1
EXHIBIT 4.2
AMENDED AND RESTATED
TRUST AGREEMENT
between
FORD CREDIT AUTO RECEIVABLES TWO L.P.
as Depositor,
and
PNC BANK, DELAWARE,
as Owner Trustee
Dated as of July 1, 1998
2
AMENDED AND RESTATED TRUST AGREEMENT, dated as of July 1, 1998
(as from time to time amended, supplemented or otherwise modified and in effect,
this "Agreement"), between FORD CREDIT AUTO RECEIVABLES TWO L.P., a Delaware
limited partnership, as Depositor, having its principal executive ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and PNC BANK, DELAWARE, a Delaware
banking corporation (the "Bank"), not in its individual capacity but solely as
trustee under this Agreement (in such capacity, the "Owner Trustee"), having its
principal corporate trust office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇.
WHEREAS, the parties hereto intend to amend and restate that
certain Trust Agreement, dated as of July 1, 1998, between the Depositor and the
Owner Trustee, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged, the Depositor and the Owner Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein are
defined in Appendix A hereto, which also contains rules as to usage that shall
be applicable herein.
1
3
ARTICLE II
ORGANIZATION OF THE TRUST
SECTION 2.01. Name. The Trust created hereby shall be known as
"Ford Credit Auto Owner Trust 1998-C", in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and ▇▇▇ and be sued.
SECTION 2.02. Office. The office of the Trust shall be in care
of the Owner Trustee at the Corporate Trust Office or at such other address in
the State of Delaware as the Owner Trustee may designate by written notice to
the Certificateholders and the Depositor.
SECTION 2.03. Purposes and Powers. (a) The purpose of the
Trust is, and the Trust shall have the power and authority, to engage in the
following activities:
(i) to issue the Notes pursuant to the Indenture, and the
Certificates pursuant to this Agreement, and to sell the Notes and the
Certificates upon the written order of the Depositor;
(ii) with the proceeds of the sale of the Notes and the
Certificates, to fund the Reserve Account, to pay the organizational,
start-up and transactional expenses of the Trust, and to pay the
balance to the Depositor pursuant to the Sale and Servicing Agreement;
(iii) to pay interest on and principal of the Notes and
distributions on the Certificates;
(iv) to Grant the Owner Trust Estate (other than the
Certificate Distribution Account and the proceeds thereof) to the
Indenture Trustee pursuant to the Indenture;
(v) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
2
4
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions
to the Noteholders and the Certificateholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the other
Basic Documents.
SECTION 2.04. Appointment of Owner Trustee. The Depositor
hereby appoints the Owner Trustee as trustee of the Trust effective as of the
date hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.05. Capital Contribution of Owner Trust Estate. As
of July 1, 1998, the Depositor sold, assigned, transferred, conveyed and set
over to the Owner Trustee the sum of $1. The Owner Trustee hereby acknowledges
receipt in trust from the Depositor, as of such date, of the foregoing
contribution, which shall constitute the initial Owner Trust Estate and shall be
deposited in the Certificate Distribution Account. The Depositor shall pay the
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee. On the Closing Date, the Depositor shall
convey to the Trust the Trust Property and the Owner Trustee shall convey to the
Depositor the Notes and the Certificates.
SECTION 2.06. Declaration of Trust. The Owner Trustee hereby
declares that it will hold the Owner Trust Estate in trust upon and subject to
the conditions set forth herein for the use and benefit of the
Certificateholders, subject to the obligations of the Trust under the Basic
Documents. It is the intention of the parties hereto that (i) the Trust
constitute a business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such
3
5
business trust and (ii) for income and franchise tax purposes, the Trust shall
be treated as a partnership, with the assets of the partnership being the
Receivables and other assets held by the Trust, the partners of the partnership
being the Certificateholders and the Depositor and the Notes constituting
indebtedness of the partnership. The parties agree that, unless otherwise re-
quired by the appropriate tax authorities, the Depositor, on behalf of the
Trust, will file or cause to be filed annual or other necessary returns, reports
and other forms consistent with the characterization of the Trust as a
partnership for such tax purposes. Effective as of the date hereof, the Owner
Trustee shall have the rights, powers and duties set forth herein and in the
Business Trust Statute with respect to accomplishing the purposes of the Trust.
The Owner Trustee has filed the Certificate of Trust with the Secretary of
State.
SECTION 2.07. Liability of the Depositor. (a)
Notwithstanding Section 3803 of the Business Trust Statute, the Depositor in
its capacity as the holder of the interests described in Section 3.11 shall be
liable directly to, and will indemnify each injured party for, all losses,
claims, damages, liabilities and expenses of the Trust (including Expenses, to
the extent that the assets of the Trust that would remain if all of the Notes
were paid in full would be insufficient to pay any such losses, claims, damages,
liabilities or expenses, or to the extent that such losses, claims, damages,
liabilities and expenses in fact are not paid out of the Owner Trust Estate)
that the Depositor would be liable for if the Trust were a partnership under the
Limited Partnership Act in which the Depositor were a general partner; provided,
however, that the Depositor shall not be liable to or indemnify Noteholders or
Note Owners for any losses incurred by Noteholders or Note Owners in their
capacity as holders of or beneficial owners of interests in limited recourse
debt secured by the Owner Trust Estate or be liable to or indemnify
Certificateholders for any losses incurred by the Certificateholders if such
losses would nevertheless have been incurred if the Certificates were limited
recourse debt secured by the Owner Trust Estate. In addition, any third-party
creditors of the Trust, or the arrangement between the Depositor and the
4
6
Trust (other than in connection with the obligations described in the preceding
sentence for which the Depositor shall not be liable), shall be deemed
third-party beneficiaries of this paragraph.
(b) No Certificateholder other than the Depositor to the
extent set forth in paragraph (a) of this Section 2.7, shall have any personal
liability for any liability or obligation of the Trust.
SECTION 2.08. Title to Trust Property. Legal title to the
entirety of the Owner Trust Estate shall be vested at all times in the Trust as
a separate legal entity, except where applicable law in any jurisdiction
requires title to any part of the Owner Trust Estate to be vested in a trustee
or trustees, in which case title shall be deemed to be vested in the Owner
Trustee, a co-trustee and/or a separate trustee, as the case may be.
SECTION 2.09. Situs of Trust. The Trust shall be located and
administered in the State of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the State of Delaware or the
State of New York. The Trust shall not have any employees in any state other
than the State of Delaware; provided, however, that nothing herein shall
restrict or prohibit the Bank or the Owner Trustee from having employees within
or without the State of Delaware. Payments will be received by the Trust only in
Delaware or New York, and payments will be made by the Trust only from Delaware
or New York. The only office of the Trust will be at the Corporate Trust Office
in the State of Delaware.
SECTION 2.10. Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Owner Trustee that:
(a) The Depositor is duly organized and validly existing as a
limited partnership in good standing under the laws of the State of Delaware,
with power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently conducted.
5
7
(b) The Depositor is duly qualified to do business as a
foreign limited partnership in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business shall require such qualifications.
(c) The Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms, and the Depositor has full
power and authority to sell and assign the property to be sold and assigned to,
and deposited with, the Trust, and the Depositor has duly authorized such sale
and assignment and deposit to the Trust; and the execution, delivery and
performance of this Agreement has been duly authorized by the Depositor.
(d) This Agreement constitutes a legal, valid, and binding
obligation of the Depositor, enforceable against the Depositor in accordance
with its terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation and
other similar laws and to general equitable principles.
(e) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under, the Certificate of
Limited Partnership or the Limited Partnership Agreement, or any indenture,
agreement or other instrument to which the Depositor is a party or by which it
is bound; nor result in the creation or imposition of any lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any law
or, to the best of the Depositor's knowledge, any order, rule or regulation
applicable to the Depositor of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties.
(f) There are no proceedings or investigations pending or, to
the Depositor's best knowledge, threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
6
8
over the Depositor or its properties: (i) asserting the invalidity of this
Agreement, the Indenture, any of the other Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated by
this Agreement, the Indenture or any of the other Basic Documents, (iii) seeking
any determination or ruling that might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement or (iv) which might adversely affect the
federal income tax attributes, or Applicable Tax State franchise or income tax
attributes, of the Notes and the Certificates.
(g) The representations and warranties of the Depositor in
Section 3.1 of the Purchase Agreement are true and correct.
SECTION 2.11. Federal Income Tax Matters. The
Cetificateholders acknowledge that it is their intent and that they understand
it is the intent of the Depositor and the Servicer that, for purposes of
federal income, state and local income and franchise tax and any other income
taxes, the Trust will be treated as a partnership and the Certificateholders
and the Depositor will be treated as partners in that partnership. The Deposi-
tor hereby agrees and the Certificateholders by acceptance of a Certificate
agree to such treatment and each agrees to take no action inconsistent with such
treatment. For purposes of federal income, State and local income and franchise
tax and any other income taxes each month:
(a) amounts paid to any Certificateholder pursuant to Section
5.2(a)(i) shall be treated as a guaranteed payment within the meaning
of Section 707(c) of the Code;
(b) to the extent the characterization provided for in
paragraph (a) of this Section 2.11 is not respected, gross ordinary
income of the Trust for such month as determined for federal income tax
purposes shall be allocated among the Certificate holders of each
Class of Certificates as of the Record Date occurring within such
month, in proportion to their ownership of the Aggregate Certificate
7
9
Balance on such date, in an amount up to the sum of (i) the Accrued
Class C Certificate Interest or Accrued Class D Certificate Interest,
as applicable, for such Class for such month, (ii) the portion of the
market discount on the Receivables accrued during such month that is
allocable to the excess, if any, of the aggregate Initial Certificate
Balance of such class of Certificates over the initial aggregate issue
price of such Class of Certificates and (iii) any amount expected to be
distributed to the Certificateholders of such Class pursuant to
Sections 4.6(c) and (d) of the Sale and Servicing Agreement (to the
extent not previously allocated pursuant to this paragraph (b)) to the
extent necessary to reverse any net loss previously allocated to
Certificateholders of such Class (to the extent not previously reversed
pursuant to this clause (iii)); and
(c) thereafter all remaining net income of the Trust (subject
to the modifications set forth below) for such month as determined for
federal income tax purposes (and each item of income, gain, credit,
loss or deduction entering into the computation thereof) shall be
allocated to the Depositor, to the extent thereof.
If the gross ordinary income of the Trust for any month is insufficient for the
allocations described in paragraph (b) above, subsequent gross ordinary income
shall first be allocated to make up such shortfall before any allocation
pursuant to paragraph (c) above. Net losses of the Trust, if any, for any month
as determined for federal income tax purposes (and each item of income, gain,
credit, loss or deduction entering into the computation thereof) shall be
allocated to the Depositor to the extent the Depositor, in its capacity as
"general partner," is reasonably expected to bear the economic burden of such
net losses, and any remaining net losses shall be allocated among the
Certificateholders as of the Record Date occurring within such month in
proportion to their ownership of the Aggregate Certificate Balance on such
Record Date. The Depositor is authorized to modify the allocations in this
paragraph if necessary or appropriate, in its sole discretion, for the
allocations to fairly reflect the economic income, gain or loss to the
8
10
Depositor or the Certificateholders or as otherwise required by the Code.
9
11
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.01. Initial Beneficial Ownership. Upon the formation
of the Trust by the contribution by the Depositor pursuant to Section 2.5 and
until the issuance of the Certificates, the Depositor shall be the sole
beneficial owner of the Trust.
SECTION 3.02. Capital Accounts. (a) The Owner Trustee shall
establish and maintain a separate bookkeeping account (a "Capital Account") for
the Depositor and each Certificateholder. The initial balance of the Capital
Account for (i) each Certificateholder shall be the amount initially paid for
such Certificateholder's Certificates and (ii) the Depositor shall be (x) the
fair market value of the Receivables minus (y) the proceeds of the sale of Notes
and Certificates net of the Reserve Initial Deposit. The Capital Account of the
Depositor or each Certificateholder shall also be increased by (i) the dollar
amount of any additional cash contributions made by the Depositor or such
Certificateholder, as the case may be, (ii) the fair market value of any
property (other than cash) contributed to the Trust by the Depositor or such
Certificateholder, as the case may be (net of any liabilities to which the
property is subject), and (iii) allocations to the Depositor or such
Certificateholder, as the case may be, of income and gain (including income
exempt from tax). The Capital Account of the Depositor or each Certificateholder
shall be decreased by (i) the dollar amount of any cash distributions made to
the Depositor or such Certificateholder, as the case may be, (ii) the fair
market value of any property (other than cash) distributed to the Depositor or
such Certificateholder, as the case may be (net of any liabil ities to which the
property is subject), (iii) allocations to the Depositor or such
Certificateholder, as the case may be, of loss or deductions (or items thereof),
and (iv) any allocations of expenditures of the Trust described in Section
705(a)(2)(B) of the Code.
(b) Notwithstanding any other provision
of this Agreement to the contrary, the foregoing provisions of this Section 3.2
regarding the maintenance of Capital Accounts shall be construed so as to comply
with the provisions of the Treasury Regulations promulgated
10
12
pursuant to Section 704 of the Code. The Depositor is hereby authorized to
modify these provisions to the minimum extent necessary to comply with such
regulations.
SECTION 3.03. The Certificates. The Class C Certificates and
the Class D Certificates shall each be issued in one or more registered,
definitive, physical certificates, in the form set forth in Exhibit A and
Exhibit B, respectively, in denominations of at least $20,000 and in integral
multiples of $1,000 in excess thereof. No Certificate may be sold, transferred,
assigned, participated, pledged, or otherwise disposed of (any such act, a
"Transfer") to any Person except in accordance with the provisions of Section
3.5 and any attempted Transfer in violation of Section 3.5 shall be null and
void (each a "Void Transfer").
The Certificates shall be executed on behalf of the Trust by
manual or facsimile signature of an authorized officer of the Owner Trustee.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefits of
this Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of authentication and
delivery of such Certificates.
If Transfer of the Certificates is permitted pursuant to
Section 3.5, a transferee of a Certificate shall become a Certificateholder, and
shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Certificate
duly registered in such transferee's name pursuant to Section 3.5.
SECTION 3.04. Authentication of Certificates. Concurrently
with the initial sale of the Receivables to the Trust pursuant to the Sale
and Servicing Agreement, the Owner Trustee shall cause the Class C
Certificates, in an aggregate principal balance equal to the Initial
Certificate Balance of such Class C Certificates, and the Class D Certificates,
in an aggregate principal balance equal to the Initial Certificate Balance of
such Class D Certificates, to be executed on behalf of the Trust,
11
13
authenticated and delivered to or upon the written order of the Depositor,
signed by the chairman of the board, the president, any executive vice
president, any vice president, the secretary, any assistant secretary, the
treasurer or any assistant treasurer of the General Partner, without further
action by the Depositor, in authorized denominations. No Certificate shall
entitle its Certificateholder to any benefit under this Agreement, or shall be
valid for any purpose, unless there shall appear on such Certificate a
certificate of authentication substantially in the form set forth in Exhibit A
or Exhibit B, as applicable, attached hereto executed by the Owner Trustee by
manual signature; such authentication shall constitute conclusive evidence that
such Certificate shall have been duly authenticated and delivered hereunder.
