.04, the Master Servicer will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Agreement (including the reasonable fees and expenses of
its agents, any co-trustee and counsel) except any such expense, disbursement
or advance as may arise from its gross negligence or bad faith and except as
provided in the second following sentence. The Master Servicer's covenants
to pay the expenses, disbursements and advances provided for in the preceding
sentence shall survive the termination of this Agreement. If the Trustee is
appointed Successor Master Servicer pursuant to Section 10.02, the provisions
of this Section 11.05 shall not apply to expenses, disbursements and advances
made or incurred by the Trustee in its capacity as Successor Master Servicer,
which shall be covered out of the Servicing Fee; provided, however, if such
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expenses, disbursements and advances incurred by the Trustee are in amount in
excess of the Servicing Fee, such excess amount shall be paid in full to the
Trustee by Ford Credit. To the extent, if any, that any federal, state or
local taxes are payable by the Trust, such taxes shall be payable solely out
of Trust Assets and not out of the personal assets of the Trustee.
SECTION 11.06. Eligibility Requirements for Trustee. The Trustee
------------------------------------
hereunder shall at all times be a corporation organized and doing business
under the laws of the United States of America or any state thereof
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then, for the purpose of this Section 11.06, the combined capital and surplus
of such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 11.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 11.07.
SECTION 11.07. Resignation or Removal of Trustee. (a) The Trustee may
---------------------------------
at any time resign and be discharged from the trust hereby created by giving
written notice thereof to the Transferor and the Master Servicer. Upon
receiving such notice of resignation, the Transferor shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 11.06 hereof and shall fail to resign after
written request therefor by the Master Servicer, or if at any time the
Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or if a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of rehabilitation, conservation
or liquidation, then the Master Servicer may remove the Trustee and promptly
appoint a successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee.
(c) Any resignation or removal of the Trustee and appointment of
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 11.08 hereof.
SECTION 11.08. Successor Trustee. (a) Any successor trustee appointed
-----------------
as provided in Section 11.07 hereof shall execute, acknowledge and deliver to
the Transferor and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as Trustee herein. The predecessor
Trustee shall deliver to the successor trustee all documents or copies
thereof, at the expense of the Master Servicer, and statements held by it
hereunder; and the Transferor and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor
trustee all such rights, power, duties and obligations. The Master Servicer
shall immediately give notice to each Rating Agency and the
Certificateholders upon the appointment of a successor trustee.
(b) No successor trustee shall accept appointment as provided in this
Section 11.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 11.06 hereof.
SECTION 11.09. Merger or Consolidation of Trustee. Any Person into
----------------------------------
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding
to the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.06 hereof, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
SECTION 11.10. Appointment of Co-Trustee or Separate Trustee. (a)
---------------------------------------------
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust may at the time be located, the Trustee shall have the
power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section 11.10, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 11.06 and
no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 11.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article XI. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee and a copy thereof given to the Master Servicer.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 11.11. Tax Returns. In the event the Trust shall be required
-----------
to file tax returns, the Master Servicer shall prepare, or shall cause to be
prepared, and shall deliver, or shall cause to be delivered, to the Trustee
no later than five days immediately preceding any applicable due date and the
Trustee shall execute, to the extent it is the appropriate person to so
execute, file any such tax returns to be filed by the Trust. The Master
Servicer in accordance with the terms of the Supplements shall also prepare
or shall cause to be prepared all tax information required by law to be
distributed to the Investor Certificateholders. The Trustee will distribute
or cause to be distributed such information to the Investor
Certificateholders. The Master Servicer, upon request, will furnish the
Trustee with all such information known to the Master Servicer as may be
reasonably required in connection with the preparation of all tax returns of
the Trust or in connection with the distribution of tax information to the
Investor Certificateholders.
SECTION 11.12. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Certificates. All rights of action and claims under this Agreement or the
------------
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Certificateholders in respect
of which such judgment has been obtained.
