EX-99.4 16 k58875a1ex99-4.txt FORM OF APPENDIX A - DEFINED TERMS 1 EXHIBIT 99.4 APPENDIX A DEFINITIONS AND USAGE Usage The following rules of construction and usage shall be applicable to any agreement or instrument that is governed by this Appendix: (a) All terms defined in this Appendix shall have the defined meanings when used in any agreement or instrument governed hereby and in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein. (b) As used herein, in any agreement or instrument governed hereby and in any certificate or other document made or delivered pursuant thereto, accounting terms not defined in this Appendix or in any such agreement, instrument, certificate or other document, and accounting terms partly defined in this Appendix or in any such agreement, instrument, certificate or other document, to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles as in effect on the date of such agreement or instrument. To the extent that the definitions of accounting terms in this Appendix or in any such agreement, instrument, certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Appendix or in any such instrument, certificate or other document shall control. (c) The words "hereof," "herein," "hereunder" and words of similar import when used in an agreement or instrument refer to such agreement or instrument as a whole and not to any particular provision or subdivision thereof; references in an agreement or instrument to "Article," "Section" or another subdivision or to an attachment are, unless the context otherwise requires, to an article, section or subdivision of or an attachment to such agreement or instrument; and the term "including" means "including without limitation." AA-1 2 (d) The definitions contained in this Appendix are equally applicable to both the singular and plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. (e) Any agreement, instrument or statute defined or referred to below or in any agreement or instrument that is governed by this Appendix means such agreement or instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns. Definitions "Accrual Period" shall mean, with respect to any Distribution Date and any Class of Notes, the period from and including the previous Distribution Date (or, in the case of the first Distribution Date, the Closing Date) to but excluding such Distribution Date. "Accrued Certificate Interest" shall mean, with respect to any Distribution Date, the sum of the Certificateholders' Monthly Accrued Interest for such Distribution Date and the Certificateholders' Interest Carryover Shortfall for such Distribution Date. "Accrued Note Interest" shall mean, with respect to any Distribution Date, the sum of the Noteholders' Monthly Accrued Interest for such Distribution Date and the Noteholders' Interest Carryover Shortfall for such Distribution Date. "Act" shall have the meaning specified in Section 11.3(a) of the Indenture. "Actuarial Method" shall mean the method of allocating a fixed level payment on a Receivable between principal and interest, pursuant to which the portion of such payment that is allocated to interest is the product of one-twelfth (1/12) of the APR on the Receivable multi- AA-2 3 plied by the scheduled principal balance of the Receivable. "Actuarial Receivable" shall mean any Receivable under which the portion of a payment with respect thereto allocable to interest and the portion of a payment with respect thereto allocable to principal is determined in accordance with the Actuarial Method. "Administration Agreement" shall mean the Administration Agreement, dated as of _________ __, ____, by and among the Administrator, the Issuer and the Indenture Trustee. "Administrator" shall mean Ford Credit, in its capacity as administrator under the Administration Agreement, or any successor Administrator thereunder. "Advance" shall mean the amount, as of the last day of a Collection Period, which the Servicer is required to advance on the respective Receivable pursuant to Section 4.4(a) of the Sale and Servicing Agreement. "Affiliate" shall mean, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" shall have meanings correlative to the foregoing. "Amount Financed" shall mean, with respect to a Receivable, the amount advanced under the Receivable toward the purchase price of the Financed Vehicle and any related costs. "Annual Percentage Rate" or "APR" of a Receivable shall mean the annual rate of finance charges stated in the Receivable. "Applicable Tax State" shall mean, as of any date of determination, each state as to which any of the following is then applicable: (a) a state in which the Owner Trustee maintains its Corporate Trust Office, (b) a AA-3 4 state in which the Owner Trustee maintains its principal executive offices, and (c) a state in which the Servicer regularly conducts servicing and collection operations other than purely ministerial activities and which relate to a material portion of the Receivables. "Assignment" shall mean the document of assignment attached as Exhibit A to the Purchase Agreement. "Authenticating Agent" shall have the meaning specified in Section 2.14 of the Indenture. "Authorized Officer" shall mean, (i) with respect to the Issuer, any officer of the Owner Trustee who is authorized to act for or on behalf of the Owner Trustee in matters relating to the Issuer and who is identified on the list of Authorized Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter) and, for so long as the Administration Agreement is in full force and effect, any officer of the Administrator who is authorized to act for the Administrator in matters relating to the Issuer and to be acted upon by the Administrator pursuant to the Administration Agreement; and (ii) with respect to the Indenture Trustee or the Owner Trustee, any officer within the Corporate Trust Office of the Indenture Trustee or the Owner Trustee, as the case may be, including any vice president, assistant vice president, secretary, assistant secretary or any other officer of the Indenture Trustee or the Owner Trustee, as the case may be, customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject and shall also mean, with respect to the Owner Trustee, any officer of the Administrator. "Available Funds" shall mean, for any Distribution Date, the sum of the Available Interest and the Available Principal. "Available Interest" shall mean, for any Distribution Date, the sum of the following amounts with respect to the preceding Collection Period: (i) that portion of all collections on Receivables allocable to AA-4 5 interest (including amounts withdrawn from the Payahead Account but excluding amounts deposited into the Payahead Account, in each case to the extent allocable to interest), (ii) Liquidation Proceeds to the extent allocable to interest due thereon in accordance with the Servicer's customary servicing procedures, (iii) all Advances made by the Servicer of interest due on Receivables and all amounts advanced by the Servicer pursuant to Section 4.4(b) of the Sale and Servicing Agreement, (iv) the Purchase Amount of each Receivable that became a Purchased Receivable during the related Collection Period to the extent attributable to accrued interest thereon, and (v) amounts paid pursuant to the Yield Supplement Agreement (including amounts, if any, withdrawn from the Yield Supplement Account or the Reserve Account pursuant to Section 5.1(a)(ii) of the Sale and Servicing Agreement); provided, however that in calculating the Available Interest the following will be excluded: (i) amounts received on Receivables to the extent that the Servicer has previously made an unreimbursed Advance of interest; and (ii) Liquidation Proceeds with respect to a particular Receivable to the extent of any unreimbursed Advances of interest. "Available Principal" shall mean, for any Distribution Date, the sum of the following amounts with respect to the preceding Collection Period: (i) that portion of all collections on Receivables allocable to principal (including amounts withdrawn from the Payahead Account but excluding amounts deposited into the Payahead Account, in each case to the extent allocable to principal), (ii) Liquidation Proceeds attributable to principal in accordance with the Servicer's customary servicing procedures, (iii) all Advances made by the Servicer of principal due on the Receivables, (iv) to the extent attributable to principal, the Purchase Amount of each Receivable that became a Purchased Receivable during such Collection Period, and (v) partial prepayments attributable to any refunded item included in the Amount Financed, such as extended warranty protection plan costs, or physical damage, credit life, disability insurance premiums, or any partial