All Certificates shall be dated the date of their authentication.
SECTION 3.05. Registration of Certificates; Transfer and
Exchange of Certificates. (a) The Certificate Registrar shall keep or cause to
be kept, at the office or agency maintained pursuant to Section 3.9, a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trust shall provide for the registration of Certificates and of
Transfers and exchanges of Certificates as herein provided. The Bank shall be
the initial Certificate Registrar. No Transfer of a Certificate shall be
recognized except upon registration of such Transfer in the Certificate
Register.
(b) No Transfer of any Class C Certificate shall be permitted,
recognized or recorded unless the prospective transferee of such Class C
Certificate shall provide a letter in the form of Exhibit C hereof to the Trust,
the Owner Trustee and the Certificate Registrar, in which such prospective
transferee shall represent the following:
(i) It is not, and each account (if any) for which it is
purchasing the Class C Certificates is not, (A) an employee benefit
plan, as defined in Section 3(3) of ERISA, that is subject to Title I
of ERISA, (B) a plan described in Section 4975(e)(1) of the Code that
is subject to Section 4975 of the Code, (C) a governmental plan, as
defined in Section 3(32) of ERISA, subject to any federal, State or
local law which is, to a material extent, similar to
12
14
the provisions of Section 406 of ERISA or Section 4975 of the Code, (D)
an entity whose underlying assets include plan assets by reason of a
plan's investment in the entity (within the meaning of Department of
Labor Regulation 29 C.F.R. Section 2510.3-101 or otherwise under
ERISA) or (E) a person investing "plan assets" of any such plan
(including without limitation, for purposes of this clause (E), any
insurance company general account, but excluding any entity registered
under the Investment Company Act of 1940, as amended).
(ii) It is, and each account (if any) for which it is
purchasing the Class C Certificates is, a Person who is (A) a citizen
or resident of the United States, (B) a corporation or partnership
organized in or under the laws of the United States or any political
subdivision thereof, (C) an estate the income of which is includible in
gross income for United States tax purposes, regardless of its source,
(D) a trust if a U.S. court is able to exercise primary supervision
over the administration of such trust and one or more Persons meeting
the conditions of clause (A), (B), (C) or (E) of this paragraph (ii)
has the authority to control all substantial decisions of the trust or
(E) a Person not described in clauses (A) through (D) above whose
ownership of the Class C Certificates is effectively connected with
such Person's conduct of a trade or business within the United States
(within the meaning of the Code) and who provides the Owner Trustee
and the Depositor with an IRS Form 4224 (and such other certifications,
representations, or opinions of counsel as may be requested by the
Owner Trustee or the Depositor).
(iii) It understands that any purported Transfer of any Class
C Certificate (or any interest therein) to any Person who does not meet
the conditions of paragraphs (i) and (ii) above shall be a Void
Transfer, and the purported transferee in a Void Transfer shall not be
recognized by the Trust or any other Person as a Certificateholder for
any purpose.
13
15
(iv) It agrees that if it determines to Transfer any of the
Class C Certificates it will cause its proposed transferee to provide
to the Trust, the Owner Trustee and the Certificate Registrar a letter
substantially in the form of Exhibit C hereof or such other written
statement as the Depositor shall prescribe.
(c) Each Class D Certificate shall bear a legend to the
following effect unless determined otherwise by the Administrator (as certified
to the Owner Trustee in an Officer's Certificate) and the Owner Trustee
consistent with applicable law:
"THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER
ANY STATE SECURITIES OR BLUE SKY LAW OF ANY STATE OF THE UNITED STATES. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES FOR THE BENEFIT OF THE
TRUST AND THE DEPOSITOR THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS, AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN
EACH CASE, THAT THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, SUBJECT TO (A) THE RECEIPT BY THE TRUST AND THE
CERTIFICATE REGISTRAR OF A CERTIFICATE SUBSTANTIALLY IN THE FORM ATTACHED AS
EXHIBIT F TO THE TRUST AGREEMENT AND (B) THE RECEIPT BY THE TRUST AND THE
CERTIFICATE REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT
D TO THE TRUST AGREEMENT, WITH SUCH CHANGES THEREIN AS MAY BE APPROVED BY THE
DEPOSITOR, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE), SUBJECT TO THE RECEIPT BY THE TRUST,
THE INITIAL PURCHASER AND THE CERTIFICATE REGISTRAR OF SUCH EVIDENCE ACCEPTABLE
TO THE TRUST AND THE INITIAL PURCHASER THAT SUCH REOFFER, RESALE, PLEDGE OR
TRANSFER IS IN COMPLIANCE WITH THE TRUST AGREEMENT AND THE SECURITIES ACT AND
OTHER APPLICABLE LAWS, (3) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT PURSUANT TO ANY OTHER EXEMPTION FROM THE REGISTRATION
14
16
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUST AND
THE CERTIFICATE REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS
EXHIBIT E TO THE TRUST AGREEMENT OR (B) THE RECEIPT BY THE TRUST, THE INITIAL
PURCHASER AND THE CERTIFICATE REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE
TRUST AND THE INITIAL PURCHASER THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS
IN COMPLIANCE WITH THE TRUST AGREEMENT AND THE SECURITIES ACT AND OTHER
APPLICABLE LAWS, OR (4) TO THE DEPOSITOR OR ITS AFFILIATES, IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND
SECURITIES AND BLUE SKY LAWS OF THE STATES OF THE UNITED STATES."
As a condition to the registration of any Transfer of a Class
D Certificate, the prospective trans feree of such a Class D Certificate shall
be required to represent in writing to the Owner Trustee, the Certifi cate
Registrar and the Initial Purchaser the following, unless determined otherwise
by the Administrator (as certified to the Owner Trustee in an Officer's Certifi
cate):
(i) It understands that no subsequent Transfer of the
Class D Certificates is permitted unless it causes its proposed
transferee to provide to the Trust, the Certificate Registrar and the
Initial Purchaser a letter substantially in the form of Exhibit D or
Exhibit E hereof (with such changes therein as may be approved by the
Depositor), as applicable, or such other written statement as the
Depositor shall prescribe.
(ii) It is not (A) an employee benefit plan, as
defined in Section 3(3) of ERISA, that is subject to Title I of ERISA,
(B) a plan described in Section 4975(e)(1) of the Code that is subject
to Section 4975 of the Code, (C) a governmental plan, as defined in
Section 3(32) of ERISA, subject to any federal, State or local law
which is, to a material extent, similar to the provisions of Section
406 of ERISA or Section 4975 of the Code, (D) an entity whose
underlying assets include plan assets by reason of a plan's investment
in the entity (within the meaning of Department of Labor Regulation 29
C.F.R. Section 2510.3-101 or otherwise under ERISA) or (E) a person
investing "plan assets"
15
17
of any such plan (including without limitation, for purposes of this
clause (E), subject to any exceptions approved by the Depositor, any
insurance company general account, but excluding any entity registered
under the Investment Company Act of 1940, as amended).
(iii) It is a person who is (A) a citizen or resident
of the United States, (B) a corporation or partnership organized in or
under the laws of the United States or any political subdivision
thereof, (c) an estate the income of which is includible in gross
income for United States tax purposes, regardless of its source, (D) a
trust if a U.S. court is able to exercise primary supervision over the
administration of such trust and one or more persons described in
clause (A), (B), (C) or (E) of this paragraph (iii) has the authority
to control all substantial decisions of the trust or (E) a person not
described in clauses (A) though (D) of this paragraph (iii) whose
ownership of the Class D Certificates is effectively connected with
such person's conduct of a trade or business within the United States
(within the meaning of the Code) and who provides the Trust and the
Depositor with an IRS Form 4224 (and such other certifications,
representations, or opinions of counsel as may be requested by the
Trust or the Depositor).
(iv) It understands that any purported Transfer of
any Class D Certificate (or any interest therein) in contravention of
any of the restrictions and conditions contained in this Section will
be a Void Transfer, and the purported transferee in a Void Transfer
will not be recognized by the Trust or any other person as a
Certificateholder for any purpose.
(d) By acceptance of any Class D Certificate, the
Certificateholder thereof specifically agrees with and represents to the
Depositor, the Trust and the Certificate Registrar, that no Transfer of such
Class D Certificate shall be made unless the registration requirements of the
Securities Act and any applicable State
16
18
securities laws are complied with, or such Transfer is exempt from the
registration requirements under the Securities Act because the Transfer
satisfies one of the following:
(i) such Transfer is in compliance with Rule 144A
under the Securities Act ("Rule 144A"), to a transferee who the
transferor reasonably believes is a Qualified Institutional Buyer that
is purchasing for its own account or for the account of a Qualified
Institutional Buyer and to whom notice is given that such Transfer is
being made in reliance upon Rule 144A under the Securities Act and (x)
the transferor executes and delivers to the Trust and the Certificate
Registrar, a Rule 144A transferor certificate substantially in the form
attached as Exhibit F and (y) the transferee executes and delivers to
the Trust and the Certificate Registrar an investment letter
substantially in the form attached as Exhibit D.
(ii) after the appropriate holding period, such
Transfer is pursuant to an exemption from registration under the
Securities Act provided by Rule 144 under the Securities Act and the
transferee, if requested by the Trust, the Certificate Registrar or
the Initial Purchaser, delivers an Opinion of Counsel in form and
substance satisfactory to the Trust and the Initial Purchaser; and
(iii) such Transfer is to an institutional accredited
investor as defined in rule 501(a)(1), (2), (3) or (7) of Regulation D
promulgated under the Securities Act in a transaction exempt from the
registration requirements of the Securities Act, such Transfer is in
accordance with any applicable securities laws of any State of the
United States or any other jurisdiction, and such investor executes and
delivers to the Trust and the Certificate Registrar an investment
letter substantially in the form attached as Exhibit E.
(e) The Owner Trustee shall make available to the prospective
transferor and transferee of a Class D
17
19
Certificate information requested to satisfy the requirements of paragraph
(d)(4) of Rule 144A (the "Rule 144A Information"). The Rule 144A Information
shall include any or all of the following items requested by the prospective
transferee:
(i) the private placement memorandum relating to the
Class D Certificates dated July 20, 1998, and any amendments or
supplements thereto;
(ii) each statement delivered to Certificateholders
pursuant to Section 5.2(b) on each Distribution Date preceding such
request; and
(iii) such other information as is reasonably
available to the Owner Trustee in order to comply with requests for
information pursuant to Rule 144A under the Securities Act.
None of the Depositor, the Certificate Registrar or the Owner
Trustee is under an obligation to register any Class D Certificate under the
Securities Act or any other securities law.
(f) Upon surrender for registration of Transfer of any
Certificate at the office or agency maintained pursuant to Section 3.9 and upon
compliance with any provisions of this Agreement relating to such Transfer, the
Owner Trustee shall execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates in
authorized denominations of a like Class and aggregate amount dated the date of
authentication by the Owner Trustee or any authenticating agent. At the option
of a Certificateholder, Certificates may be exchanged for other Certificates of
authorized denominations of a like Class and aggregate amount upon surrender of
the Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.9.
Every Certificate presented or surrendered for registration of
Transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Owner Trustee and the Certificate Registrar, duly
executed by the Certificateholder or his attorney duly authorized in writing,
with such signature guaranteed by a member firm of the New York Stock Exchange
or a commer-
18
20
cial bank or trust company. Each Certificate surrendered for registration of
Transfer or exchange shall be cancelled and subsequently disposed of by the
Certificate Registrar in accordance with its customary practice.
No service charge shall be made for any registration of
Transfer or exchange of Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or govern-
mental charge that may be imposed in connection with any Transfer or exchange of
Certificates.
The preceding provisions of this Section 3.5 notwithstanding,
the Owner Trustee shall not make and the Certificate Registrar need not register
any Transfer or exchange of Certificates for a period of fifteen (15) days
preceding any Distribution Date for any payment with respect to the
Certificates.
SECTION 3.06. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate shall be surrendered to the
Certificate Registrar, or if the Certificate Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any Certificate and (b)
there shall be delivered to the Certificate Registrar and the Owner Trustee such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a protected purchaser, the Owner Trustee on behalf of the Trust shall execute
and the Owner Trustee shall authenticate and deliver, in exchange for, or in
lieu of, any such mutilated, destroyed, lost or stolen Certificate a new Cer-
tificate of like Class, tenor and denomination. In connection with the issuance
of any new Certificate under this Section 3.6, the Owner Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section 3.6 shall constitute
conclusive evidence of ownership in the Trust, as if originally issued, whether
or not the lost, stolen or destroyed Certificate shall be found at any time.
SECTION 3.07. Persons Deemed Owners of Certificates. Prior to
due presentation of a Certificate for registration of Transfer, the Owner
Trustee, the Certifi-
19
21
cate Registrar and any Certificate Paying Agent may treat the Person in whose
name any Certificate shall be registered in the Certificate Register as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Section 5.2 and for all other purposes whatsoever, and none of the Owner
Trustee, the Certificate Registrar or any Certificate Paying Agent shall be
bound by any notice to the contrary.
SECTION 3.08. Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer and the Depositor, or to the Indenture Trustee, within fifteen (15)
days after receipt by the Owner Trustee of a written request therefor from the
Servicer or the Depositor, or the Indenture Trustee, as the case may be, a list,
in such form as the requesting party may reasonably require, of the names and
addresses of the Certificateholders as of the most recent Record Date. If three
or more Certificateholders or one or more Certificateholders of Certificates
evidencing not less than 25% of the Aggregate Certificate Balance apply in
writing to the Owner Trustee, and such application states that the applicants
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates and such application is
accompanied by a copy of the communication that such applicants propose to
transmit, then the Owner Trustee shall, within five (5) Business Days after the
receipt of such application, afford such applicants access during normal
business hours to the current list of Certificateholders. Each
Certificateholder, by receiving and holding a Certificate, shall be deemed to
have agreed not to hold any of the Depositor, the Certificate Registrar or the
Owner Trustee accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
SECTION 3.09. Maintenance of Office or Agency. The Owner
Trustee shall maintain in the State of Delaware, an office or offices or agency
or agencies where Certificates may be surrendered for registration of Transfer
or exchange and where notices and demands to or upon the Owner Trustee in
respect of the Certificates and the Basic Documents may be served. The Owner
Trustee initially designates PNC Bank, Delaware, 222 Delaware
▇▇
▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as its
principal corporate trust office for such purposes. The Owner Trustee shall give
prompt written notice to the Depositor and to the Certificateholders of any
change in the location of the Certificate Registrar or any such office or
agency.
SECTION 3.10. Appointment of Certificate Paying Agent. The
Certificate Paying Agent shall make distributions to Certificateholders from
each Certificate Distribution Account pursuant to Section 5.2 and shall report
the amounts of such distributions to the Owner Trustee. Any Certificate Paying
Agent shall have the revocable power to withdraw funds from each Certificate
Distribution Account for the purpose of making the distributions referred to
above. The Owner Trustee may revoke such power and remove the Certificate Paying
Agent if the Owner Trustee determines in its sole discretion that the
Certificate Paying Agent shall have failed to perform its obligations under this
Agreement in any material respect. The Certificate Paying Agent shall initially
be the Owner Trustee, and any co-paying agent chosen by the Owner Trustee. The
Owner Trustee shall be permitted to resign as Certificate Paying Agent upon
thirty (30) days' written notice to the Owner Trustee. In the event that the
Bank shall no longer be the Certificate Paying Agent, the Owner Trustee shall
appoint a successor to act as Certificate Paying Agent (which shall be a bank or
trust company). The Owner Trustee shall cause such successor Certificate Paying
Agent or any additional Certificate Paying Agent appointed by the Owner Trustee
to execute and deliver to the Owner Trustee an instrument in which such
successor Certificate Paying Agent or additional Certificate Paying Agent shall
agree with the Owner Trustee that as Certificate Paying Agent, such successor
Certificate Paying Agent or additional Certificate Paying Agent will hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders. The Certificate Paying Agent shall return all
unclaimed funds to the Owner Trustee and upon removal of a Certificate Paying
Agent such Certificate Paying Agent shall also return all funds in its
possession to the Owner Trustee. The provisions of Sections 7.1, 7.3, 7.4 and
8.1 shall apply to the Owner Trustee also in its role as Certificate Paying
Agent, for so long as the Owner
21
23
Trustee shall act as Certificate Paying Agent and, to the extent applicable, to
any other paying agent appointed hereunder. Any reference in this Agreement to
the Certificate Paying Agent shall include any co-paying agent unless the
context requires otherwise.
SECTION 3.11. Certain Rights of Depositor. The Depositor shall
be entitled to any amounts not needed on any Distribution Date to make payments
on the Notes or the Certificates or to make deposits to the Reserve Account
pursuant to Section 4.6 of the Sale and Servicing Agreement, and to receive
amounts remaining in the Reserve Account following the payment in full of the
aggregate principal amount of the Notes and the Aggregate Certificate Balance
and of all other amounts owing or to be distributed hereunder or under the
Indenture or the Sale and Servicing Agreement to Noteholders and
Certificateholders and the termination of the Trust. The Depositor may not
Transfer any such rights unless it shall have received an Opinion of Counsel
that such Transfer shall not cause the Trust to be classified as an association
(or publicly traded partnership) taxable as a corporation.
22
24
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.01. Prior Notice to Certificateholders with Respect
to Certain Matters. With respect to the following matters, the Owner Trustee
shall not take action unless, (I) at least thirty (30) days before the taking of
such action, the Owner Trustee shall have notified the Certificateholders and
the Rating Agencies in writing of the proposed action and (II)
Certificate-holders holding not less than a majority of the Aggregate
Certificate Balance shall not have notified the Owner Trustee in writing prior
to the 30th day after such notice is given that such Certificateholders have
withheld consent or provided alternative direction:
(a) the initiation of any material claim or lawsuit by the
Trust (except claims or lawsuits brought by the Servicer in connection
with the collection of the Receivables) and the settlement of any
material action, claim or lawsuit brought by or against the Trust
(except with respect to the afore mentioned claims or lawsuits for
collection by the Servicer of the Receivables);
(b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Business Trust Statute);
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is
required;
(d) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is not
required and such amendment materially adversely affects the interests
of the Certificateholders;
(e) the amendment, change or modification of the Sale and
Servicing Agreement or the Administration Agreement, except to cure
any ambiguity or to
23
25
amend or supplement any provision in a manner or to add any provision
that would not materially adversely affect the interests of the
Certificateholders; or
(f) the appointment pursuant to the Indenture of a successor
Note Registrar, Note Paying Agent or Indenture Trustee, or pursuant to
this Agreement of a successor Certificate Registrar, or the consent to
the assignment by the Note Registrar, Note Paying Agent or Indenture
Trustee or Certificate Registrar of its obligations under the Indenture
or this Agreement, as applicable.
SECTION 4.02. Action by Certificateholders with Respect to
Certain Matters. The Owner Trustee may not, except upon the occurrence of an
Event of Servicing Termination subsequent to the payment in full of the Notes
and in accordance with the written direction of Certificateholders holding not
less than a majority of the Aggregate Certificate Balance, (a) remove the
Servicer under the Sale and Servicing Agreement pursuant to Article VIII
thereof, (b) appoint a successor Servicer pursuant to Article VIII of the Sale
and Servicing Agreement, (c) remove the Administrator under the Administration
Agreement pursuant to Section 9 thereof or (d) appoint a successor Administrator
pursuant to Section 9 of the Administration Agreement.
SECTION 4.03. Action by Certificateholders with Respect to
Bankruptcy. The Owner Trustee shall not have the power to commence a voluntary
proceeding in bank ruptcy relating to the Trust unless the Notes have been paid
in full and each Certificateholder (other than the Depositor) approves of such
commencement in advance and delivers to the Owner Trustee a certificate
certifying that such Certificateholder reasonably believes that the Trust is
insolvent.
SECTION 4.04. Restrictions on Certificateholders' Power.
The Certificateholders shall not direct the Owner Trustee to take or refrain
from taking any action if such action or inaction would be contrary to any
obligation of the Trust or the Owner
24
26
Trustee under this Agreement or any of the other Basic Documents or would be
contrary to Section 2.3, nor shall the Owner Trustee be obligated to follow any
such direction, if given.
SECTION 4.05. Majority Control. Except as expressly provided
herein, any action that may be taken by the Certificateholders under this
Agreement may be taken by the Certificateholders of Certificates evidencing not
less than a majority of the Aggregate Certificate Balance. Except as expressly
provided herein, any written notice of the Certificateholders delivered
pursuant to this Agreement shall be effective if signed by Certificateholders of
Certificates evidencing not less than a majority of the Aggregate Certificate
Balance at the time of the delivery of such notice.
25
27
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.01. Establishment of Certificate Distribution
Account. Pursuant to Section 4.1(c) of the Sale and Servicing Agreement, there
has been established and there shall be maintained two segregated trust ac-
counts, each in the name of "PNC Bank, Delaware, as Owner Trustee" at a
Qualified Institution or Qualified Trust Institution (which shall initially be
the corporate trust department of the Bank), which shall be designated as the
"Certificate Interest Distribution Account" and the "Certificate Principal
Distribution Account," respectively (each of the Certificate Interest
Distribution Account and the Certificate Principal Distribution Account, a
"Certificate Distribution Account"). Except as expressly provided in Section
3.10, the Certificate Distribution Account shall be under the sole dominion and
control of the Owner Trustee. All monies deposited from time to time in each
Certificate Distribution Account pursuant to the Sale and Servicing Agreement
shall be applied as provided in the Basic Documents. In the event that either
Certificate Distribution Account is no longer to be maintained at the corporate
trust department of the Bank, the Servicer shall, with the Owner Trustee's
assistance as necessary, cause such Certificate Distribution Account to be
moved to a Qualified Institution or a Qualified Trust Institution within ten
(10) Business Days (or such longer period not to exceed thirty (30) calendar
days as to which each Rating Agency may consent). Each Certificate Distribution
Account will be established and maintained pursuant to an account agreement
which specifies New York law as the governing law.
SECTION 5.02. Application of Trust Funds. (a) On each
Distribution Date, the Owner Trustee shall, based on the information contained
in the Servicer's Certificate delivered on the relevant Determination Date
pursuant to Section 3.9 of the Sale and Servicing Agreement:
(i) withdraw the amounts deposited into the
Certificate Interest Distribution Account
26
28
pursuant to Section 4.6(c) of the Sale and Servicing Agreement
on or prior to such Distribution Date and make or cause to be
made distributions and payments in the following order of
priority:
(1) first, to the Certificateholders of
Class C Certificates, an amount equal to the Accrued
Class C Certificate Interest, provided that if there
are not sufficient funds available to pay the entire
amount of the Accrued Class C Certificate Interest,
the amounts available shall be applied to the payment
of such interest on the Class C Certificates on a pro
rata basis;
(2) second, to the Certificateholders of
Class D Certificates, an amount equal to the Accrued
Class D Certificate Interest; provided that if there
are not sufficient funds available to pay the entire
amount of the Accrued Class D Certificate Interest,
the amounts available shall be applied to the payment
of such interest on the Class D Certificates on a pro
rata basis; and
(3) third, to the Depositor, any funds
remaining on deposit in the Certificate Interest
Distribution Account.
(ii) withdraw the amounts deposited into the
Certificate Principal Distribution Account pursuant to Section
4.6(c) and (d) of the Sale and Servicing Agreement on or prior
to such Distribution Date and make or cause to be made
distributions and payments in the following order of priority:
(1) first, to the Certificateholders of the
Class C Certificates in reduction of the Certificate
Balance of the Class C Certificates, until the
Certificate Balance of the Class C Certificates has
been reduced to zero; provided that if there are not
sufficient funds available to
27
29
reduce the Certificate Balance of the Class C
Certificates to zero, the amounts available shall be
applied to the reduction of the Certificate Balance
of the Class C Certificates on a pro rata basis;
(2) second, to the Certificateholders of the
Class D Certificates in reduction of the Certificate
Balance of the Class D Certificates, until the Cer-
tificate Balance of the Class D Certificates has
been reduced to zero; provided that if there are not
sufficient funds available to reduce the Certificate
Balance of the Class D Certificates to zero, the
amounts available shall be applied the reduction of
the Certificate Balance of the Class D Certificates
on pro rata basis; and
(3) third, to the Depositor, any funds
remaining on deposit in the Certificate Principal
Distribution Account.
(b) On each Distribution Date, the Owner Trustee shall, or
shall cause the Certificate Paying Agent to, send to each Certificateholder as
of the related Record Date the statement provided to the Owner Trustee by the
Servicer pursuant to Section 4.9 of the Sale and Servicing Agreement with
respect to such Distribution Date.
(c) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to a Certificateholder, such tax
shall reduce the amount otherwise distributable to such Certificateholder in
accordance with this Section 5.2. The Owner Trustee and each Certificate Paying
Agent is hereby authorized and directed to retain from amounts otherwise
distributable to the Certificateholders sufficient funds for the payment of any
such withholding tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed
with respect to a Certificateholder shall be treated as cash
28
30
distributed to such Certificateholder at the time it is withheld by the Trust
and remitted to the appropriate taxing authority. If there is a possibility that
withholding tax is payable with respect to a distribution (such as a
distribution to a non-U.S. Certificateholder), the Owner Trustee may, in its
sole discretion, withhold such amounts in accordance with this paragraph (c). In
the event that a Certificateholder wishes to apply for a refund of any such
withholding tax, the Owner Trustee shall reasonably cooperate with such
Certificateholder in making such claim so long as such Certificateholder agrees
to reimburse the Owner Trustee for any out-of-pocket expenses incurred.
SECTION 5.03. Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Distribution Date
shall be made to each Certificateholder of record on the preceding Record Date
either by wire transfer, in immediately available funds, to the account of such
Certificateholder at a bank or other entity having appropriate facilities
therefor, if (i) such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five (5) Business Days prior
to such Distribution Date and such Certificateholder's Certificates in the
aggregate evidence a denomination of not less than $1,000,000, or (ii) such
Certificateholder is the Depositor or, if not, by check mailed to such
Certificateholder at the address of such Certificateholder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution in
respect of any Certificate (whether on the applicable Final Scheduled
Distribution Date or otherwise) will be payable only upon presentation and
surrender of such Certificate at the office or agency maintained for that
purpose by the Owner Trustee pursuant to Section 3.9.
SECTION 5.04. No Segregation of Monies; No Interest. Subject
to Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder need
not be segregated in any manner except to the extent required by law, the
Indenture or the Sale and Servicing Agreement, and may be deposited under such
general conditions as may be prescribed by law, and the Owner Trustee shall not
be liable for any interest thereon.
29
31
SECTION 5.05. Accounting and Reports to Noteholders,
Certificateholders, Internal Revenue Service and Others. The Owner Trustee
shall, based on information provided by or on behalf of the Depositor, (a)
maintain (or cause to be maintained) the books of the Trust on a calendar year
basis on the accrual method of accounting, (b) deliver (or cause to be
delivered) to each Certificateholder, as may be required by the Code and
applicable Treasury Regulations, such information as may be required (including
Schedule K-1) to enable each Certificateholder to prepare its federal and State
income tax returns, (c) file (or cause to be filed) such tax returns relating to
the Trust (including a partnership information return, IRS Form 1065), and make
such elections as may from time to time be required or appropriate under any
applicable State or federal statute or rule or regulation thereunder so as to
maintain the Trust's characterization as a partnership for federal income tax
purposes, (d) cause such tax returns to be signed in the manner required by law
and (e) collect (or cause to be collected) any withholding tax as described in
and in accordance with Section 5.2(c) with respect to income or distributions to
Certificateholders. The Owner Trustee shall elect under Section 1278 of the Code
to include in income currently any market discount that accrues with respect to
the Receivables. The Owner Trustee shall not make the election provided under
Section 754 of the Code.
SECTION 5.06. Signature on Returns; Tax Matters Partner. (a)
(a) The Depositor, as general partner for income tax purposes, shall
prepare (or cause to be pre pared) and sign, on behalf of the Trust,
the tax returns of the Trust.
(b) The Depositor shall be designated the "tax matters
partner" of the Trust pursuant to Section 6231(a)(7)(A) of the Code and
applicable Treasury Regulations.
30
32
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.01. General Authority. The Owner Trustee is
authorized and directed to execute and deliver the Basic Documents to which the
Trust is to be a party and each certificate or other document attached as an
exhibit to or contemplated by the Basic Documents to which the Trust is to be a
party and any amendment or other agreement, in each case, in such form as the
Depositor shall approve, as evidenced conclusively by the Owner Trustee's
execution thereof and the Depositor's execution of this Agreement, and to direct
the Indenture Trustee to authenticate and deliver (i) Class A-1 Notes in the
aggregate principal amount of $300,000,000, (ii) Class A-2 Notes in the
aggregate principal amount of $300,000,000, (iii) Class A-3 Notes in the
aggregate principal amount of $650,000,000, (iv) Class A-4 Notes in the
aggregate principal amount of $712,000,000, (v) Class A-5 Notes in the aggregate
principle amount of $200,000,000 and (vi) Class B Notes in the aggregate
principal amount of $92,000,000. In addition to the foregoing, the Owner Trustee
is authorized to take all actions required of the Trust pursuant to the Basic
Documents. The Owner Trustee is further authorized from time to time to take
such action on behalf of the Trust as is permitted by the Basic Documents and
which the Servicer or the Administrator recommends with respect to the Basic
Documents, except to the extent that this Agreement expressly requires the
consent of Certificateholders for such action.
SECTION 6.02. General Duties. It shall be the duty of the
Owner Trustee to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement and the other Basic
Documents to which the Trust is a party and to administer the Trust in the
interest of the Certificateholders, subject to the lien of the Indenture and in
accordance with the provisions of this Agreement and the other Basic Documents.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Administrator is required in the Administration
Agreement to perform any act or to discharge such duty of the Owner Trustee or
the Trust hereunder or under any other Basic
31
33
Document, and the Owner Trustee shall not be held liable for the default or
failure of the Administrator to carry out its obligations under the
Administration Agreement. Except as expressly provided in the Basic Documents,
the Owner Trustee shall have no obligation to administer, service or collect the
Receivables or to maintain, monitor or otherwise supervise the administration,
servicing or collection of the Receivables.
SECTION 6.03. Action upon Instruction. (a) Subject to
Article IV, and in accordance with the terms of the Basic Documents, the
Certificateholders may, by written instruction, direct the Owner Trustee in the
management of the Trust.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any other Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any other Basic Document, the Owner Trustee shall promptly give
notice (in such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Certificateholders received, the Owner
Trustee shall not be liable on account of such action to any Person. If the
Owner Trustee shall not have received appropriate instruction within ten (10)
days of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the other Basic Documents, as it shall deem
to be in the best interests of the Certificateholders, and shall have no
liability to any Person for such action or inaction.
32
34
(d) In the event the Owner Trustee is unsure as to the
application of any provision of this Agreement or any other Basic Document or
any such provision is ambiguous as to its application, or is, or appears to be,
in conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any such
instruction received, the Owner Trustee shall not be liable, on account of such
action or inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within ten (10) days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Agreement or the
other Basic Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.
SECTION 6.04. No Duties Except as Specified in this Agreement
or in Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee or the Trust is a party, except as expressly provided
by the terms of this Agreement or in any document or written instruction
received by the Owner Trustee pursuant to Section 6.3; and no implied duties or
obligations shall be read into this Agreement or any other Basic Document
against the Owner Trustee. The Owner Trustee shall have no responsibility for
filing any financing or continuation statement in any public office at any time
or to otherwise perfect or maintain the perfection of any security interest or
lien granted to it hereunder or to prepare or file any Commission filing for
the Trust or to record this Agreement or any other Basic Document. The Owner
Trustee nevertheless
33
35
agrees that it will, at its own cost and expense, promptly take all action as
may be necessary to discharge any lien (other than the lien of the Indenture) on
any part of the Owner Trust Estate that results from actions by, or claims
against, the Owner Trustee that are not related to the ownership or the
administration of the Owner Trust Estate.
SECTION 6.05. No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the other Basic
Documents to which the Trust or the Owner Trust is a party and (iii) in
accordance with any document or instruction delivered to the Owner Trustee
pursuant to Section 6.3.
SECTION 6.06. Restrictions. The Owner Trustee shall not take
any action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee, would (i)
affect the treatment of the Notes as indebtedness for federal income or
Applicable Tax State income or franchise tax purposes, (ii) be deemed to cause
a taxable exchange of the Notes for federal income or Applicable Tax State
income or franchise tax purposes or (iii) cause the Trust or any portion thereof
to be taxable as an association (or publicly traded partnership) taxable as a
corporation for federal income or Applicable Tax State income or franchise tax
purposes. The Certificateholders shall not direct the Owner Trustee to take
action that would violate the provisions of this Section 6.6.
34
36
ARTICLE VII
REGARDING THE OWNER TRUSTEE
SECTION 7.01. Acceptance of Trusts and Duties. The Owner
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this Agreement.
The Owner Trustee also agrees to disburse all monies actually received by it
constituting part of the Owner Trust Estate upon the terms of this Agreement to
which the Trust or Owner Trustee is a party and the other Basic Documents. The
Owner Trustee shall not be answerable or accountable hereunder or under any
other Basic Document under any circumstances, except (i) for its own willful
misconduct, bad faith or negligence or (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 7.3 expressly made by the Owner
Trustee. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made by a responsible officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the
instructions of any Certificateholder, the Indenture Trustee, the
Depositor, the Administrator or the Servicer;
(c) no provision of this Agreement or any other Basic Document
shall require the Owner Trustee to expend or risk funds or otherwise
incur any financial liability in the performance of any of its rights
or powers hereunder or under any other Basic Document if the Owner
Trustee shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable
for indebtedness evidenced by or arising under any of the Basic
Documents, including the principal of and interest on the Notes or
amounts distributable on the Certificates;
35
37
(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Depositor or for the form, character,
genuineness, sufficiency, value or validity of any of the Owner Trust
Estate or for or in respect of the validity or sufficiency of the
other Basic Documents, other than the certificate of authentication
on the Certificates, and the Owner Trustee shall in no event assume or
incur any liability, duty, or obligation to any Noteholder or to any
Certificateholder, other than as expressly provided for herein and in
the other Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Servicer, the Administrator, the Depositor or the
Indenture Trustee under any of the Basic Documents or otherwise and
the Owner Trustee shall have no obligation or liability to perform the
obligations of the Trust under this Agreement or the other Basic
Documents that are required to be performed by the Administrator under
the Administration Agreement, the Servicer under the Sale and Servicing
Agreement or the Indenture Trustee under the Indenture; and
(g) the Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement, or
to institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any other Basic Document,
at the request, order or direction of any of the Certificateholders,
unless such Certificateholders have offered to the Owner Trustee
security or indemnity satisfactory to it against the costs, expenses
and liabilities that may be incurred by the Owner Trustee therein or
thereby. The right of the Owner Trustee to perform any discretionary
act enumerated in this Agreement or in any other Basic Document shall
not be construed as a duty, and the Owner Trustee shall not be
answerable for other than its willful misconduct, bad faith or
negligence in the performance of any such act.
36
38
SECTION 7.02. Furnishing of Documents. The Owner Trustee shall
furnish to the Certificateholders, promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Basic Documents.
SECTION 7.03. Representations and Warranties. The Owner
Trustee hereby represents and warrants to the Depositor, for the benefit of the
Certificateholders, that:
(a) It is a banking corporation duly organized and validly
existing in good standing under the laws of the State of Delaware. It
has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement, and this Agreement
will be exe cuted and delivered by one of its officers who is duly
authorized to execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any federal or Delaware State law, governmental rule or
regulation governing the banking or trust powers of the Owner Trustee
or any judgment or order binding on it, or constitute any default under
its charter documents or by-laws or any indenture, mortgage, contract,
agreement or instrument to which it is a party or by which any of its
properties may be bound.
SECTION 7.04. Reliance; Advice of Counsel.
(a) The Owner Trustee may rely upon, shall be protected in relying upon, and
shall incur no liability to anyone in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion,
bond, or other document or paper believed by it to be genuine and believed by it
to be signed by the proper party or parties. The Owner Trustee may accept a
37
39
certified copy of a resolution of the board of directors or other governing body
of any corporate party as conclusive evidence that such resolution has been
duly adopted by such body and that the same is in full force and effect. As to
any fact or matter the method of the determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter
and such certificate shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder
and in the performance of its duties and obligations under this Agreement or the
other Basic Documents, the Owner Trustee (i) may act directly or through its
agents or attorneys pursuant to agreements entered into with any of them, and
the Owner Trustee shall not be liable for the conduct or misconduct of such
agents or attorneys if such agents or attorneys shall have been selected by the
Owner Trustee with reasonable care, and (ii) may consult with counsel,
accountants and other skilled Persons to be selected with reasonable care and
employed by it. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the written opinion
or advice of any such counsel, accountants or other such Persons and not
contrary to this Agreement or any other Basic Document.
SECTION 7.05. Not Acting in Individual Capacity. Except as
provided in this Article VII, in accepting the trusts hereby created, the Bank
acts solely as Owner Trustee hereunder and not in its individual capacity, and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Agreement or any other Basic Document shall
look only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.06. Owner Trustee Not Liable for Certificates or
Receivables. The recitals contained herein and in the Certificates (other than
the signature and countersignature of the Owner Trustee on the Certificates)
shall be taken as the statements of the Depositor,
38
40
and the Owner Trustee assumes no responsibility for the correctness thereof. The
Owner Trustee makes no representations as to the validity or sufficiency of
this Agreement, of any other Basic Document or of the Certifi ▇▇▇▇▇ (other than
the signature and countersignature of the Owner Trustee on the Certificates) or
the Notes, or of any Receivable or related documents. The Owner Trustee and the
Bank shall at no time have any responsibility or liability for or with respect
to the legality, validity and enforceability of any Receivable, or the
perfection and priority of any security interest created by any Receivable in
any Financed Vehicle or the maintenance of any such perfection and priority, or
for or with respect to the sufficiency of the Owner Trust Estate or its ability
to generate the payments to be distributed to Certificateholders under this
Agreement or the Noteholders under the Indenture, including, without limitation:
the existence, condition and ownership of any Financed Vehicle; the existence
and enforceability of any insurance thereon; the existence and contents of any
Receivable on any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or any intervening assignment; the
completeness of any Receivable; the performance or enforcement of any
Receivable; the compliance by the Depositor or the Servicer with any warranty or
representation made under any Basic Document or in any related document, or the
accuracy of any such warranty or representation or any action of the Indenture
Trustee, the Administrator or the Servicer or any subservicer taken in the name
of the Owner Trustee.
SECTION 7.07. Bank May Own Certificates and Notes. The Bank,
in its individual or any other capac ity, may become the owner or pledgee of
Certificates or Notes and may deal with the Depositor, the Servicer, the
Administrator and the Indenture Trustee in banking transactions with the same
rights as it would have if it were not Owner Trustee.
39
41
ARTICLE VIII
COMPENSATION AND INDEMNITY OF OWNER TRUSTEE
SECTION 8.01. Owner Trustee's Fees and Expenses. The Owner
Trustee shall receive as compensation for its services hereunder such fees as
have been separately agreed upon before the date hereof between the Depositor
and the Owner Trustee, and the Owner Trustee shall be entitled to and reimbursed
by the Depositor for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder. Such amounts shall be treated for tax purposes as having been
contributed to the Trust by the Depositor and the tax deduction for such amounts
shall be allocated to the Depositor.
SECTION 8.2. Indemnification. The Depositor shall be liable as
prime obligor for, and shall indemnify the Owner Trustee, the Bank and their
respective successors, assigns, agents and servants (collectively, the
"Indemnified Parties") from and against, any and all liabilities, obligations,
losses, damages, taxes, claims, actions and suits, and any and all reasonable
costs, expenses and disbursements (including reasonable legal fees and expenses)
of any kind and nature whatsoever (collectively, "Expenses") which may at any
time be imposed on, incurred by, or asserted against the Owner Trustee, the Bank
or any Indemnified Party in any way relating to or arising out of this
Agreement, the other Basic Documents, the Owner Trust Estate, the
administration of the Owner Trust Estate or the action or inaction of the
Owner Trustee hereunder; provided that the Depositor shall not be liable
for or required to indemnify an Indemnified Party from and against Expenses
arising or resulting from (i) the Indemnified Party's own willful misconduct,
bad faith or negligence, or (ii) the inaccuracy of any representation or
warranty contained in Section 7.3 expressly made by the Indemnified Party. The
indemnities contained in this Section 8.2 shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement. In the
event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section 8.2, the Owner Trustee's
40
42
choice of legal counsel shall be subject to the approval of the Depositor, which
approval shall not be unreasonably withheld.
SECTION 8.03. Payments to Owner Trustee. Any amounts paid to
the Owner Trustee pursuant to this Article VIII shall be deemed not to be a
part of the Owner Trust Estate immediately after such payment.
41
43
ARTICLE IX
TERMINATION
SECTION 9.01. Termination of Trust Agreement. (a) This
Agreement (other than the provisions of Article VIII) shall terminate and be of
no further force or effect and the Trust shall dissolve, (i) upon the maturity
or other liquidation of the last remaining Receivable and the disposition of
any amounts received upon such maturity or liquidation, (ii) upon the payment to
the Noteholders and the Certificateholders of all amounts required to be paid to
them pursuant to the terms of the Indenture, the Sale and Servicing Agreement
and Article V or (iii) at the time provided in Section 9.2. Any Insolvency
Event, liquidation, dissolution, death or incapacity with respect to any
Certificateholder, other than the Depositor as described in Section 9.2, shall
not (x) operate to terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of all
or any part of the Trust or Owner Trust Estate nor (z) otherwise affect the
rights, obligations and liabilities of the parties hereto. Upon dissolution of
the Trust, the Owner Trustee shall wind up the business and affairs of the Trust
as required by Section 3808 of the Business Trust Statute.
(b) Except as provided in Section 9.1(a), neither the
Depositor nor any Certificateholder shall be entitled to revoke or terminate the
Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which the Certificateholders shall surrender their
Certificates to the Certificate Paying Agent for payment of the final
distribution and cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five (5) Business Days of receipt of notice of
such termination from the Servicer, stating (i) the Distribution Date upon or
with respect to which final payment of the Certificates shall be made upon
presentation and surrender of the Certificates at the office of the Certificate
Paying Agent therein designated, (ii) the amount of any such final payment
(after reservation of sums sufficient to pay all claims and obligations, if
42
44
any, known to the Owner Trustee and payable by the Trust) and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Certificate Paying Agent therein specified. The Owner Trustee
shall give such notice to the Certificate Registrar (if other than the Owner
Trustee) and the Certificate Paying Agent at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Certificates, the
Certificate Paying Agent shall cause to be distributed to Certificateholders
amounts distributable on such Distribution Date pursuant to Section 5.2. Upon
the satisfaction and discharge of the Indenture, and receipt of a certificate
from the Indenture Trustee stating that all Noteholders have been paid in full
and that the Indenture Trustee is aware of no claims remaining against the Trust
in respect of the Indenture and the Notes, the Owner Trustee, in the absence of
actual knowledge of any other claim against the Trust, shall be deemed to have
made reasonable provision to pay all claims and obligations (including
conditional, contingent or unmatured obligations) for purposes of Section
3808(e) of the Business Trust Statute.
In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six (6) months after the
date specified in the above mentioned written notice, the Owner Trustee shall
give a second written notice to the remaining Certificateholders to surrender
their Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the Certificates
shall not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Agreement. Subject to applicable
escheat laws, any funds remaining in the Trust after exhaustion of such remedies
shall be distributed by the Owner Trustee to the Depositor.
(d) Upon final distribution of any funds remaining in the
Trust, the Owner Trustee shall cause the Certifi-
43
45
cate of Trust to be cancelled by filing a certifi cate of cancellation with the
Secretary of State in accordance with the provisions of Section 3810(c) of the
Business Trust Statute.
SECTION 9.02. Dissolution upon Insolvency or Dissolution of
Depositor or General Partner. Notwithstanding the provisions of Section 3808 of
the Business Trust Statute, in the event that an Insolvency Event or a
dissolution shall occur with respect to the Depositor or the General Partner,
the Receivables shall be sold and this Agreement and the Trust shall be
terminated in accordance with Section 9.1 ninety (90) days after the date of
such Insolvency Event or the event giving rise to such dissolution, unless,
before the end of such 90-day period, the Owner Trustee shall have received
written instructions from (a) the Certificateholders (other than the Depositor)
of each Class of Certificates evidencing not less than a majority of the
Certificate Balance of such Class and a majority of the right to receive
distributions in respect of interest on the Certificate Balance of such Class
(including in each case the Certificate Balance of Certificates owned by the
Servicer and any of its Affiliates other than the Depositor), (b) the
Noteholders (other than the Depositor) of each Class of Notes evidencing not
less than a majority of the principal amount of the outstanding Notes of such
Class and a majority of the right to receive interest on the outstanding Notes
of such Class (including in each case the Notes owned by the Servicer and any of
its Affiliates other than the Depositor), with each of the Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class A-5 Notes
and the Class B Notes treated as a separate Class of Notes for this purpose, and
(c) holders of other interests, if any (the existence of which interests the
Administrator will have advised the Owner Trustee in writing), in the Reserve
Account (other than the Depositor) having interests with a value not less than a
majority of the value of all interests in the Reserve Account (other than any
such interests held by the Depositor), to the effect that each such party
disapproves of the liquidation of the Receivables and termination of the Trust
and in connection therewith the Indenture Trustee (i) appoints an entity
acceptable to Ford Credit to acquire an interest in the Trust and to act as
substitute "general partner" of the Trust for federal income tax purposes and
(ii) obtains an Opinion of Counsel that the Trust will not thereafter be
44
46
classified as an association (or publicly traded partnership) taxable as a
corporation for federal income tax and Applicable Tax State purposes. Promptly
after the occurrence of any Insolvency Event or dissolution with respect to the
Depositor or the General Partner, (A) the Depositor shall give the Indenture
Trustee and the Owner Trustee written notice of such Insolvency Event, (B) the
Owner Trustee shall, upon the receipt of such written notice from the Depositor,
give prompt written notice to the Certificateholders, holders of interests, if
any, in the Reserve Account and the Indenture Trustee, of the occurrence of such
event, (C) the Indenture Trustee shall, upon receipt of written notice of such
Insolvency Event or dissolution from the Owner Trustee or the Depositor, give
prompt written notice to the Noteholders of the occurrence of such event, and
(D) the Owner Trustee shall, upon receipt of written instructions from the
applicable percentages of Noteholders, Certificateholders and holders of
interests, if any, in the Reserve Account disapproving of liquidation and
termination, give prompt written notice thereof to the Indenture Trustee;
provided, however, that any failure to give a notice required by this sentence
shall not prevent or delay, in any manner, a termination of the Trust pursuant
to the first sentence of this Section 9.2. Upon a termination pursuant to this
Section 9.2, the Owner Trustee shall direct the Indenture Trustee promptly to
sell the assets of the Trust (other than the Trust Accounts and the Certificate
Distribution Account) in a commercially reasonable manner and on commercially
reasonable terms. The proceeds of such a sale of the assets of the Trust shall
be treated as collections of Receivables under the Sale and Servicing Agreement
and deposited in the Collection Account and the Notes and Certificates shall be
paid in accordance with Section 4.6 of the Sale and Servicing Agreement.
SECTION 9.03. Prepayment of Certificates. (a)
The Certificates shall be prepaid in whole, but not in part, at the direction of
the Servicer pursuant to Section 9.1 of the Sale and Servicing Agreement, on
any Distribution Date on which the Servicer exercises its option to purchase the
assets of the Trust pursuant to said Section 9.1, and the amount paid by the
Servicer shall be treated as collections of Receivables and applied to pay the
unpaid principal amount of the Notes and the Aggregate Certificate Balance plus
accrued and unpaid
45
47
interest (including any overdue interest) thereon. The Servicer shall furnish
the Rating Agencies and the Certificateholders notice of such prepayment. If the
Certificates are to be prepaid pursuant to this Section 9.3(a), the Servicer
shall furnish notice of such election to the Owner Trustee not later than
twenty (20) days prior to the Prepayment Date and the Trust shall deposit by
10:00 A.M. (New York City time) on the Prepayment Date in the Certificate
Distribution Account the Prepayment Price of the Certificates to be redeemed,
whereupon all such Certificates shall be due and payable on the Prepayment
Date.
(b) Notice of prepayment under Section 9.3(a) shall be given
by the Owner Trustee by first-class mail, postage prepaid, or by facsimile
mailed or transmitted immediately following receipt of notice from the Trust or
Servicer pursuant to Section 9.3(a), but not later than ten (10) days prior to
the applicable Prepayment Date, to each Certificateholder as of the close of
business on the Record Date preceding the applicable Prepayment Date, at such
Certificateholder's address or facsimile number appearing in the Certificate
Register.
All notices of prepayment shall state:
(i) the Prepayment Date;
(ii) the Prepayment Price; and
(iii) the place where such Certificates are to be
surrendered for payment of the Prepayment Price (which
shall be the office or agency of the Owner Trustee to be
maintained as provided in Section 3.9).
Notice of prepayment of the Certificates shall be given by the Owner Trustee in
the name and at the expense of the Trust. Failure to give notice of prepayment,
or any defect therein, to any Certificateholder shall not impair or affect the
validity of the prepayment of any other Certificate.
(c) Following notice of prepayment as required by Section
9.3(b), the Certificates shall on the Prepayment Date be paid by the Trust at
the Prepayment Price and (unless the Trust shall default in the payment of the
46
48
Prepayment Price) no interest shall accrue on the Prepayment Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Prepayment Price. Following payment in full of the Prepayment
Price, this Agreement and the Trust shall terminate.
47
49
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.01. Eligibility Requirements for Owner Trustee. The
Owner Trustee shall at all times (i) be a corporation satisfying the provisions
of Section 3807(a) of the Business Trust Statute; (ii) be authorized to exercise
corporate trust powers; (iii) have a combined capital and surplus of at least
$50,000,000 and shall be subject to supervision or examination by federal or
state authorities; and (iv) shall have (or shall have a parent that has) a
long-term debt rating of investment grade by each of the Rating Agencies or be
otherwise acceptable to the Rating Agencies. If such corporation shall publish
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section 10.1, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condi tion so published. In case at any time the Owner Trustee shall
cease to be eligible in accordance with the provisions of this Section 10.1,
the Owner Trustee shall resign immediately in the manner and with the effect
specified in Section 10.2.
SECTION 10.02. Resignation or Removal of Owner Trustee. The
Owner Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Administrator. Upon receiving
such notice of resignation, the Administrator shall promptly appoint a successor
Owner Trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Owner Trustee and one copy to the successor
Owner Trustee. If no successor Owner Trustee shall have been so appointed and
have accepted appointment within thirty (30) days after the giving of such
notice of resignation, the resigning Owner Trustee may petition any court of
competent jurisdiction for the appointment of a successor Owner Trustee;
provided, however, that such right to appoint or to petition for the appointment
of any such successor shall in no event relieve the resigning Owner Trustee from
any obligations otherwise imposed on it under the Basic Documents until such
successor has in fact assumed such appointment.
48
50
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Administrator, or if at any time the Owner
Trustee shall be legally unable to act, or if at any time an Insolvency Event
with respect to the Owner Trustee shall have occurred and be continuing, then
the Administrator may remove the Owner Trustee. If the Administrator shall
remove the Owner Trustee under the authority of the immediately preceding
sentence, the Administrator shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Owner Trustee so removed and one copy to the successor
Owner Trustee, and shall pay all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions of
this Section 10.2 shall not become effective until acceptance of appointment by
the successor Owner Trustee pursuant to Section 10.3, payment of all fees and
expenses owed to the outgoing Owner Trustee and the filing of a certificate of
amendment to the Certificate of Trust if required by the Business Trust Statute.
The Administrator shall provide notice of such resignation or removal of the
Owner Trustee to the Certificateholders, the Indenture Trustee, the Noteholders
and each of the Rating Agencies.
SECTION 10.3. Successor Owner Trustee. Any sucessor Owner
Trustee appointed pursuant to Section 10.2 shall execute, acknowledge and
deliver to the Administrator and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement. Upon the
resignation or removal of the predecessor Owner Trustee becoming effective
pursuant to Section 10.2, such successor Owner Trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties, and obligations of its predecessor under this Agreement, with like
effect as if originally named as Owner Trustee. The predecessor Owner Trustee
shall, upon payment of its fees and expenses, deliver to the successor Owner
Trustee all documents and statements and monies held by it under this
Agreement, and the Administrator and the predecessor Owner Trustee shall
execute and deliver such instruments and do such
49
51
other things as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties, and
obligations.
No successor Owner Trustee shall accept appointment as
provided in this Section 10.3 unless, at the time of such acceptance, such
successor Owner Trustee shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section 10.3, the Administrator shall mail notice of the
successor of such Owner Trustee to all Certificateholders, the Indenture
Trustee, the Noteholders and the Rating Agencies. If the Administrator shall
fail to mail such notice within ten (10) days after acceptance of appointment by
the successor Owner Trustee, the successor Owner Trustee shall cause such notice
to be mailed at the expense of the Administrator.
SECTION 10.04. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall, without the execution or filing of any
instrument or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, be the successor of the Owner Trustee
hereunder; provided that such corporation shall be eligible pursuant to Section
10.1; and provided further, that the Owner Trustee shall mail notice of such
merger or consolidation to the Rating Agencies not less than fifteen (15) days
prior to the effective date thereof.
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Administrator and the Owner Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Owner Trustee to act as
50
52
co-trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person, in such
capacity, such title to the Owner Trust Estate, or any part thereof, and,
subject to the other provisions of this Section 10.5, such powers, duties,
obligations, rights and trusts as the Administrator and the Owner Trustee may
consider necessary or desirable. If the Administrator shall not have joined in
such appointment within fifteen (15) days after the receipt by it of a request
so to do, the Owner Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a successor trustee pursuant to
Section 10.1 and no notice of the appointment of any co-trustee or separate
trustee shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties, and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Owner Trustee joining
in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed,
the Owner Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties, and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under this
Agreement; and
(iii) the Administrator and the Owner Trustee acting jointly
may at any time accept the resigna-
51
53
tion of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article X. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Owner Trustee. Each such instrument shall be filed with the
Owner Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the
Owner Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
52
54
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Supplements and Amendments.
(a) This Agreement may be amended by the Depositor and the Owner Trustee, with
prior written notice to the Rating Agencies, without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement inconsistent with any other
provision of this Agreement or for the purpose of adding any provisions to or
▇▇▇▇▇ ing in any manner or eliminating any of the provisions in this Agreement;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel satisfactory to the Owner Trustee and the Indenture Trustee adversely
affect in any material respect the interests of any Noteholder or
Certificateholder; and provided further that an Opinion of Counsel shall be
furnished to the Indenture Trustee and the Owner Trustee to the effect that such
amendment (A) will not materially adversely affect the federal or any Applicable
Tax State income or franchise taxation of any outstanding Note or Certificate,
or any Noteholder or Certificateholder and (B) will not cause the Trust to be
taxable as a corporation for federal or any Applicable Tax State income or
franchise tax purposes.
(b) This Agreement may also be amended from time to time by
the Depositor and the Owner Trustee, with prior written notice to the Rating
Agencies, with the consent of (i) the Noteholders of Notes evidencing not less
than a majority of the principal amount of the Notes Outstanding and (ii) the
Certificateholders of Certificates evidencing not less than a majority of the
Aggregate Certificate Balance, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (i) increase
or reduce in any manner the amount of, or accelerate or delay the timing of, or
change the allocation or priority of, collections of payments on Receivables or
distributions that are required to be made for the benefit of the Noteholders
or the Certificateholders, or (ii) reduce the aforesaid percentage of the
principal amount of the Notes Outstand-
53
55
ing and the Aggregate Certificate Balance required to consent to any such
amendment, without the consent of all the Noteholders and Certificateholders
affected thereby; and provided further, that an Opinion of Counsel shall be
furnished to the Indenture Trustee and the Owner Trustee to the effect that such
amendment (A) will not materially adversely affect the federal or any Applicable
Tax State income or franchise taxation of any outstanding Note or Certificate,
or any Noteholder or Certificateholder and (B) will not cause the Trust to be
taxable as a corporation for federal or any Applicable Tax State income or
franchise tax purposes.
(c) Promptly after the execution of any such amendment or
consent, the Owner Trustee shall furnish written notification of the substance
of such amendment or consent to each Certificateholder, the Indenture Trustee
and each of the Rating Agencies.
(d) It shall not be necessary for the consent of
Certificateholders, the Noteholders or the Indenture Trustee pursuant to this
Section 11.1 to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of
Certificateholders provided for in this Agreement or in any other Basic
Document) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the Owner
Trustee may prescribe.
(e) Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing of such amendment
with the Secretary of State.
(f) Prior to the execution of any amendment to this Agreement
or the Certificate of Trust, the Owner Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Owner Trustee may, but shall not
be obligated to, enter into any such amendment which affects the Owner Trustee's
own rights, duties or immunities under this Agreement or otherwise.
54
56
(g) In connection with the execution of any amendment to this
Agreement or any amendment to any other agreement to which the Trust is a party,
the Owner Trustee shall be entitled to receive and conclusively rely upon an
Opinion of Counsel to the effect that such amendment is authorized or permitted
by the Basic Documents and that all conditions precedent in the Basic Documents
for the execution and delivery thereof by the Trust or the Owner Trustee, as the
case may be, have been satisfied.
SECTION 11.02. No Legal Title to Owner Trust Estate in
Certificateholders. The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their beneficial interests therein only in
accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title, or interest of the Certificateholders to and in
their beneficial interest in the Owner Trust Estate shall operate to terminate
this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
SECTION 11.03. Limitation on Rights of Others. Except for
Section 2.7, the provisions of this Agreement are solely for the benefit of the
Owner Trustee, the Depositor, the Administrator, the Certificateholders, the
Servicer and, to the extent expressly provided herein, the Indenture Trustee and
the Noteholders, and nothing in this Agreement (other than Section 2.7), whether
express or implied, shall be construed to give to any other Person any legal or
equitable right, remedy or claim in the Owner Trust Estate or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.
SECTION 11.04. Notices. (a) Unless otherwise expressly
specified or permitted by the terms hereof, all notices shall be in writing and
shall be deemed given upon receipt by the intended recipient or three (3)
Business Days after mailing if mailed by certified mail, postage prepaid (except
that notice to the Owner Trustee shall be deemed given only upon actual receipt
by the Owner Trustee), if to the Owner Trustee, addressed to the Corporate Trust
Office; if to the Depositor, addressed to
55
57
Ford Credit Auto Receivables Two L.P. at the address of its principal executive
office first above written; or, as to each party, at such other address as shall
be designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Certificateholder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 11.05. Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 11.06. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.07. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
the Depositor, the Owner Trustee and its successors and each Certificateholder
and its successors and permitted assigns, all as herein provided. Any request,
notice, direction, consent, waiver or other instrument or action by a
Certificateholder shall bind the successors and assigns of such
Certificateholder.
SECTION 11.08. No Petition. The Owner Trustee (not in its
individual capacity but solely as Owner Trustee), by entering into this
Agreement, and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not, until after the
56
58
Notes have been paid in full, institute against the Depositor, the General
Partner or the Trust, or join in any institution against the Depositor, the
General Partner or the Trust of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States federal or State bankruptcy or similar law in connection with any
obligations relating to the Certificates, the Notes, this Agreement or any of
the other Basic Documents.
SECTION 11.09. No Recourse. Each Certificateholder, by
accepting a Certificate, acknowledges that such Certificateholder's
Certificates represent beneficial interests in the Trust only and do not
represent interests in or obligations of the Depositor, the General Partner, the
Servicer, the Administrator, the Owner Trustee, the Indenture Trustee or any
Affiliate thereof, and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated in this Agreement,
the Certificates or the other Basic Documents.
SECTION 11.10. Headings. The headings of the various
Articles and Sections herein are for convenience of reference only and shall
not define or limit any of the terms or provisions hereof.
SECTION 11.11. Governing Law. This Agreement shall be
construed in accordance with the laws of the State of Delaware and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
57
59
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
FORD CREDIT AUTO RECEIVABLES
TWO L.P., as Depositor
By: FORD CREDIT AUTO RECEIVABLES
TWO, INC.,
as General Partner
By: /s/ ▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇. ▇. ▇▇▇
Title: Assistant Secretary
PNC BANK, DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By: /s/ M.B. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
60
EXHIBIT A
[FORM OF CLASS C CERTIFICATE]
NUMBER $______
R-_________ CUSIP NO. ▇▇▇▇▇▇▇▇▇
THE PRINCIPAL OF THIS CERTIFICATE IS DISTRIBUTABLE AS SET FORTH IN THE TRUST
AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
FORD CREDIT AUTO OWNER TRUST 1998-C
CLASS C 6.30% ASSET BACKED CERTIFICATE
evidencing a beneficial interest in the property of the Trust, as defined below,
which property includes a pool of motor vehicle retail installment sale
contracts, secured by security interests in the motor vehicles financed thereby,
conveyed to Ford Credit Auto Receivables Two L.P. by Ford Motor Credit Company
and conveyed by Ford Credit Auto Receivables Two L.P. to the Trust. The property
of the Trust has been pledged to the Indenture Trustee pursuant to the
Indenture to secure the payment of the Notes issued thereunder.
(This Certificate does not represent an interest in or obligation of Ford Motor
Credit Company, Ford Credit Auto Receivables Two L.P. or any of their respective
Affiliates, except to the extent described below.)
THIS CERTIFIES THAT __________ is the registered owner
of_________ DOLLARS nonassessable, fully-paid, beneficial interest in Class C
Certificates of Ford Credit Auto Owner Trust 1998-C (the "Trust") formed by
Ford Credit Auto Receivables Two L.P., a Delaware limited partnership (the
"Depositor"). The Class C Certificates have an aggregate Initial Certificate
Balance of $46,000,000 and bear interest at a rate of 6.30% per annum (the
"Class C Rate").
A-1
61
The Trust was created pursuant to an Amended and Restated
Trust Agreement, dated as of July 1, 1998 (as from time to time amended,
supplemented or otherwise modified and in effect, the "Trust Agreement"), by and
between the Depositor and PNC Bank, Delaware, not in its individual capacity but
solely as owner trustee (the "Owner Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as "Class C 6.30% Asset Backed Certificates" (herein called the
"Class C Certificates") which, together with the Certificates designated as
"Class D 7.70% Asset Backed Certificates" (the "Class D Certificates" and,
together with the Class C Certificates, the "Certificates") are issued under
and are subject to the terms, provisions and conditions of the Trust Agreement,
to which Trust Agreement the Certificateholder of this Certificate by virtue of
the acceptance hereof assents and by which such Certificateholder is bound. Also
issued under the Indenture, dated as of July 1, 1998 (as from time to time
amended, supplemented or otherwise modified and in effect, the "Indenture"),
between the Trust and The Chase Manhattan Bank, as indenture trustee (in such
capacity, the "Indenture Trustee"), are the Notes designated as "Class A-1
5.608% Asset Backed Notes", "Class A-2 5.670% Asset Backed Notes", "Class A-3
5.73% Asset Backed Notes", "Class A-4 5.81% Asset Backed Notes", "Class A-5
5.86% Asset Backed Notes" and "Class B 6.06% Asset Backed Notes" (collectively,
the "Notes"). The property of the Trust includes (i) a pool of motor vehicle
retail installment sale contracts for new and used automobiles and light trucks
and certain rights and obligations thereunder (the "Receivables"); (ii) with
respect to Precomputed Receivables, all monies due thereunder on or after the
Cutoff Date and, with respect to Simple Interest Receivables, all monies due or
received thereunder on or after the Cutoff Date; (iii) the security interests in
the Financed Vehicles granted by Obligors pursuant to the Receivables and any
other interest of the Trust in the Financed Vehicles; (iv) rights to proceeds
from claims on certain physical damage, credit life, credit disability or other
insurance policies, if any, covering Financed
A-2
62
Vehicles or Obligors; (v) Dealer Recourse; (vi) all of the Seller's rights to
the Receivable Files; (vii) such amounts as from time to time may be held in one
or more accounts maintained pursuant to the Sale and Servicing Agreement, dated
as of July 1, 1998 (as from time to time amended, supplemented or otherwise
modified and in effect, the "Sale and Servicing Agreement"), by and among the
Trust, the Depositor, as seller (in such capacity, the "Seller"), and Ford Motor
Credit Company, as servicer (the "Servicer"), including the Reserve Account;
(viii) the Seller's rights under the Sale and Servicing Agreement; (ix) the
Seller's rights under the Purchase Agreement; (x) payments and proceeds with
respect to the Receivables held by the Servicer; (xi) all property (including
the right to receive Liquidation Proceeds) securing a Receivable (other than a
Receivable repurchased by the Servicer or purchased by the Seller); (xii)
rebates of premiums and other amounts relating to insurance policies and other
items financed under the Receivables in effect as of the Cutoff Date; and
(xiii) any and all proceeds of the foregoing. THE RIGHTS OF THE OWNER TRUSTEE IN
THE FOREGOING PROPERTY OF THE TRUST HAVE BEEN PLEDGED TO THE INDENTURE TRUSTEE
TO SECURE THE PAYMENT OF THE NOTES.
Under the Trust Agreement, there will be distributed on the
fifteenth day of each month or, if such fifteenth day is not a Business Day, the
next Business Day (each, a "Distribution Date"), commencing August 15, 1998, to
the Person in whose name this Certificate is registered at the close of business
on the last day of the preceding month (the "Record Date") such
Certificateholder's percentage interest in the amount to be distributed to Class
C Certificateholders on such Distribution Date; provided, however, that
principal will be distributed to the Class C Certificateholders on each
Distribution Date on (to the extent of funds remaining after all classes of the
Notes have been paid in full) and after the date on which all classes of the
Notes have been paid in full. Notwithstanding the foregoing, following the
occurrence and during the continuation of an event of default under the
Indenture which has resulted in an acceleration of the Notes or following
certain events of insolvency or a dissolution with respect to the
A-3
63
Depositor or the General Partner, no distributions of principal or interest will
be made on the Certificates until all principal and interest on the Notes has
been paid in full.
THE HOLDER OF THIS CERTIFICATE ACKNOWLEDGES AND AGREES THAT
ITS RIGHTS TO RECEIVE DISTRIBUTIONS IN RESPECT OF THIS CERTIFICATE ARE
SUBORDINATED TO THE RIGHTS OF THE NOTEHOLDERS AS DESCRIBED IN THE SALE AND
SERVICING AGREEMENT, THE INDENTURE AND THE TRUST AGREEMENT.
It is the intent of the Depositor, the Servicer and the
Certificateholders that, for purposes of federal income, state and local
franchise and income tax and any other income taxes, the Trust will be treated
as a partnership and the Certificateholders (including the Depositor) will be
treated as partners in that partnership. The Depositor and the other
Certificateholders by accep tance of a Certificate agree to treat, and to take
no action inconsistent with the treatment of, the Certificates for such tax
purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not, until after the Notes
have been paid in full, institute against the Depositor, the General Partner or
the Trust, or join in any institution against the Depositor, the General Partner
or the Trust of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
the Notes, the Certificates, the Trust Agreement or any of the other Basic
Documents.
Distributions on this Certificate will be made as provided in
the Trust Agreement by the Owner Trustee or the Certificate Paying Agent by wire
transfer or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Owner Trustee of the pendency of such distribution
and only
A-4
64
upon presentation and surrender of this Certificate at the office or agency
maintained for the purpose by the Owner Trustee in Wilmington, Delaware.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual
signature, this Certificate shall not entitle the Certificateholder hereof to
any benefit under the Trust Agreement or the Sale and Servicing Agreement or be
valid for any purpose.
This Certificate shall be construed in accordance with the
laws of the State of Delaware and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
A-5
65
In WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust
and not in its individual capacity, has caused this Class C Certificate to be
duly executed.
FORD CREDIT AUTO OWNER
TRUST 1998-C
By: PNC BANK, DELAWARE,
not in its individual
capacity but solely as
Owner Trustee
By:
-----------------------------
Authorized Officer
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the within-mentioned
Trust Agreement.
Dated: July 29, 1998
PNC BANK, DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By:
----------------------------
Authorized Officer
66
[REVERSE OF CERTIFICATE]
The Certificates do not represent an obligation of, or an
interest in, the Depositor, the General Partner, the Servicer, the
Administrator, the Owner Trustee or any Affiliates of any of them and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein, in the Trust Agreement or in the
other Basic Documents. In addition, this Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections with respect to the Receivables (and certain other amounts),
all as more specifically set forth herein and in the Sale and Servicing
Agreement. A registration statement, which includes the Trust Agreement as an
exhibit thereto, has been filed with the Securities and Exchange Commission with
respect to the Notes and the Class C Certificates.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor and the Owner Trustee with the
consent of the Noteholders and the Certificateholders evidencing not less than a
majority of the principal amount of the Notes Outstanding and the Aggregate
Certificate Balance, respectively. Any such consent by the Certificateholder of
this Certificate shall be conclusive and binding on such Certificateholder and
on all future Certificateholders of this Certificate and of any Certificate
issued upon the registration of Transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Trust Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of any of the Certificateholders.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the Transfer of the Certificates are registrable
in the Certificate Register upon surrender of this Certificate for registration
of Transfer at the offices or agencies maintained by PNC Bank, Delaware in its
capacity as Certificate Regis trar, or by any successor Certificate Registrar,
in Wilmington, Delaware, accompanied by a written instrument
A-7
67
of transfer in form satisfactory to the Owner Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate interest in the Trust will be issued
to the designated transferee.
The Certificates are issuable as registered Certificates
without coupons in denominations of at least $20,000 and in integral multiples
of $1,000 in excess thereof. Certificates are exchangeable for new Certificates
of like Class and authorized denominations evidencing the same aggregate
denomination, as requested by the Certificateholder surrendering the same. No
service charge will be made for any such registration of Transfer or exchange,
but the Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Owner Trustee, the Certificate Registrar and any agent of
the Owner Trustee or the Certificate Registrar may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Owner Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The Certificates may not be acquired by or on behalf of (A) an
employee benefit plan, as defined in Section 3(3) of ERISA, that is subject to
Title I of ERISA, (B) a plan described in Section 4975(e)(1) of the Code that is
subject to Section 4975 of the Code, (C) a governmental plan, as defined in
Section 3(32) of ERISA, subject to any federal, state or local law which is, to
a material extent, similar to the provisions of Section 406 of ERISA or Section
4975 of the Code, (D) an entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (within the meaning of Department of
Labor Regulation 29 C.F.R. Section 2510.3-101 or otherwise under ERISA) or (E) a
person investing "plan assets" of any such plan (including without limitation,
for purposes of this clause (E), any insurance company general account, but
excluding any entity registered under the Investment Company Act of 1940, as
amended).
A-8
68
In addition, the Certificates may not be acquired by or on
behalf of a Person other than (A) a citizen or resident of the United States,
(B) a corporation or partnership organized in or under the laws of the United
States or any political subdivision thereof, (C) an estate the income of which
is includible in gross income for United States tax purposes, regardless of its
source, (D) a trust if a U.S. court is able to exercise primary supervision over
the administration of such trust and one or more Persons meeting the conditions
of this paragraph has the authority to control all substantial decisions of the
trust or (E) a Person not described in clauses (A) through (D) above whose
ownership of the Certificates is effectively connected with such Person's
conduct of a trade or business within the United States (within the meaning of
the Code) and who provides the Owner Trustee and the Depositor with an IRS Form
4224 (and such other certifications, representations, or opinions of counsel as
may be requested by the Owner Trustee or the Depositor).
The obligations and responsibilities created by the Trust
Agreement and the Trust created thereby shall terminate (i) upon the maturity or
other liquidation of the last remaining Receivable and the disposition of any
amounts received upon such maturity or liquidation or (ii) upon the payment to
the Noteholders and the Certificateholders of all amounts required to be paid to
them pursuant to the Indenture, the Trust Agreement and the Sale and Servicing
Agreement, and upon such termination any remaining assets of the Trust shall be
distributed to the Depositor. The Servicer of the Receivables may at its option
purchase the assets of the Trust at a price specified in the Sale and Servicing
Agreement, and such purchase of the Receivables and other property of the Trust
will effect early retirement of the Notes and the Certificates; however, such
right of purchase is exercisable only as of the last day of any Collection
Period as of which the Pool Balance is less than or equal to 10% of the Initial
Pool Balance.
A-9
69
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
-------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
-------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
------------------------------------------------------------------ Attorney to
transfer said Certificate on the books of the Certificate Registrar, with full
power of substitution in the pre mises.
Dated:
*/
-----------------------------
Signature Guaranteed:
*/
-----------------------------
-----------------------------
*/ NOTICE: The signature to this assignment must corre spond with the name as it
appears upon the face of the within Certificate in every particular, without
alter ation, enlargement or any change whatever. Such signa ture must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
▇-▇▇
▇▇
▇▇▇▇▇▇▇ ▇
[FORM OF CLASS D CERTIFICATE]
$_________
NUMBER
R-_______ Private Placement
CUSIP No.________
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES
OR BLUE SKY LAW OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES FOR THE BENEFIT OF THE TRUST AND THE
DEPOSITOR THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE
LAWS, AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")
TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER, WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT
THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, SUBJECT TO (A) THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF
A CERTIFICATE SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT F TO THE TRUST
AGREEMENT AND (B) THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF A
LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT D TO THE TRUST AGREEMENT,
(2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), SUBJECT TO THE RECEIPT BY THE TRUST, THE INITIAL
PURCHASER AND THE CERTIFICATE REGISTRAR OF SUCH EVIDENCE ACCEPTABLE TO THE TRUST
AND THE INITIAL PURCHASER THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE TRUST AGREEMENT AND THE SECURITIES ACT AND OTHER APPLICABLE
LAWS, (3) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF
IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT
PURSUANT TO ANY OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUST AND THE CERTIFICATE
REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT E TO THE
TRUST AGREEMENT OR (B) THE RECEIPT BY THE TRUST, THE INITIAL PURCHASER AND THE
CERTIFICATE REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUST AND THE
INITIAL PURCHASER THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE
WITH THE TRUST AGREEMENT AND THE
B-1
71
SECURITIES ACT AND OTHER APPLICABLE LAWS, OR (4) TO THE DEPOSITOR OR ITS
AFFILIATES, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE UNITED STATES AND SECURITIES AND BLUE SKY LAWS OF THE STATES OF THE UNITED
STATES.
THE PRINCIPAL OF THIS CERTIFICATE IS DISTRIBUTABLE AS SET FORTH IN THE TRUST
AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
FORD CREDIT AUTO OWNER TRUST 1998-C
CLASS D 7.70% ASSET BACKED CERTIFICATE
evidencing a beneficial interest in the property of the Trust, as defined below,
which property includes a pool of motor vehicle retail installment sale
contracts, secured by security interests in the motor vehicles financed thereby,
conveyed to Ford Credit Auto Receivables Two L.P. by Ford Motor Credit Company
and conveyed by Ford Credit Auto Receivables Two L.P. to the Trust. The property
of the Trust has been pledged to the Indenture Trustee pursuant to the
Indenture to secure the payment of the Notes issued thereunder.
(This Certificate does not represent an interest in or obligation of Ford Motor
Credit Company, Ford Credit Auto Receivables Two L.P. or any of their respective
Affiliates, except to the extent described below.)
THIS CERTIFIES THAT __________ is the registered owner of
DOLLARS nonassessable, fully-paid, beneficial interest in Class D Certificates
of Ford Credit Auto Owner Trust 1998-C (the "Trust") formed by Ford Credit Auto
Receivables Two L.P., a Delaware limited partnership (the "Depositor"). The
Class D Certificates have an aggregate Initial Certificate Balance of
$46,000,000 and bear interest at a rate of 7.70% per annum (the "Class D Rate").
B-2
72
The Trust was created pursuant to an Amended and Restated
Trust Agreement, dated as of July 1, 1998 (as from time to time amended,
supplemented or otherwise modified and in effect, the "Trust Agreement"), by and
between the Depositor and PNC Bank, Delaware, not in its individual capacity but
solely as owner trustee (the "Owner Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as "Class D 7.70% Asset Backed Certificates" (herein called the
"Class D Certificates") which, together with the Certificates designated as
"Class C 6.30% Asset Backed Certificates" (the "Class C Certificates" and,
together with the Class D Certificates, the "Certificates") are issued under and
are subject to the terms, provisions and conditions of the Trust Agreement, to
which Trust Agreement the Certificateholder of this Certificate by virtue of the
acceptance hereof assents and by which such Certificateholder is bound. Also
issued under the Indenture, dated as of July 1, 1998 (as from time to time
amended, supplemented or otherwise modified and in effect, the "Indenture"),
between the Trust and The Chase Manhattan Bank, as indenture trustee (in such
capacity, the "Indenture Trustee"), are the Notes designated as "Class A-1
5.608% Asset Backed Notes", "Class A-2 5.670% Asset Backed Notes", "Class A-3
5.73% Asset Backed Notes", "Class A-4 5.81% Asset Backed Notes", "Class A-5
5.86% Asset Backed Notes" and "Class B 6.06% Asset Backed Notes" (collectively,
the "Notes"). The property of the Trust includes (i) a pool of motor vehicle
retail installment sale contracts for new and used automobiles and light trucks
and certain rights and obligations thereunder (the "Receivables"); (ii) with
respect to Precomputed Receivables, all monies due thereunder on or after the
Cutoff Date and, with respect to Simple Interest Receivables, all monies due or
received thereunder on or after the Cutoff Date; (iii) the security interests in
the Financed Vehicles granted by Obligors pursuant to the Receivables and any
other interest of the Trust in the Financed Vehicles; (iv) rights to proceeds
from claims on certain physical damage, credit life, credit disability or other
insurance policies, if any, covering Financed Vehicles or Obligors; (v) Dealer
Recourse; (vi) all of the Seller's rights to the Receivable Files; (vii) such
amounts as from time to time may be held in one or more accounts maintained
pursuant to the Sale and Servicing Agreement, dated as of July 1, 1998 (as from
time
B-3
73
to time amended, supplemented or otherwise modified and in effect, the "Sale and
Servicing Agreement"), by and among the Trust, the Depositor, as seller (in such
capacity, the "Seller"), and Ford Motor Credit Company, as servicer (the
"Servicer"), including the Reserve Account; (viii) the Seller's rights under the
Sale and Servicing Agreement; (ix) the Seller's rights under the Purchase
Agreement; (x) payments and proceeds with respect to the Receivables held by the
Servicer; (xi) all property (including the right to receive Liquidation
Proceeds) securing a Receivable (other than a Receivable repurchased by the
Servicer or purchased by the Seller); (xii) rebates of premiums and other
amounts relating to insurance policies and other items financed under the
Receivables in effect as of the Cutoff Date; and (xiii) any and all proceeds of
the foregoing. THE RIGHTS OF THE OWNER TRUSTEE IN THE FOREGOING PROPERTY OF THE
TRUST HAVE BEEN PLEDGED TO THE INDENTURE TRUSTEE TO SECURE THE PAYMENT OF THE
NOTES.
Under the Trust Agreement, there will be distributed on the
fifteenth day of each month or, if such fifteenth day is not a Business Day, the
next Business Day (each, a "Distribution Date"), commencing August 15, 1998, to
the Person in whose name this Certificate is registered at the close of business
on the last day of the preceding month (the "Record Date") such
Certificateholder's percentage interest in the amount to be distributed to
Class D Certificateholders on such Distribution Date; provided, however, that
principal will be distributed to the Class D Certificateholders on each
Distribution Date on (to the extent of funds remaining after all classes of the
Notes and the Class C Certificates have been paid in full) and after the date on
which all classes of the Notes and the Class C Certificates have been paid in
full. Notwithstanding the foregoing, following the occurrence and during the
continuation of an event of default under the Indenture which has resulted in an
acceleration of the Notes or following certain events of insolvency or a
dissolution with respect to the Depositor or the General Partner, no
distributions of principal or interest will be made on the Certificates until
all principal and interest on the Notes has been paid in full.
B-4
74
THE HOLDER OF THIS CERTIFICATE ACKNOWLEDGES AND AGREES THAT
ITS RIGHTS TO RECEIVE DISTRIBUTIONS IN RESPECT OF THIS CERTIFICATE ARE
SUBORDINATED TO THE RIGHTS OF THE NOTEHOLDERS AND THE CLASS C CERTIFICATEHOLDERS
AS DESCRIBED IN THE SALE AND SERVICING AGREEMENT, THE INDENTURE AND THE TRUST
AGREEMENT.
It is the intent of the Depositor, the Servicer and the
Certificateholders that, for purposes of federal income, state and local
franchise and income tax and any other income taxes, the Trust will be treated
as a partnership and the Certificateholders (including the Depositor) will be
treated as partners in that partnership. The Depositor and the other
Certificateholders by acceptance of a Certificate agree to treat, and to take no
action inconsistent with the treatment of, the Certificates for such tax
purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not, until after the Notes
have been paid in full, institute against the Depositor, the General Partner or
the Trust, or join in any institution against the Depositor, the General Partner
or the Trust of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
the Notes, the Certificates, the Trust Agreement or any of the other Basic
Documents.
Distributions on this Certificate will be made as provided in
the Trust Agreement by the Owner Trustee or the Certificate Paying Agent by wire
transfer or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Owner Trustee of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency maintained for the purpose by the Owner Trustee in Wilmington, Delaware.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof,
B-5
75
which further provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual
signature, this Certificate shall not entitle the Certificateholder hereof to
any benefit under the Trust Agreement or the Sale and Servicing Agreement or be
valid for any purpose.
This Certificate shall be construed in accordance with the
laws of the State of Delaware and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
B-6
76
In WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust
and not in its individual capacity, has caused this Class D Certificate to be
duly executed.
FORD CREDIT AUTO OWNER
TRUST 1998-C
By: PNC BANK, DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By:
--------------------------------
Authorized Officer
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificates referred to in the
within-mentioned Trust Agreement.
Dated: July 29, 1998
PNC BANK, DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By:
--------------------------------
Authorized Officer
B-7
77
[REVERSE OF CERTIFICATE]
The Certificates do not represent an obligation of, or an
interest in, the Depositor, the General Partner, the Servicer, the
Administrator, the Owner Trustee or any Affiliates of any of them and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein, in the Trust Agreement or in the
other Basic Documents. In addition, this Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections with respect to the Receivables (and certain other
amounts), all as more specifically set forth herein and in the Sale and
Servicing Agreement. A registration statement, which includes the Trust Agree-
ment as an exhibit thereto, has been filed with the Securities and Exchange
Commission with respect to the Notes and the Class C Certificates.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor and the Owner Trustee with the
consent of the Noteholders and the Certificateholders evidencing not less than a
majority of the principal amount of the Notes Outstanding and the Aggregate
Certificate Balance, respectively. Any such consent by the Certificateholder of
this Certificate shall be conclusive and binding on such Certificateholder and
on all future Certificateholders of this Certificate and of any Certificate
issued upon the registration of Transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Trust Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of any of the Certificateholders.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the Transfer of the Certificates are registrable
in the Certificate Register upon surrender of this Certificate for registration
of Transfer at the offices or agencies maintained by PNC Bank, Delaware in its
capacity as Certificate Registrar, or by any successor Certificate Registrar, in
Wilmington, Delaware, accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed
by the holder hereof or such
B-8
78
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same aggregate interest
in the Trust will be issued to the designated transferee.
The Certificates are issuable as registered Certificates
without coupons in denominations of at least $20,000 and in integral multiples
of $1,000 in excess thereof. Certificates are exchangeable for new Certificates
of like Class and authorized denominations evidencing the same aggregate
denomination, as requested by the Certificateholder surrendering the same. No
service charge will be made for any such registration of Transfer or exchange,
but the Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Owner Trustee, the Certificate Registrar and any agent of
the Owner Trustee or the Certificate Registrar may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Owner Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The Certificates may not be acquired by or on behalf of (A) an
employee benefit plan, as defined in Section 3(3) of ERISA, that is subject to
Title I of ERISA, (B) a plan described in Section 4975(e)(1) of the Code that is
subject to Section 4975 of the Code, (C) a governmental plan, as defined in
Section 3(32) of ERISA, subject to any federal, state or local law which is, to
a material extent, similar to the provisions of Section 406 of ERISA or Section
4975 of the Code, (D) an entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (within the meaning of Department of
Labor Regulation 29 C.F.R. Section 2510.3-101 or otherwise under ERISA) or (E) a
person investing "plan assets" of any such plan (including without limitation,
for purposes of this clause (E), any insurance company general account, but
excluding any entity registered under the Investment Company Act of 1940, as
amended).
In addition, the Certificates may not be acquired by or on
behalf of a Person other than (A) a citizen or resident of the United States,
(B) a corporation or partnership organized in or under the laws of the United
States or any political subdivision thereof, (C) an estate the income of which
is includible in gross income for United States tax purposes, regardless of its
source, (D)
B-9
79
a trust if a U.S. court is able to exercise primary supervision over the
administration of such trust and one or more Persons meeting the conditions of
this paragraph has the authority to control all substantial decisions of the
trust or (E) a Person not described in clauses (A) through (D) above whose
ownership of the Certificates is effectively connected with such Person's
conduct of a trade or business within the United States (within the meaning of
the Code) and who provides the Owner Trustee and the Depositor with an IRS Form
4224 (and such other certifications, representations, or opinions of counsel as
may be requested by the Owner Trustee or the Depositor).
The obligations and responsibilities created by the Trust
Agreement and the Trust created thereby shall terminate (i) upon the maturity or
other liquidation of the last remaining Receivable and the disposition of any
amounts received upon such maturity or liquidation or (ii) upon the payment to
the Noteholders and the Certificateholders of all amounts required to be paid to
them pursuant to the Indenture, the Trust Agreement and the Sale and Servicing
Agreement, and upon such termination any remaining assets of the Trust shall be
distributed to the Depositor. The Servicer of the Receivables may at its option
purchase the assets of the Trust at a price specified in the Sale and Servicing
Agreement, and such purchase of the Receivables and other property of the Trust
will effect early retirement of the Notes and the Certificates; however, such
right of purchase is exercisable only as of the last day of any Collection
Period as of which the Pool Balance is less than or equal to 10% of the Initial
Pool Balance.
B-10
80
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
-------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
-------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
------------------------------------------------------------------Attorney to
transfer said Certificate on the books of the Certificate Registrar, with full
power of substitution in the premises.
Dated:
*/
---------------------------------
Signature Guaranteed:
*/
---------------------------------
---------------------------------
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
B-11
81
EXHIBIT C
[FORM OF INVESTMENT LETTER - CLASS C CERTIFICATES]
[Date]
Ford Credit Auto Owner Trust 1998-C,
as Issuer
PNC Bank, Delaware,
as Owner Trustee and
as Certificate Registrar
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In connection with our proposed purchase of the Class C 6.30% Asset
Backed Certificates (the "Certificates") of Ford Credit Auto Owner Trust 1998-C
(the "Issuer"), a trust formed by Ford Credit Auto Receivables Two L.P. (the
"Depositor" or "Seller"), we confirm that:
1. We are not, and each account (if any) for which we are
purchasing the Certificates is not, (A) an employee benefit plan (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to Title I of ERISA, (B) a plan described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), that
is subject to Section 4975 of the Code, (C) a governmental plan, as defined in
Section 3(32) of ERISA, subject to any federal, state or local law which is, to
a material extent, similar to the provisions of Section 406 of ERISA or Section
4975 of the Code, (D) an entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (within the meaning of Department of
Labor Regulation 29 C.F.R. Section 2510.3-101 or otherwise under ERISA) or (E) a
person investing "plan assets" of any such plan (including without limitation,
for purposes of this clause (E), any insurance company general account, but
excluding any entity registered under the Investment Company Act of 1940, as
amended).
2. We are, and each account (if any) for which we are
purchasing the Certificates is, a person who is (A) a citizen or resident of the
United States, (B) a corporation or partnership organized in or under the laws
of the United States or any political subdivision thereof, (C) an estate the
income of which is includible in gross income for United States tax purposes,
regardless of its source, (D) a trust if a U.S. court is able to exercise
primary supervision over the administration of such trust
C-1
82
and one or more Persons meeting the conditions of clause (A), (B), (C) or (E) of
this paragraph 2 has the authority to control all substantial decisions of the
trust or (E) a Person not described in clauses (A) through (D) above whose
ownership of the Certificates is effectively connected with such Person's
conduct of a trade or business within the United States (within the meaning of
the Code) and who provides the Issuer and the Depositor with an IRS Form 4224
(and such other certifications, representations, or opinions of counsel as may
be requested by the Issuer or the Depositor).
3. We understand that any purported resale, transfer,
assignment, participation, pledge, or other disposal of (any such act, a
"Transfer") of any Certificate (or any interest therein) to any person who does
not meet the conditions of paragraphs 1 and 2 above shall be null and void
(each, a "Void Transfer"), and the purported transferee in a Void Transfer shall
not be recognized by the Issuer or any other person as a Certificateholder for
any purpose.
4. We agree that if we determine to Transfer any of the
Certificates we will cause our proposed transferee to provide to the Issuer and
the Certificate Registrar a letter substantially in the form of this letter.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:_________________________
Name:
Title:
Securities To Be Purchased:
$ principal balance of Certificates
Annex A attached hereto lists the name of the account and principal balance of
Certificates purchased for each account (if any) for which we are purchasing
Certificates.
C-2
83
EXHIBIT D
[FORM OF INVESTMENT LETTER - CLASS D CERTIFICATES
QUALIFIED INSTITUTIONAL BUYER]
[Date]
Ford Credit Auto Owner Trust 1998-C
as Issuer
PNC Bank, Delaware
as Owner Trustee and
Certificate Registrar
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Salomon Brothers Inc
▇.▇. ▇▇▇▇▇▇ Securities Inc.
as Initial Purchasers in connection with
the Private Placement Memorandum referred to below
Asset Backed Operations
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Ford Credit Auto Owner Trust 1998-C
Class D 7.70% Asset Backed Certificates
Ladies and Gentlemen:
In connection with our proposed purchase of the Class D 7.70% Asset
Backed Certificates (the "Certificates") of Ford Credit Auto Owner Trust 1998-C
(the "Issuer"), a trust formed by Ford Credit Auto Receivables Two L.P. (the
"Depositor"), we confirm that:
1. We have received a copy of the Private Placement Memorandum
(the "Private Placement Memorandum") dated July 20, 1998, relating to
the Certificates and such other information as we deem necessary in
order to make our investment decision. We understand that the Private
Placement Memorandum speaks only as of its date and that the information
contained therein may not be correct or complete as of any time
subsequent to such date.
2. We agree to be bound by the restrictions and conditions set
forth under the heading "Notice to Investors" in the Private Placement
Memorandum and the undersigned agrees to the bound by, and not to
resell,
D-1
84
transfer, assign, participate, pledge or otherwise dispose of (any such
act, a "Transfer") the Certificates except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended
(the "Securities Act").
3. We understand that no subsequent Transfer of the Certificates
is permitted unless we cause our proposed transferee to provide to the
Issuer, the Certificate Registrar and the Initial Purchaser a letter
substantially in the form of Exhibit B or Exhibit C to the Private
Placement Memorandum, as applicable, or such other written statement as
the Depositor shall prescribe.
4. We are a "qualified institutional buyer" (within the meaning
of Rule 144A under the Securities Act) (a "QIB") and we are acquiring
the Certificates for our own account or for a single account (which is a
QIB) as to which we exercise sole investment discretion.
5. We are not (A) an employee benefit plan (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to Title I of ERISA, (B) a plan described in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the
"Code") that is subject to Section 4975 of the Code, (C) a governmental
plan, as defined in Section 3(32) of ERISA, subject to any federal,
State or local law which is, to a material extent, similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code, (D) an
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (within the meaning of Department of Labor
Regulation 29 C.F.R. Section 2510.3-101 or otherwise under ERISA) or (E)
a person investing "plan assets" of any such plan (including without
limitation, for purposes of this clause (E), any insurance company
general account, but excluding any entity registered under the
Investment Company Act of 1940, as amended).
6. We are a person who is (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws
of the United States or any political subdivision thereof, (iii) an
estate the income of which is includible in gross income for United
States tax purposes, regard less of its source, (iv) a trust if a U.S.
court is able to exercise primary supervision over the administration
of such trust and one or more persons de-
D-2
85
scribed in clauses (i) to (iii) above or clause (v) below has the
authority to control all substantial decisions of the trust or (v) a
person not described in clauses (i) to (iv) above whose ownership of the
Certificates is effectively connected with such person's conduct of a
trade or business within the United States (within the meaning of the
Code) and who provides the Issuer and the Depositor with a Form 4224
(and such other certifications, representations, or opinions of counsel
as may be requested by the Issuer or the Depositor).
7. We understand that any purported Transfer of any Certificate
(or any interest therein) in contravention of the restrictions and
conditions above will be null and void (each, a "Void Transfer"), and
the purported transferee in a Void Transfer will not be recognized by
the Issuer or any other person as a Certificateholder for any purpose.
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
----------------------
Name:
Title:
Securities To Be Purchased:
$ principal amount of Certificates
D-3
86
EXHIBIT E
[FORM OF INVESTMENT LETTER - CLASS D CERTIFICATES
INSTITUTIONAL ACCREDITED INVESTOR]
[Date]
Ford Credit Auto Owner Trust 1998-C
as Issuer
PNC Bank, Delaware
as Owner Trustee and
Certificate Registrar
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Salomon Brothers Inc
▇.▇. ▇▇▇▇▇▇ Securities Inc.
as Initial Purchasers in connection with
the Private Placement Memorandum referred to below
Asset Backed Operations
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Ford Credit Auto Owner Trust 1998-C
Class D 7.70% Asset Backed Certificates
Ladies and Gentlemen:
In connection with our proposed purchase of the Class D 7.70% Asset
Backed Certificates (the "Certificates") of Ford Credit Auto Owner Trust 1998-C
(the "Issuer"), a trust formed by Ford Credit Auto Receivables Two L.P. (the
"Depositor"), we confirm that:
1. We have received a copy of the Private Placement Memorandum
(the "Private Placement Memorandum") dated July 20, 1998, relating to
the Certificates and such other information as we deem necessary in
order to make our investment decision. We understand that the Private
Placement Memorandum speaks only as of its date and that the information
contained therein may not be correct or complete as of any time
subsequent to such date.
2. We agree to be bound by the restrictions and conditions set
forth under the heading "Notice to Investors" in the Private Placement
Memorandum and the
E-1
87
undersigned agrees to the bound by, and not to resell, transfer, assign,
participate, pledge or otherwise dispose of (any such act, a "Transfer")
the Certificates except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities
Act").
3. We understand that no subsequent Transfer of the Certificates
is permitted unless we cause our proposed transferee to provide to the
Issuer, the Certificate Registrar and the Initial Purchaser a letter
substantially in the form of Exhibit B or Exhibit C to the Private
Placement Memorandum, as applicable, or such other written statement as
the Depositor shall prescribe.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and we are
acquiring the Certificates for our own account.
5. We are not (A) an employee benefit plan (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to Title I of ERISA, (B) a plan described in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the
"Code") that is subject to Section 4975 of the Code, (C) a governmental
plan, as defined in Section 3(32) of ERISA, subject to any federal,
State or local law which is, to a material extent, similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code, (D) an
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (within the meaning of Department of Labor
Regulation 29 C.F.R. Section 2510.3-101 or otherwise under ERISA) or (E)
a person investing "plan assets" of any such plan (including without
limitation, for purposes of this clause (E), any insurance company
general account, but excluding any entity registered under the
Investment Company Act of 1940, as amended).
6. We are a person who is (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws
of the United States or any political subdivision thereof, (iii) an
estate the income of which is includible in gross income for United
States tax purposes, regard lessof its source, (iv) a trust if a U.S.
court is able to exercise primary supervision over the administration
of such trust and one or more persons described in clauses (i) to (iii)
above or clause (v)
E-2
88
below has the authority to control all substantial decisions of the
trust or (v) a person not described in clauses (i) to (iv) above whose
ownership of the Certificates is effectively connected with such
person's conduct of a trade or business within the United States (within
the meaning of the Code) and who provides the Issuer and the Depositor
with a Form 4224 (and such other certifications, representations, or
opinions of counsel as may be requested by the Issuer or the Depositor).
7. We understand that any purported Transfer of any Certificate
(or any interest therein) in contravention of the restrictions and
conditions above will be null and void (each, a "Void Transfer"), and
the purported transferee in a Void Transfer will not be recognized by
the Issuer or any other person as a Certificateholder for any purpose.
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
----------------------------
Name:
Title:
Securities To Be Purchased:
$ principal amount of Certificates
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
FORM OF RULE 144A TRANSFEROR CERTIFICATE -
CLASS D CERTIFICATES
[Date]
PNC Bank, Delaware
as Owner Trustee and
Certificate Registrar
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Ford Credit Auto Owner Trust 1998-C
Class D 7.70% Asset Backed Certificates
Ladies and Gentlemen:
This is to notify you as to the transfer of $ [*] in denomination of
Class D 7.70% Asset Backed Certificates (the "Certificates") of Ford Credit Auto
Owner Trust 1998-C
(the "Issuer").
The undersigned is the holder of the Certificates and with this notice
hereby deposits with the Owner Trustee $ [*] in denomination of Certificates and
requests that Certificates of the same class in the same aggregate denomination
be issued, executed and authenticated and registered to the purchaser on , 199[
], as specified in the Trust Agreement dated as of July 1, 1998 relating to the
Certificates, as follows:
Name: Denominations:
Address:
Taxpayer I.D. No:
The undersigned represents and warrants that the undersigned (i)
reasonably believes the purchaser is a "qualified institutional buyer," as
defined in Rule 144A under the Securities Act of 1933 (the "Act"), (ii) such
purchaser has acquired the Certificates in a transaction effected in accordance
with the exemption from the registration requirements of the Act provided by
Rule 144A, (iii) if the purchaser has purchased the Certificates for
F-1
90
an account for which it is acting as fiduciary or agent, such account is a
qualified institutional buyer and (iv) the purchaser is acquiring Certificates
for its own account or for an institutional account for which it is acting as
fiduciary or agent.
Very truly yours,
[NAME OF HOLDER OF
CERTIFICATES]
By:
-----------------------------
Name:
Title:
[*] authorized denomination
F-2
91
EXHIBIT G
[FORM OF CERTIFICATE OF TRUST]
CERTIFICATE OF TRUST OF
FORD CREDIT AUTO OWNER TRUST 1998-C
This Certificate of Trust of FORD CREDIT AUTO OWNER TRUST
1998-C (the "Trust"), dated as of July 1, 1998, is being duly executed and filed
by PNC Bank, Delaware, a Delaware banking corporation, as trustee, to form a
business trust under the Delaware Business Trust Act (12 Del. Code, Section
3801 et seq.).
1. Name. The name of the business trust formed
hereby is FORD CREDIT AUTO OWNER TRUST 1998-C.
2. Delaware Trustee. The name and business address of the
trustee of the Trust in the State of Delaware is PNC Bank, Delaware, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of
the Trust, has executed this Certificate of Trust as of the date first above
written.
PNC BANK, DELAWARE, not in its
individual capacity but solely as
owner trustee under a Trust
Agreement dated as of July 1,
1998
By:
-----------------------------
Name:
Title:
G-1
92
APPENDIX A
Definitions and Usage
AA-1
93
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND USAGE
ARTICLE II
ORGANIZATION OF THE TRUST
SECTION 2.1. Name............................................... 2
SECTION 2.2. Office............................................. 2
SECTION 2.3. Purposes and Powers................................ 2
SECTION 2.4. Appointment of Owner Trustee....................... 3
SECTION 2.5. Capital Contribution of Owner Trust
Estate............................................. 3
SECTION 2.6. Declaration of Trust............................... 3
SECTION 2.7. Liability of the Depositor......................... 4
SECTION 2.8. Title to Trust Property............................ 5
SECTION 2.9. Situs of Trust..................................... 5
SECTION 2.10. Representations and Warranties of the
Depositor.......................................... 5
SECTION 2.11. Federal Income Tax Matters......................... 7
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Beneficial Ownership...................... 10
SECTION 3.2. Capital Accounts.................................. 10
SECTION 3.3. The Certificates.................................. 11
SECTION 3.4. Authentication of Certificates.................... 11
SECTION 3.5. Registration of Certificates; Transfer
and Exchange of Certificates...................... 12
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen
Certificates...................................... 19
SECTION 3.7. Persons Deemed Owners of Certificates............. 19
SECTION 3.8. Access to List of Certificateholders'
Names and Addresses............................... 20
SECTION 3.9. Maintenance of Office or Agency................... 20
SECTION 3.10. Appointment of Certificate Paying
Agent............................................. 21
SECTION 3.11. Certain Rights of Depositor....................... 22
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Certificateholders with
Respect to Certain Matters........................ 23
SECTION 4.2. Action by Certificateholders with
Respect to Certain Matters........................ 24
i
94
SECTION 4.3. Action by Certificateholders with
Respect to Bankruptcy.............................. 24
SECTION 4.4. Restrictions on Certificateholders'
Power.............................................. 24
SECTION 4.5. Majority Control................................... 25
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate Distribution Account.. 26
SECTION 5.2. Application of Trust Funds......................... 26
SECTION 5.3. Method of Payment.................................. 29
SECTION 5.4. No Segregation of Monies; No Interest.............. 29
SECTION 5.5. Accounting and Reports to Noteholders,
Certificateholders, Internal Revenue Service and
Others............................................. 30
SECTION 5.6. Signature on Returns; Tax Matters
Partner............................................ 30
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority.................................. 31
SECTION 6.2. General Duties..................................... 31
SECTION 6.3. Action upon Instruction............................ 32
SECTION 6.4. No Duties Except as Specified in this
Agreement or in Instructions....................... 33
SECTION 6.5. No Action Except Under Specified Docu-
ments or Instructions.............................. 34
SECTION 6.6. Restrictions....................................... 34
ARTICLE VII
REGARDING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties.................... 35
SECTION 7.2. Furnishing of Documents............................ 37
SECTION 7.3. Representations and Warranties..................... 37
SECTION 7.4. Reliance; Advice of Counsel........................ 37
SECTION 7.5. Not Acting in Individual Capacity.................. 38
SECTION 7.6. Owner Trustee Not Liable for Certificates
or Receivables..................................... 38
SECTION 7.7. Bank May Own Certificates and Notes................ 39
ARTICLE VIII
COMPENSATION AND INDEMNITY OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and Expenses.................. 40
SECTION 8.2. Indemnification.................................... 40
SECTION 8.3. Payments to Owner Trustee.......................... 41
ii
95
ARTICLE IX
TERMINATION
SECTION 9.1. Termination of Trust Agreement..................... 42
SECTION 9.2. Dissolution upon Insolvency or Dissolution
of Depositor or General Partner.................... 44
SECTION 9.3. Prepayment of Certificates......................... 45
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner
Trustee........................................... 48
SECTION 10.2. Resignation or Removal of Owner
Trustee........................................... 48
SECTION 10.3. Successor Owner Trustee........................... 49
SECTION 10.4. Merger or Consolidation of Owner
Trustee........................................... 50
SECTION 10.5. Appointment of Co-Trustee or Separate
Trustee........................................... 50
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Supplements and Amendments........................ 53
SECTION 11.2. No Legal Title to Owner Trust Estate
in Certificateholders............................. 55
SECTION 11.3. Limitation on Rights of Others.................... 55
SECTION 11.4. Notices........................................... 55
SECTION 11.5. Severability...................................... 56
SECTION 11.6. Separate Counterparts............................. 56
SECTION 11.7. Successors and Assigns............................ 56
SECTION 11.8. No Petition....................................... 56
SECTION 11.9. No Recourse....................................... 57
SECTION 11.10. Headings.......................................... 57
SECTION 11.11. Governing Law..................................... 57
EXHIBIT A
[FORM OF CLASS C CERTIFICATE].......................... A-1
EXHIBIT B
[FORM OF CLASS D CERTIFICATE].......................... B-1
EXHIBIT C
[FORM OF INVESTMENT LETTER - CLASS C CERTIFICATES]..... C-1
EXHIBIT D
[FORM OF INVESTMENT LETTER - CLASS D CERTIFICATES
QUALIFIED INSTITUTIONAL BUYER]......................... D-1
iii
96
EXHIBIT E
[FORM OF INVESTMENT LETTER - CLASS D CERTIFICATES
INSTITUTIONAL ACCREDITED INVESTOR]..................... E-1
EXHIBIT F
FORM OF RULE 144A TRANSFEROR CERTIFICATE -
CLASS D CERTIFICATES.................................... F-1
EXHIBIT G
[FORM OF CERTIFICATE OF TRUST].......................... G-1
APPENDIX A
Definitions and Usage.................................. AA-1
iv
97
EXHIBIT F Form of Rule 144A Transferor
Certificate...................................... F-1
EXHIBIT G Form of Certificate of Trust........................ G-1
APPENDIX A Definitions and Usage............................... AA-1
v