SECTION 11.13. Suits for Enforcement. If a Servicing Default shall
---------------------
occur and be continuing, the Trustee, in its discretion may, subject to the
provisions of Section 10.01, proceed to protect and enforce its rights and
the rights of the Certificateholders under this Agreement by suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in
aid of the execution of any power granted in this Agreement or for the
enforcement of any other legal, equitable or other remedy as the Trustee,
being advised by counsel, shall deem most effectual to protect and enforce
any of the rights of the Trustee or the Certificateholders. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Certificateholder any plan of
reorganization, arrangement, adjustment or composition affecting the
Certificates or the rights of any Holder thereof, or authorize the Trustee to
vote in respect of the claim of any Certificateholder in any such proceeding.
SECTION 11.14. Representations and Warranties of Trustee. The Trustee
-----------------------------------------
represents and warrants that:
(i) the Trustee is a corporation organized, existing and in good
standing under the laws of the State of New York;
(ii) the Trustee has full power, authority and right to execute,
deliver and perform this Agreement and each Supplement, and has taken
all necessary action to authorize the execution, delivery and
performance by it of this Agreement and each Supplement; and
(iii) this Agreement and each Supplement has been, or will be, as
applicable, duly executed and delivered by the Trustee.
SECTION 11.15. Maintenance of Office or Agency. The Trustee will
-------------------------------
maintain at its expense in the Borough of Manhattan, The City of New York, an
office or offices or agency or agencies where notices and demands to or upon
the Trustee in respect of the Certificates and this Agreement may be served.
The Trustee initially designates its Corporate Trust Office as its office for
such purposes in New York. The Trustee will give prompt written notice to
the Master Servicer and to Holders of the Certificates of any change in the
location of the Certificate Register or any such office or agency.
ARTICLE XII
Termination
-----------
SECTION 12.01. Termination of Trust. The Trust and the respective
--------------------
obligations and responsibilities of the Transferor, the Master Servicer and
the Trustee created hereby (other than the obligation of the Trustee to make
payments to Investor Certificateholders as hereafter set forth) shall
terminate, except with respect to the duties described in Sections 7.03, 8.04
and 12.02(b), upon the earlier of (i) September 30, 2018 (the "Final Maturity
--------------
Date") and (ii) the day following the Distribution Date on which the Invested
----
Amount for all Series is zero (the "Trust Termination Date"). The Master
----------------------
Servicer will give the Rating Agencies prompt notice of the termination of
the Trust.
SECTION 12.02. Final Distribution. (a) The Master Servicer shall give
------------------
the Trustee at least 30 days prior notice of the Distribution Date on which
the Investor Certificateholders of any Series or Class may surrender their
Investor Certificates for payment of the final distribution on and
cancellation of such Investor Certificates (or, in the event of a final
distribution resulting from the application of Section 2.03 or 9.01, notice
of such Distribution Date promptly after the Master Servicer has determined
that a final distribution will occur, if such determination is made less than
30 days prior to such Distribution Date). Such notice shall be accompanied
by an Officer's Certificate setting forth the information specified in
Section 3.05 covering the period during the then-current calendar year
through the date of such notice. Not later than the fifth day of the month
in which the final distribution in respect of such Series or Class is payable
to Investor Certificateholders, the Trustee shall provide notice to Investor
Certificateholders of such Series or Class specifying (i) the date upon which
final payment of such Series or Class will be made upon presentation and
surrender of Investor Certificates of such Series or Class at the office or
offices therein designated, (ii) the amount of any such final payment and
(iii) that the Record Date otherwise applicable to such payment date is not
applicable, payments being made only upon presentation and surrender of such
Investor Certificates at the office or offices therein specified (which, in
the case of Bearer Certificate, shall be outside the United States). The
Trustee shall give such notice to the Transfer Agent and Registrar and the
Rating Agencies at the time such notice is given to Investor
Certificateholders.