prepayment which causes a reduction in the Obligor's periodic payment to below the Scheduled Payment as of the Cutoff Date; provided, however, that in calculating the Available Principal the following will be excluded: (i) amounts received on Receivables to the extent that the Servicer has previous- AA-5 6 ly made an unreimbursed Advance of principal; and (ii) Liquidation Proceeds with respect to a particular Receivable to the extent of any unreimbursed Advances of principal. "Bankruptcy Code" shall mean the United States Bankruptcy Code, 11 U.S.C. 101 et seq., as amended. "Basic Documents" shall mean the Certificate of Formation, the Limited Liability Company Agreement, the Certificate of Trust, the Trust Agreement, the Purchase Agreement, the Sale and Servicing Agreement, the Indenture, the Administration Agreement, the Yield Supplement Agreement, the Note Depository Agreement, the Certificate Depository Agreement and the other documents and certificates delivered in connection therewith. "Benefit Plan" shall have the meaning specified in Section 3.4(b) of the Trust Agreement. "Book-Entry Certificates" shall mean a beneficial interest in the Certificates, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 3.11 of the Trust Agreement. "Book-Entry Notes" shall mean a beneficial interest in the Notes, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 2.11 of the Indenture. "Business Day" shall mean any day other than a Saturday, a Sunday or a day on which banking institutions or trust companies in New York, New York are authorized or obligated by law, regulation or executive order to remain closed. "Business Trust Statute" shall mean Chapter 38 of Title 12 of the Delaware Code, 12 Delaware Code Section 3801 et seq., as amended. "Certificate" shall mean a physical certificate evidencing the beneficial interest of a Certificateholder in the property of the Trust, substantially in the form of Exhibit A or Exhibit B to the Trust Agreement, as applicable. Such certificate shall entitle the Certificateholder thereof to distributions of principal and AA-6 7 interest pursuant to the Trust Agreement from collections and other proceeds in respect of the Owner Trust Estate; provided, however, that the Owner Trust Estate has been pledged to the Indenture Trustee to secure payment of the Notes and that the rights of Certificateholders to receive distributions on the Certificates are subordinated to the rights of the Noteholders as described in the Sale and Servicing Agreement, the Indenture and the Trust Agreement. "Certificate Balance" shall mean, as the context so requires, (i) with respect to all of the Certificates, an amount equal to, initially, the Initial Certificate Balance and, thereafter, an amount equal to the Initial Certificate Balance, reduced by all amounts distributed to the Certificateholders and allocable to principal or (ii) with respect to any Certificate, an amount equal to, initially, the initial denomination of such Certificate and, thereafter, an amount equal to such initial denomination, reduced by all amounts distributed in respect of such Certificate and allocable to principal; provided, that in determining whether the Certificateholders of Certificates evidencing the requisite portion or percentage of the aggregate Certificate Balance have given any request, demand, authorization, direction, notice, consent, or waiver hereunder or under any Basic Document, Certificates owned by the Issuer, any other obligor upon the Certificates, the Seller, the Servicer or any Affiliate of any of the foregoing Persons shall be disregarded and deemed to be excluded from the Certificate Balance, except that, in determining whether the Indenture Trustee and Owner Trustee shall be protected in relying on any such request, demand, authorization, direction, notice, consent, or waiver, only Certificates that a Responsible Officer of the Indenture Trustee, if applicable, and an Authorized Officer of the Owner Trustee with direct responsibility for the administration of the Trust Agreement, if applicable, knows to be so owned shall be so disregarded. Certificates so owned that have been pledged in good faith may be regarded as included in the Certificate Balance if the pledgee establishes to the satisfaction of the Indenture Trustee or the Owner Trustee, as applicable, the pledgee's right so to act with respect to such Certificates and that the pledgee is not the Issuer, any other obligor upon the Certificates, the Seller, the Servicer or any Affiliate of any of the foregoing Persons. AA-7 8 "Certificate Depository Agreement" shall mean the agreement dated the Closing Date, by and among the Trust, the Owner Trustee, the Administrator and The Depository Trust Company, as the initial Clearing Agency, relating to the Certificates, substantially in the form of Exhibit D to the Trust Agreement. "Certificate Distribution Account" shall mean the account established and maintained as such pursuant to Section 4.1(c) of the Sale and Servicing Agreement. "Certificate Final Scheduled Distribution Date" shall mean the ____________ Distribution Date. "Certificate Indemnification Agreement" shall mean the Certificate Indemnification Agreement, dated as of _____________, ____, by and between Ford Credit and the Note Underwriters. "Certificate Underwriting Agreement" shall mean the Certificate Underwriting Agreement by and among the Seller and _____, as representative of the several Certificate Underwriters. "Certificateholder" shall mean a Person in whose name a Certificate is registered in the Certificate Register. "Certificateholders' Interest Carryover Shortfall" shall mean, with respect to any Distribution Date, the excess of the sum of the Certificateholders' Monthly Accrued Interest for the preceding Distribution Date and any outstanding Certificateholders' Interest Carryover Shortfall from the close of business on such preceding Distribution Date, over the amount in respect of interest that is actually deposited in the Certificate Distribution Account on such preceding Distribution Date, plus thirty (30) days' interest on such excess, to the extent permitted by law, at the Certificate Rate. "Certificateholders' Monthly Accrued Interest" shall mean, with respect to any Distribution Date, thirty (30) days of interest at the Certificate Rate on the Certificate Balance as of the immediately preceding Distribution Date, after giving effect to all distributions of principal to the Certificateholders on or prior to such Distribution Date (or, in the case of the first Distribu- AA-8 9 tion Date, __________ (__) days of interest at the Certificate Rate on the Initial Certificate Balance). "Certificateholders' Principal Carryover Shortfall" shall mean, as of the close of business on any Distribution Date, the excess of the Certificateholders' Regular Principal and any outstanding Certificateholders' Principal Carryover Shortfall from the preceding Distribution Date over the amount in respect of principal that is actually deposited in the Certificate Distribution Account. "Certificateholders' Regular Principal" shall mean, with respect to any Distribution Date prior to the Distribution Date on which the Notes are paid in full, zero; and with respect to any Distribution Date on or after the Distribution Date on which the Notes are paid in full, the sum of (i) the Scheduled Principal for such Distribution Date (less, on the Distribution Date on which the Notes are paid in full, the portion thereof payable on the Notes) plus (ii) any outstanding Certificateholders' Principal Carryover Shortfall from the close of business on the preceding Distribution Date; provided, however, that the Certificateholders' Regular Principal shall not exceed the Certificate Balance; and provided, further, that on the Certificate Final Scheduled Distribution Date, the principal required to be included in the Certificateholders' Regular Principal will include the lesser of (a) (i) any Scheduled Payments of principal due and remaining unpaid on each Precomputed Receivable and (ii) any principal due and remaining unpaid on each Simple Interest Receivable, in each case, in the Trust as of the Final Scheduled Maturity Date or (b) the amount that is necessary (after giving effect to the other amounts to be deposited in the Certificate Distribution Account on such Distribution Date and allocable to principal) to reduce the Certificate Balance to zero. "Certificate of Formation" shall mean the Certificate of Formation of the Depositor filed for the Depositor pursuant to Section 18-201 of the Limited Liability Company Act. "Certificate of Trust" shall mean the Certificate of Trust in the form of Exhibit C to the Trust AA-9 10 Agreement filed for the Trust pursuant to