(b) Notwithstanding a final distribution to the Investor
Certificateholders of any Series or Class (or the termination of the Trust),
except as otherwise provided in this paragraph, all funds then on deposit in
the Collection Account and any Series Account allocated to such Investor
Certificateholders shall continue to be held in trust for the benefit of such
Investor Certificateholders and the Trustee shall pay such funds to such
Investor Certificateholders upon surrender of their Investor Certificates
(and any excess shall be paid in accordance with the terms of any Enhancement
Agreement). In the event that all such Investor Certificateholders shall not
surrender their Investor Certificates for cancellation within six months
after the date specified in the notice from the Trustee described in
paragraph (a), the Trustee shall give a second notice to the remaining such
Investor Certificateholders to surrender their Investor Certificates for
cancellation and receive the final distribution with respect thereto (which
surrender and payment, in the case of Bearer Certificates, shall be outside
the United States). If within one year after the second notice all such
Investor Certificates shall not have been surrendered for cancellation, the
Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining such Investor Certificateholders
concerning surrender of their Investor Certificates, and the cost thereof
shall be paid out of the funds in the Collection Account or any Series
Account held for the benefit of such Investor Certificateholders. The
Trustee shall pay to the Transferor any monies held by it for the payment of
principal or interest that remain unclaimed for two years. After payment to
the Transferor, Investor Certificateholders entitled to the money must look
to the Transferor for payment as general creditors unless an applicable
abandoned property law designates another Person.
(c) In the event that the Invested Amount with respect to any Series is
greater than zero on its Termination Date (after giving effect to deposits
and distributions otherwise to be made on such Termination Date), the Trustee
will sell or cause to be sold on such Termination Date Receivables (or
interests therein) in an amount equal to the sum of (i) 110% of the Invested
Amount with respect to such Series on such Termination Date (after giving
effect to such deposits and distributions) and (ii) the Aggregate Available
Subordinated Amount with respect to such Series on the preceding
Determination Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the Distribution Date following such
Determination Date); provided, however, that in no event shall such amount
-------- -------
exceed such Series' Allocation Percentage (as defined in the Series
Supplements and for the Collection Period in which such Termination Date
occurs) of Receivables on such Termination Date. The proceeds (the
"Termination Proceeds") from such sale shall be immediately deposited into
--------------------
the Collection Account for the benefit of the Investor Certificateholders of
such Series. The Termination Proceeds shall be allocated and distributed to
the Investor Certificateholders of such Series in accordance with the terms
of the applicable Supplement.
SECTION 12.03. Transferor's Termination Rights. Upon the termination
-------------------------------
of the Trust pursuant to Section 12.01 and the surrender of the Transferor's
Certificates, the Trustee shall sell, assign and convey to the Transferor or
its designee, without recourse, representation or warranty, all right, title
and interest of the Trust in the Receivables, whether then existing or
thereafter created, all Related Security with respect thereto, all monies due
or to become due and all amounts received with respect thereto and all
proceeds thereof, except for amounts held by the Trustee pursuant to Section
12.02(b), and all of the Transferor's rights, remedies, powers and privileges
with respect to such Receivables under the Receivables Purchase Agreements.
The Trustee shall execute and deliver such instruments of transfer and
assignment, in each case without recourse, as shall be reasonably requested
by the Transferor to vest in the Transferor or its designee all right, title
and interest which the Trust had in all such property.
ARTICLE XIII
Miscellaneous Provisions
------------------------
SECTION 13.01. Amendment. (a) This Agreement or any Supplement may be
---------
amended from time to time (including in connection with the issuance of a
Supplemental Certificate) by the Master Servicer, the Transferor and the
Trustee without the consent of any of the Certificateholders, provided that
such action shall not adversely affect in any material respect the interests
of any Investor Certificateholder. The absence of such materially adverse
effect may be evidenced by (i) satisfaction of the Rating Agency Condition
with respect to the affected Investor Certificates in connection with such
amendment or (ii) an Opinion of Counsel for the Transferor, addressed and
delivered to the Trustee. Notwithstanding anything contained herein to the
contrary, the Trustee, with the consent of any Enhancement Providers, may at
any time and from time to time amend, modify or supplement the form of
Distribution Date Statement.