Section 3810(a) of the Business Trust Statute. "Certificate Owner" shall mean, with respect to any Book-Entry Certificate, the Person who is the beneficial owner of such Book-Entry Certificate, as reflected on the books of the Clearing Agency or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency). "Certificate Paying Agent" shall mean any paying agent or co-paying agent appointed pursuant to Section 3.9 of the Trust Agreement and shall initially be the Owner Trustee. "Certificate Pool Factor" shall mean, as of the close of business on the last day of a Collection Period, a seven-digit decimal figure equal to the Certificate Balance (after giving effect to any reductions therein to be made on the immediately following Distribution Date) divided by the Initial Certificate Balance. The Certificate Pool Factor will be 1.0000000 as of the Closing Date; thereafter, the Certificate Pool Factor will decline to reflect reductions in the Certificate Balance. "Certificate Rate" shall mean ____% per annum. Interest with respect to the Certificates shall be computed on the basis of a 360-day year consisting of twelve 30-day months for all purposes of this Agreement and the other Basic Documents. "Certificate Register" and "Certificate Registrar" shall have the respective meanings specified in Section 3.4 of the Trust Agreement. "Certificate Underwriters" shall mean the underwriters named in Schedule I to the Certificate Underwriting Agreement. "Certificate Underwriting Agreement" shall mean the Certificate Underwriting Agreement, dated __________ __, ____, between the Depositor and ____________________, as representative of the several Certificate Underwriters. AA-10 11 "Class" means a class of Notes, which may be the Class A-1 Notes, the Class A-2 Notes or the Class A-3 Notes. "Class A-1 Final Scheduled Distribution Date" shall mean the ____________ Distribution Date. "Class A-1 Noteholder" shall mean the Person in whose name a Class A-1 Note is registered on the Note Register. "Class A-1 Notes" shall mean the $______ __% Class A-1 Asset Backed Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-1 to the Indenture. "Class A-1 Rate" shall mean __% per annum. Interest with respect to the Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months for all purposes of this Agreement and the other Basic Documents. "Class A-2 Final Scheduled Distribution Date" shall mean the ____________ Distribution Date. "Class A-2 Noteholder" shall mean the Person in whose name a Class A-2 Note is registered on the Note Register. "Class A-2 Notes" shall mean the $______ __% Class A-2 Asset Backed Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-2 to the Indenture. "Class A-2 Rate" shall mean __% per annum. Interest with respect to the Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months for all purposes of this Agreement and the other Basic Documents. "Class A-3 Final Scheduled Distribution Date" shall mean the ____________ Distribution Date. "Class A-3 Noteholder" shall mean the Person in whose name a Class A-3 Note is registered on the Note Register. AA-11 12 "Class A-3 Notes" shall mean the $______ __% Class A-3 Asset Backed Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-3 to the Indenture. "Class A-3 Rate" shall mean __% per annum. Interest with respect to the Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months for all purposes of this Agreement and the other Basic Documents. "Clearing Agency" shall mean an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act. "Clearing Agency Participant" shall mean a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency. "Closing Date" shall mean _________ __, ____. "Code" shall mean the Internal Revenue Code of 1986, as amended, and Treasury Regulations promulgated thereunder. "Collateral" shall have the meaning specified in the Granting Clause of the Indenture. "Collection Account" shall mean the account or accounts established and maintained as such pursuant to Section 4.1(a) of the Sale and Servicing Agreement. "Collection Period" shall mean each calendar month during the term of this Agreement or, in the case of the initial Collection Period, the period from the Cutoff Date to and including the last day of the month in which the Cutoff Date occurred. Any amount stated "as of the close of business of the last day of a Collection Period" shall give effect to the following calculations as determined as of the end of the day on such last day: 1) all applications of collections, 2) all current and previous Payaheads, 3) all applications of Payahead Balances, 4) all Advances and reductions of Outstanding Advances and 5) all distributions. AA-12 13 "Collections" shall mean all amounts collected by the Servicer (from whatever source) on or with respect to the Receivables. "Commission" shall mean the Securities and Exchange Commission. "Computer Tape" shall mean the computer tape generated by the Seller which provides information relating to the Receivables and which was used by the Seller in selecting the Receivables conveyed to the Trust hereunder. "Corporate Trust Office" shall mean, (i) with respect to the Owner Trustee, the principal corporate trust office of the Owner Trustee located at ___________ _______________, Delaware _____ or at such other address as the Owner Trustee may designate from time to time by notice to the Certificateholders and the Depositor, or the principal corporate trust office of any successor Owner Trustee (the address of which the successor Owner Trustee will notify the Certificateholders and the Depositor); and (ii) with respect to the Indenture Trustee, the principal corporate trust office of the Indenture Trustee located at ______________, or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders and the Issuer, or the principal corporate trust office of any successor Indenture Trustee (the address of which the successor Indenture Trustee will notify the Noteholders and the Issuer). "Cutoff Date" shall mean _________ __, ____. "Dealer" shall mean the dealer who sold a Financed Vehicle and who originated and assigned the respective Receivable to Ford Credit under an existing agreement between such dealer and Ford Credit. "Dealer Recourse" shall mean, with respect to a Receivable (i) any amount paid by a Dealer or credited against a reserve established for, or held on behalf of, a Dealer in excess of that portion of finance charges rebated to the Obligor which is attributable to the Dealer's participation, if any, in the Receivable, and (ii) all recourse rights against the Dealer which originated the Receivable and any successor Dealer. AA-13 14 "Default" shall mean any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default. "Deficiency Amount" shall have the meaning assigned to such term in the definition of "Noteholders' Accelerated Principal" below. "Definitive Certificates" shall have the meaning specified in Section 3.11 of the Trust Agreement. "Definitive Notes" shall have the meaning specified in Section 2.11 of the Indenture. "Delivery", when used with respect to Reserve Account Property, shall mean: (a) with respect to bankers' acceptances, commercial paper, negotiable certificates of deposit and other obligations that constitute "instruments" within the meaning of Section 9-105(1)(i) of the UCC and are susceptible of physical delivery, transfer thereof to the Indenture Trustee or its nominee or custodian by physical delivery to the Indenture Trustee or its nominee or custodian endorsed to, or registered in the name of, the Indenture Trustee or its nominee or custodian or endorsed in blank, and, with respect to a certificated security (as defined in Section 8-102 of the UCC) transfer thereof (i) by delivery of such certificated security endorsed to, or registered in the name of, the Indenture Trustee or its nominee or custodian or endorsed in blank to a financial intermediary (as defined in Section 8-313 of the UCC) and the making by such financial intermediary of entries on its books and records identifying such certificated securities as belonging to the Indenture Trustee or its nominee or custodian and the sending by such financial intermediary of a confirmation of the purchase of such certificated security by the Indenture Trustee or its nominee or custodian, or (ii) by delivery thereof to a "clearing corporation" (as defined in Section 8-102(3) of the UCC) and the making by such clearing corporation of appropriate entries on its books reducing the appropriate securities account of the transferor and increasing the appropriate securities AA-14 15 account of a financial intermediary by the amount of such certificated security, the identification by the clearing corporation of the certificated securities for the sole and exclusive account of the financial intermediary, the maintenance of such certificated securities by such clearing corporation or a "custodian bank" (as defined in Section 8-102(4) of the UCC) or the nominee of either subject to the clearing corporation's exclusive control, the sending of a confirmation by the financial intermediary of the purchase by the Indenture Trustee or its nominee or custodian of such securities and the making by such financial intermediary of entries on its books and records identifying such certificated securities as belonging to the Indenture Trustee or its nominee or custodian (all of the foregoing, "Physical Property"), and, in any event, any such Physical Property in registered form shall be in the name of the Indenture Trustee or its nominee or custodian; and such additional or alternative procedures as may hereafter become appropriate to effect the complete transfer of ownership of any such Reserve Account Property to the Indenture Trustee or its nominee or custodian, consistent with changes in applicable law or regulations or the interpretation thereof; (b) with respect to any securities issued by the U.S. Treasury, the Federal Home Loan Mortgage Corporation or by the Federal National Mortgage Association that is a book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations, the following procedures, all in accordance with applicable law, including applicable federal regulations and Articles 8 and 9 of the UCC: book-entry registration of such Reserve Account Property to an appropriate book-entry account maintained with a Federal Reserve Bank by a financial intermediary that is also a "depository" pursuant to applicable federal regulations and issuance by such financial intermediary of a deposit advice or other written confirmation of such book-entry registration to the Indenture Trustee or its nominee or custodian of the purchase by the Indenture Trustee or its nominee or custodian of such book-entry securities; the making by such financial intermediary of entries in its books and records AA-15 16 identifying such book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations as belonging to the Indenture Trustee or its nominee or custodian and indicating that such custodian holds such Reserve Account Property as agent for the Indenture Trustee or its nominee or custodian; and such additional or alternative procedures as may hereafter become appropriate to effect complete transfer of ownership of any such Reserve Account Property to the Indenture Trustee or its nominee or custodian, consistent with changes in applicable law or regulations or the interpretation thereof; and (c) with respect to any item of Reserve Account Property that is an uncertificated security under Article 8 of the UCC and that is not governed by clause (b) above, registration on the books and records of the issuer thereof in the name of the financial intermediary, the sending of a confirmation by the financial intermediary of the purchase by the Indenture Trustee or its nominee or custodian of such uncertificated security, the making by such financial intermediary of entries on its books and records identifying such uncertificated certificates as belonging to the Indenture Trustee or its nominee or custodian. "Depositor" shall mean the Seller in its capacity as Depositor under the Trust Agreement. "Depository Agreements" shall mean the Note Depository Agreement and the Certificate Depository Agreement, collectively. "Determination Date" shall mean, with respect to any Collection Period, the eighth Business Day of the next succeeding calendar month (but not later than the tenth calendar day of such month). "Distribution Date" shall mean the _________ (_____) day of each calendar month or, if such day is not a Business Day, the next succeeding Business Day. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. AA-16 17 "Event of Default" shall have the meaning specified in Section 5.1 of the Indenture. "Event of Servicing Termination" shall mean an event specified in Section 8.1 of the Sale and Servicing Agreement. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Executive Officer" shall mean, with respect to any corporation, the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, President, Executive Vice President, any Vice President, the Secretary or the Treasurer of such corporation and, with respect to any partnership, any general partner thereof. "Expenses" shall have the meaning assigned to such term in Section 8.2 of the Trust Agreement. "Final Scheduled Maturity Date" shall mean the last day of the Collection Period immediately preceding the Certificate Final Scheduled Distribution Date. "Financed Vehicle" shall mean a new or used automobile or light truck, together with all accessions thereto, securing an Obligor's indebtedness under the respective Receivable. "Ford Credit" shall mean Ford Motor Credit Company, a Delaware corporation. "Grant" shall mean to mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create, and to grant a lien upon and a security interest in and right of set-off against, and to deposit, set over and confirm pursuant to the Indenture. A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for AA-17 18 principal and interest payments in respect of the Collateral and all other monies payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise, and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto. "Indemnified Parties" shall have the meaning assigned to such term in Section 8.2 of the Trust Agreement. "Indenture" shall mean the Indenture, dated as of _______ __, ____, by and between the Trust and the Indenture Trustee. "Indenture Trustee" shall mean __________, a _________ banking corporation, as Indenture Trustee under the Indenture, or any successor Indenture Trustee under the Indenture. "Indenture Trust Estate" shall mean all money, instruments, rights and other property that are subject or intended to be subject to the lien and security interest of Indenture for the benefit of the Noteholders (including, without limitation, all property and interests Granted to the Indenture Trustee), including all proceeds thereof. "Independent" shall mean, when used with respect to any specified Person, that such Person (a) is in fact independent of the Issuer, any other obligor on the Notes, the Seller and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Seller or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such other obligor, the Seller or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions. "Independent Certificate" shall mean a certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section AA-18 19 11.1 of the Indenture, made by an Independent appraiser or other expert appointed by an Issuer Order and approved by the Indenture Trustee in the exercise of reasonable care, and such opinion or certificate shall state that the signer has read the definition of "Independent" in this Indenture and that the signer is Independent within the meaning thereof. "Initial Certificate Balance" shall mean, as the context so requires, (i) with respect to all of the Certificates, $_____________ or (ii) with respect to any Certificate, an amount equal to the initial denomination of such Certificate. "Initial Pool Balance" shall mean $______________. "Insolvency Event" shall mean, with respect to any Person, (i) the making of a general assignment for the benefit of creditors, (ii) the filing of a voluntary petition in bankruptcy, (iii) being adjudged a bankrupt or insolvent, or having had entered against such Person an order for relief in any bankruptcy or insolvency proceeding, (iv) the filing by such Person of a petition or answer seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, (v) the filing by such Person of an answer or other pleading admitting or failing to contest the material allegations of a petition filed against such Person in any proceeding specified in (vii) below, (vi) seeking, consent to or acquiescing in the appointment of a trustee, receiver or liquidator of such Person or of all or any substantial part of the assets of such Person or (vii) the failure to obtain dismissal within 60 days of the commencement of any proceeding against such Person seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, or the entry of any order appointing a trustee, liquidator or receiver of such Person or of such Person's assets or any substantial portion thereof. "Issuer" shall mean the Trust unless a successor replaces it and, thereafter, means the successor and for purposes of any provision contained in the Indenture and required by the TIA, each other obligor on the Notes. AA-19 20 "Issuer Order" and "Issuer Request" shall mean a written order or request signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Indenture Trustee. "Letter of Credit Bank" shall mean any Person having the Required Rating that has provided a Yield Supplement Letter of Credit in accordance with Section 5.1 of the Sale and Servicing Agreement. "Lien" shall mean a security interest, lien, charge, pledge, equity, or encumbrance of any kind other than tax liens, mechanics' liens, and any liens which attach to the respective Receivable by operation of law. "Limited Liability Company Act" shall mean the Delaware Limited Liability Company Act, Chapter 18 of Title 6 of the Delaware Code, 18 Delaware Code Section 101 et seq., as amended. "Limited Liability Company Agreement" shall mean the Limited Liability Company Agreement of Ford Credit Auto Receivables Two LLC, dated as of January 29, 2001. "Limited Partnership Act" shall mean the Delaware Revised Uniform Limited Partnership Act, Chapter 17 of Title 6 of the Delaware Code, 17 Delaware Code Section 101 et seq., as amended. "Liquidated Receivable" shall mean a Receivable which, by its terms, is in default and as to which the Servicer has determined, in accordance with its customary servicing procedures, that eventual payment in full is unlikely or has repossessed and disposed of the Financed Vehicle. "Liquidation Proceeds" shall mean the monies collected from whatever source, during the respective Collection Period, on a Liquidated Receivable, net of the sum of any amounts expended by the Servicer for the account of the Obligor plus any amounts required by law to be remitted to the Obligor. "Monthly Remittance Condition" shall have the meaning specified in Section 4.1(e) of the Sale and Servicing Agreement. "Moody's" shall mean Moody's Investors Service, Inc. AA-20 21 "Note Depository Agreement" shall mean the agreement dated __________ __, ____, by and among the Trust, the Indenture Trustee and The Depository Trust Company, as the initial Clearing Agency, relating to the Notes, substantially in the form of Exhibit B to the Indenture. "Noteholder" shall mean the Person in whose name a Note is registered on the Note Register. "Noteholders' Accelerated Principal" means (a) with respect to each Distribution Date on which the difference between the Pool Balance and the aggregate outstanding principal balance of the Notes and the Certificate Balance on such Distribution Date (before giving effect to any distribution of principal of the Notes or the Certificates on such Distribution Date) is less than $_____________ (such deficiency with respect to any Distribution Date is referred to as the "Deficiency Amount"), ___% of the portion, if any, of Available Funds remaining for such Distribution Date, and (b) with respect to the Distribution Date on which the difference between the Pool Balance and the aggregate outstanding principal balance of the Notes and the Certificate Balance on such Distribution Date (before giving effect to any distribution of principal of the Notes or the Certificates on such Distribution Date) equals or exceeds $______________ and on each Distribution Date following such Distribution Date, __% of the portion, if any, of Available Funds remaining for such Distribution Date, in each case after giving effect to the payment of (i) the Servicing Fee and any overdue Servicing Fees, (ii) the Accrued Note Interest, (iii) the Noteholders' Regular Principal, (iv) the Accrued Certificate Interest and (v) the amount, if any, required to be deposited in the Reserve Account on such Distribution Date; provided, however, on any Distribution Date that the Noteholders' Accelerated Principal is calculated pursuant to clause (a) above, the Noteholders' Accelerated Principal shall not exceed the Deficiency Amount with respect to such Distribution Date; provided, further, however, that the Noteholders' Accelerated Principal shall not exceed the outstanding principal amount of the Notes (after giving effect to payments of Noteholders' Regular Principal on such Distribution Date). AA-21 22 "Noteholders' Interest Carryover Shortfall" shall mean, with respect to any Distribution Date, the excess of the sum of the Noteholders' Monthly Accrued Interest for the preceding Distribution Date and any outstanding Noteholders' Interest Carryover Shortfall from the close of business on such preceding Distribution Date, over the amount in respect of interest that is actually deposited in the Note Payment Account on such preceding Distribution Date, plus thirty (30) days' interest on the amount of interest due but not paid to Noteholders on the preceding Distribution Date to the extent permitted by law, at the applicable Note Interest Rate borne by each Class of Notes. "Noteholders' Monthly Accrued Interest" shall mean, with respect to any Distribution Date, thirty (30) days of interest at the applicable Note Interest Rate on the aggregate principal balance of each Class of Notes as of the immediately preceding Distribution Date, after giving effect to all payments of principal to the Noteholders on or prior to such Distribution Date (or, in the case of the first Distribution Date, _________ (__) days of interest at the applicable Note Interest Rate on the initial principal balance of each Class of Notes). "Noteholders' Principal Carryover Shortfall" shall mean, as of the close of business on any Distribution Date, the excess of the Principal Distribution Amount and any outstanding Noteholders' Principal Carryover Shortfall from the preceding Distribution Date over the amount in respect of principal that is actually deposited in the Note Payment Account. "Noteholders' Regular Principal" shall mean, with respect to any Distribution Date, the sum of (i) the Scheduled Principal for such Distribution Date plus (ii) the Noteholders' Principal Carryover Shortfall as of the close of business on the preceding Distribution Date; provided, however, that the Noteholders' Regular Principal shall not exceed the outstanding principal balance of the Notes; and provided, further, that, (a) on the Class A-1 Final Scheduled Distribution Date, the principal required to be deposited in the Note Payment Account will include the amount necessary (after giving effect to the other amounts to be deposited in the Note Payment Account on such Distribution Date and allocable to principal) to reduce the outstanding principal amount of the Class A-1 AA-22 23 Notes to zero; (b) on the Class A-2 Final Scheduled Distribution Date, the principal required to be deposited in the Note Payment Account will include the amount necessary (after giving effect to the other amounts to be deposited in the Note Payment Account on such Distribution Date and allocable to principal) to reduce the outstanding principal amount of the Class A-2 Notes to zero; and (c) on the Class A-3 Final Scheduled Distribution Date, the principal required to be deposited in the Note Payment Account will include the amount necessary (after giving effect to the other amounts to be deposited in the Note Payment Account on such Distribution Date and allocable to principal) to reduce the outstanding principal amount of the Class A-3 Notes to zero. "Note Indemnification Agreement" shall mean the Note Indemnification Agreement, dated as of___________,_______,by and between Ford Credit and the Note Underwriters. "Note Interest Rate" shall mean the Class A-1 Rate, the Class A-2 Rate or the Class A-3 Rate, as applicable. "Note Owner" shall mean, with respect to any Book-Entry Note, the Person who is the beneficial owner of such Book-Entry Note, as reflected on the books of the Clearing Agency or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency). "Note Paying Agent" shall mean the Indenture Trustee or any other Person that meets the eligibility standards for the Indenture Trustee specified in Section 6.11 of the Indenture and is authorized by the Issuer to make payments to and distributions from the Collection Account and the Note Payment Account, including payment of principal of or interest on the Notes on behalf of the Issuer. "Note Payment Account" shall mean the account established and maintained as such pursuant to Section 4.1(b) of the Sale and Servicing Agreement. AA-23 24 "Note Pool Factor" shall mean, with respect to each Class of Notes as of the close of business on the last day of a Collection Period, a seven-digit decimal figure equal to the outstanding principal balance of such Class of Notes (after giving effect to any reductions thereof to be made on the immediately following Distribution Date) divided by the original outstanding principal balance of such Class of Notes. The Note Pool Factor will be 1.0000000 as of the Closing Date; thereafter, the Note Pool Factor will decline to reflect reductions in the outstanding