(b) This Agreement or any Supplement may also be amended from time to
time (including in connection with the issuance of a Supplemental
Certificate) by the Master Servicer, the Transferor and the Trustee, with the
consent of the Holders of Investor Certificates evidencing not less than
66-2/3% of the aggregate unpaid principal amount of the Investor Certificates
of all adversely affected Series, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Agreement or any Supplement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (i)
-------- -------
reduce in any manner the amount of or delay the timing of any distributions
to be made to Investor Certificateholders or deposits of amounts to be so
distributed or the amount available under any Enhancement without the consent
of each affected Investor Certificateholder, (ii) change the definition of or
the manner of calculating the interest of any Investor Certificateholder
without the consent of each affected Investor Certificateholder, (iii) reduce
the aforesaid percentage required to consent to any such amendment without
the consent of each Investor Certificateholder or (iv) adversely affect the
rating of any Series or Class by any Rating Agency without the consent of the
Holders of Investor Certificates of such Series or Class evidencing not less
than 66-2/3% of the aggregate unpaid principal amount of the Investor
Certificates of such Series or Class. Any amendment to be effected pursuant
to this paragraph shall be deemed to adversely affect all outstanding Series,
other than any Series with respect to which such action shall not, as
evidenced by an Opinion of Counsel for the Transferor, addressed and
delivered to the Trustee, adversely affect in any material respect the
interests of any Investor Certificateholder of such Series. The Trustee may,
but shall not be obligated to, enter into any such amendment which affects
the Trustee's rights, duties or immunities under this Agreement or otherwise.
(c) Promptly after the execution of any such amendment or consent
(other than an amendment pursuant to paragraph (a)), the Trustee shall
furnish notification of the substance of such amendment to each Investor
Certificateholder, and the Master Servicer shall furnish notification of the
substance of such amendment to each Rating Agency, each Agent and each
Enhancement Provider.
(d) It shall not be necessary for the consent of Investor
Certificateholders under this Section to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
(e) Notwithstanding anything in this Section to the contrary, no
amendment may be made to this Agreement or any Supplement which would
adversely affect in any material respect the interests of any Enhancement
Provider without the consent of such Enhancement Provider.
(f) Any Supplement executed in accordance with the provisions of
Section 6.03 shall not be considered an amendment to this Agreement for the
purposes of this Section.
SECTION 13.02. Protection of Right, Title and Interest to Trust. (a)
------------------------------------------------
The Master Servicer shall cause this Agreement, all amendments hereto and/or
all financing statements and continuation statements and any other necessary
documents covering the Certificateholders' and the Trustee's right, title,
and interest in and to the Trust to be promptly recorded, registered and
filed, and at all times to be kept recorded, registered and filed, all in
such manner and in such places as may be required by law to preserve and
protect the right, title and interest of the Certificateholders and the
Trustee hereunder to all property comprising the Trust. The Master Servicer
shall deliver to the Trustee file-stamped copies of, or filing receipts for,
any document recorded, registered or filed as provided above, as soon as
available following such recording, registration or filing. The Transferor
shall cooperate fully with the Master Servicer in connection with the
obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this Section 13.02(a).
(b) Within 30 days after the Transferor or the Master Servicer makes
any change in its name, identity or corporate structure which would make any
financing statement or continuation statement filed in accordance with
Section 13.02(a) seriously misleading within the meaning of Section 9-402(7)
of the UCC as in effect in Michigan or any other applicable jurisdiction the
Transferor shall give the Trustee and any Agent notice of any such change and
shall file such financing statements or amendments as may be necessary to
continue the perfection of the Trust's security interest in the Receivables
and the proceeds thereof.
(c) The Transferor and the Master Servicer will give the Trustee and
any Agent prompt written notice of any relocation of any office from which it
services Receivables or keeps records concerning the Receivables or of its
principal executive office and whether, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment of
any previously filed financing or continuation statement or of any new
financing statement and shall file such financing statements or amendments as
may be necessary to perfect or to continue the perfection of the Trust's
security interest in the Receivables and the proceeds thereof. The
Transferor and the Master Servicer shall at all times maintain each office
from which it services Receivables and its principal executive officer within
the United States of America.