principal amount of such Class of Notes. "Note Register" and "Note Registrar" shall have the respective meanings specified in Section 2.5 of the Indenture. "Note Underwriting Agreement" shall mean the Note Underwriting Agreement by and among the Seller and _______, as representative of the several Note Underwriters. "Notes" shall mean the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, collectively. "Obligor" on a Receivable shall mean the purchaser or co-purchasers of the Financed Vehicle or any other Person who owes payments under the Receivable (not including any Dealer in respect of Dealer Recourse). "Officer's Certificate" shall mean (i) with respect to the Trust, a certificate signed by any Authorized Officer of the Trust and (ii) with respect to the Seller or the Servicer, a certificate signed by the chairman of the board, the president, any executive vice president, any vice president, the treasurer, any assistant treasurer, or the controller of the Seller or the Servicer, as applicable. "Opinion of Counsel" shall mean a written opinion of counsel which counsel shall be acceptable to the Indenture Trustee, the Owner Trustee or the Rating Agencies, as applicable. "Optional Purchase Percentage" shall mean 10%. "Outstanding" shall mean with respect to the Notes, as of the date of determination, all Notes there- AA-24 25 tofore authenticated and delivered under the Indenture except: Notes theretofore cancelled by the Note Registrar or delivered to the Note Registrar for cancellation; Notes or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Note Paying Agent in trust for the Noteholders of such Notes (provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision for such notice has been made, satisfactory to the Indenture Trustee); and Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser; provided, that in determining whether the Noteholders of Notes evidencing the requisite principal amount of the Notes Outstanding have given any request, demand, authorization, direction, notice, consent, or waiver under any Basic Document, Notes owned by the Issuer, any other obligor upon the Notes, the Seller, the Servicer or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying on any such request, demand, authorization, direction, notice, consent, or waiver, only Notes that a Responsible Officer of the Indenture Trustee knows to be so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not the Issuer, any other obligor upon the Notes, the Seller, the Servicer or any Affiliate of any of the foregoing Persons. AA-25 26 "Outstanding Advances" on a Receivable shall mean the sum, as of the close of business on the last day of a Collection Period, of all Advances as reduced by payments as specified in Section 14.4(a) of the Sale and Servicing Agreement with respect to such Receivable. "Owner Trustee" shall mean ___________________, a Delaware banking corporation, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, or any successor Owner Trustee under the Trust Agreement. "Owner Trust Estate" shall mean all right, title and interest of the Trust in, to and under the property and rights assigned to the Trust pursuant to Article II of the Sale and Servicing Agreement. "Payahead" on a Receivable shall mean the amount, as of the close of business on the last day of a Collection Period, specified in Section 4.3 of the Sale and Servicing Agreement with respect to such Receivable. "Payahead Account" shall mean the account established and maintained as such pursuant to Section 4.1(d) of the Sale and Servicing Agreement. "Payahead Balance" on a Receivable shall mean the sum, as of the close of business on the last day of a Collection Period, of all Payaheads made by or on behalf of the Obligor with respect to such Receivable (including any amount paid by or on behalf of the Obligor prior to the Cutoff Date that is due on or after the Cutoff Date and was not used to reduce the principal balance of such Receivable), as reduced by applications of previous Payaheads with respect to such Receivable, pursuant to Sections 4.3 and 4.4 of the Sale and Servicing Agreement. "Permitted Investments" shall mean, on any date of determination, book-entry securities, negotiable instruments or securities represented by instruments in bearer or registered form with maturities not exceeding the next Distribution Date which evidence: (a) direct obligations of, and obligations fully guaranteed as to timely payment by, the United States of America; AA-26 27 (b) demand deposits, time deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States of America or any state thereof (or any domestic branch of a foreign bank) and subject to supervision and examination by Federal or State banking or depository institution authorities; provided, however, that at the time of the investment or contractual commitment to invest therein, the commercial paper or other short-term unsecured debt obligations (other than such obligations the rating of which is based on the credit of a Person other than such depository institution or trust company) thereof shall have a credit rating from each of the Rating Agencies in the highest investment category granted thereby; (c) commercial paper having, at the time of the investment or contractual commitment to invest therein, a rating from each of the Rating Agencies in the highest investment category granted thereby; (d) investments in money market funds having a rating from each of the Rating Agencies in the highest investment category granted thereby (including funds for which the Indenture Trustee or the Owner Trustee or any of their respective Affiliates is investment manager or advisor); (e) bankers' acceptances issued by any depository institution or trust company referred to in clause (b) above; (f) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) described in clause (b); and (g) any other investment with respect to which the Issuer or the Servicer has received written notification from the Rating Agencies that the acquisition of such investment as a Permitted Investment will not result in a withdrawal or down- AA-27 28 grading of the ratings on the Notes or the Certificates. "Person" shall mean any individual, corporation, estate, partnership, joint venture, association, joint stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof. "Physical Property" shall have the meaning assigned to such term in the definition of "Delivery" above. "Pool Balance" as of the close of business of the last day of a Collection Period shall mean the aggregate Principal Balance of the Receivables (excluding Purchased Receivables and Liquidated Receivables). "Pool Factor" as of the last day of a Collection Period shall mean a seven-digit decimal figure equal to the Pool Balance divided by the Initial Pool Balance. "Precomputed Receivable" shall mean any Receivable under which the portion of a payment allocable to earned interest (which may be referred to in the related contract as an add-on finance charge) and the portion allocable to the Amount Financed are determined according to the sum of periodic balances or the sum of monthly balances or any equivalent method, or which is an Actuarial Receivable. "Predecessor Note" shall mean, with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note and, for purposes of this definition, any Note authenticated and delivered under Section 2.6 of the Indenture in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note. "Principal Balance" of a Receivable, as of the close of business on the last day of a Collection Period, shall mean the Amount Financed minus the sum of (a) in the case of a Precomputed Receivable, that portion of all Scheduled Payments due on or prior to such day allocable to principal using the actuarial or constant yield meth- AA-28 29 od, (b) in the case of a Simple Interest Receivable, that portion of all Scheduled Payments actually received on or prior to such date allocable to principal using the Simple Interest Method, (c) any refunded portion of extended warranty protection plan costs, or of physical damage, credit life, or disability insurance premiums included in the Amount Financed, (d) any payment of the Purchase Amount with respect to the Receivable allocable to principal and (e) any prepayment in full or any partial prepayments applied to reduce the principal balance of the Receivable. "Principal Distribution Amount" shall mean, with respect to any Distribution Date, the sum of (i) the Noteholders' Regular Principal plus (ii) the Noteholders' Accelerated Principal; provided, however, that after the Distribution Date on which the Notes have been paid in full, the Principal Distribution Amount with respect to the Certificates shall equal the Certificateholders' Regular Principal. "Proceeding" shall mean any suit in equity, action at law or other judicial or administrative proceeding. "Program" shall have the meaning specified in Section 3.11 of the Sale and Servicing Agreement. "Prospectus" shall have the meaning specified in the note Underwriting Agreement. "Purchase Agreement" shall mean the Purchase Agreement, dated as of ________ __, ____, by and between the Seller and Ford Credit. "Purchase Amount" shall mean the amount, as of the close business on the last day of a Collection Period, required to be paid by an Obligor to prepay in full the respective Receivable under the terms thereof (which amount shall include a full month's interest, in the month of payment, at the Annual Percentage Rate). "Purchased Receivable" shall mean a Receivable purchased as of the close of business on the last day of respective Collection Period by the Servicer pursuant to Section 3.7 of the Sale and Servicing Agreement or by the Seller pursuant to Section 2.2 of the Purchase Agreement. AA-29 30 "Purchaser" shall mean the Seller in its capacity as Purchaser under the Purchase Agreement. "Qualified Institution" shall mean __________ ______________________________ or any depository institution organized under the laws of the United States of America or any one of the states thereof or incorporated under the laws of a foreign jurisdiction with a branch or agency located in the United States of America or one of the states thereof and subject to supervision and examination by federal or state banking authorities which at all times has a short-term deposit rating of P-1 by Moody's and A-1+ by Standard & Poor's and, in the case of any such institution organized under the laws of the United States of America, whose deposits are insured by the Federal Deposit Insurance Corporation or any successor thereto. "Qualified Trust Institution" shall mean the corporate trust department of ___________________________________________ or any institution organized under the laws of the United States of America or any one of the states thereof or incorporated under the laws of a foreign jurisdiction with a branch or agency located in the United States of America or one of the states thereof and subject to supervision and examination by federal or state banking authorities which at all times (i) is authorized under such laws to act as a trustee or in any other fiduciary capacity, (ii) has not less than one billion dollars in assets under fiduciary management, and (iii) has a long-term deposit rating of not less than Baa3 from Moody's. "Rating Agency" shall mean each of the nationally recognized statistical rating organizations designated by the Seller or an Affiliate to provide a rating on the Notes or the Certificates which is then rating such Notes or Certificates. If no such organization or successor is any longer in existence, "Rating Agency" shall be a nationally recognized statistical rating organization or other comparable Person designated by the Seller or an Affiliate, notice of which designation shall be given to the Indenture Trustee, the Owner Trustee and the Servicer. "Rating Agency Condition" shall mean, with respect to any action, that each Rating Agency shall have AA-30 31 been given prior notice thereof and that each of the Rating Agencies shall have notified the Seller, the Servicer, the Owner Trustee and the Indenture Trustee in writing that such action will not result in a reduction or withdrawal of the then current rating of the Notes or the Certificates. "Realized Losses" shall mean, the excess of the Principal Balance of any Liquidated Receivable (as reduced by any Payaheads) over Liquidation Proceeds to the extent allocable to principal received in the Collection Period. "Receivable" shall mean any retail installment sale contract which shall appear on the Schedule of Receivables and any amendments, modifications or supplements to such retail installment sale contract which has not been released by the Indenture Trustee and the Owner Trustee from the Trust. "Receivable Files" shall mean the documents specified in Section 2.4 of the Sale and Servicing Agreement. "Receivables Purchase Price" shall mean $__________. "Receivable Yield Supplement Amount" shall mean, with respect to any Receivable and the related Distribution Date (other than a Liquidated Receivable or a Purchased Receivable, for Collection Periods after the Collection Period in which such Receivable became a Liquidated Receivable or a Purchased Receivable), for any Collection Period the amount (if positive) calculated by the Servicer equal to the product of one-twelfth (1/12) times (i) interest at a rate equal to the sum of (A) the Weighted Average Rate and (B) the Servicing Fee Rate minus (ii) interest on such Receivable at its APR, multiplied by such Receivable's Principal Balance as of the first day of the related Collection Period. "Record Date" shall mean, with respect to any Distribution Date or Redemption Date and any Note or Certificate, the close of business on the day prior to such Distribution Date or Redemption Date or, with respect to any Definitive Note or Definitive Certificate, the _______ (____) day of the month AA-31 32 preceding the month in which such Distribution Date or Redemption Date occurs. "Redemption Date" shall mean (i) in the case of a redemption of the Notes pursuant to Section 10.1(a) of the Indenture or a payment to Noteholders pursuant to Section 10.1(b) of the Indenture, the Distribution Date specified by the Servicer pursuant to such Section 10.1(a) or (b), as applicable, or (ii) in the case of a redemption of the Certificates pursuant to Section 9.3(a) of the Trust Agreement or a distribution to Certificateholders pursuant to Section 9.1(c) of the Trust Agreement, the Distribution Date specified by the Owner Trustee pursuant to such Section 9.3(a) or 9.1(c), as applicable. "Redemption Price" shall mean (i) with respect to the Notes, an amount equal to the unpaid principal amount of each Class of Notes plus accrued and unpaid interest thereon at the applicable Note Interest Rate to but excluding the Redemption Date and (ii) with respect to the Certificates, an amount equal to the Certificate Balance plus accrued and unpaid interest thereon at the Certificate Rate to but excluding the Redemption Date. "Registered Noteholder" shall mean the Person in whose name a Note is registered on the Note Register on the applicable Record Date. "Related Agreements" shall have the meaning specified in the recitals to the Administration Agreement. "Required Rating" shall mean a rating on (i) short-term unsecured debt obligations of P-1 by Moody's and (ii) short-term unsecured debt obligations of A-1+ by Standard & Poor's; and any requirement that short-term unsecured debt obligations have the "Required Rating" shall mean that such short-term unsecured debt obligations have the foregoing required ratings from each of such Rating Agencies. "Reserve Account" shall mean the account established and maintained as such pursuant to Section 4.7(a) of the Sale and Servicing Agreement. AA-32 33 "Reserve Account Property" shall have the meaning specified in Section 4.7(a) of the Sale and Servicing Agreement. "Reserve Initial Deposit" shall mean, with respect to the Closing Date, $________________. "Rule of 78's Payment" shall mean, with respect to any Precomputed Receivable which provides that, if such Receivable is prepaid in full, the amount payable will be determined according to the Rule of 78's method, an amount (if positive) equal to (i) the amount due allocating payments between principal and interest based upon the Rule of 78's minus (ii) the amount that would be due allocating payments between principal and interest from the date of origination of the Receivable using the Actuarial Method. "Sale and Servicing Agreement" shall mean the Sale and Servicing Agreement, dated as of _________ __, ____, by and among the Trust, the Depositor, as seller, and Ford Credit, as servicer. "Scheduled Payment" shall mean, for any Collection Period for any Receivable, the amount indicated in such Receivable as required to be paid by the Obligor in such Collection Period (without giving effect to deferments of payments pursuant to Section 3.2 of the Sale and Servicing Agreement or any rescheduling in any insolvency or similar proceedings). "Scheduled Principal" shall mean, with respect to any Distribution Date, the sum of (a) Available Principal for such Distribution Date and (b) the Principal Balance of each Receivable liquidated during the preceding Collection Period, without duplication. "Schedule of Receivables" shall mean the list identifying the Receivables attached as Schedule A to the Purchase Agreement, the Sale and Servicing Agreement and the Indenture (which list may be in the form of microfiche). "Secretary of State" shall mean the Secretary of State of the State of Delaware. AA-33 34 "Securities Act" shall mean the Securities Act of 1933, as amended. "Securityholders" shall mean the Noteholders and the Certificateholders, collectively. "Seller" shall mean Ford Credit Auto Receivables Two LLC as the seller of the Receivables under the Sale and Servicing Agreement, and each successor to Ford Credit Auto Receivables Two LLC (in the same capacity) pursuant to Section 7.3 of the Sale and Servicing Agreement. "Series" shall mean a series designated by the Seller to which specific interests of the Seller have been allocated to and identified as belonging to in accordance with Section 18-215(a) of the Delaware Limited Liability Company Act, 6 Del. C. Section 18-101, et. seq. "Series Assets" shall mean the assets of the Seller allocated to a particular series. "Servicer" shall mean Ford Credit as the servicer of the Receivables, and each successor to Ford Credit (in the same capacity) pursuant to Section 18.3 or 19.2 of the Sale and Servicing Agreement. "Servicing Fee" shall mean, with respect to a Collection Period, the fee payable to the Servicer for services rendered during such Collection Period, which shall be equal to one-twelfth of the Servicing Fee Rate multiplied by the Pool Balance as of the first day of the Collection Period. "Servicing Fee Rate" shall mean 1.0% per annum. "Simple Interest Method" shall mean the method of allocating a fixed level payment to principal and interest, pursuant to which the portion of such payment that is allocated to interest is equal to the product of the fixed rate of interest multiplied by the unpaid principal balance multiplied by the period of time elapsed since the preceding payment of interest was made. "Simple Interest Receivable" shall mean any Receivable under which the portion of a payment allocable to interest and the portion allocable to principal is determined in accordance with the Simple Interest Method. "Specified Reserve Balance" shall mean, with respect to any Distribution Date, $_______________; except that in the event that on any Distribution Date (i) the annualized average for the preceding three Collection Periods (or such shorter number of Collection Periods as have elapsed since the Cutoff Date) of the ratios of net losses (i.e., the net balances of all AA-34 35 Receivables which are determined to be uncollectible in the Collection Period, less any recoveries on Receivables charged off in the period or prior periods) to the Pool Balance as of the first day of each such Collection Period exceeds ____% or (ii) the average for the preceding three Collection Periods (or such shorter number of Collection Periods as have elapsed since the Cutoff Date) of the ratios of the number of Receivables that have been repossessed but not yet sold or are delinquent 60 days or more to the outstanding number of Receivables exceeds ___%, then the Specified Reserve Balance for such Distribution Date shall be an amount equal to $___________. "Specified Yield Supplement Balance" shall mean, on the Closing Date, $____________ and, as of the close of business on any Distribution Date, an amount equal to the sum of all projected Yield Supplement Amounts for all future Distribution Dates, assuming that future Scheduled Payments on the Receivables are made on their scheduled due dates; provided that if, on any date, Ford Credit shall fail to pay the amount payable under the Yield Supplement Agreement in accordance with the terms thereof, then, in such event, the Specified Yield Supplement Balance shall not be reduced thereafter. "Standard & Poor's" shall mean Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies, Inc. "State" means any state or commonwealth of the United State of America, or the District of Columbia. "Successor Servicer" shall have the meaning specified in Section 3.7(e) of the Indenture. "Supplemental Servicing Fee" shall mean, the fee payable to the Servicer for certain services rendered during the respective Collection Period, determined pursuant to and defined in Section 3.8 of the Sale and Servicing Agreement. "Total Required Payment" shall mean, with respect to any Distribution Date, the sum of (i) the Servicing Fee and any overdue Servicing Fees, (ii) the Accrued Note Interest, (iii) the Noteholders' Regular Principal and (iv) the Accrued Certificate Interest with respect to such Distribution Date. AA-35 36 "Treasury Regulations" shall mean regulations, including proposed or temporary regulations, promulgated under the Code. References to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations. "Trust" shall mean Ford Credit Auto Owner Trust ____-_, a Delaware business trust established pursuant to the Trust Agreement. "Trust Accounts" shall have the meaning specified in Section 4.1(d) of the Sale and Servicing Agreement. "Trust Agreement" shall mean the Amended and Restated Trust Agreement dated as of __________ __, ____, by and between the Seller, as depositor, and the Owner Trustee. "Trust Indenture Act" or "TIA" shall mean the Trust Indenture Act of 1939, as amended, unless otherwise specifically provided. "Trustee Officer" shall mean, with respect to the Indenture Trustee, any officer within the Corporate Trust Office of the Indenture Trustee with direct responsibility for the administration of the Indenture and the other Basic Documents on behalf of the Indenture Trustee and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject and, with respect to the Owner Trustee, any officer within the Corporate Trust Office of the Owner Trustee with direct responsibility for the administration of the Trust Agreement and the other Basic Documents on behalf of the Owner Trustee. "Trust Property" shall mean, collectively, (i) the Receivables; (ii) with respect to Precomputed Receivables, monies due thereunder on or after the Cutoff Date (including Payaheads) and, with respect to Simple Interest Receivables, 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 Issuer in the Financed Vehicles; (iv) rights to receive proceeds with AA-36 37 respect to the Receivables from claims on any physical damage, credit life, credit disability, or other insurance policies covering Financed Vehicles or Obligors; (v) Dealer Recourse; (vi) all of the Seller's rights to the Receivable Files; (vii) the Trust Accounts, the Certificate Distribution Account, the Reserve Account and the Yield Supplement Account and all amounts, securities, investments and other property deposited in or credited to any of the foregoing and all proceeds thereof; (viii) all of the Seller's rights under the Sale and Servicing Agreement; (ix) all of the Seller's rights under the Yield Supplement Agreement and the Purchase Agreement, including the right of the Seller to cause Ford Credit to repurchase Receivables from the Seller; (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) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing. "UCC" shall mean the Uniform Commercial Code as in effect in any relevant jurisdiction. "Weighted Average Rate" shall mean, with respect to any Collection Period, a per annum rate equal to (i) the sum of (a) the product of the applicable Note Interest Rate and the outstanding principal amount of each Class of Notes as of the preceding Distribution Date (after giving effect to any principal payment made on such Distribution Date) and (b) the product of the Certificate Rate and the Certificate Balance as of the AA-37 38 preceding Distribution Date (after giving effect to any principal payment made on such Distribution Date), divided by (ii) the sum of the outstanding principal amount of each Class of Notes and the Certificate Balance as of the preceding Distribution Date (after giving effect to any principal payment made on such Distribution Date). "Yield Supplement Account" shall have the meaning specified in Section 5.1(a) of the Sale and Servicing Agreement. "Yield Supplement Agreement" shall mean the Yield Supplement Agreement, dated as of _________ __, ____, by and between the Seller and Ford Credit, substantially in the form of Exhibit A to the Sale and Servicing Agreement. "Yield Supplement Amount" shall mean, with respect to any Distribution Date, the sum of all Receivable Yield Supplement Amounts for the related Collection Period. "Yield Supplement Initial Deposit" shall mean $______________. "Yield Supplement Letter of Credit" shall mean any letter of credit issued by the Letter of Credit Bank, as permitted by Section 5.1 of the Sale and Servicing Agreement, to support payments of the Yield Supplement Amount under the Yield Supplement Agreement. AA-38