(d) The Master Servicer will deliver to the Trustee, any Agent and any
Enhancement Provider: (i) upon the execution and delivery of each amendment
of this Agreement or any Supplement, an Opinion of Counsel to the effect
specified in Exhibit G-1; (ii) on each Addition Date on which any Additional
Accounts are to be included as the Accounts pursuant to Section 2.05(a) or
(b), an Opinion of Counsel substantially in the form of Exhibit G-2; and
(iii) on or before April 30 of each year, beginning with April 30, 1997, an
Opinion of Counsel substantially in the form of Exhibit G-2.
SECTION 13.03. Limitation on Rights of Certificateholders. (a) The
------------------------------------------
death or incapacity of any Certificateholder shall not operate to terminate
this Agreement or the Trust, nor shall such death or incapacity entitle such
Certificateholders' legal representatives or heirs to claim an accounting or
to take any action or commence any proceeding in any court for a partition or
winding-up of the Trust, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
(b) No Investor Certificateholder shall have any right to vote (except
as expressly provided in this Agreement) or in any manner otherwise control
the operation and management of the Trust, or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Investor
Certificateholders from time to time as partners or members of an
association, nor shall any Investor Certificateholder be under any liability
to any third person by reason of any action taken by the parties to this
Agreement pursuant to any provision hereof.
(c) No Investor Certificateholder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Investor Certificateholder previously shall have made, and unless the Holders
of Investor Certificates evidencing more than 50% of the aggregate unpaid
principal amount of all Investor Certificates (or, with respect to any such
action, suit or proceeding that does not relate to all Series, 50% of the
aggregate unpaid principal amount of the Investor Certificates of all Series
to which such action, suit or proceeding relates) shall have made, a request
to the Trustee to institute such action, suit or proceeding in its own name
as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after such request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Investor Certificateholder with every other
Investor Certificateholder and the Trustee, that no one or more Investor
Certificateholders shall have any right in any manner whatever by virtue or
by availing itself or themselves of any provisions of this Agreement to
affect, disturb or prejudice the rights of the holders of any other of the
Investor Certificates, or to obtain or seek to obtain priority over or
preference to any other such Investor Certificateholder, or to enforce any
right under this Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all Investor Certificateholders except
as otherwise expressly provided in this Agreement. For the protection and
enforcement of the provisions of this Section, each and every Investor
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 13.04. No Petition. The Master Servicer, Ford Credit (if it is
-----------
no longer the Master Servicer) and the Trustee, by entering into this
Agreement, each Investor Certificateholder, by accepting an Investor
Certificate, each holder of a Supplemental Certificate by accepting a
Supplemental Certificate and any Successor Master Servicer and each other
Beneficiary, by accepting the benefits of this Agreement, hereby covenants
and agrees that they will not at any time institute against FCAR any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law.
SECTION 13.05. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 13.06. Notices. (a) All demands, notices, instructions,
-------
directions and communications (collectively, "Notices") under this Agreement
-------
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, return receipt requested, to (i)
in the case of FCAR, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Secretary, (ii) in the case of Ford Credit, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Secretary, and (iii) in the case of the Trustee,
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: Corporate Trust
Department; or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.
(b) Any Notice required or permitted to be given to a Holder of
Registered Certificates shall be given by first-class mail, postage prepaid,
at the address of such Holder as shown in the Certificate Register. No
Notice shall be required to be mailed to a Holder of Bearer Certificates or
Coupons but shall be given as provided below. Any Notice so mailed within
the time prescribed in this Agreement shall be conclusively presumed to have
been duly given, whether or not the Investor Certificateholder receives such
Notice. In addition, in the case of any Series or Class with respect to
which any Bearer Certificates are outstanding, any Notice required or
permitted to be given to Investor Certificateholders of such Series or Class
shall be published in an Authorized Newspaper within the time period
prescribed in this Agreement.
SECTION 13.07. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement or
of the Certificates or rights of the Certificateholders.
SECTION 13.08. Assignment. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Section 8.02, this Agreement may not
be assigned by the Master Servicer.
SECTION 13.09. Certificates Nonassessable and Fully Paid. It is the
-----------------------------------------
intention of the parties to this Agreement that the Investor
Certificateholders shall not be personally liable for obligations of the
Trust, that the interests in the Trust represented by the Investor
Certificates shall be nonassessable for any losses or expenses of the Trust
or for any reason whatsoever and that Investor Certificates upon
authentication thereof by the Trustee are and shall be deemed fully paid.
SECTION 13.10. Further Assurances. The Transferor and the Master
------------------
Servicer agree to do and perform, from time to time, any and all acts and to
execute any and all further instruments required or reasonably requested by
the Trustee more fully to effect the purposes of this Agreement, including
the execution of any financing statements or continuation statements relating
to the Receivables for filing under the provisions of the UCC of any
applicable jurisdiction.
SECTION 13.11. No Waiver; Cumulative Remedies. No failure to exercise
------------------------------
and no delay in exercising, on the part of the Trustee or the
Certificateholders, any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges provided under this Agreement are cumulative and not exhaustive of
any rights, remedies, powers and privileges provided by law.
SECTION 13.12. Counterparts. This Agreement may be executed in two or
------------
more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute one
and the same instrument.
SECTION 13.13. Third-Party Beneficiaries. This Agreement will inure to
-------------------------
the benefit of and be binding upon the parties hereto, the Certificateholders
and the other Beneficiaries and their respective successors and permitted
assigns. Except as otherwise expressly provided in this Agreement, no other
Person will have any right or obligation hereunder.
SECTION 13.14. Actions by Certificateholders. Any request, demand,
-----------------------------
authorization, direction, notice, consent, waiver or other act by a
Certificateholder shall bind such Certificateholder and every subsequent
holder of any Certificate issued upon the registration of transfer of the
Certificates of such Certificateholder or in exchange therefor or in lieu
thereof in respect of anything done or omitted to be done by the Trustee or
the Master Servicer in reliance thereon, whether or not notation of such
action is made upon any such Certificate.
SECTION 13.15. Rule 144A Information. For so long as any of the
---------------------
Investor Certificates of any Series or Class are "restricted securities"
within the meaning of Rule 144(a)(3) under the Act, each of the Transferor,
the Trustee, the Master Servicer and any Enhancement Providers agree to
cooperate with each other to provide to any Investor Certificateholders of
such Series or Class and to any prospective purchaser of Investor
Certificates designated by such an Investor Certificateholder, upon the
request of such Investor Certificateholder or prospective purchaser, any
information required to be provided to such holder or prospective purchaser
to satisfy the condition set forth in Rule 144A(d)(4) under the Act.
SECTION 13.16. Action by Trustee. Upon any application or request by
-----------------
the Transferor or Master Servicer to the Trustee to take any action under any
provision under this Agreement, the Transferor or Master Servicer, as the
case may be, shall furnish to the Trustee an Officer's Certificate stating
that all conditions precedent, if any, provided for in this Agreement
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such Counsel all such conditions
precedent, if any, have been complied with. The Trustee shall be entitled to
conclusively rely on the Officer's Certificate or the Opinion of Counsel, as
the case may be, as authority for any action undertaken in connection
therewith.
SECTION 13.17. Merger and Integration. Except as specifically stated
----------------------
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived, or supplemented except as provided herein.
SECTION 13.18. Headings. The headings herein are for purposes of
--------
reference only and shall not otherwise affect the meaning or interpretation
or any provision hereof.
IN WITNESS WHEREOF, the Transferor, the Master Servicer and the
Trustee have caused this Pooling and Servicing Agreement to be duly executed
by their respective officers as of the day and year first above written.
FORD CREDIT AUTO RECEIVABLES LLC,
Transferor,
By: /s/
------------------------------
Name:
Title:
FORD MOTOR CREDIT COMPANY,
Master Servicer,
By: /s/
------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
Trustee,
By: /s/
------------------------------
Name:
Title: