AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 20, 1999
REGISTRATION NO. 333-74475
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
WORLD OMNI 1999-A AUTOMOBILE LEASE
SECURITIZATION TRUST
(ISSUER WITH RESPECT TO THE NOTES)
------------------------
WORLD OMNI LEASE SECURITIZATION L.P.
(ORIGINATOR OF THE TRUST AND TRANSFEROR OF THE 1999-A SPECIAL UNIT OF BENEFICIAL
INTEREST CERTIFICATE TO THE TRUST)
------------------------
WORLD OMNI LT
(ISSUER OF THE 1999-A SPECIAL UNIT OF BENEFICIAL INTEREST AND THE RELATED
CERTIFICATE)
AUTO LEASE FINANCE L.P.
(ORIGINATOR OF WORLD OMNI LT AND TRANSFEROR OF THE 1999-A SPECIAL UNIT OF
BENEFICIAL INTEREST AND THE RELATED CERTIFICATE TO THE WORLD OMNI LEASE
SECURITIZATION L.P.)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C> <C>
DELAWARE 7515 63-1120743
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
------------------------
6150 OMNI PARK DRIVE
MOBILE, ALABAMA 36609
(334) 639-7500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF PRINCIPAL EXECUTIVE OFFICES OF WORLD OMNI LEASE SECURITIZATION L.P. AND AUTO
LEASE FINANCE L.P.)
------------------------
A. TUCKER ALLEN
120 NORTHWEST 12TH AVENUE
DEERFIELD BEACH, FLORIDA 33442
(954) 429-2200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
Copies to:
<TABLE>
<S> <C>
CHARLES A. SWEET, ESQ. REED D. AUERBACH, ESQ.
WILLIAMS & CONNOLLY STROOCK & STROOCK & LAVAN LLP
725 TWELFTH STREET, N.W. 180 MAIDEN LANE
WASHINGTON, D.C. 20005 NEW YORK, NEW YORK 10038
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /x/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ___________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / __________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS AMOUNT TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE
OF SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) OFFERING PRICE(1)
<S> <C> <C> <C>
Floating Rate Automobile Lease Asset Backed Notes, Class A-1..... $ 330,000,000 100% $ 330,000,000
Floating Rate Automobile Lease Asset Backed Notes, Class A-2..... $ 310,000,000 100% $ 310,000,000
Floating Rate Automobile Lease Asset Backed Notes, Class A-3..... $ 249,000,000 100% $ 184,000,000
Floating Rate Automobile Lease Asset Backed Notes, Class A-4..... $ 184,472,000 100% $ 182,472,000
1999-A Special Unit of Beneficial Interest Certificate(2)........ (3) (3) (3)
Total............................................................ $1,073,472,000 100% $1,073,472,000
<CAPTION>
TITLE OF EACH CLASS AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTRATION FEE
<S> <C>
Floating Rate Automobile Lease Asset Backed Notes, Class A-1..... $ 91,740
Floating Rate Automobile Lease Asset Backed Notes, Class A-2..... $ 86,180
Floating Rate Automobile Lease Asset Backed Notes, Class A-3..... $ 69,222
Floating Rate Automobile Lease Asset Backed Notes, Class A-4..... $ 51,284
1999-A Special Unit of Beneficial Interest Certificate(2)........ (3)
Total............................................................ $298,426(4)
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) The 1999-A special unit of beneficial interest in World Omni LT will
constitute a beneficial interest in specified assets of World Omni LT,
including certain lease contracts and the related automobiles and light duty
trucks. Auto Lease Finance L.P. will transfer a certificate representing
this interest to World Omni Lease Securitization L.P. World Omni Lease
Securitization L.P. in turn will transfer that certificate to the Owner
Trustee for the World Omni 1999-A Automobile Lease Securitization Trust,
which will pledge it to the Indenture Trustee as security for the Automobile
Lease Asset Backed Notes, including Classes A-1, A-2, A-3 and A-4, that it
will issue. We are not offering the 1999-A special unit of beneficial
interest or the related certificate to investors under this registration
statement.
(3) Not applicable.
(4) $278.00 of which was paid previously.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
===============================================================================
<PAGE>
SUBJECT TO COMPLETION, DATED AUGUST 20, 1999
PROSPECTUS
$1,073,472,000
WORLD OMNI 1999-A
AUTOMOBILE LEASE SECURITIZATION TRUST
WORLD OMNI LEASE SECURITIZATION L.P.
(TRANSFEROR)
WORLD OMNI FINANCIAL CORP.
(SERVICER)
The notes will be issued by the World Omni 1999-A Automobile Lease
Securitization Trust. The primary source of funds for payments on the notes will
be the net collections on a pool of closed-end retail automobile and light duty
truck lease contracts. The leases and leased vehicles will be owned by World
Omni LT. The trust will own the beneficial interest in the leases and leased
vehicles represented by the 1999-A special unit of beneficial interest and will
pledge that interest to secure the notes. Payments due on the notes are
scheduled to be made on the 15th day of each month, beginning on September 15,
1999.
We are offering the following classes of floating rate notes for sale:
<TABLE>
<CAPTION>
Class A-1 Notes Class A-2 Notes Class A-3 Notes Class A-4 Notes
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Principal Amount $330,000,000 $310,000,000 $249,000,000 $184,472,000
Price(1) $ ( %) $ ( %) $ ( %) $ ( %)
Underwriting Discount(2) $ ( %) $ ( %) $ ( %) $ ( %)
Proceeds to the Transferor(3) $ $ $ $
Note Rate one-month one-month one-month one-month
LIBOR + % LIBOR + % LIBOR + % LIBOR + %
</TABLE>
(1) The price of the notes also will include interest accrued on the notes from
the date they are issued. The total price to the public (excluding such
interest) will be $ .
(2) The total underwriting discount will be $ .
(3) The aggregate proceeds to the transferor, before deducting expenses payable
by or on behalf of the transferor estimated at $ , will be $ .
The underwriters listed below will purchase the notes from the transferor
and will offer them to you at the prices set forth above.
The notes will be obligations of the trust and will be backed only by its
assets, including the 1999-A special unit of beneficial interest. The notes will
not represent interests in or obligations of World Omni Lease Securitization
L.P., Auto Lease Finance L.P., World Omni LT, World Omni Financial Corp. or any
of their affiliates.
THE NOTES ARE HIGHLY STRUCTURED. BEFORE YOU PURCHASE ANY NOTES, BE SURE YOU
UNDERSTAND THEIR STRUCTURE AND THEIR RISKS. SEE 'RISK FACTORS' BEGINNING ON PAGE
7 OF THIS PROSPECTUS FOR A DISCUSSION OF THOSE RISKS.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
We expect to make delivery of the notes in book-entry form only through The
Depository Trust Company, Cedelbank and the Euroclear System on or about
, 1999, against payment in immediately available funds. The notes will
not be listed on any exchange.
MERRILL LYNCH & CO.
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
FIRST UNION CAPITAL MARKETS
, 1999
The Information in this prospectus is not complete and may be changed. We may
not sell these securities unitl the registeration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS
CONTENT OF PROSPECTUS
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with different information. You should
not assume that the information in this prospectus is accurate as of any date
other than the date at the bottom of the front page.
We include cross-references in this prospectus to captions in these
materials where you can find further related discussions. The following Table of
Contents provides the pages on which these captions are located. You can find a
listing of the pages where capitalized terms used in this prospectus are defined
under the caption 'Index of Terms' beginning on page 95 of this prospectus.
LIMITATIONS ON OFFERS OR SOLICITATIONS
We do not intend this document to be an offer or solicitation:
o If used in a jurisdiction in which an offer or solicitation is not
authorized;
o If the person making an offer or solicitation is not qualified to do so;
or
o If an offer or solicitation is made to anyone to whom it is unlawful to
make an offer or solicitation.
TRANSACTIONS THAT MAY AFFECT THE PRICE OF THE NOTES
Certain persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of any class of notes.
Such transactions may include stabilizing. For a description of these
activities, see 'Underwriting'.
DEALER PROSPECTUS DELIVERY REQUIREMENTS
Until 1999 all dealers that effect transactions in the notes,
whether or not participating in this offering, may be required to deliver a
prospectus. This requirement is in addition to the dealer's obligation to
deliver a prospectus when acting as underwriters with respect to their unsold
allotments or subscriptions.
ii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
------- ----
<S> <C>
PROSPECTUS SUMMARY............................... 1
Terms of the Floating Rate Notes............... 2
Overview Diagram............................... 3
Overview of the Transaction's
Structure...................................... 4
The Leases and Leased Vehicles................. 4
Calculation and Allocation of Principal and
Interest Collections........................... 4
The Class A Interest Rate Cap.................. 4
Credit Enhancement............................. 5
Calculation and Distributions of
Interest....................................... 5
Distributions of Principal..................... 6
Allocation of Losses........................... 6
Optional Redemption............................ 6
Servicer Advances.............................. 6
Tax Status..................................... 6
ERISA Considerations........................... 6
Mailing Address and Telephone
Number......................................... 6
RISK FACTORS..................................... 7
You May Have Difficulty Selling Your Notes..... 7
You May Suffer Losses on Your Investment
Resulting From Losses on the Leases and Leased
Vehicles....................................... 7
You May Be Required to Reinvest Your Principal
in Amounts and at Times Different Than You
Expect......................................... 8
Risks Associated with Sequential Payment of
Principal on the Notes......................... 9
The Geographic Concentration of Leases Could
Result in Greater Losses on the Notes.......... 10
Possible Effects of Consumer Protection Laws... 10
Possible Liens to Satisfy ERISA
Liabilities.................................... 10
Possible Liability as a Result of Lessees'
Operation of Leased Vehicles................... 11
Possible Effects of Insolvency or Bankruptcy of
World Omni, the Transferor, Auto Lease Finance
L.P. or Their General Partners, the Origination
Trust or the
Trust.......................................... 11
The Default of the Class A Cap Provider Under
Class A Interest Rate Cap Could Result in
Delayed or Reduced Payments to Noteholders..... 12
<PAGE>
<CAPTION>
SECTION PAGE
------- ----
<S> <C>
The Failure to Pay Principal on the Notes
Generally Will Not Result in an Event of
Default........................................ 12
Computer Problems in the Year 2000 May Result
in Delayed Payments and Losses on the Notes.... 12
The Withdrawal or Downgrading of the Notes'
Initial Ratings Will Affect Their Prices on
Resale......................................... 13
The Notes Are Not Suitable Investments for All
Investors...................................... 13
You May Find it Difficult to Pledge Your Notes... 13
You May Experience Delays in Receipt of
Distributions.................................. 13
THE TRUST........................................ 14
Formation and Assets of the Trust.............. 14
Additional Protection for Class A
Noteholders.................................... 14
THE ORIGINATION TRUST............................ 15
Formation of the Origination Trust............. 15
The SUBI....................................... 15
Limited Powers of Origination Trust............ 16
Allocation of Origination Trust
Liabilities.................................... 16
ALF L.P. ...................................... 17
The Origination Trustee........................ 17
The Origination Trust Assets................... 17
Contract Origination and Titling of Leased
Vehicles....................................... 18
USE OF PROCEEDS.................................. 18
THE TRANSFEROR................................... 18
WORLD OMNI....................................... 19
General........................................ 19
Administrative and Legal Proceedings Involving
World Omni..................................... 20
Lease Contract Underwriting
Procedures..................................... 20
Required Insurance............................. 21
Collection, Repossession and Disposition
Procedures..................................... 22
Year 2000 Matters.............................. 22
Delinquency, Repossession and Loss
Data........................................... 23
THE CONTRACTS.................................... 25
Selection and Terms of the Contracts........... 25
Characteristics of the Contracts............... 27
Representations, Warranties and
Covenants...................................... 30
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
SECTION PAGE
------- ----
<S> <C>
MATURITY, PREPAYMENT AND YIELD CONSIDERATIONS.... 32
CLASS A NOTE FACTORS AND TRADING INFORMATION;
REPORTS TO CLASS A NOTEHOLDERS................. 38
DESCRIPTION OF THE NOTES......................... 38
The Indenture.................................. 38
Summary of the Terms of the Notes.............. 38
Transfer of the SUBI in Exchange for the
Notes.......................................... 40
Reallocation Payments and Reallocation Deposit
Amounts........................................ 40
Calculation and Allocation of Collections and
Loss Amounts................................... 40
Distributions to the Transferor................ 43
Determination of One-Month
LIBOR.......................................... 43
Distributions on the Notes..................... 44
The Accounts................................... 50
Early Amortization Events...................... 52
Statements to Noteholders...................... 53
Termination of the Trust; Redemption of the
Notes.......................................... 55
Book-Entry Registration........................ 55
Definitive Notes............................... 58
The Indenture Trustee.......................... 59
SECURITY FOR THE NOTES........................... 60
Primary Security for the Notes................. 60
The Reserve Fund............................... 60
The Residual Value Insurance Policy............ 63
The Contingent and Excess Liability Insurance
Policies....................................... 65
THE CLASS A INTEREST RATE CAP.................... 65
ADDITIONAL DOCUMENT PROVISIONS................... 67
Amendments..................................... 67
The Indenture.................................. 68
The Agreement.................................. 70
<PAGE>
<CAPTION>
SECTION PAGE
------- ----
<S> <C>
The SUBI Trust Agreement....................... 71
The Servicing Agreement........................ 74
CERTAIN LEGAL ASPECTS OF THE ORIGINATION TRUST
AND THE SUBI..................................... 80
The Origination Trust.......................... 80
Qualification of VT Inc. as Fiduciary.......... 80
The SUBI....................................... 81
Insolvency Related Matters..................... 81
Legal Proceedings.............................. 82
CERTAIN LEGAL ASPECTS OF THE CONTRACTS AND THE
LEASED VEHICLES.................................. 82
Back-Up Security Interests..................... 82
Vicarious Tort Liability....................... 83
Repossession of Leased Vehicles................ 84
Deficiency Judgments........................... 84
Consumer Protection Laws....................... 85
Other Limitations.............................. 86
MATERIAL INCOME TAX CONSIDERATIONS............... 86
Federal Taxation............................... 86
Florida Income Taxation........................ 90
ERISA CONSIDERATIONS............................. 90
UNDERWRITING..................................... 91
NOTICE TO CANADIAN RESIDENTS..................... 92
Resale Restrictions............................ 92
Representations of Purchasers.................. 92
Rights of Action and Enforcement............... 93
Notice to British Columbia Residents........... 93
RATINGS OF THE CLASS A NOTES..................... 93
LEGAL MATTERS.................................... 94
EXPERTS.......................................... 94
INDEX OF CAPITALIZED TERMS....................... 95
GLOBAL CLEARANCE, SETTLEMENT AND TAX
DOCUMENTATION PROCEDURES......................... 98
INDEX TO FINANCIAL STATEMENTS OF
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE
COMPANY.......................................... F-1
</TABLE>
iv
<PAGE>
PROSPECTUS SUMMARY
This summary contains a brief description of the notes and other selected
information from the prospectus. These brief descriptions are only intended to
provide an overview to aid in your understanding and are qualified by the full
descriptions in the prospectus. This summary does not contain all of the
information that you need to consider in making an investment decision. To
understand all of the terms of the offering, please carefully read the entire
prospectus.
<TABLE>
<S> <C>
Trust: World Omni 1999-A Automobile Lease Securitization Trust
Transferor: World Omni Lease Securitization L.P.
Servicer: World Omni Financial Corp.
Indenture Trustee: Harris Trust and Savings Bank
Owner Trustee: Chase Manhattan Bank Delaware
Trust Assets: 1999-A special unit of beneficial interest in the
origination trust
Origination Trust: World Omni LT
Origination Trust
Assets Allocated to
1999-A Special Unit
of Beneficial
Interest: o The leases, which are closed-end retail automobile and
light duty truck leases originated by vehicle dealers
in World Omni Financial Corp.'s network of dealers
o The vehicles leased under the leases
o Payments made under insurance policies related to the
leases and leased vehicles
Class A Interest Rate
Cap Provider: Credit Lyonnais New York Branch, trading under the
Credit Lyonnais Derivatives Program
Residual Value
Insurer: American International Specialty Lines Insurance Company
Annual Servicing Fee: 1% of aggregate net investment value of leases, leased
vehicles and other origination trust assets allocated to
the 1999-A special unit of beneficial interest, plus
late fees, administrative fees and similar charges
</TABLE>
1
<PAGE>
TERMS OF THE FLOATING RATE NOTES
<TABLE>
<CAPTION>
Class A-1 Notes Class A-2 Notes Class A-3 Notes Class A-4 Notes
------------------ ---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Initial Principal $330,000,000 $310,000,000 $249,000,000 $184,472,000
Amount:
Interest Rate: one month one month one month one month
LIBOR + % LIBOR + % LIBOR + % LIBOR + %
Stated Maturity Date: February 15, 2002 September 15, 2002 March 15, 2003 October 15, 2005
</TABLE>
For each class of notes we are offering under this prospectus:
o Interest will be calculated on the basis of the actual number of days
elapsed and a 360-day year;
o The trust will distribute interest and (during the amortization period)
principal to noteholders on the fifteenth day of each month, or if that day
is not a business day, then the next business day, beginning on September
15, 1999;
o Unless there is an early amortization event, the amortization period will
begin on September 1, 2000 and the trust will begin distributing principal
to noteholders on October 16, 2000;
o The trust will distribute available principal sequentially, first to the
Class A-1 noteholders until their notes are paid in full, second to the
Class A-2 noteholders until their notes are paid in full, third to the Class
A-3 noteholders until their notes are paid in full, and fourth pro rata to
the Class A-4 noteholders and the Class B noteholders (we are not offering
the Class B Notes under this prospectus);
o The notes will be in book-entry form, in minimum denominations of $1,000 and
multiples thereof;
o You may hold your notes through The Depository Trust Company, Cedelbank or
the Euroclear System; and
o It is a condition to issuance that the Class A Notes be rated Aaa by
Moody's, AAA by Standard & Poor's and AAA by Fitch, although a rating agency
may withdraw or lower its rating if warranted by future circumstances.
2
<PAGE>
OVERVIEW DIAGRAM
[Chart Goes Here]
3
<PAGE>
OVERVIEW OF THE TRANSACTION'S STRUCTURE
Motor vehicle dealers in World Omni Financial Corp.'s network of dealers
assign closed-end retail automobile and light duty truck leases to the
origination trust. World Omni created the origination trust to avoid the
administrative difficulty and expense of retitling leased vehicles when it
securitizes automobile and light duty truck leases. The origination trust will
issue the 1999-A special unit of beneficial interest, which will represent the
beneficial interest in a specific portfolio of leases and leased vehicles. The
trust will own the 1999-A special unit of beneficial interest, which will
primarily support the payments on the notes. The trust and the noteholders will
have no interest in any assets of the origination trust other than those
allocated to the 1999-A special unit of beneficial interest. Please review the
structural diagram on the previous page for more detail.
THE LEASES AND LEASED VEHICLES
Net collections on the leases and leased vehicles will be the primary
source of funds for payments on the notes. Each lease will have an original term
of no more than 60 months and will be a finance lease for accounting purposes.
The leased vehicles will be automobiles and light duty trucks, each of which is
either new, a dealer demonstrator or a manufacturer's program vehicle (a vehicle
that was sold directly by the manufacturer to a rental company and returned to
the manufacturer for resale).
As of March 31, 1999, the initial cutoff date for the creation of the
1999-A special unit of beneficial interest:
o There were 49,883 initial leases;
o The lease rate of the initial leases ranged from 3.00% to 12.98%, with a
weighted average lease rate of 8.17%;
o The aggregate of the original principal balances of the initial leases was
$1,269,796,940;
o The aggregate outstanding principal balance of the initial leases was
$1,199,262,835;
o The aggregate of the residual values of the initial leased vehicles was
$819,048,502;
o The initial leases had a weighted average original term of 39.96 months and
a weighted average remaining term to scheduled maturity of 32.99 months; and
o The aggregate net investment value of the initial leases, leased vehicles
and other assets of the origination trust allocated to the 1999-A special
unit of beneficial interest was $1,160,510,742 (after discounting to 9.70%
any lease with a lesser lease rate, and excluding matured and charged off
leases and matured leased vehicles that have not been sold for more than two
months).
The revolving period will extend until the amortization date (i.e.,
September 1, 2000, unless certain early amortization events occur). All
principal collections made on the leases and leased vehicles during the
revolving period, and all other funds that accrue during the revolving period
and that otherwise would be available to make principal payments on the notes,
will be reinvested in additional leases and leased vehicles.
CALCULATION AND ALLOCATION OF PRINCIPAL AND INTEREST COLLECTIONS
Principal collections generally will be all collections allocable to the
principal component of any lease, with the principal component of any lease with
a lease rate of less than 9.70% discounted to that rate. The remaining
collections generally will be interest collections.
The servicer will allocate interest collections, principal collections
(during the amortization period) and losses on the leases and leased vehicles
between the notes and the transferor interest, based on the investor percentage
and the transferor percentage. The investor percentage for losses and interest
collections generally will be the outstanding principal balance of the notes
divided by the aggregate net investment value, in each case as of the end of the
preceding calendar month. The investor percentage for principal collections
generally will be the outstanding principal balance of the notes divided by the
aggregate net investment value, in each case as of the end of the revolving
period. The transferor percentage will be 100% minus the relevant investor
percentage.
THE CLASS A INTEREST RATE CAP
Because the interest rates on the Class A notes will be floating and the
lease rates on the leases will be fixed, the trust will enter into a Class A
interest rate cap with Credit Lyonnais New York Branch, as cap provider, to
mitigate the basis risk associated with an increase in the weighted average
interest rates on the Class A notes above the weighted average lease rates under
the leases. If one-month LIBOR for any distribution date exceeds the cap rate
(i.e., %), then the cap provider
4
<PAGE>
will be required to pay to the trust an amount equal to:
o One-month LIBOR for the distribution date minus the cap rate; multiplied by
o The notional amount (i.e., the outstanding principal balance of the Class A
notes after the distributions on the previous distribution date); multiplied
by
o A fraction, the numerator of which is the actual number of days elapsed from
the previous distribution date to the current distribution date and the
denominator of which is 360.
Any receipts on the Class A interest rate cap will be the first source for
interest payments on the Class A notes.
CREDIT ENHANCEMENT
The following credit enhancement will be available for payments on the
Class A notes if the net collections on the leases and leased vehicles and
receipts on the Class A interest rate cap are insufficient to pay amounts due to
the noteholders:
o Subordination of the transferor interest (i.e., amounts that otherwise would
be payable to the transferor);
o Payments under the residual value insurance policy;
o Amounts withdrawn from the reserve fund; and
o Subordination of the Class B notes (i.e., principal collections that
otherwise would be distributed to the Class B noteholders).
The transferor interest will be the undivided equity interest in the trust,
and generally will represent the right to receive the transferor percentage of
interest collections (net of the transferor percentage of the servicing fee,
certain administrative expenses and certain insurance premiums) and, during the
amortization period, the transferor percentage of principal collections.
American International Specialty Lines Insurance Company will issue the
residual value insurance policy. The maximum amount available under the residual
value insurance policy to make payments to noteholders on any distribution date
will be the investor percentage of losses on the disposition of matured leased
vehicles and under World Omni's pro-active lease termination programs for the
preceding month. The aggregate maximum amount payable under the residual value
insurance policy will not exceed twenty percent of the aggregate insured
residual values of all leased vehicles.
The reserve fund will be an account maintained by the indenture trustee,
created with an initial deposit of $11,605,107.42. In general, it will be
supplemented on each distribution date by certain deposits out of the investor
percentage of interest collections until the deposited amount equals a reserve
fund requirement calculated under a specified formula. Absent certain triggering
events, the reserve fund requirement generally will be the lesser of
$11,605,107.42 (i.e., 1.0% of the initial aggregate net investment value) and
the note balance.
In addition to the Class A notes, the trust will issue $60,927,000 in
initial outstanding principal amount of Class B notes. We are not offering the
Class B notes under this prospectus. The Class B Notes initially will be held by
an affiliate of the Transferor.
CALCULATION AND DISTRIBUTIONS OF INTEREST
The interest rate on each class of Class A notes will be a floating
interest rate based on one-month LIBOR, or the London interbank offered
quotations for one-month United States dollar deposits. The trust generally will
pay interest on each class of notes on each distribution date from and including
the previous month's distribution date through but excluding the current
distribution date. The trust will pay interest on the basis of the actual number
of days elapsed and a 360-day year.
Any receipts on the Class A interest rate cap will be the first source for
interest payments on the Class A notes. The investor percentage of interest
collections also will be available for the trust to make interest and related
payments. The other sources of credit enhancement described above will be
available for the trust to make interest and related payments if the receipts on
the Class A interest rate cap and the investor percentage of interest
collections are insufficient.
The payments to be made from these sources will include interest on the
notes, administrative expenses, deposits to the reserve fund, the servicing fee,
and certain losses incurred on the leases and leased vehicles. Interest on the
Class A notes will be senior in priority to all other required payments other
than certain administrative expenses incurred in an event of default. For a
further description of the payments to be made from these sources and their
relative priorities, see 'Description of the Notes--Distributions on the
Notes--Distributions of Interest'.
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On each distribution date during the revolving period after all of the
foregoing payments, the trust will pay any remaining funds from these sources to
the transferor. On each distribution date during the amortization period after
all of the foregoing payments, the trustee first will pay to the noteholders out
of any remaining funds from these sources an accelerated principal distribution
equal to one-twelfth of 0.25% of the then-aggregate net investment value. The
trust then will pay any remainder to the transferor.
DISTRIBUTIONS OF PRINCIPAL
Unless there is an early amortization event, the trust will not distribute
any principal on the Notes until the October 2000 distribution date. Unless
there is an early amortization event, this will correspond to the last calendar
month in the revolving period.
The October 2000 distribution date will (again, unless there is an early
amortization event) correspond to the first calendar month in the amortization
period. Beginning on this distribution date, the trust generally will distribute
the investor percentage of principal collections for the preceding calendar
month sequentially to each of the Class A-1, A-2 and A-3 noteholders until their
notes have been paid in full. Thereafter, the trust will distribute those
principal collections to the Class A-4 and Class B noteholders pro rata in
accordance with their respective class percentages. The Class A and B
percentages will be the outstanding principal balance of each of such class as a
percentage of the outstanding principal balance of all notes, immediately after
the Class A-3 notes have been paid in full.
ALLOCATION OF LOSSES
There may be losses on the leases and leased vehicles due to default, early
termination, or if the proceeds from the disposition of a leased vehicle under a
matured lease are less than its residual value. If on any distribution date
there are insufficient funds to pay the noteholders the investor percentage of
current losses on the leases and leased vehicles, the outstanding principal
balance of the notes will be written down, beginning with the Class B notes.
After the principal balance of the Class B notes has been reduced to zero, the
outstanding principal balance of the Class A notes will be written down pro
rata.
OPTIONAL REDEMPTION
The trust will redeem the notes if the tranferor exercises its option to
purchase the assets of the trust. The transferor will have this option on any
distribution date if, either before or after payments on that date, the
aggregate outstanding principal amount of all notes is less than ten percent of
the initial aggregate outstanding principal amount of all notes.
SERVICER ADVANCES
The servicer will make an advance equal to the monthly lease payments due,
but not received, during each calendar month for leases that are 31 days or more
past due. The servicer also may (but will not be required to) make an advance
for leases that are past due for a shorter period. The Servicer will not be
required to make any advance if it believes it may not ultimately be
recoverable.
TAX STATUS
Special federal income tax counsel to the transferor is of the opinion that
the Class A notes will be characterized as indebtedness for federal income tax
purposes. Each Class A noteholder and beneficial owner will agree to treat the
Class A notes as indebtedness for federal, state and local income tax purposes.
We advise you to consult with your own tax advisors. For further information
regarding material federal income tax considerations with respect to the Class A
notes, see 'Material Income Tax Considerations--Federal Taxation'.
ERISA CONSIDERATIONS
In general, notes may be acquired by pension, profit-sharing or other
employee benefit plans, as well as individual retirement accounts and Keough
plans. However, an employee benefit plan should consult its counsel before
purchasing any Class A notes, and the plan fiduciary and the plan's legal
advisors should consider the matters discussed in this prospectus. For details,
see 'ERISA Considerations'.
MAILING ADDRESS AND TELEPHONE NUMBER
World Omni Lease Securitization L.P.'s mailing address is 6150 Omni Park
Drive, Mobile, AL 36609, and its telephone number is (334) 639-7500.
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RISK FACTORS
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YOU MAY HAVE DIFFICULTY SELLING YOUR
NOTES. The notes will not be listed on any securities exchange. As a result, if
you want to sell your notes you must locate a purchaser that is willing to
purchase those notes. Currently, there is no secondary market for the
notes. We cannot assure you that a secondary market will develop. The
underwriters intend to make a secondary market for the notes, by offering
to buy the notes from investors who wish to sell. However, the underwriters
will not be obligated to make offers to buy the notes and may stop making
offers at any time. In addition, the prices offered, if any, may not
reflect prices that other potential purchasers, were they to be given the
opportunity, would be willing to pay. You may not be able to sell your
notes when you want to do so or you may not be able to obtain the price
that you wish to receive upon any sale of your notes.
YOU MAY SUFFER LOSSES ON YOUR
INVESTMENT RESULTING FROM LOSSES ON
THE LEASES AND LEASED VEHICLES. There may be losses on the leases and leased vehicles due to default, early
termination, or if the proceeds from the disposition of a leased vehicle
under a matured lease are less than its residual value. World Omni's dealer
agreements generally do not provide for recourse to dealers for losses on
leases they originated. The servicer will allocate to each class of Class A
notes a portion of the losses on the leases and leased vehicles accruing
during any calendar month. On the related distribution date, the trust will
use any funds that remain from the investor percentage of interest
collections and available credit enhancement, after interest payments to
the noteholders and certain other required payments, to pay the investor
percentage of those losses to the Class A noteholders (or, during the
revolving period, to reinvest in additional leases and leased vehicles).
The trust will pay those losses to the Class A noteholders sequentially,
beginning with the Class A-1 noteholders, if the outstanding principal
balance of the Class B notes is positive, and pro rata if it has been
reduced to zero. If the investor percentage of the previous month's losses
exceeds the funds available for payment (or reinvestment) after the other
required distributions, the outstanding principal balance of the notes will
be written down, beginning with the Class B notes. After the principal
balance of the Class B notes has been reduced to zero, the outstanding
principal balance of the Class A notes will be written down pro rata. In
this event, you may suffer a loss on your investment.
The severity of losses experienced by the trust in connection with the
disposition of leased vehicles will be affected by:
o The frequency of early terminations under World Omni's pro-active lease
termination programs, and the nature of those programs;
o The supply of vehicles similar to the leased vehicles being disposed of;
o The new and used car market demand for vehicles similar to the leased
vehicles being disposed of; and
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o The economic and geographic conditions generally at the time of
disposition of a leased vehicle.
YOU MAY BE REQUIRED TO REINVEST YOUR
PRINCIPAL IN AMOUNTS AND AT TIMES
DIFFERENT THAN YOU EXPECT. THE AMORTIZATION PERIOD MAY BEGIN EARLY IF PREPAYMENTS ON THE LEASES ARE
TOO HIGH OR THE ORIGINATION TRUST CANNOT ORIGINATE ENOUGH QUALIFIED LEASES.
During the revolving period, there may not be enough available leases and
leased vehicles to allow for full reinvestment of principal collections and
losses that otherwise would be distributable to noteholders during the
amortization period, either because principal collections or losses are
greater than expected or because World Omni's dealers have not generated
enough eligible leases and leased vehicles. Either of these circumstances
could result in an early amortization event, in which case the amortization
period would begin before September 1, 2000 and the trust would begin
paying principal to noteholders before the October 2000 distribution date.
The retail automobile and light duty truck leasing business in the United
States may be affected by a variety of social, economic and geographic
factors, including economic factors such as interest rates, unemployment
levels, the rate of inflation and consumer perceptions of economic
conditions. However, we cannot predict these factors, how they will affect
the leasing industry generally, or whether prepayments and losses on the
leases and leased vehicles and the dealers' ability to originate qualified
leases will follow industry trends. Therefore, you will bear the risk that
you will have to reinvest the principal on your notes earlier than
expected, at an interest rate less than the rate on the Class A notes.
THE TIMING AND AMOUNTS OF PAYMENTS AND LOSSES ON THE LEASES AND LEASED
VEHICLES MAY AFFECT THE TIMING AND AMOUNTS OF PAYMENTS ON THE NOTES.
During the amortization period, the trust generally will distribute
payments on the leases and leased vehicles, and payments in respect of
losses, to noteholders as they are received. We cannot predict with any
certainty the rate or timing of principal payments or losses on the leases
or leased vehicles, or the rate or timing of principal payments on the
notes or their yield to maturity. You will bear the risk that the timing
and amount of distributions on the notes will prevent you from attaining
your desired yield.
If there are excess collections on any distribution date relating to the
amortization period, the trust will distribute the accelerated principal
distribution amount as principal to the noteholders. The trust also may pay
principal on the notes faster if World Omni makes reallocation payments to
the origination trust in return for leases and leased vehicles that did not
meet the relevant eligibility criteria, or if World Omni breaches certain
servicing obligations. The transferor may purchase all of the trust's
assets when the outstanding principal balance of the notes is less than ten
percent of their initial balance, which would trigger a redemption and
prepayment of the notes. In all of these circumstances, you will bear the
risk that you will have to reinvest the principal on
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your notes earlier than expected, at an interest rate less than the rate on
the Class A notes.
EARLY TERMINATIONS OF LEASES MAY RESULT IN EARLIER PAYMENT OF THE NOTES.
Early termination of a lease may be due to voluntary prepayment as
permitted under the lease, voluntary prepayment under World Omni's
pro-active lease termination programs, or repossession of the leased
vehicle after the lessee's default. Any early termination may result in
earlier principal payments. Early termination due to default or voluntary
prepayment under World Omni's pro-active lease termination programs may
result in losses. World Omni estimates that over calendar years 1996, 1997
and 1998, an average of approximately 70% of the retail automobile and
light duty truck leases in its overall portfolio terminated prior to
maturity. We cannot predict whether the prepayment or default rates for
leases allocated to the 1999-A special unit of beneficial interest will
bear any relationship to World Omni's historical rates.
Earlier principal payments on the leases, and payments to noteholders of
losses, will result in earlier payment of the notes. Again, you will bear
the risk that you will have to reinvest the principal on your notes earlier
than expected, at an interest rate less than the rate on the Class A notes.
RISKS ASSOCIATED WITH SEQUENTIAL
PAYMENT OF PRINCIPAL ON THE NOTES. In general, the trust will distribute the investor percentage of principal
collections (and to the extent funds are available to do so, current losses
on the leases and leased vehicles) sequentially to the Class A-1, A-2 and
A-3 noteholders until each class has been paid in full, and only then will
it distribute principal collections and (to the extent funds are available
to do so) current losses pro rata to the Class A-4 and Class B noteholders.
Therefore, you should not expect to receive any principal payments on your
notes until every lower-numbered class of Class A noteholders has been paid
in full.
If there are not enough funds to pay the investor percentage of all current
losses to the noteholders, the trust will first write down the principal
balance of the Class B notes to reflect unpaid current losses until their
outstanding principal balance has been reduced to zero, and then will write
down the principal balances of the Class A notes pro rata. Therefore, the
Class A-2 notes may be allocated more losses than the Class A-1 notes, the
Class A-3 notes may be allocated more losses than the Class A-1 or A-2
notes, and the Class A-4 notes may be allocated more losses than the Class
A-1, A-2 or A-3 notes, in each case as a relative percentage of their
initial outstanding principal balances. Primarily, this is because of the
sequential payment of principal to the Class A noteholders, and because the
trust will allocate losses among the Class A notes based on the ratio of
their then-current principal balances. This ratio will increase as the
outstanding principal balance of each class senior in priority of payment
decreases during the amortization period.
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THE GEOGRAPHIC CONCENTRATION OF
LEASES COULD RESULT IN GREATER
LOSSES ON THE NOTES. Economic conditions (including factors such as unemployment, interest and
inflation rates, and consumer perceptions of the economy) in the states
where lessees reside may affect the delinquency, loss and prepayment
experience on the leases and leased vehicles. The largest percentage of the
initial pool of leases was (and we expect the largest percentage of
subsequently allocated leases will be) originated in the five-state area of
Florida, Georgia, Alabama, North Carolina and South Carolina. Less than 8%
of the total number of the initial pool of leases was originated in any one
state other than this five-state area. Therefore, we expect that the
lessees will be concentrated in that five-state area, and that adverse
economic conditions in that area may have a disproportionate impact on the
performance of the leases and leased vehicles. This could delay the timing
of receipt of principal and interest payments, or result in greater losses,
on the notes.
POSSIBLE EFFECTS OF CONSUMER
PROTECTION LAWS. Numerous federal and state consumer protection laws impose requirements on
retail lease contracts such as the leases. If the origination trust fails
to comply with these requirements, it may be subject to liabilities, and
its claims against lessees may be subject to set-off. Many states,
including the states where the leases are concentrated, have adopted lemon
laws that give lessees of substandard vehicles certain rights. A lessee's
remedies may include, among other things, the right to terminate its lease
and the right to a refund of previous lease payments. World Omni will
represent that each lease complies with all requirements of law in all
material respects. It will be required to pay for the reallocation of any
lease that breaches this representation, if the breach has certain material
adverse effects and is not timely cured. However, if the violation does not
trigger a reallocation payment, or if World Omni does not make the payment,
you may suffer losses on your notes.
POSSIBLE LIENS TO SATISFY ERISA
LIABILITIES. The assets of the origination trust, including those allocated to the
1999-A special unit of beneficial interest, could become subject to liens
in favor of the Pension Benefit Guaranty Corporation to satisfy unpaid
ERISA obligations of any member of an 'affiliated group' that includes
World Omni. Such a lien would have priority over the interest of the
noteholders in the leased vehicles, in which the indenture trustee will not
have a perfected security interest. We believe that the likelihood of any
such liability being asserted or successfully pursued is remote, because
World Omni's affiliated group maintains only one plan (which is not a
multi-employer or multiple employer plan) that would subject it to a lien
if the plan were to terminate with insufficient assets to pay its
liabilities. Further, that plan historically has had assets that
significantly exceeded its liabilities. However, if these conditions do not
continue in the future, it could lead to losses on the notes. The rating
agencies may downgrade the Class A notes in the event of any unfunded ERISA
liability of any member of World Omni's affiliated group.
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POSSIBLE LIABILITY AS A RESULT OF
LESSEES' OPERATION OF LEASED
VEHICLES. State laws differ as to whether someone injured in an accident involving a
leased vehicle may sue the vehicle's owner merely because it owns the
vehicle. Where state law permits such actions, as it does in New York
against titling trusts like the origination trust, the origination trust
and its assets could be subject to liability. The laws of many other states
(including the five-state area) either do not permit such suits or
recognize such actions, or the lessor's liability is capped at the amount
of any liability insurance that the lessee was required to, but failed to,
maintain. However, third parties might sue the origination trust, as owner
of the leased vehicles, based on other legal theories, such as a product
defect or improper vehicle preparation prior to the origination of the
related lease contract.
If there are any such claims, all insurance coverage is exhausted and
damages are assessed against the origination trust, the claimants could
impose claims against the origination trust's assets. If any such claims
are imposed against any of the leases or leased vehicles or, in certain
limited circumstances, other origination trust assets not allocated to the
1999-A special unit of beneficial interest, you could incur a loss on your
investment.
POSSIBLE EFFECTS OF INSOLVENCY OR
BANKRUPTCY OF WORLD OMNI, THE
TRANSFEROR, AUTO LEASE FINANCE L.P.
OR THEIR GENERAL PARTNERS, THE
ORIGINATION TRUST OR THE TRUST. We have structured the transactions described in this prospectus in an
effort to ensure that:
o None of the transferor, Auto Lease Finance L.P. or their general
partners, the origination trust or the trust will be the subject of a
bankruptcy or state insolvency proceeding;
o The bankruptcy or insolvency of World Omni would not result in the
consolidation of the assets and liabilities of any of those entities
with those of World Omni; and
o The transfer of the 1999-A special unit of beneficial interest from the
transferor to the trust is either a true sale or the grant of a
perfected security interest.
However, if these efforts are unsuccessful, you could experience delays in
payments due on your notes, or may suffer losses on your notes.
Payments that are made by World Omni to the transferor, Auto Lease Finance
L.P, either of their general partners, the origination trust or the trust
may be recoverable as a preferential transfer if made within one year
before a World Omni bankruptcy filing. The insolvency of World Omni also
could result in its replacement as servicer, which could temporarily
interrupt payments on the notes.
If, despite the built-in structural protections, certain bankruptcy or
insolvency-related events were to occur as to the transferor, this would be
an early amortization event. The amortization period would begin before
September 1, 2000, and the trust would begin to distribute principal to
noteholders before the October 2000 distribution date. As
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with any early amortization event, you will bear the risk that you will
have to reinvest the principal on your notes earlier than expected, at an
interest rate less than the rate on the Class A notes.
We have registered the origination trust under certain states' business
trust laws. This means that it may be subject to bankruptcy or state
insolvency laws. If, despite the built-in structural protections, the
origination trust becomes bankrupt or insolvent, then claims against its
assets could have priority over the beneficial interest in those assets
represented by the 1999-A special unit of beneficial interest and you may
suffer a loss on your notes.
THE DEFAULT OF THE CLASS A CAP
PROVIDER UNDER CLASS A INTEREST RATE
CAP COULD RESULT IN DELAYED OR
REDUCED PAYMENTS TO NOTEHOLDERS. If a payment is due to the trust under the Class A interest rate cap, a
default by the cap provider may affect the trust's ability to make interest
payments on the Class A notes, and you may incur a loss on your notes.
An early amortization event will result if the cap provider fails to
make a required payment within five calendar days, if certain ratings
relating to the cap provider's program are downgraded or if certain
other specified events occur, and an acceptable replacement cap or other
arrangement is not timely implemented. The amortization period would
begin before September 1, 2000, and the trust would begin to distribute
principal to noteholders before the October 2000 distribution date. As
with any early amortization event, you will bear the risk that you will
have to reinvest the principal on your notes earlier than expected, at
an interest rate less than the rate on the Class A notes.
THE FAILURE TO PAY PRINCIPAL ON THE
NOTES GENERALLY WILL NOT RESULT IN
AN EVENT OF DEFAULT. The amounts of required principal payments to noteholders generally will be
limited to the funds available from collections on leases and leased
vehicles and credit enhancement. Therefore, the failure to pay principal on
the notes generally will not result in an event of default under the
indenture, and noteholders may not be able to enforce any remedies for
nonpayment, until the stated maturity date.
COMPUTER PROBLEMS IN THE YEAR 2000
MAY RESULT IN DELAYED PAYMENTS AND
LOSSES ON THE NOTES. Many computer programs were written using two digits to identify a year.
These programs cannot differentiate between the years 2000 and 1900, and
therefore may generate erroneous data or cause interruptions in system
processing during the transition from years 1999 to 2000. If World Omni
does not attain year 2000 compliance for its significant information
technology systems by the year 2000, World Omni believes that it would be
unable to sustain its current level of performance and customer service.
World Omni has undertaken a comprehensive program to coordinate its
compliance efforts. We do not anticipate that year 2000 issues on World
Omni's part will have a material adverse effect on the trust or the
origination trust, the assets of the origination trust (including the
leases and leased vehicles), or the servicing of those
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assets. However, to the extent that World Omni's systems have year 2000
problems, the amount and timing of distributions to noteholders could be
adversely affected.
THE WITHDRAWAL OR DOWNGRADING OF THE
NOTES' INITIAL RATINGS WILL AFFECT
THEIR PRICES ON RESALE. A security rating is not a recommendation to buy, sell or hold securities.
Similar ratings on different types of securities do not necessarily mean
the same thing. You are encouraged to analyze the significance of each
rating independently from any other rating. Any rating agency may change
its rating of the notes after the notes are issued if that rating agency
believes that circumstances have changed. Any subsequent change in rating
is likely to affect the price that a subsequent purchaser will be willing
to pay for the notes.
THE NOTES ARE NOT SUITABLE
INVESTMENTS FOR ALL INVESTORS. The notes may not be a suitable investment if you require a regular or
predictable schedule of payments or payment on any specific date. The notes
are complex investments that should be considered only by investors who,
either alone or with their financial, tax and legal advisors, have the
expertise to analyze the prepayment, reinvestment, default and market risk,
the tax consequences of an investment, and the interaction of these
factors.
YOU MAY FIND IT DIFFICULT TO PLEDGE
YOUR NOTES. Since transactions in the notes can be effected only through The Depository
Trust Company, Cedelbank or Euroclear, their participants and indirect
participants, the ability of the owner of a note to pledge a note to
persons or entities that do not participate in The Depository Trust
Company, Cedelbank or Euroclear systems, or otherwise to take actions in
respect of such notes, may be limited due to lack of a physical certificate
representing such notes.
YOU MAY EXPERIENCE DELAYS IN RECEIPT
OF DISTRIBUTIONS. Owners of notes may experience some delay in their receipt of distributions
of interest and principal on the notes since such distributions will be
forwarded by the trustee to The Depository Trust Company. The Depository
Trust Company will credit these distributions to the accounts of its
participants, which will thereafter credit them to the accounts of note
owners, either directly or indirectly through indirect participants.
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THE TRUST
FORMATION AND ASSETS OF THE TRUST
The Transferor will create the World Omni 1999-A Automobile Lease
Securitization Trust (THE 'TRUST') pursuant to a Securitization Trust Agreement
dated as of August 1, 1999 (THE 'AGREEMENT') among the Transferor, Chase
Manhattan Bank Delaware, as owner trustee (THE 'OWNER TRUSTEE') and the
Indenture Trustee. Under the Agreement, the Transferor will transfer the SUBI,
represented by the SUBI Certificate, to the Trust in exchange for the Notes and
a certificate evidencing the undivided equity interest in the Trust (THE
'TRANSFEROR INTEREST'). (Agreement, Section 2.02).
The most important property of the Trust will be the SUBI, which will
evidence the entire beneficial interest in certain specified Origination Trust
Assets (i.e., the SUBI Assets). For a description of the SUBI, see 'The
Origination Trust--The SUBI'. In addition to the SUBI, the property of the Trust
will primarily include:
(1) Class A Cap Receipts;
(2) Amounts in the Distribution Account and the Reserve Fund and
investments of those amounts;
(3) The Owner Trustee's and the Trust's rights as a third-party
beneficiary to the Servicing Agreement and the SUBI Trust Agreement;
and
(4) A beneficial interest in amounts in the SUBI Collection Account and
investments of those amounts.
ADDITIONAL PROTECTION FOR CLASS A NOTEHOLDERS
The following will provide extra protection to the Class A Noteholders:
(1) The Investor Percentage of Interest Collections that otherwise would
be used to make payments subordinate to those due to the Class A
Noteholders, including interest payments to the Class B Noteholders;
(2) Credit enhancement in the form of amounts otherwise payable to the
Transferor in respect of the Transferor Interest;
(3) So long as World Omni is the Servicer, subordination of payment of the
Investor Percentage of the Servicing Fee;
(4) Credit enhancement in the form of Insured Residual Value Loss Amounts
paid under the Residual Value Insurance Policy;
(5) Credit enhancement in the form of available amounts in the Reserve
Fund; and
(6) In the case of the Class A-4 Notes, credit enhancement in the form of
principal amounts otherwise payable to the Class B Noteholders.
If these sources of funds are insufficient, the Class A Noteholders ultimately
will depend upon payments made on or in respect of the Contracts and Leased
Vehicles (including payments under related insurance policies, payments by
Dealers under their limited repurchase obligations, and Reallocation Payments by
World Omni) for distributions on the SUBI and, in turn, distributions on the
Class A Notes. In this event, a variety of factors (including the Trust's lack
of a direct ownership interest in the Contracts and Leased Vehicles and its lack
of a perfected security interest in the Leased Vehicles) may limit the amounts
realized under the Contracts and Leased Vehicles to less than the amounts due
from the related lessees. Therefore, you may suffer delays in payment and losses
on your investment as a result of lessee defaults or delinquencies or because of
greater than expected depreciation of the Leased Vehicles. See 'The Origination
Trust--Allocation of Origination Trust Liabilities', 'Security for the
Notes--The Reserve Fund', 'Additional Document Provisions--The Servicing
Agreement--Insurance on Leased Vehicles', 'Certain Legal Aspects of the
Origination Trust and the SUBI--The SUBI' and 'Certain Legal Aspects of the
Contracts and the Leased Vehicles--Back Up Security Interests' for related
discussions.
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Neither the Trust nor the Class A Noteholders will have any interest in the
UTI, any Other SUBI or any Origination Trust Assets evidenced by the UTI or any
Other SUBI. Payments made on or in respect of the Origination Trust Assets not
represented by the SUBI will not be available to make payments on the Class A
Notes. For further information regarding the Origination Trust and its assets,
see 'The Origination Trust'.
THE ORIGINATION TRUST
FORMATION OF THE ORIGINATION TRUST
ALF L.P. created World Omni LT, an Alabama trust (THE 'ORIGINATION TRUST')
pursuant to a Second Amended and Restated Trust Agreement (THE 'ORIGINATION
TRUST AGREEMENT') among ALF L.P., as grantor and initial beneficiary, the
Origination Trustee and U.S. Bank, National Association ('U.S. BANK'), as trust
agent (IN THAT CAPACITY, THE 'TRUST AGENT'). The primary business purpose of the
Origination Trust is to take assignments of, and serve as record holder of title
to, substantially all of the fixed rate retail closed-end lease contracts and
the related leased vehicles originated through Dealers in World Omni's network
since November 1993. For further information regarding the Origination Trust,
see 'Additional Document Provisions--The SUBI Trust Agreement' and 'Certain
Legal Aspects of the Origination Trust and the SUBI'.
THE SUBI
The Origination Trust will issue the 1999-A Special Unit of Beneficial
Interest (THE 'SUBI') pursuant to a Supplement 1999-A to the Origination Trust
Agreement (THE 'SUBI SUPPLEMENT', AND TOGETHER WITH THE ORIGINATION TRUST
AGREEMENT AS SO SUPPLEMENTED, THE 'SUBI TRUST AGREEMENT'). The SUBI will
evidence a beneficial interest in certain specified Origination Trust Assets
(THE 'SUBI ASSETS') consisting of:
(1) The Contracts, the Leased Vehicles and all proceeds or payments
received or due on or after the related Cutoff Date;
(2) The SUBI Collection Account (which, together with the money on deposit
in it, will be pledged to the Indenture Trustee for the benefit of the
Noteholders);
(3) The right to receive payments made to World Omni, the Origination
Trust or the Origination Trustee under any insurance policy relating
to the Contracts, the related lessees or the Leased Vehicles,
including Insured Residual Value Loss Amounts payable under the
Residual Value Insurance Policy;
(4) The right to receive the proceeds of any Dealer repurchase obligations
in respect of the Contracts or Leased Vehicles;
(5) All other Origination Trust Assets related to the Contracts and Leased
Vehicles; and
(6) All proceeds of the foregoing.
(SUBI Trust Agreement, Sections 4.02, 11.01 and 11.02).
During the Revolving Period, the Origination Trustee will reinvest
Principal Collections and an amount equal to Loss Amounts that otherwise would
be distributed to the Noteholders in Subsequent Contracts and Subsequent Leased
Vehicles, which will become SUBI Assets at that time. The SUBI will not
represent a direct interest in the SUBI Assets, nor will it represent an
interest in any Origination Trust Assets other than the SUBI Assets. Payments
made on or in respect of such other Origination Trust Assets will not be
available to make payments on the Notes or to cover expenses of the Origination
Trust allocable to the SUBI Assets.
Pursuant to the SUBI Trust Agreement, the Origination Trustee will issue a
certificate (THE 'SUBI CERTIFICATE'), which will evidence the SUBI and the
entire beneficial interest in the SUBI Assets, to the Transferor on the Closing
Date. Immediately afterwards, the Transferor will transfer the SUBI Certificate
to the Trust pursuant to the Agreement, and the Trust will pledge the SUBI
Certificate to the Indenture Trustee pursuant to the Indenture.
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LIMITED POWERS OF ORIGINATION TRUST
In general, as required by the Origination Trust Agreement, the Origination
Trust has not and will not:
(1) Issue interests or securities other than the SUBI, the SUBI
Certificate, other special units of beneficial interest ('OTHER
SUBIS') representing divided interests in other portfolios of
Origination Trust Assets ('OTHER SUBI ASSETS') and certificates
representing Other SUBIs or portions thereof ('OTHER SUBI
CERTIFICATES'), the Undivided Trust Interest (THE 'UTI'), representing
a divided interest in the Origination Trust Assets not allocated as
SUBI Assets or Other SUBI Assets (THE 'UTI ASSETS') and one or more
certificates representing the UTI or portions thereof ('UTI
CERTIFICATES');
(2) Borrow money (except from World Omni) in connection with funds used to
acquire lease contracts and the related leased vehicles;
(3) Make loans;
(4) Invest in or underwrite securities, other than Permitted Investments
or as otherwise permitted by the Origination Trust Agreement or the
SUBI Trust Agreement;
(5) Offer securities in exchange for property (other than the SUBI
Certificate, the Other SUBI Certificates and the UTI Certificates); or
(6) Repurchase or otherwise reacquire its securities except in connection
with financing or refinancing the acquisition of lease contracts and
the related leased vehicles or as otherwise permitted by each such
financing or refinancing.
(SUBI Trust Agreement, Section 5.01). The Origination Trust may not acquire
lease contracts other than through Dealers in World Omni's network, unless they
were (in World Omni's reasonable judgment) originated generally in accordance
with World Omni's then-current lease contract underwriting standards. (SUBI
Trust Agreement, Section 2.01).
For additional information regarding permitted and required activities of
the Origination Trust, see 'Additional Document Provisions--The SUBI Trust
Agreement'.
ALLOCATION OF ORIGINATION TRUST LIABILITIES
The Origination Trust Assets are comprised of several portfolios of assets
other than the SUBI Assets, including eight portfolios of Other SUBI Assets and
the remaining portfolio of UTI Assets. ALF L.P. has pledged (and may in the
future pledge) the UTI as security for obligations to third-party lenders, and
has created and sold and may in the future create and sell or pledge Other SUBIs
in connection with other financings. The Origination Trust Agreement will permit
the Origination Trust, in the course of its activities, to incur certain
liabilities relating to its assets other than the SUBI Assets, or relating to
its assets generally, and to which the SUBI Assets may become subject. As among
the beneficiaries of the Origination Trust and their pledgees, the Origination
Trust Agreement provides that an Origination Trust liability relating to a
particular Origination Trust Asset will be allocated to and charged against the
portfolio of Origination Trust Assets to which that asset belongs. All
portfolios of Origination Trust Assets will bear pro rata those Origination
Trust liabilities that relate to the Origination Trust Assets generally. The
Origination Trustee, the beneficiaries of the Origination Trust (including the
Trust) and their pledgees (including the Indenture Trustee) will be bound by
this allocation. In particular, the Origination Trust Agreement requires the
holders of Other SUBI Certificates and UTI Certificates to waive any claim that
they might otherwise have with respect to the SUBI Assets and to fully
subordinate any claims to the SUBI Assets if this waiver is effective.
Similarly, by virtue of holding Notes or a beneficial interest in the Notes,
Noteholders and Note Owners will be deemed to waive any claim that they might
otherwise have with respect to Other SUBI Assets and the UTI Assets.
For further information regarding these matters, see 'Additional Document
Provisions--The SUBI Trust Agreement--Creation of Beneficial Interests and
Allocation of Rights and Liabilities' and 'Certain Legal Aspects of the
Origination Trust and the SUBI--The SUBI'.
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ALF L.P.
Auto Lease Finance L.P., a Delaware limited partnership ('ALF L.P.'), was
formed solely for the purpose of being grantor and initial beneficiary of the
Origination Trust, holding the UTI and the UTI Certificates, acquiring interests
in the SUBI and the Other SUBIs and engaging in related transactions. The sole
general partner of ALF LP is Auto Lease Finance LLC, a Delaware limited
liability company ('ALF LLC') and a wholly owned, special purpose finance
subsidiary of World Omni. ALF LLC was organized in September 1998 (as successor
by merger to Auto Lease Finance, Inc.), solely for the purpose of acting as the
successor general partner of ALF L.P. and engaging directly in activities
permitted to ALF L.P. ALF L.P.'s limited partnership agreement and ALF LLC's
limited liability company agreement limit their activities to these purposes and
to any activities incidental to and necessary for these purposes. ALF LLC
generally may not transfer its general partnership interest in ALF L.P. so long
as any financings involving interests in the Origination Trust (including the
Notes) are outstanding. World Omni is the sole member of ALF LLC and the sole
limited partner of ALF L.P. The principal office of ALF L.P. is located at 6150
Omni Park Drive, Mobile, Alabama and its telephone number is (334) 639-7500.
THE ORIGINATION TRUSTEE
VT Inc., an Alabama corporation (THE 'ORIGINATION TRUSTEE'), is a wholly
owned, special purpose subsidiary of U.S. Bank that was organized in 1993 solely
for the purpose of acting as Origination Trustee. U.S. Bank, as Trust Agent,
serves as agent for the Origination Trustee to perform certain functions of the
Origination Trustee pursuant to the Origination Trust Agreement. (Origination
Trust Agreement, Section 5.03). The Origination Trust Agreement provides that if
U.S. Bank no longer can be the Trust Agent, the designee of ALF L.P. (which may
not be ALF L.P. or any of its affiliates) will have the option to purchase the
stock of the Origination Trustee for a nominal amount. If ALF L.P.'s designee
does not exercise this option timely, then the Origination Trustee will appoint
a new trust agent, and that new trust agent (or its designee) will next have the
option to purchase the stock of the Origination Trustee. If the new trust agent
or its designee does not exercise this option timely, U.S. Bank may sell the
stock of the Origination Trustee to another party. (Origination Trust Agreement,
Section 6.10).
THE ORIGINATION TRUST ASSETS
The assets of the Origination Trust (THE 'ORIGINATION TRUST ASSETS') will
consist of:
(1) Fixed rate retail closed-end lease contracts originated throughout the
United States and assigned to the Origination Trust by World Omni or
Dealers since November 1993, and all money due from lessees under
those contracts;
(2) The automobiles and light duty trucks leased under those lease
contracts, and their proceeds;
(3) All of World Omni's rights (but not its obligations) with respect to
those lease contracts and leased vehicles, including the right to
receive proceeds of any Dealer repurchase obligations;
(4) The rights to proceeds from residual value, physical damage, credit
life, disability and any other insurance policies covering those lease
contracts or leased vehicles or the related lessees, including the
Contingent and Excess Liability Insurance Policies, the Residual Value
Insurance Policy and other residual value insurance policies on any
Other SUBI Assets or UTI Assets;
(5) All security deposits due to the lessor under those lease contracts;
and
(6) All proceeds of the foregoing.
(Origination Trust Agreement, Section 2.01).
World Omni services the Origination Trust Assets generally pursuant to a
Second Amended and Restated Servicing Agreement, as amended, between the
Origination Trustee, on behalf of the Origination Trust, and World Omni (IN THAT
CAPACITY, THE 'SERVICER'), and will service the SUBI Assets particularly
pursuant to that agreement as supplemented by a Supplement 1999-A to Servicing
Agreement (COLLECTIVELY,
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THE 'SERVICING AGREEMENT'). For further information regarding the servicing of
the Origination Trust Assets, see 'Additional Document Provisions--The Servicing
Agreement'.
CONTRACT ORIGINATION AND TITLING OF LEASED VEHICLES
The Origination Trustee, on behalf of the Origination Trust, will be listed
as the owner of each leased vehicle on its certificate of title. Liens will not
be placed on certificates of title, nor will new certificates of title be
issued, to reflect the interests of the Owner Trustee (as holder of the SUBI
Certificate) or the Indenture Trustee (as pledgee of the SUBI Certificate) in
the Leased Vehicles. The certificates of title to the Leased Vehicles will,
however, reflect a first lien (THE 'ADMINISTRATIVE LIEN') in favor of Bank of
America Trust Company of Florida, N.A. or AL Holding Corp. The sole purpose of
the Administrative Lien will be to assure delivery of the certificates of title
to the Leased Vehicles to the Servicer. Neither of the holders of the
Administrative Lien will have any interest in any of the Leased Vehicles.
Pursuant to agreements between World Omni and the Dealers, each Dealer must
repurchase from the Origination Trust lease contracts that do not meet the
Dealer's representations and warranties. These representations and warranties
relate primarily to the origination of the lease contracts and the titling of
the leased vehicles, and generally do not relate to the creditworthiness of the
lessees or the collectibility of the lease contracts. Typically, the Dealer
agreements do not otherwise provide for recourse to the Dealer for unpaid
amounts under a defaulted lease contract. World Omni's rights to receive
proceeds of any Dealer repurchase obligations will be Origination Trust Assets
(and also SUBI Assets to the extent they relate to the Contracts and Leased
Vehicles), although the related Dealer agreements will not be Origination Trust
Assets.
For a description of World Omni's underwriting criteria for all lease
contracts originated by the Origination Trust, see 'World Omni--Lease Contract
Underwriting Procedures'.
USE OF PROCEEDS
The Transferor will use the net proceeds from the sale of the Class A Notes
(i.e., the proceeds of the public offering of the Class A Notes, less related
expenses) to purchase the SUBI Certificate from ALF L.P.
THE TRANSFEROR
World Omni Lease Securitization L.P., a Delaware limited partnership (THE
'TRANSFEROR') , was formed in June 1994, solely for the purpose of acquiring
interests in the SUBI and Other SUBIs, issuing asset-backed notes and
certificates and engaging in related transactions. The sole general partner of
the Transferor is World Omni Lease Securitization LLC, a Delaware limited
liability company ('WOLS LLC') and a wholly owned, special purpose finance
subsidiary of World Omni. WOLS LLC was formed in September 1998 (as successor by
merger to World Omni Lease Securitization, Inc.), solely for the purpose of
acting as the successor general partner of the Transferor and engaging directly
in activities permitted to the Transferor. The limited partnership agreement of
the Transferor and the limited liability company agreement of WOLS LLC limit
their activities to these purposes and to any activities incidental to and
necessary for these purposes. WOLS LLC generally may not transfer its general
partnership interest in the Transferor so long as any financings involving
interests formerly or partially held by it in the Origination Trust (including
the Notes) are outstanding. World Omni is the sole limited partner of the
Transferor and the sole member of WOLS LLC. The principal office of the
Transferor is located at 6150 Omni Park, Mobile, Alabama 36609 and its telephone
number is (334) 639-7500.
A support agreement dated as of October 1, 1995, as amended (THE 'SUPPORT
AGREEMENT'), between the Transferor and World Omni requires World Omni to retain
100% direct or indirect ownership of the Transferor. Under the Support
Agreement, under certain circumstances World Omni must make contributions or
loans or provide or arrange for financial assistance to the Transferor to ensure
that the Transferor maintains positive partners' capital. The Support Agreement
will limit World Omni's total support obligations to $138 million. The Support
Agreement is not a guarantee by World Omni of the Notes or any other obligations
of the Transferor. The Support Agreement provides that no one other than the
Transferor and WOLS LLC may enforce its requirements. Therefore, although World
Omni intends to comply with all of its
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obligations under the Support Agreement, it is unlikely that the Indenture
Trustee or the Noteholders would be able to enforce the Support Agreement
directly against World Omni.
WORLD OMNI
GENERAL
The Contracts were or (if not yet originated) will be assigned to the
Origination Trust by certain motor vehicle dealers ('DEALERS') in the dealer
network of World Omni Financial Corp., a Florida corporation ('WORLD OMNI').
World Omni is a wholly owned subsidiary of JM Family Enterprises, Inc., a
Delaware corporation ('JMFE'). JMFE is primarily engaged, through its
subsidiaries, in providing Toyota dealerships in the states of Florida, Georgia,
Alabama, North Carolina and South Carolina (THE 'FIVE STATE AREA'), as well as
other automotive dealerships throughout the United States, with a full range of
distribution and financial services.
In addition to lease contract financing, World Omni provides retail
installment contract financing to retail customers of certain automotive dealers
and wholesale floorplan financing and capital and mortgage loans to dealers and
customers of Southeast Toyota Distributors, Inc., a Florida corporation ('SET'),
World Omni's sister corporation, as well as to other automotive dealers within
and outside the Five State Area.
SET is the exclusive distributor of Toyota cars and light duty trucks,
parts and accessories in the Five State Area. This means that SET is the sole
provider of Toyotas to Dealers in the Five State Area. SET distributes Toyota
vehicles pursuant to a Distributor Agreement which first was entered into in
1968 and has been renewed through October 1999, with Toyota Motor Sales, USA,
Inc., a California corporation. We expect that this agreement will be renewed
for another five year term. Toyota Motor Sales is wholly owned by Toyota Motor
Corporation, the largest automotive company in Japan. In addition, for a fee SET
processes Lexus vehicles in eight states (including the Five State Area) and
processes Lexus parts in a nine state area. SET's consolidated revenues for the
years ended December 31, 1998, 1997 and 1996 were approximately $4.9 billion,
$4.5 billion and $4.2 billion, respectively. Since March 1996, World Omni has
provided substantially all financial services by and through SET's Toyota
Dealers in the Five State Area under the name 'Southeast Toyota Finance'.
World Omni (either directly or through the Origination Trust or various
special purpose finance subsidiaries) owns and leases vehicles primarily through
more than 3,000 Dealers located throughout the United States. Pursuant to
written agreements with World Omni, each Dealer offers automobiles and light
duty trucks for set lease periods pursuant to World Omni approved terms and a
World Omni supplied form of closed-end retail motor vehicle lease and disclosure
statement. Each Dealer is responsible for obtaining certain credit-related
information about a prospective lessee and for forwarding that information for
review and credit evaluation to one of World Omni's central operations centers,
which are located in St. Louis, Missouri and Deerfield Beach, Florida. The
operations center then sends the results of this computer-based evaluation to
the purchase office located in that operation center for final review and credit
evaluation. The purchase office then advises the Dealer if the applicant is
acceptable. If a prospective lessee is accepted, the Dealer will prepare the
necessary paperwork to sell the vehicle from its inventory to World Omni or its
designee, and to enter into a lease contract with its customer and assign the
lease contract to World Omni or, at World Omni's direction, a different
assignee. Substantially all retail lease contracts originated by World Omni
Dealers are assigned to, and the related leased vehicles are titled in the name
of, the Origination Trustee on behalf of the Origination Trust. For further
information on lease contract underwriting, including details on how World Omni
reviews, evaluates and 'scores' each application, see 'World Omni--Lease
Contract Underwriting Procedures'.
World Omni services its lease contracts primarily through its St. Louis
operations center and a servicing center located in Mobile, Alabama. These
centers handle collection activities, operational accounting, insurance
verification, pro-active lease terminations and dealer and customer inquiries
for World Omni. In addition, the St. Louis and Deerfield centers verify that all
lease contract documents supplied by a Dealer conform with World Omni's
requirements.
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World Omni began operations in 1982, and as of December 31, 1998, 1997 and
1996, World Omni and its affiliates had approximately 347,000, 305,000 and
232,000 retail lease contracts outstanding, respectively. The aggregate net
outstanding principal balances of retail lease contracts at those dates
(including retail lease contracts that were sold but were still being serviced
by World Omni), were $7.4 billion, $6.5 billion and $4.6 billion, respectively.
Of these amounts, the related leased vehicles had an estimated aggregate
residual value as of the end of their lease terms of approximately $5.6 billion,
$4.8 billion and $3.3 billion respectively. For the years ended December 31,
1998, December 31, 1997 and December 31, 1996, World Omni's consolidated gross
revenues were approximately $706 million, $359 million and $275 million,
respectively.
World Omni's principal executive offices are located at 120 Northwest 12th
Avenue, Deerfield Beach, Florida 33442, and its telephone number is (954)
429-2200.
ADMINISTRATIVE AND LEGAL PROCEEDINGS INVOLVING WORLD OMNI
As part of its regular examination process of the consolidated federal
income tax returns of JMFE and its subsidiaries (including World Omni) for
certain prior years, the Internal Revenue Service (THE 'IRS') currently is
reviewing, among other things, certain prior transactions similar to the
proposed issuance of Notes. The IRS has proposed treating those transactions as
sales rather than financings for federal income tax purposes, which would affect
World Omni's depreciation deductions. It also has proposed treating the
Origination Trust and each securitization trust created for those transactions
as an association taxable as a corporation, rather than a trust, for federal
income tax purposes. In connection with each transaction, World Omni received an
opinion of tax counsel to the effect that the transaction was properly treated
as a financing and that neither the Origination Trust nor the relevant
securitization trust would be treated as an association taxable as a
corporation, in each case for federal income tax purposes. While management
believes that a challenge by the IRS would be unsuccessful, we cannot assure you
of this result. The IRS also has proposed changes to a number of other positions
that were taken on the tax returns it is examining.
Management is vigorously defending its positions and believes that the
ultimate resolution of all of these issues will not have a material adverse
effect on the Noteholders, JMFE's or World Omni's operations and financial
condition, or the financial condition of the Origination Trust. However, if the
IRS were to prevail on certain of these issues, it could have a material adverse
effect on JMFE's or World Omni's operations and financial condition, or the
financial condition of the Origination Trust. Management believes that even if
the IRS were to prevail on all of these issues, it would not result in any
material impairment of World Omni's ability to perform its obligations and its
duties as Servicer under the Servicing Agreement. We cannot, however, assure you
of this result.
LEASE CONTRACT UNDERWRITING PROCEDURES
World Omni's underwriting standards are intended to evaluate a prospective
lessee's credit standing and repayment ability. Generally, the Dealer requires a
prospective lessee to complete a credit application on a form prepared or
approved by World Omni. As part of the description of the applicant's financial
condition, the applicant is required to provide current information detailing,
among other things, employment history, residential status and annual income.
Upon receipt by the applicable office, World Omni personnel enter all
application data into a centralized computer network (owned and maintained by a
division of JMFE) that automatically obtains an independent credit bureau report
and then 'scores' the application with the use of a scorecard. The scorecard
enables World Omni to review an application and establish the probability that
the proposed lease contract will be paid in accordance with its terms. The
credit scores rank-order applications according to credit risk, which is the
likelihood that the account will be delinquent or repossessed. World Omni also
evaluates the application against a 'cutoff score' it has established as the
minimum acceptable score to purchase a lease contract, which is revised from
time to time as changes occur in economic conditions and World Omni's lease
contract portfolio.
This numerical credit scoring system was developed by Fair, Isaac & Company
('FAIR, ISAAC'), a lending and leasing consulting firm, specifically for World
Omni based upon an analysis of the historical performance of World Omni's retail
automobile and light duty truck lease and installment sale contract
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portfolios. To determine the appropriate characteristics for credit scoring,
Fair, Isaac reviewed a random sample of 10,000 retail lease contracts and 10,000
retail installment sale contracts from World Omni's portfolio. Fair, Isaac then
compiled a list of various characteristics that cumulatively carried the most
weight in predicting historical performance and assigned point values and
weighting to each of these characteristics. The weighting system is particularly
significant because the weightings are beyond the control of a dealer and cannot
be manipulated. Fair, Isaac determined that the most accurate determinant of the
performance of a lease or installment sale contract was the credit bureau
report. Based on this historical performance, Fair, Isaac prepared two retail
credit and two lease scorecards (which differ according to whether the vehicle
is new or used and the geographical location of the dealer), each of which
assigned at least a 50% weighting to the credit bureau report. World Omni
implemented the Fair, Isaac scorecard system in the fourth quarter of 1990 and
used it for substantially all lease contracts originated from that time until
February 1997.
In an effort to increase the predictive ability of the scorecards, World
Omni implemented an updated scorecard system, also developed by Fair, Isaac
specifically for World Omni, in February 1997. The updated scorecard system
includes three retail credit and two lease scorecards (which, for lease
scorecards, differ according to the geographic location of the dealer and, for
retail scorecards, whether the vehicle is new or used and the credit 'depth' of
the applicant). The revised scorecards place a greater emphasis upon the credit
bureau report.
Each of these numerical scoring models is intended to provide a means of
analysis to assist in decision making, but the final decision rests with World
Omni's credit specialists. Under World Omni's guidelines, a credit specialist
generally may not override the scorecard analysis of applications above or below
the cutoff score by more than a limited percentage of those applications
(depending on vehicle make and geographic location). World Omni tracks both the
number of overrides granted by each credit specialist and the aggregate number
of overrides granted by all credit specialists daily to ensure the statistical
validity of the scoring models. World Omni reports in detail on all aspects of
the numerical scoring model to track the performance of its retail automobile
and light duty truck lease contract portfolio. This enables World Omni to fine
tune the scoring model according to statistical indications to continually
assure its statistical validity. In limited circumstances, World Omni may
pre-approve lessees with established World Omni credit histories for new leases
without the use of a numerical scorecard. World Omni also may automatically
approve lessees with certain minimum credit bureau scores in certain
circumstances.
For the years ended December 31, 1998, 1997 and 1996, World Omni (either
directly or through the Origination Trust or various special purpose finance
subsidiaries), on average, booked approximately 58%, 63% and 70%, respectively,
of all lease credit applications. World Omni underwrote substantially all of the
Initial Contracts (and will underwrite substantially all of the Subsequent
Contracts) using the updated numerical scorecards. See 'The
Contracts--Characteristics of the Contracts' for further information on the
identity and characteristics of the Contracts.
After World Omni's purchase office has approved an application and the
prospective lessee has agreed to the terms of the lease contract, including an
assignment of the lease contract from the Dealer to World Omni (or its
assignee), the Dealer transmits to World Omni a lease contract package
containing, among other things, the standard form lease contract between the
Dealer and the lessee, the customer's application, applicable insurance
information (company, agent and additional insured(s), with the lessor named as
loss payee) and any payments due from the customer. World Omni determines
whether the package complies with its requirements. World Omni compares the
specifics of the lease contract to the application approved by the purchasing
department, and verifies the rate, truth-in-leasing disclosures and purchase
price from the Dealer.
REQUIRED INSURANCE
Each lease contract requires the lessee to maintain automobile bodily
injury and property damage liability insurance that names the Dealer's assignee
(for the Contracts, the Origination Trustee on behalf of the Origination Trust)
as an additional insured. Each lease contract also requires the lessee to
maintain (all risks) comprehensive and collision insurance covering damage to
the leased vehicle and naming the Dealer's assignee (again, for the Contracts,
the Origination Trustee on behalf of the Origination Trust) as loss payee.
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World Omni independently verifies the insurance coverage through its third-party
contracted agents when the lease contract is executed.
COLLECTION, REPOSSESSION AND DISPOSITION PROCEDURES
World Omni makes collection efforts in its capacity as Servicer. In most
cases, these efforts are enhanced by the use of an automated dialing system.
Notwithstanding the centralization of collection efforts, independent
contractors continue to handle repossessions locally. In general, World Omni's
guidelines for collection of lease contracts and repossession of leased vehicles
include the following:
<TABLE>
<CAPTION>
NUMBER OF DAYS DELINQUENT ACTION
------------------------- ------
<S> <C>
15-49................................................. Telephone contact with the lessee is initiated
50-89................................................. Telephone and/or field collections continue
60-90................................................. The leased vehicle is normally repossessed
</TABLE>
Occasionally, a lessee may become delinquent and be willing but unable to
bring his or her account current (i.e., a skipped payment). In this situation,
at the discretion of collection department management but subject to extensive
guidelines, World Omni may extend the lease contract, if the lessee pays an
extension fee equal to the lesser of (i) the product of 1.15% multiplied by the
outstanding principal balance of the lease contract, and (ii) one-half of the
related monthly contract payment (AN 'EXTENSION FEE'). In circumstances deemed
appropriate by collection department management, World Omni may reduce or waive
the Extension Fee. However, the Servicing Agreement will require that the
Servicer deposit all Extension Fees relating to the Contracts into the SUBI
Collection Account. In addition, occasionally a lessee requests an extension of
his or her lease contract for one or more months from the original specified
maturity of the lease until the lessee negotiates a new lease contract or sales
contract for a different vehicle. World Omni effects these extensions by
modifying the relevant lease contract to provide for an additional number of
Monthly Payments, with a continuation of the appropriate lease charge and a
corresponding reduction in the Residual Value to reflect depreciation during the
extension period. Moreover, the Servicer may not extend a Contract more than
five times or more than five months in the aggregate or to a date later than the
last day of the second month before the final scheduled Distribution Date. For
further details regarding collections on the Contracts, see 'Additional Document
Provisions--The Servicing Agreement--Collections'.
World Omni disposes of off-lease vehicles through several outlets. These
include a Toyota 'certified' program, in which vehicles are inspected and given
body work, repairs and maintenance as needed, certified as meeting the program
standards, and then potentially sold to automobile dealers (primarily in World
Omni's network) for retail sale. World Omni also disposes of off-lease vehicles
through large regional automobile auctions (which also are used for liquidating
repossessed vehicles) and negotiated sales of groups of vehicles to rental
companies, fleet lessors and others.
YEAR 2000 MATTERS
World Omni is committed to taking all appropriate actions to achieve year
2000 compliance for its significant information technology systems before
January 1, 2000. However, if it does not attain year 2000 compliance for its
significant information technology systems by the year 2000, World Omni believes
that it would be unable to sustain its current level of performance and customer
service.
World Omni identified all of its significant information technology
applications that needed to be modified to ensure year 2000 compliance, which in
some cases required replacement of entire systems. World Omni has appropriately
modified substantially all of its information technology systems that had year
2000 issues, including the software it developed in-house. World Omni believes
that all of its significant vendor software is also year 2000 compliant. The
total costs of World Omni's year 2000 project have not had, nor do we anticipate
that they will have, a material impact on World Omni's financial position or
results of operations or its ability to perform its obligations as servicer. In
addition, World Omni has communicated with all of its significant third party
suppliers of operational support and non-information technology systems to
determine its vulnerability if they do not address their own year 2000 issues.
While World Omni believes that it has no material exposure to any year 2000
problems of its significant suppliers, it is seeking assurances from them that
they will be compliant.
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We do not anticipate that year 2000 issues on World Omni's part will have a
material adverse effect on the Trust or the Origination Trust, the Origination
Trust Assets (including the Contracts and Leased Vehicles), or the servicing of
those assets.
Our projections of World Omni's year 2000 compliance, which are 'forward
looking statements' within the meaning of Section 27A of the Securities Act of
1933, as amended (THE 'SECURITIES ACT') and Section 21E of the Securities
Exchange Act of 1934, as amended (THE 'EXCHANGE ACT'), are based on management's
best estimates, which were derived using numerous assumptions of future events
(including the continued availability of certain resources, third party
modification plans and other factors). However, we cannot assure you these
estimates will be achieved, and actual results could differ materially from
those we anticipate. Specific factors that might cause such material differences
include the availability and cost of personnel trained in this area, the ability
to locate and correct all relevant computer codes and similar uncertainties.
DELINQUENCY, REPOSSESSION AND LOSS DATA
The following tables set forth certain delinquency, repossession and loss
data with respect to World Omni's retail automobile and light duty truck lease
contract portfolio originated by Dealers located throughout the United States,
including lease contracts assigned to the Origination Trust and lease contracts
originated by World Omni and assigned to special purpose finance subsidiaries of
World Omni, as of and for the years ended December 31, 1994 through 1998 and for
the six month period ended June 30, 1999.
As shown on these tables, World Omni's delinquency rates trended up in 1995
and 1996, consistent with trends in overall consumer credit and, to a lesser
extent, due to some disruption in collection activity caused by the
implementation of a new collection system at the Mobile Center in 1996. During
1997, 1998 and the six month period ended June 1999 delinquencies declined
somewhat but remained essentially stable.
Net Repossession Losses as a percentage of Average Net Receivables
increased in both 1995 and 1996. The increase in 1995 was driven primarily by an
increase in the Average Net Repossession Loss per Liquidated Lease Contract
which was generally due to higher average amounts being financed and higher
residual values. These same factors continued to cause an increase in the
Average Net Repossession Loss per Liquidated Lease Contract during 1996. In
addition, a general weakening in the used car market negatively affected loss
severity during 1996. The higher frequency of repossession in 1996 was due to a
general trend of weaker overall consumer credit quality nationally as well as
World Omni adjusting, to a limited extent, its credit policies.
Net Repossession Losses as a percent of Average Net Receivables remained
substantially unchanged during 1997, 1998 and the first half of 1999. Average
Net Repossession Loss per Liquidated Lease Contract increased during 1997 and
1998 as a result of increases in residual values financed and softness in the
market for used vehicles. The Number of Repossessions as a percentage of Average
Lease Contracts Outstanding during 1997, 1998 and the first half of 1999
declined due to the general improvement in the credit quality of World Omni's
lease portfolio.
Residual value losses and the number of vehicles returned to and sold by
World Omni have increased steadily since 1994. In 1995, losses and returns
increased as a result of special programs on shorter-term leases. Losses in 1996
increased over 1995 as a result of generally higher residual values, weakness in
the used vehicle market, higher losses on shorter-term leases (i.e., leases with
terms 24 months or shorter) and an increase in the losses on leases with other
maturities. Generally, the 1996 trends continued through 1997 and 1998,
resulting in higher vehicle returns and losses during these periods. During the
first half of 1999, losses on shorter-term leases declined due to reduced volume
originations after 1996. However, returns and losses on three-year leases
continued to increase due to high residual values, a softer used car market and
World Omni's discontinuance of a special incentive program. If the used vehicle
market continues to experience weakness, World Omni's returns and losses in the
future could be negatively affected. Based upon prior experience, World Omni
does not believe that its loss experience or those recent negative trends will
materially adversely affect Class A Noteholders or World Omni's business.
However, we can give no assurances in this regard.
23
<PAGE>
The data presented in the following tables are for illustrative purposes
only. Delinquency, repossession and loss experience may be influenced by a
variety of economic, social, geographic and other factors. In addition, the data
presented below may be affected by the growth and relative lack of seasoning of
the portfolio. Accordingly, we cannot assure you that World Omni's delinquency,
repossession and loss experience with respect to its retail automobile and light
duty truck lease contracts and the related leased vehicles in the future, or the
experience with respect to the Contracts and the Leased Vehicles, will be
similar to that set forth below.
RETAIL VEHICLE LEASE CONTRACT DELINQUENCY EXPERIENCE
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
AT JUNE 30, -----------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Dollar Amount of Lease
Contracts(1)...................... $ 7,240,346 $ 7,390,297 $ 6,527,588 $ 4,641,992 $ 2,798,830 $ 1,823,823
Ending Number of Lease Contracts.... 341,546 346,802 304,863 231,942 156,471 114,298
Percentage of Lease Contracts
Delinquent(2)(3)(4)
31-60 Days........................ 1.26% 1.24% 1.27% 1.42% 1.12% 0.97%
61-90 Days........................ 0.18 0.21 0.23 0.13 0.08 0.03
91 Days or More................... 0.04 0.05 0.06 0.03 0.01 0.01
----------- ----------- ----------- ----------- ----------- -----------
Total......................... 1.48% 1.50% 1.56% 1.58% 1.21% 1.01%
</TABLE>
- ------------------
(1) Based on the sum of all principal amounts outstanding under lease contracts
(inclusive of the residual values of the related leased vehicles).
(2) Excludes lease contracts the related lessees of which are bankrupt or have
commenced bankruptcy proceedings. As of June 30, 1999 approximately 457
lease contracts involving bankrupt lessees were delinquent for at least 61
days.
(3) The period of delinquency is based on the number of days payments are
contractually past due.
(4) As a percentage of the total number of lease contracts at period end.
RETAIL VEHICLE LEASE CONTRACT REPOSSESSION AND LOSS EXPERIENCE
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
AT JUNE 30, -------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Dollar Amount of Lease Contracts(1)....... $ 7,240,346 $ 7,390,297 $ 6,527,588 $ 4,641,992 $ 2,798,830 $ 1,823,823
Ending Number of Lease Contracts.......... 341,546 346,802 304,863 231,942 156,471 114,298
Average Lease Contracts Outstanding....... 347,849 324,606 268,305 194,492 133,069 93,023
Repossessions:
Number of Repossessions................. 3,308 6,350 5,843 4,297 2,519 1,776
Number of Repossessions as a
Percentage of:
Lease Contracts Outstanding(4).......... 1.94% 1.83% 1.92% 1.85% 1.61% 1.55%
Average Lease Contracts Outstanding(4).. 1.90% 1.96% 2.18% 2.21% 1.89% 1.91%
Losses:
Average Net Receivables Outstanding..... $ 7,400,867 $ 6,951,688 $ 5,602,946 $ 3,718,336 $ 2,243,790 $ 1,426,382
Net Repossession Losses(2).............. $ 21,722 $ 42,531 $ 35,351 $ 23,196 $ 11,347 $ 6,283
Average Net Repossession Loss per
Liquidated Lease Contract(1)(3)....... $ 6,566 $ 6,698 $ 6,050 $ 5,398 $ 4,505 $ 3,538
Net Repossession Losses as a Percentage
of Average Net Receivables(4)......... 0.59% 0.61% 0.63% 0.62% 0.51% 0.44%
</TABLE>
- ------------------
(1) Based on the sum of all principal amounts outstanding under lease contracts
(inclusive of the residual values of the related leased vehicles).
(2) Includes losses on charged-off accounts, but does not include expenses
incurred to dispose of vehicles.
(3) Dollars not in thousands.
(4) The number for June 30, 1999 has been annualized.
24
<PAGE>
RESIDUAL VALUE LOSS EXPERIENCE(1)
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
AT JUNE 30, ----------------------------------------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Total Number of Leased Vehicles Scheduled to
Terminate.................................... 48,328 66,012 78,002 36,413 25,677
Number of Leased Vehicles Returned to and Sold
by World Omni................................ 23,968 26,342 22,555 5,018 4,611
Full Termination Ratio(2)...................... 49.6% 39.9% 28.9% 13.8% 18.0%
Total Losses (Gains) on Vehicles that Reached
Scheduled Term (3)........................... $47,008(4) $ 47,611(4) $ 27,338(4) $ 3,700 $ 1,893
Average Loss (Gain)(3)(5)...................... $ 1,961 $ 1,807 $ 1,212 $ 737 $ 411
<CAPTION>
1994
-----------
<S> <C>
Total Number of Leased Vehicles Scheduled to
Terminate.................................... 14,775
Number of Leased Vehicles Returned to and Sold
by World Omni................................ 779
Full Termination Ratio(2)...................... 5.3%
Total Losses (Gains) on Vehicles that Reached
Scheduled Term (3)........................... $ (168)
Average Loss (Gain)(3)(5)...................... $ (216)
</TABLE>
- ------------------
(1) To the extent that the average maturity of lease contracts varies over
time, the residual value loss experience for the periods in the table may
not be fully comparable.
(2) The ratio of line 2 over line 1 expressed as a percentage.
(3) Figures do not include expenses incurred in disposal of vehicles returned
to World Omni.
(4) Does not include losses related to World Omni's incentive programs of
approximately $428,348 for the six months ended June 30, 1999 and
approximately $9,427,425 and $1,879,447 at December 31, 1998 and December
31, 1997, respectively.
(5) Dollars not in thousands.
THE CONTRACTS
SELECTION AND TERMS OF THE CONTRACTS
World Omni selected the lease contracts to be initially allocated to the
SUBI (THE 'INITIAL CONTRACTS') and the related leased vehicles (THE 'INITIAL
LEASED VEHICLES') from the Origination Trust's portfolio of retail closed-end
automobile and light duty truck lease contracts that are not evidenced by or
reserved for allocation to an Other SUBI. During the Revolving Period, the
Origination Trustee will reinvest Principal Collections (and an amount equal to
Loss Amounts that otherwise would be distributed to the Noteholders) in
additional closed-end retail lease contracts (THE 'SUBSEQUENT CONTRACTS' AND,
TOGETHER WITH THE INITIAL CONTRACTS, THE 'CONTRACTS') and the related leased
vehicles (THE 'SUBSEQUENT LEASED VEHICLES' AND, TOGETHER WITH THE INITIAL LEASED
VEHICLES, THE 'LEASED VEHICLES'), which at the time of that reinvestment will
become SUBI Assets. For further information regarding this reinvestment, see
'Description of the Notes--Distributions on the Notes--Application and
Distributions of Principal--Revolving Period.
The Initial Contracts were, and the Subsequent Contracts will be,
originated by Dealers located throughout the United States and assigned to the
Origination Trust. For more details on the underwriting procedures that were and
will be used to originate the Contracts, see 'World Omni--Lease Contract
Underwriting Procedures'. World Omni selected the Initial Contracts, and will
select the Subsequent Contracts, based upon criteria specified by the SUBI Trust
Agreement. For a description of these criteria, see 'The
Contracts--Characteristics of the Contracts--Selection Criteria' and
'--Representations, Warranties and Covenants'.
Although World Omni generally will select Subsequent Contracts in its
discretion out of the entire pool of eligible lease contracts owned by the
Origination Trust, certain lease contracts booked from March 1, 1998 to May 31,
1999 have been reserved for allocation to the SUBI, so that Subsequent Contracts
will be selected first from this pool to the extent available. Also, certain
leases have been, and may in the future be, allocated to (or reserved for
allocation to) Other SUBIs and therefore not be available for allocation to the
SUBI. Further, if World Omni is selecting Subsequent Contracts for the SUBI at
the same time as it is allocating additional lease contracts to any
previously-established Other SUBIs out of the Origination Trust's general pool
of available lease contracts, World Omni will first allocate lease contracts to
those Other SUBIs. World Omni will represent and warrant that it employed no
other adverse selection procedures in selecting the Contracts and that it is not
aware of any selection bias that would cause their delinquencies or losses to be
worse than those of the Origination Trust's other retail closed-end automobile
and light duty truck lease
25
<PAGE>
contracts. However, we cannot assure you that the delinquencies or losses on the
Contracts will not be worse. Because World Omni may originate Subsequent
Contracts using different underwriting criteria than it used for the Initial
Contracts, the characteristics of the Subsequent Contracts may vary from those
of the Initial Contracts.
Each Contract has or will have an original term of no more than 60 months,
a 'capitalized cost' (which may exceed the manufacturer's suggested retail
price), plus an implicit rate calculated as an approximate annual percentage
rate (THE 'LEASE RATE'). The Contracts were or will be written on a constant
yield basis and provide for equal monthly payments ('MONTHLY PAYMENTS') so that
at the end of the lease term the capitalized cost will be amortized to an amount
equal to the residual value of the Leased Vehicle as established when the
Contract was originated (AS IT MAY BE ADJUSTED UNDER WORLD OMNI'S EXTENSION
PROGRAMS, THE 'RESIDUAL VALUE').
At the origination of the Contracts, the related Leased Vehicles were or
will be new vehicles, dealer demonstrator vehicles driven fewer than 6,000 miles
or manufacturers' program vehicles. Manufacturers' program vehicles are vehicles
which have been sold directly by manufacturers to rental car companies and
returned to the manufacturer for resale, generally after a period of eight to
twelve months. These vehicles generally are then resold to dealers through an
automobile auction.
All of the Contracts will be closed-end leases. Under a 'closed-end lease',
at the end of its term, if the lessee does not elect to purchase the leased
vehicle by exercise of the specified purchase option, the lessee is required to
return the leased vehicle to or upon the order of the lessor, and he or she will
owe only any unpaid contractual obligations, as well as any specified incidental
charges such as excess mileage and excessive wear and use. In contrast, under an
'open-end lease', the lessee also is obligated to pay at the end of the lease
term any deficit between the fair market value of the leased vehicle at that
time and the residual value established when the lease was originated.
Each Contract will provide that the lessor may terminate the Contract and
repossess the Leased Vehicle if the lessee defaults. Events of default under the
Contracts will include failure to make payment when due, certain events of
bankruptcy or insolvency, failure to maintain the required insurance coverage,
failure to maintain or repair the Leased Vehicle, failure to comply with any
other provision of the Contract, and material misrepresentations by the lessee
in his or her application.
Each lessee will be permitted to purchase the Leased Vehicle at the end of
the term of his or her Contract. The purchase price will be a fixed dollar
amount equal to the Residual Value plus a purchase option fee plus any
applicable taxes and other incidental charges due under the Contract. In
addition, each Contract will allow the lessee to voluntarily terminate the
Contract by paying certain miscellaneous charges and an Early Termination Charge
as described below. World Omni expects that many Contracts will not run to their
full terms. For further information related to the relationship between payments
on the Contracts and the effective yield on the Notes, see 'Risk Factors--You
May Be Required to Reinvest Your Principal Earlier Than Expected Because of
Earlier Than Expected Payments of the Notes' and 'Maturity, Prepayment and Yield
Considerations'.
Each Contract will provide that when the lessee terminates the Contract
early, is not in default and does not exercise his or her option to purchase the
Leased Vehicle, he or she must pay an amount (THE 'EARLY TERMINATION CHARGE')
equal to:
(1) The amount of the Monthly Payment times the number of Monthly Payments
not yet made; plus
(2) Any other unpaid amounts under the Contract, other than excess mileage
and excessive wear and use charges, that are not prohibited by
applicable law, plus
(3) Any official fees and taxes related to the termination of the
Contract; plus
(4) The Residual Value; plus
(5) The disposition fee set forth in the Contract (generally, either
$250.00 or $350.00); minus
(6) The Realized Value of the Leased Vehicle; minus
26
<PAGE>
(7) The unearned lease charges calculated in accordance with an actuarial
method.
Under the actuarial method of determining unearned lease charges, the Contracts
will provide that the monthly lease charges (including those for the month in
which the early termination occurs) are earned in advance on the scheduled due
dates of the Monthly Payments and that the Monthly Payments are deemed to have
been received on their scheduled due dates.
If the Contract is terminated early and the lessee is in default, he or she
will owe the sum of:
(1) The Early Termination Charge;
(2) All collection, repossession, storage, preparation and sale expenses
of the Leased Vehicle, to the extent permitted by applicable law;
(3) Attorneys' fees and disbursements incurred after default, not to
exceed 15% of the amount the lessee owes (or any lesser rate required
by applicable law); and
(4) Simple interest at a rate of 15% per year (or any lesser rate required
by applicable law) on all of the lessor's expenses and all of the
lessee's obligations after termination, other than earned but unpaid
Lease Charges.
The 'REALIZED VALUE' of a Leased Vehicle will be the price the Servicer
receives on disposition of the Leased Vehicle. World Omni will sell the Leased
Vehicles at wholesale or otherwise determine its wholesale value in a
commercially reasonable manner. However, each Contract provides that the lessee
has the right to obtain from a qualified independent appraiser acceptable to the
lessor a written appraisal of the wholesale value of the Leased Vehicle. This
appraised value then would be used as the wholesale value for purposes of
calculating the amount the lessee owes.
If a Contract is terminated early and the lessee is in default, the
Servicer ultimately may collect a net amount that is less than the amount to
which its capitalized cost has been amortized at that point in time (THE
'OUTSTANDING PRINCIPAL BALANCE'). This shortfall may be due to, among other
things, the use of wholesale appraisal of a Leased Vehicle in calculating the
amount due from the lessee. If a Contract reaches the due date for its last
Monthly Payment, after any extensions (THE 'MATURITY DATE'), the Servicer may
not be able to sell or otherwise dispose of the Leased Vehicle for a net amount
at least equal to its Residual Value. If any of these shortfalls is not covered
by the available sources of extra protection to the Class A Noteholders, you may
suffer a loss on your investment. See 'The Trust--Additional Protection for
Class A Noteholders' for a summary description of these sources of extra
protection.
CHARACTERISTICS OF THE CONTRACTS
Selection Criteria
World Omni selected or will select the Contracts by reference to several
criteria, including, as of the related Cutoff Date, that each Contract:
(1) Relates to a Leased Vehicle that was at the time of the origination a
new vehicle, a limited mileage dealer demonstrator vehicle, or a
manufacturer's program vehicle;
(2) Was originated in the United States after November 1, 1993 in the case
of the Initial Contracts and on or before August 31, 2000 in the case
of the Subsequent Contracts;
(3) Has a Maturity Date on or after May 1, 2000 and no later than February
28, 2004 in the case of the Initial Contracts and no later than August
31, 2005 in the case of the Subsequent Contracts;
(4) Fully amortizes to an amount equal to the Residual Value of the Leased
Vehicle based on a fixed Lease Rate calculated on a constant yield
basis and provides for level payments over its term (except for
payment of the Residual Value);
(5) Was not more than 60 days past due; and
(6) Has never been extended for more than five months in the aggregate.
(SUBI Trust Agreement, Section 10.01).
27
<PAGE>
General Portfolio Characteristics of Initial Contracts and Leased Vehicles
There are 49,883 Initial Contracts. As of April 1, 1999 (THE 'INITIAL
CUTOFF DATE'), the Lease Rate of the Initial Contracts ranged from 3.00% to
12.98%, with a weighted average Lease Rate of 8.17%. The aggregate of the
original principal balances of the Initial Contracts as of their origination
dates was $1,269,796,940. As of the Initial Cutoff Date, the aggregate
Outstanding Principal Balance of the Initial Contracts was $1,199,262,835, the
aggregate Residual Value of the Initial Leased Vehicles was $819,048,502, and
the Initial Contracts had a weighted average original term of 39.96 months and a
weighted average remaining term to scheduled maturity of 32.99 months. As of the
Initial Cutoff Date, the aggregate Discounted Principal Balance of the Initial
Contracts and the Aggregate Net Investment Value was $1,160,510,742.
The 'AGGREGATE NET INVESTMENT VALUE' as of any day will equal the sum of:
(1) The Discounted Principal Balance of all Contracts other than
Charged-off, Liquidated, Matured and Additional Loss Contracts;
(2) The aggregate Residual Values of all Leased Vehicles under Contracts
that reached their Maturity Dates (EACH, A 'MATURED CONTRACT') within
the three immediately preceding Collection Periods, but which, as of
the last day of the most recent Collection Period, had been unsold and
not otherwise disposed of by the Servicer for no more than two full
Collection Periods ('MATURED LEASED VEHICLE INVENTORY'); and
(3) During the Revolving Period, the amount of Principal Collections and
Loss Amounts that otherwise would be distributed to the Noteholders,
if any, that have not been reinvested in Subsequent Contracts and
Subsequent Leased Vehicles.
The 'DISCOUNTED PRINCIPAL BALANCE' of any Contract with a Lease Rate of
less than 9.70% (A 'DISCOUNTED CONTRACT') will equal the present value of all
remaining Monthly Payments on that Contract and the Residual Value of the
related Leased Vehicle, calculated using a discount rate of 9.70%, and of any
Contract with a Lease Rate greater than 9.70% will equal the Outstanding
Principal Balance of that Contract. For a description of how principal payments
on Discounted Contracts will be discounted to determine Principal Collections,
see 'Description of the Notes--Calculation and Allocation of Collections and
Loss Amounts'.
The following is some additional information regarding the characteristics
of the Initial Contracts and the Initial Leased Vehicles:
INITIAL CONTRACTS
<TABLE>
<CAPTION>
AVERAGE MINIMUM MAXIMUM
---------- --------- ----------
<S> <C> <C> <C>
Original Principal Balance............................. $25,455.50 $6,864.26 $91,445.23
Outstanding Principal Balance(1)....................... $24,041.51 $6,808.46 $84,339.99
Residual Value......................................... $16,419.39 $3,014.55 $59,660.85
Lease Rate(1).......................................... 8.17%(2) 3.00% 12.98%
Seasoning (months)(1).................................. 6.97(2) 2 16
Remaining Term (months)(1)............................. 32.99(2) 13 58
</TABLE>
- ------------------
(1) As of the Initial Cutoff Date.
(2) Weighted by Outstanding Principal Balance as of the Initial Cutoff Date.
28
<PAGE>
Distribution of the Initial Leased Vehicles by Make
As of the Initial Cutoff Date, the composition of the Initial Leased
Vehicles by make of vehicle was as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF NUMBER OF
VEHICLE MAKE INITIAL CONTRACTS INITIAL CONTRACTS
- ------------ ----------------- -----------------
<S> <C> <C>
Toyotas............................................................... 22,809 45.73%
United States manufacturers........................................... 24,754 49.62
Other Japanese manufacturers.......................................... 544 1.09
Other foreign manufacturers........................................... 1,776 3.56
------- -------
Total............................................................... 49,883 100.00%
</TABLE>
Distribution of the Initial Contracts by Lease Rate
The distribution of the Initial Contracts as of the Initial Cutoff Date by
Lease Rate was as follows:
<TABLE>
<CAPTION>
INITIAL PERCENTAGE OF AGGREGATE
PERCENTAGE OF CUTOFF DATE INITIAL CUTOFF DATE
NUMBER OF NUMBER OF OUTSTANDING OUTSTANDING
LEASE RATE RANGE INITIAL CONTRACTS INITIAL CONTRACTS PRINCIPAL BALANCE PRINCIPAL BALANCE
- ---------------- ----------------- ----------------- ----------------- -----------------------
<S> <C> <C> <C> <C>
3.00% to 3.99%........... 885 1.77% $ 17,176,411.27 1.43%
4.00% to 4.99%........... 1,982 3.97 35,047,876.75 2.92
5.00% to 5.99%........... 1,654 3.32 27,216,920.74 2.27
6.00% to 6.99%........... 3,918 7.85 77,152,493.36 6.43
7.00% to 7.99%........... 12,331 24.72 310,946,652.68 25.93
8.00% to 8.99%........... 17,207 34.49 453,570,437.19 37.82
9.00% to 9.99%........... 8,963 17.97 210,329,676.60 17.54
10.00% to 10.99%........... 2,088 4.19 49,444,938.57 4.12
11.00% to 11.99%........... 701 1.41 15,270,622.12 1.28
12.00% to 12.99%........... 154 0.31 3,106,805.37 0.26
------ ------ ----------------- ------
Total.................... 49,883 100.00% $1,199,262,834.65 100.00%
</TABLE>
Distribution of the Initial Contracts by Maturity
The distribution of the Initial Contracts as of the Initial Cutoff Date by
year of maturity was as follows:
<TABLE>
<CAPTION>
INITIAL PERCENTAGE OF AGGREGATE
PERCENTAGE OF CUTOFF DATE INITIAL CUTOFF DATE
NUMBER OF NUMBER OF OUTSTANDING OUTSTANDING
YEAR OF MATURITY INITIAL CONTRACTS INITIAL CONTRACTS PRINCIPAL BALANCE PRINCIPAL BALANCE
- ---------------- ----------------- ----------------- ----------------- -----------------------
<S> <C> <C> <C> <C>
2000....................... 1,631 3.27% $ 45,128,456.93 3.76%
2001....................... 23,094 46.30 542,580,780.90 45.24
2002....................... 19,955 40.00 478,684,329.77 39.92
2003....................... 4,372 8.76 110,051,141.33 9.18
2004....................... 831 1.67 22,818,125.72 1.90
------- ------- ----------------- -------
Total.................... 49,883 100.00% $1,199,262,834.65 100.00%
</TABLE>
29
<PAGE>
Distribution of the Initial Contracts by State
The distribution of the Initial Contracts as of the Initial Cutoff Date by
state of origination, broken out for states representing 5% or more of the
number of Initial Contracts, was as follows:
<TABLE>
<CAPTION>
INITIAL PERCENTAGE OF AGGREGATE
PERCENTAGE OF CUTOFF DATE INITIAL CUTOFF DATE
NUMBER OF NUMBER OF OUTSTANDING OUTSTANDING
STATE BALANCE INITIAL CONTRACTS INITIAL CONTRACTS PRINCIPAL BALANCE PRINCIPAL BALANCE
- ------------- ----------------- ----------------- ----------------- -----------------------
<S> <C> <C> <C> <C>
Florida.................... 16,313 32.70% $ 352,367,907.22 29.38%
Georgia.................... 6,069 12.17 137,873,271.55 11.50
North Carolina............. 5,401 10.83 117,284,618.27 9.78
Alabama.................... 3,612 7.24 81,582,650.39 6.80
New Jersey................. 3,536 7.09 96,243,436.84 8.03
New York................... 2,521 5.05 68,320,586.27 5.70
All other states........... 12,431 24.92 345,590,364.11 28.81
------- ------- ----------------- -------
Total.................... 49,883 100.00% $1,199,262,834.65 100.00%
</TABLE>
REPRESENTATIONS, WARRANTIES AND COVENANTS
The Servicer will prepare a schedule describing the Initial Contracts and
Initial Leased Vehicles, which will be attached as an exhibit to the SUBI Trust
Agreement. The Servicer will amend this schedule from time to time as Subsequent
Contracts and Subsequent Leased Vehicles become SUBI Assets during the Revolving
Period.
This schedule will identify each Contract by identification number, will
identify each Leased Vehicle by its vehicle identification number and will set
forth as to each such Contract, among other things, its:
(1) Date of origination;
(2) Maturity Date;
(3) Monthly Payment;
(4) Original Outstanding Principal Balance;
(5) Outstanding Principal Balance and Discounted Principal Balance as of
the related Cutoff Date; and
(6) Residual Value.
(Servicing Agreement, Sections 1.01 and 10.01).
In the Servicing Agreement, World Omni will represent and warrant that each
Contract and Leased Vehicle satisfies the applicable selection criteria. See
'--Selection Criteria' for a description of these requirements.
World Omni also will represent and warrant as to each Contract and, to the
extent applicable, the related Leased Vehicle or lessee, that:
(1) It was originated by a Dealer located in the United States in the
ordinary course of its business and in compliance with World Omni's
normal credit and collection policies and practices;
(2) It is owned by the Origination Trustee, on behalf of the Origination
Trust, free of all liens, encumbrances or rights of others (other
than the Administrative Lien);
(3) It was originated in compliance with, and complies with, all material
applicable legal requirements;
(4) All material consents, licenses, approvals or authorizations of, or
registrations or declarations with, any governmental authority
required to be obtained, effected or given by the originator of the
Contract and the Origination Trustee in connection with the
origination of the Contract, the execution, delivery and performance
by the originator of the Contract and the acquisition by the
Origination Trust of the Contract and Leased Vehicle, have been duly
obtained, effected or given and are in full force and effect as of
the date of creation or acquisition;
(5) It is the legal, valid and binding obligation of the lessee;
30
<PAGE>
(6) To the knowledge of the Servicer, it is not subject to any right of
rescission, setoff, counterclaim or any other defense of the lessee
to pay the Outstanding Principal Balance and no such right, defense
or counterclaim has been asserted or threatened;
(7) Each of the Dealer, the Servicer and the Origination Trustee has
satisfied all of its obligations;
(8) It is payable solely in United States dollars in the United States;
(9) The lessee is located in the United States and is not ALF LLC (or its
predecessor), ALF L.P., WOLS LLC (or its predecessor), the Transferor
or any of their respective affiliates, or the United States or any
state or local government, or any agency, department or
instrumentality of the United States or any state or local
government;
(10) It requires the lessee to maintain insurance against loss or damage
to the related Leased Vehicle under an insurance policy that names
the Origination Trustee as loss payee, and the Leased Vehicle is
covered by the Residual Value Insurance Policy;
(11) The certificate of title is registered in the name of the Origination
Trustee (or a properly completed application has been submitted to
the appropriate titling authority);
(12) It is a closed-end lease that requires equal monthly payments to be
made within 60 months of its origination date and requires those
payments to be made within 30 days after the billing date;
(13) It is fully assignable and does not require the consent of the lessee
as a condition to any transfer, sale or assignment of the rights of
the originator;
(14) It has a Residual Value that does not exceed the lesser of $60,000
and an amount reasonably established by the Servicer consistent with
its policies and practices for setting residual values in closed-end
retail automobile and light duty truck leases;
(15) It has never been extended by more than five months in the aggregate
or otherwise modified except in accordance with World Omni's normal
credit and collection policies and practices;
(16) The lessee has not made a claim under the Soldiers' and Sailors'
Civil Relief Act of 1940;
(17) It is not an Other SUBI Asset;
(18) The lessee is not bankrupt or currently the subject of a bankruptcy
proceeding;
(19) It is not more than 60 days past due;
(20) It is a finance lease for accounting purposes; and
(21) It is a 'true lease' for applicable state law purposes.
(SUBI Trust Agreement, Section 10.01; Servicing Agreement, Sections 8.01 and
9.01).
The Servicing Agreement will provide that if the Origination Trustee, World
Omni, the Owner Trustee, the Indenture Trustee or the Transferor discovers a
breach of any of these representations, warranties or covenants that materially
and adversely affects the interest of the Trustee, the Indenture Trustee or the
Noteholders in a Contract or Leased Vehicle, and World Omni does not cure the
breach in all material respects within 60 days after it discovers or receives
notice of the breach, World Omni will be required to make a deposit (or cause to
be deposited) into the SUBI Collection Account. The amount of the required
deposit (THE 'REALLOCATION PAYMENT') will equal the Discounted Principal Balance
of the nonconforming Contract on the last day of the Collection Period during
which the cure period ended, plus any imputed lease charge on the Contract (at
its Lease Rate) that was delinquent as of the end of that Collection Period.
World Omni's obligation to make Reallocation Payments will survive its
termination as Servicer. (Servicing Agreement, Sections 8.03 and 11.01).
In addition to these representations, warranties and covenants, the
Servicing Agreement also will impose several conditions precedent to the
reinvestment of Principal Collections (and an amount equal to Loss Amounts that
otherwise would be distributed to the Noteholders) in Subsequent Contracts and
Subsequent Leased Vehicles during the Revolving Period. These include the
following (unless the Indenture Trustee
31
<PAGE>
receives confirmation from each Rating Agency that the use of different criteria
will not result in the qualification, reduction or withdrawal of its rating on
any Class of Notes):
(1) Each Subsequent Contract will be allocated as a SUBI Asset based upon
its Discounted Principal Balance as of the relevant Cutoff Date;
(2) The weighted average remaining term of the Contracts (including the
Subsequent Contracts) is not greater than 38 months; and
(3) The weighted average Residual Value of the Leased Vehicles to the
Contracts (including the Subsequent Leased Vehicles), as a percentage
of the aggregate Outstanding Principal Balance of the Contracts
(including the Subsequent Contracts), in each case as of the related
origination dates is not greater than 67%.
(Servicing Agreement, Section 8.02).
MATURITY, PREPAYMENT AND YIELD CONSIDERATIONS
A variety of factors may affect the life of the Class A Notes, including
the prepayment experience of the pool of Contracts.
Absent an Early Amortization Event, the Trust will not begin paying
principal to Noteholders until the October 2000 Distribution Date. However, the
Origination Trust may not own enough lease contracts and leased vehicles meeting
the relevant selection criteria during the Revolving Period to allow for the
full reinvestment of Principal Collections (and an amount equal to Loss Amounts
that otherwise would be distributed to the Noteholders) in Subsequent Contracts
and Subsequent Leased Vehicles. This may result either from greater than
expected Principal Collections or Loss Amounts, or if Dealers have not assigned
enough lease contracts and leased vehicles meeting the relevant selection
criteria to the Origination Trust. Either of these circumstances could result in
an Early Amortization Event, in which case the Amortization Period would begin
before September 1, 2000 and the Trust would begin paying principal to
Noteholders before the October 2000 Distribution Date. See 'Description of the
Notes--Early Amortization Events' for a description of Early Amortization Events
and their results.
The retail automobile and light duty truck leasing business in the United
States may be affected by a variety of social, economic and geographic factors,
including economic factors such as interest rates, unemployment levels, the rate
of inflation and consumer perceptions of economic conditions. However, we cannot
predict these factors, how they will affect the leasing industry generally, or
whether prepayments and losses on the Contracts and Leased Vehicles and the
Dealers' ability to originate qualified leases will follow industry trends.
The Notes will be 'pay though' securities. Therefore, the amount of
Principal Collections and Loss Amounts distributed to Noteholders during the
Amortization Period will directly reflect the amount of payments and losses on
the Contracts and Leased Vehicles. We cannot predict with any certainty the rate
or timing of payments or losses on the Contracts or Leased Vehicles, or the rate
or timing of principal payments on the Notes or their yield to maturity. A
substantial increase in the rate of payments on the Contracts and Leased
Vehicles during the Amortization Period or a high level of losses may shorten
the final maturity of, and may significantly affect the yields on, the Notes.
For a description of distributions on the Notes, see 'Description of the
Notes--Distributions on the Notes--Distributions of Interest' and '--Application
and Distributions of Principal'.
Other events may cause an accelerated payment of principal on the Notes. If
there are Excess Collections on any Distribution Date relating to the
Amortization Period, the Trust will distribute the Accelerated Principal
Distribution Amount as principal to the Noteholders. The Trust also may pay
principal on the Notes faster if World Omni makes Reallocation Payments to the
Origination Trust. The Transferor may purchase all of the Trust's assets when
the Note Balance is less than ten percent of the Initial Note Balance, which
would trigger a redemption and prepayment of the Notes. See 'Description of the
Notes-- Distributions on the Notes--Distributions of Interest' for a description
of the Accelerated Principal Distribution Amount, 'The
Contracts--Representations, Warranties and Covenants' for a description of
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<PAGE>
Reallocation Payments and 'Description of the Notes--Termination of the Trust;
Redemption of the Notes' for a discussion of the repurchase by the Transferor of
the Trust's assets.
World Omni estimates that over calendar years 1996, 1997 and 1998 an
average of approximately 70% of the number of retail automobile and light duty
truck lease contracts in its portfolio (including those owned by the Origination
Trust and by various special purpose finance subsidiaries of World Omni) with
scheduled maturities during that period were terminated prior to maturity. These
early terminations primarily were due either to voluntary prepayment (a lessee
may prepay his or her lease at any time in return for payment of their remaining
lease contract obligations and a processing fee that generally equals $250 or
$350) or to repossession of the leased vehicle after the lessee's default under
the lease. We cannot predict with any certainty whether the prepayment or
default rates for the Contracts and Leased Vehicles will bear any relationship
to World Omni's historical rates.
As a part of its pro-active lease termination programs, World Omni monitors
its overall portfolio and encourages lessees with remaining lease terms of less
than one year to buy, trade in or refinance their leased vehicles early. These
programs may include selectively offered incentives to encourage customer
loyalty and to minimize anticipated residual value losses on lease contracts
scheduled to reach maturity in the near term. These incentives generally occur
during the last year of a lease contract (typically the last six months), and
for the years 1996, 1997 and 1998 and the six months ended June 30, 1999 the
losses relating to these incentives were $223,303, $1,879,447, $9,427,425 and
$428,348, respectively. World Omni may continue the use of these incentive
programs in the future. All such losses relating to the Contracts will
constitute Residual Value Loss Amounts and, therefore, will be covered by the
Residual Value Insurance Policy.
Early terminations (whether due to prepayment or default) may result in
earlier principal payments on the Contracts, and early terminations due to
default may result in Loss Amounts. Earlier principal payments on the Contracts,
and distributions to Noteholders of Loss Amounts, will result in earlier payment
of the principal on Notes. We cannot assure you that the Contracts will
experience the same rate of prepayment or default or any greater or lesser rate
than World Omni's historical rate, or that the Residual Value experience of
Leased Vehicles under Contracts that have reached their Maturity Dates will not
differ from World Omni's historical residual value loss experience. For the
distribution of the Initial Contracts by year of maturity, see 'The
Contracts--Characteristics of the Contracts--Distribution of the Initial
Contracts by Maturity', and for World Omni's historical levels of lease contract
defaults, leased vehicle repossessions and losses and residual value losses, see
'World Omni--Delinquency, Repossession and Loss Data'.
Note also that the Trust will invest money on deposit in the Accounts, and
Principal Collections (and Loss Amounts that otherwise would be distributed to
the Noteholders) that have not been reinvested in Subsequent Contracts and
Subsequent Leased Vehicles during the Revolving Period, in Permitted
Investments. Although all gain and other income from those investments will be
available for the Trust to make the distributions of interest and related
distributions, we cannot assure you as to the rate of return that the Trust will
realize on those Permitted Investments. For a description of interest and
related distributions, see 'Description of the Notes--Distributions on the
Notes--Distributions of Interest'.
The effective yield on, and average life of, each Class of Class A Notes
will depend upon, among other things, the amount of scheduled and unscheduled
payments on or in respect of the Contracts and the Leased Vehicles and the rate
at which the Trust distributes those payments to the Class A Noteholders. If the
Trust pays the Class A Notes faster than you expect for any of the reasons
discussed above, you and the other Class A Noteholders will bear the entire risk
that you will have to reinvest the principal on your Class A Notes earlier than
expected, at an interest rate lower than your Note Rates. The timing of changes
in the rate of prepayments on the Contracts and payments in respect of the
Leased Vehicles may also affect significantly your actual yield to maturity and
the average life of your Class A Notes. A substantial increase in the rate of
payments on the Contracts and Leased Vehicles (including prepayments and
liquidations) during the Amortization Period may shorten the final maturity of
and may significantly affect the yield on your Class A Notes. If you purchase
Class A Notes in the secondary market at a price other than par, your yield will
vary from the anticipated yield if the rate of prepayment on the Contracts
differs from the rate you anticipated when you purchased your Class A Notes.
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<PAGE>
In sum, the following factors will affect your expected yield:
(1) The price you paid for your Class A Notes;
(2) The rate of prepayments on the Contracts and Leased Vehicles, and of
Loss Amounts; and
(3) Your assumed reinvestment rate.
These factors do not operate independently, but are interrelated. For example,
if the rate of prepayments on the Contracts and Leased Vehicles or Loss Amounts
is slower than you now anticipate, your yield will be lower if then-prevailing
interest rates are higher than you now anticipate and higher if then-prevailing
interest rates are lower than you now anticipate. Conversely, if the rate of
prepayments on the Contracts and Leased Vehicles or Loss Amounts is faster than
anticipated, your yield will be higher if interest rates are higher than you
anticipated and lower if interest rates are lower than you anticipated.
In general, during the Amortization Period, the Trust will distribute the
Investor Percentage of Principal Collections first to the Class A-1 Noteholders
until the Class A-1 Notes have been paid in full, second to the Class A-2
Noteholders until the Class A-2 Notes have been paid in full, third to the Class
A-3 Noteholders until the Class A-3 Notes have been paid in full, and fourth to
the Class A-4 and Class B Noteholders pro rata based on the Class A Percentage
and the Class B Percentage. The Servicer will calculate the Class A Percentage
and the Class B Percentage for purposes of allocating the Investor Percentage of
Principal Collections when the Class A-1, Class A-2 and Class A-3 Notes have
been paid in full, which may affect the maturity and yield on the Class A-4
Notes. Unless the Note Balance of the Class B Notes has been reduced to zero,
the Trust will distribute any Covered Loss Amount first to the Class A-1
Noteholders until the Class A-1 Notes have been paid in full, second to the
Class A-2 Noteholders until the Class A-2 Notes have been paid in full, third to
the Class A-3 Noteholders until the Class A-3 Notes have been paid in full, and
fourth to the Class A-4 Noteholders until the Class A-4 Notes have been paid in
full. In sum, you may not receive any distributions of principal on your Class A
Notes until every lower-numbered Class of Class A Notes has been paid in full.
The Trust will allocate any Uncovered Loss Amount first to the Class B
Notes (and will write down the Class B Note Balance correspondingly) until the
Class B Note Balance has been reduced to zero, and second to the Class A Notes
pro rata (and write down the Class A-1, Class A-1, Class A-3 and Class A-4 Note
Balances correspondingly), based on the Class A-1, Class A-2, Class A-3 and
Class A-4 Allocation Percentages. Therefore, the Class A-2 Notes may be
allocated more Uncovered Loss Amounts than the Class A-1 Notes, the Class A-3
Notes may be allocated more Uncovered Loss Amounts than the Class A-1 or A-2
Notes, and the Class A-4 Notes may be allocated more Uncovered Loss Amounts than
the Class A-1, A-2 or A-3 Notes, in each case as a relative percentage of their
Initial Note Balances. This is primarily because of the sequential payment of
principal on the Class A Notes, and because the Class A-1, Class A-2, Class A-3
and Class A-4 Allocation Percentages will be calculated based on the ratio of
the then-current Class A-1, Class A-2, Class A-3 and Class A-4 Note Balances.
This ratio will increase as the Note Balance of each Class of Class A Notes
senior in priority of payment decreases during the Amortization Period.
We provide the following information solely to illustrate the effect of
prepayments of the Contracts on the Class A-1, Class A-2, Class A-3 and Class
A-4 Note Balances and the weighted average life of each Class of Class A Notes
under the assumptions stated below. We do not purport to predict the prepayment
rates that the Contracts might actually experience.
Prepayments on automobile lease contracts may be measured by a prepayment
standard or model. We will use a prepayment model expressed in terms of
percentages of 'ABS', which means a prepayment model that assumes a constant
percentage of the original number of Contracts in a pool prepay each month. Our
base prepayment assumption (THE 'PREPAYMENT ASSUMPTION') assumes that, based on
the additional assumptions in the next paragraph, the original Outstanding
Principal Balance of a Contract will prepay as follows
(1) 0.30% ABS for the first six months of the life of the Contract;
(2) 0.50% ABS for the seventh through twelfth month of the life of the
Contract;
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<PAGE>
(3) 0.65% ABS for the thirteenth through eighteenth month of the life of
the Contract;
(4) 0.85% ABS for the nineteenth through twenty-fourth month of the life
of the Contract;
(5) 1.10% ABS for the twenty-fifth through thirtieth month of the life of
the Contract; and
(6) 1.60% ABS following the thirtieth month of the life of the Contract
until the original Outstanding Principal Balance of the Contract has
been paid in full.
Neither ABS nor the Prepayment Assumption purports to be a historical
description of prepayment experience or a prediction of the anticipated rate of
prepayment of lease contracts, including the Contracts. We cannot assure you
that the Contracts will prepay at the levels of the Prepayment Assumption or at
any other rate.
We prepared the tables below on the basis of certain additional
assumptions, including that:
(1) All Collections (including Monthly Payments and Net Matured Leased
Vehicle Proceeds) are received timely, and no Contracts are ever
delinquent;
(2) There are no Reallocation Payments or Reallocation Deposit Amounts;
(3) There are no Loss Amounts;
(4) The Transferor exercises its option to purchase the property of the
Trust;
(5) The Trust makes all distributions of principal (including any
Accelerated Principal Distribution Amount) and interest on the Class
A Notes on the required dates;
(6) The annual Servicing Fee is 1% of the Aggregate Net Investment Value;
(7) All Contract prepayments are full Prepayments;
(8) The Revolving Period ends on September 1, 2000;
(9) The Initial Contracts have assumed Lease Rates of 9.70%, and were
originated 7 months prior to the Initial Cutoff Date;
(10) The Closing Date is September 1, 1999;
(11) All Principal Collections for each Collection Period during the
Revolving Period are reinvested, on a Transfer Date that is the 15th
day of the following calendar month, in Subsequent Contracts that
have stated terms of 3 years, Lease Rates of 9.70% and Residual
Values equal to 65% of their original Outstanding Principal Balances,
were originated on August 31, 1999 and that otherwise have terms that
are substantially similar to those of the Initial Contracts; and
(12) One-Month LIBOR remains constant at 5.28%, and the Cap Rate is 6.50%.
We cannot predict the actual levels of losses and delinquencies on the
Contracts. Because we prepared the tables based on these assumptions, there will
be discrepancies between the actual characteristics of the Subsequent Contracts
and our assumed characteristics of the Subsequent Contracts, as well as other
discrepancies between our assumptions and the actual Contract experience. Any
such discrepancy may increase or decrease the percentage of the outstanding
Class A-1, Class A-2, Class A-3 or Class A-4 Note Balance and the weighted
average lives of each Class of Class A Notes as set forth in the tables. In
addition, because the Contracts will have characteristics that differ from our
assumptions, the Trust may make distributions of principal on the Class A Notes
earlier or later than as set forth in the tables. We urge you to make your
investment decision on a basis that includes your own determination as to
anticipated prepayment rates under a variety of the assumptions we discuss.
The following tables set forth the percentages of the Initial Note Balance
of each Class of Class A Notes that would be outstanding after each of the dates
shown, based on rates equal to 0%, 50%, 100%, 150% and 200% of the Prepayment
Assumption. '0% Prepayment Assumption' assumes no prepayments on a Contract,
'50% Prepayment Assumption' assumes that a Contract will prepay at 50% of the
Prepayment Assumption, and so forth.
35
<PAGE>
PERCENTAGE OF INITIAL CLASS A PRINCIPAL BALANCE REMAINING
AND WEIGHTED AVERAGE LIFE OF CLASS A-1 NOTES
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTIONS
------------------------------------
DISTRIBUTION DATE 0% 50% 100% 150% 200%
- ----------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Initial Percentage.......................................................... 100 100 100 100 100
November 1999............................................................... 100 100 100 100 100
February 2000............................................................... 100 100 100 100 100
May 2000.................................................................... 100 100 100 100 100
August 2000................................................................. 100 100 100 100 100
November 2000............................................................... 90 86 82 76 68
February 2001............................................................... 76 67 56 41 22
May 2001.................................................................... 44 31 12 0 0
August 2001................................................................. 0 0 0 0 0
Weighted Average Life (Years)(1)............................................ 1.65 1.58 1.50 1.41 1.34
==== ==== ==== ==== ====
</TABLE>
- ------------------
(1) The weighted average life of the Class A-1 Notes is determined by (i)
multiplying the amount of each principal payment by the number of years
from the Closing Date to the related Distribution Date, (ii) adding the
results, and (iii) dividing the sum by the Initial Class A-1 Note Balance.
PERCENTAGE OF INITIAL CLASS A PRINCIPAL BALANCE REMAINING
AND WEIGHTED AVERAGE LIFE OF CLASS A-2 NOTES
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTIONS
------------------------------------
DISTRIBUTION DATE 0% 50% 100% 150% 200%
- ----------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Initial Percentage.......................................................... 100 100 100 100 100
November 1999............................................................... 100 100 100 100 100
February 2000............................................................... 100 100 100 100 100
May 2000.................................................................... 100 100 100 100 100
August 2000................................................................. 100 100 100 100 100
November 2000............................................................... 100 100 100 100 100
February 2001............................................................... 100 100 100 100 100
May 2001.................................................................... 100 100 100 78 0
August 2001................................................................. 94 78 53 6 0
November 2001............................................................... 38 24 0 0 0
February 2002............................................................... 16 0 0 0 0
May 2002.................................................................... 0 0 0 0 0
Weighted Average Life (Years)(1)............................................ 2.23 2.14 2.02 1.85 1.62
==== ==== ==== ==== ====
</TABLE>
- ------------------
(1) The weighted average life of the Class A-2 Notes is determined by (i)
multiplying the amount of each principal payment by the number of years
from the Closing Date to the related Distribution Date, (ii) adding the
results, and (iii) dividing the sum by the Initial Class A-2 Note Balance.
36
<PAGE>
PERCENTAGE OF INITIAL CLASS A PRINCIPAL BALANCE REMAINING
AND WEIGHTED AVERAGE LIFE OF CLASS A-3 NOTES
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTIONS
-------------------------------------------
DISTRIBUTION DATE 0% 50% 100% 150% 200%
- ----------------- --------- --------- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Initial Percentage.......................................................... 100 100 100 100 100
November 1999............................................................... 100 100 100 100 100
February 2000............................................................... 100 100 100 100 100
May 2000.................................................................... 100 100 100 100 100
August 2000................................................................. 100 100 100 100 100
November 2000............................................................... 100 100 100 100 100
February 2001............................................................... 100 100 100 100 100
May 2001.................................................................... 100 100 100 100 38
August 2001................................................................. 100 100 100 100 22
November 2001............................................................... 100 100 100 37 1
February 2002............................................................... 100 100 65 0 0
May 2002.................................................................... 34 26 5 0 0
August 2002................................................................. 3 0 0 0 0
November 2002............................................................... 0 0 0 0 0
Weighted Average Life (Years)(1)............................................ 2.71 2.67 2.54 2.20 1.80
========= ========= ==== ==== ====
</TABLE>
- ------------------
(1) The weighted average life of the Class A-3 Notes is determined by (i)
multiplying the amount of each principal payment by the number of years
from the Closing Date to the related Distribution Date, (ii) adding the
results, and (iii) dividing the sum by the Initial Class A-3 Note Balance.
PERCENTAGE OF INITIAL CLASS A PRINCIPAL BALANCE REMAINING
AND WEIGHTED AVERAGE LIFE OF CLASS A-4 NOTES
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTIONS
------------------------------------
DISTRIBUTION DATE 0% 50% 100% 150% 200%
- ----------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Initial Percentage.......................................................... 100 100 100 100 100
November 1999............................................................... 100 100 100 100 100
February 2000............................................................... 100 100 100 100 100
May 2000.................................................................... 100 100 100 100 100
August 2000................................................................. 100 100 100 100 100
November 2000............................................................... 100 100 100 100 100
February 2001............................................................... 100 100 100 100 100
May 2001.................................................................... 100 100 100 100 100
August 2001................................................................. 100 100 100 100 100
November 2001............................................................... 100 100 100 100 100
February 2002............................................................... 100 100 100 91 81
May 2002.................................................................... 100 100 100 60 0
August 2002................................................................. 100 97 78 0 0
November 2002............................................................... 0 0 0 0 0
Weighted Average Life (Years)(1)............................................ 3.04 3.04 3.00 2.74 2.51
==== ==== ==== ==== ====
</TABLE>
- ------------------
(1) The weighted average life of the Class A-4 Notes is determined by (i)
multiplying the amount of each principal payment by the number of years
from the Closing Date to the related Distribution Date, (ii) adding the
results, and (iii) dividing the sum by the Initial Class A-4 Note Balance.
37
<PAGE>
CLASS A NOTE FACTORS AND TRADING INFORMATION;
REPORTS TO CLASS A NOTEHOLDERS
The 'CLASS A-1 NOTE FACTOR', the 'CLASS A-2 NOTE FACTOR', the 'CLASS A-3
NOTE FACTOR' and the 'CLASS A-4 NOTE FACTOR' each will be a seven-digit decimal
that the Servicer will compute each month indicating the Class A-1, Class A-2,
Class A-3 or Class A-4 Note Balance, as of the close of business on the
Distribution Date in that month, as a fraction of the Initial Note Balance of
the related Class of Class A Notes. Each Note Factor initially will be 1.0000000
and will remain unchanged during the Revolving Period, except in certain limited
circumstances where there are Uncovered Loss Amounts allocated to the relevant
Class of Class A Notes and the related Note Balance is written down
correspondingly. During the Amortization Period, each Note Factor will decline
to reflect reductions in the related Note Balance resulting from distributions
of principal and any Uncovered Loss Amounts. The portion of the Class A Note
Balance for a given month allocable to a Class A Noteholder can be determined by
multiplying the original denomination of the holder's Class A Note by the
related Note Factor for that month.
Pursuant to the Agreement, the Indenture Trustee will provide to all
registered holders of the Class A Notes (i.e., Cede as the nominee of DTC unless
the Trust issues Definitive Notes) unaudited monthly reports concerning payments
received on the Contracts and the Leased Vehicles, the Aggregate Net Investment
Value, the Investor Percentage, the Class A-1, Class A-2, Class A-3 and Class
A-4 Note Factors and various other items of information. Note Owners may obtain
copies of these reports by writing to the Indenture Trustee. The Indenture
Trustee also will furnish to Class A Noteholders tax reporting information for
each calendar year no later than the latest date permitted by law. For further
details concerning information that will be furnished to Noteholders and Note
Owners, see 'Description of the Notes--Statements to Noteholders' and
'Description of the Notes--Book-Entry Registration'.
DESCRIPTION OF THE NOTES
THE INDENTURE
The Trust will issue the Notes pursuant to an Indenture (THE 'INDENTURE'),
with Harris Trust and Savings Bank, as indenture trustee (THE 'INDENTURE
TRUSTEE'), a form of which (together with forms of the Agreement, the SUBI Trust
Agreement and the Servicing Agreement) we have filed as an exhibit to the
Registration Statement containing this prospectus. The summaries of the
provisions of the those documents contained below and elsewhere in this
prospectus do not purport to be complete and are subject to, and qualified in
their entirety by reference to, the provisions of those documents. Where we
refer in a summary to the particular provisions of or terms used in the
Indenture, the Agreement, the SUBI Trust Agreement and the Servicing Agreement,
we incorporate by reference the actual provisions (including definitions and
section references) of those documents.
SUMMARY OF THE TERMS OF THE NOTES
The Trust will issue $1,073,472,000 in aggregate initial principal amount
(THE 'INITIAL NOTE BALANCE') of Floating Rate Automobile Lease Asset Backed
Notes (THE 'NOTES'), in several classes (EACH, A 'CLASS'). (The date on which
the Trust will issue the Notes is the 'CLOSING DATE'.) We are offering the
following senior Classes of Notes under this prospectus:
(1) Floating Rate Automobile Lease Asset Backed Notes, Class A-1 (THE
'CLASS A-1 NOTES'), in the initial aggregate principal amount of
$330,000,000 (THE 'INITIAL CLASS A-1 NOTE BALANCE'), bearing interest
at an annual percentage rate equal to One-Month LIBOR plus %
(THE 'CLASS A-1 NOTE RATE');
(2) Floating Rate Automobile Lease Asset Backed Notes, Class A-2 (THE
'CLASS A-2 NOTES'), in the initial aggregate principal amount of
$310,000,000 (THE 'INITIAL CLASS A-2 NOTE BALANCE'), bearing interest
at an annual percentage rate equal to One-Month LIBOR plus %
(THE 'CLASS A-2 NOTE RATE');
38
<PAGE>
(3) Floating Rate Automobile Lease Asset Backed Notes, Class A-3 (THE
'CLASS A-3 NOTES'), in the initial aggregate principal amount of
$249,000,000 (THE 'INITIAL CLASS A-3 NOTE BALANCE'), bearing interest
at an annual percentage rate equal to One-Month LIBOR plus % (THE
'CLASS A-3 NOTE RATE'); and
(4) Floating Rate Automobile Lease Asset Backed Notes, Class A-4 (THE
'CLASS A-4 NOTES' AND, TOGETHER WITH THE CLASS A-1, CLASS A-2 AND
CLASS A-3 NOTES, THE 'CLASS A NOTES'), in the initial aggregate
principal amount of $184,472,000 (THE 'INITIAL CLASS A-4 NOTE
BALANCE' AND, TOGETHER WITH THE INITIAL CLASS A-1, CLASS A-2 AND
CLASS A-3 NOTE BALANCES, THE 'INITIAL CLASS A NOTE BALANCE'), bearing
interest at an annual percentage rate equal to One-Month LIBOR plus %
(THE 'CLASS A-4 NOTE RATE').
The Trust also will issue Floating Rate Automobile Lease Asset Backed Notes,
Class B (THE 'CLASS B NOTES') in the initial aggregate principal amount of
$60,927,000 (THE 'INITIAL CLASS B NOTE BALANCE'), bearing interest at a floating
rate, which will be subordinate to the Class A Notes. We are not offering the
Class B Notes under this prospectus. The Class B Notes initially will be held by
an affiliate of the Transferor.
The Trust will issue the Class A Notes in denominations of $1,000 and
integral multiples thereof in book-entry form. (Indenture, Section 2.02). The
Class A Notes initially will be represented by notes registered in the name of
Cede, the nominee of DTC, and persons acquiring interests in the Class A Notes
('NOTE OWNERS') generally will not be entitled to receive fully registered,
certificated notes ('DEFINITIVE NOTES') except in limited circumstances. Unless
Class A Notes are issued as Definitive Notes, where we refer to distributions,
notices, reports and statements to Class A Noteholders, this will mean those
same actions to DTC or Cede for the benefit of Note Owners in accordance with
DTC procedures. (Indenture, Section 2.10). For a description of the book-entry
registration of the Class A Notes, see 'Description of the Notes--Book-Entry
Registration', and for a description of the circumstances under which the Trust
will issue Definitive Notes, see 'Description of the Notes--Definitive Notes'.
The outstanding principal amount of a Class of Notes at any time (THE
'CLASS A-1 NOTE BALANCE', THE 'CLASS A-2 NOTE BALANCE', THE 'CLASS A-3 NOTE
BALANCE', THE 'CLASS A-4 NOTE BALANCE' AND THE 'CLASS B NOTE BALANCE',
RESPECTIVELY) will be equal to the Initial Note Balance of that Class, less the
sum of (i) all payments made on or before that date allocable to principal, (ii)
the aggregate amount of Uncovered Loss Amounts allocated to that Class of Notes,
and (iii) for the Class B Notes, any Class B Note Principal Carryover Shortfall.
(Agreement, Section 1.01). For a description of these distributions and
allocations, see 'Description of the Notes--Distributions on the
Notes--Distributions of Interest' and '-- Application and Distributions of
Principal'. At any time, the 'CLASS A NOTE BALANCE' will equal the sum of the
Class A-1, Class A-2, Class A-3 and Class A-4 Note Balances, and the 'NOTE
BALANCE' will equal the sum of the Class A and Class B Note Balances.
The holders of record of each Class of Notes (THE 'CLASS A-1 NOTEHOLDERS',
THE 'CLASS A-2 NOTEHOLDERS', THE 'CLASS A-3 NOTEHOLDERS', THE 'CLASS A-4
NOTEHOLDERS' AND THE 'CLASS B NOTEHOLDERS', RESPECTIVELY) will be entitled to
receive distributions of interest at the related Note Rate and certain
distributions of principal during the Amortization Period, funded from the
Investor Percentage of Interest Collections and Principal Collections and
certain other sources. The Class A-1, Class A-2, Class A-3 and Class A-4
Noteholders collectively will be the 'CLASS A NOTEHOLDERS', and the Class A and
Class B Noteholders collectively will be the 'NOTEHOLDERS'. The right of the
Class B Noteholders to receive payments of interest and principal will be
subordinated in certain respects to the right of the Class A Noteholders to
receive those payments. For a detailed description of the rights of the
Noteholders to receive distributions from the Trust, see 'Description of the
Notes--Distributions on the Notes'.
The final maturity date for each Class of Class A Notes (THE 'STATED
MATURITY DATE') will be as follows: for the Class A-1 Notes, February 15, 2002;
for the Class A-2 Notes, September 15, 2002; for the Class A-3 Notes, March 15,
2003; and for the Class A-4 Notes, October 15, 2005.
The Transferor will permanently retain the certificate representing the
Transferor Interest (THE 'TRANSFEROR CERTIFICATE'), which will represent the
entire equity interest in the Trust, including the right to
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receive the Transferor Percentage of Interest Collections and Principal
Collections. See 'Description of the Notes--Calculation and Allocation of
Collections and Loss Amounts' for the calculation of these percentages. The
Transferor Certificate will be subordinated to the Notes in certain respects.
For further information in this regard, see 'Description of the Notes--Certain
Payments to the Transferor'.
During the Revolving Period, the Note Balance will remain constant except
where there are Uncovered Loss Amounts, which will result in the write-down of
the Note Balances of certain Classes of Notes. During the Amortization Period,
the Note Balance will decline as the Trust distributes the Investor Percentage
of Principal Collections and Accelerated Principal Distribution Amounts to the
Noteholders and if there are Uncovered Loss Amounts. The Aggregate Net
Investment Value can change daily as lessees pay principal on the Contracts and
Leased Vehicles, as World Omni makes Reallocation Payments and pays Reallocation
Deposit Amounts (in the event of an uncured breach of certain representations
and warranties or servicing covenants as to the Contracts), as the Origination
Trust incurs liquidation and other losses on the Contracts and Leased Vehicles,
as the Trust sells or disposes of Leased Vehicles in Matured Leased Vehicle
Inventory, and as Leased Vehicles remain unsold for long enough that they no
longer are considered part of Mature Leased Vehicle Inventory.
TRANSFER OF THE SUBI IN EXCHANGE FOR THE NOTES
On the Closing Date, pursuant to the Agreement, the Transferor will
transfer the SUBI Certificate to the Owner Trustee and thereby transfer to the
Trust, without recourse, its entire interest in the SUBI. At the same time, the
Owner Trustee on behalf of the Trust will deliver the Notes and the Transferor
Certificate to or upon the order of the Transferor. (Agreement, Sections 2.02
and 4.02).
Pursuant to the Agreement, the Transferor will represent and warrant that,
immediately prior to its transfer of the SUBI Certificate to the Trust, it had
good title to, and was the sole legal and beneficial owner of, the SUBI
Certificate, free and clear of liens and claims. (Agreement, Section 5.01).
REALLOCATION PAYMENTS AND REALLOCATION DEPOSIT AMOUNTS
Under certain circumstances World Omni will be required to make
Reallocation Payments in respect of certain Contracts (and the related Leased
Vehicles) discovered not to be in compliance with World Omni's representations
or warranties or Contracts as to which it has not followed certain servicing
procedures where the failure materially and adversely affects the Contract. For
more information about Reallocation Payments, see 'The Contracts--
Representations, Warranties and Covenants' and 'Additional Document
Provisions--The Servicing Agreement-- Collections'. When World Omni makes a
Reallocation Payment during the Amortization Period (but not during the
Revolving Period), the Aggregate Net Investment Value will decline by an amount
equal to the Discounted Principal Balance of the relevant Contract, which will
reduce the Transferor Interest by the same amount. The Contract and the related
Leased Vehicle will no longer constitute SUBI Assets, because they will be
reallocated as UTI Assets. If this reduction would cause the Transferor Interest
to become less than zero, World Omni also will be required to deposit an amount
equal to that deficit (THE 'REALLOCATION DEPOSIT AMOUNT') into the SUBI
Collection Account. If World Omni is required to pay a Reallocation Deposit
Amount, reallocation of the related Contract and Leased Vehicle will not occur
unless it actually makes that payment. (Servicing Agreement, Section 8.03).
CALCULATION AND ALLOCATION OF COLLECTIONS AND LOSS AMOUNTS
Pursuant to the Servicing Agreement, the Servicer will allocate all
Interest Collections and (during the Amortization Period) Principal Collections
received during each calendar month (or, for the initial such period, from the
Initial Cutoff Date through August 31, 1999) (A 'COLLECTION PERIOD') between the
Notes and the Transferor Certificate, based on the Investor Percentage and the
Transferor Percentage. The Servicer also will make similar allocations of all
Loss Amounts for each Collection Period. (SUBI Trust Agreement, Sections 10.01
and 12.01; Servicing Agreement, Section 9.02).
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'COLLECTIONS' for any Collection Period will include all net collections
received on the Contracts and Leased Vehicles during that Collection Period
other than Insured Residual Value Loss Amounts paid under the Residual Value
Insurance Policy, such as:
(1) Monthly Payments, including amounts collected in previous Collection
Periods that represented Monthly Payments not yet due at that time
('PAYMENTS AHEAD'), but which became due during the current
Collection Period;
(2) Early payments of the Outstanding Principal Balance of a Contract
('PREPAYMENTS');
(3) Advances by the Servicer;
(4) Proceeds from the sale or other disposition of Leased Vehicles under
Matured Contracts (including payments for excess mileage and excess
wear and use, but excluding Insured Residual Value Loss Amounts paid
under the Residual Value Insurance Policy) ('MATURED LEASED VEHICLE
PROCEEDS'), net of expenses ('MATURED LEASED VEHICLE EXPENSES')
incurred in connection with the realization of those Matured Leased
Vehicle Proceeds ('NET MATURED LEASED VEHICLE PROCEEDS');
(5) Proceeds received from the sale or other disposition of repossessed
Leased Vehicles ('REPOSSESSED VEHICLE PROCEEDS'), net of expenses
('REPOSSESSED VEHICLE EXPENSES') incurred in connection with the
realization of those Repossessed Vehicle Proceeds ('NET REPOSSESSED
VEHICLE PROCEEDS');
(6) Other amounts received in connection with the realization of the
amounts due under any Contract (TOGETHER WITH MATURED LEASED VEHICLE
PROCEEDS AND REPOSSESSED VEHICLE PROCEEDS, 'LIQUIDATION PROCEEDS'),
net of other expenses (TOGETHER WITH MATURED LEASED VEHICLE EXPENSES
AND REPOSSESSED VEHICLE EXPENSES, 'LIQUIDATION EXPENSES') incurred in
connection with the realization of Liquidation Proceeds (TOGETHER
WITH NET MATURED LEASED VEHICLE PROCEEDS AND NET REPOSSESSED VEHICLE
PROCEEDS, 'NET LIQUIDATION PROCEEDS'); and
(7) Any Undistributed Transferor Excess Collections for the preceding
Collection Period.
For a discussion of required and permitted Advances, see 'Additional Document
Provisions--The Servicing Agreement--Advances'. For a description of
Undistributed Transferor Excess Collections, see 'Description of the
Notes--Distributions on the Notes--Distributions of Interest'.
However, Collections shall not include, and (as appropriate) shall be net
of:
(1) Payments Ahead for future Collection Periods;
(2) Amounts paid to the Servicer to reimburse outstanding Advances,
Matured Leased Vehicle Expenses, Repossessed Vehicle Expenses and
other Liquidation Expenses;
(3) Any Insurance Proceeds applied to repair a Leased Vehicle or released
to a lessee under the Servicer's normal procedures, and amounts paid
to the Servicer to reimburse other related expenses not included in
Liquidation Expenses but which are recoverable under the Servicing
Agreement ('INSURANCE EXPENSES');
(4) Late payment charges, payments of insurance premiums, excise taxes or
similar items; and
(5) Additional Loss Amounts.
'INTEREST COLLECTIONS' for any Collection Period generally will equal the
amount by which Collections exceed Principal Collections. 'PRINCIPAL
COLLECTIONS' for any Collection Period will be all Collections allocable to the
principal component of any Contract (including any payment in respect of a
Leased Vehicle, but excluding any payment as to which a Loss Amount was realized
during a previous Collection Period). However, for purposes of determining
Principal Collections, the principal component of all payments on a Discounted
Contract (or the related Leased Vehicle) will be discounted to present value at
a rate of 9.70%, which will effectively reallocate a portion of this principal
component to Interest Collections. (SUBI Trust Agreement, Section 10.01;
Agreement, Section 1.01). In addition, for any Collection Period during the
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Revolving Period, Loss Amounts that otherwise would be distributable to the
Noteholders on the related Distribution Date will be treated as if they were
Principal Collections for purposes of reinvestment in Subsequent Contracts and
Subsequent Leased Vehicles. (Agreement, Section 3.03).
'LOSS AMOUNTS' for any Collection Period will consist of:
(1) An amount (THE 'CHARGED-OFF AMOUNT') equal to the Discounted
Principal Balances of all Contracts where the Leased Vehicle was
repossessed and sold or otherwise disposed of, or which were written
off by the Servicer in accordance with its normal policies for
writing off lease contracts other than for repossessions
('CHARGED-OFF CONTRACTS'), during that Collection Period;
(2) An amount generally equal to the aggregate net losses on dispositions
of Matured Leased Vehicle Inventory or under World Omni's pro-active
lease termination programs (THE 'RESIDUAL VALUE LOSS AMOUNT'), which
will equal the sum of:
(a) The aggregate of the Residual Values of all Leased Vehicles
included in Matured Leased Vehicle Inventory but that, as of
the end of the Collection Period, had remained unsold and not
otherwise disposed of for at least two full Collection Periods;
(b) Any excess of (1) the aggregate Residual Values of all Leased
Vehicles previously included in Matured Leased Vehicle
Inventory but that were sold or otherwise disposed of during
that Collection Period, over (2) Net Matured Leased Vehicle
Proceeds for that Collection Period; and
(c) Any losses on Contracts (up to their Discounted Principal
Balances) terminated on or prior to their Maturity Dates during
that Collection Period under World Omni's pro-active lease
termination programs, in which less than the Outstanding
Principal Balance of the Contract is paid by or on behalf of
the lessee; and
(3) Any losses incurred by the Origination Trust in the event of any
uninsured liability to third parties that is borne by the SUBI Assets
(including amounts reserved within the SUBI Collection Account
against future such losses) ('ADDITIONAL LOSS AMOUNTS'), whether they
are incurred:
(a) With respect to the SUBI Assets and therefore are allocated to
the SUBI Assets;
(b) With respect to the Origination Trust Assets generally and
therefore a pro rata portion is allocated to the SUBI Assets;
or
(c) With respect to UTI Assets or Other SUBI Assets if they are
insufficient to pay that liability and therefore a portion is
allocated to the SUBI Assets.
(SUBI Trust Agreement, Sections 7.01 and 10.01; Agreement, Section 1.01). See
'Maturity, Prepayment and Yield Considerations' for a discussion of World Omni's
pro-active lease termination programs. See 'Additional Document Provisions--The
Agreement--Allocation of Beneficial Interests and Liabilities' and 'Certain
Legal Aspects of the Origination Trust and The SUBI--The SUBI' for more
information on Additional Loss Amounts, their creation and allocation.
The 'INVESTOR PERCENTAGE' for any Collection Period will mean:
(1) For Loss Amounts and Interest Collections, the percentage equivalent
of a fraction (not to exceed 100%), the numerator of which is the
Note Balance on the last day of the preceding Collection Period (or,
for the first Collection Period, the Initial Note Balance), and the
denominator of which is the Aggregate Net Investment Value on the
last day of the preceding Collection Period (or, for the first
Collection Period, as of the Initial Cutoff Date); and
(2) For Principal Collections during the Amortization Period, the
percentage equivalent of a fraction (not to exceed 100%), the
numerator of which is the Note Balance and the denominator of which
is the Aggregate Net Investment Value, in each case as of the last
day of the last Collection Period before (a) the Amortization Date or
(b) an Early Amortization Event.
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For convenience, this prospectus refers to the Investor Percentage as if it were
the same percentage at all times and for all amounts. The Investor Percentage
may be a different percentage for each Collection Period, and will vary
primarily as a result of changes in the Aggregate Net Investment Value. The
'TRANSFEROR PERCENTAGE' in all cases will equal 100% minus the applicable
Investor Percentage. (Agreement, Section 1.01).
Because of the way the Investor Percentage is calculated, the Servicer will
allocate Interest Collections to Noteholders based on the relationship of the
Note Balance to the Aggregate Net Investment Value (which may change daily and
from Collection Period to Collection Period). However, the Servicer will
allocate Principal Collections to the Noteholders during the Amortization Period
by reference to a fixed Investor Percentage.
DISTRIBUTIONS TO THE TRANSFEROR
On each Distribution Date, the Indenture Trustee will make distributions to
the Transferor in satisfaction of the Trust's payment obligations, from funds in
the Distribution Account in respect of the related Collection Period, in the
following amounts (THE 'TRANSFEROR AMOUNTS'):
(1) If the Distribution Date relates to the Revolving Period, the
Transferor Percentage of Interest Collections; and
(2) If the Distribution Date relates to the Amortization Period, the
Transferor Percentage of Interest Collections and (if the Transferor
Interest is equal to or greater than zero) the Transferor Percentage
of Principal Collections.
The Indenture Trustee will make these distributions net of the Transferor
Percentage of the Servicing Fee, Capped Origination Trust Administrative
Expenses, Capped Trust Administrative Expenses, Capped Contingent and Excess
Liability Premiums and Uncapped Administrative Expenses for the related
Collection Period. For descriptions of these amounts, see 'Description of the
Notes--Distributions on the Notes-- Distributions of Interest'. The Indenture
Trustee will retain in the Distribution Account for payment to the Noteholders
any Principal Collections not paid to the Transferor because the Transferor
Interest is less than or equal to zero ('UNALLOCATED PRINCIPAL COLLECTIONS').
However, the Indenture Trustee will not pay any Transferor Amounts unless
it also pays all distributions required to be paid to the Noteholders out of the
Investor Percentage of Interest Collections that are senior in priority to
Excess Collections, and the amount on deposit in the Reserve Fund (after all
withdrawals and deposits on the relevant Distribution Date) is at least equal to
the Reserve Fund Cash Requirement. (Agreement, Section 3.03). For further
information on distributions out of the Investor Percentage of Interest
Collections, see 'Description of the Notes--Distributions on the
Notes--Distributions of Interest', and for a discussion of the Reserve Fund and
the Reserve Fund Cash Requirement, see 'Security for the Notes--The Reserve
Fund'.
On any Distribution Date, the Transferor may (at its option) instruct the
Indenture Trustee and the Servicer not to distribute any or all Transferor
Amounts otherwise due to it, but instead to redeposit those amounts (THE
'UNDISTRIBUTED TRANSFEROR AMOUNTS') into the SUBI Collection Account.
Undistributed Transferor Amounts will be treated as if they were Collections
during the then-current Collection Period. The Transferor will have no claim to
any Undistributed Transferor Amounts, except insofar as they become Excess
Collections that are payable to the Transferor for a succeeding Collection
Period. (Agreement, Section 3.03).
DETERMINATION OF ONE-MONTH LIBOR
The Servicer will determine One-Month LIBOR for each Distribution Date on
the second business day prior to the preceding Distribution Date (or, for the
initial Distribution Date, the second business day prior to the Closing Date)
(EACH A 'LIBOR DETERMINATION DATE'). For purposes of calculating One-Month
LIBOR, a business day is any day on which dealings in deposits in U.S. Dollars
are transacted in the London interbank market.
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'ONE-MONTH LIBOR' means the rate for deposits in U.S. Dollars for a period
of one month (commencing on the previous Distribution Date) which appears on the
Telerate Page 3750 as of 11:00 a.m., London time, on the LIBOR Determination
Date. If this rate does not appear on Telerate Page 3750, the rate for that day
will be determined based on the rates quoted by four major banks in the London
interbank market selected by the Servicer (THE 'REFERENCE BANKS') at
approximately 11:00 a.m., London time, for deposits in U.S. Dollars to prime
banks in the London interbank market for a period of one month (commencing on
the previous Distribution Date). The Servicer will request the principal London
office of each Reference Bank to provide a quotation of its rate. If the
Reference Banks provide at least two such quotations, the rate for that day will
be the arithmetic mean of their quotations. If they provide only one quotation,
the rate for that day will be the arithmetic mean of the rates quoted by three
major banks in New York City, selected by the Servicer, at approximately 11:00
a.m., New York City time, for loans in U.S. Dollars to leading European banks
for a period of one month (commencing on the previous Distribution Date).
'TELERATE PAGE 3750' means the display page currently so designated on the
Dow Jones Telerate Service (or any other page that replaces that page on that
service for the purpose of displaying comparable rates or prices).
DISTRIBUTIONS ON THE NOTES
Servicer Determinations Before Distribution Date
On the second Business Day before each Distribution Date (A 'DETERMINATION
DATE'), the Servicer will inform the Indenture Trustee of, among other things,
the amount of Interest Collections and Principal Collections, the Investor
Percentage, the Transferor Percentage, the Class A-1, Class A-2, Class A-3 and
Class A-4 Note Factors, the Class A-1, Class A-2, Class A-3, Class A-4 and Class
B Allocation Percentages, the amount of Advances to be made by the Servicer, the
Required Amount, if any, to be withdrawn from the Reserve Fund and the Servicing
Fee and other servicing compensation payable to the Servicer, in each case with
respect to the Collection Period immediately preceding that Determination Date.
On or before each Determination Date, the Servicer also will determine the
Reserve Fund Cash Requirement, the Class A Cap Receipt, the amounts to be
distributed to the Noteholders and to the Transferor in respect of the
Transferor Interest and any Reserve Fund Supplemental Requirement. (Servicing
Agreement, Sections 9.02 and 10.01).
Distributions of Interest
The fifteenth day of each month, or if that day is not a day other than a
Saturday or Sunday or other than a day on which banks in New York, New York,
Palisades Park, New Jersey, Chicago, Illinois, Wilmington, Delaware, Deerfield
Beach, Florida or Mobile, Alabama, are authorized or obligated by law, executive
order or government decree to be closed (EACH, A 'BUSINESS DAY'), then the next
Business Day, beginning with September 15, 1999, will be a 'DISTRIBUTION DATE'.
The Indenture Trustee will use the following sources of funds, in the following
priority, to make distributions on each Distribution Date as described in the
interest payment waterfall below:
(1) Interest Collections for the related Collection Period (and any Class
A Cap Receipt);
(2) Transferor Amounts that would otherwise be distributable to the
Transferor in respect of the Transferor Interest for that Collection
Period (first from the Interest Collections portion and then from the
Principal Collections portion);
(3) Except for distributions required by clause (9) of the payment
waterfall, any amounts deposited by the Transferor, in its sole
discretion, into the Distribution Account as a capital contribution
to the Trust and designated for that purpose;
(4) Except for distributions required by clause (9) of the payment
waterfall, any Insured Residual Value Loss Amounts paid under the
Residual Value Insurance Policy for that Collection Period;
(5) Except for distributions required by clause (9) of the payment
waterfall, any Required Amount withdrawn from the Reserve Fund; and
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(6) To the extent needed to make distributions described in clauses (3),
(10) and (11) of the interest payment waterfall to the Class A-4
Noteholders during the Amortization Period, amounts that would
otherwise be distributable to the Class B Noteholders in respect of
the Class B Percentage of the Investor Percentage of Principal
Collections for that Collection Period.
(Agreement, Section 3.03).
On each Distribution Date, the Indenture Trustee will make the following
distributions from the Distribution Account in satisfaction of the obligations
of the Trust and the Origination Trust, in the following amounts and priority:
(1) If there is an Indenture Event of Default, to the Indenture Trustee,
the Investor Percentage of Capped Indenture Trustee Administrative
Expenses, and to the Owner Trustee, the Investor Percentage of Capped
Owner Trustee Administrative Expenses;
(2) First from any Class A Cap Receipt and only then from other available
amounts, to each Class of Class A Noteholders, interest at the
related Note Rate on the Class A-1, Class A-2, Class A-3 or Class A-4
Note Balance, as applicable, as of the previous Distribution Date
(after any reduction in the Note Balance on that Distribution Date)
or, for the first Distribution Date, on the Initial Class A-1, Class
A-2, Class A-3 or Class A-4 Note Balance, as applicable, together
with any unpaid Class A-1, Class A-2, Class A-3 or Class A-4 Interest
Carryover Shortfall. Interest will be based on the actual number of
days from and including the previous Distribution Date (or for the
initial Distribution Date, from and including the Closing Date) to
but excluding the current Distribution Date and a 360-day year;
(3) To each Class of Class A Noteholders, accrued and unpaid interest at
the related Note Rate on any unreimbursed Uncovered Loss Amounts from
previous Distributions Dates that were allocated to their Notes and
resulted in write-downs of their respective Note Balances. If there
are not enough funds to make this distribution, the available funds
will be allocated pro rata based on the Class A-1, Class A-2, Class
A-3 and Class A-4 Allocation Percentages;
(4) To the Class B Noteholders, interest from the available sources
described above at an annual rate not expected to exceed %, and from
additional sources of funds reserved to Class B Notes, at a specified
floating rate (the 'CLASS B NOTE RATE') on the Class B Note Balance
as of the previous Distribution Date (after any reduction in the
Class B Note Balance on that Distribution Date) or, for the first
Distribution Date, on the Initial Class B Note Balance, together with
any unpaid Class B Interest Carryover Shortfall. Again, interest will
be based on the actual number of days from and including the previous
Distribution Date (or for the initial Distribution Date, from and
including the Closing Date) to but excluding the current Distribution
Date and a 360-day year;
(5) To the Servicer, the Investor Percentage of Capped Contingent and
Excess Liability Premiums;
(6) To the Origination Trustee, the Investor Percentage of Capped
Origination Trust Administrative Expenses;
(7) In circumstances other than clause (1), to the Indenture Trustee, the
Investor Percentage of Capped Indenture Trustee Administrative
Expenses, and to the Owner Trustee, the Investor Percentage of Capped
Owner Trustee Administrative Expenses;
(8) If World Omni is not the Servicer, to the other Servicer, the
Investor Percentage of the Servicing Fee and of any unpaid Servicing
Fees due to the other Servicer for prior Collection Periods;
(9) To the Reserve Fund, all available funds until the amount on deposit
equals the Reserve Fund Cash Requirement;
(10) To the Class A Noteholders:
(a) If the Note Balance of the Class B Notes has not been reduced
to zero, the Covered Loss Amount, sequentially to each Class
of Class A Noteholders beginning with the Class A-1
Noteholders until the Note Balance of each such Class has been
reduced to zero; or
(b) If the Note Balance of the Class B Notes has been reduced to
zero, the Covered Loss Amount, pro rata based on the Class
A-1, Class A-2, Class A-3 and Class A-4 Allocation
Percentages;
(11) To each Class of Class A Noteholders, any Uncovered Loss Amounts from
previous Distribution Dates that were allocated to that Class and
resulted in the write-down of its Note Balance, that
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have not already been reimbursed. If there are not enough funds to
make this distribution, the available funds will be allocated pro
rata based on the Class A-1, Class A-2, Class A-3 and Class A-4
Allocation Percentages;
(12) To the Class B Noteholders, accrued and unpaid interest at the Class
B Note Rate on any unreimbursed Uncovered Loss Amounts from previous
Distribution Dates that were allocated to the Class B Notes and
resulted in the write-down of the Class B Note Balance, and on any
unreimbursed Class B Note Principal Carryover Shortfall;
(13) To the Class B Noteholders, any unreimbursed Uncovered Loss Amounts
from previous Distribution Dates that were allocated to the Class B
Notes and resulted in the write-down of the Class B Note Balance,
together with any Class B Note Principal Carryover Shortfall;
(14) If World Omni is the Servicer (and has not elected to waive the
Servicing Fee for the related Collection Period), to the Servicer,
the Investor Percentage of the Servicing Fee for the related
Collection Period and of any unpaid Servicing Fees for prior
Collection Periods; and
(15) To the Indenture Trustee, the Owner Trustee and the Origination
Trustee, the Investor Percentage of any Uncapped Administrative
Expenses due to it.
Only Class A Noteholders as of the day before a Distribution Date (or, if
Definitive Notes are issued, as of the last day of the preceding calendar month)
(EACH, A 'RECORD DATE') will be entitled to receive distributions on the Class A
Notes. (Agreement, Sections 1.01 and 3.03).
On any Distribution Date relating to a Collection Period during the
Revolving Period, amounts otherwise payable to Noteholders pursuant to clauses
(10), (11) and (13) in this payment waterfall will be treated as if they were
Principal Collections for that Collection Period. Therefore, they will be
available to be reinvested in Subsequent Contracts and Subsequent Leased
Vehicles, rather than being paid to the Noteholders. (Agreement, Section 3.03).
For further information on reinvestment of Principal Collections, see
'Description of the Notes--Distributions on the Notes--Application and
Distributions of Principal'.
Any remaining funds will be 'EXCESS COLLECTIONS'. On each Distribution Date
related to a Collection Period during the Revolving Period, the Indenture
Trustee will distribute all Excess Collections to the Transferor. On each
Distribution Date related to a Collection Period during the Amortization Period,
the Indenture Trustee will distribute all Excess Collections, up to but not
exceeding the product of one-twelfth of 0.25% and the Aggregate Net Investment
Value as of the last day of that Collection Period (THE 'ACCELERATED PRINCIPAL
DISTRIBUTION AMOUNT'), to Noteholders as an additional payment of principal, and
then will distribute any remaining Excess Collections to the Transferor. The
Indenture Trustee will distribute any Accelerated Principal Distribution Amount
to each of the Class A-1, Class A-2 and Class A-3 Noteholders sequentially,
until each such Class of Notes has been paid in full, and then to the Class A-4
and Class B Noteholders pro rata in accordance with the Class A Percentage and
the Class B Percentage. On any Distribution Date, the Transferor may (at its
option) instruct the Indenture Trustee not to distribute any or all Excess
Collections due to it, but instead to redeposit that amount ('UNDISTRIBUTED
TRANSFEROR EXCESS COLLECTIONS') into the SUBI Collection Account. Undistributed
Transferor Excess Collections will be treated as if they were Collections during
the then-current Collection Period. The Transferor will have no claim to any
Undistributed Transferor Excess Collections, except insofar as they become
Excess Collections that are payable to the Transferor for a succeeding
Collection Period. (Agreement, Sections 1.01 and 3.03).
'CAPPED ORIGINATION TRUST ADMINISTRATIVE EXPENSES' will be specified
administrative expenses of the Origination Trust, up to $100,000 in any calendar
year. (SUBI Trust Agreement, Section 10.01). 'CAPPED INDENTURE TRUSTEE
ADMINISTRATIVE EXPENSES' will be the Indenture Trustee's compensation and other
specified administrative expenses, up to $50,000 in any calendar year (or
$100,000 in a calendar year in which an Indenture Event of Default occurs).
'CAPPED OWNER TRUSTEE ADMINISTRATIVE EXPENSES' will be the Owner Trustee's
compensation and other specified administrative expenses, up to $5,000 in any
calendar year. (Agreement, Section 1.01). 'UNCAPPED ADMINISTRATIVE EXPENSES'
will be the Indenture Trustee's and Owner Trustee's compensation and specified
administrative expenses of the Origination Trust, the Indenture Trustee and the
Owner Trustee in excess of the amounts of Capped Origination Trust
Administrative Expenses, Capped Indenture Trustee Administrative Expenses and
Capped Owner Trustee Administrative Expenses.
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'CAPPED CONTINGENT AND EXCESS LIABILITY PREMIUMS' will be the premiums then
due on the portion of the Contingent and Excess Liability Insurance Policies
allocable to the SUBI, up to $375,000 in any calendar year.
'COVERED LOSS AMOUNTS' for any Distribution Date will be the lesser of the
Investor Percentage of Loss Amounts for the related Collection Period, and the
amount actually available for distribution under clause (x) of the payment
waterfall. 'UNCOVERED LOSS AMOUNTS' for any Distribution Date will be any excess
of the Investor Percentage of Loss Amounts for the related Collection Period
over Covered Loss Amounts. Uncovered Loss Amounts will be allocated first to the
Class B Notes, and therefore the Class B Note Balance will be written down,
until the Class B Note Balance has been reduced to zero. Thereafter, Uncovered
Loss Amounts will be allocated to the Class A Notes, and therefore the Class
A-1, Class A-2, Class A-3 and Class A-4 Note Balances will be written down, pro
rata based on the Class A-1, Class A-2, Class A-3 and Class A-4 Allocation
Percentages. (Agreement, Section 1.01). For a description of the calculation of
the Note Balances for each Class of Notes, see 'Description of the
Notes--Summary of the Terms of the Notes'.
Uncovered Loss Amounts will arise on any Distribution Date when the
Investor Percentage of Interest Collections (and any Class A Cap Receipt),
Insured Residual Value Loss Amounts paid under the Residual Value Insurance
Policy, the Required Amount, the Transferor Amounts and, with respect to any
Class A-4 Note Principal Loss Amount, principal amounts otherwise payable to the
Class B Noteholders are not sufficient to cover the Investor Percentage of all
Loss Amounts for the related Collection Period. If Uncovered Loss Amounts for
any Distribution Date are allocated to your Class of Notes, the Note Balance of
your Notes will be reduced but you will not receive a corresponding payment. If
there are insufficient funds available to reimburse those Uncovered Loss Amounts
on subsequent Distribution Dates, you will suffer a loss on your Notes.
On any Distribution Date, the 'CLASS A-1 ALLOCATION PERCENTAGE' will mean
the Class A-1 Note Balance as a percentage of the Note Balance, calculated as of
the last day of the related Collection Period. The 'CLASS A-2 ALLOCATION
PERCENTAGE', the 'CLASS A-3 ALLOCATION PERCENTAGE', the 'CLASS A-4 ALLOCATION
PERCENTAGE' and the 'CLASS B ALLOCATION PERCENTAGE' will be calculated in the
same manner as the Class A-1 Allocation Percentage, appropriately modified to
relate to the Class A-2, Class A-3 or Class A-4 Notes, respectively. However,
the 'CLASS A PERCENTAGE' will mean the Class A Note Balance as a percentage of
the Note Balance, calculated immediately after the Class A-3 Notes have been
paid in full, and the 'CLASS B PERCENTAGE' will mean the Class B Note Balance as
a percentage of the Note Balance, calculated immediately after the Class A-3
Notes have been paid in full. Neither the Class A Percentage nor the Class B
Percentage will change after it is set.
On any Distribution Date, the 'CLASS A-1 INTEREST CARRYOVER SHORTFALL' will
be any excess of:
(1) The sum of:
(a) The interest distributable on the Class A-1 Notes;
(b) Any outstanding Class A-1 Interest Carryover Shortfall from the
preceding Distribution Date; and
(c) Interest at the Class A-1 Note Rate on any outstanding Class A-1
Interest Carryover Shortfall from the preceding Distribution
Date through the current Distribution Date; over
(2) The amount of interest distributed to the Class A-1 Noteholders on
that Distribution Date.
The 'CLASS A-2 INTEREST CARRYOVER SHORTFALL', the 'CLASS A-3 INTEREST
CARRYOVER SHORTFALL', the 'CLASS A-4 INTEREST CARRYOVER SHORTFALL' and the
'CLASS B INTEREST CARRYOVER SHORTFALL' will be calculated in the same manner as
the Class A-1 Interest Carryover Shortfall, appropriately modified to relate to
the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class B
Notes, respectively. (Agreement, Section 1.01).
On any Distribution Date from and after the Distribution Date on which the
Class A-3 Notes are paid in full, the 'CLASS B NOTE PRINCIPAL CARRYOVER
SHORTFALL' will be any of the Class B Percentage of the
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Investor Percentage of Principal Collections for the related Collection Period
that is instead applied to the distribution of principal to the Class A
Noteholders pursuant to clauses (iii), (x) and (xi) in the payment waterfall.
The 'VOTING INTERESTS' of the Class A Notes will be allocated among the
Class A-1, Class A-2, Class A-3 and Class A-4 Noteholders or Note Owners in
accordance with the Note Balances of their Class A-1, Class A-2, Class A-3 and
Class A-4 Notes, and of the Class B Notes will be allocated among the Class B
Noteholders in accordance with their Note Balances of their Class B Notes.
However, in certain circumstances, any Notes held or beneficially owned by ALF
LLC, ALF L.P., the Transferor, WOLS LLC, World Omni or any of their affiliates
will be excluded from this determination. (Agreement, Section 1.01).
On any Distribution Date, the 'REQUIRED AMOUNT' will be the lesser of:
(1) The amount on deposit in the Reserve Fund on the related Deposit Date
after all required deposits through that Distribution Date (including
under clause (9) in the interest payment waterfall); and
(2) Any excess of:
(a) The full amount distributable under clauses (1) through (8)
and (10) through (15) of the interest payment waterfall; over
(b) The sum of:
(i) The Investor Percentage of Interest Collections for
the related Collection Period (plus any Class A Cap
Receipt);
(ii) Any Transferor Amounts applied to cover the
distributable amount described in clause (a); and
(iii) Any Insured Residual Value Loss Amounts paid under the
Residual Value Insurance Policy for the related
Collection Period.
(Agreement, Sections 1.01, 3.03 and 3.04). For further details regarding the
Reserve Fund, see 'Security for the Notes--The Reserve Fund'.
Application and Distributions of Principal
Revolving Period. The Indenture Trustee will not pay any principal to the
Class A Noteholders until the October 2000 Distribution Date or the Distribution
Date in the month after the occurrence of an Early Amortization Event.
The 'REVOLVING PERIOD' will begin on the Closing Date and end on the
earlier of September 1, 2000 (THE 'AMORTIZATION DATE') or the date of an Early
Amortization Event. On one or more days selected by the Servicer in any
Collection Period during the Revolving Period or in the first Collection Period
after the end of the Revolving Period (EACH, A 'TRANSFER DATE'), the Servicer
will identify the Origination Trust's lease contracts and the related leased
vehicles that are eligible to be allocated to the SUBI. On each Transfer Date,
the Servicer, on behalf of the Origination Trustee, will allocate as SUBI Assets
additional such lease contracts and related leased vehicles with aggregate
Discounted Principal Balances as of the last day of the preceding Collection
Period (EACH, A 'SUBSEQUENT CUTOFF DATE' AND, TOGETHER WITH THE INITIAL CUTOFF
DATE, THE 'CUTOFF DATES') approximately equal to, but no greater than, all
Principal Collections since the Initial Cutoff Date (including Loss Amounts that
are treated as if they were Principal Collections for this purpose) that have
not yet been reinvested in Subsequent Contracts and Subsequent Leased Vehicles.
See 'Description of the Notes--Distributions on the Notes--Distributions of
Interest' for a description of Loss Amounts that are treated as if they were
Principal Collections for reinvestment purposes. Upon their allocation as SUBI
Assets, these lease contracts and leased vehicles will become Subsequent
Contracts and Subsequent Leased Vehicles. On each Transfer Date, the Servicer,
on behalf of the Indenture Trustee, will transfer the reinvested amount from the
SUBI Collection Account to an account maintained by the Origination Trustee to
hold collections on Origination Trust Assets that are not SUBI Assets or Other
SUBI Assets.
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Any Principal Collections (and Loss Amounts that are treated as Principal
Collections for reinvestment purposes) that are not so reinvested on any
Transfer Date may be reinvested in additional Subsequent Contracts and
Subsequent Leased Vehicles on subsequent Transfer Dates. If on the twenty-fifth
day of any month (beginning September 1999) during the Revolving Period the
amount of such Principal Collections and Loss Amounts as of the last day of the
immediately preceding month that has not been reinvested in Subsequent Contracts
and Subsequent Leased Vehicles exceeds $1,000,000, an Early Amortization Event
will occur, the Revolving Period will terminate prior to the Amortization Date
and any unreinvested Principal Collections will be distributed as principal to
Noteholders on the next Distribution Date. (Servicing Agreement, Section 8.02;
SUBI Trust Agreement, Section 11.02; Agreement, Section 8.01).
Amortization Period. The 'AMORTIZATION PERIOD' will begin on the earlier
of the Amortization Date or the date of an Early Amortization Event, and will
end when each Class of Notes has been paid in full and all Uncovered Loss
Amounts and Class B Note Principal Carryover Shortfalls have been repaid in
full, together with accrued interest thereon, or when the Trust otherwise
terminates. On each Distribution Date relating to a Collection Period in the
Amortization Period and ending on the Distribution Date on which the Class A-3
Notes are paid in full (and unless the Class B Note Balance has been reduced to
zero), the Indenture Trustee, in satisfaction of the Trust's obligations, will
distribute the Investor Percentage of all Principal Collections for that
Collection Period as principal sequentially to each of the Class A-1, Class A-2
and Class A-3 Noteholders, until each such Class of Notes has been paid in full.
Thereafter, the Indenture Trustee will distribute the Class A Percentage and the
Class B Percentage of those Principal Collections to the Class A-4 Noteholders
and the Class B Noteholders. If the Class B Note Balance has been reduced to
zero, the Indenture Trustee will distribute those Principal Collections to the
Class A Noteholders pro rata, based on the Class A-1, Class A-2, Class A-3 and
Class A-4 Allocation Percentages.
On the Distribution Date related to the first month in the Amortization
Period, the Indenture Trustee also will distribute to the Class A-1 Noteholders
the Class A Percentage of the Investor Percentage of any Principal Collections
(and Loss Amounts that are treated as Principal Collections for reinvestment
purposes) that were not reinvested in Subsequent Contracts and Subsequent Leased
Vehicles, and of any Unallocated Principal Collections. The Indenture Trustee
will not distribute more principal to any Class of Noteholders than the Initial
Note Balance of that Class. (SUBI Trust Agreement, Section 11.02; Indenture,
Section 2.06; Agreement, Section 3.03).
In general, no principal payments (including Covered Loss Amounts) will be
made on the Class A-2 Notes until the Class A-1 Notes have been paid in full, on
the Class A-3 Notes until the Class A-1 and Class A-2 Notes have been paid in
full, or on the Class A-4 or Class B Notes until the Class A-1, Class A-2 and
Class A-3 Notes have been paid in full. Principal payments to the Class A-1,
Class A-2 and Class A-3 Noteholders will be based on the entire Investor
Percentage of all Principal Collections during the relevant Collection Period,
while principal payments to the Class A-4 Noteholders will be based on the Class
A Percentage of the Investor Percentage of Principal Collections.
Any Uncovered Loss Amounts will be allocated first to the Class B Notes
(and the Class B Note Balance will be written down) until the Class B Note
Balance has been reduced to zero, and then to the Class A Notes (and the Class
A-1, Class A-2, Class A-3 and Class A-4 Note Balances will be written down) pro
rata based on the Class A-1, Class A-2, Class A-3 and Class A-4 Allocation
Percentages. Uncovered Loss Amounts will not be allocated or reimbursed to any
Noteholder once his or her Notes have been paid in full. For further information
regarding the allocation and reimbursement of Uncovered Loss Amounts, see
'Description of the Notes--Distributions of Interest'.
The Indenture Trustee first will distribute the Investor Percentage of the
net proceeds of any sale or other disposition of the SUBI, the SUBI Certificate
or other property of the Trust (which may occur in certain Indenture Events of
Default) that constitute Principal Collections to the Class A Noteholders (pro
rata among them, based on the Class A-1, Class A-2, Class A-3 and Class A-4
Percentages) until the Class A Notes have been paid in full. If any such
proceeds remain, the Indenture Trustee will distribute them to the Class B
Noteholders. For further details, see 'Additional Document Provisions--The
Indenture--Events of Default.'
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On any Distribution Date from and after the Distribution Date on which the
Class A-3 Notes are paid in full, if the other available amounts are
insufficient, the Indenture Trustee will withhold from the Class B Noteholders
the Class B Percentage of the Investor Percentage of Principal Collections for
the related Collection Period and use it instead to pay the following to the
Class A Noteholders, in accordance with the interest payment waterfall:
(1) Accrued and unpaid interest at the related Note Rates on any
unreimbursed Uncovered Loss Amounts from previous Distributions Dates
that were allocated to the Class A Notes and resulted in write-downs
of their respective Note Balances;
(2) The Covered Loss Amount; and
(3) Any unreimbursed Uncovered Loss Amounts from previous Distribution
Dates that were allocated to the Class A Notes and resulted in the
write-downs of their respective Note Balances.
See 'Description of the Notes--Distributions on the Notes--Distributions of
Interest' for details on this subordination.
THE ACCOUNTS
The Distribution Account
The Servicer will establish a trust account with and in the name of the
Indenture Trustee for the benefit of the Noteholders and the Transferor, as
holder of the Transferor Certificate, from which the Indenture Trustee will make
all payments with respect to the Notes (THE 'DISTRIBUTION ACCOUNT'). (Agreement,
Section 3.01). Within one Business Day of receipt, the Servicer will deposit all
Insured Residual Value Loss Amounts paid under the Residual Value Insurance
Policy (if they relate to the Amortization Period) into the Distribution
Account. On each Deposit Date, the Servicer, on behalf of the Indenture Trustee,
will remit (or cause to be remitted) all Collections for the related Collection
Period, any Class A Cap Receipt and any Required Amount to the Distribution
Account (Agreement, Section 3.02). These deposits will come from, among other
sources, the SUBI Collection Account, the Reserve Fund, the Class A Cap Provider
and the Transferor (in the case of exercise of its right to purchase the SUBI
when the Note Balance is less than or equal to 10% of the Initial Note Balance).
The SUBI Collection Account
Establishment of the SUBI Collection Account. The Origination Trustee will
establish a trust account with and in the name of the Indenture Trustee for the
benefit of the Noteholders and the Transferor, as holder of the Transferor
Certificate, into which the Servicer generally will deposit all collections on
the Contracts and the Leased Vehicles (THE 'SUBI COLLECTION ACCOUNT' AND,
TOGETHER WITH THE DISTRIBUTION ACCOUNT AND THE RESERVE FUND, THE 'ACCOUNTS').
(SUBI Trust Agreement, Section 12.01).
Deposits into the SUBI Collection Account. Deposits into the SUBI
Collection Account will include the following payments relating to the SUBI
Assets:
(1) Monthly Payments;
(2) Prepayments;
(3) Matured Leased Vehicle Proceeds, Repossessed Vehicle Proceeds and
other Liquidation Proceeds, and Insurance Proceeds;
(4) Extension Fees;
(5) Payments Ahead;
(6) Advances made by the Servicer;
(7) Reallocation Payments and Reallocation Deposit Amounts;
(8) Undistributed Transferor Excess Collections; and
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(9) During the Revolving Period, Insured Residual Value Loss Amounts paid
under the Residual Value Insurance Policy.
(Servicing Agreement, Sections 2.02, 8.02, 9.02 and 9.04; SUBI Trust Agreement,
Section 12.01).
'INSURANCE PROCEEDS' will include recoveries pursuant to the Contingent and
Excess Liability Insurance Policies and the comprehensive, collision, public
liability and property damage insurance policy required to be obtained and
maintained by the lessee pursuant to each Contract (or, in certain
circumstances, payment by the Servicer in lieu of those proceeds), and amounts
paid by any insurer under any other insurance policy relating to the Contracts,
the related lessees or the Leased Vehicles, but will not include Insured
Residual Value Loss Amounts paid under the Residual Value Insurance Policy.
(SUBI Trust Agreement, Section 10.01). For a description of the circumstances
under which the Servicer will be required to make payments in lieu of lessee
insurance proceeds, see 'Additional Document Provisions--The Servicing
Agreement--Insurance on Leased Vehicles'.
Lessees normally will make their Monthly Payments by mail to a lock box
maintained by the Servicer, and the Servicer normally will deposit them in the
SUBI Collection Account within two Business Days after receipt. The Servicer
will remit all other payments on the Contracts or the Leased Vehicles other than
Security Deposits and Insured Residual Value Loss Amounts paid under the
Residual Value Insurance Policy, including any Monthly Payments delivered
directly to the Servicer or World Omni (if World Omni is no longer the
Servicer), Matured Leased Vehicle Proceeds, Repossessed Vehicle Proceeds and
other Liquidation Proceeds, Insurance Proceeds, Extension Fees, Payments Ahead
and Prepayments (regardless of whether made by lessees or other persons), to the
SUBI Collection Account within two Business Days after it receives them.
(Servicing Agreement, Sections 2.02 and 9.02).
However, the Servicer may remit these amounts to the SUBI Collection
Account less frequently if it obtains a letter of credit, surety bond or
insurance policy to secure timely remittance of monthly collections to the SUBI
Collection Account, and each Rating Agency confirms to the Indenture Trustee
that the alternative remittance schedule will not result in the qualification,
reduction or withdrawal of its then-current rating of any Class of Notes.
(Servicing Agreement, Section 9.02).
Net Deposits. So long as World Omni is the Servicer, it may deposit in the
Distribution Account only the net amount distributable to the Indenture Trustee,
as pledgee of the SUBI, and the Transferor on each Deposit Date. However, the
Servicer will account to the Indenture Trustee, the Origination Trustee, the
Noteholders and the Transferor as if all of the required deposits and
distributions were made individually. (Agreement, Section 3.05; Servicing
Agreement, Section 9.02). This 'net deposit' provision will be for
administrative convenience and will not affect the net amounts required to be
deposited into the Accounts.
Withdrawals from the SUBI Collection Account. On each Deposit Date, the
Servicer (on behalf of the Indenture Trustee) will transfer from the SUBI
Collection Account all Principal Collections and Interest Collections for the
related Collection Period (including any portion of Payments Ahead representing
Monthly Payments due in that Collection Period) to the Distribution Account.
However, during the Revolving Period, it will retain Principal Collections in
the SUBI Collection Account for reinvestment in Subsequent Contracts and
Subsequent Leased Vehicles. (Agreement, Section 3.02; SUBI Trust Agreement,
Section 12.01; Servicing Agreement, Sections 2.02, 8.02 and 9.02). For details
regarding the reinvestment of Principal Collections during the Revolving Period,
see 'Description of the Notes--Distributions on the Notes--Application and
Distributions of Principal--Revolving Period'.
If the Servicer supplies the Origination Trustee and the Indenture Trustee
with an officer's certificate setting forth the basis for its withdrawal, the
Indenture Trustee will remit the following to the Servicer from the SUBI
Collection Account, without interest and before any other distribution on that
date:
(1) Unreimbursed Matured Leased Vehicle Expenses, Repossessed Vehicle
Expenses and other Liquidation Expenses;
(2) Delinquent Monthly Payments with respect to which the Servicer has
made an unreimbursed Advance; and
(3) Any unreimbursed Advances that the Servicer has concluded are
Nonrecoverable Advances.
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(Servicing Agreement, Section 9.02). For further information regarding
Nonrecoverable Advances, see 'Additional Document Provisions--The Servicing
Agreement--Advances'.
Maintenance of the Accounts
The Accounts will be maintained with the Indenture Trustee so long as
either the short-term unsecured debt obligations of the Indenture Trustee are
rated at least P-1 by Moody's and A-1 by Standard & Poor's (and, if those
obligations are rated by Fitch, at least F-1 by Fitch), or the Indenture Trustee
is a depository institution or trust company with corporate trust powers and a
long-term unsecured debt rating from Moody's of at least Baa3, and each Account
is a segregated trust account in the Indenture Trustee's corporate trust
department. If the Indenture Trustee does not meet either of these criteria, the
Servicer (with the Indenture Trustee's assistance) will move the Accounts to a
depository institution that meets at least one of them. (Agreement, Sections
3.01 and 3.04; SUBI Trust Agreement, Sections 12.01 and 12.03; Servicing
Agreement, Section 9.02).
Permitted Investments
At the Servicer's direction, the Indenture Trustee will invest funds in the
Accounts in Permitted Investments. Permitted Investments in the SUBI Collection
Account and Reserve Fund must mature no later than the Business Day before the
next Deposit Date, while Permitted Investments in the Distribution Account must
mature no later than the Business Day before the next Distribution Date.
However, if the obligor of a Permitted Investment is also the depository of the
Account, this investment may mature on the related Deposit Date or Distribution
Date itself, as applicable. In addition, Permitted Investments during the
Revolving Period of Principal Collections in the SUBI Collection Account may
mature on any dates set in the Servicer's discretion to maintain enough cash to
acquire Subsequent Contracts and Subsequent Leased Vehicles on the relevant
Transfer Dates.
All income or other gain from these investments generally will be retained
in the relevant Account, and such gain in the SUBI Collection Account and
Distribution Account generally will be treated as Interest Collections. Any loss
resulting from these investments will be charged to the relevant Account. (SUBI
Trust Agreement, Section 12.01; Agreement, Sections 3.01 and 3.04; Servicing
Agreement, Section 9.02).
'PERMITTED INVESTMENTS' will be specified in the SUBI Trust Agreement and
will be limited to investments that meet the criteria of Moody's and Standard &
Poor's (and, if these investments are rated by Fitch, of Fitch) from time to
time as consistent with its then-current rating of each Class of Notes.
(Agreement, Section 1.01).
EARLY AMORTIZATION EVENTS
An 'EARLY AMORTIZATION EVENT', which will result in the early termination
of the Revolving Period and the early commencement of the Amortization Period,
will mean any of the following:
(1) Failure by the Servicer to make any payment or deposit required with
respect to the SUBI or the Notes within five Business Days after its
due date, or to deliver the required monthly certificate within ten
Business Days after any Determination Date;
(2) Failure by the Transferor or the Servicer to observe or perform in
any material respect any other of its covenants or agreements, which
materially and adversely affects the rights of holders of the SUBI or
Noteholders and which continues unremedied for 60 days after written
notice to the Transferor or the Servicer from the Indenture Trustee
or the Origination Trustee, or to the Transferor or the Servicer and
to the Indenture Trustee from Noteholders with not less than 25% of
the Voting Interests of all Notes (voting together as a single
class);
(3) Failure to cure the inaccuracy of certain representations, warranties
and certificates of the Transferor or the Servicer, which materially
and adversely affects the rights of holders of the SUBI or
Noteholders and which continues uncured for 60 days after notice as
described in clause (2). However, this failure will not constitute an
Early Amortization Event if it causes a Reallocation Payment to
become due and the Servicer pays the Reallocation Payment timely;
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(4) Certain bankruptcy and insolvency events relating to the Transferor;
(5) Any impermissible lien or encumbrance that is not released or bonded
over within 60 days;
(6) The Transferor, the Trust or the Origination Trust becomes subject to
registration as an 'investment company' under the Investment Company
Act of 1940, as amended;
(7) If on the 25th day of any month (beginning September 25, 1999) the
amount of Principal Collections (and Loss Amounts that are treated as
Principal Collections) as of the last day of the previous Collection
Period that have not been reinvested in Subsequent Contracts and
Subsequent Leased Vehicles exceeds $1,000,000;
(8) An Event of Servicing Termination or an Indenture Event of Default;
(9) If on any Distribution Date the aggregate amount withdrawn from the
Reserve Fund and deposited into the Distribution Account on or before
that date exceeds $2,901,276.86 (i.e., 0.25% multiplied by the
Aggregate Net Investment Value as of the Initial Cutoff Date);
(10) Any Leased Vehicle is no longer covered by the Residual Value
Insurance Policy or one or more policies with substantially similar
coverage and provisions issued by an insurer acceptable to each
Rating Agency, or an alternative mechanism to support Residual Values
of Leased Vehicles implemented in accordance with the procedures
required for amendment of the Agreement;
(11) The failure of the Class A Cap Provider to make a required payment
within five calendar days of its due date; or
(12) If certain other events occur with regard to the Class A Interest
Rate Cap, as described under "The Class A Interest Rate Cap", and the
Cap Provider does not timely obtain a replacement cap agreement with
substantially the same terms, or establish another arrangement
satisfactory to any relevant Rating Agency, in any case such that it
will not reduce or withdraw its rating of any Class A Notes.
(Agreement, Section 8.01). See 'Additional Document Provisions--Amendments' for
a description of the procedures required to amend the Agreement.
If there is an Early Amortization Event, the Trust will begin distributing
principal to the Noteholders on the Distribution Date in the following month. In
this event, Class A-1 Noteholders will begin receiving distributions of
principal earlier than they otherwise would have, and Class A-2, Class A-3 and
Class A-4 Noteholders may begin receiving distributions of principal earlier
than they otherwise would have, which may shorten the final maturity of the
relevant Class of Notes.
STATEMENTS TO NOTEHOLDERS
On each Distribution Date, the Indenture Trustee will include with each
distribution to each Noteholder as of Record Date (which, in the case of the
Class A Notes, will be Cede as the nominee of DTC unless Definitive Notes are
issued) a statement, setting forth with respect to such Distribution Date or the
related Collection Period, among other things, the following:
(1) The Investor Percentages for Interest Collections and Principal
Collections for that Collection Period;
(2) The amount being distributed to Noteholders;
(3) The amount being distributed to Noteholders that is allocable to
interest and to principal on each Class of Notes;
(4) The amount being distributed to Noteholders that is allocable to any
Class A-1, Class A-2, Class A-3, Class A-4 or Class B Interest
Carryover Shortfall;
(5) Any unpaid Class A-1, Class A-2, Class A-3, Class A-4 or Class B
Interest Carryover Shortfall, after giving effect to distributions on
that Distribution Date;
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(6) The Note Balance, the Class A-1, Class A-2, Class A-3, Class A-4 and
Class B Note Balances, the Class A-1, Class A-2, Class A-3 and Class
A-4 Note Factors, each after giving effect to distributions on that
Distribution Date;
(7) The Class A-1, Class A-2, Class A-3, Class A-4 and Class B Allocation
Percentages for that Distribution Date;
(8) Any Covered Loss Amounts and Uncovered Loss Amounts for that
Distribution Date;
(9) Any Uncovered Loss Amounts from previous Distribution Dates that were
allocated to any Class of Notes and are being reimbursed on that
Distribution Date;
(10) Any accrued interest on Uncovered Loss Amounts from previous
Distribution Dates that is being paid to any Class of Noteholders on
that Distribution Date;
(11) Any unreimbursed Uncovered Loss Amounts, after giving effect to
distributions on that Distribution Date, that are allocated to any
Class of Notes;
(12) Any accrued and unpaid Loss Amounts from previous Distribution Dates,
after giving effect to distributions on that Distribution Date, that
are due to any Class of Noteholders;
(13) Any unreimbursed Class B Note Principal Carryover Shortfall;
(14) The Investor Percentage of the Servicing Fee;
(15) Any Required Amount included in the amount being distributed to
Noteholders, the balance on deposit in the Reserve Fund on that
Distribution Date, the change in that balance from the immediately
preceding Distribution Date, the Reserve Fund Cash Requirement and
any Reserve Fund Supplemental Requirement, RV Insurer Reserve Fund
Supplemental Requirement or Downgrade Reserve Fund Supplemental
Requirement;
(16) Any Transferor Amount included in the amount being distributed to
Noteholders;
(17) The Aggregate Net Investment Value as of the end of the Collection
Period;
(18) The aggregate amount of Payments Ahead on deposit in the SUBI
Collection Account and the change in that amount from the immediately
preceding Distribution Date;
(19) The aggregate amount of Advances made for that Collection Period and
the aggregate amount of unreimbursed Advances on that Distribution
Date;
(20) Certain information used in determining compliance with the
Charge-off Rate Test and the Delinquency Test;
(21) Any Insured Residual Value Loss Amount for that Distribution Date;
and
(22) The Class A Cap Receipt for that Distribution Date.
Each amount in clauses (2) through (5) and (8) through (13) will be expressed in
the aggregate and as a dollar amount per $1,000 of the Initial Class A, Class
A-1, Class A-2, Class A-3, Class A-4 or Class B Note Balance, as applicable.
Noteholders and Note Owners may obtain copies of these statements by requesting
them in writing from the Indenture Trustee.
Within the prescribed period of time for tax reporting purposes after the
end of each calendar year, the Indenture Trustee also will mail to each person
who at any time during such calendar year was a Class A or Class B Noteholder or
a Note Owner, a statement containing the sum of the amounts described in clauses
(2) through (7) and (9) through (14) above for the purpose of preparing his or
her federal income tax return. (Agreement, Section 3.06).
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TERMINATION OF THE TRUST; REDEMPTION OF THE NOTES
The obligations of the Transferor and the Indenture Trustee under the
Agreement will terminate upon the earliest of:
(1) The disposition, expiration or termination of the SUBI, and the
distribution of all proceeds thereof, together with all amounts on
deposit in the Accounts and the Reserve Fund, as prescribed in the
Agreement;
(2) The day after the Distribution Date on which the Notes are paid in
full and there are no unreimbursed Uncovered Loss Amounts allocated to
the Notes and no Class B Note Principal Carryover Shortfall (or unpaid
accrued interest on those amounts); or
(3) The Transferor's purchase of the assets of the Trust and the resulting
redemption of the Notes.
To avoid excessive administrative expenses, the Transferor may purchase all
of the assets of the Trust on any Distribution Date (THE 'REDEMPTION DATE') if,
either before or after giving effect to any principal payment on that date, the
Note Balance is less than or equal to 10% of the Initial Note Balance. The
purchase price will be the greater of:
(1) The Note Balance plus accrued and unpaid interest thereon at the
related Note Rates, plus certain other accrued and unpaid amounts that
are due to the Noteholders or the Servicer; and
(2) The Aggregate Net Investment Value as of the last day of the preceding
Collection Period.
If the Transferor elects to purchase the assets of the Trust, the Indenture
Trustee will furnish a redemption notice to each Noteholder not more than 30
days and not less than 15 days before the Redemption Date. The failure to give
this notice, or any defect in the notice, to any Noteholder of any Note selected
for redemption will not impair or affect the validity of the redemption. The
Notes will become due and payable on, and no interest will accrue after, the
Redemption Date. (Agreement, Sections 7.01 and 7.02; Indenture, Section 2.06).
The Indenture Trustee will make the final distribution to any Noteholder
only upon surrender and cancellation of his or her Note at an office or agency
of the Indenture Trustee specified in the redemption notice. If the Indenture
Trustee has taken certain measures to locate a Noteholder and failed, it will
distribute any remaining amounts owed to that Noteholder to the Transferor.
(Indenture, Section 2.06).
BOOK-ENTRY REGISTRATION
Note Owners may hold through The Depository Trust Company ('DTC') in the
United States, or through Cedelbank ('CEDEL') or the Euroclear System
('EUROCLEAR') in Europe (which in turn hold through DTC), if they are
participants in those systems, or indirectly through organizations that are
participants in those systems ('PARTICIPANTS').
Cede & Co. ('CEDE'), as nominee for DTC, will hold the Class A Notes. Cedel
and Euroclear will hold omnibus positions on behalf of their Participants
through customers' securities accounts in Citibank, N.A. or Morgan Guaranty
Trust Company of New York (THE 'DEPOSITARIES'), which in turn will hold those
positions in customers' securities accounts in the Depositaries' names on the
books of DTC. Unless and until the Trust issues Definitive Notes, we anticipate
that the only Class A Noteholder will be Cede, as the nominee of DTC. Note
Owners will only be permitted to exercise their rights indirectly through DTC.
Transfers between Participants in DTC ('DTC PARTICIPANTS') will occur in
accordance with DTC rules. Transfers between Participants in Cedel ('CEDEL
PARTICIPANTS') and Participants in Euroclear ('EUROCLEAR PARTICIPANTS') will
occur in accordance with their respective rules and operating procedures.
Persons holding directly or indirectly through DTC, on the one hand, and
directly or indirectly through Cedel Participants or Euroclear Participants, on
the other, will effect cross-market transfers in DTC in accordance with DTC
rules on behalf of Cedel or Euroclear by its Depositary. However, each
cross-market transaction will require delivery of instructions to Cedel or
Euroclear by the counterparty in that system in accordance with its rules and
procedures and within its established deadlines (European time). Cedel or
Euroclear will, if the transaction meets its settlement requirements, deliver
instructions to its Depositary to
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take action to effect final settlement on its behalf by delivering or receiving
securities in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Cedel Participants
and Euroclear Participants may not deliver instructions directly to the relevant
Depositaries.
Because of time-zone differences, credits of securities received in Cedel
or Euroclear as a result of a transaction with a DTC Participant will be made
during subsequent securities settlement processing and dated the business day
following the DTC settlement date. These credits and transactions will be
reported to the relevant Cedel Participants or Euroclear Participants on such
business day. Cash received in Cedel or Euroclear as a result of sales of Class
A Notes by or through a Cedel Participant or Euroclear Participant to a DTC
Participant will be received with value on the DTC settlement date but will be
available in the relevant Cedel or Euroclear cash account only as of the
business day following settlement in DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a 'banking organization' within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a 'clearing corporation' within the
meaning of New York's Uniform Commercial Code (THE 'UCC') and a 'clearing
agency' registered pursuant to the provisions of Section 17A of the Exchange
Act. DTC holds securities that DTC Participants deposit with DTC. DTC also
facilitates the clearance and settlement of securities transactions among DTC
Participants through electronic computerized book-entry changes in accounts of
DTC Participants, eliminating the need for physical movement of securities
certificates. DTC Participants include securities brokers and dealers (including
the Underwriters), banks, trust companies, clearing corporations and certain
other organizations. Indirect access to the DTC system also is available to
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a DTC Participant, either directly or indirectly
(THE 'INDIRECT DTC PARTICIPANTS'). The rules applicable to DTC and DTC
Participants are on file with the Securities and Exchange Commission.
Note Owners who are not DTC Participants or Indirect DTC Participants but
who desire to purchase, sell or otherwise transfer ownership of, or an interest
in, Class A Notes under the DTC System may do so only through DTC Participants
or Indirect DTC Participants. DTC Participants will receive a credit for the
Class A Notes in DTC's records. The ownership interest of each Note Owner in
turn will be recorded on the DTC Participants' and Indirect DTC Participants'
respective records. Note Owners will not receive written confirmation from DTC
of their purchases, but Note Owners should receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the DTC Participant or Indirect DTC Participant through which the
Note Owner entered into the transaction. Transfers of ownership interests in the
Class A Notes will be accomplished by entries made on the books of DTC
Participants acting on behalf of Note Owners.
To facilitate subsequent transfers, all Class A Notes deposited by DTC
Participants with DTC will be registered in the name of Cede, as nominee of DTC.
The deposit of Class A Notes with DTC and their registration in the name of Cede
will effect no change in beneficial ownership. DTC will have no knowledge of the
actual Note Owners and its records will reflect only the identity of the DTC
Participants to whose accounts the Class A Notes are credited, who may or may
not be the Note Owners. DTC Participants and Indirect DTC Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to DTC Participants,
by DTC Participants to Indirect DTC Participants and by DTC Participants and
Indirect DTC Participants to Note Owners will be governed by arrangements among
them, subject to applicable statutory or regulatory requirements.
The Indenture Trustee will make principal and interest payments on the
Class A Notes to DTC. DTC's practice is to credit DTC Participants' accounts on
each Distribution Date in accordance with their holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payment on the
Distribution Date. Payments by DTC Participants and Indirect DTC Participants to
Note Owners will be governed by standing instructions and customary practices,
as with securities held for the accounts of customers in bearer form or
registered in 'street name', and will be the responsibility of the DTC
Participant or Indirect DTC Participant and not of DTC, the Indenture Trustee,
the Owner Trustee, the Origination Trustee, the Servicer or the Transferor,
subject to applicable statutory or regulatory requirements. Payment of
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principal of and interest on the Class A Notes to DTC will be the responsibility
of the Indenture Trustee, disbursement of those payments to DTC Participants
will be the responsibility of DTC, and disbursement of those payments to Note
Owners will be the responsibility of DTC Participants and Indirect DTC
Participants. As a result, under the book-entry format, Note Owners may
experience some delay in their receipt of payments.
Because DTC can only act on behalf of DTC Participants, who in turn act on
behalf of Indirect DTC Participants and certain banks, the ability of a Note
Owner to pledge Class A Notes to persons or entities that do not participate in
the DTC system, or otherwise take actions with respect to such Class A Notes,
may be limited due to the lack of a physical Note for such Class A Notes.
Neither DTC nor Cede will consent or vote with respect to the Class A
Notes. Under its usual procedures, DTC mails an 'Omnibus Proxy' to the Indenture
Trustee as soon as possible after any applicable record date for a consent or
vote. The Omnibus Proxy assigns Cede's consenting or voting rights to those DTC
Participants to whose accounts the Class A Notes are credited on that record
date (identified in a listing attached to the Omnibus Proxy). None of the
Transferor, the Servicer, the Origination Trustee, the Owner Trustee or the
Indenture Trustee will have any liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests of the Class A
Notes held by Cede, as nominee of DTC, or for maintaining, supervising or
reviewing any records relating to those beneficial ownership interests.
Cedel is incorporated under the laws of Luxembourg as a professional
depository. Cedel holds securities for Cedel Participants and facilitates the
clearance and settlement of securities transactions between Cedel Participants
through electronic book-entry changes in accounts of Cedel Participants,
eliminating the need for physical movement of certificates. Transactions may be
settled in Cedel in any of 34 currencies, including United States dollars. Cedel
provides to Cedel Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Cedel interacts with domestic markets in
several countries. As a professional depositary, Cedel is regulated by the
Luxembourg Monetary Institute. Cedel Participants are recognized financial
institutions around the world, including underwriters, securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Indirect access to Cedel also is available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Cedel Participant, either directly or indirectly.
Euroclear was created in 1968 to hold securities for Euroclear Participants
and to clear and settle transactions between Euroclear Participants through
simultaneous electronic book-entry delivery against payment, eliminating the
need for physical movement of certificates and any risk from lack of
simultaneous transfers of securities and cash. Transactions may be settled in
Euroclear in any of 34 currencies, including United States dollars. The
Euroclear System includes various other services, including securities lending
and borrowing, and interacts with domestic markets in more than 25 countries
generally similar to the arrangements for cross-market transfers with DTC
described above. Euroclear is operated by the Brussels, Belgium office of Morgan
Guaranty Trust Company of New York (THE 'EUROCLEAR OPERATOR'), under contract
with Euroclear Clearance System S.C., a Belgian cooperative corporation (THE
'COOPERATIVE'). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Cooperative. The Cooperative's board
establishes policy for the Euroclear System. Euroclear Participants include
banks (including central banks), securities brokers and dealers and other
professional financial intermediaries. Indirect access to the Euroclear System
is also available to other firms that clear through or maintain a custodial
relationship with a Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System
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and applicable Belgian law. These rules, procedures and laws govern transfers of
securities and cash within Euroclear, withdrawals of securities and cash from
Euroclear and receipts of payments with respect to securities in Euroclear. All
securities in Euroclear are held on a fungible basis without attribution of
specific certificates to specific securities clearance accounts. The Euroclear
Operator acts under these rules, procedures and laws only on behalf of Euroclear
Participants, and has no record of or relationship with persons holding through
Euroclear Participants.
Distributions on Class A Notes held through Cedel or Euroclear will be
credited to the cash accounts of Cedel Participants or Euroclear Participants in
accordance with the relevant system's rules and procedures, to the extent
received by its Depositary. Those distributions will be subject to tax reporting
and withholding in accordance with relevant United States tax laws and
regulations. For further information in this regard, see 'Material Income Tax
Considerations--Federal Taxation--Federal Income Tax Consequences to Foreign
Investors' and, in Annex I, 'Global Clearance, Settlement and Tax Documentation
Procedures--Certain U.S. Federal Income Tax Documentation Requirements'. Cedel
or the Euroclear Operator, as the case may be, will take any other action
permitted to be taken by a Class A Noteholder on behalf of a Cedel Participant
or Euroclear Participant only in accordance with its relevant rules and
procedures and subject to the relevant Depositary's ability to effect such
actions on its behalf through DTC.
Although DTC, Cedel and Euroclear have agreed to these procedures in order
to facilitate transfers of Class A Notes among Participants of DTC, Cedel and
Euroclear, they are under no obligation to perform or continue to perform these
procedures and may discontinue them at any time.
DEFINITIVE NOTES
The Trust will issue Class A Notes as Definitive Notes to Note Owners
rather than to DTC only if:
(1) DTC is no longer willing or able to discharge its responsibilities
with respect to the Class A Notes, and neither the Indenture Trustee
nor the Transferor is able to locate a qualified successor;
(2) The Transferor, at its option, elects to terminate the book-entry
system through DTC; or
(3) After an Indenture Event of Default, Note Owners representing in the
aggregate more than 50% of the Voting Interests of the Class A Notes
(voting together as a single class) advise the Indenture Trustee
through DTC or its successor in writing that the continuation of a
book-entry system through DTC or its successor is no longer in the
best interest of Note Owners.
When any of these events occurs, the Indenture Trustee will notify all Note
Owners, through Participants, of the availability through DTC of Definitive
Notes. Upon surrender by DTC of the certificates representing the Class A Notes
and the receipt of instructions for re-registration, the Indenture Trustee will
issue Definitive Notes to Note Owners, who will become Noteholders for all
purposes of the Agreement. (Indenture, Section 2.12).
The Indenture Trustee then will make payments on the Class A Notes directly
to their Noteholders in accordance with the procedures set forth in the
Indenture. The Indenture Trustee will make interest payments and any principal
payments on the Definitive Notes on each Distribution Date to Noteholders in
whose names the Definitive Notes were registered at the close of business on the
related Record Date. The Indenture Trustee will make payments by check mailed to
the addresses of the Noteholders on the Note register or, under certain
circumstances, by wire transfer to a bank or depository institution located in
the United States. (Indenture, Section 2.06). The Indenture Trustee will make
the final payment on any Class A Notes (whether Definitive Notes or global
certificates registered in the name of Cede representing the Class A Notes) only
upon presentation and surrender of those Definitive Notes or global certificates
at the office or agency specified in the notice of final distribution.
(Indenture, Section 2.06).
Definitive Notes will be transferable and exchangeable at the offices of
the Indenture Trustee or the note registrar set forth in the Agreement. The
Indenture Trustee will not impose a service charge for any registration of
transfer or exchange, but the Indenture Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge. (Indenture, Section
2.04).
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THE INDENTURE TRUSTEE
Appointment, Resignation, Eligibility and Actions
Harris Trust and Savings Bank will be the Indenture Trustee under the
Indenture. The corporate trust office of the Indenture Trustee is located at 311
West Monroe, 12th Floor, Chicago, Illinois 60606. Harris is not affiliated with
World Omni, although it does act as a service provider to World Omni.
The Indenture Trustee may resign at any time, in which event the Trust will
be obligated to appoint a successor Indenture Trustee. Noteholders representing
more than 50% of the Voting Interests of all Notes (voting together as a single
class) may remove the Indenture Trustee by delivering notice to the Indenture
Trustee and the Trust. The Trust also may remove the Indenture Trustee if the
Indenture Trustee ceases to be eligible under the Indenture, becomes legally
unable to act or becomes insolvent. In these circumstances, the Trust will
appoint a successor Indenture Trustee. Any resignation or removal of the
Indenture Trustee and appointment of a successor Indenture Trustee will not
become effective until acceptance of the appointment by the successor.
(Indenture, Section 6.10).
The Indenture Trustee generally must be a corporation organized under the
laws of a state, authorized to exercise corporate trust powers under those laws,
and subject to supervision or examination under those laws, with a combined
capital and surplus of at least $50,000,000 and a long-term deposit rating no
lower than Baa3 by Moody's, or must be otherwise acceptable to each Rating
Agency. A co-trustee or separate trustee need not meet these eligibility
requirements. (Indenture, Sections 6.08 and 6.14 ).
Noteholders representing more than 50% of the Voting Interests of all Notes
(voting together as a single class) generally will have the power to direct any
proceeding for any remedy available to the Indenture Trustee under the
Agreement, and the exercise of any trust or power conferred on the Indenture
Trustee by the Agreement (including actions by the Indenture Trustee in its
capacity as a party to, or a third-party beneficiary of, the SUBI Trust
Agreement or the Servicing Agreement). However, the Indenture Trustee will not
be required to follow such a direction if, after being advised by counsel, it
concludes that the action is unlawful, or if it in good faith determines that
the proceedings directed would be illegal, would subject it to personal
liability or would be unduly prejudicial to the rights of other Noteholders.
(Indenture, Section 5.14).
A Noteholder may institute proceedings under the Indenture, but only if he
or she previously has given to the Indenture Trustee written notice of default
and if Noteholders representing not less than 25% of the Voting Interests of all
Notes (voting together as a single class) have requested in writing that the
Indenture Trustee institute such proceedings in its own name as Indenture
Trustee and have offered to the Indenture Trustee reasonable indemnity and the
Trustee for 60 days has neglected or refused to institute any such proceeding.
(Indenture, Section 5.09). The Indenture Trustee will not be obligated to
exercise any of the rights or powers vested in it by the Agreement or to make
any investigation of matters under the Agreement or to institute, conduct or
defend any litigation under or in relation to the Agreement at the request,
order or direction of any of the Noteholders, unless those Noteholders have
offered it reasonable security or indemnity against the costs, expenses and
liabilities which it may incur. (Indenture, Section 6.03). Noteholders will have
no express right to institute a proceeding directly under the SUBI Trust
Agreement or the Servicing Agreement.
List of Noteholders
Upon the Servicer's written request, the Indenture Trustee, as note
registrar, will provide within 15 days a list of the names and addresses of all
Noteholders. In addition, three or more Noteholders or Noteholders representing
not less than 25% of the Voting Interests of any Class of Notes, upon compliance
by such Noteholders with certain specified requirements, may request that the
Indenture Trustee, as note registrar, afford them access during business hours
to the current list of Noteholders for purposes of communicating with respect to
their rights under the Indenture. (Indenture, Section 7.02). For further
information regarding communications with Noteholders, see 'Description of the
Notes--Book-Entry Registration' and '--Definitive Notes'.
The Indenture will not provide for any annual or other meetings of
Noteholders.
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SECURITY FOR THE NOTES
PRIMARY SECURITY FOR THE NOTES
The Notes will be secured by all of the property of the Trust, which will
primarily consist of the SUBI as evidenced by the SUBI Certificate. The property
of the Trust will also include amounts on deposit in the Reserve Fund and the
Distribution Account. The Indenture Trustee also will have a security interest
in the Contracts and the related contract rights that may be perfected by filing
a financing statement under the UCC. For details, see 'Certain Legal Aspects of
the Origination Trust and the SUBI--The SUBI' and 'Certain Legal Aspects of the
Contracts and the Leased Vehicles--Back-up Security Interests'. The Indenture
Trustee also will have a security interest in the SUBI Collection Account, the
Distribution Account and the Reserve Fund, the Contingent and Excess Liability
Insurance Policies and the Residual Value Insurance Policy and will be a
third-party beneficiary of the SUBI Trust Agreement and the Servicing Agreement.
Neither the Owner Trustee nor the Indenture Trustee will have a perfected
security interest in the Leased Vehicles.
THE RESERVE FUND
Establishment and Purposes of the Reserve Fund
The Owner Trustee will establish a trust account with and in the name of
the Indenture Trustee for the benefit of the Noteholders and the Transferor, as
holder of the Transferor Certificate (THE 'RESERVE FUND'). The Servicer, on
behalf of the Indenture Trustee, will apply the money in the Reserve Fund on
each Distribution Date to pay the Required Amount if Transferor Amounts and
Insured Residual Value Loss Amounts paid under the Residual Value Insurance
Policy are insufficient to cover certain shortfalls in amounts due to the
Noteholders. For a description of payments of the Required Amount, see
'Description of the Notes--Distributions on the Notes--Distributions of
Interest'. In addition, any remaining money in the Reserve Fund will be
available to make payments to the Noteholders if Collections ultimately are
insufficient to pay the Class A-1, Class A-2, Class A-3, Class A-4 or Class B
Notes in full. (Agreement, Sections 3.03 and 3.04).
The Reserve Fund Cash Requirement
The Transferor will deposit $11,605,107.42 (THE 'INITIAL DEPOSIT') into the
Reserve Fund on or before the Closing Date. On each Distribution Date, the
Reserve Fund will be funded with available funds from the Investor Percentage of
Interest Collections and Transferor Amounts that otherwise would be paid to the
Transferor, in the priority required by the interest payment waterfall, until
the amount on deposit equals the Reserve Fund Cash Requirement. For details on
this deposit, see 'Description of the Notes--Distributions on the
Notes--Distributions of Interest'. The Reserve Fund also will be supplemented by
all income realized on Permitted Investments in the Reserve Fund, net of losses
on those investments. So long as all of the Reserve Fund Tests are satisfied and
there is no RV Insurer Trigger Event or Downgrade Trigger Event, the 'RESERVE
FUND CASH REQUIREMENT' on any Distribution Date will be the lesser of
$11,605,107.42 (i.e., 1.0% of the Aggregate Net Investment Value as of the
Initial Cutoff Date), and the Note Balance as of that Distribution Date (after
any reduction on that date). In these circumstances, we expect that the Reserve
Fund Cash Requirement will be $11,605,107.42 on each Distribution Date relating
to the Revolving Period. (Agreement, Sections 3.03 and 3.04).
Other Reserve Fund Requirements
On each Deposit Date or Distribution Date when the Required Amount or any
other amount is to be withdrawn from the Reserve Fund, if the amount on deposit
in the Reserve Fund is insufficient to make that withdrawal (A 'RESERVE FUND
DEFICIENCY'), the Transferor will be required to deposit into the Reserve Fund
the lesser of the Reserve Fund Deficiency and $5,802,553.71 (i.e., 0.5% of the
Aggregate Net Investment Value as of the Initial Cutoff Date), less all amounts
previously deposited by the Transferor into the Reserve Fund to satisfy a
Reserve Fund Deficiency (THE 'RESERVE FUND SUPPLEMENTAL REQUIREMENT').
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If a conservator, receiver or bankruptcy trustee is appointed by the RV
Insurer, or if certain other bankruptcy or insolvency events occur with respect
to the RV Insurer, or if the Residual Value Insurance Policy is declared void or
unenforceable in a final judgment after all appeals, and if one or more policies
with substantially similar aggregate coverage and provisions have not been
issued by an insurer acceptable to each Rating Agency nor has an alternative
mechanism been implemented to support the Residual Values of the Leased Vehicles
in accordance with the procedures required for amendment of the Agreement, then
an 'RV INSURER TRIGGER EVENT' will exist. For a description of the procedures
required for amendment of the Agreement, see 'Additional Document
Provisions--Amendments'. Within 60 days of notice of an RV Insurer Trigger
Event, the Transferor will be required to deposit into the Reserve Fund the
difference between the greater of the Initial Deposit and the amount then on
deposit in the Reserve Fund, and $40,617,875.97 (i.e., 3.5% of the Aggregate Net
Investment Value as of the Initial Cutoff Date) (THE 'RV INSURER RESERVE FUND
SUPPLEMENTAL REQUIREMENT'). From that time until one or more policies with
substantially similar aggregate coverage and provisions are issued by an insurer
acceptable to each Rating Agency, or an alternative mechanism is implemented to
support the Residual Values of the Leased Vehicles as described above, the
Reserve Fund Cash Requirement will be $40,617,875.97 (i.e., 3.5% of the
Aggregate Net Investment Value as of the Initial Cutoff Date).
If the RV Insurer's financial strength rating is downgraded to 'Aa3' or
lower by Moody's, or below 'AAA' by Standard & Poor's (or, if rated by Fitch,
below 'AAA' by Fitch), a 'DOWNGRADE TRIGGER EVENT' will exist. Within 60 days of
a Downgrade Trigger Event, the Transferor will be required either to cause one
or more policies with substantially similar aggregate coverage and provisions to
be issued by an insurer acceptable to each Rating Agency, or to cause an
alternative mechanism to be implemented to support the Residual Values of the
Leased Vehicles as described above, or to deposit into the Reserve Fund any
amount that the Rating Agencies may require in order to maintain their
then-current ratings on each Class of Notes (THE 'DOWNGRADE RESERVE FUND
SUPPLEMENTAL REQUIREMENT'). For so long as the Transferor elects to deposit the
Downgrade Reserve Fund Supplemental Requirement rather than obtain an alternate
insurance policy or implement an alternate Residual Value support mechanism, the
Reserve Fund Cash Requirement will be the amount the Rating Agencies require in
order to maintain their then-current ratings on each Class of Notes. In that
event, the Rating Agencies may impose additional conditions to the maintenance
of their then-current ratings on each Class of Notes, including the addition of
further triggers for the application of the Alternate Reserve Fund Formula
(which generally would be expected to relate to the Residual Values of the
Leased Vehicles). If the Transferor cannot obtain an alternate insurance policy,
implement an alternate Residual Value support mechanism or deposit the Downgrade
Reserve Fund Supplemental Requirement, or determines in good faith that any of
those would not be commercially reasonable, then on each Distribution Date all
Excess Collections will be deposited into the Reserve Fund, regardless of the
Reserve Fund Cash Requirement, and the Rating Agencies may downgrade their
then-current ratings on each Class of Notes. On the Distribution Date after the
Transferor obtains an alternate insurance policy, implements an alternate
Residual Value support mechanism or deposits the Downgrade Reserve Fund
Supplemental Requirement, money in the Reserve Fund in excess of the Reserve
Fund Cash Requirement will be distributed to the Transferor (or to the
Noteholders to the extent allocable to the Accelerated Principal Distribution
Amount). (Agreement, Sections 1.01 and 3.04).
Payment of the Reserve Fund Supplemental Requirement, the RV Insurer
Reserve Fund Supplemental Requirement and the Downgrade Reserve Fund
Supplemental Requirement will be obligations of the Transferor. If there is a
Reserve Fund Deficiency, an RV Insurer Trigger Event or a Downgrade Trigger
Event, the Reserve Fund Supplemental Requirement, the RV Insurer Reserve Fund
Supplemental Requirement or the Downgrade Reserve Fund Supplemental Requirement,
as the case may be, will supplement the cash available in the Reserve Fund to a
limited extent. We cannot assure you that the Transferor will have sufficient
cash to fund all or a part of any Reserve Fund Deficiency or to meet its
obligation to pay any Reserve Fund Supplemental Requirement, RV Insurer Reserve
Fund Supplemental Requirement or Downgrade Reserve Fund Supplemental
Requirement. However, pursuant to the Support Agreement, World Omni has agreed
under certain circumstances to provide or arrange for financial assistance in
order to ensure that the Transferor maintains positive partners' capital. The
Support Agreement will not constitute a guarantee by World Omni of any of the
Transferor's obligations, including payment of any Reserve Fund Supplemental
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Requirement, RV Insurer Reserve Fund Supplemental Requirement or Downgrade
Reserve Fund Supplemental Requirement. See 'The Transferor' for further
information in this regard.
Reserve Fund Tests
If any Reserve Fund Test is not satisfied as of any Determination Date and
no RV Insurer Trigger Event or Downgrade Trigger Event has occurred and is
continuing, the Reserve Fund Cash Requirement for the related Distribution Date
(THE 'ALTERNATE RESERVE FUND FORMULA') will be the lesser of two times the
Reserve Fund Cash Requirement and the Note Balance as of that Distribution Date
(after any reduction on that date). The Alternate Reserve Fund Formula will be
used to determine the Reserve Fund Cash Requirement on all future Distribution
Dates until all Reserve Fund Tests are satisfied. (Agreement, Section 1.01).
However, see 'Additional Document Provisions--The Servicing
Agreement--Compliance with ERISA' for an ERISA compliance test that, if not
satisfied on any Determination Date, will result in all Excess Collections being
deposited in the Reserve Fund until that test has been satisfied.
The 'RESERVE FUND TESTS' will be the Charge-off Rate Test and the
Delinquency Test. The 'CHARGE-OFF RATE TEST' will not be satisfied if, on any
Determination Date, the average of the Charge-off Rates for the three preceding
calendar months is greater than 2.75%. The 'CHARGE-OFF RATE' for any calendar
month will be the Discounted Principal Balance of all Contracts that became
Charged-off Contracts during that month, less all Net Repossessed Vehicle
Proceeds and other Net Liquidation Proceeds collected during that month on
Charged-off Contracts, all divided by the average of the Aggregate Net
Investment Value as of the last day of that month and the preceding month. This
result will then be multiplied by twelve to produce an annualized rate.
The 'DELINQUENCY TEST' will not be satisfied if, on any Determination Date,
the average of the Delinquency Rates for the three preceding calendar months is
greater than 1.75%. The 'DELINQUENCY RATE' for any calendar month will be the
number of Current Contracts that are 61 days or more delinquent, whether or not
the related Leased Vehicles have been repossessed (or repossession proceedings
have been initiated), but which have not yet been sold, divided by the aggregate
number of Current Contracts, in each case as of the last day of that month.
'CURRENT CONTRACTS' will be all Contracts other than Charged-off, Liquidated,
Matured and Additional Loss Contracts. A 'LIQUIDATED CONTRACT' will be a
Contract that has been the subject of a Prepayment or otherwise has been paid in
full. An 'ADDITIONAL LOSS CONTRACT' will be a Contract that has been sold to pay
an Additional Loss Amount. (Agreement, Section 1.01).
The Transferor may request each Rating Agency to approve a different
formula for determining the Reserve Fund Cash Requirement, the Reserve Fund
Supplemental Requirement, the RV Insurer Reserve Fund Supplemental Requirement
or the Downgrade Reserve Fund Supplemental Requirement (including using
different Reserve Fund Tests or different cures for failures of those tests)
that would result in a decrease in their amounts. The Transferor also may
request each Rating Agency to approve a change in the manner by which the
Reserve Fund is funded, which could include borrowings by the Transferor to fund
all or a portion of the Initial Deposit (payable from assets or cash flow
otherwise payable to the Transferor) or to meet the Reserve Fund Cash
Requirement, the Reserve Fund Supplemental Requirement, the RV Insurer Reserve
Fund Supplemental Requirement and/or the Downgrade Reserve Fund Supplemental
Requirement. If each Rating Agency confirms to the Indenture Trustee to the
effect that the use of any the new formula or change will not result in a
qualification, reduction or withdrawal of its then-current rating of any Class
of Notes, and the Transferor's counsel delivers an opinion as required for
amendments to the Agreement, then the new formula or change will be implemented
and the Agreement will be amended if necessary, without the consent of any
Noteholder or Note Owner. (Agreement, Section 9.01). For a discussion of
required opinions of counsel for amendments to the Agreement, see 'Additional
Document Provisions--Amendments'.
Withdrawals from the Reserve Fund
On each Deposit Date, the Indenture Trustee will withdraw any Required
Amount from the Reserve Fund, to the extent available, and deposit it in the
Distribution Account. Money in the Reserve Fund also will be available to make
certain other payments to Noteholders and the Transferor. See 'Security for the
Notes-- The Reserve Fund--Establishment and Purposes of the Reserve Fund'. Money
in the Reserve Fund on a
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Distribution Date in excess of the Reserve Fund Cash Requirement will be
released to the Transferor. Any such amounts received by the Transferor will be
free of any claim of the Trust, the Indenture Trustee or the Noteholders and
will not be available to the Indenture Trustee or the Trust for the purpose of
making deposits to the Reserve Fund or making payments to the Noteholders. In no
event will the Transferor be required to refund any amount properly received by
it from the Reserve Fund. (Agreement, Sections 3.03 and 3.04).
THE RESIDUAL VALUE INSURANCE POLICY
American International Specialty Lines Insurance Company (THE 'RV INSURER')
will issue a residual value insurance policy (THE 'RESIDUAL VALUE INSURANCE
POLICY') to the Indenture Trustee. The Residual Value Insurance Policy will
cover the 'INSURED RESIDUAL VALUE LOSS AMOUNT' for any Collection Period, which
will be the lesser of the Investor Percentage of the Residual Value Loss Amount
and any shortfall in the amount required to make all payments in the interest
payment waterfall (other than deposits into the Reserve Fund) for the related
Distribution Date, after application of the Investor Percentage of Interest
Collections and Transferor Amounts otherwise payable in respect of the
Transferor Interest.
The Residual Value Insurance Policy will cover only the Leased Vehicles and
not any UTI Asset or Other SUBI Asset. Insured Residual Value Loss Amounts will
be driven primarily by Residual Value Loss Amounts. Residual Value Loss Amounts
will only arise in connection with Residual Value losses, which will be
generated by the disposition of Leased Vehicles Matured Contracts and losses on
Contracts terminated on or prior to their Maturity Dates under World Omni's
pro-active termination programs in connection with the payment by or on behalf
of the lessee of less than their respective Outstanding Principal Balances.
The Residual Value Insurance Policy may not be cancelled by the RV Insurer.
The Residual Value Insurance Policy will not have any deductibles or provide for
co-insurance, but the aggregate maximum amount payable under the Residual Value
Insurance Policy with respect to any Leased Vehicle will be the lesser of
$60,000 and its residual value. Additionally, the aggregate maximum amount
payable under the Residual Value Insurance Policy will not exceed twenty percent
of the aggregate residual values of all Leased Vehicles. For these purposes, the
residual value of a Leased Vehicle generally will be determined by reference to
World Omni's residual value lease policies communicated to its Dealers (which
amount generally will be equal to its Residual Value), as adjusted for
extensions of the related Contract.
On or before the fifth calendar day before each Distribution Date, the
Servicer will determine whether, on that Distribution Date, there will be any
Insured Residual Value Loss Amount for the related Collection Period. If so, the
Servicer will make a claim for the Insured Residual Value Loss Amount under the
Residual Value Insurance Policy. Pursuant to the Residual Value Insurance
Policy, so long as all conditions precedent to liability set forth therein are
satisfied and no exclusions apply, the RV Insurer will pay any claim within five
calendar days. The Residual Value Insurer will deposit the proceeds of a claim
relating to the Revolving Period directly into the SUBI Collection Account so
they will be available for reinvestment in Subsequent Contracts and Subsequent
Leased Vehicles. The Residual Value Insurer will deposit the proceeds of a claim
relating to the Amortization Period directly into the Distribution Account so
they will be available on the Distribution Date to make the distributions
required by the interest payment waterfall, including Covered Loss Amounts and
unreimbursed Uncovered Loss Amounts from previous Distribution Dates.
The RV Insurer is an insurance company incorporated under the laws of the
State of Alaska and is wholly owned by National Union Fire Insurance Company of
Pittsburgh, Pa. ('NATIONAL UNION'), The Insuarnce Company of the State of
Pennsylvania, and Birmingham Fire Insurance Company of Pennsylvania, all of
which are wholly-owned subsidiaries of American International Group, Inc.
('AIG'), a publicly-held holding company incorporated under the laws of the
State of Delaware. The Residual Value Insurance Policy is an obligation of the
RV Insurer and not of AIG or any other affiliate of the RV Insurer. The RV
Insurer is located at American International Specialty Lines Insurance Company,
c/o American International Surplus Lines Agency, Inc., Harborside Financial
Center, 401 Plaza 3, Jersey City, New Jersey 07311 and its telephone number is
(201) 309-1100.
For the year ended December 31, 1998, the RV Insurer had Total Admitted
Assets of approximately $626 million, Total Liabilities of approximately $386
million and a Capital and Surplus Account of
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approximately $241 million, in each case as reported on a statutory accounting
basis (which varies from generally accepted accounting principles in certain
respects) in accordance with guidelines established by the National Association
of Insurance Commissioners. As of the date of this Prospectus, the RV Insurer
was rated 'Aaa' by Moody's and 'AAA' by Standard & Poor's for financial
strength.
The RV Insurer files Annual Statements with the insurance departments of
the State of Alaska and other states in which it is eligible to write insurance.
Copies of the Annual Statement of the RV Insurer for the year ended December 31,
1998 are available on request from the Indenture Trustee. Audited financial
statements of the RV Insurer, prepared in accordance with Alaska insurance
regulations, for the two years ended December 31, 1998 and the two years ended
December 31, 1997, are included in this Prospectus.
Under its current overall reinsurance arrangements, the RV Insurer
reinsures approximately 80% of its business with National Union. The RV Insurer
also has ceded additional reinsurance of its obligations under the Residual
Value Insurance Policy to National Union. As a result of these reinsurance
arrangements, which do not relieve the RV Insurer from its direct obligations to
the insureds under the Residual Value Insurance Policy, 98% of the Insured
Residual Value Loss Amounts paid by the RV Insurer under that policy will be
reinsured by National Union. The Indenture Trustee on behalf of the Noteholders,
the insured under the Residual Value Insurance Policy, will have no rights
against National Union as a result of these reinsurance arrangements.
For the year ended December 31, 1998, National Union had Total Assets of
approximately $15 billion. Total Liabilities of approximately $10 billion and a
Capital and Surplus Account of approximately $5 billion, in each case as
reported on a statutory accounting basis (which varies from generally accepted
accounting principles in certain respects) in accordance with the guidelines
established by the National Association of Insurance Commissioners. As of the
date of this Prospectus, National Union was rated 'Aaa' by Moody's and 'AAA' by
Standard & Poor's for financial strength.
AIG and the RV Insurer have entered into a Support Agreement. Under the
Support Agreement, AIG has agreed that AIG will cause the RV Insurer to maintain
a policyholders' surplus of not less than $1 million or such greater amount as
shall be sufficient to enable the RV Insurer to perform its obligations under
any policy issued by it. The Support Agreement also provides that if the RV
Insurer needs funds not otherwise available to make timely payment of its
obligations under policies issued by it or otherwise, AIG will provide such
funds at the request of the RV Insurer. The Support Agreement is not a direct or
indirect guarantee by AIG to any person of any obligation of the RV Insurer. AIG
may terminate the Support Agreement only under circumstances in which the RV
Insurer attains a 'AAA' financial strength rating by Standard & Poor's (or, if
Standard & Poor's shall not make such a rating available, an equivalent rating
from another nationally recognized statistical rating organization) without the
Support Agreement. Policyholders (including the Indenture Trustee on behalf of
the Noteholders) may enforce the Support Agreement only if AIG fails to meet its
obligations thereunder on demand.
For the year ended December 31, 1998, AIG had Total Assets of approximately
$194 billion, Total Capital Funds of approximately $27 billion and Net Income of
approximately $3.8 billion, in each case as reported on a consolidated basis in
accordance with generally accepted accounting principles.
The Servicing Agreement will require that World Omni pay the premiums due
on the Residual Value Insurance Policy and will provide that as long as any
Notes are outstanding, it will not permit the Indenture Trustee, as the insured
party, to terminate or cause the termination of the Residual Value Insurance
Policy unless one or more policies are issued with substantially similar
aggregate coverage and provisions issued by an insurer acceptable to each Rating
Agency, or an alternative mechanism is implemented to support the Residual
Values of the Leased Vehicles in accordance with the procedures required for
amending the Agreement. For a description of these procedures, see 'Additional
Document Provisions--Amendments'. World Omni's obligations will survive any
termination of World Omni as Servicer under the Servicing Agreement. (Servicing
Agreement, Section 9.10). World Omni will be obligated to reimburse the RV
Insurer for a specified percentage of claims paid under the Residual Value
Insurance Policy, although World Omni's failure to do so will not affect the RV
Insurer's obligation to pay claims under the Residual Value Insurance Policy.
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THE CONTINGENT AND EXCESS LIABILITY INSURANCE POLICIES
In addition to the liability insurance and the physical damage
(comprehensive and collision, covering damage to the Leased Vehicles) insurance
required to be obtained and maintained by the lessees pursuant to the Contracts,
and as additional protection should any lessee fail to maintain that coverage,
World Omni maintains contingent liability insurance with Lexington Insurance
Company that provides coverage of up to $2 million per occurrence (with no
annual or aggregate cap on the number of claims thereunder) for bodily injury
and property damage suffered by third persons caused by any vehicle owned by any
insured. World Omni also maintains substantial excess insurance coverage for
which the Origination Trustee is an additional named insured (ALL OF THESE
POLICIES, THE 'CONTINGENT AND EXCESS LIABILITY INSURANCE POLICIES'). These
insurance policies together cover in excess of $10 million per accident, and
permit multiple claims in any policy period. If this coverage were exhausted and
damages were assessed against the Origination Trust, third parties could impose
claims against the Origination Trust Assets. In this event you could incur a
loss on your investment. However, the Origination Trustee will be an additional
named insured under the Contingent and Excess Liability Insurance Policies and
payments under these policies will constitute SUBI Assets. If the insurers make
payments to third party claimants against the Origination Trust under the
Contingent and Excess Liability Insurance Policies, this will reduce the
Additional Loss Amounts that might otherwise be incurred by the SUBI Assets. See
'Certain Legal Aspects of the Origination Trust and the SUBI--The SUBI' and
'Certain Legal Aspects of the Contracts and the Leased Vehicles--Vicarious Tort
Liability' for a discussion of related risks.
The Servicing Agreement will provide that so long as any Notes are
outstanding, neither the Origination Trustee nor World Omni may terminate any
Contingent and Excess Liability Insurance Policy unless, among other things, a
replacement insurance policy providing at least the same amount of coverage and
not providing for any annual or aggregate cap on payments is obtained and each
Rating Agency informs the Indenture Trustee that the replacement insurance will
not cause its then-current rating of any Class of Notes to be qualified, reduced
or withdrawn. These obligations of World Omni will survive any termination of
World Omni as Servicer under the Servicing Agreement. (Servicing Agreement,
Section 9.10).
Under certain limited circumstances where the lessee does not maintain the
required insurance, World Omni will be required to pay the amount that otherwise
would have been recoverable under that insurance. For information on this
obligation, see 'Additional Document Provisions--The Servicing Agreement--
Insurance on Leased Vehicles'. If all of the lessee's insurance, the Contingent
and Excess Liability Insurance Policies and World Omni's payment obligations are
exhausted and no other source of reimbursement is available, you may incur a
loss on your investment.
THE CLASS A INTEREST RATE CAP
The Trust will enter into an interest rate cap for the benefit of the Class
A Notes (THE 'CLASS A INTEREST RATE CAP') with Credit Lyonnais New York Branch
trading under the Credit Lyonnais Derivatives Program, as cap provider (IN THAT
CAPACITY, THE 'CLASS A CAP PROVIDER'). The Class A Cap Provider's obligations
under the Class A Interest Rate Cap will be guaranteed by CLFG Corp. ('CLFG')
under the Credit Lyonnais Derivatives Program (THE 'PROGRAM'). The Class A
Interest Rate Cap will have a notional amount as of any Deposit Date or
Distribution Date (THE 'NOTIONAL AMOUNT') equal to the Class A Note Balance as
of the close of business on the preceding Distribution Date (after giving effect
to distributions on that date). On the first Deposit Date and Distribution Date,
the notional amount will equal the Initial Class A Note Balance.
Under the Class A Interest Rate Cap, the Class A Cap Provider will make a
payment to the Trust on the Deposit Date if One-Month LIBOR for that
Distribution Date exceeds % (THE 'CAP RATE'), in an amount equal to the
following (THE 'CLASS A CAP RECEIPT'):
(1) One-Month LIBOR for the distribution date minus the Cap Rate;
multiplied by
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(2) The Notional Amount; multiplied by
(3) A fraction, the numerator of which is the actual number of days
elapsed from the previous Distribution Date to but excluding the
current Distribution Date (or, for the first Deposit Date and
Distribution Date, the actual number of days elapsed from the Closing
Date to but excluding the first Distribution Date), and the
denominator of which is 360.
The Servicer will deposit any Class A Cap Receipt for a Deposit Date into
the Distribution Account, where it will be available for distributions under the
interest payment waterfall on the related Distribution Date. (Agreement, Section
3.03).
The Class A Interest Rate Cap will terminate on the earliest of:
(1) The Stated Maturity Date;
(2) The Distribution Date when the Class A Note Balance is reduced to
zero; and
(3) The date designated by the Indenture Trustee as an early termination
date for the Class A Interest Rate Cap following a payment default by
the Class A Cap Provider or certain other customary early termination
events, including illegality and certain tax events.
The Class A Cap Provider is the New York licensed branch of Credit Lyonnais
S.A., a banking corporation organized and existing under the laws of the
Republic of France. The Class A Cap Provider is licensed under the New York
State Banking Law and is subject to the supervision of the Superintendent of
Banks of the State of New York. The principal place of business of the Class A
Cap Provider is located at 1301 Avenue of the Americas, New York, New York
10019. Credit Lyonnais S.A. has long-term credit rating of 'A3' by Moody's and
'BBB+' by Standard & Poor's. It has a short-term credit rating for commercial
paper of 'F1' by Fitch, which does not rate its long-term obligations.
The Program is a special derivatives products program of Credit Lyonnais
S.A. Under the Program, derivatives transactions are entered into by the Class A
Cap Provider and a counterparty and are guaranteed, as to the Class A Cap
Provider's obligations to a counterparty (THE 'CLFG GUARANTEE'), by CLFG, which
is a special purpose, bankruptcy-remote corporation wholly owned by Financial
Security Assurance Holdings Ltd. The obligations of the Class A Cap Provider
with respect to derivative transactions the Class A Cap Provider enters into
under the Program, including the Class A Interest Rate Cap, are supported by the
Program's resources described below, and are rated 'Aaa' by Moody's and 'AAAt'
by Standard & Poor's. Payment of such obligations is not rated by Fitch.
The obligations of CLFG under the CLFG Guarantee are backed by:
(1) The global resources of Credit Lyonnais S.A.;
(2) A renewable 35-year, irrevocable and unconditional financial guaranty
insurance policy in an initial amount of $200,000,000 (which may be
increased by the Class A Cap Provider up to $500,000,000) issued to
CLFG by its affiliate, Financial Security Insurance, Inc. ("THE CLFG
INSURER"), a monoline United States insurer rated 'Aaa' by Moody's,
'AAA' by Standard & Poor's and "AAA" by Fitch;
(3) Collateral, the required amount of which is determined weekly under
Program guidelines, pledged by the Class A Cap Provider to a
segregated account held by the Program's collateral trustee (together
with the receivables described in (4) below) for the benefit, on a
first priority basis, of CLFG to secure the Class A Cap Provider's
obligations to reimburse CLFG for payments due to counterparties under
the CLFG Guarantee; and
(4) Pledged receivables from investment grade guaranteed counterparties
that have net payable positions with respect to the Class A Cap
Provider.
The collateral described in clause (3) above consists of high quality,
liquid investments of a type required by rating agencies to be consistent with a
triple-A rating. If the financial strength rating of the CLFG Insurer is placed
on Watchlist by Moody's with negative implications or the claims-paying ability
rating of the CLFG Insurer is placed on CreditWatch by Standard & Poor's with
negative implications or any other such rating is suspended, withdrawn or
downgraded below 'Aaa' by Moody's or 'AAA' by Standard
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& Poor's, or any other similar rating of the CLFG Insurer by another rating
agency is suspended, withdrawn or downgraded below an equivalent level, or if
the CLFG Insurer becomes insolvent, the Class A Cap Provider is required within
three days, of that event to post additional collateral. This collateral will
have a maximum value (as determined under the Program) at least equal to the
policy amount until either (1) the CLFG Insurer's triple-A ratings are
reconfirmed or (2) the Class A Cap Provider, as required under the Program,
replaces the CLFG Insurer with another triple-A rated insurer that issues a
substitute policy.
In addition, the Trust will have the option to terminate the Class A
Interest Rate Cap if Moody's, Standard & Poor's or another rating agency
downgrades the Program. Following such a termination, the Trust may be due a
termination payment.
The CLFG Guarantee provides that a counterparty may make an individual
claim if the Class A Cap Provider fails to make any payment to that counterparty
under the related agreement. Under the Program, if a counterparty (including the
Trust) makes a claim under the CLFG Guarantee for a payment the Class A Cap
Provider has failed to make, the Class A Cap Provider is required, within two
business days of such claim, to deliver additional cash collateral to the
collateral trustee for the Program sufficient to enable it to make the payment
due, plus accrued interest, to the counterparty. Any failure by the Class A Cap
Provider to do so is a failure by the Class A Cap Provider to meet the
collateral requirements of the Program, resulting in a Program Event and
termination of the Program as described below.
If the Class A Cap Provider fails to satisfy the collateral requirements of
the Program or certain insolvency events occur with regard to the Class A Cap
Provider or Credit Lyonnais S.A. (a 'PROGRAM EVENT'), an orderly liquidation of
the Program will commence. After notifying the counterparties, the collateral
trustee will liquidate any securities held as collateral, and funds available
from liquidation of collateral, collected receivables and, if necessary, draws
on the insurance policy will be applied by the collateral trustee on behalf of
CLFG to pay the amounts due to the counterparties, which shall be calculated to
include the full replacement value of the guaranteed transactions. The
collateral trustee will use the Program's risk model to value transactions with
below investment-grade counterparties and to determine payment of full
replacement value at the counterparty's side of the market.
An Early Amortization Event will occur if:
(1) A Program Event occurs;
(2) The CLFG Insurer is placed on Watchlist by Moody's, CreditWatch by S&P
or Rating Alert by Fitch with negative implications and neither (a)
the CLFG Insurer's triple-A ratings are reconfirmed nor (b) the Class
A Cap Provider replaces the CLFG Insurer with another triple-A rated
insurer that issues a substitute policy; or
(3) Moody's or Standard & Poor's or another rating agency downgrades the
Program;
and the Trust or the Class A Cap Provider does not timely obtain a replacement
cap with substantially the same terms or establish another arrangement
satisfactory to any relevant Rating Agency, in each case such that it will not
reduce or withdraw its rating of any Class A Notes.
For further details regarding these Early Amortisation Events and their
consequences, see 'Description of the Notes--Early Amortization Events'.
ADDITIONAL DOCUMENT PROVISIONS
AMENDMENTS
The Indenture, the Agreement, the SUBI Trust Agreement, the Servicing
Agreement and the other agreements and instruments relating to the transactions
discussed in this Prospectus may be amended by their parties, without the
consent of the Noteholders, to do the following:
(1) To cure any ambiguity;
(2) To correct or supplement any provision that may be inconsistent with
any other provision; or
(3) To add any other provisions with respect to matters or questions that
are not inconsistent or to add or amend any provision in connection
with permitting transfers of the Class B Notes.
However, any such action may not, in the parties' good faith judgment,
materially and adversely affect any Noteholder's interests, and the Indenture
Trustee is entitled to receive an opinion of counsel that the
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amendment will not adversely and materially affect the legal interest of any
Noteholder. (Indenture, Section 9.02; Agreement, Section 9.01).
Those agreements and instruments also may be amended by their parties to
add any provisions, change them in any manner, eliminate any of their provisions
or modify in any manner the rights of any Class of Noteholders, if:
(1) Each Rating Agency confirms to the Indenture Trustee that the
amendment would not cause its then-current rating on any Class of
Notes to be qualified, reduced or withdrawn; or
(2) The Indenture Trustee receives the consent of Noteholders with more
than 50% of the Voting Interests of all Notes (voting together as a
single class).
Permitted changes specifically may include changing the formula for determining
the Reserve Fund Cash Requirement, the Reserve Fund Supplemental Requirement,
the RV Insurer Reserve Fund Supplement Requirement or the Downgrade Reserve Fund
Supplemental Requirement, changing the remittance schedule for deposits into the
Distribution Account, changing the definition of Permitted Investments, or
replacing the Residual Value Insurance Policy with an alternative mechanism.
However, any amendment eliminating the Reserve Fund or the Residual Value
Insurance Policy, reducing the Reserve Fund Cash Requirement to less than the
lesser of $11,605,107.42 and the Note Balance as of the related Distribution
Date (after giving effect to any reduction on that date), or eliminating or
reducing the RV Insurer Reserve Fund Supplement Requirement also will require an
opinion of the Transferor's counsel that, after the amendment, for federal
income tax purposes the Trust will not be treated as an association taxable as a
corporation, and the Class A Notes will, and the Class B Notes should, properly
be characterized as indebtedness that is secured by the assets of the Trust.
No amendment may increase, reduce, accelerate or delay collections of
payments on the SUBI or the SUBI Certificate, any distributions required to be
made on any Class of Notes or any Note Rate, without the consent of all
Noteholders and Note Owners. Further, no amendment may reduce the percentage of
the Voting Interests of the Notes of any Class required to consent to any
amendment, without the consent of all Noteholders and Note Owners. (Indenture,
Section 9.02; Agreement, Section 9.01).
THE INDENTURE
Events of Default
The following will be 'INDENTURE EVENTS OF DEFAULT':
(1) If the Trust fails to make any interest payment on any Class A Note
due to the lack of available funds to make that payment, within five
Business Days after the payment would have been due had those funds
been available;
(2) After all Class A Notes have been paid in full, if the Trust fails to
make any interest payment on any Class B Note due to the lack of
available funds to make that payment, within five Business Days after
the payment would have been due had those funds been available;
(3) If the Trust defaults in any interest or principal payment on any Note
for five Business Days after its due date;
(4) If the Trust defaults in the observance or performance in any material
respect of any other covenant or agreement, or any representation or
warranty of the Trust was incorrect in any material respect, the
default materially and adversely affects the Noteholders' rights and
the default continues uncured for a period of 60 days after written
notice to the Trust by the Indenture Trustee or to the Trust and the
Indenture Trustee by the Noteholders representing at least 25% of the
Note Balance; and
(5) Certain bankruptcy and insolvency events with respect to the Trust.
(Indenture, Section 5.01). You should be aware that the amount of principal
required to be paid to Class A Noteholders before the Stated Maturity Date
generally will be limited to amounts available in the Distribution
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Account for payment to Noteholders. Therefore, the failure to pay principal on
any Class A Notes generally will not result in an Indenture Event of Default
until the Stated Maturity Date. (Indenture, Section 2.06).
If there is an Indenture Event of Default, then the Indenture Trustee or
Noteholders representing not less than 25% of the Voting Interests of all Notes
(voting together as a single class) may declare the Notes to be immediately due
and payable, by notifying the Trust (and the Indenture Trustee if notice is
given by the Noteholders). The Notes will become immediately due and payable
upon any such declaration. However, if the Indenture Event of Default results
from a specified bankruptcy or insolvency event with respect to the Trust, the
Notes will become immediately due and payable automatically without any notice.
Under certain circumstances, after the Notes have been accelerated and
before the Indenture Trustee has obtained a judgment for payment, Noteholders
representing more than 50% of the Voting Interests of all Notes (voting together
as a single class) may rescind and annul the acceleration. (Indenture, Section
5.02).
After acceleration of the Notes, the Indenture Trustee may institute a
proceeding to collect amounts due or foreclose on Trust property, exercise
remedies as a secured party, sell or otherwise dispose of the SUBI (in
accordance with the procedures described below) or elect to have the Trust
maintain possession of the SUBI and continue to apply Collections as if there
were no acceleration. (Indenture, Section 5.04 and 5.05).
The Indenture Trustee will not be obligated to exercise any of its rights
or powers under the Indenture at the request of any Noteholders unless those
Noteholders have offered reasonable security or indemnity against the costs,
expenses and liabilities which the Indenture Trustee might incur in complying
with that request. Subject to the provisions for indemnification in the
Indenture and certain limitations, Noteholders representing more than 50% of the
Voting Interests of all Notes (voting together as a single class) will have the
right to direct the time, method and place of conducting any proceeding or any
remedy available to the Indenture Trustee. Noteholders representing more than
50% of the Voting Interests of all Notes (voting together as a single class)
also may, in certain cases, waive any default, other than a default in the
payment of principal or interest or a default under a provision that cannot be
modified without the waiver or consent of all Noteholders. (Indenture, Section
5.14 and 5.15).
No Noteholder may institute any proceeding under the Indenture, unless:
(1) He or she has notified the Indenture Trustee of an Indenture Event of
Default;
(2) Noteholders representing at least 25% of the Voting Interests of all
Notes (voting together as a single class) have requested the Indenture
Trustee to institute proceedings in its own name as Indenture Trustee;
(3) The requesting Noteholders have offered the Indenture Trustee
reasonable indemnity;
(4) The Indenture Trustee has failed to institute a proceeding for 60
days; and
(5) The Indenture Trustee has not received any inconsistent direction
during that 60-day period from Noteholders with at least 50% of the
Voting Interests of all Notes (voting together as a single class).
(Indenture, Section 5.09).
If there is an Indenture Event of Default, the Indenture Trustee may, and
upon receipt of written instructions from Noteholders representing Voting
Interests of at least 50% of the Class A Notes (voting together as a single
class) or more than 50% of the Voting Interests of all Notes (voting together as
a single class), will, publish a notice stating that it intends to sell or
dispose of the SUBI and the SUBI Certificate and the other property of the Trust
in a commercially reasonable manner (unless it elects to retain the SUBI as
described above). Following publication, unless otherwise prohibited by
applicable law, the Indenture Trustee will sell or dispose of the SUBI, the SUBI
Certificate and such other property in a commercially reasonable manner and on
commercially reasonable terms. However, it shall not sell or dispose of the SUBI
without the consent of all the Noteholders if the proceeds would not be
sufficient to pay the Notes in full.
The Indenture Trustee will distribute the net disposition proceeds of the
SUBI, the SUBI Certificate and other Trust property to the Noteholders in the
normal priority for Interest Collections and Principal
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Collections during the Amortization Period, except that it will distribute the
Investor Percentage of Principal Collections arising from those proceeds:
(1) First, to the Class A Noteholders, pro rata based on the Class A-1,
Class A-2, Class A-3 and Class A-4 Note Balances, until all Class A
Notes have been paid in full; and
(2) Second, to the Class B Noteholders, until the Class B Notes have been
paid in full.
If these proceeds, together with all other sources of funds that ordinarily are
available to make principal and interest payments on the Class A Notes, are
insufficient to pay the Class A Note Balance, any unreimbursed Uncovered Loss
Amounts allocated to the Class A Notes and any accrued and unpaid interest on
those Uncovered Loss Amounts, you may suffer a loss on your Notes. (Indenture,
Section 5.08 and 5.17).
Annual Compliance Statement
The Trust will file with the Indenture Trustee an annual written statement
as to the fulfillment of its obligations under the Indenture. (Indenture,
Section 3.09).
Annual Report
The Indenture Trustee will mail to all Noteholders a brief annual report
relating to its eligibility and qualification to continue as Indenture Trustee,
any amounts advanced by it under the Indenture, the amount, interest rate and
maturity date of certain indebtedness the Trust may owe to the Indenture Trustee
in its individual capacity, the property and funds physically held by the
Indenture Trustee in that capacity, and any action it has taken that materially
affects the Notes and that it has not reported previously. (Indenture, Section
7.03).
Satisfaction and Discharge
The Indenture will be discharged upon delivery of all Notes to the
Indenture Trustee for cancellation or, with certain limitations, upon deposit
with the Indenture Trustee of enough funds to pay all Notes in full. (Indenture,
Section 4.01).
No Petition
The Indenture Trustee (and any co-trustee or separate trustee) will not
institute or join in any bankruptcy or similar proceeding against the Trust
until one year and one day after the Notes are paid in full. (Indenture, Section
6.17).
THE AGREEMENT
No Petition
Each of the Indenture Trustee and the Owner Trustee will not institute or
join in any bankruptcy or similar proceeding against the Transferor, WOLS LLC,
ALF L.P., ALF LLC, the Origination Trust or the Origination Trustee until one
year and one day after the later of payment in full of the Notes, and final
payment of all other financings involving Origination Trust interests (including
and all transactions involving the UTI and each Other SUBI). (Agreement, Section
6.16).
The Owner Trustee
Chase Manhattan Bank Delaware will be the Owner Trustee under the
Agreement. The corporate trust office of the Owner Trustee currently is located
at 1201 N. Market Street, 8th Floor, Wilmington, Delaware 19801. The Owner
Trustee is not affiliated with World Omni, although it does act as a service
provider to World Omni.
The Owner Trustee may resign at any time. The Transferor may remove the
Owner Trustee if it ceases to meet certain specified eligibility requirements,
becomes legally unable to act or becomes insolvent. In these circumstances, the
Transferor will be obligated to appoint a successor Owner Trustee. Any
resignation
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or removal of the Owner Trustee and appointment of a successor Owner Trustee
will not become effective until a successor Owner Trustee accepts its
appointment. (Agreement, Section 6.10). Any corporation into which the Owner
Trustee is merged or with which it is consolidated, any corporation resulting
from any merger or consolidation with the Owner Trustee, or any corporation to
which the Owner Trustee transfers all or substantially all of its corporate
trust business, shall automatically succeed to the Owner Trustee's rights under
the Agreement if it satisfies the specified eligibility requirements.
(Agreement, Section 6.06).
THE SUBI TRUST AGREEMENT
Creation of Beneficial Interests and Allocation of Rights and Liabilities
ALF L.P. is the grantor and (as holder of the UTI) a beneficiary of the
Origination Trust. In its capacity as grantor, ALF L.P. will from time to time
convey (or cause to be conveyed) the Origination Trust Assets to the Origination
Trustee, in trust for the holders of beneficial interests in the Origination
Trust (i.e., the SUBI, any Other SUBIs and the UTI). (SUBI Trust Agreement,
Section 2.01). ALF L.P. will hold the UTI, which represents a beneficial
interest in all Origination Trust Assets other than the SUBI Assets and any
Other SUBI Assets. (SUBI Trust Agreement, Section 4.01). ALF L.P. has pledged
(and may in the future pledge) the UTI as security for obligations to
third-party lenders, and has created and sold or pledged (and may in the future
create and sell or pledge) Other SUBIs in connection with financings similar to
the transaction described in this prospectus.
Each Other SUBI will be created pursuant to a supplement to the Origination
Trust Agreement which will amend the Origination Trust Agreement only with
respect to that Other SUBI, just as the provisions of the SUBI Supplement amend
the Origination Trust Agreement only as it relates to the SUBI. (SUBI Trust
Agreement, Section 4.02).
The Origination Trustee will own all Origination Trust Assets, including
the SUBI Assets, on behalf of the beneficiaries of the Origination Trust. Each
portfolio of Origination Trust Assets, including the SUBI Assets, any Other SUBI
Assets and the UTI Assets, will be segregated from all other Origination Trust
Assets on the books and records of the Origination Trustee and the Servicer. The
holders and pledgees of any beneficial interest in the Origination Trust will
have no rights to any Origination Trust Assets other than those allocated to
their beneficial interest. Further, each holder or pledgee of any beneficial
interest in the Origination Trust will be required to expressly disclaim any
interest in the Origination Trust Assets other than those allocated to its
beneficial interest, and to fully subordinate any claims to those other
Origination Trust Assets in the event that this disclaimer is not given effect.
(SUBI Trust Agreement, Sections 7.01 and 7.02; Servicing Agreement, Section
2.02).
Liabilities of the Origination Trust generally will be allocated to the
portfolio of Origination Trust Assets with respect to which they were incurred.
Therefore, the SUBI Assets generally will not be available to make payments on
(or pay expenses relating to) the UTI or any Other SUBIs, any Other SUBI Assets
generally will not be available to make payments on (or pay expenses relating
to) the SUBI, the UTI or any other Other SUBI, and the UTI Assets generally will
not be available to make payments on (or pay expenses related to) the SUBI or
any Other SUBI. However, Origination Trust liabilities that are incurred with
respect to all Origination Trust Assets (or do not relate to any Origination
Trust Assets) will be allocated pro rata among all Origination Trust Assets,
including the SUBI Assets. If a third party claim is satisfied out of
Origination Trust Assets in other proportions, then the Origination Trustee will
reallocate all remaining Origination Trust Assets among the various portfolios
so that each bears the expense as nearly as possible as if it had been satisfied
out of the proper portfolios. If the Origination Trust incurs any liability
related to a portfolio of Origination Trust Assets whose assets are insufficient
to cover it, the remaining amount may be incurred by the remaining portfolios of
Origination Trust Assets. Therefore, if any such liability arises with respect
to the UTI Assets or Other SUBI Assets, the SUBI Assets may be charged with a
portion of it. (SUBI Trust Agreement, Sections 7.01 and 7.05). See 'Certain
Legal Aspects of the Origination Trust and The SUBI--The SUBI' for a discussion
of related risks.
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Special Obligations of ALF L.P. as Beneficiary and Grantor
ALF L.P., as grantor, generally will be liable for all debts and
obligations arising from the Origination Trust Assets or the operation of the
Origination Trust. However, its liability to any pledgee or assignee of the
beneficial interest (including the UTI, the SUBI and any Other SUBIs) will be
limited to that set forth in the related financing documents. ALF LLC, as the
general partner of ALF L.P., is required at all times to maintain a minimum net
worth of $10 million. The Origination Trust will indemnify ALF L.P. out of the
Origination Trust Assets for any liability or expense it suffers arising from
the Origination Trust Assets or the operation of the Origination Trust. (SUBI
Trust Agreement, Sections 4.03 and 11.10).
Origination Trustee Duties and Powers; Fees and Expenses
The SUBI Trust Agreement will require the Origination Trustee to apply for
and maintain all licenses, permits and authorizations necessary and appropriate
to accept assignments of the Contracts and the Leased Vehicles and to carry out
its duties as Origination Trustee, including motor vehicle dealer licenses. It
also will require the Origination Trustee to file applications for certificates
of title resulting in the Origination Trustee being the holder of legal title of
record to the Leased Vehicles. (SUBI Trust Agreement, Section 5.01). In carrying
out these duties, the Origination Trustee will be required to exercise the same
degree of care and skill as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs. (SUBI Trust Agreement,
Section 5.02).
ALF L.P. may replace the Origination Trustee only if it ceases to be meet
certain specified requirements. Its removal will be mandatory if certain
representations and warranties made by the Origination Trustee prove to have
been materially incorrect when made, or in certain events of bankruptcy or
insolvency. (SUBI Trust Agreement, Section 6.03). The Indenture Trustee, as
pledgee of the SUBI Certificate on behalf of the Noteholders, may, or at the
direction of Noteholders representing more than 50% of the Voting Interests of
all Notes (voting together as a single class) will, cause the Origination
Trustee to remove or replace the Trust Agent for a material breach of its
obligations. (SUBI Trust Agreement, Sections 5.03 and 10.02).
The Origination Trustee will make no representations as to the validity or
sufficiency of the SUBI, the SUBI Certificate (other than its execution and
authentication), or of any Contract, Leased Vehicle or related document. The
Origination Trustee will not be responsible for performing any of the duties of
ALF L.P. or the Servicer. The Origination Trustee will not be accountable for
the use or application by any owners of beneficial interests in the Origination
Trust of any funds paid to them in respect of their interest in Origination
Trust Assets, or the investment of any of funds relating to Origination Trust
Assets before they are deposited into the Origination Trustee's accounts. The
Origination Trustee will not independently verify the Contracts or the Leased
Vehicles. (SUBI Trust Agreement, Section 5.04). The duties of the Origination
Trustee generally will be limited to the acceptance of assignments of lease
contracts, the titling of the related leased vehicles in the name of the
Origination Trustee, the creation of beneficial interests in the Origination
Trust, the maintenance of the accounts relating to those interests and the
receipt of the various certificates, reports and other instruments required to
be furnished to it (which it will only be required to examine to determine
whether they conform to the requirements of the SUBI Trust Agreement). (SUBI
Trust Agreement, Section 5.01).
The Origination Trustee will not be obligated to exercise any of the rights
or powers vested in it by the SUBI Trust Agreement, to investigate any matters
arising under that agreement or to institute, conduct or defend any litigation
under or in relation to that agreement, at the request of ALF L.P., the Servicer
or the holders of a majority in interest in the SUBI, unless the requesting
parties have offered it reasonable security or indemnity against the costs,
expenses and liabilities that it may incur. The requesting parties will pay the
Origination Trustee's reasonable expenses of every requested such exercise,
investigation or other action. If paid by the Origination Trustee, those
expenses will be reimbursed from the Origination Trust Assets. (SUBI Trust
Agreement, Sections 5.03 and 6.08).
The Origination Trustee may enter from time to time into one or more agency
agreements (AN 'AGENCY AGREEMENT') with anyone (including any affiliate of the
Origination Trustee) that is by experience and expertise qualified to act in a
trustee capacity and is otherwise acceptable to ALF LLC. The Origination Trustee
has engaged U.S. Bank as the Trust Agent. The Agency Agreement (which currently
is a part of the
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SUBI Trust Agreement) requires the Trust Agent to perform all of the Origination
Trustee' obligations under the SUBI Trust Agreement. (SUBI Trust Agreement,
Section 5.03).
The Origination Trustee will be paid out of Origination Trust Assets
reasonable compensation and reimbursement of all reasonable expenses. (SUBI
Trust Agreement, Section 6.08). However, with regard to the SUBI Assets, these
expenses will be paid as set forth in the interest payment waterfall. For that
waterfall, see 'Description of the Notes--Distributions on the
Notes--Distributions of Interest'.
Indemnity of Origination Trustee and Trust Agents
The Origination Trustee and each Trust Agent will be indemnified out of the
Origination Trust Assets for any loss, liability, expense or other claim arising
from any of the Origination Trust Assets or the Origination Trustee's or the
Trust Agent's acceptance or performance of the trusts and duties contained in
the SUBI Trust Agreement or any Agency Agreement. However, neither the
Origination Trustee nor any Trust Agent will be indemnified for any claim for
which World Omni is liable under the Servicing Agreement, which was incurred
because of the Origination Trustee's or the Trust Agent's willful misfeasance,
bad faith or negligence, or which was incurred because the Origination Trustee
or Trust Agent breached its representations and warranties in the SUBI Trust
Agreement or the Servicing Agreement. These indemnities may result in Additional
Loss Amounts if the related claims arise from the SUBI Assets or they are
otherwise allocated to the SUBI. (SUBI Trust Agreement, Section 5.05).
Termination
The Origination Trust and the obligations of ALF L.P. and the Origination
Trustee will terminate upon the later of:
(1) The payment to ALF L.P. and each other permitted holder of any
beneficial interest in the Origination Trust of all amounts they are
due and the termination all financings secured by the Origination
Trust Assets; and
(2) The maturity or liquidation and disposition of all Origination Trust
Assets and the disposition to or upon the order of each ALF L.P. and
each other permitted holder of any beneficial interest in the
Origination Trust of all net proceeds.
(SUBI Trust Agreement, Section 8.01).
No Petition
The Origination Trustee and the Trust Agent will not institute or join in
any bankruptcy or similar proceeding against the Transferor, WOLS LLC, ALF L.P.
or ALF LLC until one year and one day after final payment of all financings
involving Origination Trust interests. (SUBI Trust Agreement, Section 6.09).
Each pledgee or assignee of any Origination Trust interest must give a similar
non-petition covenant. (SUBI Trust Agreement, Sections 4.01 and 4.02).
Owner Trustee and Indenture Trustee as Third-Party Beneficiaries
The Trust (as the holder of the SUBI) and the Indenture Trustee (as the
pledgee of the SUBI) will be third-party beneficiaries of the SUBI Trust
Agreement. Therefore, the Owner Trustee may, with the consent of the Indenture
Trustee, or will, upon the instruction of the Indenture Trustee, exercise any
right conferred by the SUBI Trust Agreement upon a holder or pledgee of any
interest in the SUBI. The Indenture Trustee may give such a consent or
instruction at its own instigation and will give such a consent or instruction
upon the instruction of Noteholders representing more than 50% of the Voting
Interests of all Notes (voting together as a single class). (SUBI Trust
Agreement, Section 10.02).
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THE SERVICING AGREEMENT
Primary Servicer Duties
Pursuant to the Servicing Agreement, the Servicer will perform on behalf of
the Origination Trustee all of the obligations of the lessor under the
Contracts. These obligations will include collecting and posting payments,
responding to lessee inquiries, investigating delinquencies, sending payment
statements and reporting tax information to the lessees, paying the disposition
costs of Leased Vehicles related to Charged-off Contracts, Matured Contracts and
Additional Loss Contracts and policing the Contracts, commencing legal
proceedings to enforce Contracts, administering the Contracts (including
accounting for collections and furnishing monthly and annual statements to the
Origination Trustee with respect to distributions) and generating federal income
tax information. The Origination Trustee will furnish the Servicer with all
powers of attorney and other documents necessary or appropriate to enable it to
carry out its duties under the Servicing Agreement. The Indenture Trustee and
the Owner Trustee will be third-party beneficiaries of the Servicing Agreement.
(Servicing Agreement, Sections 2.01 and 12.12).
Custody of Contract Documents and Certificates of Title
To assure uniform quality in servicing the Contracts and World Omni's own
portfolio of automobile and light duty truck lease contracts and to reduce
administrative costs, the Origination Trustee will appoint World Omni, as
Servicer, to be its agent, bailee and custodian of the Contracts, the
certificates of title for the Leased Vehicles and the insurance policies and
other documents relating to the Contracts, the lessees and the Leased Vehicles.
World Omni will not physically segregate those documents from other similar
documents relating to its own lease contracts and leased vehicles or those which
it services for others (including lease contracts and leased vehicles that are
Origination Trust Assets but not SUBI Assets). World Omni's accounting records
and computer systems will reflect the interests of the holders of interests in
the SUBI in all Contracts, Leased Vehicles and related contract rights, and UCC
financing statements reflecting certain interests in the Contracts and the
related contract rights will be filed. For more information on these UCC
filings, see 'Certain Legal Aspects of the Contracts and Leased
Vehicles--Back-up Security Interests'. The Servicer will be responsible for
filing all periodic sales and use tax and property tax reports, periodic
renewals of licenses and permits, periodic renewals of qualifications to act as
a trust and a business trust and other periodic governmental filings,
registrations or approvals related to the Origination Trustee and the
Origination Trust. (Servicing Agreement, Sections 2.01 and 2.07).
Collections
The Servicer will service, administer and collect all amounts due on the
Contracts, and will make reasonable efforts to collect those amounts. It will be
obligated to service the Contracts generally in accordance with customary and
usual procedures of institutions that service closed-end automobile and light
duty truck lease contracts and, to the extent more exacting, the procedures it
uses for lease contracts it services for its own account. (Servicing Agreement,
Sections 2.01 and 2.02).
Consistent with its usual procedures, the Servicer may extend the Maturity
Date of any Contract by up to five months in the aggregate, although it may not
extend any Contract more than five times and the new Maturity Date must be no
later than the last day of May 2006, the second month before the final
maturity date for the Class B Notes. The Servicer will deposit any Extension Fee
into the SUBI Collection Account. If the Servicer extends a Contract improperly,
the Servicing Agreement will require it to deposit the Reallocation Payment for
that Contract into the SUBI Collection Account on the Deposit Date for the
Collection Period in which it granted the extension. At that time, the
improperly extended Contracts and the related Leased Vehicle will be reallocated
as UTI Assets and will no longer be SUBI Assets. (Servicing Agreement, Sections
2.02 and 9.02). See 'World Omni--Collection, Repossession and Disposition
Procedures' for further details regarding collection procedures.
The Servicer generally will deposit all payments received on the Contracts
and the Leased Vehicles (other than Security Deposits) into the SUBI Collection
Account within two Business Days after receipt. For a fuller description, see
'Description of the Notes--The Accounts--The SUBI Collection Account'.
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Notification of Liens and Claims
The Servicer will be required to notify the Origination Trustee, the
Indenture Trustee and the Owner Trustee as soon as practicable of all liens or
claims made with respect to any Origination Trust Asset by a third party that
would have a material adverse impact on, among others, the Transferor, the
Origination Trust, the Trust or any SUBI Asset. (Servicing Agreement, Sections
2.08 and 9.09). See 'Certain Legal Aspects of the Origination Trust and the
SUBI--The SUBI' and 'Certain Legal Aspects of the Contracts and the Leased
Vehicles--Back-up Security Interests' for a discussion of the risk of liens on
certain SUBI Assets and other Origination Trust Assets.
Advances
On each Deposit Date, the Servicer will deposit into the SUBI Collection
Account an advance equal to the aggregate Monthly Payments due but not received
during the related Collection Period on Contracts that were 31 days or more past
due as of the end of that Collection Period. The Servicer also may (but will not
be required to) make such an advance for Contracts that were less than 31 days
past due as of that date. The aggregate such advance on any Distribution Date
will be an 'ADVANCE'. However, the Servicer will not be required to make an
Advance to the extent that, in its reasonable judgment of the Servicer, the
Advance may not be ultimately recoverable from Net Liquidation Proceeds or
otherwise (A 'NONRECOVERABLE ADVANCE'). (Servicing Agreement, Sections 6.01 and
9.04).
In making Advances, the Servicer will assist in maintaining a regular flow
of scheduled principal and interest payments on the Contracts, rather than
guarantee or insure against losses. Accordingly, the Origination Trust will
reimburse all Advances, without interest, when it receives a payment on a
Contract on which the Servicer made an Advance. The Origination Trust also will
reimburse the Servicer for all Nonrecoverable Advances from Collections in
general. (Servicing Agreement, Section 9.02).
Security Deposits
The Origination Trustee's rights to the Contracts will include all rights
to any security deposit paid by a lessee when his or her Contract was originated
(A 'SECURITY DEPOSIT'). As part of its servicing obligations, the Servicer will
retain each Security Deposit as an agent for the Origination Trust and will
apply the proceeds of each Security Deposits in accordance with the terms of the
related Contract, its customary and usual servicing procedures and applicable
law. However, if any Contract becomes a Charged-off Contract or the related
Leased Vehicle is repossessed, the related Security Deposit will, to the extent
provided by applicable law and that Contract, constitute Liquidation Proceeds.
(Servicing Agreement, Section 2.04). The Origination Trustee's interest in the
Security Deposits may not be enforceable against third parties until they are
deposited into the SUBI Collection Account. The Servicer will not be required to
segregate the Security Deposits from its own funds, and any income earned from
investment of the Security Deposits will belong to the Servicer as additional
servicing compensation.
Insurance on Leased Vehicles
Each lessee is required to maintain in full force and effect during his or
her Contract term a comprehensive and collision physical damage insurance policy
covering the actual cash value of the related Leased Vehicle and naming the
Origination Trustee, on behalf of the Origination Trust, as loss payee. Each
lessee also is required to maintain bodily injury and property damage liability
insurance in amounts equal to the greater of the amount prescribed by applicable
state law or industry standards as set forth in the Contract and naming the
Origination Trustee, on behalf of the Origination Trust, as an additional
insured. (Servicing Agreement, Section 2.11). Since lessees may choose their own
insurers to provide the required coverage, the specific terms and conditions of
their policies will vary. If a lessee fails to obtain or maintain the required
insurance, his or her Contract will be in default. It is World Omni's practice
not to obtain insurance on behalf of and at the expense of a defaulting related
lessee, but instead to repossess his or her Leased Vehicle. If a required
insurance policy lapses, is not maintained in full force and effect or the
Servicer fails to maintain the right to receive proceeds of claims for damage to
or destruction of a Leased Vehicle, the Servicing Agreement will require World
Omni to pay promptly into the SUBI Collection Account all
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amounts that otherwise would have been recoverable as Insurance Proceeds. This
obligation will survive any termination of World Omni as Servicer under the
Servicing Agreement. (Servicing Agreement, Section 2.11).
World Omni does not require lessees to carry credit disability, credit life
or credit health insurance or other similar insurance coverage that provides for
Contract payments if the lessee is disabled or dies. If the lessee obtains such
coverage, the lessee's beneficiary may choose to apply its proceeds to payments
on his or her Contract.
Realization on Charged-off Contracts
The Servicer will use commercially reasonable efforts to repossess and
liquidate each Leased Vehicle under a Contract that is in default and for which
it cannot make satisfactory arrangements for collection of delinquent payments.
The Servicer may liquidate such Leased Vehicles through repossession and
disposition at a public or private sale, or it may take any other action
permitted by applicable law. The Servicer may enforce all rights under any such
Contract, sell or otherwise dispose of the Leased Vehicle in accordance with the
Contract and begin and prosecute any proceedings in connection with the
Contract. The Servicer will follow repossession practices and procedures that it
deems necessary or advisable and that are normal and usual for responsible
holders of closed-end automobile and light duty truck lease contracts and, to
the extent more exacting, the practices and procedures it uses for defaulted
lease contracts it services for its own account. In any event, the Servicer will
comply with all applicable laws. The Servicer will be required to repair the
Leased Vehicle if it reasonably determines that repairs will increase the Net
Repossessed Vehicle Proceeds. The Servicer will be responsible for all costs and
expenses of the sale or other disposition of Leased Vehicles related to
Charged-off Contracts, other defaulted Contracts and the related Leased
Vehicles, but will be entitled to reimbursement of those costs that constitute
Repossessed Vehicle Expenses, other Liquidation Expenses or expenses recoverable
under an applicable insurance policy. The Servicer will deposit all Repossessed
Vehicle Proceeds into the SUBI Collection Account, and will be entitled to
reimbursement of all Repossessed Vehicle Expenses from the SUBI Collection
Account when it presents an officer's certificate to the Indenture Trustee.
Principal Collections for a Collection Period will include all Net Repossessed
Vehicle Proceeds collected during that Collection Period. (Servicing Agreement,
Sections 2.06 and 9.02).
Matured Leased Vehicle Inventory
On a Contract's Maturity Date, the lessee has the option to acquire his or
her Leased Vehicle for its Residual Value plus any applicable taxes and all
other incidental charges due under the Contract. If the lessee chooses not to
exercise this option but instead returns the Leased Vehicle to the Servicer, the
Leased Vehicle will be placed in Matured Leased Vehicle Inventory, and the
Servicer, acting on behalf of the Origination Trust, will sell or otherwise
dispose of the Leased Vehicle in a manner similar to that for other off-lease
Leased Vehicles. (Servicing Agreement, Section 2.06).
The Servicer will deposit all Matured Leased Vehicle Proceeds into the SUBI
Collection Account, and will be entitled to reimbursement of Matured Leased
Vehicle Expenses from the SUBI Collection Account when it presents an officer's
certificate to the Indenture Trustee. Principal Collections for a Collection
Period will include all Net Matured Leased Vehicle Proceeds collected during
that Collection Period. (SUBI Trust Agreement, Section 10.01; Servicing
Agreement, Section 9.02).
Records, Servicer Determinations and Reports
The Servicer will retain all data relating to the servicing of the
Contracts. Upon an Event of Servicing Termination and termination of the
Servicer's obligations under the Servicing Agreement, the Servicer will use
commercially reasonable efforts to transfer the servicing of the Contracts to a
successor servicer in an orderly and efficient manner. (Servicing Agreement,
Sections 2.03 and 9.03). The Servicer will perform certain monitoring and
reporting functions on behalf of the Transferor, the Indenture Trustee, the
Owner Trustee, the Origination Trustee and the Noteholders. These will include
the preparation and delivery to the Indenture Trustee, the Origination Trustee
and each Rating Agency of a monthly certificate, on or before each Determination
Date, setting forth all information necessary to make all distributions required
for the related Collection Period, as well as the preparation and delivery of
monthly statements containing a variety
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of data about the Notes, the SUBI, the Contracts and the Leased Vehicles, and an
annual officer's certificate specifying the occurrence and status of any Event
of Servicing Termination. (Servicing Agreement, Sections 3.03, 10.01 and 10.03).
For details regarding the Servicer's monthly statement, see 'Description of the
Notes--Statements to Noteholders'.
Evidence as to Compliance
The Servicing Agreement will require that a firm of nationally recognized
independent accountants furnish to the Indenture Trustee on or before April 30
of each year, beginning April 30, 2000, a statement of the Servicer's compliance
during the preceding calendar year (or since the Closing Date for the first such
statement) with certain standards relating to the servicing of the Contracts,
the Servicer's accounting records and computer files and certain other matters.
(Servicing Agreement, Sections 3.02 and 10.02).
The Servicing Agreement also will require the Servicer to deliver to the
Indenture Trustee on or before April 30 of each year, beginning April 30, 2000,
a certificate signed by an officer stating that the Servicer has fulfilled its
obligations under the Agreement throughout the preceding calendar year (or since
the Closing Date for the first such certificate) or describing each default in
those obligations. (Servicing Agreement, Sections 3.03 and 10.03).
Note Owners and Class A Noteholders may obtain copies of these statements
and certificates by requesting them in writing from the Indenture Trustee at its
corporate trust office. (Agreement, Section 3.06).
Compliance with ERISA
On or before each Determination Date, the Servicer will provide the
Indenture Trustee and each Rating Agency with an officer's certificate stating
that none of SET, JMFE, World Omni or any of their affiliates for purposes of
the Employee Retirement Income Security Act of 1974, as amended ('ERISA'), does
any of the following:
(1) Maintains an ERISA plan that had unfunded current liability as of its
last valuation date;
(2) Anticipates that the value of the assets of any ERISA plan it
maintains would not be sufficient to cover any current liability; or
(3) Is contemplating benefit improvements with respect to any plans then
maintained or the establishment of any new ERISA plans, either of
which would cause it to maintain an ERISA plan with unfunded current
liability.
If the Servicer does not timely make these certifications or any of them is
incorrect, the Indenture Trustee will deposit into the Reserve Fund all Excess
Collections for the related Distribution Date, regardless of the Reserve Fund
Cash Requirement. On the Distribution Date after the next Determination Date on
which the Servicer has made these certifications correctly, the Indenture
Trustee will release all money in the Reserve Fund in excess of the Reserve Fund
Cash Requirement to the Transferor (or to the Noteholders to the extent
allocable to the Accelerated Principal Distribution Amount). (Servicing
Agreement, Section 10.03; Agreement, Sections 1.01, 3.03 and 3.04). See
'Security for the Notes--The Reserve Fund--The Reserve Fund Cash Requirement'
for a description of the Reserve Fund Cash Requirement.
Servicing Compensation
The Servicer will be entitled to compensation for the performance of its
servicing obligations under the Servicing Agreement. The monthly fee for
servicing the SUBI Assets (THE 'SERVICING FEE') will be payable on each
Distribution Date out of Interest Collections, and will equal one-twelfth of the
product of 1.00% and the Aggregate Net Investment Value as of the first day of
the preceding month (or, on the first Distribution Date, as of the Initial
Cutoff Date). The Servicing Fee will be calculated and paid based upon a 360-day
year consisting of twelve 30-day months. The Investor Percentage of the
Servicing Fee will be paid out of the Investor Percentage of Interest
Collections in the priority set forth in the interest payment waterfall. So long
as World Omni is the Servicer, it may elect to waive the Servicing Fee for the
related Collection Period, so long as it believes that sufficient Interest
Collections will be available on future Distribution Dates to pay the
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waived Servicing Fee, without interest. If World Omni waives the Servicing Fee
for any Collection Period, it will be deemed to equal zero for all purposes of
the Agreement and the Servicing Agreement.
The Servicer will also be entitled to additional servicing compensation in
the form of late fees and other administrative fees or similar charges paid with
respect to the Contracts, and earnings from the investment of Security Deposits.
For further information regarding Security Deposits, see 'Additional Document
Provisions--The Servicing Agreement--Security Deposits'. However, the Servicer
will not be entitled to any Extension Fees, which will be required to be
deposited into the SUBI Collection Account. The Servicer will pay all expenses
it incurs in connection with its servicing activities under the Servicing
Agreement (including the payment of Uncapped Administrative Expenses), and will
not be entitled to reimbursement for expenses other than Liquidation Expenses or
Insurance Expenses or Uncapped Administrative Expenses that are reimbursed out
of Interest Collections in the priority required by the interest payment
waterfall. (Servicing Agreement, Sections 2.05 and 9.06).
The Servicing Fee will compensate the Servicer for performing the functions
of a third party servicer of the Contracts as an agent for the Origination
Trustee under the Servicing Agreement, including collecting and posting
payments, responding to inquiries of lessees on the Contracts, investigating
delinquencies, sending payment statements and reporting tax information to
lessees, paying the costs of sale or other disposition of Leased Vehicles
relating to defaulted Contracts and Leased Vehicles included in Matured Leased
Vehicle Inventory, policing the SUBI Assets, administering the Contracts
(including making Advances), accounting for collections, furnishing monthly and
annual statements to the Indenture Trustee with respect to distributions and
generating federal income tax information. (Servicing Agreement, Section 2.05).
Servicer Resignation and Termination
The Servicer may not resign under the Servicing Agreement unless it
determines that its duties are no longer permissible because of a change in
applicable law or regulations. No resignation will become effective until a
successor servicer has assumed the Servicer's obligations. The Servicer may not
assign the Servicing Agreement or any of its related rights, powers, duties or
obligations except after a permitted resignation or in connection with a
consolidation, merger, conveyance, transfer or lease under the terms required by
the Servicing Agreement. (Servicing Agreement, Sections 2.10 and 9.11).
The rights and obligations of the Servicer under the Servicing Agreement
may be terminated following an Event of Servicing Termination. (Servicing
Agreement, Sections 4.01 and 11.01). For details, see 'Additional Document
Provisions--The Servicing Agreement--Rights Upon Event of Servicing
Termination'.
Indemnification by the Servicer
The Servicer will indemnify the Origination Trustee and its agents for any
and all liabilities, losses, damages and expenses that they incur as a result of
any act or omission by the Servicer in performing its servicing duties.
(Servicing Agreement, Section 9.08).
Events of Servicing Termination
'EVENTS OF SERVICING TERMINATION' with respect to the SUBI Assets will
consist of, among other things:
(1) Failure by the Servicer to deliver to the Indenture Trustee for
distribution to Noteholders any required payment, which continues
unremedied for five Business Days after discovery by an officer of the
Servicer or the Servicer's receipt of notice from the Indenture
Trustee, the Origination Trustee or Noteholders with at least 25% of
the Voting Interests of all Notes (voting together as a single class);
(2) Failure by the Servicer to perform in any material respect any other
obligation under the Servicing Agreement, which materially and
adversely affects the rights of holders of interests in the SUBI or
the Noteholders and which is not remedied for 60 days after notice as
described in clause (1);
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(3) Failure by the Servicer to deliver to the Origination Trustee or the
Indenture Trustee any required report within ten Business Days after
its due date;
(4) Any representation, warranty, statement, certificate, report or other
writing of the Servicer proves to be incorrect in any material respect
when it was made, and is not remedied for 30 days after notice as
described in clause (1);
(5) Failure by the Servicer to maintain or pay when due any premium on any
Contingent and Excess Liability Insurance Policy or the Residual Value
Insurance Policy;
(6) Failure by the Transferor to timely deposit any required RV Insurer
Reserve Fund Supplemental Requirement into the Reserve Fund after an
RV Insurer Trigger Event; and
(7) Certain bankruptcy and insolvency events relating to the Servicer.
However, a default under clause (1) for a period of ten Business Days, under
clause (2) for a period of 90 days, under clause (3) for a period of 20 Business
Days or under clause (4) for a period of 60 days, will not be an Event of
Servicing Termination if caused by act of God or other similar occurrence. If
such an event occurs, the Servicer still must use all commercially reasonable
efforts to perform its obligations in a timely manner in accordance with the
Servicing Agreement, and the Servicer must provide to the Indenture Trustee, the
Origination Trustee, the Transferor and the Noteholders prompt notice of the
event, together with a description of its efforts to perform its obligations.
(Servicing Agreement, Sections 4.01 and 11.01).
Rights Upon Event of Servicing Termination
As long as an Event of Servicing Termination remains unremedied, the
Origination Trustee, upon the direction of the Indenture Trustee or Noteholders
representing more than 50% of the Voting Interests of all Notes (voting together
as a single class), may terminate all of the Servicer's rights and obligations
under the Servicing Agreement with respect to the SUBI Assets. After such a
termination, the Trust Agent generally will succeed to the rights, powers,
responsibilities, duties and liabilities of the Servicer under the Servicing
Agreement with respect to the SUBI Assets (excluding certain specified
obligations) or provide for a new Servicer to be approved by each Rating Agency.
The Trust Agent or other new Servicer will receive substantially the same
servicing compensation to which the Servicer otherwise would have been entitled.
However, if a bankruptcy trustee or similar official is appointed for the
Servicer and no other Event of Servicing Termination has occurred, the trustee
or official may have the power to prevent the Origination Trustee, the Indenture
Trustee or such Noteholders from effecting a transfer of servicing. In any
event, the Servicer will remain obligated to perform certain specified
obligations and to reimburse the Trust Agent for any losses incurred in
performing certain such obligations, and will be entitled to payment of certain
amounts for services rendered before termination. (Servicing Agreement, Sections
4.01 and 11.01).
Noteholders representing more than 50% of the Voting Interests of all Notes
(voting together as a single class), with the consent of the Origination Trustee
and the Indenture Trustee (not to be unreasonably withheld), may waive any
default by the Servicer under the Servicing Agreement and its consequences with
respect to the SUBI Assets, other than a default in making any required deposits
to or payments from an Account or under a provision that cannot be modified or
amended without the consent of each Noteholder (in which event a waiver will
require the approval of all Noteholders). No such waiver will impair the rights
of the Noteholders with respect to subsequent defaults. (Servicing Agreement,
Section 4.01).
No Petition
The Servicer will not institute, or join in, any bankruptcy or similar
proceeding against the Transferor, WOLS LLC, ALF L.P., ALF LLC, the Origination
Trustee or the Origination Trust until one year and one day after final payment
of all financings involving Origination Trust interests. (Servicing Agreement,
Section 5.14).
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Termination
The Servicing Agreement will terminate upon the earlier of the termination
of the Origination Trust, the discharge of the Servicer under the Servicing
Agreement or the termination of the Agreement. (Servicing Agreement, Section
5.01).
Indenture Trustee and Owner Trustee as Third-Party Beneficiaries
As the holder of the SUBI, the Owner Trustee, and as the pledgee of the
SUBI, the Indenture Trustee, will be third-party beneficiaries of the Servicing
Agreement. (Servicing Agreement, Section 12.12).
CERTAIN LEGAL ASPECTS OF THE ORIGINATION TRUST
AND THE SUBI
THE ORIGINATION TRUST
The Origination Trust may be deemed to be a business trust under Alabama
law. In an Alabama business trust, the trust property is managed for the profit
of the beneficiaries, as opposed to a common 'asset preservation' trust, in
which the trustee is charged with the mere maintenance of trust property. The
principal requirement for the formation of a business trust in Alabama is the
filing of the trust instrument with the appropriate state authority. The
Origination Trust Agreement has been, and the SUBI Trust Agreement will be, so
filed. The Origination Trust also has been qualified as a business trust
authorized to transact business in certain other states where it is required to
be qualified.
Because the Origination Trust has been registered as a business trust for
Alabama and other state law purposes, like a corporation, it may be eligible to
be a debtor in its own right under the United States Bankruptcy Code. For
details of the related risks, see 'Certain Legal Aspects of the Origination
Trust and the SUBI--Insolvency Related Matters'.
QUALIFICATION OF VT INC. AS FIDUCIARY
State laws, including the laws in the Five State Area, differ as to whether
a corporate trustee that leases vehicles in that state, such as VT Inc., must
qualify as a fiduciary. The consequences of the failure to be qualified as a
fiduciary in a jurisdiction where such qualification is required differ by
state, and could include penalties against VT Inc. and its directors and
officers ranging from fines to the inability of VT Inc. to maintain an action in
the courts of that jurisdiction.
World Omni believes that VT Inc. does not exercise sufficient discretion in
the performance of its duties under the SUBI Trust Agreement or take such other
discretionary actions that it should be considered to be exercising fiduciary
powers within the meaning of any applicable state law. However, we cannot assure
you that World Omni will prevail in this view. Because no jurisdiction in which
this issue is uncertain, VT Inc. has not qualified as a fiduciary and the
consequences of failure to be qualified would be material, represents a
significant percentage of the value of the SUBI Assets, World Omni believes that
the failure to be qualified as a fiduciary in any jurisdiction where it may be
required will not materially and adversely affect the Noteholders. However, we
cannot assure you in this regard. World Omni, as Servicer, will indemnify VT
Inc., as Origination Trustee, for all losses suffered by the Origination Trustee
because of the Servicer's acts and omissions in connection with its undertakings
to identify all of the Origination Trustee's and the Origination Trust's
required periodic governmental filings, registrations and approvals.
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THE SUBI
The Origination Trust will issue the SUBI pursuant to the SUBI Trust
Agreement. The SUBI will evidence a beneficial interest, rather than a direct
interest, in the SUBI Assets, and it will not represent an interest in any
Origination Trust Assets other than the SUBI Assets. Under the required
allocation of Origination Trust liabilities, payments on other Origination Trust
Assets will not be available to make payments on the Notes or to cover expenses
of the Origination Trust allocable to the SUBI Assets. Any liability to third
parties arising from a Contract or Leased Vehicle generally will be borne by the
holders of interests in the SUBI (including the Trust). If any third party
liability arises from a contract or leased vehicle that is an Other SUBI Asset
or a UTI Asset, the other portfolios of Origination Trust Assets (including the
SUBI Assets) generally will not be subject to that liability. To the extent that
such a third party liability is satisfied out of the SUBI Assets, the
Origination Trustee will reallocate the various portfolios of Origination Trust
Assets (including the SUBI Assets) so that each portfolio will bear the expense
of the claim as nearly as possible as if the claim had been allocated in the
required manner. If there are not enough Origination Trust Assets in a portfolio
of Other SUBI Assets or UTI Assets to pay a related third party liability, the
other Origination Trust Assets (including the SUBI Assets) will be available to
do so. Under these circumstances, you may incur a loss on your investment. For
further details regarding the required allocation of Origination Trust
liabilities, see 'Additional Document Provisions--The Agreement--Creation of
Beneficial Interests and Allocation of Rights and Liabilities'.
Similarly, if a third-party claim that otherwise would be allocable to an
Other SUBI or the UTI is satisfied out of the SUBI Assets rather than the
related portfolio, and the claim exceeds the value of that portfolio, the
Origination Trustee will not be able to reallocate the remaining Origination
Trust Assets so that each portfolio will bear the expense of the claim as nearly
as possible if the claim has been properly allocated. In such circumstances, you
could incur a loss on your investment.
The Trust and the Indenture Trustee will not own directly or have a direct
security interest in the Leased Vehicles and certain other SUBI Assets, but they
generally will have only an indirect beneficial ownership interest in those
assets and a security interest in that indirect beneficial ownership interest,
respectively. Therefore, perfected liens of third-party creditors of the
Origination Trust in any SUBI Assets will take priority over the interests of
the Trust and the Indenture Trustee. A general creditor of the Origination Trust
may obtain a lien on SUBI Assets regardless of whether its claim would be
allocated to such SUBI Assets under the terms of the Origination Trust
Agreement. Potentially material examples of such liens could include tax liens
arising against the Transferor or the Trust, liens arising under various federal
and state criminal statutes, certain liens in favor of the Pension Benefit
Guaranty Corporation, judgment liens arising from successful claims arising
under federal and state consumer protection laws and Lemon Laws and relating to
leases and leased vehicles that are Origination Trust Assets, and judgment liens
arising from successful claims against the Origination Trust arising from the
operation of the leased vehicles that are Origination Trust Assets. See 'Risk
Factors--The Failure to Comply with Consumer Protection Laws Could Lead to
Losses for the Origination Trust and Losses on the Notes', '--Liens to Satisfy
ERISA Liabilities Could Lead to Losses for the Origination Trust and Losses on
the Notes' and '--Vicarious Tort Liability of the Origination Trust Could Result
Losses on the Notes' and 'Certain Legal Aspects of the Contracts and the Leased
Vehicles--Vicarious Tort Liability' and '--Consumer Protection Laws' for a
further discussion of these risks.
INSOLVENCY RELATED MATTERS
Each holder or pledgee of the UTI and any Other SUBI will be required to
expressly disclaim any interest in the SUBI Assets, and to fully subordinate any
claims to the SUBI Assets in the event that this disclaimer is not given effect.
For a description of these requirements, see 'The Origination Trust--Creation of
Beneficial Interests and Allocation of Rights and Liabilities'. Although we can
make no assurances, in the unlikely event of a bankruptcy of ALF L.P., the
Transferor believes that the SUBI Assets would not be treated as part of ALF
L.P.'s bankruptcy estate and that, even if they were so treated, the
subordination by holders and pledgees of the UTI and Other SUBIs should be
enforceable.
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In addition, the Transferor has taken steps in structuring the transactions
contemplated by this prospectus that are intended to make it unlikely that the
voluntary or involuntary application for relief by World Omni under any
Insolvency Laws will result in consolidation of the assets and liabilities of
ALF LLC, ALF L.P., WOLS LLC, the Transferor, the Origination Trust or the Trust
with those of World Omni. With respect to WOLS LLC and ALF LLC, these steps
include their creation as separate, special purpose finance subsidiaries of
World Omni pursuant to limited liability company agreements containing certain
limitations (including the requirement that each must have a board of managers,
known as a 'board of directors', including at all times at least two
'independent directors' and restrictions on the nature of their respective
businesses and on their ability to commence a voluntary case or proceeding under
any federal bankruptcy or state insolvency law without the affirmative vote of a
majority of their respective directors, including each independent director).
With respect to the Transferor and ALF L.P., these steps include their creation
as separate, special purpose limited partnerships of which WOLS LLC and ALF LLC,
respectively, are the sole general partners, pursuant to limited partnership
agreements containing certain limitations (including restrictions on the nature
of their respective businesses and on their ability to commence a voluntary case
or proceeding under federal bankruptcy or state insolvency law without the
affirmative vote of all of the directors of their respective general partners,
including each independent director).
However, delays in payments on the Notes and possible losses on the Notes
could result if a court concluded that the assets and liabilities of ALF LLC,
ALF L.P., the Transferor, WOLS LLC, the Origination Trust or the Trust should be
consolidated with those of World Omni under federal bankruptcy or state
insolvency laws, if a filing were made under any such bankruptcy or insolvency
law by or against ALF LLC, ALF L.P., the Transferor, WOLS LLC, the Origination
Trust or the Trust, or if an attempt were made to litigate any of these issues.
For more information on these and related risks, see 'Risk Factors--Possible
Effects of Insolvency or Bankruptcy of World Omni, the Transferor, Auto Lease
Finance L.P. or Their General Partners, the Origination Trust or the Trust'.
LEGAL PROCEEDINGS
None of ALF LLC, ALF L.P., the Transferor or WOLS LLC is a party to any
legal proceeding. World Omni is a party to, and is vigorously defending,
numerous legal proceedings, all of which it believes constitute ordinary routine
litigation incidental to the business and activities conducted by World Omni.
The Origination Trustee, on behalf of the Origination Trust, has been named as a
defendant in various cases which it believes constitute ordinary routine
litigation incidental to the business and activities conducted by the
Origination Trustee as an assignee of lease contracts and leased vehicles. For a
description of a pending IRS review, see 'World Omni--Certain Administrative and
Legal Proceedings Involving World Omni' and 'Material Federal Income Tax
Considerations--Federal Taxation--Possible Alternative Treatment of the Class A
Notes'.
CERTAIN LEGAL ASPECTS OF
THE CONTRACTS AND THE LEASED VEHICLES
BACK-UP SECURITY INTERESTS
Absent prior perfection of a security interest by the Trust or the
Indenture Trustee in the SUBI Assets, the holder of a perfected lien in any SUBI
Assets would have priority over the interests of the Indenture Trustee and the
Trust. Therefore, the Transferor has taken certain actions to ensure that the
Indenture Trustee will be deemed to have a perfected security interest in the
SUBI Certificate (and the SUBI evidenced thereby) and in the Contracts and the
related rights in which a security interest can be perfected by filing a
financing statement under the UCCs of Alabama, Illinois, Florida and New York.
In particular, UCC-1 financing statements will be filed in Alabama, Florida,
Illinois and New York to effect this perfection. By virtue of its possession of
the SUBI Certificate, the Indenture Trustee also will have a perfected security
interest in that instrument and the SUBI it evidences. However, no action will
be taken to perfect any lien that the Indenture Trustee may be deemed to have in
the Leased Vehicles. Therefore, if a third party imposes a valid lien against a
Leased Vehicle, its interest will be superior to the unperfected beneficial
interest of the Indenture Trustee. Although the Servicer intends to contest and
endeavor to remove any such liens, if it is
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unsuccessful, you could incur a loss on your investment. For further information
relating to potential liens on the SUBI Assets, see 'Additional Document
Provisions--The Servicing Agreement--Notification of Liens and Claims' and
'Certain Legal Aspects of the Origination Trust and the SUBI--The SUBI'.
The Indenture Trustee's back-up security interest in a Contract could be
subordinate to the interest of a purchaser who takes possession of a Contract
without knowledge or actual notice of the Indenture Trustee's security interest,
before completion of the filing described above. The Contracts will not be
stamped to reflect the Indenture Trustee's security interest.
A variety of liens could be imposed on the SUBI Assets that, by operation
of law, would take priority over the Indenture Trustee's interest. For a
description of these liens, see 'Certain Legal Aspects of the Origination Trust
and the SUBI--The SUBI'. Any perfected security interest of the Indenture
Trustee in any Trust property could also be subordinate to claims of any trustee
in bankruptcy or debtor-in-possession if the Transferor goes bankrupt before the
transfer of the Trust property from the Transferor to the Trust under the
Agreement.
VICARIOUS TORT LIABILITY
Although the Origination Trust will own the Leased Vehicles, they will be
operated by the lessees under the Contracts and their invitees. State laws
differ as to whether someone injured in an accident involving a leased vehicle
may sue the vehicle's owner merely because it owns the vehicle. If applicable
state law permits such an action, as it does in New York against titling trusts
like the Origination Trust, the Origination Trust and the Origination Trust
Assets may be subject to liability. However, the laws of many states, including
each of the states in the Five State Area, either do not permit such suits or
recognize such actions, or the lessor's liability is capped at the amount of any
liability insurance that the lessee was required to, but failed to, maintain.
In Alabama and Georgia, a victim of such an accident involving a leased
vehicle has no cause of action against the vehicle's owner arising from its
negligent operation unless the owner has negligently entrusted or negligently
continues to entrust the vehicle to an inappropriate lessee.
Florida statute provides that the owner of a vehicle under a lease with an
initial term of at least one year is exempt from liability arising from such an
accident if the lease requires the lessee to maintain certain specified levels
of insurance and that insurance is in effect. In 1991, in a case involving
finance leases, the Florida Supreme Court ruled that this statute is
constitutional and that a Florida lessor that complies with the statute will not
be financially responsible for liability or tort claims arising from the
negligent operation of the leased vehicle or the negligent acts of the operator.
In 1992, the Florida Supreme Court held that this statute is applicable to true
leases as well as finance leases. In March 1996, the Florida Supreme Court
strictly interpreted the requirements of this statute, ruling a lessor's blanket
contingent liability insurance policy did not satisfy the statutory requirement
that the lessee have insurance in effect at the time of the accident. However,
effective with respect to actions brought on or after June 1, 1996, the statute
was amended to provide that a lessor's blanket contingent liability insurance
policy with certain required policy limits will satisfy the statute's
requirements. The Origination Trust's insurance coverage meets these
requirements.
In North Carolina, a lessor of a motor vehicle generally is not responsible
to injured parties for a lessee's negligent use of the leased vehicle when all
control has been relinquished to the lessee, unless the lessor knew or in the
exercise of reasonable care should have known that the leased vehicle was
defective or unsafe at the time of delivery to the lessee and the defect or
unsafe condition caused injury, or if the lessor negligently entrusted the
vehicle to an incompetent lessee.
In contrast to the states in the Five-State Area and many other states, New
York law provides that the holder of title of a motor vehicle (including a
titling trust as lessor) may be considered an 'owner'. Therefore, it may be
jointly and severally liable with the lessee for the negligent use or operation
of a motor vehicle. In New York, there is no limit on an owner's liability.
Recently, the Supreme Court of New York ruled that a finance company acting as
an agent for a titling trust may be considered an 'owner' of a motor vehicle and
thus subject to joint and several liability with the lessee for the negligent
use or operation of the
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leased motor vehicle for the duration of a lease. The court's ruling was in the
context of the denial of a summary judgment motion brought by the defendant to
dismiss the case. As a result of the rulings in New York, losses could arise if
lawsuits are brought against either the Origination Trust or World Omni, as
agent of the Origination Trust, in connection with the negligent use or
operation of leased vehicles that are Origination Trust Assets.
Third parties also might sue the Origination Trust, as owner of the Leased
Vehicles, based on other legal theories, such as a product defect or improper
vehicle preparation prior to the origination of the related lease contract.
All of the Contracts will require the lessees to maintain insurance
satisfying applicable state law. In addition, if this insurance lapses or is not
properly maintained, the Servicer will be required to pay the amounts that would
have been recoverable under this insurance. The Origination Trust also will be
the beneficiary of World Omni's Contingent and Excess Liability Insurance
Policies, which provide coverage in excess of $10 million per claim, with an
allowance for multiple claims in any policy period. Although the Origination
Trust's insurance coverage is substantial, if all applicable insurance coverage
were exhausted and damages were assessed against the Origination Trust, parties
injured in accidents involving leased vehicles could impose claims against the
SUBI Assets. However, those claims would not take priority over any SUBI Assets
in which the Indenture Trustee has a prior perfected security interest, such as
the Contracts. For more information about this security interest, see 'Certain
Legal Aspects of the Contracts and the Leased Vehicles--Back-up Security
Interests'. If any third party were to successfully impose such a claim against
the SUBI Assets, you could incur a loss on your investment.
REPOSSESSION OF LEASED VEHICLES
If a lessee does not cure a default within a certain period of time after
notice, the Servicer ordinarily will retake possession of his or her Leased
Vehicle. Some jurisdictions require that a lessee of a vehicle be notified of a
default and be given a specific time period to cure the default before
repossession. Generally, this right to cure may be exercised on a limited number
of occasions in any one-year period. In these jurisdictions, if the lessee
objects or raises a defense to repossession, the lessor must obtain an order
from the appropriate state court, and must then repossess the vehicle in
accordance with that order. Other jurisdictions permit repossession without
notice (although in Florida, Georgia and North Carolina a course of conduct in
which the lessor has accepted late payments has been held to create a right of
the lessee to receive prior notice), but only if the lessor can accomplish it
peacefully. If the lessor cannot avoid a breach of the peace, judicial action is
required.
In Georgia or North Carolina, a lessor may repossess a leased vehicle
without notice, but only if it can accomplish the repossession without a breach
of the peace. If the lessor cannot avoid a breach of the peace, it must seek a
writ of possession in a state court action or pursue other judicial action to
repossess the leased vehicle.
After the Servicer has repossessed a Leased Vehicle, it may provide the
lessee with a period of time to cure his or her default under the Contract. If
by the end of that period the lessee has not cured the default, the Servicer
will attempt to sell or otherwise dispose of the Leased Vehicle. The Net
Repossessed Vehicle Proceeds from that sale or disposition may be less than the
remaining amounts due under the Contract at the time of the lessee's default.
DEFICIENCY JUDGMENTS
The Servicer generally will apply the proceeds of sale of a Leased Vehicle
first to the expenses of resale and repossession and then to the satisfaction of
the amounts due under the Contract. While some states prohibit or limit
deficiency judgments if the net proceeds from resale of a leased vehicle do not
cover the full amounts due under the lease, the lessor can seek a deficiency
judgment in those states that do not prohibit directly or limit such judgments
(including each of the States in the Five State Area). However, in some states
(including Florida), a lessee may be allowed an offsetting recovery for any
amount not recovered at resale because the terms of the resale were not
commercially reasonable. In any event, a deficiency judgment would be a personal
judgment against the lessee for the shortfall, and it is unlikely that a
defaulting lessee
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would have substantial capital or sources of income. Therefore, in many cases,
it may not be useful to seek a deficiency judgment. Even if the Servicer obtains
a deficiency judgment, it may be settled at a significant discount.
In Georgia or North Carolina, amounts recoverable by the lessor from a
lessee upon default or early termination are not considered to be 'deficiency
judgments', but damages for breach or early termination of
the lease. The only limitation or prohibition on such damages is that they be
reasonable in light of the anticipated harm caused by the default. Georgia and
North Carolina law do not require a lessor to refund to a lessee any excess
proceeds from disposition of a leased vehicle. However, in Georgia, where a
lessor or lessee has exercised its rights against the manufacturer and obtained
a replacement vehicle and the lessor realizes a gain from disposition of the
replacement vehicle, the lessor must refund to the lessee the lesser of any
offset for use paid by the lessee to the manufacturer or the gain realized by
the lessor.
CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws impose requirements
upon lessors and servicers involved in consumer leasing. The federal Consumer
Leasing Act of 1976 and Regulation M, issued by the Board of Governors of the
Federal Reserve System, for example, require a number of disclosures when a
vehicle is leased, including the amount of any down payment, a description of
the lessee's liability at the end of the lease term, the amount of any periodic
payments, the circumstances under which the lessee may terminate the lease prior
to the end of the lease term, the capitalized cost of the vehicle and a warning
regarding possible charges for early termination. These consumer protection laws
apply to the Origination Trustee as a 'co-lessor' of the Contracts and may also
apply to the Trust as holder of a beneficial interest in the Contracts. The
failure to comply with these consumer protection laws may result in liabilities
of the Servicer, the Origination Trust and the Origination Trustee, including
liabilities for statutory damages and attorneys' fees. In addition, claims by
the Servicer, the Origination Trust and the Origination Trustee may be subject
to set-off as a result of noncompliance with these laws.
Courts have applied general equitable principles in litigation relating to
repossession and deficiency balances. These equitable principles may have the
effect of relieving a lessee from some or all of the legal consequences of a
default.
In several cases, consumers have asserted that the self-help remedies of
lessors violate the due process protection provided under the Fourteenth
Amendment to the Constitution of the United States. Courts have generally found
that repossession and resale by a lessor do not involve sufficient state action
to afford constitutional protection to consumers.
Many states, including each State in the Five State Area, have adopted laws
('LEMON LAWS') providing redress to consumers who purchase or lease a vehicle
that remains out of conformity with its manufacturer's warranty after a
specified number of attempts to correct a problem or after a specific time
period. Should any Leased Vehicle become subject to a Lemon Law, a lessee could
compel the Origination Trust to terminate the related Contract and refund all or
a portion of payments that the lessee already has paid. Although the Origination
Trust may be able to assert a claim against the manufacturer of any such
defective Leased Vehicle, we cannot assure you that any such claim would be
successful.
Historically, less than one-half of one percent of all automobiles and
light duty trucks leased by World Omni (including lease contracts owned by the
Origination Trust and by various special purpose subsidiaries of World Omni)
have become the subject of an action under any Lemon Law. World Omni will
represent and warrant to the Owner Trustee and the Indenture Trustee as of the
relevant Cutoff Date that no Leased Vehicles is out of compliance with any law,
including any Lemon Law. Nevertheless, we cannot assure you that no Leased
Vehicles will become subject to return (and the related Contract terminated) in
the future under a Lemon Law.
The Servicer will represent and warrant that each Contract complies with
all requirements of law in all material respects. If any such representation and
warranty proves incorrect as to any Contract and is not timely cured, World Omni
will be required to deposit a Reallocation Payment (together with, in certain
circumstances during the Amortization Period, a Reallocation Deposit Amount) for
that Contract into the
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SUBI Collection Account unless the breach is cured. See 'The
Contracts--Characteristics of the Contracts-- Selection Criteria' and
'--Representations, Warranties and Covenants' for further information regarding
these representations and warranties.
OTHER LIMITATIONS
In addition to laws limiting or prohibiting deficiency judgments, numerous
other statutory provisions, including federal bankruptcy and state insolvency
laws, may interfere with or affect the ability of a lessor to enforce its rights
under an automobile or light duty truck lease contract. For example, if a lessee
commences bankruptcy proceedings, the lessor's receipt of rental payments due
under the lease is likely to be delayed. In addition, a lessee who commences
bankruptcy proceedings might be able to assign the lease contract to another
party even though the lease prohibits assignment.
MATERIAL INCOME TAX CONSIDERATIONS
FEDERAL TAXATION
General
The following discussion represents the opinion of Cadwalader, Wickersham &
Taft, special federal income tax counsel to the Trust, as to material federal
income tax consequences to holders of the Class A Notes who are original owners
and who hold the Class A Notes as capital assets under the Internal Revenue Code
of 1986, as amended (THE 'CODE'). We do not intend this discussion to be
complete or to deal with all aspects of federal income taxation or any aspects
of state or local taxation that may be relevant to Class A Noteholders or Note
Owners in light of their particular circumstances. Neither do we intend this
discussion to cover certain types of Class A Noteholders or Note Owners subject
to special treatment under the federal income tax laws (for example, banks and
life insurance companies). We have based this discussion on present provisions
of the Code, the regulations under the Code and judicial and ruling authorities,
all of which are subject to change (which may be retroactive). We do not intend
to seek a ruling from the IRS on any of these issues. Moreover, we cannot assure
you that if we sought such a ruling, the IRS would rule favorably. You and your
income tax return preparer should be aware that, under applicable Treasury
Regulations, one who provides advice on specific issues of law is not considered
an income tax return preparer unless the advice is given on events that have
occurred when the advice is rendered and not on the consequences of contemplated
actions, and the advice is directly relevant to the determination of an entry on
a tax return. Accordingly, you should consult your tax advisors and tax return
preparers regarding the preparation of any item on your tax returns, even where
we have discussed the anticipated tax treatment. In fact, you should consult
your tax advisors as to all tax consequences of the purchase, ownership or
disposition of the Class A Notes, including under federal income tax laws and
regulations and the laws and regulations of any state, foreign country or other
taxing jurisdiction.
Characterization of the Class A Notes as Indebtedness
The Transferor, the Owner Trustee, each Noteholder, and each Note Owner (by
acquiring a beneficial interest in a Class A Note) will express in the Agreement
and in the Indenture their intent that, for federal, state and local income and
franchise tax purposes, the Class A Notes will be indebtedness, secured by the
assets of the Trust. The Transferor and the Owner Trustee, by entering into the
Agreement and the Indenture, and each Noteholder and each Note Owner, by
acquiring a beneficial interest in a Class A Note, will agree to treat the Class
A Notes as indebtedness for federal, state and local income and franchise tax
purposes.
In general, the characterization of a transaction for federal income tax
purposes is based upon economic substance, and the substance of the transaction
in which the Class A Notes will be issued is consistent with their treatment as
debt for federal income tax purposes. Whether the economic substance of a
property transfer is a sale or a loan secured by the transferred property
depends upon numerous factors, which are designed to determine whether the
transferor has relinquished (and the transferee has obtained) substantial
incidents of ownership in the property. The primary factors are whether the
transferee has the opportunity to
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gain if the property increases in value, and has the risk of loss if the
property decreases in value. Based upon its analysis of these factors,
Cadwalader, Wickersham & Taft is of the opinion that, for federal income tax
purposes, the characterization of the Class A Notes should be governed by the
substance of the transaction and accordingly, the Trust will be treated as a
mere security device and not as an association taxable as a corporation, and the
Class A Notes will properly be characterized as indebtedness that is secured by
the Trust assets.
Taxation of Interest and Discount Income
Assuming that the Note Owners are owners of debt obligations for federal
income tax purposes, interest generally will be taxable as ordinary income for
those purposes when received by the Note Owners using the cash method of
accounting and when accrued by Note Owners using the accrual method of
accounting. Interest on the Class A Notes may also constitute 'investment
income' for purposes of certain Code limitations on the deductibility of
investment interest expense.
Original Issue Discount. Under the original issue discount ('OID')
provisions of the Code and the related regulations, the Class A Notes may be
deemed to have been issued with OID. The OID will equal the excess, if any, of
the 'stated redemption price at maturity' of the relevant Class (generally equal
to its Initial Note Balance plus all interest other than 'qualified stated
interest' payable before or at maturity), over its original issue price (in this
case, the initial offering price at which a substantial amount of the Class is
sold to the public). The issue price of a Class A Note is the first price at
which a substantial amount of its Class is sold to the public (excluding bond
houses, brokers, underwriters or wholesalers). If less than a substantial amount
of a particular Class is sold for cash on or before the Closing Date, the issue
price of the Class will be treated as the fair market value of the Class on the
Closing Date. The Trust will treat the issue price of a Class A Note as
including the amount paid by its Noteholder for accrued interest prior to the
Note's issue date. However, a Class A Noteholder may elect to treat that accrued
interest as a separate asset received on the first Distribution Date. The stated
redemption price at maturity of a Class A Note includes its Initial Note
Balance, but generally will not include distributions of interest if they
constitute 'qualified stated interest'. Qualified stated interest generally
means interest payable at a single fixed rate or qualified variable rate, if the
interest payments are unconditionally payable at intervals of one year or less
during the entire term of the relevant Class. Therefore, interest paid on the
Class A Notes should be treated by the IRS as qualified stated interest. A Class
A Noteholder must include any OID income under a Class A Note over its term as
it accrues under a constant yield method. In general, a Noteholder must include
OID in income before it receives cash representing that income, regardless of
its method of accounting.
The amount of OID on a Class A Note will be considered to be zero if it is
less than a de minimis amount determined under the Code. Under the de minimis
rule, OID on a Class A Note will be considered to be zero if it is less than
0.25% of the stated redemption price at maturity of that Note multiplied by the
Note's weighted average maturity. Class A Noteholders generally must report de
minimis OID pro rata as they receive principal payments, and this income will be
capital gain if the Noteholder holds its Note as a capital asset. However,
accrual method Class A Noteholders may elect to accrue both de minimis OID and
market discount under a constant interest method.
If a Class A Note is issued with OID, its Noteholder must include in gross
income, for all days during its taxable year in which it holds the Note, the sum
of the 'daily portions' of that OID. The amount of OID includible in income by a
Noteholder will be computed by allocating to each day during a taxable year a
pro rata portion of the OID that accrued during the relevant accrual period,
assuming no change in the initial Note Rate. The Noteholder would make
adjustments for each accrual period if the current Note Rate was greater or less
than the initial Note Rate.
If a Noteholder purchases a Class A Note issued with OID at an 'acquisition
premium' (i.e., at a price in excess of the adjusted issue price of the Class A
Note, but less than or equal to its 'stated redemption price at maturity'), his
or her OID includible in income in each taxable year will be reduced by the
portion of the premium properly allocable to that year.
Market Discount. You should be aware that the resale of a Class A Note may
be affected by the market discount rules of the Code. These rules generally
provide that, subject to a de minimis exception, if a
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Noteholder acquires a Class A Note at a market discount (i.e., at a price below
its 'adjusted issue price') and later recognizes gain on its disposition, the
lesser of that gain or the portion of the market discount that accrued while he
or she held the Class A Note will be treated as ordinary interest income
realized at the time of the disposition. A Class A Noteholder may elect to
include market discount currently in gross income in taxable years to which it
is attributable, computed using either a ratable accrual or a yield to maturity
method. A Class A Noteholder who does not make this election may be required to
defer a portion of the deduction for interest on indebtedness incurred to
purchase or carry the Class A Note.
Premium. A Note Owner who purchases a Class A Note for more than its
stated redemption price at maturity will be subject to the premium amortization
rules of the Code, if the Note Owner held the Class A Note as a capital asset.
Under those rules, the Note Owner may elect to amortize that premium on a
constant yield method. Amortizable premium reduces interest income on the Class
A Note. If the Note Owner does not make this election, the premium paid for the
Class A Note generally will be included in the tax basis of the Class A Note in
determining the gain or loss on its disposition or upon receipt of a principal
payment.
You should consult your own tax advisor as to the impact of the original
issue discount, market discount, and premium amortization rules.
Sales of Class A Notes
In general, a Note Owner will recognize gain or loss upon the sale,
exchange, redemption or other taxable disposition of a Class A Note measured by
the difference between:
(1) The amount of cash and the fair market value of any property received
(other than amounts attributable to, and taxable as, accrued stated
interest); and
(2) The Note Owner's tax basis in the Class A Note, as increased by any
OID or market discount previously included in income by the Noteholder
and decreased by any deductions previously allowed for amortizable
bond premium and by any payments, other than qualified stated interest
payments, received on the Class A Note.
Subject to the market discount rules discussed above and to the more than
one-year holding period requirement for long-term capital gain treatment, any
such gain or loss generally will be long-term capital gain or loss, if the Note
Owner held the Class A Note as a capital asset. The federal income tax rates
applicable to capital gains for taxpayers other than individuals, estates and
trusts are currently the same as those applicable to ordinary income. However,
the maximum ordinary income rate for individuals, estates and trusts is
generally 39.6%, whereas the maximum long-term capital gains rate for such
taxpayers is 20% for capital assets held for more than one year. Moreover,
capital losses generally may be used only to offset capital gains.
Federal Income Tax Consequences to Foreign Investors
This section describes the United States federal income tax treatment of
Foreign Investors if the Class A Notes are treated as debt. A 'FOREIGN INVESTOR'
is any person other than a U.S. Person. A 'U.S. PERSON' is:
(1) A citizen or resident of the United States;
(2) A corporation, partnership or other entity organized in or under the
laws of the United States or any state or political subdivision (other
than a partnership that is not treated as a United States person under
any applicable Treasury regulations);
(3) An estate whose income is subject to United States federal income tax,
regardless of its source; or
(4) A trust whose administration is subject to the primary supervision of
a United States court and where one or more United States persons have
authority to control all substantial decisions of the trust.
However, to the extent provided in regulations, certain trusts in existence on
August 20, 1996 and treated as United States persons prior to that date that
elect to continue to be so treated also are U.S. Persons.
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The Code and Treasury regulations generally subject interest paid to a
Foreign Investor to a withholding tax at a rate of 30% (unless the rate is
changed by an applicable treaty). The withholding tax, however, is eliminated
with respect to certain 'portfolio debt investments' issued to Foreign
Investors. Portfolio debt investments include debt instruments issued in
registered form for which the United States payor receives a statement that the
beneficial owner of the instrument is a Foreign Investor. The Class A Notes will
be issued in registered form. Therefore, if the information required by the Code
is furnished (as described below) and no other exceptions to the withholding tax
exemption are applicable, no withholding tax will apply to the Class A Notes.
For the Class A Notes to constitute portfolio debt investments exempt from
United States withholding tax, the withholding agent must receive from the Note
Owner an executed IRS Form W-8 signed under penalty of perjury by the Note Owner
stating that the Note Owner is a Foreign Investor and providing his or her name
and address. The withholding agent must receive the statement in the calendar
year in which the interest payment is made, or in either of the two preceding
calendar years.
A Note Owner that is a nonresident alien or foreign corporation will not be
subject to United States federal income tax on gain realized on the sale,
exchange or redemption of a Class A Note, if:
(1) The gain is not effectively connected with a trade or business carried
on by the Note Owner in the United States;
(2) In the case of an individual Note Owner, he or she is not present in
the United States for 183 days or more during the taxable year in
which such sale, exchange or redemption occurs; and
(3) In the case of gain representing accrued interest, the conditions
described in the immediately preceding paragraph are satisfied.
Backup Withholding
A Note Owner may be subject to a backup withholding at the rate of 31% with
respect to interest paid on the Class A Notes if he or she, upon issuance, fails
to supply the Indenture Trustee or his or her broker with his or her taxpayer
identification number, fails to report interest, dividends or other 'reportable
payments' (as defined in the Code) properly, or under certain circumstances,
fails to provide the Trustee or his or her broker with a certified statement,
under penalty of perjury, that he or she is not subject to backup withholding.
The Indenture Trustee will send annual information returns to the IRS and to
each Note Owner setting forth the amount of interest paid on the Class A Notes
and the amount of tax withheld. A Foreign Investor who meets the exemption for
'portfolio debt investments' described above will not be subject to backup
withholding or information reporting.
New Withholding Regulations
On October 6, 1997, the Treasury Department issued new regulations that
make certain modifications to the withholding, backup withholding and
information reporting rules described above. These new regulations attempt to
unify certification requirements and modify reliance standards. The new
regulations will generally be effective for payments made after December 31,
2000, subject to certain transition rules. We urge you to consult your own tax
advisor regarding the these new regulations.
Possible Alternative Treatment of the Class A Notes
Although it is the opinion of Cadwalader, Wickersham & Taft that the Class
A Notes will properly be characterized as debt for federal income tax purposes,
their opinion will not be binding on the IRS and we cannot assure you that this
characterization shall prevail. If the IRS were to contend successfully that the
Class A Notes did not represent debt for federal income tax purposes, certain
adverse tax consequences to the Class A Noteholders could result. For example,
income to certain tax-exempt entities (including pension funds) generally would
be 'unrelated business taxable income', and income to foreign holders generally
would be subject to U.S. withholding tax and reporting requirements. As part of
its regular examination process of the consolidated federal income tax returns
of JMFE and its subsidiaries (which include World Omni) for certain prior years,
the IRS currently is reviewing, among other things, certain transactions similar
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to the proposed issuance of the Notes. For more information about these
proceedings, see 'World Omni-- Administrative and Legal Proceedings Involving
World Omni'. The IRS has proposed treating those transactions as sales rather
than financings for federal income tax purposes, which would affect World Omni's
depreciation deductions. It also has proposed treating the Origination Trust and
each securitization trust created for those transactions as an association
taxable as corporation, rather than a trust for federal income tax purposes. In
connection with each transaction, World Omni received an opinion of tax counsel
that the transaction was properly treated as a financing and that neither the
Origination Trust nor the relevant securitization trust would be treated as an
association taxable as corporation for federal income tax purposes. While
management believes that a challenge by the IRS would be unsuccessful, we cannot
assure you of this result. We advise you to consult with your own tax advisor
regarding the federal income tax consequences of the purchase, ownership and
disposition of the Class A Notes.
FLORIDA INCOME TAXATION
A rule under the Florida Income Tax Code (THE 'LOAN RULE') provides that a
'financial organization' earning or receiving interest from loans secured by
tangible property located in Florida will be deemed to be conducting business or
earning or receiving income in Florida, and will be subject to Florida corporate
income tax regardless of where the interest was received. A financial
organization is defined to include any bank, trust company, savings bank,
industrial bank, land bank, safe deposit company, private banker, savings and
loan association, credit union, cooperative bank, small loan company, sales
finance company or investment company. If the Loan Rule were to apply to the
Class A Notes, then a financial organization investing in the Class A Notes
would be subject to Florida corporate income tax on a portion of its income at a
maximum rate of 5.5%, and would be required to file an income tax return in
Florida, even if it has no other Florida contacts. English, McCaughan & O'Bryan,
P.A., special Florida counsel to the Transferor, is of the opinion that if the
matter were properly presented to a court with jurisdiction, and if relevant law
were interpreted consistent with existing authority, the court would hold the
Loan Rule not to apply to an investment in the Class A Notes or the receipt of
interest on those Notes by a financial organization with no other Florida
contacts. We urge you to consult your own tax advisor as to the applicability of
the Loan Rule to an investment in Class A Notes and your ability to offset any
such Florida tax against any other state tax liabilities.
ERISA CONSIDERATIONS
In general, the Class A Notes may be acquired by pension, profit-sharing or
other employee benefit plans, as well as an individual retirement accounts and
Keogh plans (EACH, A 'BENEFIT PLAN'). ERISA and the Code prohibit a Benefit Plan
from engaging in certain transactions with persons that are 'parties in
interest' under ERISA or 'disqualified persons' under the Code with respect to
such Benefit Plan. A violation of these prohibited transaction rules may result
in an excise tax or other penalties and liabilities under ERISA and the Code for
those persons or the fiduciaries of the Benefit Plan. In addition, ERISA also
requires fiduciaries of a Benefit Plan subject to ERISA to make investments that
are prudent, diversified and in accordance with the governing plan documents.
Certain transactions involving the Trust might constitute prohibited
transactions under ERISA and the Code with respect to a Benefit Plan that
purchased Class A Notes if assets of the Trust were deemed to be assets of the
Benefit Plan. Under a regulation issued by the United States Department of
Labor, the assets of the Trust would be treated as plan assets of a Benefit Plan
for the purposes of ERISA and the Code only if the Benefit Plan acquired an
'equity interest' in the Trust and none of the exceptions to plan assets
contained in the regulation was applicable. An equity interest is an interest
other than an instrument which is treated as indebtedness under applicable local
law and which has no substantial equity features. Although there is little
guidance on the subject, the Transferor believes that, at the time of their
issuance, the Class A Notes should be treated as indebtedness of the Trust
without substantial equity features for purposes of this regulation. This
determination is based in part upon the traditional debt features of the Class A
Notes, including the reasonable expectation of purchasers of Class A Notes that
the Class A Notes will be repaid when due, as well as the absence of conversion
rights, warrants and other typical equity features. The debt treatment of the
Class A Notes for ERISA purposes could change if the Trust incurred losses.
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However, whether or not the Class A Notes are treated as an equity interest
for purposes of this regulation, the acquisition or holding of Class A Notes by
or on behalf of a Benefit Plan could give rise to a prohibited transaction if
the Trust, the Indenture Trustee, the Owner Trustee, the Origination Trustee,
the Transferor or World Omni is or becomes a party in interest or a disqualified
person with respect to such Benefit Plan. Certain exemptions from the prohibited
transaction rules could be applicable to a Benefit Plan's purchase and holding
of Class A Notes, depending on the type and circumstances of the plan fiduciary
making the acquisition decision. Included among these are exemptions regarding
transactions effected by 'in-house asset managers'; investments by insurance
company general accounts; investments by bank collective investment funds;
investments by insurance company pooled separate accounts; and transactions
effected by 'qualified professional asset managers'. By acquiring an interest in
a Note, each Note Owner will be deemed to represent that either it is not
acquiring the Class A Notes with the assets of a Benefit Plan, or its
acquisition and holding of the Class A Notes will not give rise to a nonexempt
prohibited transaction under ERISA or the Code.
Due to the complexities of these rules and the penalties imposed upon those
involved in prohibited transactions, if you are the fiduciary of a Benefit Plan,
you should consult with your counsel regarding whether the assets of the Trust
would be considered plan assets, and the applicability of the prohibited
transaction provisions of ERISA and the Code to that investment. You also should
determine whether, under the general fiduciary standards of investment prudence
and diversification, an investment in the Class A Notes is appropriate for your
Benefit Plan, taking into account its overall investment policy and the
composition of its investment portfolio.
UNDERWRITING
Under the Underwriting Agreement dated , 1999 (THE
'UNDERWRITING AGREEMENT'), the Underwriters named below (THE 'UNDERWRITERS'),
for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated is acting as
representative (THE 'REPRESENTATIVE'), have severally (but not jointly) agreed
to purchase from the Transferor Class A-1 Notes, Class A-2 Notes, Class A-3
Notes and Class A-4 Notes:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PRINCIPAL AMOUNT PRINCIPAL AMOUNT PRINCIPAL AMOUNT
UNDERWRITER OF CLASS A-1 NOTES OF CLASS A-2 NOTES OF CLASS A-3 NOTES OF CLASS A-4 NOTES
- ----------- ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................
Banc of America Securities LLC...........
Chase Securities Inc. ...................
Credit Suisse First Boston Corporation...
First Union Capital Markets..............
------------------ ------------------ ------------------ ------------------
Total................................ 330,000,000 310,000,000 249,000,000 184,472,000
</TABLE>
The Underwriting Agreement provides that, subject to certain conditions
precedent, the Underwriters will be obligated to purchase all the Class A Notes
if any are purchased. The Underwriting Agreement provides that if an Underwriter
defaults, in certain circumstances the non-defaulting Underwriters' purchase
commitments may be increased or the Underwriting Agreement may be terminated.
The Underwriters have agreed to reimburse the Transferor for certain expenses
incurred in offering the Class A Notes.
The Representative has advised the Transferor that:
(i) The Underwriters propose to offer the Class A Notes to the public
initially at the public offering prices set forth on the cover page of
this prospectus;
(ii) The Underwriters propose to offer those Notes to certain dealers at
the public offering prices set forth on the cover page of this
prospectus, less a concession of %, %, % and % of the Initial Note
Balance of each Class A-1, Class A-2, Class A-3 and Class A-4 Note;
and
(iii) The Underwriters and the dealers described in clause (ii) may allow a
discount of %, %, and % of the Initial Note Balance of each Class A-1,
Class A-2, Class A-3 and Class A-4 Note on sales to certain other
dealers.
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After the initial public offering, the Underwriters may change the public
offering price and concessions and discounts to dealers.
The Transferor and World Omni have agreed to jointly and severally
indemnify the Underwriters against certain liabilities, including civil
liabilities under the Securities Act, as amended, or contribute to any payments
the Underwriters are required to make in respect of those liabilities.
We expect that we will deliver the Class A Notes in return for payment on
or about the date specified in the last paragraph of the cover page of this
prospectus, which is the business day after the date of this prospectus.
Applicable regulations under the Exchange Act generally require that secondary
market transactions settle in three business days, unless the parties to the
trade expressly agree otherwise. Accordingly, because the Class A Notes
initially will settle business days after the date of this prospectus,
purchasers who wish to trade them on the date of this prospectus must specify an
alternate settlement cycle at the time of the trade to prevent a failed
settlement. If you wish to trade Class A Notes on the date of this prospectus,
please consult your own advisor.
If an Underwriter delivers an electronic prospectus to you, then it will
promptly deliver to you, without charge, a paper copy of this prospectus if you
(or your representative) request it while the Underwriters are required to
deliver a prospectus.
The Underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Over-allotment involves syndicate sales in excess of the
offering size, which creates a syndicate short position. Stabilizing
transactions permit bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the Class A Notes in the open market after the
distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the Underwriters to reclaim a selling concession from a
syndicate member when the Class A Notes originally sold by such syndicate member
are purchased in a syndicate covering transactions and penalty bids may cause
the prices of the Class A Notes to be higher than they would otherwise be in the
absence of such transactions. If the Underwriters begin these transactions, they
may discontinue them at any time.
Neither we nor the Underwriters makes any representation or prediction as
to the direction or magnitude of any effect that these transactions may have on
the prices of the Class A Notes. In addition, neither we nor any Underwriter
makes any representation that the Underwriters will engage in these transactions
or that if they begin these transactions, they will not discontinue them without
notice.
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
We are distributing the Class A Notes in Canada only on a private placement
basis exempt from the requirement that the Transferor prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of the Class A Notes are effected. Therefore, you must resell Class A
Notes in Canada in accordance with applicable securities laws which will vary
depending on the relevant jurisdiction, and which may require resales to be made
in accordance with available statutory exemptions or pursuant to a discretionary
exemption granted by the applicable Canadian securities regulatory authority. We
advise you to seek legal advice before reselling any Class A Notes.
REPRESENTATIONS OF PURCHASERS
Each purchaser of Class A Notes in Canada who receives a purchase
confirmation will be deemed to represent to the Transferor and the dealer who
provides the purchase confirmation that:
(1) The purchaser is entitled under applicable provincial securities laws
to purchase Class A Notes without the benefit of a prospectus
qualified under those securities laws;
(2) Where required by law, that the purchaser is purchasing as principal
and not as agent; and
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(3) The purchaser has reviewed the text above under 'Notice to Canadian
Residents--Resale Restrictions'.
RIGHTS OF ACTION AND ENFORCEMENT
The securities being offered are those of foreign issuers and Ontario
purchasers will not receive the contractual right of action prescribed by
Section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available, including
common law rights of action for damages or rescission or rights of action under
the civil liabilities provisions of the U.S. federal securities laws.
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Ontario purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside of Canada. Following a recent decision of the U.S. Supreme
Court, it is possible that Ontario purchasers will not be able to rely upon the
remedies set out in Section 12(2) of the Securities Act if the securities are
being offered under a U.S. private placement memorandum.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of Class A Notes to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any Class
A Notes acquired by such purchaser pursuant to this offering. Such report must
be in the form attached to British Columbia Securities Commission Blanket Order
BOR #95/17, a copy of which may be obtained from the Transferor. Only one such
report must be filed in respect of Class A Notes acquired on the same date and
under the same prospectus exemption.
RATINGS OF THE CLASS A NOTES
We will not issue and sell the Notes unless each of Moody's Investors
Service, Inc. ('MOODY'S'), Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc. ('STANDARD & POOR'S') and Fitch IBCA, Inc. ('FITCH'
AND, TOGETHER WITH MOODY'S AND STANDARD & POOR'S, THE 'RATING AGENCIES') rates
each Class of Class A Notes in its highest rating category. The Rating Agencies
will base their ratings of the Class A Notes primarily on the value of the
Initial Contracts, the Residual Value Insurance Policy, the Reserve Fund, the
Class A Interest Rate Cap, the Class A Cap Provider, and the terms of the
Transferor Interest and the Class B Notes. See 'Security for the Notes--The
Reserve Fund--Other Reserve Fund Requirements' for information regarding the
effect of a downgrade by a Rating Agency of the credit rating of the RV Insurer.
See 'Description of the Notes--Early Amortization Events' and 'The Interest Rate
Cap' for information regarding the effect of a downgrade by a Rating Agency of
the credit rating of the Class A Cap Provider or a payment default by the Class
A Cap Provider. We cannot assure you that any Rating Agency will not lower or
withdraw its rating of any Class of Class A Notes if, in its judgment, future
circumstances so warrant. If a Rating Agency qualifies, reduces or withdraws its
rating of any Class of Class A Notes, no person or entity will be obligated to
provide any additional credit enhancement for that Class. Any reduction in the
rating assigned to the Class A Cap Provider or the RV Insurer may result in a
reduction in the rating of the Class A Notes.
The ratings of the Class A Notes should be evaluated independently from
similar ratings on other types of securities. A rating is not a recommendation
to buy, sell or hold the related Class A Notes, because it does not comment on
market price or suitability for a particular investor. The ratings of each Class
of Class A Notes address the likelihood of the payment of principal of and
interest on those Notes pursuant to their terms.
We cannot assure you whether any rating agency other than Moody's, Standard
& Poor's and Fitch will rate the Class A Notes, or, if one does, what rating it
will assign. A rating on any Class of Class A Notes by
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another rating agency, if assigned at all, may be lower than the ratings
assigned to that Class by Moody's, Standard & Poor's and Fitch.
LEGAL MATTERS
Williams & Connolly, Washington, D.C, will pass on certain legal matters
for the Transferor. McDermott, Will & Emery, New York, New York and Chicago,
Illinois, will pass on certain other legal matters under New York and Illinois
law, Hand Arendall, L.L.C., Birmingham, Alabama, will pass on certain other
legal matters under Alabama law, and English, McCaughan & O'Bryan, P.A., Fort
Lauderdale, Florida, will pass on certain other legal matters under Florida law.
Cadwalader, Wickersham & Taft, New York, New York will act as special federal
income tax counsel to the Transferor. Stroock & Stroock & Lavan LLP, New York,
New York will act as counsel for the Underwriters.
EXPERTS
American International Specialty Lines Insurance Company's Statement of
Admitted Assets, Liabilities, Capital and Surplus (Statutory Basis) as of
December 31, 1998 and 1997, the Statement of Income and Capital and Surplus
Account (Statutory Basis) for the Years Ended December 31, 1998, 1997 and 1996,
and the Statement of Cash Flows (Statutory Basis) for the Years Ended December
31, 1998, 1997 and 1996, included in this Prospectus have been so included in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants
(which report expresses an adverse opinion under generally accepted accounting
principles and an unqualified opinion as to the statutory basis of accounting),
given on the authority of said firm as experts in auditing and accounting.
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INDEX OF CAPITALIZED TERMS
The following is a list of the capitalized terms used in this prospectus
and the pages on which their definitions appear.
<TABLE>
<S> <C>
ABS............................................. 34
Accelerated Principal Distribution Amount....... 46
Accounts........................................ 50
Additional Loss Amounts......................... 42
Additional Loss Contract........................ 62
Administrative Lien............................. 18
Advance......................................... 75
Agency Agreement................................ 72
Aggregate Net Investment Value.................. 28
Agreement....................................... 14
AIG............................................. 63
ALF L.P......................................... 17
ALF LLC......................................... 17
Alternate Reserve Fund Formula.................. 62
Amortization Date............................... 48
Amortization Period............................. 49
Benefit Plan.................................... 90
Business Day.................................... 44
Cap Rate........................................ 65
Capped Contingent and Excess Liability
Premiums...................................... 47
Capped Indenture Trustee Administrative
Expenses...................................... 46
Capped Origination Trust Administrative
Expenses...................................... 46
Capped Owner Trustee Administrative Expenses.... 46
Cede............................................ 55
Cedel........................................... 55
Cedel Participants.............................. 55
Charge-off Rate................................. 62
Charge-off Rate Test............................ 62
Charged-off Amount.............................. 42
Charged-off Contracts........................... 42
Class........................................... 38
Class A Cap Provider............................ 65
Class A Cap Receipt............................. 67
Class A Interest Rate Cap....................... 65
Class A Note Balance............................ 39
Class A Noteholders............................. 39
Class A Notes................................... 39
Class A Percentage.............................. 47
Class A-1 Allocation Percentage................. 47
Class A-1 Interest Carryover Shortfall.......... 47
Class A-1 Note Balance.......................... 39
Class A-1 Note Factor........................... 38
Class A-1 Noteholders........................... 39
Class A-1 Note Rate............................. 38
Class A-1 Notes................................. 38
Class A-2 Allocation Percentage................. 47
Class A-2 Interest Carryover Shortfall.......... 47
Class A-2 Note Balance.......................... 39
Class A-2 Note Factor........................... 38
Class A-2 Note Rate............................. 38
Class A-2 Noteholders........................... 39
Class A-2 Notes................................. 39
Class A-3 Allocation Percentage................. 47
Class A-3 Interest Carryover Shortfall.......... 47
Class A-3 Note Balance.......................... 39
Class A-3 Note Factor........................... 38
Class A-3 Note Rate............................. 39
Class A-3 Noteholders........................... 39
Class A-3 Notes................................. 39
Class A-4 Allocation Percentage................. 47
Class A-4 Interest Carryover Shortfall.......... 47
Class A-4 Note Balance.......................... 39
Class A-4 Note Factor........................... 38
Class A-4 Note Rate............................. 39
Class A-4 Noteholders........................... 39
Class A-4 Notes................................. 39
Class B Allocation Percentage................... 47
Class B Interest Carryover Shortfall............ 47
Class B Note Balance............................ 45
Class B Note Principal Carryover Shortfall...... 47
Class B Note Rate............................... 39
Class B Noteholders............................. 39
Class B Notes................................... 39
Class B Percentage.............................. 47
CLFG............................................ 65
CLFG Guarantee.................................. 66
CLFG Insurer.................................... 66
Closing Date.................................... 38
Code............................................ 86
Collection Period............................... 40
Collections..................................... 41
Contingent and Excess Liability Insurance
Policies...................................... 65
Contracts....................................... 25
Cooperative..................................... 57
Covered Loss Amounts............................ 47
Current Contracts............................... 62
Cutoff Dates.................................... 48
Dealers......................................... 19
Definitive Notes................................ 39
Delinquency Rate................................ 62
Delinquency Test................................ 62
Depositaries.................................... 55
Determination Date.............................. 44
Discounted Contract............................. 28
Discounted Principal Balance.................... 28
Distribution Account............................ 50
Distribution Date............................... 44
Downgrade Reserve Fund Supplemental
Requirement................................... 61
Downgrade Trigger Event......................... 61
DTC............................................. 55
DTC Participants................................ 55
Early Amortization Event........................ 52
</TABLE>
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<TABLE>
<S> <C>
Early Termination Charge........................ 26
ERISA........................................... 77
Euroclear....................................... 55
Euroclear Operator.............................. 57
Euroclear Participants.......................... 55
Events of Servicing Termination................. 78
Excess Collections.............................. 46
Exchange Act.................................... 23
Extension Fee................................... 22
Fair, Isaac..................................... 20
Fitch........................................... 93
Five State Area................................. 19
Foreign Investor................................ 88
Global Securities............................... 98
Indenture....................................... 38
Indenture Events of Default..................... 68
Indenture Trustee............................... 38
Indirect DTC Participants....................... 56
Initial Class A Note Balance.................... 39
Initial Class A-1 Note Balance.................. 38
Initial Class A-2 Note Balance.................. 38
Initial Class A-3 Note Balance.................. 39
Initial Class A-4 Note Balance.................. 39
Initial Class B Note Balance.................... 39
Initial Contracts............................... 25
Initial Cutoff Date............................. 28
Initial Deposit................................. 60
Initial Leased Vehicles......................... 25
Initial Note Balance............................ 38
Insurance Expenses.............................. 41
Insurance Proceeds.............................. 57
Insured Residual Value Loss Amount.............. 63
Interest Collections............................ 41
Investor Percentage............................. 42
IRS............................................. 20
JMFE............................................ 19
Lease Rate...................................... 26
Leased Vehicles................................. 25
Lemon Laws...................................... 85
LIBOR Determination Date........................ 43
Liquidated Contract............................. 62
Liquidation Expenses............................ 41
Liquidation Proceeds............................ 41
Loan Rule....................................... 90
Loss Amounts.................................... 42
Matured Contract................................ 28
Matured Leased Vehicle Expenses................. 41
Matured Leased Vehicle Inventory................ 28
Matured Leased Vehicle Proceeds................. 41
Maturity Date................................... 27
Monthly Payments................................ 26
Moody's......................................... 93
National Union.................................. 63
Net Liquidation Proceeds........................ 41
Net Matured Leased Vehicle Proceeds............. 41
Net Repossessed Vehicle Proceeds................ 41
New Regulations................................. 100
Nonrecoverable Advance.......................... 75
Note Balance.................................... 39
Note Owners..................................... 39
Noteholders..................................... 39
Notes........................................... 38
Notional Amount................................. 65
OID............................................. 87
One-Month LIBOR................................. 44
Origination Trust............................... 15
Origination Trust Agreement..................... 15
Origination Trust Assets........................ 17
Origination Trustee............................. 17
Other SUBI Assets............................... 16
Other SUBI Certificates......................... 16
Other SUBIs..................................... 16
Outstanding Principal Balance................... 27
Owner Trustee................................... 14
Participants.................................... 55
Payments Ahead.................................. 41
Permitted Investments........................... 52
Prepayment Assumption........................... 34
Prepayments..................................... 41
Principal Collections........................... 41
Program......................................... 65
Program Event................................... 67
Rating Agencies................................. 93
Realized Value.................................. 27
Reallocation Deposit Amount..................... 40
Reallocation Payment............................ 31
Record Date..................................... 46
Redemption Date................................. 55
Reference Banks................................. 44
Repossessed Vehicle Expenses.................... 41
Repossessed Vehicle Proceeds.................... 41
Representative.................................. 91
Required Amount................................. 48
Reserve Fund.................................... 60
Reserve Fund Cash Requirement................... 60
Reserve Fund Deficiency......................... 60
Reserve Fund Supplemental Requirement........... 60
Reserve Fund Tests.............................. 62
Residual Value.................................. 26
Residual Value Insurance Policy................. 63
Residual Value Loss Amount...................... 42
Revolving Period................................ 48
RV Insurer...................................... 63
RV Insurer Reserve Fund Supplemental
Requirement................................... 61
RV Insurer Trigger Event........................ 61
Securities Act.................................. 23
Security Deposit................................ 75
Servicer........................................ 17
Servicing Agreement............................. 18
Servicing Fee................................... 77
SET............................................. 19
Standard & Poor's............................... 93
Stated Maturity Date............................ 39
SUBI............................................ 15
SUBI Assets..................................... 15
</TABLE>
96
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<TABLE>
<S> <C>
SUBI Certificate................................ 15
SUBI Collection Account......................... 50
SUBI Supplement................................. 15
SUBI Trust Agreement............................ 15
Subsequent Contracts............................ 25
Subsequent Cutoff Date.......................... 48
Subsequent Leased Vehicles...................... 25
Support Agreement............................... 18
Telerate Page 3750.............................. 44
Transfer Date................................... 48
Transferor...................................... 18
Transferor Amounts.............................. 43
Transferor Certificate.......................... 39
Transferor Interest............................. 14
Transferor Percentage........................... 43
Trust........................................... 14
Trust Agent..................................... 15
U.S. Bank....................................... 15
U.S. Person..................................... 88
UCC............................................. 56
Unallocated Principal Collections............... 43
Uncapped Administrative Expenses................ 46
Uncovered Loss Amounts.......................... 47
Underwriters.................................... 91
Underwriting Agreement.......................... 91
Undistributed Transferor Amounts................ 43
Undistributed Transferor Excess Collections..... 46
UTI............................................. 16
UTI Assets...................................... 16
UTI Certificates................................ 16
Voting Interests................................ 48
WOLS LLC........................................ 18
World Omni...................................... 19
</TABLE>
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ANNEX 1
GLOBAL CLEARANCE, SETTLEMENT AND
TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered Class A Notes
(THE 'GLOBAL SECURITIES') will be available only in book-entry form. Investors
in the Global Securities may hold their Global Securities through any of DTC,
Cedel or Euroclear. The Global Securities will be tradeable as home market
instruments in both the European and U.S. domestic markets. Initial settlement
and all secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities
through Cedel and Euroclear will be conducted in the ordinary way in accordance
with their normal rules and operating procedures and in accordance with
conventional eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations.
Secondary cross-market trading between Cedel or Euroclear and DTC
Participants holding Notes will be effected on a delivery-against-payment basis
through the Depositaries of Cedel and Euroclear (in that capacity) and as DTC
Participants.
Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless they meet certain requirements and deliver
appropriate U.S. tax documents to the securities clearing organizations or their
participants.
Initial Settlement
DTC will hold all Global Securities in book-entry form in the name of Cede,
as nominee of DTC. Investors' interests in the Global Securities will be
represented through financial institutions acting on their behalf as direct and
indirect Participants in DTC. As a result, Cedel and Euroclear will hold
positions on behalf of their participants through their respective Depositaries,
which in turn will hold those positions in accounts as DTC Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to U.S. corporate debt obligations. Investor
securities custody accounts will be credited with their holdings against payment
in same-day funds on the settlement date.
Investors electing to hold their Global Securities through Cedel or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no 'lock-up' or restricted period. Global Securities will be credited to the
securities custody accounts on the settlement date against payment in the
same-day funds.
Secondary Market Trading
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading Between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to U.S. corporate
debt obligations in same-day funds.
Trading Between Cedel and/or Euroclear Participants. Secondary market
trading between Cedel Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
Trading Between DTC Seller and Cedel or Euroclear Purchaser. When Global
Securities are to be transferred from the account of a DTC Participant to the
account of a Cedel Participant or a Euroclear Participant, the purchaser will
send instructions to Cedel or Euroclear through a Cedel Participant or
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Euroclear Participant at least one business day before settlement. Cedel or
Euroclear will instruct the relevant Depositary to receive the Global Securities
against payment. Payment will include interest accrued on the Global Securities
from and including the last coupon payment date to and excluding the settlement
date, on the basis of actual days elapsed and a 360 day year. The relevant
Depositary then will make payment to the DTC Participant's account against
delivery of the Global Securities. After settlement has been completed, the
Global Securities will be credited to the relevant clearing system and by the
clearing system, in accordance with its usual procedures, to the Cedel
Participant's or Euroclear Participant's account. The Global Securities credit
will appear the next day (European time) and the cash debit will be back-valued
to, and the interest on the Global Securities will accrue from, the value date
(i.e., the preceding day when settlement occurred in New York). If settlement is
not completed on the intended value date (i.e., the trade fails), the Cedel or
Euroclear cash debit will be valued instead as of the actual settlement date.
Cedel Participants and Euroclear Participants will need to make available
to the relevant clearing systems the funds necessary to process same-day funds
settlement. The most direct means of doing so is to pre-position funds for
settlement, either from cash on hand or existing lines of credit, as they would
for any settlement occurring within Cedel or Euroclear. Under this approach,
they may take on credit exposure to Cedel or Euroclear until the Global
Securities are credited to their accounts one day later.
As an alternative, if Cedel or Euroclear has extended a line of credit to
them, Cedel Participants or Euroclear Participants can elect not to pre-position
funds and allow that credit line to be drawn upon the finance settlement. Under
this procedure, Cedel Participants or Euroclear Participants purchasing Global
Securities would incur overdraft charges for one day, assuming they cleared the
overdraft when the Global Securities were credited to their accounts. However,
interest on the Global Securities would accrue from the value date. Therefore,
in many cases the investment income on the Global Securities earned during that
one-day period may substantially reduce or offset the amount of such overdraft
charges, although this result will depend on each Cedel Participant's or
Euroclear Participant's particular cost of funds.
Since settlement will take place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the relevant Depositary for the benefit of Cedel Participants or Euroclear
Participants. The sale proceeds will be available to the DTC seller on the
settlement date. Thus, to the DTC Participant a cross-market transaction will
settle no differently than a trade between two DTC Participants.
Trading Between Cedel or Euroclear Seller and DTC Purchaser. Due to time
zone differences in their favor, Cedel Participants and Euroclear Participants
may employ their customary procedures for transactions in which Global
Securities are to be transferred by the respective clearing systems, through the
respective Depositaries, to a DTC Participant. The seller will send instructions
to Cedel or Euroclear through a Cedel Participant or Euroclear Participant at
least one business day prior to settlement. In these cases, Cedel or Euroclear
will instruct the respective Depositaries, as appropriate, to deliver the bonds
to the DTC Participant's account against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment date
to and excluding the settlement date on the basis of actual days elapsed and a
360 day year. The payment will then be reflected in the account of the Cedel
Participant or Euroclear Participant the following day, and receipt of the cash
proceeds in the Cedel Participant's or Euroclear Participant's account would be
back-valued to the value date (which would be the preceding day, when settlement
occurred in New York). Should the Cedel Participant or Euroclear Participant
have a line of credit with its respective clearing system and elect to be in
debit in anticipation of receipt of the sale proceeds in its account, the
back-valuation will extinguish any overdraft charges incurred over that one-day
period. If settlement is not completed on the intended value date (i.e., the
trade fails), receipt of the cash proceeds in the Cedel Participant's or
Euroclear Participant's account would instead be value as of the actual
settlement date.
Finally, day traders that use Cedel or Euroclear and that purchase Global
Securities from DTC Participants for delivery to Cedel Participants or Euroclear
Participants should note that these trades would
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automatically fail on the sale side unless affirmative action were taken. At
least three techniques should be readily available to eliminate this potential
problem:
(1) Borrowing through Cedel or Euroclear for one day (until the
purchase side of the day trade is reflected in their Cedel or
Euroclear accounts) in accordance with the clearing system's
customary procedures;
(2) Borrowing the Global Securities in the U.S. from a DTC Participant
no later than one day before settlement, which would give the
Global Securities sufficient time to be reflected in their Cedel
or Euroclear account in order to settle the sale side of the
trade; or
(3) Staggering the value dates for the buy and sell sides of the trade
so that the value date for the purchase from the DTC Participant
is at least one day before the value date for the sale to the
Cedel Participant or Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding through Cedel or Euroclear
(or through DTC if the holder has an address outside the U.S.) will be subject
to the 30% U.S. withholding tax that generally applies to payments of interest
(including original issue discount) on registered debt issued by U.S. Persons,
unless each clearing system, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business in the
chain of intermediaries between such beneficial owner and the U.S. entity
required to withhold tax complies with applicable certification requirements,
and the such beneficial owner takes one of the following steps to obtain an
exemption or reduced tax rate:
(1) Exemption for non-U.S. Persons (Form W-8). Beneficial owners of
Global Securities that are non-U.S. Persons can obtain a complete
exemption from the withholding tax by filing a signed Form W-8
(Certificate of Foreign Status). If the information shown on Form
W-8 or the Tax Certificate changes, a new Form W-8 or Tax
Certificate, as the case may be, must be filed within 30 days of
such change;
(2) Exemption for non-U.S. Person with effectively connected income
(Form 4224). A non-U.S. Person, including a non-U.S. corporation
or bank with a U.S. branch, for which the interest income is
effectively connected with its conduct of a trade or business in
the United States, can obtain an exemption from the withholding
tax by filing Form 4224 (Exemption from Withholding of Tax on
Income Effectively Connected with the Conduct of a Trade or
Business in the United States);
(3) Exemption or reduced rate for non-U.S. persons resident in treaty
countries (Form 1001). Non-U.S. Persons that are beneficial owners
of Global Securities residing in a country that has a tax treaty
with the United States can obtain an exemption or reduced tax rate
(depending on the treaty terms) by filing Form 1001 (Ownership,
Exemption or Reduced Rate Certificate). If the treaty provides
only for a reduced rate, withholding tax will be imposed at that
rate unless the filer alternatively files Form W-8. Form 1001 may
be filed by the Note Owner or his agent;
(4) Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a
complete exemption from the withholding tax by filing Form W-9
(Payer's Request for Taxpayer Identification Number and
Certification); or
(5) U.S. Federal Income Tax Reporting Procedure. The beneficial owner
of a Global Security or, in the case of a Form 1001 or a Form 4224
filer, his agent, files by submitting the appropriate form to the
person through whom it holds (the clearing agency, in the case of
persons holding directly on the books of the clearing agency).
Except as provided below, Form W-8 and form 1001 are effective for
three calendar years and Form 4224 is effective for one calendar
year.
Final withholding regulations (THE 'NEW REGULATIONS') effective January 1,
2001 affect the documentation required from non-U.S. Persons having validly
existing IRS Forms, such as IRS Forms W-8, 1001 or 4224. The New Regulations
replace a number of current tax certification forms (including IRS
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Forms W-8, 1001 and 4224, as discussed above) with a new series of IRS Forms W-8
and generally standardize the period of time for which withholding agents can
rely on such forms (although certain of the new forms may remain valid
indefinitely if the beneficial owner provides a United States taxpayer
identification number and the information on the form does not change). Existing
forms and statements will remain valid until the earlier of their expiration or
December 31, 2000.
This summary does not deal with all aspects of U.S. federal income tax
withholding that may be relevant to foreign holders of the Global Securities. We
urge you to consult your own tax advisor for specific tax advice concerning your
holding and disposing of the Global Securities.
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INDEX TO FINANCIAL STATEMENTS
OF
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
<TABLE>
<S> <C>
Report of PricewaterhouseCoopers LLP....................................................................... F-2
Statement of Admitted Assets, Liabilities, Capital and Surplus (Statutory Basis) of American International
Specialty Lines Insurance Company as of December 31, 1998 and 1997....................................... F-3
Statement of Income and Capital and Surplus Account (Statutory Basis) of American International Specialty
Lines Insurance Company for the Years Ended December 31, 1998, 1997 and 1996............................. F-4
Statement of Cash Flows (Statutory Basis) of American International Specialty Lines Insurance Company for
the Years Ended December 31, 1998, 1997 and 1996......................................................... F-5
Notes to Financial Statements (Statutory Basis) of American International Specialty Lines Insurance Company
as of December 31, 1998 and 1997 and for each of the three years in the period ended December 31, 1998... F-6
Condensed Statement of Admitted Assets, Liabilities, Capital and Surplus (Statutory Basis) of American
International Surplus Lines Insurance Company as of June 30, 1999 and December 31, 1998 (Unaudited)...... F-13
Condensed Statement of Income and Capital and Surplus Account (Statutory Basis) of American International
Surplus Lines Insurance Company for the Six Months Ended June 30, 1999 and
1998 (Unaudited)......................................................................................... F-14
Condensed Statement of Cash Flows (Statutory Basis) of American International Surplus Lines Insurance
Company for the Six Months Ended June 30, 1999 and 1998 (Unaudited)...................................... F-15
</TABLE>
THE FINANCIAL STATEMENTS OF AMERICAN INTERNATIONAL SPECIALTY LINES
INSURANCE COMPANY ('AISLIC') INCLUDED IN THIS PROSPECTUS HAVE BEEN PREPARED ON A
STATUTORY BASIS RATHER THAN IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES, BECAUSE STATE INSURANCE DEPARTMENTS RESPONSIBLE FOR OVERSIGHT OF
AISLIC'S FINANCIAL CONDITION REQUIRE FINANCIAL STATEMENTS TO BE PRESENTED ON A
STATUTORY BASIS. AS A RESULT, AISLIC DOES NOT PREPARE FINANCIAL STATEMENTS IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of American International Specialty
Lines Insurance Company:
We have audited the accompanying statements of admitted assets, liabilities,
capital and surplus (statutory basis) of American International Specialty Lines
Insurance Company (the Company) as of December 31, 1998 and 1997, and related
statements of income and capital and surplus account, and cash flow (statutory
basis) for each of the three years in the period ended December 31, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits of the accompanying statutory basis financial statements
in accordance with generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As described more fully in Note 1 to the financial statements, the Company
prepared these financial statements using accounting practices prescribed or
permitted by the Insurance Department of the State of Alaska, which practices
differ from generally accepted accounting principles. The effects on the
financial statements of the variances between the statutory basis of accounting
and generally accepted accounting principles, although not reasonably
determinable, are presumed to be material.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with generally accepted accounting principles, the financial position
of American International Specialty Lines Insurance Company as of December 31,
1998 and 1997, or the results of its operations or its cash flows for each of
the three years in the period ended December 31, 1998.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the admitted assets, liabilities, capital and surplus of
American International Specialty Lines Insurance Company as of December 31, 1998
and 1997, and the results of its operations and its cash flow for each of the
three years in the period ended December 31, 1998, on the basis of accounting
described in Note 1.
PRICEWATERHOUSECOOPERS LLP
May 26, 1999
F-2
<PAGE>
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
STATEMENT OF ADMITTED ASSETS, LIABILITIES, CAPITAL AND SURPLUS
(STATUTORY BASIS)
AS OF DECEMBER 31,
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
ADMITTED ASSETS
Bonds, principally at amortized cost (market value: 1998-$457,460,832;
1997-$419,043,081)............................................................. $425,547,936 $392,530,810
Short-term investments, at amortized cost (approximates market value)............ 730,631 313,070
Other invested assets, at market value (cost: 1998-$39,377,985; 1997-$25,027).... 39,376,538 25,024
Cash............................................................................. 3,622,642 4,898,363
------------ ------------
Total invested assets and cash................................................. 469,277,747 397,767,267
Agents' balances or uncollected premiums:
Premiums in course of collection (including ceded reinsurance balances payable
of, 1998-$121,410,080; 1997-$21,204,794).................................... 48,788,446 32,387,301
Premiums and installments booked but deferred and not yet due (including ceded
reinsurance balances payable of, 1998-$100,379,896; 1997-$84,599,368)....... 38,185,589 60,761,718
Reinsurance recoverable on loss payments......................................... 47,014,930 21,205,325
Interest and dividends due and accrued........................................... 7,293,968 7,121,738
Federal income tax recoverable................................................... 3,294,852 890,035
Receivable from parent, subsidiaries and affiliates.............................. 6,911,531 0
Loss funds on deposit............................................................ 5,622,057 46,864,930
------------ ------------
Total admitted assets.......................................................... $626,389,120 $566,998,314
============ ============
LIABILITIES
Unpaid losses.................................................................... $186,943,712 $175,842,655
Unpaid loss adjustment expenses.................................................. 35,010,432 42,835,882
Reinsurance payable on paid loss and loss adjustment expenses.................... 28,464,421 22,150,694
Unearned premiums................................................................ 104,710,777 87,330,606
Funds held under reinsurance treaties............................................ 4,231 4,231
Provision for reinsurance........................................................ 9,639,712 8,078,091
Drafts outstanding............................................................... 18,161,275 0
Payable to affiliates............................................................ 0 15,811,276
Other liabilities................................................................ 2,574,715 2,744,026
------------ ------------
Total liabilities.............................................................. 385,509,275 354,797,461
------------ ------------
CAPITAL AND SURPLUS
Common capital stock, $33.35 par value, 150,000 shares authorized, issued and
outstanding.................................................................... 5,002,500 5,002,500
Capital in excess of par value................................................... 98,377,500 98,377,500
Unassigned surplus............................................................... 137,499,845 108,820,853
------------ ------------
Total capital and surplus...................................................... 240,879,845 212,200,853
------------ ------------
Total liabilities, capital and surplus......................................... $626,389,120 $566,998,314
============ ============
</TABLE>
See Notes to Financial Statements
F-3
<PAGE>
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
STATEMENT OF INCOME AND CAPITAL AND SURPLUS ACCOUNT
(STATUTORY BASIS)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1998 1997 1996
-------------- -------------- --------------
<S> <C> <C> <C>
Underwriting income:
Premiums earned............................................... $ 101,205,883 $ 92,589,846 $ 97,505,461
-------------- -------------- --------------
Deductions:
Losses incurred............................................... 75,094,310 65,849,794 60,951,620
Loss adjustment expenses incurred............................. 8,460,105 11,326,894 21,162,771
Other underwriting expenses incurred.......................... 12,342,886 14,177,114 11,741,435
-------------- -------------- --------------
Total underwriting deductions.............................. 95,897,301 91,353,802 93,855,826
-------------- -------------- --------------
Net underwriting gain...................................... 5,308,582 1,236,044 3,649,635
-------------- -------------- --------------
Investment income:
Net investment income earned.................................. 23,980,761 23,736,924 24,101,919
Net realized capital (losses) gains........................... 310,286 3,423,103 (298,241)
-------------- -------------- --------------
Net investment gain........................................... 24,291,047 27,160,027 23,803,678
-------------- -------------- --------------
Income before federal income taxes............................ 29,599,629 28,396,071 27,453,313
Federal income tax provision.................................. 3,108,856 4,098,713 5,295,642
-------------- -------------- --------------
Net income.................................................... $ 26,490,773 $ 24,297,358 $ 22,157,671
============== ============== ==============
CAPITAL AND SURPLUS ACCOUNT
Total capital and surplus, December 31,
previous year............................................ $ 212,200,853 $ 192,349,335 $ 170,437,802
-------------- -------------- --------------
Gains and (losses) in surplus:
Net income.................................................... 26,490,773 24,297,358 22,157,671
Change in non-admitted assets................................. 3,749,840 (4,689,758) 337,748
Change in provision for reinsurance........................... (1,561,621) 243,918 (583,886)
Change in surplus as regards policyholders
for the year............................................... 28,678,992 19,851,518 21,911,533
-------------- -------------- --------------
Total capital and surplus, December 31,
current year............................................. $ 240,879,845 $ 212,200,853 $ 192,349,335
============== ============== ==============
</TABLE>
See Notes to Financial Statements
F-4
<PAGE>
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
STATEMENT OF CASH FLOWS
(STATUTORY BASIS)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1998 1997 1996
-------------- -------------- --------------
<S> <C> <C> <C>
Premiums collected (net of reinsurance)......................... $ 128,512,329 $ 75,172,363 $ 105,998,970
Loss and loss adjustment expenses paid
(net of salvage, subrogation and reinsurance)................. 81,613,422 75,092,150 54,443,038
Underwriting expenses paid...................................... 11,524,883 12,928,861 12,154,628
-------------- -------------- --------------
Net cash flows from underwriting................................ 35,374,024 (12,848,648) 39,401,304
-------------- -------------- --------------
Investment income collected (net of investment expenses paid)... 23,702,715 24,030,469 23,600,054
Other income (expenses)......................................... 0 (1,266,850) 1,263,766
Federal income taxes paid....................................... (5,513,673) (5,035,160) (7,320,317)
-------------- -------------- --------------
Net cash flows from operations.................................. 53,563,066 4,879,811 56,944,807
-------------- -------------- --------------
Proceeds from investments sold, matured or repaid:
Bonds......................................................... 12,022,873 79,455,746 54,626,495
Other invested assets......................................... 42,770,000 81,574,000 172,166,000
-------------- -------------- --------------
Total investment proceeds....................................... 54,792,873 161,029,746 226,792,495
Cost of investments acquired (long-term only):
Bonds......................................................... 44,686,991 59,405,759 120,713,170
Other invested assets......................................... 82,059,866 80,925,718 160,118,547
-------------- -------------- --------------
Total investments acquired...................................... 126,746,857 140,331,477 280,831,717
-------------- -------------- --------------
Net cash from investments....................................... (71,953,984) 20,698,269 (54,039,222)
Other cash provided:
Net transfers from affiliates................................. 0 15,868,276 0
Other cash provided........................................... 41,242,873 588,761 0
-------------- -------------- --------------
Total other cash provided....................................... 41,242,873 16,457,037 0
-------------- -------------- --------------
Other cash applied:
Net transfers to affiliates................................... 22,722,799 0 2,012,313
Other applications............................................ 987,316 43,461,704 3,165,556
-------------- -------------- --------------
Total other cash applied........................................ 23,710,115 43,461,704 5,177,869
-------------- -------------- --------------
Net cash from financing and miscellaneous sources............... 17,532,758 (27,004,667) (5,177,869)
-------------- -------------- --------------
Net change in cash and short-term investments................... (858,160) (1,426,587) (2,272,284)
RECONCILIATION
Cash and short-term investments:
Beginning of year............................................. 5,211,433 6,638,020 8,910,304
-------------- -------------- --------------
End of year................................................... $ 4,353,273 $ 5,211,433 $ 6,638,020
============== ============== ==============
</TABLE>
See Notes to Financial Statements
F-5
<PAGE>
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENT
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(A) Organization
American International Specialty Lines Insurance Company (the 'Company') is
owned by the following wholly owned subsidiaries of American International
Group, Inc. (the 'Parent'): National Union Fire Insurance Company of Pittsburgh,
PA. (70%); The Insurance Company of the State of Pennsylvania (20%); and
Birmingham Fire Insurance Company of Pennsylvania (10%). The Company has
significant transactions with the Parent and affiliates (see Notes 3 and 4). The
Company is predominantly a writer of property and casualty excess and surplus
lines.
(B) Basis of Presentation
The accompanying financial statements were prepared in conformity with the
statutory accounting practices (SAP) of the National Association of Insurance
Commissioners (NAIC) and as prescribed or permitted by the State of Alaska
Department of Commerce and Economic Development, Division of Insurance, which is
a comprehensive basis of accounting other than generally accepted accounting
principles (GAAP). SAP varies in certain respects from GAAP. Under GAAP: (1)
costs incidental to acquiring business related to premiums written and costs
allowed by assuming reinsurers related to premiums ceded are deferred and
amortized over the periods covered by the underlying policies or reinsurance
agreements; (2) provision is made for deferred income taxes relating to
temporary differences between financial reporting and taxable income; (3)
provision is made for deferred income taxes relating to unrealized appreciation
on investments; (4) adjustments relating to the difference between the amount
recorded for financial statement purposes and the amount subsequently filed on
the tax return are charged or credited directly to income as opposed to
unassigned surplus; (5) non-admitted assets and statutory basis reserves are
restored to surplus; (6) the reserve for losses and loss expenses and reserve
for unearned premiums are presented gross of ceded reinsurance by establishing a
reinsurance asset; and (7) debt securities deemed to be available for sale are
reported at fair value, and the difference betweeen cost and fair value is
reflected net of related deferred income taxes, as a separate component of
accumulated other comprehensive income in shareholders' equity.
Significant statutory accounting practices are as follows:
A. The preparation of financial statements in conformity with the
accounting practices prescribed or permitted by the State of Alaska
Department of Commerce and Economic Development, Division of Insurance,
requires management to make estimates and assumptions that effect the
reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the period. Actual results
could differ from those estimates.
B. Investments are carried at values designated by the NAIC. Bonds are
carried at amortized cost, except those bonds not in good standing, which
are carried at NAIC-designated values. Investment income is recorded as
earned. Realized gains or losses on the disposition of investments are
determined on the basis of specific identification.
C. Premiums written are primarily earned on a daily pro-rata basis
over the terms of the policies to which they relate. Accordingly, unearned
premiums represent the portion of premiums written which is applicable to
the unexpired terms of policies in force. Premium estimates for
retrospectively rated policies are recognized within the periods in which
the related losses are incurred. The cost of reinsurance is accounted for
over the life of the underlying reinsured policies using assumptions
consistent with those used to account for the underlying policies.
D. Certain assets, principally furniture, equipment, and leasehold
improvements and certain overdue agents' balances, are designated
'non-admitted assets' and are directly charged to unassigned surplus.
F-6
<PAGE>
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENT--(CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
E. The liabilities for unpaid losses and loss adjustment expenses,
including incurred but not reported losses, are determined on the basis of
claims adjustors' evaluations and other estimates, including historical
loss experience. The methods of making such estimates and for establishing
the resulting reserves are continually reviewed and updated, and any
resulting adjustments are recorded in the current period. Accordingly,
losses and loss adjustment expenses are charged to income as incurred.
Amounts recoverable from reinsurers are estimated in a manner consistent
with the claim liability associated with the reinsured policy.
F. Certain required statutory basis reserves, principally the
provision for reinsurance, are charged to surplus and reflected as a
liability of the Company.
G. Commissions, premium taxes, and certain other underwriting expenses
related to premiums written are charged to income at the time the premiums
are written and are included in 'Other underwriting expenses incurred.'
H. Unpaid losses and loss adjustment expenses have been reduced by
anticipated salvage and subrogation in the amount of approximately
$1,596,000 and $1,158,000 at December 31, 1998 and December 31, 1997,
respectively.
I. The Company considers all highly liquid debt securities with
maturities of twelve months or less to be short-term investments. Such
investments are deemed to be cash equivalents for purposes of the statement
of cash flows.
J. Other invested assets consist primarily of shares of an
intermediate bond mutual fund. The intermediate bond mutual fund is carried
principally at market value.
2. FEDERAL INCOME TAXES:
The Company files a consolidated U.S. federal income tax return with the
Parent pursuant to a consolidated tax sharing agreement. The agreement provides
that the Parent will not charge the Company a greater portion of the
consolidated tax liability than would have been paid by the Company if it had
filed a separate federal income tax return. In addition, the agreement provides
that the Company will be reimbursed by the Parent for tax benefits relating to
any net losses of the Company utilized in filing the consolidated return. The
'Federal income tax recoverable' in the accompanying statement of admitted
assets, liabilities, capital and surplus are due to/from the Parent.
The U.S. federal income tax rate applicable to ordinary income is 35% for
1998, 1997 and 1996. Actual tax expense on income from operations differs from
the 'expected' amount principally as a result of tax-exempt investment income,
unearned premiums and the discounting of unpaid losses and loss adjustment
expenses.
3. MANAGEMENT AGREEMENT:
The Company is managed and operated by American International Surplus Lines
Agency, Inc. ('Agency'), a wholly owned subsidiary of the Parent. The management
agreement provides the Agency with the authority to conduct a significant
portion of the business affairs of the Company. As compensation for these
services, the management agreement provides that the Company pay the Agency an
annual management fee of $100,000 plus actual expenses incurred on behalf of
managing the Company. The management fee and expense reimbursement paid to the
Agency was approximately $5,767,000, $4,783,000 and $2,961,000 in 1998, 1997 and
1996 respectively.
F-7
<PAGE>
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENT--(CONTINUED)
4. RELATED PARTY TRANSACTIONS:
The Company cedes all agency business written in the State of Alaska to the
New Hampshire Insurance Company (a wholly owned subsidiary of the Parent). The
Company cedes 80% of its surplus lines insurance to National Union Fire
Insurance Company of Pittsburgh, PA. (a wholly owned subsidiary of the Parent)
through a reinsurance quota share agreement. The Company also assumes
reinsurance from Lexington Insurance Company, an affiliate. In 1998 and 1997 the
Company also had entered into accident year aggregate loss ratio and excess
agreements with National Union Fire Insurance Company of Pittsburgh, PA.
5. INVESTMENTS:
The amortized cost and NAIC market values of investments in fixed
maturities carried at December 31, 1998 and December 31, 1997, were as follows:
<TABLE>
<CAPTION>
GROSS GROSS NAIC
AMORTIZED UNREALIZED UNREALIZED MARKET
1998 COST GAINS LOSSES VALUE
- ----- --------- ---------- ---------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Fixed maturities:
States, municipalities and political subdivisions................ $ 425,548 $ 31,977 $ 64 $457,461
--------- --------- ---- --------
Total bonds...................................................... $ 425,548 $ 31,977 $ 64 $457,461
========= ========= ==== ========
<CAPTION>
GROSS GROSS NAIC
AMORTIZED UNREALIZED UNREALIZED MARKET
1997 COST GAINS LOSSES VALUE
- ---- --------- ---------- ---------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Fixed maturities:
States, municipalities and political subdivisions................ $ 392,531 $ 26,512 $ 0 $419,043
--------- --------- ---- --------
Total bonds...................................................... $ 392,531 $ 26,512 $ 0 $419,043
========= ========= ==== ========
</TABLE>
The amortized cost and NAIC market values of fixed maturities at December
31, 1998, by contractual maturity, are shown below. Actual maturities may differ
from contractual maturities because borrowers may have the right to call or
prepay certain obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
AMORTIZED NAIC
COST MARKET VALUE
--------- ------------
(IN THOUSANDS)
<S> <C> <C>
Due in one year or less............................................ $ 5,029 $ 5,406
Due after one year through five years.............................. 32,762 35,219
Due after five years through ten years............................. 66,923 71,942
Due after ten years................................................ 320,834 344,894
--------- ----------
Total.............................................................. $ 425,548 $457,461
========= ==========
</TABLE>
Proceeds from sales of investments in fixed maturities during 1998, 1997
and 1996 were $40,033,470, $71,565,746, and $40,033,470 respectively. Gross
gains of $247,107, $3,529,895 and $364,892 and gross losses of $213, $0 and
$402,706 were realized on those sales in 1998, 1997, and 1996, respectively.
Securities carried at amortized cost of $10,687,625 and $10,678,785 were
deposited with regulatory authorities as required by law, at December 31, 1998,
and December 31, 1997, respectively.
Included in 'Net investment income earned' are investment expenses of
$217,663, $282,957 and $229,672 for 1998, 1997 and 1996, respectively.
F-8
<PAGE>
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENT--(CONTINUED)
6. REINSURANCE:
In the ordinary course of business, the Company reinsures certain risks
with affiliates and other companies. Such arrangements serve to limit the
Company's maximum loss on catastrophes, large and unusually hazardous risks. To
the extent that any reinsuring company might be unable to meet its obligations,
the Company would be liable for its respective participation in such defaulted
amounts.
Reserves for unearned premiums and paid and unpaid losses and loss
adjustment expenses, including those incurred but not reported to the Company,
have been reduced for reinsurance ceded as follows:
<TABLE>
<CAPTION>
UNEARNED PAID AND UNPAID LOSSES
PREMIUM AND LOSS ADJUSTMENT
1998 RESERVES EXPENSES
- ---- -------- ----------------------
(IN THOUSANDS)
<S> <C> <C>
Affiliates................................................ $589,427 $1,914,582
Non-Affiliates............................................ 49,186 137,120
-------- ----------
Total..................................................... $638,613 $2,051,702
======== ==========
<CAPTION>
1997
- ----
<S> <C> <C>
Affiliates................................................ $490,124 $1,652,567
Non-Affiliates............................................ 31,157 131,834
-------- ----------
Total..................................................... $521,281 $1,784,401
======== ==========
</TABLE>
F-9
<PAGE>
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENT--(CONTINUED)
6. REINSURANCE--(CONTINUED)
Net premiums written and earned comprise the following:
<TABLE>
<CAPTION>
1998 WRITTEN EARNED
- ---- --------- ---------
(IN THOUSANDS)
<S> <C> <C>
Direct business..................................................... $ 790,155 $ 651,942
Reinsurance assumed
Affiliates........................................................ 26,545 31,046
Non-Affiliates.................................................... 0 0
--------- ---------
Reinsurance ceded
Affiliates........................................................ (632,823) (533,520)
Non-Affiliates.................................................... (65,291) (48,262)
--------- ---------
Net premiums........................................................ $ 118,586 $ 101,206
========= =========
<CAPTION>
1997 WRITTEN EARNED
- ---- --------- ---------
(IN THOUSANDS)
<S> <C> <C>
Direct business..................................................... $ 663,123 $ 644,974
Reinsurance assumed
Affiliates........................................................ 31,963 26,398
Non-Affiliates.................................................... 0 0
--------- ---------
Reinsurance ceded
Affiliates........................................................ (556,321) (531,213)
Non-Affiliates.................................................... (36,770) (47,569)
--------- ---------
Net Premiums........................................................ $ 101,995 $ 92,590
========= =========
<CAPTION>
1996 WRITTEN EARNED
- ---- --------- ---------
(IN THOUSANDS)
<S> <C> <C>
Direct business..................................................... $ 780,243 $ 655,126
Reinsurance assumed
Affiliates........................................................ 31,522 18,502
Non-Affiliates.................................................... 0 23
--------- ---------
Reinsurance ceded
Affiliates........................................................ (645,572) (510,745)
Non-Affiliates.................................................... (54,990) (65,401)
--------- ---------
Net Premiums........................................................ $ 111,203 $ 97,505
========= =========
</TABLE>
For the years ended December 31, 1998, 1997 and 1996 reinsurance
recoveries, which reduced loss and loss expenses incurred, amounted to
$683,127,314, $596,374,228 and $523,014,777, respectively.
F-10
<PAGE>
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENT--(CONTINUED)
6. REINSURANCE--(CONTINUED)
The following unsecured reinsurance recoverables exceeded 3% of the capital
and surplus of the Company at December 31, 1998:
<TABLE>
<CAPTION>
REINSURER
- --------- AMOUNT
--------------
(IN THOUSANDS)
<S> <C>
Affiliates..................................................................... $2,286,345
General Reinsurance Company.................................................... 44,382
Oddyssey Reinsurance Company................................................... 9,915
American Re-Insurance Company.................................................. 9,015
Lloyd's Underwriters........................................................... 10,227
----------
Total.......................................................................... $2,359,884
===========
</TABLE>
7. DIVIDEND RESTRICTION:
Under Alaska law, the Company may pay cash dividends only from earned
surplus determined on a statutory basis. Further, the Company is restricted (on
the basis of the lower of 10% of the Company's statutory surplus at the end of
the preceding twelve-month period or 100% of the Company's net investment income
for the preceding twelve-month period) as to the amount of dividends it may
declare or pay in any twelve-month period without the prior approval of the
State of Alaska Department of Commerce and Economic Development, Division of
Insurance. The maximum dividend payable without prior approval at December 31,
1998, amounted to approximately $24,087,984.
8. PENSION PLANS AND DEFERRED COMPENSATION:
The Company's employees participate in benefit plans sponsored by the
Parent, including a noncontributory defined benefit pension plan, and a
voluntary savings plan (a 401(k) plan) which provides certain matching
contributions. These plans cover substantially all of the Company's employees.
The Parent's plans do not separately indentify plan benefits and plan assets
attributable to employees of participating companies.
Some of the Company's officers and key employees are participants in the
Parent's Stock Option Plan.
9. CONTINGENCY:
The Company, in common with the insurance industry in general, is subject
to litigation, including claims for punitive damages, in the normal course of
its business. The Company does not believe that such litigation will have a
material adverse affect on its financial condition.
The Company has no known exposure to asbestos or environmental claims.
F-11
<PAGE>
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENT--(CONTINUED)
10. LIABILITY FOR UNPAID CLAIMS AND CLAIM ADJUSTMENT EXPENSES:
Activity in the liability for unpaid claims and claim adjustment expenses
is summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Net Balance at January 1................................. $218,679 $201,994 $172,270
Incurred related to:
Current year........................................... 83,607 77,740 82,288
Prior years............................................ (53) (563) (174)
-------- -------- --------
Total incurred........................................... 83,554 77,177 82,114
-------- -------- --------
Paid related to:
Current year........................................... 10,257 7,517 7,280
Prior years............................................ 70,023 52,975 45,110
-------- -------- --------
Total paid............................................... 80,280 60,492 52,390
-------- -------- --------
Net Balance at December 31............................... $221,953 $218,679 $201,994
======== ======== ========
</TABLE>
F-12
<PAGE>
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
CONDENSED STATEMENT OF ADMITTED ASSETS, LIABILITIES, CAPITAL AND SURPLUS
(STATUTORY BASIS)
AS OF
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
ASSETS
Bonds............................................................................ $472,882,088 $425,547,936
Cash and short-term investments.................................................. 5,333,554 4,353,273
Other invested assets............................................................ 4,888,584 39,376,538
------------ ------------
Subtotals, cash and invested assets.............................................. 483,104,226 469,277,747
Agents' balances or uncollected premiums (net as to commissions and dividends):
Premiums and agents' balances in course of collection (after deducting ceded
reinsurance balances payable)............................................... 9,603,995 48,788,446
Premiums, agents' balances and installments booked but deferred and not yet due
(after deducting ceded reinsurance balances payable)........................ 67,362,199 38,185,589
Reinsurance recoverables on loss and loss adjustment expense payments............ 35,513,741 47,014,930
Federal income tax recoverable and interest thereon.............................. 0 3,294,852
Interest, dividends and real estate income due and accrued....................... 8,232,206 7,293,968
Receivable from parent, subsidiaries and affiliates.............................. 0 6,911,531
Loss Funds on Deposit............................................................ 10,641,230 5,622,057
------------ ------------
Totals......................................................................... $614,457,597 $626,389,120
============ ============
LIABILITIES, SURPLUS AND OTHER FUNDS
Losses........................................................................... $178,347,153 $186,943,712
Reinsurance payable on paid loss and loss adjustment expenses.................... 26,159,930 28,464,421
Loss adjustment expenses......................................................... 35,349,856 35,010,432
Other expenses (excluding taxes, licenses and fees).............................. 971,092 2,164,805
Federal and foreign income taxes (excluding deferred taxes)...................... 29,746 0
Unearned premiums (after deducting ceded reinsurance unearned premiums).......... 102,577,572 104,710,777
Funds held by company under reinsurance treaties................................. 4,231 4,231
Provision for reinsurance........................................................ 9,639,712 9,639,712
Drafts outstanding............................................................... 0 18,161,275
Payable to parent, subsidiaries and affiliates................................... 11,527,869 0
Other liabilities................................................................ 1,623,612 409,910
------------ ------------
Total liabilities.............................................................. 366,230,773 385,509,275
------------ ------------
Common capital stock............................................................. 5,002,500 5,002,500
Gross paid in and contributed surplus............................................ 98,377,500 98,377,500
Unassigned funds (surplus)....................................................... 144,846,824 137,499,845
------------ ------------
Surplus as regards policyholders................................................. 248,226,824 240,879,845
------------ ------------
Totals......................................................................... $614,457,597 $626,389,120
============ ============
</TABLE>
F-13
<PAGE>
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
CONDENSED STATEMENT OF INCOME AND CAPITAL AND SURPLUS ACCOUNT
(STATUTORY BASIS)
FOR THE SIX MONTHS ENDED JUNE 30,
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
-------------- --------------
<S> <C> <C>
UNDERWRITING INCOME:
Premiums earned:
Direct......................................................................... $ 289,348,922 $ 330,059,663
Assumed........................................................................ 49,512,126 13,459,298
Ceded.......................................................................... 298,742,983 290,820,655
-------------- --------------
Net............................................................................ 40,118,065 52,698,306
-------------- --------------
Deductions:
Losses incurred:
Direct......................................................................... 207,639,944 230,385,470
Assumed........................................................................ 62,410,355 10,677,429
Ceded.......................................................................... 244,464,043 210,536,032
-------------- --------------
Net............................................................................ 25,586,256 30,526,867
Loss expenses incurred........................................................... 8,336,609 12,844,341
Other underwriting expenses incurred............................................. 6,412,497 7,067,980
-------------- --------------
Total underwriting deductions.................................................... 40,335,362 50,439,188
-------------- --------------
Net underwriting gain or (loss).................................................. (217,297) 2,259,118
-------------- --------------
INVESTMENT INCOME
Net investment income earned..................................................... 13,367,294 11,738,663
Net realized capital gains....................................................... 375,687 252,552
-------------- --------------
Net investment gain.............................................................. 13,742,981 11,991,215
-------------- --------------
OTHER INCOME
Net income before federal and foreign income taxes............................... 13,525,684 14,250,333
Federal and foreign income taxes incurred........................................ 74,598 1,245,733
-------------- --------------
Net income....................................................................... $ 13,451,086 $ 13,004,600
============== ==============
CAPITAL AND SURPLUS ACCOUNT
Surplus as regards policyholders, December 31 previous year...................... $ 240,879,845 $ 212,200,853
-------------- --------------
GAINS AND (LOSSES) IN SURPLUS
Net income....................................................................... 13,451,086 13,004,600
Net unrealized capital gains or losses........................................... (10,380) 39,356
Change in non-admitted assets.................................................... (6,093,726) 5,945,736
Change in provision for reinsurance.............................................. 0 0
Change in surplus as regards policyholders....................................... 7,346,980 18,989,692
-------------- --------------
Surplus as regards policyholders, as of June 30.................................. $ 248,226,825 $ 231,190,545
============== ==============
</TABLE>
F-14
<PAGE>
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
CONDENSED STATEMENT OF CASH FLOWS
(STATUTORY BASIS)
FOR THE SIX MONTHS ENDED JUNE 30
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
-------------- --------------
<S> <C> <C>
CASH FROM OPERATIONS
Premiums collected net of reinsurance............................................. $ 41,898,976 $ 51,827,100
Loss and loss adjustment expenses paid
(net of salvage and subrogation)................................................ 51,144,576 29,863,272
Underwriting expenses paid........................................................ 7,606,210 7,314,258
-------------- --------------
Cash from underwriting............................................................ (16,851,810) 14,649,570
-------------- --------------
Net investment income............................................................. 12,458,664 11,861,951
Other income...................................................................... 0 527
Federal and foreign income taxes recovered........................................ 3,250,000 295,000
-------------- --------------
Net cash from operations.......................................................... (1,143,146) 26,807,018
-------------- --------------
CASH FROM INVESTMENTS
Proceeds from investments sold, matured or repaid:
Bonds........................................................................... 8,984,030 11,643,204
Other invested assets........................................................... 53,100,000 3,155,000
-------------- --------------
Total investment proceeds......................................................... 62,084,030 14,798,204
Cost of investments acquired (long-term only):
Bonds........................................................................... 55,866,089 5,629,378
Other invested assets........................................................... 18,728,443 31,603,957
-------------- --------------
Total investments acquired........................................................ 74,594,532 37,233,335
-------------- --------------
Net cash from investments......................................................... (12,510,502) (22,435,131)
CASH FROM FINANCING AND MISCELLANEOUS SOURCES
Cash provided:
Net transfers from affiliates................................................... 18,439,400 0
Other cash provided............................................................. 0 41,252,867
-------------- --------------
Total............................................................................. 18,439,400 41,252,867
-------------- --------------
Net transfers to affiliates....................................................... 0 33,966,019
Other applications................................................................ 3,805,470 473,592
-------------- --------------
Total............................................................................. 3,805,470 34,439,611
-------------- --------------
Net cash from financing and miscellaneous sources................................. 14,633,930 6,813,256
-------------- --------------
RECONCILIATION OF CASH AND SHORT-TERM INVESTMENTS
Net change in cash and short-term investments..................................... 980,282 11,185,143
Cash and short-term investments:
Beginning of year............................................................... 4,353,267 5,211,431
-------------- --------------
End of June 30.................................................................. $ 5,333,549 $ 16,396,574
============== ==============
</TABLE>
F-15
<PAGE>
$1,073,472,000
WORLD OMNI 1999-A
AUTOMOBILE LEASE SECURITIZATION TRUST
$330,000,000
FLOATING RATE AUTOMOBILE LEASE ASSET BACKED NOTES,
CLASS A-1
$310,000,000
FLOATING RATE AUTOMOBILE LEASE ASSET BACKED NOTES,
CLASS A-2
$249,000,000
FLOATING RATE AUTOMOBILE LEASE ASSET BACKED NOTES,
CLASS A-3
$184,472,000
FLOATING RATE AUTOMOBILE LEASE ASSET BACKED NOTES,
CLASS A-4
WORLD OMNI LEASE SECURITIZATION L.P.
(TRANSFEROR)
WORLD OMNI FINANCIAL CORP.
(SERVICER)
PROSPECTUS
MERRILL LYNCH & CO.
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
FIRST UNION CAPITAL MARKETS
, 1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND PAYMENT.
We estimate the expenses to be incurred in connection with the offering of
the Class A Notes as follows:
SEC registration fee............................................ $ 298,426
Legal fees and expenses......................................... 250,000
Accounting fees and expenses.................................... 60,000
Blue sky fees and expenses...................................... 25,000
Rating agency fees.............................................. 270,000
Trustee fees and expenses....................................... 25,000
Printing........................................................ 180,000
Miscellaneous................................................... 20,000
------------
Total................................................. $ 1,128,426*
============
* Does not include premium for Residual Value Insurance Policy, which will be
paid by the Servicer.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 17-108 of the Delaware Revised Uniform Limited Partnership Act
provides that, subject to any standards and restrictions set forth in its
partnership agreement, a limited partnership may, and has the power to,
indemnify and hold harmless any partner or other person from and against any and
all claims and demands.
Pursuant to Section 4.08 of the Transferor's Agreement of Limited
Partnership, the Transferor will, to the fullest extent permitted by law,
indemnify its general partner, WOLS LLC, and its managers, officers, members,
agents, affiliates and employees acting within the scope of their authority,
against their losses and expenses sustained because of their acts on behalf of
the Transferor or in furtherance of the Transferor's interests, if they were not
fraudulent or in bad faith and did not constitute willful or wanton misconduct
or gross negligence.
Pursuant to Section 4.08 of ALF L.P.'s Agreement of Limited Partnership,
ALF L.P. will, to the fullest extent permitted by law, indemnify its general
partner, ALF LLC, and its managers, officers, members, agents, affiliates and
employees acting within the scope of their authority, against their losses and
expenses sustained because of their acts on behalf of ALF L.P. or in furtherance
of ALF L.P.'s interests, if they were not fraudulent or in bad faith and did not
constitute willful or wanton misconduct or gross negligence.
We also refer you to Section 7 of the Underwriting Agreement (see Exhibit
1.1), which provides for indemnification by the Transferor under certain
circumstances.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Not applicable.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
1.1 -- Form of Underwriting Agreement
3.1 -- Certificate of Formation of World Omni Lease Securitization LLC (incorporated by reference from
Exhibit 3.1 to Registration Statement on Form S-1, File No. 333-63367 (THE '1998-A REGISTRATION
STATEMENT'))
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
3.2 -- Limited Liability Company Agreement of World Omni Lease Securitization LLC, dated as of September
18 , 1998 (incorporated by reference from Exhibit 3.2 to the 1998-A Registration Statement)
3.3 -- Amended and Restated Agreement of Limited Partnership of World Omni Lease Securitization L.P.
between World Omni Lease Securitization, Inc. and World Omni Financial Corp., dated as of July 1,
1994 (incorporated by reference from Exhibit 3.3 to Registration Statement on Form S-1, File No.
33-85036 (THE '1994-B REGISTRATION STATEMENT'))
3.4 -- Assignment of General Partnership Interest and Amendment to Amended and Restated Agreement of
Limited Partnership of World Omni Lease Securitization, L.P. among World Omni Lease Securitization,
Inc., World Omni Lease Securitization LLC and World Omni Financial Corp., dated as of September 23,
1998 (incorporated by reference from Exhibit 3.4 to the 1998-A Registration Statement)
3.5 -- Certificate of Formation of Auto Lease Finance LLC (incorporated by reference from Exhibit 3.5 to
the 1998-A Registration Statement)
3.6 -- Limited Liability Company Agreement of Auto Lease Finance LLC, dated as of September 18 , 1998
(incorporated by reference from Exhibit 3.5 to the 1998-A Registration Statement)
3.7 -- Amended and Restated Agreement of Limited Partnership of Auto Lease Finance L.P. between Auto Lease
Finance Inc. and World Omni Financial Corp., dated as of July 1, 1994 (incorporated by reference
from Exhibit 10.7 to the 1994-B Registration Statement)
3.8 -- Assignment of General Partnership Interest and Amendment to Amended and Restated Agreement of
Limited Partnership of Auto Lease Finance L.P. among Auto Lease Finance Inc., Auto Lease Finance
LLC and World Omni Financial Corp., dated as of September 23 , 1998 (incorporated by reference from
Exhibit 3.8 to the 1998-A Registration Statement)
3.9 -- Form of Securitization Trust Agreement among World Omni Lease Securitization L.P., Chase Manhattan
Bank Delaware, as Owner Trustee and Harris Trust and Savings Bank, as Indenture Trustee (including
form of Transferor Certificate)
4.1 -- Form of Indenture between World Omni 1999-A Automobile Lease Securitization Trust and Harris Trust
and Savings Bank, as Indenture Trustee (including forms of Class A Notes)
5.1 -- Opinion of McDermott, Will & Emery with respect to legality
8.1 -- Opinion of Cadwalader, Wickersham & Taft with respect to federal income tax matters
8.2 -- Opinion of English, McCaughan & O'Bryan, P.A. with respect to certain Florida tax matters
10.1 -- Second Amended and Restated Trust Agreement among Auto Lease Finance L.P., VT Inc. and U.S. Bank
National Association (as successor to Bank of America Illinois), dated as of July 1, 1994
(incorporated by reference from Exhibit 10.1 to the 1994-B Registration Statement)
10.2 -- Amendment No. 1 to Second Amended and Restated Trust Agreement among Auto Lease Finance L.P., VT
Inc. and U.S. Bank National Association (as successor to Bank of America Illinois), dated as of
November 1, 1994 (incorporated by reference from Exhibit 10.8 to the 1994-B Registration Statement)
10.3 -- Amendment No. 2 to the Second Amended and Restated Trust Agreement among Auto Lease Finance L.P.,
VT Inc. and U.S. Bank National Association (as successor to Bank of America Illinois), dated as of
September 23 , 1998 (incorporated by reference from Exhibit 10.3 to the 1998-A Registration
Statement)
10.4 -- Form of Supplement 1999-A to Trust Agreement among Auto Lease Finance L.P., VT Inc. and U.S. Bank
National Association (as successor to Bank of America Illinois) (including form of SUBI
Certificate)
10.5 -- Second Amended and Restated Servicing Agreement between VT Inc. and World Omni Financial Corp.,
dated as of July 1, 1994 (incorporated by reference from Exhibit 10.3 to the 1994-B Registration
Statement)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
10.6 -- Amendment No. 1 to Second Amended and Restated Servicing Agreement between VT Inc. and World Omni
Financial Corp., dated as of September 23, 1998 (incorporated by reference from Exhibit 10-6 to the
1998-A Registration Statement)
10.7 -- Form of Supplement 1999-A to Servicing Agreement between VT Inc. and World Omni Financial Corp.
10.8 -- Second Amended and Restated Assignment Agreement among World Omni Financial Corp., Auto Lease
Finance L.P. and VT Inc., dated as of July 1, 1994 (incorporated by reference from Exhibit 10.9 to
Registration Statement on Form S-1, File No. 33-95404)
10.9 -- Amendment No. 1 to Second Amended and Restated Assignment Agreement among World Omni Financial
Corp., Auto Lease Finance L.P. and VT Inc., dated as of October 1, 1995 (incorporated by reference
from Exhibit 10.10 to Registration Statement on Form S-1, File No. 333-00794 (THE '1996-A
REGISTRATION STATEMENT'))
10.10 -- Support Agreement between World Omni Financial Corp. and World Omni Lease Securitization L.P.,
dated as of October 1, 1995 (incorporated by reference from Exhibit 10.11 to the 1996-A
Registration Statement)
10.11 -- Amendment No. 1 to Support Agreement between World Omni Financial Corp. and World Omni Lease
Securitization L.P., dated as of May 1, 1996 (incorporated by reference from Exhibit 10.12 to
Registration Statement on Form S-1, File No. 333-11449)
10.12 -- Amendment No. 2 to Support Agreement, dated as of October 1, 1996 between World Omni Financial
Corp., and World Omni Lease Securitization L.P., dated as of October 1, 1996 (incorporated by
reference from Exhibit 10.10 to Registration Statement on Form S-1, File No. 333-21917)
10.13 -- Amendment No. 3 to Support Agreement between World Omni Financial Corp. and World Omni Lease
Securitization L.P., dated as of April 1, 1997
10.14 -- Amendment No. 4 to Support Agreement between World Omni Financial Corp. and World Omni Lease
Securitization L.P., dated as of October 1, 1997 (incorporated by reference from Exhibit 10.14 to
the 1998-A Registration Statement)
10.15 -- Amendment No. 5 to Support Agreement between World Omni Financial Corp. and World Omni Lease
Securitization L.P. dated as of September 23, 1998
10.16 -- Amendment No. 6 to Support Agreement between World Omni Financial Corp. and World Omni Lease
Securitization L.P. dated as of October 1, 1998
10.17 -- Form of Amendment No. 7 to Support Agreement between World Omni Financial Corp. and World Omni
Lease Securitization L.P.
10.18 -- Form of Residual Value Insurance Policy
10.19 -- Form of Class A Interest Rate Cap
23.1 -- Consent of McDermott, Will & Emery (included as a part of Exhibit 5.1)
23.2 -- Consent of Cadwalader, Wickersham & Taft (included as a part of Exhibit 8.1)
23.3 -- Consent of English, McCaughan & O'Bryan, P.A. (included as a part of Exhibit 8.2)
23.4 -- Consent of Williams & Connolly
23.5 -- Consent of Hand Arendall, L.L.C.
23.6 -- Consent of PricewaterhouseCoopers LLP
24.1 -- Power of Attorney*
25.1 -- Form T-1 of Harris Trust and Savings Bank
</TABLE>
- ------------------
* Previously filed.
II-3
<PAGE>
(b) Financial Statement Schedules:
Not applicable.
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake as follows:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933 (THE 'ACT');
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the 'Calculation of
Registration Fee' table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(b) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(d) To provide to the Underwriters at the closing date specified in
the Underwriting Agreement certificates in such denominations and
registered in such names as required by the Underwriters to provide prompt
delivery to each purchaser.
(e) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of any
registrant pursuant to the foregoing provisions, or otherwise, each
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is therefore unenforceable. In the event that a
claim for indemnification against such liabilities (other than payment by a
registrant of expenses incurred or paid by a director, officer or
controlling person of such registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, each
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(f) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by each registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act will be deemed to be part of this registration
statement as of the time it was declared effective.
(g) For purposes of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus will be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time will be deemed to
be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each registrant
has duly caused this Amendment No. 1 to Registration Statement on Form S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Deerfield Beach and State of Florida, on the 19th day of August, 1999.
WORLD OMNI LEASE SECURITIZATION L.P.,
on behalf of itself and as originator of
the World Omni 1999-A Automobile Lease
Securitization Trust
By: WORLD OMNI LEASE SECURITIZATION
LLC, as General Partner
By: /s/ A. TUCKER ALLEN
-------------------------------
Name: A. Tucker Allen
Title: Vice President and Corporate
Treasurer
AUTO LEASE FINANCE L.P., on behalf of itself
and as originator of World Omni LT
By: AUTO LEASE FINANCE LLC, as General
Partner
By: /s/ A. TUCKER ALLEN
--------------------------------
Name: A. Tucker Allen
Title: Vice President and Corporate
Treasurer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to Registration Statement on Form S-1 has been signed below
by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ A. TUCKER ALLEN Director and Vice President and Corporate August 19, 1999
------------------------------- Treasurer of the General Partner of each of
A. Tucker Allen World Omni Lease Securitization L.P. and Auto
Lease Finance L.P. (Principal Financial and
Accounting Officer)
* Director of the General Partner of each of August 19, 1999
------------------------------- World Omni Lease Securitization L.P. and Auto
Colin W. Brown Lease Finance L.P.
* Director of the General Partner of each of August 19, 1999
------------------------------- World Omni Lease Securitization L.P. and Auto
Jeffrey B. Shapiro Lease Finance L.P
* Director of the General Partner of each of August 19, 1999
------------------------------- World Omni Lease Securitization L.P. and Auto
Christopher C. Wheeler Lease Finance L.P.
* /S/ A. TUCKER ALLEN
-------------------------------
A. Tucker Allen
Attorney-in-Fact
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
1.1 -- Form of Underwriting Agreement
3.1 -- Certificate of Formation of World Omni Lease Securitization LLC (incorporated by reference from
Exhibit 3.1 to Registration Statement on Form S-1, File No. 333-63367 (THE '1998-A REGISTRATION
STATEMENT'))
3.2 -- Limited Liability Company Agreement of World Omni Lease Securitization LLC, dated as of September
18, 1998 (incorporated by reference from Exhibit 3.2 to the 1998-A Registration Statement)
3.3 -- Amended and Restated Agreement of Limited Partnership of World Omni Lease Securitization L.P.
between World Omni Lease Securitization, Inc. and World Omni Financial Corp., dated as of July 1,
1994 (incorporated by reference from Exhibit 3.3 to the Registration Statement on Form S-1, File
No. 33-85036 (THE '1994-B REGISTRATION STATEMENT'))
3.4 -- Assignment of General Partnership Interest and Amendment to Amended and Restated Agreement of
Limited Partnership of World Omni Lease Securitization, L.P. among World Omni Lease Securitization,
Inc., World Omni Lease Securitization LLC and World Omni Financial Corp., dated as of September 23,
1998 (incorporated by reference from Exhibit 3.4 to the 1998-A Registration Statement)
3.5 -- Certificate of Formation of Auto Lease Finance LLC (incorporated by reference from Exhibit 3.5 to
the 1998-A Registration Statement)
3.6 -- Limited Liability Company Agreement of Auto Lease Finance LLC, dated as of September 18, 1998
(incorporated by reference from Exhibit 3.6 to the 1998-A Registration Statement)
3.7 -- Amended and Restated Agreement of Limited Partnership of Auto Lease Finance L.P. between Auto Lease
Finance Inc. and World Omni Financial Corp., dated as of July 1, 1994 (incorporated by reference
from Exhibit 10.7 to the 1994-B Registration Statement)
3.8 -- Assignment of General Partnership Interest and Amendment to Amended and Restated Agreement of
Limited Partnership of Auto Lease Finance L.P. among Auto Lease Finance Inc., Auto Lease Finance
LLC and World Omni Financial Corp., dated as of September 23, 1998 (incorporated by reference from
Exhibit 3.8 to the 1998-A Registration Statement)
3.9 -- Form of Securitization Trust Agreement among World Omni Lease Securitization L.P., Chase Manhattan
Bank Delaware, as Owner Trustee and Harris Trust and Savings Bank, as Indenture Trustee (including
form of Transferor Certificate)
4.1 -- Form of Indenture between World Omni 1999-A Automobile Lease Securitization Trust and Harris Trust
and Savings Bank, as Indenture Trustee (including forms of Class A Notes)
5.1 -- Opinion of McDermott, Will & Emery with respect to legality
8.1 -- Opinion of Cadwalader, Wickersham & Taft with respect to federal income tax matters
8.2 -- Opinion of English, McCaughan & O'Bryan, P.A. with respect to certain Florida tax matters
10.1 -- Second Amended and Restated Trust Agreement among Auto Lease Finance L.P., VT Inc. and U.S. Bank
National Association (as successor to Bank of America Illinois), dated as of July 1, 1994
(incorporated by reference from Exhibit 10.1 to the 1994-B Registration Statement)
10.2 -- Amendment No. 1 to Second Amended and Restated Trust Agreement among Auto Lease Finance L.P., VT
Inc. and U.S. Bank National Association (as successor to Bank of America Illinois), dated as of
November 1, 1994 (incorporated by reference from Exhibit 10.8 to the 1994-B Registration Statement)
10.3 -- Amendment No. 2 to the Second Amended and Restated Trust Agreement among Auto Lease Finance L.P.,
VT Inc. and U.S. Bank National Association (as successor to Bank of America Illinois), dated as of
September 23, 1998 (incorporated by reference from Exhibit 10.3 to the 1998-A Registration
Statement)
10.4 -- Form of Supplement 1999-A to Trust Agreement among Auto Lease Finance L.P., VT Inc. and U.S. Bank
National Association (as successor to Bank of America Illinois) (including form of SUBI
Certificate)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
10.5 -- Second Amended and Restated Servicing Agreement between VT Inc. and World Omni Financial Corp.,
dated as of July 1, 1994 (incorporated by reference from Exhibit 10.3 to the 1994-B Registration
Statement)
10.6 -- Amendment No. 1 to Second Amended and Restated Servicing Agreement between VT Inc. and World Omni
Financial Corp., dated as of September 23, 1998 (incorporated by reference from Exhibit 10.6 to the
1998-A Registration Statement)
10.7 -- Form of Supplement 1999-A to Servicing Agreement between VT Inc. and World Omni Financial Corp.
10.8 -- Second Amended and Restated Assignment Agreement among World Omni Financial Corp., Auto Lease
Finance L.P. and VT Inc., dated as of July 1, 1994 (incorporated by reference from Exhibit 10.9 to
Registration Statement on Form S-1, File No. 33-95404)
10.9 -- Amendment No. 1 to Second Amended and Restated Assignment Agreement among World Omni Financial
Corp., Auto Lease Finance L.P. and VT Inc., dated as of October 1, 1995 (incorporated by reference
from Exhibit 10.10 to Registration Statement on Form S-1, File No. 333-00794 (THE '1996-A
REGISTRATION STATEMENT'))
10.10 -- Support Agreement between World Omni Financial Corp. and World Omni Lease Securitization L.P.,
dated as of October 1, 1995 (incorporated by reference from Exhibit 10.11 to the 1996-A
Registration Statement)
10.11 -- Amendment No. 1 to Support Agreement between World Omni Financial Corp. and World Omni Lease
Securitization L.P., dated as of May 1, 1996 (incorporated by reference from Exhibit 10.12 to
Registration Statement on Form S-1, File No. 333-11449)
10.12 -- Amendment No. 2 to Support Agreement, dated as of October 1, 1996 between World Omni Financial
Corp., and World Omni Lease Securitization L.P., dated as of October 1, 1996 (incorporated by
reference from Exhibit 10.10 to Registration Statement on Form S-1, File No. 333-21917)
10.13 -- Amendment No. 3 to Support Agreement between World Omni Financial Corp. and World Omni Lease
Securitization L.P., dated as of April 1, 1997
10.14 -- Amendment No. 4 to Support Agreement between World Omni Financial Corp. and World Omni Lease
Securitization L.P., dated as of October 1, 1997 (incorporated by reference from Exhibit 10.4 to
the 1998-A Registration Statement)
10.15 -- Amendment No. 5 to Support Agreement between World Omni Financial Corp. and World Omni Lease
Securitization L.P., dated as of September 23, 1998
10.16 -- Amendment No. 6 to Support Agreement between World Omni Financial Corp. and World Omni Lease
Securitization L.P. dated as of October 1, 1998
10.17 -- Form of Amendment No. 7 to Support Agreement between World Omni Financial Corp. and World Omni
Lease Securization L.P.
10.18 -- Form of Residual Value Insurance Policy
10.19 -- Form of Class A Interest Rate Cap
23.1 -- Consent of McDermott, Will & Emery (included as a part of Exhibit 5.1)
23.2 -- Consent of Cadwalader, Wickersham & Taft (included as a part of Exhibit 8.1)
23.3 -- Consent of English, McCaughan & O'Bryan, P.A. (included as part of Exhibit 8.2)
23.4 -- Consent of Williams & Connolly
23.5 -- Consent of Hand Arendall, L.L.C.
23.6 -- Consent of PricewaterhouseCoopers LLP
24.1 -- Power of Attorney*
25.1 -- Form T-1 of Harris Trust and Savings Bank
</TABLE>
- ------------------
* Previously filed.
Exhibit 1.1
WORLD OMNI 1999-A AUTOMOBILE LEASE SECURITIZATION TRUST
$_________
Floating Rate Automobile Lease Asset Backed Notes, Class A-1
$_________
Floating Rate Automobile Lease Asset Backed Notes, Class A-2
$_________
Floating Rate Automobile Lease Asset Backed Notes, Class A-3
$_________
Floating Rate Automobile Lease Asset Backed Notes, Class A-4
UNDERWRITING AGREEMENT
August __, 1999
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
As Representative of the
Several Underwriters
World Financial Center
North Tower
New York, New York 10281-1201
Dear Sirs:
1. Introductory. World Omni Lease Securitization L.P., a Delaware
limited partnership (the "Transferor"), Auto Lease Finance L.P., a Delaware
limited partnership ("ALF L.P."), and World Omni Financial Corp., a Florida
corporation ("World Omni"), hereby confirm their respective agreements with you
and each of the other underwriters named in Schedule I hereto (the
"Underwriters"), for whom you are acting as representative (the
"Representative"), with respect to the sale by the Transferor to the
Underwriters of $_________ aggregate principal amount of Floating Rate
Automobile Lease Asset Backed Notes, Class A-1 (the "Class A-1 Notes"),
$_________ aggregate principal amount of Floating Rate Automobile Lease Asset
Backed Notes, Class A-2 (the "Class A-2 Notes"), $_________ aggregate principal
amount of Floating Rate Automobile Lease Asset Backed Notes, Class A-3 (the
"Class A-3 Notes") and $_________ aggregate principal amount of Floating Rate
Automobile Lease Asset Backed Notes, Class A-4 (the "Class A-4 Notes" and,
together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes,
the "Class A Notes") of the World Omni 1999-A Automobile
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Lease Securitization Trust (the "Trust") under the terms and conditions herein
contained. The Class A-1 Notes will bear an annual percentage rate equal to
One-Month LIBOR (as defined in the Prospectus) plus ___%. The Class A-2 Notes
will bear an annual percentage rate equal to One-Month LIBOR (as defined in the
Prospectus) plus ____%. The Class A-3 Notes will bear an annual percentage rate
equal to One-Month LIBOR (as defined in the Prospectus) plus ___%. The Class A-4
Notes will bear an annual percentage rate equal to One-Month LIBOR (as defined
in the Prospectus) plus ____%. The sole general partner of the Transferor is
World Omni Lease Securitization LLC (as successor by merger to World Omni Lease
Securitization, Inc.) ("WOLS LLC" or the "WOLS LP General Partner"), a Delaware
limited liability company and a wholly owned, special purpose finance subsidiary
of World Omni, and the sole limited partner of the Transferor is World Omni (in
such capacity, the "WOLS LP Limited Partner"). The sole general partner of ALF
L.P. is Auto Lease Finance LLC (as successor by merger to Auto Lease Finance,
Inc.) ("ALF LLC" or the "ALF L.P. General Partner"), a Delaware limited
liability company and a wholly owned, special purpose finance subsidiary of
World Omni, and the sole limited partner of ALF L.P. is World Omni (in such
capacity, the "ALF L.P. Limited Partner").
Simultaneously with the issuance of the Class A Notes, the Transferor
will cause the Trust to issue $__________ aggregate principal amount of
Automobile Lease Asset Backed Notes, Class B (the "Class B Notes" and, together
with the Class A Notes, the "Notes"). The Notes will be issued pursuant to an
indenture, dated as of August 1, 1999 (the "Indenture"), between the Trust and
Harris Trust & Savings Bank, as indenture trustee (in such capacity, the
"Indenture Trustee"). The Transferor will own the undivided equity interest in
the Trust (the "Transferor Interest"). The Transferor or an affiliate thereof
will initially own the Class B Notes. The Transferor Interest will be evidenced
by a certificate (the "Transferor Certificate") issued pursuant to a
securitization trust agreement, dated as of August 1, 1999 (the "Securitization
Trust Agreement"), among the Transferor, Chase Manhattan Bank, Delaware as owner
trustee (in such capacity, the "Owner Trustee") and the Indenture Trustee. The
Class B Notes will be subordinated to the Class A Notes, and the Transferor
Certificate will be subordinated to the Notes, in each case to the extent
described in the Securitization Trust Agreement and the Indenture. Capitalized
terms used herein that are not otherwise defined shall have the meanings
ascribed thereto in the Indenture.
The property of the Trust will consist primarily of a special unit of
beneficial interest (the "SUBI"), which, in turn, will evidence a beneficial
interest in certain specified assets of World Omni LT, an Alabama business trust
(the "Origination Trust"), payments to the Trust by Credit Lyonnais New York
Branch (the "Class A Cap Counterparty") pursuant to the interest rate cap
agreement (the "Class A Interest Rate Cap") between the Class A Cap Counterparty
and the Trust dated August __, 1999 and monies on deposit in the Reserve Fund
and in certain other accounts (collectively, the "SUBI Assets"). The assets of
the Origination Trust (the "Origination Trust Assets") will consist primarily of
retail closed-end lease contracts assigned to the Origination Trust by motor
vehicle dealers in the World Omni network of dealers, the automobiles and light
duty trucks relating thereto and the proceeds thereof, and payments made under
certain insurance policies relating to such lease contracts, the related lessees
or such leased vehicles, including payments made under a residual value
insurance policy, dated as of August 1, 1999 (the "Residual Value Insurance
Policy") issued by American International Specialty Lines Insurance
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Company, a subsidiary of subsidiaries of American International Group, Inc. (the
"Insurer") in respect of the Leased Vehicles. The SUBI will not evidence a
direct interest in the SUBI Assets, nor will it represent a beneficial interest
in any Origination Trust Assets other than the SUBI Assets. The Owner Trustee
and the Trust will pledge the SUBI and the other property of the Trust to the
Indenture Trustee to secure the Notes pursuant to the Indenture.
The SUBI will be evidenced by a certificate (the "SUBI Certificate")
issued to ALF L.P. by the Origination Trust pursuant to a trust agreement as
amended and restated as of July 1, 1994, as amended by Amendment No. 1 thereto
dated as of November 1, 1994, and as supplemented by a supplement dated as of
August 1, 1999 (collectively, the "SUBI Trust Agreement"), in each case among
ALF L.P., as initial grantor and initial beneficiary, VT Inc., as trustee (the
"Origination Trustee"), and (for certain limited purposes only) U.S. Bank
National Association, as trust agent (in such capacity, the "Trust Agent"). The
SUBI Certificate will be sold by ALF L.P. to the Transferor pursuant to the SUBI
certificate purchase and sale agreement, dated as of August 1, 1999 (the
"Certificate Purchase and Sale Agreement"), between the Transferor and ALF L.P.
The Origination Trust Assets (including the SUBI Assets) will be serviced by
World Omni pursuant to a second amended and restated servicing agreement dated
as of July 1, 1994, as amended and as supplemented by a servicing supplement
dated as of August 1, 1999 (collectively, the "Servicing Agreement"), in each
case between the Origination Trustee and World Omni. The Securitization Trust
Agreement, the SUBI Trust Agreement, the Certificate Purchase and Sale
Agreement, the Indenture, the Servicing Agreement, the Class A Interest Rate
Cap, the backup security agreement, dated as of August 1, 1999 (the "Backup
Security Agreement"), among World Omni, ALF L.P., the Origination Trustee, the
Transferor, the Owner Trustee and the Indenture Trustee, the support agreement,
dated as of October 1, 1995, as amended (the "Support Agreement"), by World Omni
in favor of the Transferor, the Amended and Restated Intercreditor Agreement,
dated as of December 31, 1997, among World Omni, ALF L.P., the Transferor, the
Indenture Trustee, the Origination Trustee, the Trust Agent, the Owner Trustee
and the other parties named in Appendix A thereto, together with an accession
agreement thereto (collectively, the "Intercreditor Agreement"), between the
Indenture Trustee and the Transferor, and the Reimbursement and Indemnification
Agreement, dated as of August 1, 1999, between World Omni and the Insurer, are
referred to herein collectively as the "Basic Documents".
2. Representations and Warranties of the Transferor, ALF L.P. and World
Omni.
(a) Each of the Transferor, ALF L.P. and World Omni, jointly and
severally, represents and warrants to, and agrees with, each of the Underwriters
that:
(i) A registration statement on Form S-1 (No. 333-74455), including
a form of prospectus, relating to the registration of the Class A Notes
has been filed with the Securities and Exchange Commission (the
"Commission") and, the offering thereof from time to time in accordance
with Rule 415 of the rules and regulations of the Commission, either
(1) has been declared effective under the Securities Act of 1933, as
amended (the "Act"), and is not proposed to be amended or (2) is
proposed to be amended by amendment or post-effective amendment. If the
Transferor or ALF L.P. does not propose to amend such registration
statement and if any post-effective amendment to such
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registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent such
post-effective amendment has been declared effective by the Commission.
For purposes of this Agreement, "Effective Time" means if the
Transferor and ALF L.P. have advised the Representative that they (1)
do not propose to amend such registration statement, the date and time
as of which such registration statement, or the most recent
post-effective amendment thereto (if any) filed prior to the execution
and delivery of this Agreement, was declared effective by the
Commission or (2) propose to file an amendment or post-effective
amendment to such registration statement, the date and time as of which
such registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective by
the Commission. "Effective Date" means the date of the Effective Time.
Such registration statement, as amended at the Effective Time,
including all information, if any, deemed to be a part of such
registration statement as of the Effective Time pursuant to Rule
430A(b) under the Act, and including the exhibits thereto, is
hereinafter referred to as the "Registration Statement", and the form
of prospectus relating to the Class A Notes, in the form transmitted to
the Commission for filing pursuant to and in accordance with Rule
424(b) under the Act ("Rule 424(b)"), or (if no such filing is
required) as included in the Registration Statement, is hereinafter
referred to as the "Prospectus". The Prospectus delivered to you for
use in connection with the offering of the Class A Notes will be
identical to the electronically transmitted copies thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval ("EDGAR") system, except to the extent permitted by
Regulation S-T.
(ii) If the Effective Time is prior to the execution and delivery
of this Agreement: (A) on the Effective Date, the Registration
Statement conformed, and on the date of this Agreement the Registration
Statement will conform in all material respects with the requirements
of the Act and the rules and regulations of the Commission promulgated
under the Act (the "Rules and Regulations") and at such times did not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and (B) on the date of this
Agreement, at the time of the filing of the Prospectus pursuant to Rule
424(b) and at the Closing Date (as such term is defined in Section 3
hereof), the Prospectus will conform in all material respects to the
requirements of the Act and the Rules and Regulations and does not
include, or will not include, any untrue statement of a material fact,
nor does the Prospectus omit, nor will it omit, any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the
Effective Time is subsequent to the execution and delivery of this
Agreement: (A) on the Effective Date, the Registration Statement and
the Prospectus will conform in all material respects to the
requirements of the Act and the Rules and Regulations and the
Registration Statement will not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and
(B) on the Effective Date, at the time of the filing of the Prospectus
pursuant to Rule 424(b), if required, and at the Closing Date, the
Prospectus will not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The two immediately
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preceding sentences do not apply to statements in or omissions from the
Registration Statement or Prospectus based upon written information
furnished to the Transferor and ALF L.P. by any Underwriter through the
Representative specifically for use therein. The Prospectus delivered
to you for use in connection with the offering of the Class A Notes
will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to the EDGAR system, except to the
extent permitted by Regulation S-T.
(iii) The Basic Documents, the SUBI Certificate and the Residual
Value Insurance Policy conform in all material respects to the
descriptions thereof and the statements in relation thereto contained
in the Prospectus; the SUBI Certificate has been duly and validly
authorized and, when executed, issued, authenticated and delivered in
accordance with the SUBI Trust Agreement, will be duly and validly
issued and outstanding and entitled to the benefits of the SUBI Trust
Agreement.
(iv) The Notes and the Transferor Certificate conform in all
material respects to the description thereof and the statements in
relation thereto contained in the Prospectus; the Notes and the
Transferor Certificate have been duly and validly authorized and, when
executed, issued, authenticated and delivered in accordance with the
Indenture and the Securitization Trust Agreement, respectively, and, in
the case of the Class A Notes, when delivered to the Underwriters,
against payment of the consideration specified herein, will be duly and
validly issued and outstanding and entitled to the benefits of the
Indenture.
(v) None of the Transferor, World Omni, WOLS LLC, ALF LLC, ALF
L.P., the Origination Trust or the Trust is now or, as a result of the
transactions contemplated by this Agreement, will become, an
"investment company", nor is any of them "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act").
(vi) Each of the Contracts and Leased Vehicles allocated as a SUBI
Asset on the Closing Date or on the related Transfer Date will meet the
eligibility criteria for selection described in the SUBI Trust
Agreement.
(vii) Each Initial Contract is, and each Subsequent Contract will
be, in substantially one of the forms attached as an Exhibit to the
SUBI Trust Agreement and constitutes or will constitute on the related
Transfer Date the legal, valid, binding and enforceable agreement of
the parties thereto; and each Contract complies or will comply on the
Closing Date or on the related Transfer Date in all material respects
as to content and form with all applicable state and federal laws,
including without limitation, consumer protection laws.
(viii) At or prior to the Closing Date, the Origination Trustee
will have allocated Contracts and Leased Vehicles as SUBI Assets that
have an Aggregate Net Investment Value as of the Initial Cutoff Date
equal to $1,160,510,742.
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(b) The Transferor and World Omni, as the WOLS LP Limited Partner, as
the ALF L.P. Limited Partner and on behalf of WOLS LLC as the WOLS LP General
Partner and on behalf of ALF LLC as the ALF L.P. General Partner, jointly and
severally represent and warrant to, and agree with, each of the Underwriters
that:
(i) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise set
forth therein, (A) there has been no material adverse change or
development resulting in a prospective material adverse change in the
condition, financial or otherwise, or business prospects, of the
Transferor, the WOLS LP General Partner, ALF L.P. or the ALF L.P.
General Partner, whether or not arising in the ordinary course of
business and (B) there have been no transactions entered into by the
Transferor, the WOLS LP General Partner, ALF L.P. or the ALF L.P.
General Partner, other than those in the ordinary course of their
respective businesses, that are material with respect to the
Transferor, the WOLS LP General Partner, ALF L.P. or the ALF L.P.
General Partner.
(ii) Each of the Transferor and ALF L.P. has been duly formed and
is validly existing as a limited partnership under the Delaware Revised
Uniform Limited Partnership Act, 6 Del. C. ? 17-101 et seq. (the
"Delaware Act"), and all filings required at the date hereof under the
Delaware Act with respect to the due formation and valid existence of
the Transferor and ALF L.P. as a limited partnership have been made;
each of the Transferor and ALF L.P. has all requisite power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus or in the World Omni Lease
Securitization L.P. Amended and Restated Limited Partnership Agreement,
dated as of July 1, 1994, as amended by that certain Assignment of
General Partnership Interest and Amendment to Amended and Restated
Agreement of Limited Partnership dated as of September 23, 1998 (the
"WOLS LLC Partnership Agreement"), between the WOLS LP General Partner
and the WOLS LP Limited Partner or the Auto Lease Finance L.P. Amended
and Restated Limited Partnership Agreement, dated as of July 1, 1994 as
amended by that certain Assignment of General Partnership Interest and
Amendment to Amended and Restated Agreement of Limited Partnership
dated as of September 23, 1998 (the "ALF LLC Partnership Agreement"
and, together with the WOLS LLC Partnership Agreement, the "Partnership
Agreements"), between the ALF L.P. General Partner and the ALF L.P.
Limited Partner, as the case may be, and to enter into and to perform
its obligations under the related Partnership Agreement, this
Agreement, each Basic Document to which the Transferor or ALF L.P. is a
party or by which it may be bound, the Notes and the Transferor
Certificate; each of the Transferor and ALF L.P. is duly qualified or
registered as a foreign partnership to transact business and is in good
standing in each jurisdiction in which such qualification or
registration is required, whether by reason of the ownership of
property or the conduct of business, except where the failure to so
qualify would not have a material adverse effect on its condition,
financial or otherwise, or business prospects.
(iii) The WOLS LP General Partner is the sole general partner of
the Transferor and the WOLS LP Limited Partner is the sole limited
partner of the Transferor
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and, at the Closing Date, each of the WOLS LP General Partner and the
WOLS LP Limited Partner will own its respective partnership interest in
the Transferor (each of which is a nontransferable interest to the
extent provided under the WOLS LLC Partnership Agreement) free and
clear of any lien, mortgage, pledge, charge, encumbrance, adverse claim
or other security interest (collectively, "Liens") except as permitted
by the Basic Documents.
(iv) The ALF L.P. General Partner is the sole general partner of
ALF L.P. and the ALF L.P. Limited Partner is the sole limited partner
of ALF L.P. and, at the Closing Date, each of the ALF L.P. General
Partner and the ALF L.P. Limited Partner will own its respective
partnership interests in ALF L.P. (each of which is a nontransferable
interest to the extent provided under the ALF LLC Partnership
Agreement) free and clear of any Lien except as permitted by the Basic
Documents.
(v) None of the Transferor, the WOLS LP General Partner, ALF L.P.
or the ALF L.P. General Partner is in violation of its organizational
or charter documents, limited liability company agreement or the
related Partnership Agreement, as the case may be, or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party
or by which it may be bound, or to which any of its properties or
assets is subject; the execution, delivery and performance by each of
the Transferor, the WOLS LP General Partner, ALF L.P. and the ALF L.P.
General Partner, as the case may be, of this Agreement, the related
Partnership Agreement, each Basic Document to which it is a party, the
Notes and the Transferor Certificate, the consummation of the
transactions contemplated herein and therein and compliance by it with
its obligations hereunder and thereunder have been duly and validly
authorized by all necessary action (corporate or otherwise) and will
not conflict with or constitute a breach of or default under, or result
in the creation or imposition of any Lien (except as permitted by the
Basic Documents) upon any of its property or assets pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it may be a party, by which it may be bound or to
which any of its properties or assets is subject, nor will such action
result in any violation of the provisions of its charter or
organizational documents, bylaws or the related Partnership Agreement,
or any applicable law, administrative regulation or administrative or
court decree.
(vi) There is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending or, to
the knowledge of any of the Transferor, the WOLS LP General Partner,
the WOLS LP Limited Partner, ALF L.P., the ALF L.P. General Partner,
the ALF L.P. Limited Partner and World Omni, threatened, against or
affecting the Transferor, the WOLS LP General Partner, ALF L.P. or the
ALF L.P. General Partner that is required to be disclosed in the
Registration Statement and that is not disclosed or that might result
in any material adverse change in its condition, financial or
otherwise, or in its earnings, business affairs or business prospects
or that might materially and adversely affect its properties or assets
or that might materially and adversely affect the consummation of this
Agreement, either
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Partnership Agreement or any Basic Document to which any of such
entities is a party or by which it may be bound; all pending legal or
governmental proceedings to which the Transferor, the WOLS LP General
Partner, ALF L.P. or the ALF L.P. General Partner is a party or of
which any of their respective properties or assets is the subject that
are not described in the Registration Statement, including ordinary
routine litigation incidental to their respective businesses, are,
considered in the aggregate, not material; and there are no contracts
or documents of the Transferor, the WOLS LP General Partner, the WOLS
LP Limited Partner, ALF L.P., the ALF L.P. General Partner or the ALF
L.P. Limited Partner that are required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations that
have not been so filed.
(vii) Except such as may be required by the Act, the Rules and
Regulations or state securities laws, no authorization, approval or
consent of any court, governmental authority or agency or any other
Person is necessary in connection with (A) the issuance of the SUBI
Certificate, (B) the issuance of the Notes and the Transferor
Certificate or the offering and sale of the Notes, (C) the execution,
delivery and performance by the Transferor or ALF L.P. of this
Agreement, any Basic Document to which it is a party, the Notes or the
Transferor Certificate or (D) the consummation by the Transferor or ALF
L.P. of the transactions contemplated hereby or thereby, except such
authorizations, approvals or consents as will have been obtained and
are in full force and effect as of the Closing Date.
(viii) Each of the Transferor, the WOLS LP General Partner, ALF
L.P. and the ALF L.P. General Partner possesses all material
certificates, authorities, licenses and permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies as
are necessary to conduct the business now operated by it, and none of
such entities has received notice of any proceedings relating to the
revocation or modification of any such certificate, authority, license
or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely
affect its condition, financial or otherwise.
(ix) This Agreement has been duly executed and delivered by the
WOLS LP General Partner for the Transferor and by the ALF L.P. General
Partner for ALF L.P.
(x) As of the Closing Date, each of the Basic Documents to which
any of the Transferor, the WOLS LP General Partner, ALF L.P. or the ALF
L.P. General Partner is a party and the WOLS LLC Partnership Agreement
or the ALF LLC Partnership Agreement, as the case may be, has been duly
executed and delivered by each such entity, and, assuming the due
authorization, execution and delivery thereof by the other parties
thereto, will constitute the legal, valid and binding agreement of the
Transferor, the WOLS LP General Partner, ALF L.P. or the ALF L.P.
General Partner, as the case may be, enforceable in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar
laws affecting enforcement of creditors' rights generally and by
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
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(xi) The Transferor will use the proceeds of the Class A Notes as
described in the Prospectus under the caption "Use of Proceeds".
(xii) As of the Closing Date, the representations and warranties of
each of the Transferor, the WOLS LP General Partner, ALF L.P. and the
ALF L.P. General Partner in the related Partnership Agreement and in
each Basic Document to which it is a party and in Officer's
Certificates of any of the Transferor, the WOLS LP General Partner, ALF
L.P. and the ALF L.P. General Partner delivered on the Closing Date or
on each Transfer Date, as the case may be, will be true and correct,
and each Underwriter may rely on such representations and warranties as
if they were set forth herein in full.
(xiii) None of the Transferor, the WOLS LP General Partner, the
WOLS LP Limited Partner, ALF L.P., the ALF L.P. General Partner or the
ALF L.P. Limited Partner conducts business or has affiliates who
conduct business in Cuba or with the government of Cuba within the
meaning of Section 517.075 of the Florida Securities and Investors
Protection Act or Regulation Section 3E-900.001 promulgated thereunder.
(c) World Omni, on its own behalf and on behalf of ALF LLC, WOLS LLC
and the Origination Trustee, each to the extent indicated below, represents and
warrants to, and agrees with, each of the Underwriters that:
(i) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise set
forth therein, (A) there has been no material adverse change or
development resulting in a prospective material adverse change in the
condition, financial or otherwise, or in the earnings or business
affairs of the Origination Trustee (in its capacity as trustee of the
Origination Trust) or World Omni and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
and (B) there have been no transactions entered into by the Origination
Trustee (in its capacity as trustee of the Origination Trust), World
Omni or any other subsidiary of World Omni, other than those in the
ordinary course of business, that are material with respect to the
condition, financial or otherwise, or the earnings or business affairs
of the Origination Trustee (in its capacity as trustee of the
Origination Trust) or World Omni and its subsidiaries considered as one
enterprise.
(ii) World Omni has been duly incorporated, is current in the
payment of taxes to the State of Florida and fees to the Florida
Department of State and its status is "active"; World Omni has
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and to enter
into and to perform its obligations under this Agreement, the
Partnership Agreements and each Basic Document to which World Omni is a
party or by which it may be bound; and World Omni is duly qualified as
a foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify would not have a
material adverse effect on its condition, financial or otherwise, or
its earnings, business affairs or business prospects or its ability to
perform
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its obligations under each Basic Document to which it is a party or by
which it may be bound.
(iii) Each of WOLS LLC and ALF LLC has been duly incorporated and
is validly existing as a limited liability company in good standing
under the laws of the State of Delaware, in each case with power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and to
perform its obligations under each Basic Document to which it is a
party or by which it may be bound; each of WOLS LLC and ALF LLC is duly
qualified as a foreign limited liability company to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on its
condition, financial or otherwise, or its earnings or business affairs;
all of the issued and outstanding membership interests of each of WOLS
LLC and ALF LLC is owned by World Omni, free and clear of Liens and
neither WOLS LLC nor ALF LLC has any subsidiaries. Each of WOLS LLC and
ALF LLC is current in the payment of any taxes required to be paid by
each of WOLS LLC and ALF LLC.
(iv) The Origination Trust has been qualified as a business trust
under applicable Alabama law and all filings required to be made in
respect of the Origination Trust's status as a business trust under the
laws of each state in which such filings are required have been made
and are in full force and effect on the Closing Date, except where the
failure so to file would not have a material adverse effect on its
condition, financial or otherwise, or its earnings, business affairs or
business prospects or its ability to perform its obligations under each
Basic Document to which it is a party or by which it may be bound.
(v) World Omni is not in violation of its organizational or charter
documents, bylaws or either Partnership Agreement, or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party
or by which it may be bound, or to which any of its property or assets
is subject; the execution, delivery and performance by World Omni of
this Agreement, each Partnership Agreement and each Basic Document to
which it is a party and the consummation of the transactions
contemplated herein and therein and compliance by it with its
obligations hereunder and thereunder have been duly and validly
authorized by all necessary action (corporate or otherwise) and will
not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any Lien (except as permitted
by the Basic Documents) upon any of its properties or assets pursuant
to, any material contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which it is a party or by which it may be
bound, or to which any of its properties or assets is subject, nor will
such action result in any violation of the provisions of its charter or
organizational documents, bylaws or each Partnership Agreement, as the
case may be, or any applicable law, administrative regulation or
administrative or court decree.
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(vi) There is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of World Omni, threatened against or affecting World
Omni or the Origination Trustee (in its capacity as trustee of the
Origination Trust), that is required to be disclosed in the
Registration Statement and that is not disclosed or that might result
in any material adverse change in its condition, financial or
otherwise, or in its earnings, business affairs or business prospects
or that might materially and adversely affect its properties or assets
or that might materially and adversely affect the consummation of this
Agreement, either Partnership Agreement or any Basic Document to which
it is a party or by which it may be bound; and all pending legal or
governmental proceedings to which World Omni or the Origination Trustee
(in its capacity as trustee of the Origination Trust) is a party or of
which any of their respective properties or assets is the subject that
are not described in the Prospectus, including ordinary routine
litigation incidental to their respective businesses, are, considered
in the aggregate, not material.
(vii) No authorization, approval or consent of any court,
governmental authority or agency or any other Person is necessary in
connection with the execution, delivery and performance by World Omni,
ALF LLC, WOLS LLC or the Origination Trustee (in its capacity as
trustee of the Origination Trust) of this Agreement, each applicable
Partnership Agreement or any Basic Document to which any of them is a
party or the consummation by any of them of the transactions
contemplated hereby or thereby, except such authorizations, approvals
or consents as will have been obtained and are in full force and effect
as of the Closing Date.
(viii) Each of World Omni and the Origination Trustee (in its
capacity as trustee of the Origination Trust) possesses all material
certificates, authorities, licenses or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies as
are necessary to conduct the business now operated by it, and neither
of such entities has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority, license
or permit that, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely
affect its condition, financial or otherwise, or its earnings, business
affairs or business prospects or its ability to perform its obligations
under each Basic Document to which it is a party or by which it may be
bound.
(ix) This Agreement has been duly executed and delivered by World
Omni.
(x) As of the Closing Date, each Basic Document to which World Omni
is a party and each Partnership Agreement has been duly executed and
delivered by World Omni and, assuming the due authorization, execution
and delivery thereof by the other parties thereto, will constitute the
legal, valid and binding agreement of World Omni, enforceable in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting enforcement of creditors' rights generally and
by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
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(xi) At the time of execution and delivery of the 1999-A SUBI
Supplement on the Closing Date, the Origination Trustee on behalf of
the Origination Trust will have good and marketable title to the
Initial Contracts, the related Contract Rights, the Initial Leased
Vehicles and other rights relating to the Initial Contracts and the
Initial Leased Vehicles being allocated as SUBI Assets pursuant
thereto, free and clear of Liens (except as permitted by the Basic
Documents and other than the administrative lien in favor of Bank of
America Trust Company of Florida, N.A. or AL Holding Corp. (the
"Administrative Lien")) and will not have assigned to any Person any of
its right, title or interest in any such Contracts, Contract Rights,
Leased Vehicles or other rights, or shall have obtained the release of
any such prior assignment.
(xii) On each Transfer Date the Origination Trustee on behalf of
the Origination Trust will have good and marketable title to the
related Subsequent Contracts, the related Contract Rights, the related
Subsequent Leased Vehicles and other rights relating to such Subsequent
Contracts and Subsequent Leased Vehicles being allocated as SUBI Assets
pursuant thereto, free and clear of Liens (other than the
Administrative Lien), and will not have assigned to any Person any of
its right, title or interest in any such Subsequent Contracts, Contract
Rights, Subsequent Leased Vehicles or other rights, or shall have
obtained the release of any such prior assignment.
(xiii) As of the Closing Date, the representations and warranties
of World Omni in the Partnership Agreements and in each Basic Document
to which it is a party and in Officer's Certificates of World Omni
delivered on the Closing Date or on each Transfer Date, as the case may
be, will be true and correct, and each Underwriter may rely on such
representations and warranties as if they were set forth herein in
full.
(xiv) At or prior to the Closing Date, World Omni, as Servicer
under the Servicing Agreement, has made the appropriate allocation of
assets within the estate of the Origination Trust to the SUBI Assets
required by the SUBI Trust Agreement.
(xv) As of the Closing Date, the Origination Trustee has not
assigned to any Person any of its right, title or interest in any of
the Contracts, Contract Rights, Leased Vehicles or other related rights
constituting the SUBI Assets, or has obtained the release of each such
prior assignment.
(xvi) On each Transfer Date the Origination Trustee will not have
assigned to any Person any of its right, title or interest in any of
the related Subsequent Contracts, Contract Rights, Subsequent Leased
Vehicles or other related rights constituting the SUBI Assets, or shall
have obtained the release of each such prior assignment.
(d) Any Officer's Certificate signed by any officer of the Transferor,
World Omni, WOLS LLC, ALF LLC or ALF L.P. and delivered to the Representative or
counsel for the Underwriters shall be deemed a representation and warranty of
the Transferor, World Omni, WOLS LLC, ALF LLC or ALF L.P., as the case may be,
to each Underwriter as to the matters covered thereby.
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3. Purchase, Sale and Delivery of the Class A Notes. On the basis of
and in reliance on the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Transferor agrees to sell to each Underwriter, severally and not jointly, and
each Underwriter, severally and not jointly, agrees to purchase from the
Transferor the aggregate principal amount of each Class of Class A Notes set
forth in Schedule I opposite the name of such Underwriter, at a purchase price
equal to the following percentages of the aggregate initial principal balances
thereof, (i) in the case of the Class A-1 Notes, _____%, (ii) in the case of the
Class A-2 Notes, ______%, (iii) in the case of the Class A-3 Notes, ______% and
(iv) in the case of the Class A-4 Notes, ______%.
Each Class of Class A Notes will initially be represented by one or
more notes registered in the name of Cede & Co., as the nominee of The
Depository Trust Company ("DTC"). The interests of beneficial owners of each
Class of Class A Notes will be represented by book entries on the records of DTC
and participating members thereof. Definitive instruments evidencing the Class A
Notes will be available only under the limited circumstances specified in the
Indenture.
The Transferor will deliver the Class A Notes to the Representative for
the respective accounts of the Underwriters, against payment of the purchase
price therefor in immediately available funds payable to the order of the
Transferor, at the office of Williams & Connolly, 725 Twelfth Street, N.W.,
Washington, D.C. 20005-5901 (or at such other location as agreed upon among the
Transferor, ALF L.P., World Omni and the Representative) at 10:00 A.M., New York
time, on ________, 1999, or at such other time not later than five full business
days thereafter, as the Transferor, ALF L.P., World Omni and the Representative
determine, such time being herein referred to as the "Closing Date". The
instruments evidencing the Notes and the Transferor Certificate will be made
available for inspection at the above offices of Williams & Connolly (or at such
other location agreed upon among the Transferor, ALF L.P., World Omni and the
Representative) at least 24 hours prior to the Closing Date.
Pursuant to Rule 15c6-1(d) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the Transferor, ALF L.P., World Omni and the
Underwriters have agreed that the Closing Date will be not less than nine
business days following the date hereof. The Transferor, ALF L.P., World Omni
and the Underwriters further agree that upon receipt by an investor who has
received an electronic Prospectus or a request by such investor's representative
(whether such request is delivered to an Underwriter, the Transferor or ALF
L.P.) during the period during which there is an obligation to deliver a
Prospectus, the Underwriters will promptly deliver or cause to be delivered
without charge, a paper copy of the Prospectus.
4. Certain Agreements of the Underwriters.
(a) It is understood that the Underwriters propose to offer the Class A
Notes for sale to the public as set forth in the Prospectus.
(b) The Underwriters covenant and agree that prior to the date which is
one year and one day after the last date upon which (i) each Class of Notes has
been paid in full, and (ii) all obligations due under any other Securitized
Financing have been paid in full, the Underwriters will not institute against,
or join any other Person in instituting against, ALF L.P. any
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bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or
other proceeding under any federal or state bankruptcy or similar law. The
foregoing shall not limit the right of any Underwriter to file any claim in or
otherwise take actions with respect to any such proceeding instituted by any
Person not under such a constraint.
(c) Until the Representative informs the Transferor in writing that all
of the Class A Notes have been sold by the Underwriters, each Underwriter
covenants and agrees to provide to the Transferor each day, with respect to
sales of the Class A Notes made by such Underwriter on such date at any price
other than the public offering price set forth on the cover page of the
Prospectus, the information in writing (which may be in the form of a telecopy)
necessary to enable the Transferor to prepare and file or transmit for filing
with the Commission the information requested by the Commission to be filed with
respect to the distribution of the Class A Notes.
5. Certain Agreements of the Transferor, ALF L.P. and World Omni. Each
of the Transferor, ALF L.P. and World Omni jointly and severally covenants and
agrees with each of the Underwriters that:
(a) If the Effective Time is prior to the execution and delivery of
this Agreement, the Transferor and ALF L.P. will file the Prospectus
with the Commission pursuant to and in accordance with subparagraph (1)
(or, if applicable and if consented to by the Representative,
subparagraph (4)) of Rule 424(b), not later than the second business
day following the execution and delivery of this Agreement. The
Transferor and ALF L.P. will advise the Representative promptly of any
such filing pursuant to Rule 424(b).
(b) The Transferor and ALF L.P. will advise the Representative
promptly of any proposal to amend or supplement the registration
statement as filed or the related prospectus or the Registration
Statement or the Prospectus and will not effect any such amendment or
supplement without the consent of the Representative. The Transferor
and ALF L.P. will advise the Representative promptly of the
effectiveness of the Registration Statement (if the Effective Time is
subsequent to the execution and delivery of this Agreement), of any
amendment or supplement of the Registration Statement or the Prospectus
and of the institution by the Commission of any stop order proceedings
in respect of the Registration Statement. The Transferor and ALF L.P.
will use their best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible its lifting, if issued. The
Transferor and ALF L.P. will comply with the Act, the Exchange Act, the
Trust Indenture Act of 1939, as amended and the rules and regulations
contemplated thereunder so as to permit the completion of the
distribution of the Class A Notes as contemplated in this Agreement and
in the Prospectus. The Transferor and ALF L.P. will file with the
Commission all documents required to be filed pursuant to the Exchange
Act within the time periods specified in the Exchange Act or the rules
and regulations promulgated thereunder.
(c) If, at any time when a prospectus relating to the Class A Notes
is required to be delivered under the Act, any event occurs as a result
of which the Prospectus as then
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amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend
or supplement the Prospectus to comply with the Act, the Transferor and
ALF L.P. promptly will prepare and file, or cause to be prepared and
filed, with the Commission an amendment or supplement that will correct
such statement or omission or effect such compliance. Neither the
consent of the Representative to, nor the delivery by any Underwriter
of, any such amendment or supplement shall constitute a waiver of any
of the conditions set forth in Section 6 hereof.
(d) As soon as practicable, but not later than the Availability
Date (as defined below), the Transferor and ALF L.P. will cause the
Indenture Trustee to make generally available to the Class A
Noteholders an earnings statement covering a period of at least 12
months beginning after the Effective Date that will satisfy the
provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the
end of the fourth fiscal quarter following the fiscal quarter that
includes the Effective Date, except that, if such fourth fiscal quarter
is the last quarter of the fiscal year of the Transferor and ALF L.P.,
"Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(e) The Transferor and ALF L.P. will furnish to the Representative
copies of the registration statement as originally filed with the
Commission and each amendment thereto (in each case at least one of
which will be signed and will include all exhibits), each related
preliminary prospectus, the Prospectus and all amendments and
supplements to such documents, in each case as soon as available and in
such quantities as the Representative may reasonably request.
(f) The Transferor and ALF L.P. will arrange for the qualification
of the Class A Notes for sale under the laws of such jurisdictions in
the United States as the Representative may designate and will continue
such qualifications in effect so long as required for the distribution
of the Class A Notes, provided that neither the Transferor nor ALF L.P.
shall be obligated to qualify to do business nor become subject to
service of process generally, but only to the extent required for such
qualification, in any jurisdiction in which it is not currently so
qualified.
(g) So long as any Notes are outstanding, the Transferor, ALF L.P.
or World Omni, as the case may be, will make good faith efforts to
deliver or cause to be delivered to the Representative, as soon as each
becomes available, copies of (i) each report relating to the Notes
delivered to Noteholders pursuant to Section 3.06 of the Securitization
Trust Agreement, (ii) the annual statement as to compliance and the
annual statement of a firm of independent public accountants furnished
pursuant to Sections 3.02, 3.03 or 10.02 of the Servicing Agreement,
(iii) each certificate or notice delivered by the Servicer pursuant to
Section 10.03 of the Servicing Agreement, (iv) each periodic report
required to be filed by the Transferor or ALF L.P. with the Commission
pursuant to the Exchange Act, or any order of the Commission thereunder
and (v) such other information concerning the Transferor, World Omni,
ALF LLC, WOLS LLC, ALF L.P., the Origination Trustee (in
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its capacity as trustee of the Origination Trust), the Origination
Trust, the Trust, the Notes or the Transferor Certificate as the
Representative may reasonably request from time to time.
(h) The Transferor, ALF L.P. and World Omni will pay all expenses
incident to the performance of their respective obligations under this
Agreement, including without limitation, (i) expenses incident to the
word processing, printing and reproduction of the registration
statement as originally filed with the Commission and each amendment
thereto, preliminary prospectuses and the Prospectus (including any
amendments and supplements thereto), (ii) the fees and disbursements of
the Origination Trustee, the Owner Trustee, the Indenture Trustee, the
Trust Agent, the Insurer and their respective counsel, (iii) the fees
and disbursements of counsel and the independent public accountants of
the Transferor, ALF L.P. and World Omni, (iv) the fees charged by each
of Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's, a
division of The McGraw-Hill Companies, Inc. ("Standard & Poor's") and
Fitch IBCA, Inc. ("Fitch" and, together with Moody's and Standard &
Poor's, the "Rating Agencies") in connection with the rating of each
Class of Notes, (v) the fees of DTC in connection with the book-entry
registration of the Class A Notes and (vi) expenses (including
reasonable fees and disbursements of counsel) incurred by the
Underwriters pursuant to Section 5(f) hereof in connection with the
qualification of the Class A Notes for sale under the laws of such
jurisdictions in the United States as the Representative may designate.
If this Agreement is terminated by the Representative in accordance
with the provisions of Section 6 or clause (i) or clause (ii) of
Section 10 hereof, the Transferor, ALF L.P. and World Omni shall
reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel to the
Underwriters.
(i) For a period of 45 days from the date hereof, none of the
Transferor, ALF L.P., World Omni or any of their respective affiliates
will, without the prior written consent of the Representative, directly
or indirectly, offer, sell or contract to sell or announce the offering
of, in a public or private transaction, any other collateralized
securities (other than the Class B Notes) similar to the Class A Notes.
(j) So long as any Class A Notes are outstanding, the Transferor,
ALF L.P. and World Omni will cause to be delivered to the
Representative a reliance letter relating to each Opinion of Counsel
delivered to the Owner Trustee, the Indenture Trustee, the Origination
Trustee or any Rating Agency by counsel to the Transferor, ALF L.P. or
World Omni relating to the transactions contemplated by this Agreement
or the Basic Documents.
(k) To the extent, if any, that the rating provided with respect to
any Class of Class A Notes by any Rating Agency or the Insurer is
conditional upon the furnishing of documents or the taking of any other
actions by the Transferor, ALF L.P. or World Omni, the Transferor, ALF
L.P. or World Omni, as the case may be, shall furnish such documents
and take any such other actions.
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6. Conditions of the Obligations of the Underwriters. The obligation of
the several Underwriters to purchase and pay for the Class A Notes will be
subject to the accuracy of the respective representations and warranties on the
part of the Transferor, ALF L.P. and World Omni herein, to the accuracy of the
statements of the respective officers of the Transferor, ALF L.P. and World Omni
made pursuant to the provisions hereof, to the performance by the Transferor,
ALF L.P. and World Omni of their respective obligations hereunder and to the
following additional conditions precedent:
(a) On (i) the date of this Agreement, the Representative, ALF L.P. and
the Transferor shall have received a letter or letters, dated the date of
delivery thereof (which, if the Effective Time is prior to the execution and
delivery of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to the
Effective Time), of Arthur Andersen LLP ("Arthur Andersen") confirming that they
are independent public accountants within the meaning of the Act and the Rules
and Regulations, substantially in the form of the draft or drafts to which the
Representative has previously agreed and otherwise in form and in substance
satisfactory to the Representative and counsel for the Underwriters and (ii) on
the Closing Date, the Representative, ALF L.P. and the Transferor shall have
received a letter or letters, dated as of the Closing Date, from Arthur
Andersen, updating each letter delivered pursuant to clause (i) above, in form
and substance satisfactory to the Representative and counsel for the
Underwriters.
(b) If the Effective Time has not occurred prior to the date of this
Agreement, the Effective Time shall be the date of execution and delivery of
this Agreement, or the next business day after the date of this Agreement or
such later date as shall have been consented to by the Representative. If the
Effective Time is prior to the execution and delivery of this Agreement, the
Prospectus shall have been filed with the Commission in accordance with the
Rules and Regulations and Section 5(a) hereof. Prior to the Closing Date, no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted or,
to the knowledge of the Transferor, ALF L.P., World Omni or the Representative,
shall be contemplated by the Commission.
(c) The Representative shall have received certificates of the
President, any Vice President or the Treasurer or any Assistant Treasurer of (i)
the WOLS LP General Partner on behalf of the Transferor, (ii) the ALF L.P.
General Partner on behalf of ALF L.P. and (iii) World Omni, each dated the
Closing Date, in which such officer shall state, in the case of (A) the
Transferor and ALF L.P., that (1) the representations and warranties of the
Transferor or ALF L.P., as the case may be, in each Basic Document to which it
is a party and in this Agreement are true and correct, (2) to the best knowledge
of such officer after reasonable investigation, the Transferor or ALF L.P., as
the case may be, has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at or prior to the Closing
Date, no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been instituted or are
contemplated by the
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Commission and (3) subsequent to the date of this Agreement, there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Transferor or ALF L.P.,
as the case may be, except as set forth in or contemplated by the Prospectus and
(B) World Omni, that (1) the representations and warranties of World Omni in
each Basic Document to which it is a party and in this Agreement are true and
correct, (2) to the best knowledge of such officer after reasonable
investigation, World Omni has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder and (3) subsequent
to the date of this Agreement, there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of World Omni except as set forth in or contemplated by the
Prospectus.
(d) The Representative shall have received a certificate, dated the
Closing Date, of a Vice President or another duly authorized officer of the
Insurer, satisfactory in form and substance to the Representative and counsel to
the Underwriters, substantially to the effect that, among other things, (i) the
information provided by the Insurer for use in the Registration Statement and
the Prospectus is true and correct in all material respects and (ii) since the
date of the financial statements of the Insurer included in the Prospectus,
there has been no change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Insurer that would have
a material adverse effect on the ability of the Insurer to meet its obligations
under the Residual Value Insurance Policy.
(e) The Representative shall have received:
(1) The favorable opinions of (A) Williams & Connolly, counsel to
the Transferor, ALF L.P. and World Omni, (B) Hand Arendall, L.L.C.,
special Alabama counsel to the Transferor, ALF L.P. and World Omni, (C)
English, McCaughan & O'Bryan, P.A., special Florida counsel to the
Transferor, ALF L.P. and World Omni, (D) McDermott, Will & Emery,
special Illinois and New York counsel to the Transferor, ALF L.P. and
World Omni, (E) Richards, Layton & Finger, special Delaware counsel to
the Transferor, ALF L.P. and World Omni, (F) Burbage & Weddell L.L.C.,
special Georgia counsel to the Transferor, ALF L.P. and World Omni and
(G) Smith Helms Mulliss & Moore, special North Carolina counsel to the
Transferor, ALF L.P. and World Omni, in each case dated the Closing
Date and satisfactory in form and substance to the Representative and
counsel for the Underwriters, and, in the aggregate substantially to
the effect that:
(i) World Omni has been incorporated under the Florida General
Corporation Act, is current in the payment of fees due to the
Florida Department of State and its status is active; World Omni
has corporate power and authority to own, lease and operate its
properties, to conduct its business as presently conducted and to
enter into and perform its obligations under this Agreement, each
Partnership Agreement and each Basic Document to which it is a
party; to the best of their knowledge, World Omni is duly qualified
as a foreign corporation to transact business and is in good
standing in Alabama, Georgia, North Carolina and South Carolina;
and, to the best of their knowledge, all of the issued and
outstanding membership interest of WOLS LLC and ALF LLC is owned by
World Omni, free and clear of Liens.
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(ii) Each of WOLS LLC and ALF LLC has been duly incorporated
and is validly existing as a limited liability company in good
standing under the laws of the State of Delaware, with power and
authority to own, lease and operate its properties, to conduct its
business as described in the Registration Statement and to enter
into and perform its obligations under the related Partnership
Agreement and each Basic Document to which it is a party; to the
best of such counsel's knowledge and information, each of WOLS LLC
and ALF LLC is duly qualified as a foreign limited liability
company to transact business in Florida and Alabama; and the shares
of issued and outstanding member interest of each of WOLS LLC and
ALF LLC have been duly authorized and validly issued and are fully
paid and non-assessable.
(iii) Each of the Transferor and ALF L.P. is duly qualified and
registered as a foreign partnership to transact business and is in
good standing in Alabama and Florida.
(iv) This Agreement has been duly authorized, executed and
delivered by WOLS LLC, as the WOLS LP General Partner, ALF LLC, as
the ALF L.P. General Partner and World Omni.
(v) The Origination Trust has been qualified as a business
trust under applicable Alabama law and what is commonly known as a
business trust under Chapter 609 of the Florida Statutes, and all
filings required to be made in respect of the Origination Trust's
status as a business trust under the laws of the States of Alabama
and Florida have been made and are in full force and effect on the
Closing Date.
(vi)(a) The Notes are in due and proper form, all conditions
precedent provided for in the Indenture relating to the issuance,
authentication and delivery of the Notes have been complied with
and the Notes have been duly and validly authorized and, when
executed, issued, authenticated and delivered pursuant to the
Indenture, and, in the case of the Class A Notes, when delivered to
the Underwriters against payment of the consideration set forth in
this Agreement, will be duly and validly issued and outstanding and
entitled to the benefits of the Indenture.
(b) The Transferor Certificate is in due and proper form, all
conditions precedent provided for in the Securitization Trust
Agreement relating to the issuance, authentication and delivery of
the Transferor Certificate have been complied with and the
Transferor Certificate has been duly and validly authorized and,
when executed, issued, authenticated and delivered pursuant to the
Securitization Trust Agreement, will be duly and validly issued and
outstanding and entitled to the benefits of the Securitization
Trust Agreement.
(vii) Each Partnership Agreement and each Basic Document to
which the Transferor, WOLS LLC, ALF LLC, ALF L.P. and World Omni is
a
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party has been duly authorized, executed and delivered by the
Transferor, WOLS LLC, ALF LLC, ALF L.P. and World Omni, as the case
may be, and, assuming the due authorization, execution and delivery
thereof by the other parties thereto, will constitute the legal,
valid and binding agreement of such entity enforceable against such
entity in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting enforcement of
creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law). (In rendering such opinion as to
the enforceability of a Basic Document, counsel shall state that in
the event of a conflict of law arising under such Basic Document,
the governing law of such Basic Document will apply without regard
to any otherwise applicable principles of conflicts of laws in the
related state).
(viii) To the best knowledge and information of such counsel,
(A) there are no legal or governmental proceedings pending or
threatened that are required to be disclosed in the Registration
Statement other than those disclosed therein and (B) all pending
legal or governmental proceedings to which the Transferor, WOLS
LLC, ALF LLC, ALF L.P., the Origination Trustee (in its capacity as
trustee of the Origination Trust) or World Omni is a party or to
which any of their respective properties or assets is subject that
are not described in the Registration Statement, including ordinary
routine litigation incidental to the business of such entity, are,
considered in the aggregate with respect to the Transferor, WOLS
LLC, ALF LLC, ALF L.P., the Origination Trustee (in its capacity as
trustee of the Origination Trust) or World Omni as the case may be,
not material.
(ix) The statements in the Prospectus under the captions
"Summary", "Risk Factors", "Description of the Notes", "Security
for the Notes", "Security for the Notes--The Residual Value
Insurance Policy", "Additional Document Provisions" and "The Class
A Interest Rate Cap", insofar as such statements purport to
summarize certain terms or provisions of the SUBI, the Notes and
the Transferor Certificate, the Basic Documents, the Residual Value
Insurance Policy, the Contingent and Excess Liability Insurance
Policies and the Class A Interest Rate Cap, provide a fair summary
of such provisions, and the statements in the Prospectus under "The
Origination Trust--Allocation of Origination Trust Liabilities",
"Risk Factors-- Possible Effects of Consumer Protection Laws",
"--Possible Liens to Satisfy ERISA Liabilities", "--Possible
Liability as a Result of Lessee's Operation of Leased Vehicles" and
"--Possible Effects of Insolvency or Bankruptcy of World Omni, the
Transferor, Auto Lease Finance L.P. or Their General Partners, the
Origination Trust or the Trust, "Additional Document Provisions",
"Certain Legal Aspects of the Origination Trust and the SUBI",
"Certain Legal Aspects of the Contracts and the Leased Vehicles"
and "ERISA Considerations", to the extent that they constitute
matters of law, summaries of legal matters, documents or
proceedings or legal conclusions relating to U.S. federal law or
the laws of the States of Florida,
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Georgia or North Carolina have been prepared or reviewed by such
counsel and are correct in all material respects.
(x) To the best knowledge and information of such counsel, (A)
there are no contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or
referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to therein
or filed as exhibits thereto, (B) the descriptions thereof or
references thereto are correct and (C) no default exists in the due
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument so
described, referred to or filed.
(xi) No authorization, approval, consent or order of any court
or governmental authority or agency is required in connection with
the issuance of the SUBI Certificate, the Notes or the Transferor
Certificate, the offering of the Notes or the sale of the Class A
Notes to the Underwriters, except those authorizations, approvals,
consents and orders which have previously been obtained and are in
full force and effect as of the Closing Date; provided, that such
counsel need express no opinion as to state securities laws.
(xii) None of (A) the execution, delivery and performance by
the Transferor, ALF L.P. or World Omni of this Agreement or by the
Transferor, WOLS LLC, ALF LLC, ALF L.P. or World Omni of any
applicable Partnership Agreement or any Basic Document to which
such entity is a party, (B) the consummation of the transactions
contemplated herein or therein by any such entity or (C) the
fulfillment of the terms hereof or thereof by any such entity will
conflict with, result in a breach of or constitute a default under,
or with the giving of notice or the passage of time or both, would
constitute a default under or result in the creation or imposition
of any Lien (except as permitted by the Basic Documents) upon any
property or assets of such entity pursuant to the terms of (i) the
organizational, charter or partnership documents or bylaws of such
entity, (ii) to the best knowledge and information of such counsel
and except as otherwise provided in the Basic Documents, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which such entity is a party or by which it may be
bound, or to which any of the properties or assets of such entity
is subject or (iii) any applicable law, statute or regulation or,
to the best knowledge and information of such counsel, any
judgment, order or decree applicable to such entity of any court,
regulatory body or other governmental instrumentality having
jurisdiction over such entity except, in the case of clauses (ii)
and (iii) above, for defaults, breaches or violations that do not,
in the aggregate, have a material adverse effect on such entity.
(xiii) None of the Transferor, WOLS LLC, ALF LLC, ALF L.P.,
World Omni, the Origination Trust or the Trust is an "investment
company" or is "controlled" by an "investment company" as such
terms are defined in the Investment Company Act.
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(xiv) The Registration Statement has become effective under the
Act, and, to the best knowledge and information of such counsel, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Act, and
the Registration Statement and the Prospectus, and each amendment
or supplement thereto, as of their respective effective or issue
dates, complied as to form in all material respects with the
requirements of the Act, the Trust Indenture Act of 1939, as
amended, and the Rules and Regulations. Such counsel has no reason
to believe that either the Registration Statement, at the Effective
Time, or any such amendment or supplement, as of its effective
date, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or that
the Prospectus, at the date of this Agreement (or any such
amendment or supplement, as of its respective date) or at the
Closing Date included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; it being
understood that such counsel need express no opinion as to the
financial statements or other financial or statistical data
contained in the Registration Statement or the Prospectus.
(xv) Neither the SUBI Trust Agreement nor the Securitization
Trust Agreement is required to be qualified under the Trust
Indenture Act of 1939, as amended.
(xvi) The Indenture and the Backup Security Agreement create a
valid first priority perfected security interest in favor of the
Indenture Trustee, for the benefit of the Noteholders, in the SUBI
Collection Account, the Distribution Account, the Reserve Fund and
the proceeds thereof (including Permitted Investments) for so long
as they are held in such accounts.
(xvii) The transfer of the SUBI Certificate by ALF L.P. to the
Transferor constitutes a sale of the SUBI Certificate and the SUBI
Assets evidenced thereby. The transfer of the SUBI Certificate by
the Transferor to the Trust (A) constitutes a sale of the SUBI
Certificate and the SUBI Assets evidenced thereby or (B) if such
transfer does not constitute a sale, then the Securitization Trust
Agreement, the Indenture and the delivery to and possession by the
Indenture Trustee of the SUBI Certificate creates a valid first
priority perfected security interest for the benefit of the
Noteholders in the SUBI Certificate.
(xviii) Each of the Transferor, WOLS LLC, ALF LLC, ALF L.P.,
World Omni and the Origination Trustee (in its capacity as trustee
of the Origination Trust) possesses such certificates, authorities,
licenses, permits and
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other governmental authorizations issued by Alabama and Florida, in
the case of the Transferor, WOLS LLC, ALF LLC, ALF L.P. and World
Omni, and by the States of Alabama, Florida, Georgia and North
Carolina, in the case of the Origination Trustee (on behalf of the
Origination Trust), materially necessary to conduct the business
now operated by it, and none of such entities has received any
notice of proceedings relating to the revocation or modification of
any such certificate, authority, license or permit that, singly or
in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would materially and adversely affect the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of such entity.
(xix) The choice of law provisions contained in each dealer
agreement between World Omni and a dealer that originates lease
contracts comprising Origination Trust Assets are valid and
enforceable under the laws of Alabama, Georgia and North Carolina.
(xx) The assignment provisions contained in each dealer
agreement between World Omni and a dealer that originates lease
contracts comprising Origination Trust Assets are valid and
enforceable under the laws of the State in which such dealer
originates such lease contracts.
(xxi) Assuming the chief executive office of the Origination
Trustee is located in the State of Illinois and the timely filing
of an appropriate UCC Financing Statement with the Secretary of the
State of Illinois, the grant by the Origination Trustee to the
Indenture Trustee of a security interest in the 1999-A Leases
pursuant to the Backup Security Agreement will create a valid,
first priority perfected security interest in the 1999-A Leases.
(2) The favorable opinion of Hand Arendall, L.L.C., special
Alabama counsel to the Transferor, ALF L.P. and World Omni, dated the
Closing Date and satisfactory in form and substance to the
Representative and counsel to the Underwriters, and substantially to
the effect that:
(i) The SUBI Certificate has been duly and validly authorized
and, when executed, issued, authenticated and delivered pursuant to
the SUBI Trust Agreement, will be duly and validly issued and
outstanding and entitled to the benefits of the SUBI Trust
Agreement.
(ii) The lease contracts originated in Alabama are "true
leases" for purposes of Alabama law.
(iii) Assuming the chief executive office of the Origination
Trustee is located in the State of Alabama and the timely filing of
an appropriate UCC Financing Statement with the Secretary of the
State of Alabama, the grant by the Origination Trustee to the
Indenture Trustee of a security interest in the 1999-A Leases
pursuant to the Backup Security Agreement will create a valid,
first priority perfected security interest in the 1999-A Leases.
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(3) The favorable opinion of Richards, Layton & Finger, special
Delaware counsel to the Transferor, ALF L.P. and World Omni, dated the
Closing Date and satisfactory in form and substance to the
Representative and counsel to the Underwriters, to the effect that:
(i) Each of the Transferor and ALF L.P. has been duly formed
and is validly existing in good standing as a limited partnership
under the Delaware Act with all requisite power under the Delaware
Act and the related Partnership Agreement to enter into and perform
its obligations under this Agreement, the related Partnership
Agreement and each Basic Document to which it is a party.
(ii) The execution and delivery of and performance under the
related Partnership Agreement and each Basic Document to which the
Transferor or ALF L.P. is a party (A) have been duly authorized by
all requisite partnership action on the part of the Transferor or
ALF L.P., (B) are permitted under the Delaware Act and the related
Partnership Agreement and (C) will not violate any Delaware statute
or regulation; provided that such counsel need express no opinion
regarding state securities laws.
(iii) No consent, approval, authorization or order of, or
registration or filing or declaration with, any Delaware court or
governmental agency or body is required in connection with either
the Transferor's or ALF L.P.'s execution or delivery of or
performance under the related Partnership Agreement and each Basic
Document to which it is a party.
(4) The favorable opinion of English, McCaughan & O'Bryan, P.A.,
special Florida counsel to the Transferor, ALF L.P. and World Omni,
dated the Closing Date and satisfactory in form and substance to the
Representative and counsel for the Underwriters, and substantially to
the effect that:
(i) The Class A Notes will constitute "indebtedness" for
purposes of Florida income tax law, and the Class B Notes should
constitute "indebtedness" for purposes of Florida income tax law.
(ii) The loan rule promulgated under the Florida Corporate
Income Tax Code and included in the Florida Administrative Code
relating to interest on loans by "financial organizations" (as such
term is defined therein), should not apply to an investment in the
Notes by such a financial organization.
(iii) The statements in the Prospectus under "Material Income
Tax Considerations--Florida Income Taxation", to the extent that
they constitute matters of law, summaries of legal matters,
documents or proceedings or legal conclusions, have been reviewed
by such counsel and are correct in all material respects.
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(iv) The lease contracts originated in Florida are "true
leases" for purposes of Florida law.
(v) Assuming that all other elements necessary to render a
lease contract legal, valid, binding and enforceable were present
in connection with the execution, delivery and performance of each
lease contract, and assuming that no action was taken in connection
with the execution, delivery and performance of each lease contract
that would give rise to a defense to the legality, validity,
binding effect and enforceability of such lease contract, nothing
in the forms of such lease contracts, as attached as an Exhibit to
the Servicing Agreement, would render such lease contract other
than legal, valid, binding and enforceable; assuming the validity,
binding effect and enforceability in all other respects, such forms
of lease contracts are in sufficient compliance with applicable
federal and Florida state consumer protection laws so as not to be
rendered void or voidable at the election of the related lessee.
(5) The favorable opinion of Cadwalader, Wickersham & Taft, special
federal income tax counsel to the Transferor and ALF L.P., dated the
Closing Date and satisfactory in form and substance to the
Representative and counsel to the Underwriters, to the effect that (i)
the Class A Notes will constitute "indebtedness" for federal income tax
purposes and (ii) the statements in the Prospectus under the captions
"Summary--Tax Status" and "Material Income Tax Considerations--Federal
Taxation", to the extent that they constitute matters of law, summaries
of legal matters or legal conclusions, have been reviewed by such
counsel and are correct in all material respects.
(6) Reliance letters relating to each legal opinion relating to the
transactions contemplated by this Agreement and the Basic Documents
rendered by counsel to the Transferor, ALF L.P. or World Omni to the
Owner Trustee, the Indenture Trustee, the Origination Trustee or any
Rating Agency.
(7) The favorable opinion of _________________________, counsel to
the Indenture Trustee, dated the Closing Date and satisfactory in form
and substance to the Representative and counsel to the Underwriters, to
the effect that:
(i) The Indenture Trustee has been duly incorporated and is
validly existing as a ________, in good standing under the laws of
the _________with full power and authority (corporate and other) to
own its properties and conduct its business, as presently conducted
by it, and to enter into and perform its obligations as Indenture
Trustee under each Basic Document to which the Indenture Trustee is
a party.
(ii) Each Basic Document to which the Indenture Trustee is a
party has been duly authorized, executed and delivered by the
Indenture Trustee and, assuming the due authorization, execution
and delivery thereof by the other
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parties thereto, will constitute a legal, valid and binding
obligation of the Indenture Trustee enforceable in accordance with
its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar
laws affecting enforcement of creditors' rights generally and by
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(iii) The Notes have been duly authenticated and delivered by
the Indenture Trustee.
(iv) Neither the execution nor delivery by the Indenture
Trustee of each Basic Document to which it is a party nor the
consummation of any of the transactions by the Indenture Trustee
contemplated thereby require the consent or approval of, the giving
of notice to, the registration with or the taking of any other
action with respect to, any governmental authority or agency under
any existing federal or state law governing the banking or trust
powers of the Indenture Trustee.
(v) The execution and delivery of each Basic Document to which
the Indenture Trustee is a party and the performance by the
Indenture Trustee of its terms do not conflict with or result in a
violation of (A) any federal or state law or regulation governing
the banking or trust powers of the Indenture Trustee, (B) the
Articles of Association or By-Laws of the Indenture Trustee or (C)
to the best knowledge of such counsel, any indenture, lease or
material agreement to which the Indenture Trustee is a party or to
which its assets are subject.
(8) The favorable opinion of Dorsey & Whitney, counsel to the
Origination Trustee and the Trust Agent, dated the Closing Date and
satisfactory in form and substance to the Representative and counsel
for the Underwriters, to the effect that:
(i) The Origination Trustee has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Alabama with corporate power and authority to own,
lease and operate its properties, to conduct its business as
described in the Registration Statement and to enter into and
perform its obligations under each Basic Document to which it is a
party; to the best of their knowledge and information, the
Origination Trustee is duly qualified as a foreign corporation to
transact business and is in good standing in Georgia, Florida,
North Carolina and Illinois; and the shares of issued and
outstanding capital stock of the Origination Trustee have been duly
authorized and validly issued, are fully paid and non-assessable
and are owned by U.S. Bank, free and clear of any Liens. The Trust
Agent has been duly incorporated and is validly existing as a
national banking association, in good standing under the laws of
the United States of America, with full power and authority
(corporate and other) to own its properties and conduct its
business, as presently conducted by it, and to enter into and
perform its obligations as Trust Agent under each Basic Document to
which the Trust Agent is a party.
(ii) Each Basic Document to which the Origination Trustee or
the Trust Agent is a party has been duly authorized, executed and
delivered by the Origination Trustee or the Trust Agent, as
applicable, and, assuming the due authorization, execution and
delivery thereof by the other
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parties thereto, will constitute legal, valid and binding
obligations of the Origination Trustee or the Trust Agent, as
applicable, enforceable in accordance with their respective terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws
affecting enforcement of creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(iii) The SUBI Certificate has been duly executed,
authenticated and delivered by the Origination Trustee.
(iv) Neither the execution nor delivery by the Origination
Trustee or the Trust Agent of each Basic Document to which it is a
party nor the consummation of any of the transactions by the
Origination Trustee or the Trust Agent contemplated thereby require
the consent or approval of, the giving of notice to, the
registration with or the taking of any other action with respect
to, any Person or entity, including any governmental authority or
agency under any existing federal or state law.
(v) The execution and delivery of each Basic Document to which
the Origination Trustee is a party and the performance by the
Origination Trustee of their respective terms do not conflict with
or result in a violation of its articles of incorporation or bylaws
of the Origination Trustee or, to the best of such counsel's
knowledge, any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which it is a party, by which it may
be bound or to which any of its property or assets is subject.
(vi) The execution and delivery of each Basic Document to which
the Trust Agent is a party and the performance by the Trust Agent
of its terms do not conflict with or result in a violation of (A)
any federal or state law or regulation governing the banking or
trust powers of the Trust Agent, (B) the Articles of Association or
By-Laws of the Trust Agent or (C) to the best knowledge of such
counsel, any indenture, lease or material agreement to which the
Trust Agent is a party or to which its assets are subject.
(9) The favorable opinions of counsel of the Insurer, dated the
Closing Date and satisfactory in form and substance to the
Representative and counsel to the Underwriters, substantially in the
form of the draft opinion previously delivered to the Representative,
to the effect that, among other things, (i) the Insurer has been duly
incorporated and is in good standing in the jurisdiction of its
incorporation, (ii) the Insurer has the corporate power and authority
to issue, execute, deliver and perform its
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obligations under the Residual Value Insurance Policy, (iii) the
Residual Value Insurance Policy is enforceable in accordance with its
terms and (iv) the Residual Value Insurance Policy is not required to
be registered under the Act.
(10) The favorable opinion of The Bayard Firm, special counsel to
the Owner Trustee, dated the Closing Date and satisfactory in form and
substance to the Representative and counsel to the Underwriters, to the
effect that:
(i) the Owner Trustee has been incorporated and is validly
existing as a Delaware __________, in good standing under the laws
of the State of Delaware and is authorized thereunder and pursuant
thereto to transact the business of banking, to exercise fiduciary
power and to enter into and perform its obligations as Owner
Trustee under each Basic Document to which the Owner Trustee is a
party.
(ii) Each Basic Document to which the Owner Trustee is a party
has been duly authorized, executed and delivered by the Owner
Trustee and, assuming the due authorization, execution and delivery
thereof by the other parties thereto, will constitute a legal,
valid and binding obligation of the Owner Trustee enforceable in
accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, moratorium, reorganization or
other similar laws affecting enforcement of creditors' rights
generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity
or at law).
(iii) Each Note has been duly executed and delivered by the
Owner Trustee. The Transferor Certificate has been duly executed,
authenticated and delivered by the Owner Trustee.
(iv) Neither the execution nor delivery by the Owner Trustee of
each Basic Document to which it is a party nor the consummation of
any of the transactions by the Owner Trustee contemplated thereby
require the consent or approval of, the giving of notice to, the
registration with or the taking of any other action with respect
to, any Person or entity, including any governmental authority or
agency under any existing federal or state law.
(v) The execution and delivery of each Basic Document to which
the Owner Trustee is a party and the performance by the Owner
Trustee of its terms do not conflict with or result in a violation
of (A) any federal or state law or regulation governing the banking
or trust powers of the Owner Trustee, (B) the Articles of
Association or By-Laws of the Owner Trustee or (C) to the best
knowledge of such counsel, any indenture, lease or material
agreement to which the Owner Trustee is a party or to which its
assets are subject.
(11) The favorable opinion of Stroock & Stroock & Lavan LLP,
counsel for the Underwriters, dated the Closing Date, with respect to
the validity of the Notes and such
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other related matters as the Representative shall request, which
opinions shall be satisfactory in form and substance to the
Representative and counsel for the Underwriters.
(f) The Insurer shall have issued the Residual Value Insurance Policy.
(g) On or prior to the Closing Date, the Representative shall have
received an officer's certificate from an officer of the Insurer stating that
although the information in the Prospectus under "Security for the Notes--The
Residual Value Insurance Policy" is limited and does not purport to provide the
scope of disclosure required to be included in a prospectus with respect to a
registrant under the Act in connection with the public offering of securities of
such registrant, such officer has no reason to believe that the information in
the Prospectus under "Security for the Notes--The Residual Value Insurance
Policy" contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(h) Each Class of Class A Notes shall be rated in the highest rating
category by each of Moody's, Standard & Poor's and Fitch and the Class B Notes
shall be rated by at least two of Moody's, Standard & Poor's and Fitch, at least
A3 by Moody's, at least A- by Standard & Poor's and at least A by Fitch.
(i) On or prior to the Closing Date, all of the conditions precedent to
the execution of the Class A Interest Rate Cap have been satisfied and each of
the opinions delivered in connection with the Class A Interest Rate Cap have
been addressed to the Underwritiers and delivered to the Representative.
(j) On or prior to the Closing Date, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance of the Notes
and the Transferor Certificate and sale of the Class A Notes as herein
contemplated and related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the parties to the
Basic Documents in connection with the issuance of the Notes and the Transferor
Certificate and sale of the Class A Notes as herein contemplated shall be
satisfactory in form and substance to the Representative and counsel for the
Underwriters.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representative by notice to the Transferor, ALF L.P. and World Omni at
any time at or prior to the Closing Date, and such termination shall be without
liability of any party to any other party except as provided in Section 5(h)
hereof.
7. Indemnification and Contribution.
(a) Each of the Transferor and World Omni agrees, jointly and
severally, to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act as
follows:
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(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the information deemed
to be part of the Registration Statement pursuant to Rule 430A(b) of
the Rules and Regulations, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Transferor and World Omni; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 7(c) hereof, the fees and disbursements
of counsel chosen by the Representative), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under clause
(i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Transferor by
any Underwriter through the Representative expressly for use in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Transferor and World Omni, each of their respective directors, each of their
respective officers who signed the Registration Statement and each person, if
any, who controls each of the Transferor and World Omni, respectively, within
the meaning of Section 15 of the Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Transferor by such
Underwriter directly or through the Representative expressly for use in the
Registration
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Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it with
respect to which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve it from any liability which it may have
other than on account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of such action. In no event shall
an indemnifying party be liable for the fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances.
8. Contribution. If the indemnification provided for in Section 7
hereof is unavailable or insufficient to hold harmless an indemnified party
under subsection (a) or (b) thereof, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the loss, liability, claim, damage or expense referred to in subsection (a)
or (b) of Section 7 (i) in such proportion as is appropriate to reflect the
relative benefits received by the Transferor and World Omni on the one hand and
the Underwriters on the other from the offering of the Class A Notes or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Transferor
and World Omni on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such loss, liability, claim,
damage or expense as well as any other relevant equitable considerations. The
relative benefits received by the Transferor and World Omni on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Transferor bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Transferor, World Omni or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the loss, liability, claim, damage or expense
referred to in the first sentence of this Section shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim which is the
subject of this Section. Notwithstanding the provisions of this Section, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Class A Notes underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Notwithstanding the other
provisions of this Section, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the Act shall have the same rights to
contribution as such Underwriter and each director of the Transferor and World
31
<PAGE>
Omni, each officer of the Transferor who signed the Registration Statement and
each person, if any, who controls either the Transferor or World Omni within the
meaning of Section 15 of the Act shall have the same rights to contribution as
the Transferor or World Omni, as the case may be. The Underwriters' respective
obligations to contribute pursuant to this Section are several in proportion to
the principal amount of the Class A Notes set forth opposite their respective
names in Schedule I hereto and not joint.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Transferor, ALF L.P. and World Omni or their respective officers and of the
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, the Transferor, ALF
L.P., World Omni or any of their respective representatives, officers or
directors or any controlling Person, and will survive delivery of and payment
for the Class A Notes. If for any reason the purchase of the Class A Notes by
the Underwriters is not consummated, the Transferor, ALF L.P. and World Omni
shall remain responsible for the expenses to be paid or reimbursed by them
pursuant to Section 5(h) hereof and the respective obligations of the
Transferor, World Omni, ALF L.P. and the Underwriters pursuant to Section 7
hereof shall remain in effect. If the purchase of the Class A Notes by the
Underwriters is not consummated for any reason other than solely because of the
occurrence of any event specified in clause (iii), (iv) or (v) of Section 10
hereof, the Transferor, ALF L.P. and World Omni will reimburse the Underwriters
for all out-of-pocket expenses (including the reasonable fees and disbursements
of counsel) reasonably incurred by them in connection with the offering of the
Class A Notes.
10. Termination of Agreement. The Representative may terminate this
Agreement, by notice to the Transferor, ALF L.P. and World Omni, at any time
prior to or at the Closing Date (i) if there has been, since the date of this
Agreement or since the respective dates as of which information is given in the
Registration Statement, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Transferor, World Omni, ALF L.P., the Origination Trust or the Insurer, whether
or not arising in the ordinary course of business; (ii) if there has occurred
any downgrading in the rating of the debt securities of the Transferor, ALF
L.P., World Omni or the Insurer by any "nationally recognized statistical rating
organization" (as such term is defined for purposes of Rule 436(g) under the
Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the Transferor, ALF
L.P., World Omni or the Insurer (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) if there has occurred any material adverse
change in the financial markets in the United States or any outbreak of
hostilities or other calamity or crisis, the effect of which is such as to make
it, in the judgment of the Representative, impracticable to market any Class of
Notes or to enforce contracts for the sale of any Class of Notes; (iv) if
trading generally on either the American Stock Exchange or the New York Stock
Exchange has been suspended, or minimum or maximum prices for trading have been
fixed or maximum ranges for prices for securities have been required, by either
of said Exchanges or by order of the Commission or any other governmental
authority; or (v) if a banking moratorium has been declared by either federal,
New York, Delaware, Florida, Illinois or Alabama authorities.
32
<PAGE>
11. Default By One or More of the Underwriters. If one or more of the
Underwriters shall fail at the Closing Date to purchase the Class A Notes which
it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representative shall have the right, but not the obligation,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representative shall not
have completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted Securities does
not exceed 10% of the total aggregate principal amount of the Class A
Notes, the non-defaulting Underwriters shall be obligated to purchase
the full amount thereof in such proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations
of all non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Securities
exceeds 10% of the total aggregate principal amount of the Class A
Notes, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter.
No action pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representative or ALF L.P. and the Transferor
shall have the right to postpone the Closing Time for a period not exceeding
seven days in order to effect any required changes in the Registration Statement
or Prospectus or in any other documents or arrangement.
12. Notices. All communications hereunder will be in writing and, if
sent to (i) the Underwriters, shall be directed to the Representative and will
be mailed, delivered or sent by facsimile and confirmed to it at Merrill Lynch &
Co., North Tower, World Financial Center, New York, New York 10281-1201,
Attention: Geoffrey R. Witt, Managing Director (facsimile number (212)
449-9015); (ii) the Transferor, will be mailed, delivered or sent by facsimile
and confirmed to it at World Omni Lease Securitization L.P., c/o World Omni
Lease Securitization LLC, 120 N.W. 12th Avenue, Deerfield Beach, Florida 33442,
Attention: A. Tucker Allen, Vice President and Corporate Treasurer (facsimile
number (954) 429-2685); (iii) ALF L.P., will be mailed, delivered or sent by
facsimile and confirmed to it at Auto Lease Finance L.P., c/o Auto Lease Finance
LLC, 120 N.W. 12th Avenue, Deerfield Beach, Florida 33442, Attention: A. Tucker
Allen, Vice President and Corporate Treasurer (facsimile number (954) 429-2685);
or (iv) World Omni, will be mailed, delivered or sent by facsimile and confirmed
to it at World Omni Financial Corp., 120 N.W. 12th Avenue, Deerfield Beach,
Florida 33442, Attention: A. Tucker Allen, Vice President and Corporate
Treasurer (facsimile number (954) 429-2685).
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling Persons referred to in Sections 7 and 8 hereof,
and no other Person will have any right or obligation hereunder.
33
<PAGE>
14. Severability of Provisions. Any covenant, provision, agreement or
term of this Agreement that is prohibited or is held to be void 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.
15. Miscellaneous. This Agreement constitutes the entire agreement and
understanding of the parties hereto with respect to the matters and transactions
contemplated hereby and supersedes all prior agreements and understandings
whatsoever relating to such matters and transactions. Neither this Agreement nor
any term hereof may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought. The headings in this
Agreement are for the purposes of reference only and shall not limit or
otherwise affect the meaning hereof.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
17. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without regard to any
otherwise applicable principles of conflicts of laws.
34
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us one of the counterparts duplicate
hereof, whereupon it will become a binding agreement between the Transferor, ALF
L.P. and World Omni and the Underwriters in accordance with its terms.
Very truly yours,
WORLD OMNI LEASE SECURITIZATION L.P.
By: WORLD OMNI LEASE SECURITIZATION
LLC, its General Partner
By: __________________________
Patrick C. Ossenbeck
Assistant Treasurer
AUTO LEASE FINANCE L.P.
By: AUTO LEASE FINANCE LLC,
its General Partner
By: ___________________________
Patrick C. Ossenbeck
Assistant Treasurer
WORLD OMNI FINANCIAL CORP.
By: ___________________________
Patrick C. Ossenbeck
Assistant Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: ___________________________
Name:
Title:
For itself and as Representative of the other Underwriters named in Schedule I
hereto.
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount of Principal Amount of Principal Amount of Principal Amount of
Class A-1 Class A-2 Class A-3 Class A-4
Name of Underwriter Notes Notes Notes Notes
- ------------------- ----- ----- ----- -----
<S> <C> <C> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................
$_________ $_________ $_________ $_________
Total .............................
</TABLE>
EXHIBIT 3.9
================================================================================
WORLD OMNI LEASE SECURITIZATION L.P.,
CHASE MANHATTAN BANK DELAWARE, AS OWNER TRUSTEE
AND
HARRIS TRUST AND SAVINGS BANK, AS INDENTURE TRUSTEE
WORLD OMNI 1999-A AUTOMOBILE LEASE SECURITIZATION TRUST
SECURITIZATION TRUST AGREEMENT
------------------------------
DATED AS OF AUGUST 1, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS .............................................................................................1
ARTICLE ONE. DEFINITIONS..................................................................................2
Section 1.01. Definitions..................................................................................2
Section 1.02. Article and Section References..............................................................25
ARTICLE TWO. CREATION OF TRUST...........................................................................25
Section 2.01. Creation of Trust...........................................................................25
Section 2.02. Conveyance of the 1999-A SUBI Interest......................................................25
Section 2.03. Acceptance by Owner Trustee.................................................................25
ARTICLE THREE. DISTRIBUTIONS; RESERVE FUND; STATEMENTS TO SECURITYHOLDERS..................................26
Section 3.01. Distribution Account........................................................................26
Section 3.02. Collections.................................................................................26
Section 3.03. Distributions...............................................................................27
Section 3.04. Reserve Fund................................................................................31
Section 3.05. Net Deposits................................................................................33
Section 3.06. Statements to Noteholders...................................................................33
ARTICLE FOUR. THE TRANSFEROR CERTIFICATE..................................................................35
Section 4.01. The Transferor Certificate..................................................................35
Section 4.02. Authentication and Delivery of Transferor Certificate.......................................35
Section 4.03. No Transfer of Transferor Certificate.......................................................36
Section 4.04. Mutilated, Destroyed, Lost or Stolen Certificates...........................................36
Section 4.05. Persons Deemed Owners.......................................................................36
ARTICLE FIVE. THE TRANSFEROR..............................................................................36
Section 5.01. Representations of Transferor...............................................................36
Section 5.02. Liability of Transferor; Indemnities........................................................38
Section 5.03. Merger or Consolidation of, or Assumption of the Obligations of, Transferor; Certain
Limitations.................................................................................38
Section 5.04. Limitation on Liability of Transferor and Others............................................39
Section 5.05. Transferor May Own Notes....................................................................39
Section 5.06. No Transfer.................................................................................40
Section 5.07. Tax Matters Partner.........................................................................40
ARTICLE SIX. THE OWNER TRUSTEE...........................................................................40
Section 6.01. Duties of Owner Trustee.....................................................................40
Section 6.02. Certain Matters Affecting the Owner Trustee.................................................41
Section 6.03. Owner Trustee Not Liable for Notes, Transferor Certificate or Leases........................42
Section 6.04. Owner Trustee May Own Notes.................................................................43
Section 6.05. Owner Trustee's Fees and Expenses...........................................................43
Section 6.06. Eligibility Requirements for Owner Trustee..................................................43
Section 6.07. Resignation or Removal of Owner Trustee.....................................................43
Section 6.08. Successor Owner Trustee.....................................................................44
Section 6.09. Merger or Consolidation of Owner Trustee....................................................44
Section 6.10. Appointment of Co-Trustee or Separate Owner Trustee.........................................44
Section 6.11. Representations and Warranties of Owner Trustee.............................................45
Section 6.12. Tax Returns.................................................................................46
Section 6.13. Owner Trustee May Enforce Claims Without Possession of Transferor Certificate...............46
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Section 6.14. Suit for Enforcement........................................................................46
Section 6.15. Rights of Indenture Trustee to Direct Owner Trustee.........................................47
Section 6.16. No Petition.................................................................................47
Section 6.17. Authority to Execute........................................................................47
Section 6.18. Management of the Trust.....................................................................47
ARTICLE SEVEN. TERMINATION.................................................................................47
Section 7.01. Termination of the Trust....................................................................47
Section 7.02. Optional Purchase of the 1999-A SUBI Interest...............................................48
ARTICLE EIGHt. EARLY AMORTIZATION EVENTS...................................................................48
Section 8.01. Early Amortization Events...................................................................48
ARTICLE NINE. MISCELLANEOUS PROVISIONS....................................................................50
Section 9.01. Amendment...................................................................................50
Section 9.02. Protection of Title to Trust................................................................51
Section 9.03. Limitation on Rights of Transferor..........................................................52
Section 9.04. Governing Law...............................................................................52
Section 9.05. Notices.....................................................................................53
Section 9.06. Severability of Provisions..................................................................53
Section 9.07. Assignment..................................................................................53
Section 9.08. Transferor Certificate Nonassessable and Fully Paid.........................................53
Section 9.09. Successors and Assigns......................................................................53
ARTICLE TEN. AGENT FOR SERVICE...........................................................................53
Section 10.01. Agent for Service of Transferor.............................................................53
Section 10.02. Agent of Owner Trustee......................................................................54
EXHIBITS:
Exhibit A - Form of Transferor Certificate.....................................................A-1
Exhibit B - Form of Certificate of Trust.......................................................B-1
</TABLE>
ii
<PAGE>
SECURITIZATION TRUST AGREEMENT
THIS SECURITIZATION TRUST AGREEMENT, dated as of August 1, 1999, is
made with respect to the formation of the WORLD OMNI 1999-A AUTOMOBILE LEASE
SECURITIZATION TRUST (the "Trust"), among WORLD OMNI LEASE SECURITIZATION L.P.,
a Delaware limited partnership ("WOLS LP" or, in its capacity as transferor
hereunder, the "Transferor"), CHASE MANHATTAN BANK DELAWARE, a Delaware banking
corporation, as owner trustee (not in its individual capacity, but solely as
owner trustee hereunder, the "Owner Trustee"), and HARRIS TRUST AND SAVINGS
BANK, an Illinois banking corporation, as indenture trustee (the "Indenture
Trustee").
RECITALS
A. Auto Lease Finance L.P., a Delaware limited partnership ("ALF LP"),
VT Inc., an Alabama corporation (the "Origination Trustee"), and, for certain
limited purposes set forth therein, U.S. Bank National Association, a national
banking association (formerly known as First Bank National Association and
successor trustee to Bank of America Illinois, an Illinois banking corporation)
(together with its successors, "U.S. Bank"), have entered into that certain
Second Amended and Restated Trust Agreement dated as of July 1, 1994, as amended
by that certain Amendment No. 1 to Second Amended and Restated Trust Agreement
dated as of November 1, 1994 and that certain Amendment No. 2 to Second Amended
and Restated Trust Agreement dated as of September 23, 1998 (as the same may be
further amended, supplemented or modified, the "Origination Trust Agreement"),
amending and restating that certain original Trust Agreement dated as of
November 1, 1993 among Auto Lease Finance, Inc. ("ALFI"), the Origination
Trustee and U.S. Bank, and that certain Amended and Restated Trust Agreement
dated as of June 1, 1994 among ALFI, ALF LP, the Origination Trustee and U.S.
Bank, pursuant to which ALF LP and the Origination Trustee formed World Omni LT,
an Alabama trust (the "Origination Trust"), for the purpose of taking
assignments and conveyances of, holding in trust and dealing in various Trust
Assets (as defined in the Origination Trust Agreement) in accordance with the
Origination Trust Agreement. ALFI and World Omni Financial Corp., a Florida
corporation ("WOFCO"), ALFI's parent, have entered into that certain Limited
Partnership Agreement dated as of June 1, 1994, as amended and restated pursuant
to that certain Amended and Restated Limited Partnership Agreement dated as of
July 1, 1994, pursuant to which ALF LP was formed and ALFI contributed to ALF LP
all of its right, title and interest in and to the Origination Trust.
B. On September 23, 1998, ALFI was merged with and into Auto Lease
Finance LLC ("ALF LLC"), a Delaware single member limited liability company the
sole member of which is WOFCO, pursuant to that certain Assignment of General
Partnership Interest and Amendment to Amended and Restated Limited Partnership
Agreement of Auto Lease Finance L.P. dated as of September 23, 1998 among WOFCO,
ALFI and ALF LLC and that certain Certificate of Merger dated September 23, 1998
filed by WOFCO with the Secretary of State for the State of Delaware whereby ALF
LLC succeeded to all of the rights and obligations of ALFI, including but not
limited to those as general partner of ALF LP, as reflected in the Amended and
Restated Certificate of Limited Partnership of ALF LP filed with the Delaware
Secretary of State as of September 23, 1998.
C. The Origination Trustee, on behalf of the Origination Trust, and
WOFCO (in its capacity as servicer, the "Servicer") also have entered into that
certain Second Amended and Restated Servicing Agreement dated as of July 1,
1994, as amended by that certain Amendment No. 1 to Second Amended and Restated
Servicing Agreement dated as of September 23, 1998 (as the same may be further
amended, supplemented or modified, the "Servicing Agreement"), amending and
restating that certain original Servicing Agreement dated as of November 1,
1993, and that certain Amended and Restated Servicing Agreement dated as of June
1, 1994, which provides for, among other things, the servicing of the Trust
Assets by the Servicer.
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<PAGE>
D. Concurrently herewith, and as contemplated by the terms of the
Origination Trust Agreement, ALF LP, the Origination Trustee, U.S. Bank and WOLS
LP have entered into a Supplement 1999-A to Trust Agreement dated as of August
1, 1999 (the "1999-A SUBI Supplement") pursuant to which the Origination
Trustee, on behalf of the Origination Trust and at the direction of ALF LP, will
create and issue to ALF LP a special unit of beneficial interest in the
Origination Trust, or "SUBI" (as defined in the Origination Trust Agreement)
(such SUBI, the "1999-A SUBI"), whose beneficiaries generally will be entitled
to the net cash flow arising from, but only from, the related SUBI Portfolio (as
defined in the Origination Trust Agreement) (such SUBI Portfolio, the "1999-A
SUBI Portfolio"), which 1999-A SUBI will be evidenced by a SUBI Certificate (as
defined in the Origination Trust Agreement) representing a 100% beneficial
interest in the 1999-A SUBI (the "1999-A SUBI Certificate"), all as set forth in
the Origination Trust Agreement and the 1999-A SUBI Supplement.
E. Also concurrently herewith, and as contemplated by the terms of the
Servicing Agreement, the Origination Trustee, on behalf of the Origination
Trust, and the Servicer also have entered into a Supplement 1999-A to Servicing
Agreement dated as of August 1, 1999 (the "1999-A Servicing Supplement"),
pursuant to which the terms of the Servicing Agreement will be supplemented
insofar as they apply to the 1999-A SUBI Portfolio, providing for further
specific servicing obligations that will benefit the holder of the 1999-A SUBI
Certificate and the parties to the Securitized Financing (as defined in the
Origination Trust Agreement) contemplated by this Agreement.
F. Also concurrently herewith, ALF LP and the Transferor have entered
into that certain SUBI Certificate Purchase and Sale Agreement dated as of
August 1, 1999 (the "SUBI Certificate Agreement"), pursuant to which ALF LP sold
to the Transferor, without recourse, all of ALF LP's right, title and interest
in and to the 1999-A SUBI and the 1999-A SUBI Certificate, all monies due
thereon and paid thereon in respect thereof and the right to realize on any
property that may be deemed to secure the 1999-A SUBI, and all proceeds thereof,
all in consideration of the cash payment to ALF LP of an amount equal to the
Aggregate Net Investment Value (as defined below) of the 1999-A SUBI Portfolio
as of the Initial Cutoff Date (as defined in the 1999-A SUBI Supplement).
G. The Transferor and the Owner Trustee desire to enter into this
Agreement to create the Trust.
H. Also concurrently herewith, the Indenture Trustee and the Owner
Trustee are entering into that certain Indenture dated as of August 1, 1999 (the
"Indenture") pursuant to which, among other things, the Trust will issue the
Notes (as defined in the Indenture) and the Trust will grant a security interest
to the Indenture Trustee with respect to all of the Trust Estate (as defined
herein); and the Indenture Trustee is entering into this Agreement to
acknowledge the terms and conditions relative to the Notes.
I. The parties hereto desire, pursuant to this Agreement, to provide
for the issuance by the Trust of the Transferor Certificate (as defined herein)
and to provide for the exchange of the Transferor Certificate and the Notes for
the 1999-A SUBI Certificate in connection with a Securitized Financing (as
defined in the Origination Trust Agreement) by the Transferor.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE ONE. DEFINITIONS
Section 1.01. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (a) unless otherwise defined
herein, all capitalized terms used herein shall have the meanings attributed to
them by Section 0.01 of the Origination Trust Agreement, by Section 10.01 of the
2
<PAGE>
1999-A SUBI Supplement or Section 6.01 of the 1999-A Servicing Supplement, as
applicable, (b) the capitalized terms defined in this Agreement have the
meanings assigned to them in this Agreement and include (i) all genders and (ii)
the plural as well as the singular, (c) all references to words such as
"herein", "hereof" and the like shall refer to this Agreement as a whole and not
to any particular article or section within this Agreement, (d) the term
"include" and all variations thereon shall mean "include without limitation" and
(e) the term "or" shall include "and/or".
"Accelerated Principal Distribution Amount" has the meaning set forth
in Section 3.03(c)(ii).
"Additional Loss Lease" means a 1999-A Lease that has been sold or
otherwise disposed of to pay an Additional Loss Amount.
"Administrative Expense" means any reasonable administrative cost or
expense associated with the Indenture, the Notes, the Trust or the Origination
Trust, including reasonable fees and expenses of attorneys and accountants.
"Advance" means those advances required or permitted to be made by the
Servicer pursuant to Section 9.04 of the 1999-A Servicing Supplement.
"Aggregate Net Investment Value" means, as of any day, the sum of (i)
the aggregate of the Discounted Principal Balances of all 1999-A Leases at such
date, each such Discounted Principal Balance being derived from the Schedule of
Leases and Leased Vehicles as in effect on such date; provided that as of the
last day of any Collection Period, there shall be eliminated from the Schedule
of Leases and Leased Vehicles for the purpose of this definition (including,
without limitation, the determination at any subsequent time of the Aggregate
Net Investment Value as of the last day of any Collection Period) each 1999-A
Lease that became a Charged-off, Liquidated, Matured or Additional Loss Lease
before the end of such Collection Period, (ii) the aggregate of the Booked
Residual Values of those Leased Vehicles that have been added to Matured Leased
Vehicle Inventory within the three immediately preceding Collection Periods but
have not been sold or otherwise disposed of as of the last day of the most
recent Collection Period for no more than two full Collection Periods, each such
Booked Residual Value being derived from the Schedule of Leases and Leased
Vehicles as in effect on such date, and (iii) prior to the last Transfer Date,
the aggregate amount of Principal Collections (and amounts treated as Principal
Collections pursuant to the last sentence of Section 3.03(b)) that have not been
reinvested in additional 1999-A Leases and 1999-A Leased Vehicles pursuant to
Section 11.02 of the 1999-A SUBI Supplement.
"Aggregate Net Losses" means, with respect to a Collection Period, an
amount equal to the aggregate Discounted Principal Balances of all 1999-A Leases
that became Charged-off Leases during such Collection Period minus all Net
Repossessed Vehicle Proceeds and other Net Liquidation Proceeds collected during
such Collection Period with respect to Charged-off Leases.
"Agreement" means this Securitization Trust Agreement and all
amendments hereof and supplements hereto.
"ALFI" means Auto Lease Finance, Inc. and its successors.
"ALF LLC" means Auto Lease Finance LLC, a Delaware single member
limited liability company, the general partner of ALF LP.
"ALF LP" has the meaning set forth in Recital A.
"Alternate Reserve Fund Formula" means that formula pursuant to which
the Reserve Fund Cash Requirement is to be calculated if any Reserve Fund Test
is not satisfied as of any Distribution Date. Pursuant to the Alternate Reserve
Fund Formula, the Reserve Fund Cash Requirement shall equal two times the Base
Reserve Fund Formula, but which amount shall in no event be greater than
3
<PAGE>
the Note Balance on such Distribution Date (after giving effect to reductions in
the Note Balance on such Distribution Date).
"Amortization Date" means September 1, 2000.
"Amortization Period" means the period beginning with the day
immediately succeeding the last day of the Revolving Period and ending on the
day the Notes have been paid in full and all unpaid Class A-1 Uncovered Loss
Amounts, Class A-2 Uncovered Loss Amounts, Class A-3 Uncovered Loss Amounts,
Class A-4 Uncovered Loss Amounts, Class B Uncovered Loss Amounts and unpaid
Class B Note Principal Carryover Shortfalls have been paid in full, in each case
with accrued interest thereon, or the Trust otherwise terminates.
"Authorized Newspaper" means a newspaper of general circulation in the
Borough of Manhattan, The City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
"Base Reserve Fund Formula" means that formula pursuant to which the
Reserve Fund Cash Requirement is to be calculated if all Reserve Fund Tests are
satisfied as of any Distribution Date. Pursuant to the Base Reserve Fund Formula
the Reserve Fund Cash Requirement with respect to any Distribution Date will
equal the lesser of (i) the amount of the Reserve Fund Initial Deposit and (ii)
the Note Balance as of the related Distribution Date (after giving effect to
reductions in the Note Balance on such Distribution Date).
"Book-Entry Notes" means a beneficial interest in the Class A Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.10 of the Indenture.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in New York, New York, Palisades Park, New Jersey,
Chicago, Illinois, Wilmington, Delaware, Deerfield Beach, Florida, or Mobile,
Alabama are authorized or obligated by law, executive order or governmental
decree to be closed.
"Business Trust Statute" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss. 3801 et seq.
"Capped Indenture Trustee Administrative Expenses" means, with respect
to any Distribution Date, the compensation of the Indenture Trustee pursuant to
Section 6.07 of the Indenture and those other Administrative Expenses with
respect to the Indenture and the Notes, including those due under Section 6.07
of the Indenture that, together with all such Administrative Expenses paid since
the beginning of the calendar year in which such Distribution Date occurs, do
not exceed $[__________] (or $[__________] in any year in which an Indenture
Event of Default occurs).
"Capped Owner Trustee Administrative Expenses" means, with respect to
any Distribution Date, the compensation of the Owner Trustee pursuant to Section
6.05 and those other Administrative Expenses with respect to the Trust,
including those due under Section 6.05, as are due on such Distribution Date
that, together with all such Administrative Expenses paid since the beginning of
the calendar year in which such Distribution Date occurs, do not exceed
$[__________].
"Certificate" means the Transferor Certificate.
"Certificateholder" means the Transferor.
"Certificate of Trust" means the Certificate of Trust in the form of
Exhibit B filed for the Trust pursuant to the Business Trust Statute.
4
<PAGE>
"Charged-off Amount" means, as of any Distribution Date, an amount
equal to the sum of the Discounted Principal Balances, as of the end of the
related Collection Period, of any Charged-off Leases that became Charged-off
Leases during that related Collection Period.
"Charge-off Rate" means, with respect to any Collection Period, a
percentage equivalent to a fraction, the numerator of which is the product of
(a) 12 and (b) the Aggregate Net Losses with respect to such Collection Period,
and the denominator of which is the quotient of (a) the Aggregate Net Investment
Value as of the last day of such Collection Period plus the Aggregate Net
Investment Value as of the last day of the immediately preceding Collection
Period, divided by (b) 2.
"Charge-off Rate Test" means that determination, made on each
Determination Date, of the average of the Charge-off Rates for the immediately
preceding three Collection Periods (or during the months of June, July and
August in respect of the September 1999 Determination Date, the months of July
and August 1999 and the September 1999 Collection Period in respect of the
October 1999 Determination Date, and the month of August 1999 and the September
and October 1999 Collection Periods in respect of the November 1999
Determination Date). The Charge-off Rate Test will be satisfied if such average
is [____]% or less.
"Class" means all Securities whose form is identical except for
variation in denomination, principal amount or owner.
"Class A Cap Rate" means [____]%.
"Class A Cap Receipt" shall mean, to the extent the following is a
positive number, an amount equal to the product of (i) One-Month LIBOR with
respect to the related Distribution Date minus the Class A Cap Rate, (ii) the
Class A Notional Amount and (iii) a fraction, the numerator of which is the
actual number of days from and including the prior Distribution Date (or, with
respect to the first Distribution Date, the actual number of days from the date
of issuance of the Class A Notes) to but excluding the related Distribution
Date, and the denominator of which is 360.
"Class A Cap Provider" means Credit Lyonnais New York Branch, a New
York licensed branch of Credit Lyonnais, S.A., a banking corporation organized
and existing under the laws of the Republic of France.
"Class A Interest Rate Cap Agreement" means that certain interest rate
cap agreement dated as of August [___], 1999 [and effective as of [_______]
[____]. 1999] by and between the Trust and the Class A Cap Provider.
"Class A Notes" means the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 Notes.
"Class A Note Balance" means the sum of the Class A-1 Note Balance, the
Class A-2 Note Balance, Class A-3 Note Balance and the Class A-4 Note Balance.
"Class A Noteholder" means any Holder of a Class A-1 Note, Class A-2
Note, Class A-3 Note or Class A-4 Note.
"Class A Notional Amount" means the sum of the Class A-1 Notional
Amount, the Class A-2 Notional Amount, the Class A-3 Notional Amount and the
Class A-4 Notional Amount.
"Class A Percentage" means the Class A Note Balance immediately after
the Class A-3 Notes have been paid in full as a percentage of the Note Balance
at such time.
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"Class A-1 Allocation Percentage" means, as of any Distribution Date,
the Class A-1 Note Balance as of the last day of the related Collection Period
as a percentage of the Note Balance as of such last day.
"Class A-1 Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-1 Principal Distributable Amount and
the Class A-1 Interest Distributable Amount.
"Class A-1 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess, if any, of (i) the Class A-1 Interest
Distributable Amount for such Distribution Date plus any outstanding Class A-1
Interest Carryover Shortfall from the immediately preceding Distribution Date
plus interest on such outstanding Class A-1 Interest Carryover Shortfall, to the
extent permitted by law, at the Class A-1 Note Rate from such immediately
preceding Distribution Date to but not including the current Distribution Date,
over (ii) the amount of interest distributed to Class A-1 Noteholders on such
current Distribution Date.
"Class A-1 Interest Distributable Amount" means, with respect to any
Distribution Date, the product of (i) the Class A-1 Note Rate (ii) the Class A-1
Note Balance as of the immediately preceding Distribution Date (after giving
effect to changes in the Class A-1 Note Balance made on such immediately
preceding Distribution Date) and (iii) a fraction, the numerator of which is the
actual number of days from and including the prior Distribution Date (or, in the
case of the first Distribution Date, the Closing Date) to but excluding the
related Distribution Date, and the denominator of which is 360.
"Class A-1 Note" means one of the Notes executed by the Owner Trustee
on behalf of the Trust and authenticated by the Indenture Trustee in
substantially the form set forth in Exhibit A to the Indenture.
"Class A-1 Note Balance" shall initially equal the Initial Class A-1
Note Balance and, on any date, shall equal the Initial Class A-1 Note Balance,
reduced by the sum of (i) all amounts distributed to Class A-1 Noteholders and
allocable to principal on or prior to such date, and (ii) the aggregate amount
of any Class A-1 Uncovered Loss Amounts.
"Class A-1 Note Factor" means, with respect to any Distribution Date, a
seven-digit decimal figure equal to the Class A-1 Note Balance as of the close
of business on such Distribution Date (after giving effect to all changes in the
Class A-1 Note Balance made on that date) divided by the Initial Class A-1 Note
Balance.
"Class A-1 Noteholder" means any Holder of a Class A-1 Note.
"Class A-1 Note Rate" means One Month LIBOR plus [_____]%.
"Class A-1 Notional Amount" shall mean, as determined on each Deposit
Date, the Class A-1 Note Balance as of close of business on the preceding
Distribution Date, provided, however, with respect to the first Deposit Date,
the Class A-1 Notional Amount will be equal to the Initial Class A-1 Note
Balance.
"Class A-1 Principal Distributable Amount" means, with respect to any
Distribution Date related to a Collection Period in the Amortization Period, the
amount (if any) that is distributable to the Class A-1 Noteholders pursuant to
Section 3.03(d).
"Class A-1 Uncovered Loss Amounts" for any Distribution Date will be
(i) until the Class B Note Balance has been reduced to zero, zero; (ii) after
the Class B Note Balance has been reduced to zero and until the Class A-1 Note
Balance has been reduced to zero, the Class A-1 Allocation Percentage of any
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Uncovered Loss Amounts for that Distribution Date; and (iii) after the Class A-1
Note Balance has been reduced to zero, zero.
"Class A-1 Uncovered Loss Interest Amount" means, with respect to any
Distribution Date, the aggregate amount of accrued and unpaid interest (at the
Class A-1 Note Rate) on the aggregate amount of unreimbursed Class A-1 Uncovered
Loss Amounts from previous Distribution Dates.
"Class A-2 Allocation Percentage" means, as of any Distribution Date,
the Class A-2 Note Balance as of the last day of the related Collection Period
as a percentage of the then Note Balance as of such last day.
"Class A-2 Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-2 Principal Distributable Amount and
the Class A-2 Interest Distributable Amount.
"Class A-2 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess, if any, of (i) the Class A-2 Interest
Distributable Amount for such Distribution Date plus any outstanding Class A-2
Interest Carryover Shortfall from the immediately preceding Distribution Date
plus interest on such outstanding Class A-2 Interest Carryover Shortfall, to the
extent permitted by law, at the Class A-2 Note Rate from such immediately
preceding Distribution Date to but not including the current Distribution Date,
over (ii) the amount of interest distributed to Class A-2 Noteholders on such
current Distribution Date.
"Class A-2 Interest Distributable Amount" means, with respect to any
Distribution Date, the product of (i) the Class A-2 Note Rate (ii) the Class A-2
Note Balance as of the immediately preceding Distribution Date (after giving
effect to changes in the Class A-2 Note Balance made on such immediately
preceding Distribution Date) and (iii) a fraction, the numerator of which is the
actual number of days from and including the prior Distribution Date (or, in the
case of the first Distribution Date, the Closing Date) to but excluding the
related Distribution Date, and the denominator of which is 360.
"Class A-2 Note" means one of the Notes executed by the Owner Trustee
on behalf of the Trust and authenticated by the Indenture Trustee in
substantially the form set forth in Exhibit B to the Indenture.
"Class A-2 Note Balance" shall initially equal the Initial Class A-2
Note Balance and, on any date, shall equal the Initial Class A-2 Note Balance,
reduced by the sum of (i) all amounts distributed to Class A-2 Noteholders and
allocable to principal on or prior to such date, and (ii) the aggregate amount
of any Class A-2 Uncovered Loss Amounts.
"Class A-2 Note Factor" means, with respect to any Distribution Date, a
seven-digit decimal figure equal to the Class A-2 Note Balance as of the close
of business on such Distribution Date (after giving effect to all changes in the
Class A-2 Note Balance made on that date) divided by the Initial Class A-2 Note
Balance.
"Class A-2 Noteholder" means any Holder of a Class A-2 Note.
"Class A-2 Note Rate" means One Month LIBOR plus [_____]%.
"Class A-2 Notional Amount" shall mean, as determined on each Deposit
Date, the Class A-2 Note Balance as of close of business on the preceding
Distribution Date, provided, however, with respect to the first Deposit Date,
the Class A-2 Notional Amount will be equal to the Initial Class A-2 Note
Balance.
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<PAGE>
"Class A-2 Principal Distributable Amount" means, with respect to any
Distribution Date related to a Collection Period in the Amortization Period, the
amount (if any) that is distributable to the Class A-2 Noteholders pursuant to
Section 3.03(d).
"Class A-2 Uncovered Loss Amounts" for any Distribution Date will be
(i) until the Class B Note Balance has been reduced to zero, zero; (ii) after
the Class B Note Balance has been reduced to zero and until the Class A-2 Note
Balance has been reduced to zero, the Class A-2 Allocation Percentage of any
Uncovered Loss Amounts for that Distribution Date; and (iii) after the Class A-2
Note Balance has been reduced to zero, zero.
"Class A-2 Uncovered Loss Interest Amount" means, with respect to any
Distribution Date, the aggregate amount of accrued and unpaid interest (at the
Class A-2 Note Rate) on the aggregate amount of unreimbursed Class A-2 Uncovered
Loss Amounts from previous Distribution Dates.
"Class A-3 Allocation Percentage" means, as of any Distribution Date,
the Class A-3 Note Balance as of the last day of the related Collection Period
as a percentage of the then Note Balance as of such last day.
"Class A-3 Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-3 Principal Distributable Amount and
the Class A-3 Interest Distributable Amount.
"Class A-3 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess, if any, of (i) the Class A-3 Interest
Distributable Amount for such Distribution Date plus any outstanding Class A-3
Interest Carryover Shortfall from the immediately preceding Distribution Date
plus interest on such outstanding Class A-3 Interest Carryover Shortfall, to the
extent permitted by law, at the Class A-3 Note Rate from such immediately
preceding Distribution Date to but not including the current Distribution Date,
over (ii) the amount of interest distributed to Class A-3 Noteholders on such
current Distribution Date.
"Class A-3 Interest Distributable Amount" means, with respect to any
Distribution Date, the product of (i) the Class A-3 Note Rate (ii) the Class A-3
Note Balance as of the immediately preceding Distribution Date (after giving
effect to changes in the Class A-3 Note Balance made on such immediately
preceding Distribution Date) and (iii) a fraction, the numerator of which is the
actual number of days from and including the prior Distribution Date (or, in the
case of the first Distribution Date, the Closing Date) to but excluding the
related Distribution Date, and the denominator of which is 360.
"Class A-3 Note" means one of the Notes executed by the Owner Trustee
on behalf of the Trust and authenticated by the Indenture Trustee in
substantially the form set forth in Exhibit C to the Indenture.
"Class A-3 Note Balance" shall initially equal the Initial Class A-3
Note Balance and, on any date, shall equal the Initial Class A-3 Note Balance,
reduced by the sum of (i) all amounts distributed to Class A-3 Noteholders and
allocable to principal on or prior to such date, and (ii) the aggregate amount
of any Class A-3 Uncovered Loss Amounts.
"Class A-3 Note Factor" means, with respect to any Distribution Date, a
seven-digit decimal figure equal to the Class A-3 Note Balance as of the close
of business on such Distribution Date (after giving effect to all changes in the
Class A-3 Note Balance made on that date) divided by the Initial Class A-3 Note
Balance.
"Class A-3 Noteholder" means any Holder of a Class A-3 Note.
"Class A-3 Note Rate" means One Month LIBOR plus [_____]%.
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<PAGE>
"Class A-3 Notional Amount" shall mean, as determined on each Deposit
Date, the Class A-3 Note Balance as of close of business on the preceding
Distribution Date, provided, however, with respect to the first Deposit Date,
the Class A-3 Notional Amount will be equal to the Initial Class A-3 Note
Balance.
"Class A-3 Principal Distributable Amount" means, with respect to any
Distribution Date related to a Collection Period in the Amortization Period, the
amount (if any) that is distributable to the Class A-3 Noteholders pursuant to
Section 3.03(d).
"Class A-3 Uncovered Loss Amounts" for any Distribution Date will be
(i) until the Class B Note Balance has been reduced to zero, zero; (ii) after
the Class B Note Balance has been reduced to zero and until the Class A-3 Note
Balance has been reduced to zero, the Class A-3 Allocation Percentage of any
Uncovered Loss Amounts for that Distribution Date; and (iii) after the Class A-3
Note Balance has been reduced to zero, zero.
"Class A-3 Uncovered Loss Interest Amount" means, with respect to any
Distribution Date, the aggregate amount of accrued and unpaid interest (at the
Class A-3 Note Rate) on the aggregate amount of unreimbursed Class A-3 Uncovered
Loss Amounts from previous Distribution Dates.
"Class A-4 Allocation Percentage" means, as of any Distribution Date,
the Class A-4 Note Balance as of the last day of the related Collection Period
as a percentage of the then Note Balance as of such last day.
"Class A-4 Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-4 Principal Distributable Amount and
the Class A-4 Interest Distributable Amount.
"Class A-4 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess, if any, of (i) the Class A-4 Interest
Distributable Amount for such Distribution Date plus any outstanding Class A-4
Interest Carryover Shortfall from the immediately preceding Distribution Date
plus interest on such outstanding Class A-4 Interest Carryover Shortfall, to the
extent permitted by law, at the Class A-4 Note Rate from such immediately
preceding Distribution Date to but not including the current Distribution Date,
over (ii) the amount of interest distributed to Class A-4 Noteholders on such
current Distribution Date.
"Class A-4 Interest Distributable Amount" means, with respect to any
Distribution Date, the product of (i) the Class A-4 Note Rate (ii) the Class A-4
Note Balance as of the immediately preceding Distribution Date (after giving
effect to changes in the Class A-4 Note Balance made on such immediately
preceding Distribution Date) and (iii) a fraction, the numerator of which is the
actual number of days from and including the prior Distribution Date (or, in the
case of the first Distribution Date, the Closing Date) to but excluding the
related Distribution Date, and the denominator of which is 360.
"Class A-4 Note" means one of the Notes executed by the Owner Trustee
on behalf of the Trust and authenticated by the Indenture Trustee in
substantially the form set forth in Exhibit D to the Indenture.
"Class A-4 Note Balance" shall initially equal the Initial Class A-4
Note Balance and, on any date, shall equal the Initial Class A-4 Note Balance,
reduced by the sum of (i) all amounts distributed to Class A-4 Noteholders and
allocable to principal on or prior to such date, and (ii) the aggregate amount
of any Class A-4 Uncovered Loss Amounts.
"Class A-4 Note Factor" means, with respect to any Distribution Date, a
seven-digit decimal figure equal to the Class A-4 Note Balance as of the close
of business on such Distribution Date (after
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<PAGE>
giving effect to all changes in the Class A-4 Note Balance made on that date)
divided by the Initial Class A-4 Note Balance.
"Class A-4 Noteholder" means any Holder of a Class A-4 Note.
"Class A-4 Note Rate" means One Month LIBOR plus [_____]%.
"Class A-4 Notional Amount" shall mean, as determined on each Deposit
Date, the Class A-4 Note Balance as of close of business on the preceding
Distribution Date, provided, however, with respect to the first Deposit Date,
the Class A-4 Notional Amount will be equal to the Initial Class A-4 Note
Balance.
"Class A-4 Principal Distributable Amount" means, with respect to any
Distribution Date related to a Collection Period in the Amortization Period, the
amount (if any) that is distributable to the Class A-4 Noteholders pursuant to
Section 3.03(d).
"Class A-4 Uncovered Loss Amounts" for any Distribution Date will be
(i) until the Class B Note Balance has been reduced to zero, zero; (ii) after
the Class B Note Balance has been reduced to zero and until the Class A-4 Note
Balance has been reduced to zero, the Class A- Allocation Percentage of any
Uncovered Loss Amounts for that Distribution Date; and (iii) after the Class A-4
Note Balance has been reduced to zero, zero.
"Class A-4 Uncovered Loss Interest Amount" means, with respect to any
Distribution Date, the aggregate amount of accrued and unpaid interest (at the
Class A-4 Note Rate) on the aggregate amount of unreimbursed Class A-4 Uncovered
Loss Amounts from previous Distribution Dates.
"Class B Allocation Percentage" means, as of any Distribution Date, the
Class B Note Balance as of the last day of the related Collection Period as a
percentage of the then Note Balance as of such last day.
"Class B Cap Provider" means Credit Lyonnais New York Branch, a New
York licensed branch of Credit Lyonnais, S.A., a banking corporation organized
and existing under the laws of the Republic of France.
"Class B Cap Rate" means [____]%.
"Class B Cap Receipt" shall mean, to the extent the following is a
positive number, an amount equal to the product of (i) One-Month LIBOR with
respect to the related Distribution Date minus the Class B Cap Rate, (ii) the
Class B Notional Amount and (iii) a fraction, the numerator of which is the
actual number of days from and including the prior Distribution Date (or, with
respect to the first Distribution Date, the actual number of days from the date
of issuance of the Class B Notes) to but excluding the related Distribution
Date, and the denominator of which is 360.
"Class B Distributable Amount" means, with respect to any Distribution
Date, the sum of the Class B Principal Distributable Amount and the Class B
Interest Distributable Amount.
"Class B Fixed Interest Carryover Shortfall" means, for any
Distribution Date, an amount, if positive, equal to (1) the sum of (A) the
excess, if any of (i) an amount equal to the amount described in subclause (2)
of the definition of Class B Note Rate Cap for the previous Distribution Date
over (ii) the interest paid to the Class B Noteholders on such previous
Distribution Date and (B) the Class B Fixed Interest Carryover Shortfall
immediately following the second preceding Distribution Date less (2)
reimbursement of Class B Interest Carryover Shortfalls on the previous
Distribution Date.
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"Class B Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess, if any, of (i) the Class B Interest Distributable
Amount for such Distribution Date plus any outstanding Class B Interest
Carryover Shortfall from the immediately preceding Distribution Date plus
interest on such outstanding Class B Interest Carryover Shortfall, to the extent
permitted by law, at the Class B Note Rate from such immediately preceding
Distribution Date to but not including the current Distribution Date over (ii)
the amount of interest distributed to Class B Noteholders on such current
Distribution Date.
"Class B Interest Distributable Amount" means, with respect to any
Distribution Date, the product of (i) the Class B Note Rate (ii) the Class B
Note Balance as of the immediately preceding Distribution Date (after giving
effect to changes in the Class B Note Balance made on such immediately preceding
Distribution Date) and (iii) a fraction, the numerator of which is the actual
number of days from and including the prior Distribution Date (or, in the case
of the first Distribution Date, the Closing Date) to but excluding the related
Distribution Date, and the denominator of which is 360.
"Class B Interest Rate Cap Agreement" means that certain interest rate
cap agreement dated as of August [___], 1999 [and effective as of [_______]
[____]. 1999] by and between the Trust and the Class B Cap Provider.
"Class B Note" means any one of the Notes executed by the Owner Trustee
on behalf of the Trust and authenticated by the Indenture Trustee in
substantially the form set forth in Exhibit E to the Indenture.
"Class B Note Balance" shall initially equal the Initial Class B Note
Balance and, on any date, shall equal the Initial Class B Note Balance, reduced
by the sum of (i) all amounts distributed to Class B Noteholders and allocable
to principal on or prior to such date, (ii) the aggregate amount of any Class B
Uncovered Loss Amounts, and (iii) the aggregate amount of any Class B Note
Principal Carryover Shortfalls.
"Class B Note Rate Cap" means, the sum of (1) the Class B Fixed
Interest Carryover Shortfall and (2) either (x) if a Class B Cap Receipt was
received in full on the Deposit Date preceding the related Distribution Date,
the Class B Interest Distributable Amount, or (y) if a Class B Cap Receipt was
due but not paid in full on the Deposit Date prior to the related Distribution
Date, the sum of (i) the product of (A) one-twelfth (or, in the case of the
first Distribution Date, [__]/360) of [_____]% and (B) the Class B Note Balance
as of the immediately preceding Distribution Date (after giving effect to
changes in the Class B Note Balance made on such immediately preceding
Distribution Date) and (ii) any amounts received in partial payment of the Class
B Cap Receipt for the related Distribution Date.
"Class B Note Factor" means, with respect to any Distribution Date, a
seven-digit decimal figure equal to the Class B Note Balance as of the close of
business on such Distribution Date (after giving effect to all changes in the
Class B Note Balance made on that date) divided by the Initial Class B Note
Balance.
"Class B Note Principal Carryover Shortfall" means, with respect to any
Distribution Date, the amount that otherwise would have been made available for
reinvestment in additional 1999-A SUBI Assets pursuant to Section 11.02 of the
1999-A SUBI Supplement (if on a Distribution Date related to a Collection Period
in the Revolving Period) or distributed to the Class B Noteholders (if on a
Distribution Date related to a Collection Period in the Amortization Period), in
each case in respect of Principal Collections pursuant to Section 3.03(d), but
instead is applied as set forth in clauses (iii), (vii) and (viii) of Section
3.03(b) pursuant to Section 3.03(e).
"Class B Note Principal Carryover Shortfall Interest Amount" means,
with respect to any Distribution Date, the aggregate amount of accrued and
compounded interest (at the Class B Note Rate)
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on the aggregate amount of unreimbursed Class B Note Principal Carryover
Shortfall as of the immediately preceding Distribution Date.
"Class B Note Rate" means One Month LIBOR plus [_____]%.
"Class B Noteholder" means any Holder of a Class B Note.
"Class B Notional Amount" shall mean, as determined on each Deposit
Date, the Class B Note Balance as of close of business on the preceding
Distribution Date, provided, however, with respect to the first Deposit Date,
the Class B Notional Amount will be equal to the Initial Class B Note Balance.
"Class B Percentage" means the Class B Note Balance immediately after
the Class A-3 Notes have been paid in full as a percentage of the Note Balance
at such time.
"Class B Principal Distributable Amount" means, with respect to any
Distribution Date related to a Collection Period in the Amortization Period, the
amount (if any) that is distributable to the Class B Noteholders pursuant to
Section 3.03(d).
"Class B Uncovered Loss Amounts" for any Distribution Date will be (i)
until the Class B Note Balance has been reduced to zero, any Uncovered Loss
Amounts for that Distribution Date; and (ii) after the Class B Note Balance has
been reduced to zero, zero.
"Class B Uncovered Loss Interest Amount" means, with respect to any
Distribution Date, the aggregate amount of accrued and unpaid interest (at the
Class B Note Rate) on the aggregate amount of unreimbursed Class B Uncovered
Loss Amounts from previous Distribution Dates.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means 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" means September [__], 1999.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Period" shall have the meaning set forth in the 1999-A SUBI
Supplement.
"Commission" means the Securities and Exchange Commission, and any
successor thereto.
"Corporate Trust Office" means, (a) with respect to the Indenture
Trustee, as set forth in the Indenture, and (b) with respect to the Owner
Trustee, the Corporate Trust Department of the Owner Trustee located at 1201 N.
Market Street, 8th Floor, Wilmington, Delaware 19801, or at such other address
as the Owner Trustee may designate from time to time by notice to the Indenture
Trustee, the Transferor, the Servicer and the Trust, or the principal corporate
trust office of any successor Owner Trustee.
"Covered Loss Amount" means (A) for any Distribution Date on or prior
to the Distribution Date on which the Class A Note Balance is reduced to zero,
the lesser of (i) the Investor Percentage of Loss Amounts for such Distribution
Date and (ii) the amounts actually available for distribution under clause (vii)
of Section 3.03(b) and (B) for any Distribution Date after the Distribution Date
on which the Class A Note Balance is reduced to zero, zero.
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"Current Lease" means each 1999-A Lease that is not a Charged-off
Lease, a Matured Lease, a Liquidated Lease or an Additional Loss Lease.
"Definitive Notes" shall have the meaning specified in Section 2.10 of
the Indenture.
"Delinquency Rate" means, with respect to any Collection Period, the
percentage equivalent to a fraction, the numerator of which is the number of
outstanding 1999-A Leases as to which, as of the last day of such Collection
Period, all or any part of a Monthly Lease Payment in excess of $40 is unpaid
(including without limitation because of a check being returned for insufficient
funds) 61 days or more after its Due Date (other than a 1999-A Lease as to which
an extension has been granted with respect to such Due Date by the Servicer
pursuant to clause (ii) of Section 2.02(b) of the Servicing Agreement and
Section 9.02(a) of the 1999-A Servicing Supplement), whether or not (a) the
related 1999-A Leased Vehicle has been repossessed (or the process of
repossession has been commenced) but has not yet been sold or otherwise disposed
of during such Collection Period, or (b) the related Obligor is the subject of
bankruptcy or similar proceedings, and the denominator of which is the aggregate
number of Current Leases on the last day of such Collection Period.
"Delinquency Rate Test" means that determination, made on each
Determination Date, of the average of the Delinquency Rates for the three
immediately preceding Collection Periods (or during the months of June, July and
August 1999 in respect of the September 1999 Determination Date, during the
months of July and August 1999 and the September 1999 Collection Period in
respect of the October 1999 Determination Date and the month of August 1999 and
the September and October 1999 Collection Periods in respect of the November
1999 Determination Date). The Delinquency Rate Test will be satisfied if such
average is [____]% or less.
"Deposit Date" shall have the meaning set forth in the 1999-A SUBI
Supplement.
"Designated Maturity" shall mean, for any LIBOR Determination Date, one
month.
"Determination Date" means, with respect to any Distribution Date, the
second Business Day prior to such Distribution Date.
"Distribution Account" means the account or accounts designated as such
and established and maintained pursuant to Section 3.01.
"Distribution Date" means, with respect to a Collection Period, the
fifteenth day of the following month, or if that day is not a Business Day, the
next Business Day, beginning with September 15, 1999.
"Downgrade Reserve Fund Formula" means the greatest amount that any
Rating Agency shall require for calculation of the Reserve Fund Cash Requirement
in order to maintain its then-current rating on any Class of Notes.
"Downgrade Reserve Fund Supplemental Requirement" means the greatest
amount that any Rating Agency shall require to be deposited into the Reserve
Fund in order to maintain its then-current ratings on any Class of Notes.
"Downgrade Trigger Event" means that the RV Insurer's claims paying
ability is downgraded to "Aa3" or lower by Moody's, below "AAA" by Standard &
Poors or (if the RV Insurer's claims paying ability is rated by Fitch) below
"AAA" by Fitch.
"Early Amortization Event" has the meaning set forth in Section 8.01.
"Early Termination Amount" means, as of any Distribution Date, an
amount equal to (i) the sum of the Discounted Principal Balances, as of the end
of the related Collection Period, of any Early Termination Leases that became
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Early Termination Leases during that related Collection Period, such Discounted
Principal Balances reflecting all payments of (or in lieu of) Monthly Lease
Payments other than non-cash items, less (ii) the Net Liquidation Proceeds
arising from payments made in connection with the realization of the Booked
Residual Values (and the retention by Lessees or Lessors) of the related 1999-A
Leased Vehicles, including any charges for excess mileage and excess wear and
use, but excluding payments in the form of non-cash items.
"Entitlement Holder" has the meaning set forth in Section 8-102(a)(7)
of the UCC.
"Entitlement Orders" has the meaning set forth in Section 8-102(a)(8)
of the UCC.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Compliance Test" means the timely, true and accurate
certification, on or before each Determination Date, by the Servicer to the
Indenture Trustee and each Rating Agency to the effect set forth in Section
10.03(c) of the 1999-A Servicing Supplement.
"Excess Collections" means, with respect to any Distribution Date, the
remaining amount on deposit in the Distribution Account in respect of such
Distribution Date after all distributions pursuant to Section 3.03(b) have been
made, net of any amount required to maintain the Distribution Account in good
standing.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Final Scheduled Maturity Date" means, with respect to the Class A
Notes, the [__________] [200_] Distribution Date and, with respect to the Class
B Notes, the [__________] [200_] Distribution Date.
"Financial Intermediary" means a financial intermediary, as such term
is defined in Section 8-313(4) of the UCC.
"Fitch" means Fitch IBCA, Inc., and its successors.
"Flow-Through Entity" has the meaning set forth in Section 2.04 of the
Indenture.
"Holder" of a Note or "Noteholder" means the Person in whose name such
Note is registered in the Note Register, except that, solely for the purposes of
giving any consent, waiver, request or demand pursuant to this Agreement, the
interest evidenced by any Note registered in the name of the Transferor, ALF LP
or WOFCO, or any Person controlling, controlled by or under common control with
the Transferor, ALF LP or WOFCO, shall not be taken into account in determining
whether the requisite percentage necessary to effect any such consent, waiver,
request or demand shall have been obtained. "Holder" of the Transferor
Certificate means the Transferor.
"Indenture" has the meaning set forth in Recital H.
"Indenture Event of Default" means an "Event of Default" as defined in
the Indenture.
"Indenture Trustee" means the Person acting as the Indenture Trustee
under the Indenture, its successor in interest, and any successor trustee
appointed pursuant to the Indenture.
"Independent Director" means a director of the general partner of the
Transferor who shall at no time be (i) a director, officer, employee or former
employee of any Affiliate of the Transferor, (ii) a natural person related to
any director, officer, employee or former employee of any Affiliate, (iii) a
holder (directly or indirectly) of any voting securities of any Affiliate, or
(iv) a natural person related to a holder (directly or indirectly) of any voting
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securities of any Affiliate. For these purposes, "Affiliate" shall mean any
entity other than the Transferor or any similarly organized special purpose
finance subsidiary of an Affiliate (i) which owns beneficially, directly or
indirectly, more than 10% of the outstanding shares of the common stock or
partnership interests of the Transferor, (ii) which is in control of the
Transferor, as currently defined under ss. 230.405 of the Rules and Regulations
of the Commission, 17 C.F.R. ss. 230.405, (iii) of which 10% or more of the
outstanding shares of its common stock or partnership interests are owned
beneficially, directly or indirectly, by any entity described in clause (i) or
(ii) above, or (iv) which is controlled by an entity described in clause (i) or
(ii) above, as currently defined under ss. 230.405 of the Rules and Regulations
of the Commission, 17 C.F.R. ss. 230.405.
"Indorsement" has the meaning set forth in Section 8-304 of the UCC.
"Initial Class A Note Balance" means the sum of the Initial Class A-1
Note Balance, the Initial Class A-2 Note Balance, the Initial Class A-3 Note
Balance and the Initial Class A-4 Note Balance.
"Initial Class A-1 Note Balance" means $[__________].
"Initial Class A-2 Note Balance" means $[__________].
"Initial Class A-3 Note Balance" means $[__________].
"Initial Class A-4 Note Balance" means $[__________].
"Initial Class B Note Balance" means $[__________].
"Initial Note Balance" means the sum of the Initial Class A Note
Balance and the Initial Class B Note Balance.
"Insurance Policy" means, with respect to a 1999-A Lease, 1999-A Leased
Vehicle or Obligor under a 1999-A Lease, any policy of comprehensive, collision,
public liability, physical damage, personal liability, credit health or
accident, credit life or employment insurance, or any other form of insurance.
"Insured Residual Value Loss Amount" means, as of any Distribution
Date, the lesser of: (i) the product of (A) the Investor Percentage with respect
to Loss Amounts for the related Collection Period, and (B) the Residual Value
Loss Amount incurred during such Collection Period; and (ii) the shortfall if
any, described in clause (ii) of Section 3.03(e).
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Investor Percentage" means, with respect to any Collection Period,
(a) as used with respect to Interest Collections, Covered Loss
Amounts, Uncovered Loss Amounts, Loss Amounts, Capped Indenture Trustee
Administrative Expenses and Capped Owner Trustee Administrative Expenses, the
percentage equivalent of a fraction (not to exceed 100%), the numerator of which
is the Note Balance as of the last day of the immediately preceding Collection
Period (or, in the case of the first Collection Period, the Initial Note
Balance), and the denominator of which is the Aggregate Net Investment Value as
of the last day of the immediately preceding Collection Period (or, in the case
of the first Collection Period, the Initial Cutoff Date); and
(b) as used with respect to Principal Collections allocable to
the 1999-A SUBI Interest, the percentage equivalent of a fraction (not to exceed
100%), the numerator of which is the Note Balance and the denominator of which
is the Aggregate Net Investment Value, each as of the last day of the last full
Collection Period preceding the first to occur of the Amortization Date or any
Early Amortization Event.
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"LIBOR Determination Date" means the second business day prior to the
preceding Distribution Date (or, in the case of the first Distribution Date, the
second business day prior to the Closing Date). For purposes of this definition,
"business day" shall mean any day on which commercial banks are open for
business (including dealings in foreign exchange and foreign currency deposits)
in London, England.
"Liquidated Lease" means a 1999-A Lease that (a) has been the subject
of a Prepayment in full, or (b) has been paid in full, regardless of whether all
or any part of such payment has been made by the Obligor under the related
1999-A Lease, the Servicer pursuant to the Servicing Agreement or 1999-A
Servicing Supplement, an insurer pursuant to an Insurance Policy or the Residual
Value Insurance Policy or otherwise.
"Liquidation Expenses" means reasonable out-of-pocket expenses incurred
by the Servicer in connection with the realization of the full amounts due or to
become due under any 1999-A Lease, including expenses incurred in connection
with the repossession of any 1999-A Leased Vehicle, the sale or other
disposition of a 1999-A Leased Vehicle, whether upon repossession or upon return
of a 1999-A Leased Vehicle related to a Matured Lease, any collection effort
(whether or not resulting in a lawsuit against the Obligor under such 1999-A
Lease) or any application for Insurance Proceeds.
"Loss Amount" means, with respect to any Distribution Date, an amount
equal to the sum of the Charged-off Amount, the Residual Value Loss Amount and
the Additional Loss Amount, in each case for the related Collection Period.
"Moody's" means Moody's Investors Service, Inc., and its successors.
"1999-A Servicing Supplement" has the meaning set forth in Recital E.
"1999-A SUBI" has the meaning set forth in Recital D.
"1999-A SUBI Certificate" has the meaning set forth in Recital D.
"1999-A SUBI Interest" has the meaning set forth in Section 2.02.
"1999-A SUBI Portfolio" has the meaning set forth in Recital D.
"1999-A SUBI Supplement" has the meaning set forth in Recital D.
"Note Balance" initially means the Initial Note Balance and, as of any
date, means the sum of the Class A Note Balance and the Class B Note Balance as
of the close of business on such date, after giving effect to any changes
therein on such date.
"Noteholder" means the Holder of a Note.
"Note Owner" means, with respect to a Book-Entry Note, the Person who
is the 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 or as an indirect participant in accordance with the rules of
such Clearing Agency) and shall mean, with respect to a Definitive Note, the
related Noteholder.
"Note Rate" means the Class A-1 Note Rate, the Class A-2 Note Rate, the
Class A-3 Note Rate, the Class A-4 Note Rate or the Class B Note Rate, as the
case may be.
"Note Register" means the register maintained pursuant to the
Indenture.
"Notice of Adverse Claim" has the meaning set forth in Section
8-102(a)(1) and 8-105 of the UCC.
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"Officer's Certificate" means a certificate signed by the President,
any Vice President, the Treasurer or any Assistant Treasurer, the Secretary or
any Assistant Secretary of the general partner of the Transferor or the
Servicer, as the case may be, and delivered to the Indenture Trustee or the
Owner Trustee, as applicable.
"One Month LIBOR" means, as of any LIBOR Determination Date, the rate
for deposits in U.S. Dollars for a period of the Designated Maturity (commencing
on the previous Distribution Date) which appears on the Telerate page 3750 as of
11:00 a.m., London time, on such date. If such rate does not appear on Telerate
page 3750, the rate for that day will be determined on the basis of the rates at
which deposits in U.S. Dollars are offered by the Reference Banks at
approximately 11:00 a.m., London time, on that day to prime banks in the London
interbank market for a period of the Designated Maturity (commencing on the
previous Distribution Date). The Servicer will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that day will be the
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that day will be the arithmetic mean of the rates quoted
by major banks in New York City, selected by the Servicer, at approximately
11:00 a.m., New York time, on that day for loans in U.S. Dollars to leading
European banks for a period of the Designated Maturity (commencing on the
previous Distribution Date).
"Opinion of Counsel" means a written opinion of counsel (who, in the
case of counsel to the Transferor or the Servicer, may be an employee of or
outside counsel to the Transferor or the Servicer), which counsel, in the case
of an opinion delivered to the Indenture Trustee or the Owner Trustee,
respectively, shall be reasonably acceptable to such Trustee.
"Origination Trust" has the meaning set forth in Recital A.
"Origination Trust Agreement" has the meaning set forth in Recital A.
"Origination Trustee" has the meaning set forth in Recital A.
"Outstanding Advances" means, with respect to a Distribution Date, the
sum of all Advances made as of or prior to such date minus all payments or
collections as of or prior to such date that are specified in Section 9.02(g) of
the 1999-A Servicing Supplement as applied to reimburse such Advance as are
unreimbursed or are Nonrecoverable Advances.
"Owner Trustee" means the Person acting not in its individual capacity
but solely as Owner Trustee on behalf of the Trust under this Agreement, its
successor in interest, and any successor trustee appointed pursuant to Section
6.08.
"Percentage Interest" means, as to any Note, the percentage obtained by
dividing the outstanding principal balance of such Note by the Note Balance or
by the Class A Note Balance, the Class A-1 Note Balance, the Class A-2 Note
Balance, the Class A-3 Note Balance, the Class A-4 Note Balance or the Class B
Note Balance, as the context may require; provided, however, that where the
Percentage Interest is relevant in determining whether the vote of the requisite
percentage of Noteholders necessary to effect any consent, waiver, request or
demand shall have been obtained, the aggregate Percentage Interest shall be
deemed to be reduced by the amount equal to the Percentage Interest (without
giving effect to this provision) represented by the interests evidenced by any
such Note that is registered in the name of the Transferor, WOFCO or any Person
controlling, controlled by or under common control with the Transferor or WOFCO.
"Permitted Investments" means any one or more of the following
instruments, obligations or securities, in each case with a remaining term to
maturity of no more than one year:
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(a)(i) direct obligations of, and obligations guaranteed as to
full and timely payment of principal and interest by, the United States or any
agency or instrumentality of the United States the obligations of which are
backed by the full faith and credit of the United States (other than the
Government National Mortgage Association), and (ii) direct obligations of, or
obligations fully guaranteed by, the Federal National Mortgage Association or
any State then rated with the highest available credit rating of Moody's,
Standard & Poor's and (if rated by Fitch) Fitch, for such obligations, which
obligations are, at the time of investment, otherwise acceptable to each Rating
Agency for securities having a rating at least equivalent to the rating of the
Class A Notes at the Closing Date;
(b) certificates of deposit, demand or time deposits of,
bankers' acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Indenture Trustee or Chase Manhattan
Bank Delaware or its successors as Owner Trustee) incorporated under the laws of
the United States or any State and subject to supervision and examination by
federal and/or State banking authorities and the deposits of which are fully
insured by the Federal Deposit Insurance Corporation, so long as at the time of
such investment or contractual commitment providing for such investment either
such depository institution or trust company has the Required Rating or the
Indenture Trustee shall have received a letter from each Rating Agency to the
effect that such investment would not result in the qualification, downgrading
or withdrawal of the ratings then assigned to any Rated Securities;
(c) repurchase obligations held by the Indenture Trustee that
are acceptable to the Indenture Trustee with respect to (i) any security
described in clause (a) above or (e) below, or (ii) any other security issued or
guaranteed by any agency or instrumentality of the United States, in either case
entered into with a federal agency or depository institution or trust company
(including the Indenture Trustee) acting as principal, whose obligations having
the same maturity as that of the repurchase agreement would be Permitted
Investments under clause (b) above; provided, however, that repurchase
obligations entered into with any particular depository institution or trust
company (including the Indenture Trustee or Owner Trustee) will not be Permitted
Investments to the extent that the aggregate principal amount of such repurchase
obligations with such depository institution or trust company held by the
Indenture Trustee on behalf of the Trust shall exceed 10% of either the
Aggregate Net Investment Value or the aggregate unpaid principal balance or face
amount, as the case may be, of all Permitted Investments held by the Indenture
Trustee on behalf of the Trust;
(d) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States or any State
so long as at the time of such investment or contractual commitment providing
for such investment either the long-term, unsecured debt of such corporation has
the highest available rating from Moody's, Standard & Poor's and (if rated by
Fitch) Fitch, or the Indenture Trustee shall have received a letter from each
Rating Agency to the effect that such investment would not result in the
qualification, downgrading or withdrawal of the ratings then assigned to any
Rated Securities, or commercial paper or other short-term debt having the
Required Rating; provided, however, that any such commercial paper or other
short-term debt may have a remaining term to maturity of no longer than 30 days
after the date of such investment or contractual commitment providing for such
investment, and that securities issued by any particular corporation will not be
Permitted Investments to the extent that investment therein will cause the then
outstanding principal amount or face amount, as the case may be, of securities
issued by such corporation and held by the Indenture Trustee on behalf of the
Trust to exceed 10% of either the Aggregate Net Investment Value or the
aggregate unpaid principal balance or face amount, as the case may be, of all
Permitted Investments held by the Indenture Trustee on behalf of the Trust;
(e) interests in any open-end or closed-end management type
investment company or investment trust (i) registered under the Investment
Company Act, the portfolio of which is limited to the obligations of, or
guaranteed by, the United States and to agreements to repurchase such
obligations, which agreements, with respect to principal and interest, are at
least 100% collateralized by such obligations marked to market on a daily basis
and the investment company or investment trust shall take delivery of such
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obligations either directly or through an independent custodian designated in
accordance with the Investment Company Act and (ii) acceptable to each Rating
Agency (as approved in writing by each Rating Agency) as collateral for
securities having ratings equivalent to the ratings of the Rated Securities on
the Closing Date;
(f) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation (as approved in writing by each Rating
Agency) as will not result in the qualification, downgrading or withdrawal of
the ratings then assigned to any Rated Securities by each Rating Agency;
(g) investments in Permitted Investments maintained in "sweep
accounts," short-term asset management accounts and the like utilized for the
investment, on an overnight basis, of residual balances in investment accounts
maintained at the Indenture Trustee or any other depository institution or trust
company organized under the laws of the United States or any state that is a
member of the Federal Deposit Insurance Corporation, the short-term debt of
which has the highest available credit rating of Moody's, Standard & Poor's and
(if rated by Fitch) Fitch; provided, however, that any such account must be
maintained with an institution meeting the requirements of Section 3.01
applicable to the Distribution Account;
(h) guaranteed investment contracts entered into with any
financial institution having a final maturity of not more than one month from
the date of acquisition, the short-term debt securities of which institution
have the Required Rating;
(i) funds classified as money market funds or invested in
money market instruments consisting of: U.S. Treasury bills, other obligations
issued or guaranteed by the U.S. government, its agencies or instrumentalities;
certificates of deposit; banker's acceptances; and commercial paper (including
variable master demand notes); provided, however, that the fund or the
investment in the fund shall be rated with the highest available credit rating
of Moody's, Standard & Poor's and (if rated by Fitch) Fitch, and redemptions
shall be permitted on a daily or next business day basis; and
(j) such other investments acceptable to each Rating Agency
(as approved in writing by each Rating Agency) as will not result in the
qualification, downgrading or withdrawal of the ratings then assigned to any
Rated Securities by such Rating Agency.
Notwithstanding anything to the contrary contained in the foregoing
definition:
(a) no Permitted Investment may be purchased at a premium;
(b) any of the foregoing which constitutes a certificated security
shall not be considered a Permitted Investment unless
(i) in the case of a certificated security that is in
bearer form, (A) the Indenture Trustee acquires physical possession of
such certificated security, or (B) a person, other than a Securities
Intermediary, acquires possession of such certificated security on
behalf of the Indenture Trustee; and
(ii) in the case of a certificated security that is
in registered form, (A)(1) the Indenture Trustee acquires physical
possession of such certificated security, (2) a person, other than a
Securities Intermediary, acquires possession of such certificated
security on behalf of the Indenture Trustee, or (3) a Securities
Intermediary acting on behalf of the Indenture Trustee acquires
possession of such certificated security and such certificated security
has been specially indorsed to the Indenture Trustee, and (B) (1) such
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certificated security is indorsed to the Indenture Trustee or in blank
by an effective Indorsement, or (2) such certificated security is
registered in the name of the Indenture Trustee;
(c) any of the foregoing that constitutes an uncertificated
security shall not be considered a Permitted Investment unless (A) the Indenture
Trustee is registered by the issuer as the owner thereof, (B) a person, other
than a Securities Intermediary, becomes the registered owner of such
uncertificated security on behalf of the Indenture Trustee, or (C) the issuer of
such uncertificated security agrees that it will comply with the instructions
originated by the Indenture Trustee without further consent by any registered
owner of such uncertificated security;
(d) any of the foregoing that constitutes a Security
Entitlement shall not be considered a Permitted Investment unless (A) the
Indenture Trustee becomes the Entitlement Holder thereof, or (B) the Securities
Intermediary has agreed to comply with the Entitlement Orders originated by the
Indenture Trustee without further consent by the Entitlement Holder; and
(e) any of the foregoing shall not constitute a Permitted
Investment unless the Indenture Trustee (A) has given value, and (B) does not
have Notice of an Adverse Claim.
For purposes of this definition, any reference to the highest available
credit rating of an obligation shall mean the highest available credit rating
for such obligation (excluding any "+" signs associated with such rating), or
such lower credit rating (as approved in writing by each Rating Agency) as will
not result in the qualification, downgrading or withdrawal of the rating then
assigned to any Rated Securities by such Rating Agency.
"Rated Securities" means each Class of Securities that has been rated
by a Rating Agency at the request of the Transferor.
"Rating Agency" means each of Moody's, Standard & Poor's and Fitch and
any other nationally recognized statistical rating agency, but only if it has
rated any Class of Notes as of the Closing Date at the request of the Transferor
and continues to do so.
"Reallocation Deposit Amount" means any amount required to be deposited
by the Servicer into the 1999-A SUBI Collection Account pursuant to the last
sentence of Section 8.03(a) of the 1999-A Servicing Supplement.
"Record Date" means, with respect to each Distribution Date, (i) in the
case of the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes or the
Class A-4 Notes, the calendar day immediately preceding such Distribution Date
(or, if Definitive Notes have been issued, the last day of the immediately
preceding calendar month) and (ii) in the case of the Class B Notes, the last
day of the calendar month immediately preceding the month in which such
Distribution Date occurs.
"Reference Banks" means four major banks in the London interbank market
selected by the Servicer.
"Required Amount" means, as of any Deposit Date, the lesser of: (a) the
excess of (i) the sum of any anticipated amounts to be payable as set forth in
clauses (i) through (v) and (vii) through (xii) of Section 3.03(b) with respect
to the related Distribution Date (plus those amounts included in clauses (a)
through (c) of the definition of "Interest Collections" in the 1999-A SUBI
Supplement), over (ii) the sum of (A) the product of (x) the Investor Percentage
with respect to Interest Collections and (y) the Interest Collections collected
during or received with respect to the related Collection Period, (plus in the
case of Section 3.03(b)(ii) the Class A Cap Receipt and in the case of Section
3.03(b)(iv) the Class B Cap Receipt) for the related Distribution Date), (B) any
Transferor Amounts for the related Distribution Date applied pursuant to Section
3.03(e)(i), and (C) the proceeds of any claim under the Residual Value Insurance
Policy pursuant to Section 9.10(b) of the 1999-A Servicing Supplement, as
applied pursuant
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to clause (ii) of Section 3.03(e); and (b) the total amount on deposit in the
Reserve Fund after all deposits thereto pursuant to clause (vi) of Section
3.03(b).
"Required Rating" means a rating on commercial paper or other short
term unsecured debt obligations of Prime-1 by Moody's so long as Moody's is a
Rating Agency, A-1 by Standard & Poor's so long as Standard & Poor's is a Rating
Agency, and if such commercial paper or short term unsecured debt obligations
are rated by Fitch, at least F-1 by Fitch so long as Fitch is a Rating Agency;
and any requirement that deposits or debt obligations have the "Required Rating"
shall mean that such deposits or debt obligations have the foregoing required
ratings from Moody's, Standard & Poor's and (if rated by Fitch) Fitch.
"Reserve Fund" means the account designated as such and established and
maintained pursuant to Section 3.04.
"Reserve Fund Cash Requirement" means with respect to any Distribution
Date the maximum sum of money required to be on deposit in the Reserve Fund at
any one time and shall be calculated as follows: (a) if a RV Insurer Trigger
Event or Downgrade Trigger Event shall have occurred and be continuing, (i) if
only one of the RV Insurer Trigger Event or Downgrade Trigger Event shall have
occurred and be continuing (and, with respect to a Downgrade Trigger Event, the
60 day period set forth in the fourth sentence of Section 3.04(b) has elapsed
and the Transferor has elected to comply with the requirements of clause (ii)
thereof rather than clause (i)), then in accordance with the RV Insurer Trigger
Event Reserve Fund Formula or Downgrade Reserve Fund Formula, as applicable, or
(ii) if both the RV Insurer Trigger Event and the Downgrade Trigger Event shall
have occurred and be continuing (and, with respect to a Downgrade Trigger Event,
the 60 day period set forth in the fourth sentence of Section 3.04(b) has
elapsed and the Transferor has elected to comply with the requirements of clause
(ii) thereof rather than clause (i)), then in accordance with the greater of the
RV Insurer Reserve Fund Formula or Downgrade Reserve Fund Formula from time to
time; or (b) if the ERISA Compliance Test is satisfied as of such Distribution
Date and no RV Insurer Trigger Event or Downgrade Trigger Event shall have
occurred and be continuing, (i) if all applicable Reserve Fund Tests are
satisfied as of the related Determination Date, in accordance with the Base
Reserve Fund Formula, or (ii) if any Reserve Fund Test is unsatisfied as of any
Distribution Date, in accordance with the Alternate Reserve Fund Formula.
"Reserve Fund Deficiency" means, as of any Deposit Date, the excess, if
any, of (a) the sum of any Required Amount (considered without regard to clause
(b) of the definition thereof) and any other amounts payable out of the Reserve
Fund pursuant hereto on such Deposit Date or the related Distribution Date, over
(b) the total amount on deposit in the Reserve Fund, prior to any deposit
therein by, or on behalf of, the Transferor pursuant to Section 3.04(b).
"Reserve Fund Initial Deposit" means $[__________].
"Reserve Fund Test" means either of the Charge-off Rate Test or the
Delinquency Rate Test.
"Reserve Fund Supplemental Requirement" means, as of any Deposit Date
on which there is a Reserve Fund Deficiency, the lesser of (a) such Reserve Fund
Deficiency and (b) $[__________] less the aggregate of all amounts previously
deposited by or on behalf of the Transferor into the Reserve Fund to satisfy a
Reserve Fund Deficiency.
"Residual Value Insurance Policy" means that certain Residual Value
Insurance Policy number [__________] effective as of [________], 1999, by the RV
Insurer, in favor of the Indenture Trustee.
"Residual Value Loss Amount" means, as of any Distribution Date, the
sum of the following: (a) the Booked Residual Values of all 1999-A Leased
Vehicles included in Matured Leased Vehicle Inventory as of the last day of the
related Collection Period but which as of such day had remained unsold and not
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otherwise disposed of by the Servicer for at least two full Collection Periods;
(b) any excess of the sum of the Booked Residual Values of all Matured Vehicles
sold or otherwise disposed of from Matured Leased Vehicle Inventory during the
related Collection Period over Net Matured Leased Vehicle Proceeds; and (c) any
Early Termination Amount for the related Collection Period.
"Responsible Officer" means an officer of the Owner Trustee or
Indenture Trustee, as applicable, assigned to the applicable Corporate Trust
Office, including any Vice President, any trust officer or any other officer
performing functions similar to those performed by the persons who at the time
shall be such officers, and any other officer of the Owner Trustee or Indenture
Trustee, as applicable, to whom a matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"RV Insurer" means American International Specialty Lines Insurance
Company, an Alaska stock insurance company.
"RV Insurer Reserve Fund Supplemental Requirement" means, at any time,
the difference between (i) the greater of (A) the Reserve Fund Initial Deposit
and (B) the amount then on deposit in the Reserve Fund, and (ii) $[__________].
"RV Insurer Trigger Event" means any of the following:
(a) The RV Insurer shall file a petition commencing a
voluntary case under any chapter of the Federal bankruptcy laws; or the RV
Insurer shall file a petition or answer or consent seeking reorganization,
arrangement, adjustment, or composition under any other similar applicable
Federal law, or shall consent to the filing of any such petition, answer, or
consent; or the RV Insurer shall appoint, or consent to the appointment of a
custodian, receiver, liquidator, trustee, assignee, sequestrator or other
similar official in bankruptcy or insolvency of it or of any substantial part of
its property, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due;
(b) any order for relief against the RV Insurer shall have
been entered by a court having jurisdiction in the premises under any chapter of
the Federal bankruptcy laws; or a decree or order by a court having jurisdiction
in the premises shall have been entered approving as properly filed a petition
seeking reorganization, arrangement, adjustment, or composition of the RV
Insurer under any other similar applicable Federal law; or a decree or order of
a court having jurisdiction in the premises for the appointment of a custodian,
receiver, liquidator, trustee, assignee, sequestrator or other similar official
in bankruptcy, receivership or insolvency of the RV Insurer or of any
substantial part of its property, or for the winding up or liquidation of its
affairs, shall have been entered; or
(c) the Residual Value Insurance Policy shall have been
declared void or unenforceable by a court of competent jurisdiction in a final
judgment as to which the time for noting an appeal has expired and all appeals
have been decided;
in each case without: (i) one or more policies with substantially
similar coverage and provisions to the Residual Value Insurance Policy having
been issued by an insurer acceptable to each Rating Agency (as evidenced by
confirmation (written or oral) from each to the effect that such change would
not result in its then-current rating of any Rated Securities being qualified,
reduced or withdrawn), provided that the Origination Trustee, the Owner Trustee
and the Indenture Trustee shall at all times have the same rights with respect
to any replacement policy as with respect to the original policy; or (ii) an
alternative mechanism to support the Booked Residual Values of the 1999-A Leased
Vehicles having been approved in accordance with the procedures set forth in
Section 9.01 for the amendment hereof.
"RV Insurer Trigger Event Reserve Fund Formula" means $[__________].
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"Schedule of Leases and Leased Vehicles" means the schedule of 1999-A
Leases and 1999-A Leased Vehicles as such schedule shall be amended and updated
from time to time.
"Securities" means the Notes and the Transferor Certificate.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Intermediary" has the meaning set forth in Section
8-102(a)(14) of the UCC.
"Security Entitlement" has the meaning set forth in Section
8-102(a)(17) of the UCC.
"Servicer" means WOFCO, in its capacity as servicer of the 1999-A
Leases and 1999-A Leased Vehicles, and each successor thereto (in the same
capacity) appointed pursuant to Sections 2.10 of the Servicing Agreement and
9.11 of the 1999-A Servicing Supplement, respectively.
"Servicer's Certificate" means an Officer's Certificate of the Servicer
completed and executed pursuant to Section 10.01 of the 1999-A Servicing
Supplement.
"Servicing Agreement" has the meaning set forth in Recital C.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The McGraw Hill Companies, Inc., and its successors.
"State" means any state of the United States, the District of Columbia
and the Commonwealth of Puerto Rico.
"SUBI Certificate" has the meaning set forth in Recital D.
"SUBI Certificate Agreement" has the meaning set forth in Recital F.
"Transaction Documents" has the meaning attributed to the term
"Securitization Trust Documents" in the 1999-A SUBI Supplement.
"Transferor" means WOLS LP, in its capacity as transferor of the 1999-A
SUBI Certificate and the 1999-A SUBI Interest under this Agreement, and each
successor thereto (in the same capacity) pursuant to Section 2.02.
"Transferor Amounts" means, with respect to any Distribution Date,
amounts available for distribution to the Transferor in respect of the
Transferor Distributable Amount for such Distribution Date that are instead
distributed pursuant to Section 3.03(e) because of an insufficiency in the
amount of Interest Collections available to make such distributions on such
Distribution Date (as determined pursuant to Section 3.03(e)).
"Transferor Certificate" means the Certificate executed and
authenticated by the Owner Trustee in substantially the form set forth in
Exhibit A to this Agreement.
"Transferor Distributable Amount" means, with respect to any
Distribution Date, the sum of the Transferor Principal Distributable Amount and
the Transferor Interest Distributable Amount.
"Transferor Interest" means, as of any date, an amount equal to (i) the
Aggregate Net Investment Value less (ii) the Note Balance.
"Transferor Interest Distributable Amount" means, with respect to any
Distribution Date, the amount equal to the Transferor Percentage (with respect
to Interest Collections) of all Interest
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Collections collected during or received in respect of the related Collection
Period, less the Transferor Percentage of Capped Indenture Trustee
Administrative Expenses, Capped Owner Trustee Administrative Expenses and
Uncapped Administrative Expenses.
"Transferor Percentage" means, with respect to Interest Collections and
Principal Collections respectively, received in or with respect to any
Collection Period, 100% minus the Investor Percentage as applied for such
Collection Period with respect to such items, respectively.
"Transferor Principal Distributable Amount" means, with respect to any
Distribution Date related to a Collection Period in the Amortization Period, the
amount equal to the Transferor Percentage (with respect to Principal
Collections) of all Principal Collections collected during or received in
respect of the related Collection Period.
"Trust" means the World Omni 1999-A Automobile Lease Securitization
Trust created by this Agreement, the estate of which consists or will consist of
the Trust Estate.
"Trust Estate" means (i) the property conveyed to the Trust under
Section 2.02; (ii) the Distribution Account, the Reserve Fund and such monies as
are from time to time deposited therein; (iii) the Residual Value Insurance
Policy and (iv) all proceeds of the foregoing.
"UCC" means (a) in the case of Permitted Investments, the Uniform
Commercial Code as in effect in the State of Illinois, and (b) in all other
cases, the Uniform Commercial Code as in effect in the relevant jurisdiction.
"Uncapped Administrative Expenses" means Administrative Expenses that
would be Capped Contingent and Excess Liability Premiums, Capped Origination
Trust Administrative Expenses, Capped Indenture Trustee Administrative Expenses
or Capped Owner Trustee Administrative Expenses, respectively, except that they
exceed $[__________], $[__________], $[__________] (or $[__________] as
applicable) or $[__________] in any calendar year, respectively.
"Uncovered Loss Amounts" means, for any Distribution Date, the excess
of (i) the Investor Percentage of Loss Amounts for such Distribution Date over
(ii) Covered Loss Amounts for such Distribution Date.
"Undistributed Transferor Excess Collections" has the meaning set forth
in Section 3.03(c).
"Uninvested Principal Collections" means, as of the end of the
Revolving Period, any Principal Collections with respect to the Revolving Period
(or amounts treated as Principal Collections pursuant to Section 3.03(b)) then
on deposit in the 1999-A SUBI Collection Account that have not been reinvested
in additional 1999-A Leases and 1999-A Leased Vehicles as contemplated by
Section 8.02 of the 1999-A Servicing Supplement.
"United States" means the United States of America, its territories and
possessions and areas subject to its jurisdiction.
"U.S. Bank" has the meaning set forth in Recital A.
"Vice President" of any Person means any vice president of such Person,
whether or not designated by a number or words before or after the title "Vice
President."
"WOFCO" means World Omni Financial Corp. and its successors.
"WOLS LLC" means World Omni Lease Securitization LLC, a single member
Delaware limited liability company, the general partner of WOLS LP.
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"WOLS LP" means World Omni Lease Securitization L.P. and its
successors.
Section 1.02. Article and Section References.
Except as otherwise specified herein, all article and section
references shall be to Articles and Sections in this Agreement.
ARTICLE TWO. CREATION OF TRUST
Section 2.01. Creation of Trust.
Upon the execution of this Agreement by the parties hereto, there is
hereby created the World Omni 1999-A Automobile Lease Securitization Trust. It
is the intention of the parties hereto that the Trust constitute a business
trust under the Business Trust Statute, that the Owner Trustee be the sole
trustee of such business trust, and that this Agreement constitute the governing
instrument of such business trust. The Owner Trustee shall file the Certificate
of Trust with the Secretary of State of the State of Delaware.
Section 2.02. Conveyance of the 1999-A SUBI Interest.
In consideration of the Trust's delivery to, or upon the order of, the
Transferor of executed and authenticated Notes, in authorized denominations, in
an aggregate amount equal to the sum of the Initial Class A Note Balance and the
Initial Class B Note Balance, and of the executed and authenticated Transferor
Certificate, the Transferor does hereby transfer, assign and otherwise convey to
the Trust, in trust for the benefit of the Noteholders and Certificateholder, to
the full extent of the Transferor's interest therein, without recourse (subject
to the Transferor's obligations herein):
(i) all right, title and interest of the Transferor
in and to its interest in the 1999-A SUBI and the 1999-A SUBI Certificate
evidencing that interest in the 1999-A SUBI (such interest, the "1999-A SUBI
Interest") and all monies due thereon and paid thereon or in respect thereof;
(ii) the right to realize upon any property that may
be deemed to secure the 1999-A SUBI Interest;
(iii) all rights accruing to the holder of the 1999-A
SUBI Interest as a third-party beneficiary under the Origination Trust
Agreement, the 1999-A SUBI Supplement, the Servicing Agreement and the 1999-A
Servicing Supplement; and
(iv) all proceeds of the foregoing.
The Transferor also does hereby grant to the Trust a
security interest in all of the foregoing, and the Trust shall have all the
rights, powers and privileges of a secured party under the UCC.
Section 2.03. Acceptance by Owner Trustee.
The Owner Trustee does hereby accept on behalf of the Trust all
consideration conveyed by the Transferor pursuant to Section 2.02 and declares
that the Owner Trustee shall hold such consideration in trust as herein set
forth for the benefit of the Noteholders and the Certificateholder, subject to
the terms and provisions of this Agreement and the Indenture.
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ARTICLE THREE. DISTRIBUTIONS; RESERVE FUND; STATEMENTS TO SECURITYHOLDERS
Section 3.01. Distribution Account.
(a) Pursuant to Section 9.02(e) of the 1999-A Servicing
Supplement, the Servicer (on behalf of the Owner Trustee) shall establish the
Distribution Account in the name of the Indenture Trustee for the benefit of the
Noteholders and the Certificateholder. The Distribution Account shall be an
account initially established with the Indenture Trustee and maintained with the
Indenture Trustee so long as (i) the commercial paper or other short-term
unsecured debt obligations of the Indenture Trustee have the Required Rating, or
(ii) the Distribution Account is a segregated trust account bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Noteholders and the Certificateholder, which
Distribution Account is located in the Corporate Trust Office of the Indenture
Trustee and, so long as Moody's is a Rating Agency, the Indenture Trustee has a
long term deposit rating from Moody's of at least Baa3 (or such lower rating as
Moody's shall approve in writing) and corporate trust powers under applicable
federal and state laws and is organized under the laws of the United States or
any State. In the event that the Indenture Trustee no longer meets either of the
requirements stated above, then the Servicer shall, with the Indenture Trustee's
assistance as necessary, cause the Distribution Account to be moved to a bank or
trust company that satisfies the above-mentioned requirements. The Owner Trustee
hereby grants a security interest in the Distribution Account and all amounts on
deposit therein including all Permitted Investments therein and all proceeds of
the foregoing to the Indenture Trustee for the benefit of the Noteholders.
(b) For so long as the depository institution or trust company
then maintaining the Distribution Account meets the requirements of either
Section 3.01(a)(i) or (ii), all amounts held in the Distribution Account shall,
to the extent permitted by applicable laws, rules and regulations, be invested,
as directed by the Servicer pursuant to Section 9.02(j) of the 1999-A Servicing
Supplement, in Permitted Investments (or, if the Servicer fails to give such
directions, as provided in Section 8.03 of the Indenture); otherwise such
amounts shall be maintained in cash. Earnings on investment of funds in the
Distribution Account shall be retained in the Distribution Account and shall
constitute part of the Trust Estate, and losses shall be charged against the
funds on deposit therein.
Section 3.02. Collections.
(a) Pursuant to Sections 9.02(b) and 9.10(b) of the 1999-A
Servicing Supplement, the Servicer shall deposit all proceeds of claims made
under the Residual Value Insurance Policy for insured Residual Value Loss
Amounts with respect to the Amortization Period into the Distribution Account
within one (1) Business Day after receipt. Pursuant to Section 12.01(c) of the
1999-A SUBI Supplement and Section 9.02(g) of the 1999-A Servicing Supplement,
on each Deposit Date the Servicer shall cause the transfer from the 1999-A SUBI
Collection Account to the Distribution Account of all Interest Collections and,
on each Deposit Date related to the Collection Period in which the Amortization
Date or any Early Amortization Event occurs, and each subsequent Collection
Period, all Principal Collections, in each case for the preceding Collection
Period (including, on the Deposit Date related to the Collection Period in which
an Early Amortization Event occurs, all Principal Collections with respect to
such Collection Period prior to the Early Amortization Event). Pursuant to the
Class A Interest Rate Cap Agreement and the Class B Interest Rate Cap Agreement,
on each Deposit Date the Class A Cap Provider shall deposit into the
Distribution Account the Class A Cap Receipt, and the Class B Cap Provider shall
deposit into the Distribution Account the Class B Cap Receipt, if any. Further,
on the Deposit Date related to the Collection Period in which the Amortization
Date or any Early Amortization Event occurs, the Servicer also shall cause the
transfer from the 1999-A SUBI Collection Account to the Distribution Account all
Reallocation Deposit Amounts and Uninvested Principal Collections on deposit in
the 1999-A SUBI Collection Account at the time the Amortization Period
commences. Such deposit may be made in the form of a single deposit and shall be
made in immediately available funds, no later than 3:00 p.m., New York City
time, on the relevant Deposit Date.
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(b) The Indenture Trustee shall retain, subject to the
provisions of this Agreement and the other Transaction Documents, all
collections on or in respect of the 1999-A SUBI Interest transferred to the
Indenture Trustee, on behalf of the Noteholders, in accordance with such
provisions, in the Distribution Account or the Reserve Fund, as the case may be.
The Indenture Trustee shall be deemed to have possession of such monies and
collections for purposes of Section 9-305 of the UCC of the jurisdiction in
which such property is located.
Section 3.03. Distributions.
(a) On each Determination Date, pursuant to Section 9.02(f) of
the 1999-A Servicing Supplement, the Servicer shall calculate the amounts to be
distributed to the holder of the 1999-A SUBI Certificate, the Class A-1
Distributable Amount, the Class A-2 Distributable Amount, the Class A-3
Distributable Amount, the Class A-4 Distributable Amount, the Class B
Distributable Amount, the Transferor Distributable Amount, and all other
distributions to be made on the related Distribution Date.
(b) The rights of the Class B Noteholders to receive
distributions of Interest Collections in respect of the Class B Notes shall be
and are subordinated to the rights of the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders and the Class A-4 Noteholders to receive
distributions of Interest Collections in respect of the Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes to the extent
provided in this Agreement and the Indenture. On each Distribution Date the
Indenture Trustee shall distribute the product of (i) the Investor Percentage
with respect to Interest Collections, multiplied by (ii) the Interest
Collections paid over to the Indenture Trustee from the 1999-A SUBI Collection
Account pursuant to Section 3.02(a), together with any Transferor Amounts, any
amounts deposited by the Transferor into the Distribution Account pursuant to
subsection (e)(ii) below, any proceeds of a claim made under the Residual Value
Insurance Policy pursuant to Section 9.10(b) of the 1999-A Servicing Supplement
and the Required Amount, if any, for such Distribution Date, and any amount of
Principal Collections that otherwise would be distributed to the Class B
Noteholders pursuant to subsection (d) below but is required to be applied to
the payment of clauses (iii), (vii) and (viii) below pursuant to subsection
(e)(v) below, in the following amounts and otherwise in the following order of
priority to the following Persons:
(i) in the event of an Indenture Event of Default, to
the Indenture Trustee, the Investor Percentage of Capped Indenture Trustee
Administrative Expenses and to the Owner Trustee, the Investor Percentage of
Capped Owner Trustee Administrative Expenses;
(ii) first from the Class A Cap Receipt and then from
the amounts remaining after application of
clause (i) above the Class A-1 Interest Distributable Amount for such
Distribution Date together with any unpaid Class A-1 Interest Carryover
Shortfall, the Class A-2 Interest Distributable Amount for such Distribution
Date together with any unpaid Class A-2 Interest Carryover Shortfall, the Class
A-3 Interest Distributable Amount for such Distribution Date together with any
unpaid Class A-3 Interest Carryover Shortfall and the Class A-4 Interest
Distributable Amount for such Distribution Date together with any unpaid Class
A-4 Interest Carryover Shortfall, to the Class A-1, the Class A-2, the Class A-3
and the Class A-4 Noteholders, respectively;
(iii) to the Class A-1, Class A-2, Class A-3 and
Class A-4 Noteholders, respectively, the Class A-1
Uncovered Loss Interest Amount, the Class A-2 Uncovered Loss Interest Amount,
the Class A-3 Uncovered Loss Interest Amount and the Class A-4 Uncovered Loss
Interest Amount, if any, for such Distribution Date; provided, however, if funds
available are not sufficient to the make these distributions, such funds will be
allocated pro rata among the Class A Noteholders based on the Class A-1, Class
A-2, Class A-3 and Class A-4 Allocation Percentages;
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(iv) first from the Class B Cap Receipt and then from
the amounts remaining after application of clauses (i), (ii) and (iii) above,
the Class B Interest Distributable Amount for such Distribution Date, together
with any unpaid Class B Interest Carryover Shortfall, to the Class B
Noteholders; provided, however, the amount distributable pursuant to this clause
(iv) will be limited to the Class B Note Rate Cap;
(v) in circumstances other than those set forth in
clause (i), the Investor Percentage of Capped Indenture Trustee Administrative
Expenses for the preceding Collection Period to the Indenture Trustee and the
Investor Percentage of Capped Owner Trustee Administrative Expenses for the
preceding Collection Period to the Owner Trustee;
(vi) until the amount on deposit in the Reserve Fund
equals the Reserve Fund Cash Requirement, to
the Reserve Fund;
(vii) to the Class A Noteholders, (A) so long as the
Note Balance of the Class B Notes has not been
reduced to zero, an amount equal to the Covered Loss Amount for the related
Distribution Date, sequentially, commencing with the Class A-1 Noteholders until
the Note Balance on each such Class has been reduced to zero, or (B) if the Note
Balance of the Class B Notes has been reduced to zero, an amount equal to the
Covered Loss Amount for the related Distribution Date, pro rata based on the
Class A-1, Class A-2, Class A-3 and Class A-4 Allocation Percentages;
(viii) to the Class A-1, the Class A-2, the Class A-3
and the Class A-4 Noteholders, respectively,
any unreimbursed Class A-1 Uncovered Loss Amounts, Class A-2 Uncovered Loss
Amounts, Class A-3 Uncovered Loss Amounts and Class A-4 Uncovered Loss Amounts
remaining from previous Distribution Dates; provided, however, if funds
available are not sufficient to the make these distributions, such funds will be
allocated pro rata among the Class A Noteholders based on the Class A-1, Class
A-2, Class A-3 and Class A-4 Allocation Percentages;
(ix) to the Class B Noteholders, any Class B
Uncovered Loss Interest Amount and any Class B Note Principal Carryover
Shortfall Interest Amount for such Distribution Date;
(x) to the Class B Noteholders, any unreimbursed
Class B Uncovered Loss Amounts and any
unreimbursed Class B Note Principal Carryover Shortfall, in each case remaining
from previous Distribution Dates;
(xi) the Investor Percentage of Uncapped
Administrative Expenses, (A) to the Origination Trustee, the Indenture Trustee
or the Owner Trustee, as applicable, and then (B) to the Servicer, reimbursement
of any previous advance of Administrative Expenses that was made by the Servicer
pursuant to Section 9.05(a) of the 1999-A Servicing Supplement and has not yet
been reimbursed; and
(xii) the balance, if any, shall constitute Excess
Collections and shall be applied as set forth in
subsection (c) below.
Notwithstanding the foregoing, on any Distribution
Date related to a Collection Period in the Revolving Period, the amounts set
forth in clauses (vii), (viii) and (x) above shall not be paid to the
Noteholders, but shall be treated as Principal Collections for purposes of
Section 11.02 of the 1999-A SUBI Supplement.
(c) On each Distribution Date, the Indenture Trustee shall
distribute any Excess Collections in the following amounts and in the following
order of priority:
(i) if the Distribution Date relates to a Collection
Period in the Revolving Period, then as follows:
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(A) if (1) the ERISA Compliance Test is
unsatisfied, or (2) if a Downgrade Trigger Event has Toccurred and is
continuing, the 60 day period set forth in the fourth sentence of
Section 3.04(b) has elapsed, and the Transferor cannot comply with the
requirements of either clause (i) or clause (ii) thereof or has
determined in good faith that such compliance would not be commercially
reasonable, then any remainder to the Reserve Fund; and
(B) if Excess Collections are not required
to be applied as set forth in clause (A) above, then any remainder to
the Transferor;
(ii) if the Distribution Date relates to a Collection
Period in the Amortization Period, then as follows:
(A) any remainder up to but not exceeding
the product of one-twelfth of .25% and the Aggregate Net Investment
Value as of the last day of the related Collection Period (the
"Accelerated Principal Distribution Amount") as an additional principal
distribution to the Noteholders as follows: the Accelerated Principal
Distribution Amount will be distributed first to the Class A-1
Noteholders until the Class A-1 Notes have been paid in full, second,
to the Class A-2 Noteholders until the Class A-2 Notes have been paid
in full, third, to the Class A-3 Noteholders until the Class A-3 Notes
have been paid in full and fourth, the Class A Percentage and the Class
B Percentage of any remaining amount will be distributed to the Class
A-4 Noteholders and the Class B Noteholders, respectively, until such
Notes have been paid in full;
(B) if (1) the ERISA Compliance Test is
unsatisfied, or (2) if a Downgrade Trigger Event has occurred and is
continuing, the 60 day period set forth in the fourth sentence of
Section 3.04(b) has elapsed, and the Transferor cannot comply with the
requirements of either clause (i) or clause (ii) thereof or has
determined in good faith that such compliance would not be commercially
reasonable, then the balance of any remainder to the Reserve Fund; and
(C) if Excess Collections are not required
to be applied as set forth in clauses (A) and (B) above, then the
balance of any remainder to the Transferor.
Notwithstanding the foregoing, (i) to the extent that amounts would
otherwise be paid to the Class B Noteholders in accordance with clause (b)(iv)
above if calculated without regard to the proviso therein, amounts otherwise
payable to the Transferor shall be paid first to the Class B Noteholders in an
amount equal to the difference, if positive, between the amount payable in
clause (b)(iv) above calculated without regard to the proviso therein and the
amount payable in clause (b)(iv) above; and (ii) to the extent that such amounts
are not due to the Class B Noteholders pursuant to clause (i) of this sentence,
the Transferor may instruct the Indenture Trustee and the Servicer to redeposit
into the 1999-A SUBI Collection Account any Excess Collections that otherwise
would be payable to the Transferor pursuant to the foregoing ("Undistributed
Transferor Excess Collections"), for treatment as Collections with respect to
the Collection Period during which such Distribution Date occurs. By so
instructing the Indenture Trustee and the Servicer, the Transferor waives any
right that it may be deemed to have in the related Undistributed Transferor
Excess Collections, except insofar as they become Excess Collections payable to
the Transferor in respect of a subsequent Collection Period.
(d) On each Distribution Date beginning with the Distribution
Date related to the Collection Period in which the Amortization Period commences
and ending on the Distribution Date before the Distribution Date on which the
Class A-3 Notes have been paid in full, the Indenture Trustee shall distribute
an amount equal to the Investor Percentage of all Principal Collections
collected or received in respect of the related Collection Period to (w) the
Class A-1 Noteholders until the Class A-1 Notes have been paid in full, (x) the
Class A-2 Noteholders until the Class A-2 Notes have been paid in full, (y) the
Class A-3 Noteholders until the Class A-3 Notes have been paid in full and (z)
the Class A Percentage and the Class B Percentage thereof to the Class A-4
Noteholders and Class B Noteholders, respectively. On each Distribution Date
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after the Class A-3 Notes have been paid in full, the Indenture Trustee shall
distribute (i) to the Class A-4 Noteholders, the Class A Percentage of Principal
Collections collected or received in respect of the related Collection Period
and (ii) subject to subsection (e) below, to the Class B Noteholders, the Class
B Percentage of such Principal Collections. Distributions to Noteholders
pursuant to Sections 3.03(b)(vii), (viii) and (x) also shall constitute
distributions of principal. The aggregate amount of principal distributed to any
Class of Noteholders shall not exceed the Initial Note Balance attributable to
that Class of Notes.
(e) If and to the extent that the amount of Interest
Collections (measured for these purposes without regard to any deduction
therefrom provided for in clauses (a) through (c) of the definition of "Interest
Collections" in the 1999-A SUBI Supplement) available to make distributions on a
Distribution Date (plus, in the case of clause (b)(ii) above, the Class A Cap
Receipt and, in the case of clause (b)(iv) above, the Class B Cap Receipt) is
insufficient to make distributions (or, on a Distribution Date related to a
Collection Period in the Revolving Period, applications as if such amounts were
Principal Collections) pursuant to clauses (i) through (xi) of Section 3.03(b)
and clauses (a) through (c) of the definition of the term "Interest Collections"
in the 1999-A SUBI Supplement, then:
(i) amounts otherwise available for distribution to the
Transferor in respect of the Transferor Interest Distributable Amount for such
Distribution Date, and then in respect of the Transferor Principal Distributable
Amount, will be applied towards such insufficiency;
(ii) if after giving effect to clause (i), there is still
a shortfall (other than any shortfall in amounts available to apply as set forth
in clause (vi) of Section 3.03(b)) in amounts available to make all
distributions (or, on a Distribution Date related to a Collection Period in the
Revolving Period, applications as if such amounts were Principal Collections)
pursuant to Section 3.03(b) and clauses (a) through (c) of the definition of the
term "Interest Collections" in the 1999-A SUBI Supplement, then any amounts that
may be deposited by the Transferor, in its sole discretion, into the
Distribution Account as a capital contribution to the Trust and designated for
that purpose will be applied towards such shortfall;
(iii) if after giving effect to clauses (i) and (ii),
there is still a shortfall (other than any shortfall in amounts available to
apply as set forth in clause (vi) of Section 3.03(b)) in amounts available to
make all distributions (or, on a Distribution Date related to a Collection
Period in the Revolving Period, applications as if such amounts were Principal
Collections) pursuant to Section 3.03(b) and clauses (a) through (c) of the
definition of the term "Interest Collections" in the 1999-A SUBI Supplement, the
proceeds of any claim made by the Servicer pursuant to Section 9.10(b) of the
1999-A Servicing Supplement will be applied towards such shortfall;
(iv) if after giving effect to clauses (i), (ii) and
(iii), there is still a shortfall (other than any shortfall in amounts available
to apply as set forth in clause (vi) of Section 3.03(b)) in amounts available to
make all distributions (or, on a Distribution Date related to a Collection
Period in the Revolving Period, applications as if such amounts were Principal
Collections) pursuant to Section 3.03(b) and clauses (a) through (c) of the
definition of the term "Interest Collections" in the 1999-A SUBI Supplement, the
Required Amount will be withdrawn from the Reserve Fund and applied towards such
shortfall; and
(v) if, on a Distribution Date related to a Collection
Period during the Amortization Period, after giving effect to clauses (i), (ii),
(iii) and (iv), there is still a shortfall in amounts required to make the
distributions (or, on a Distribution Date related to a Collection Period in the
Revolving Period, available for reinvestment in additional 1999-A SUBI Assets
pursuant to Section 11.02 of the 1999-A SUBI Supplement) pursuant to clause
(iii), (vii) or (viii) of Section 3.03(b), amounts otherwise available for
distribution to the Class B Noteholders in respect of principal pursuant to
subsection (d) above will be applied toward such insufficiency.
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In the event that there remain shortfalls in the amounts
required to be distributed pursuant to Section 3.03(b)(ii) to the Class A-1
Noteholders, the Class A-2 Noteholders, the Class A-3 Noteholders and the Class
A-4 Noteholders, and, on and after any Distribution Date on which the Note
Balance of the Class B Notes has been reduced to zero, there remains any
shortfall in amounts required to be distributed to the Class A-1 Noteholders,
the Class A-2 Noteholders, the Class A-3 Noteholders and the Class A-4
Noteholders under Sections 3.03(b)(iii), (vii) or (viii), the amounts available
will be distributed pro rata to Class A-1 Noteholders, Class A-2 Noteholders,
Class A-3 Noteholders and Class A-4 Noteholders based on the Class A-1
Allocation Percentage, the Class A-2 Allocation Percentage, the Class A-3
Allocation Percentage and the Class A-4 Allocation Percentage, respectively.
(f) On each Distribution Date, amounts that otherwise would be
payable to the Transferor in respect of the Transferor Distributable Amount
(other than Transferor Amounts) will be distributed to the Transferor by the
Indenture Trustee as follows: (A) if such Distribution Date relates to a
Collection Period during the Revolving Period, the interest component of such
remaining amounts will be paid in respect of the Transferor Interest
Distributable Amount and (B) if such Distribution Date relates to a Collection
Period during the Amortization Period, (1) the interest component of such
remaining amounts will be paid in respect of the Transferor Interest
Distributable Amount and (2) if and to the extent that the Transferor Interest
will be equal to or greater than zero, after all required distributions have
been made on such Distribution Date, the principal component of such remaining
amounts will be paid in respect of the Transferor Principal Distributable
Amount. Any amounts that would otherwise be payable to the Transferor pursuant
to the foregoing as the Transferor Principal Distributable Amount, but may not
be so paid because the Transferor Interest would be less than or equal to zero,
shall instead be distributed to the Noteholders pursuant to Section 3.03(d).
Upon any distribution of amounts to the Transferor, the Noteholders will have no
further rights, in, or claims to, such amounts. Notwithstanding the foregoing,
the Transferor may instruct the Trustee and the Servicer to redeposit into the
1999-A SUBI Collection Account any Transferor Distributable Amounts that
otherwise would be payable to the Transferor pursuant to the foregoing, for
treatment as Collections with respect to the Collection Period during which that
Distribution Date occurs. By so instructing the Trustee and the Servicer, the
Transferor waives any right that it may be deemed to have in those Transferor
Distributable Amounts, except insofar as they become Excess Collections payable
to the Transferor in respect of a subsequent Collection Period.
(g) On the Final Scheduled Maturity Date with respect to any
Class, an additional payment to the Holders of such Class shall be made as and
to the extent required by Section 3.04(f).
Section 3.04. Reserve Fund.
(a) (i) In order to assure that sufficient amounts to
make required distributions to Noteholders will
be available, pursuant to Section 9.02(e) of the 1999-A Servicing Supplement the
Servicer (on behalf of the Owner Trustee) shall establish and maintain with and
in the name of the Indenture Trustee a separate trust account to be known as the
"Reserve Fund", which will include the money and other property deposited and
held therein pursuant to Section 3.03(c)(i) and this Section. The Reserve Fund
shall be an account initially established with the Indenture Trustee and
maintained with the Indenture Trustee so long as (A) the commercial paper or
other short-term unsecured debt obligations of the Indenture Trustee have the
Required Rating, or (B) the Reserve Fund is a segregated trust account bearing a
designation clearly indicating the funds deposited therein are held in trust for
the benefit of the Noteholders, which Reserve Fund is located in the Corporate
Trust Office of the Indenture Trustee and, so long as Moody's is a Rating
Agency, the Indenture Trustee has a long-term deposit rating from Moody's of at
least Baa3 (or such lower rating as Moody's shall approve in writing) and
corporate trust powers under applicable federal and state laws and is organized
under the laws of the United States or any State. In the event that the
Indenture Trustee no longer meets either of the requirements stated above, then
the Servicer shall, with the Indenture Trustee's assistance as necessary, cause
the Reserve Fund to be moved to a bank or trust company that satisfies the
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above-mentioned requirements. The Owner Trustee hereby grants a security
interest in the Reserve Fund and all amounts on deposit therein including all
Permitted Investments therein and all proceeds of the foregoing to the Indenture
Trustee for the benefit of the Noteholders.
(ii) For so long as the depository institution or
trust company then maintaining the Reserve Fund meets the requirements of either
Section 3.04(a)(i)(A) or (B), all amounts held in the Reserve Fund shall, to the
extent permitted by applicable laws, rules and regulations, be invested, as
directed by the Servicer pursuant to Section 9.02(j) of the 1999-A Servicing
Supplement, in Permitted Investments (or, if the Servicer fails to give such
directions, as provided in Section 8.03 of the Indenture); otherwise such
amounts shall be maintained in cash. Earnings on investment of funds in the
Reserve Fund shall be retained in the Reserve Fund and shall constitute part of
the Trust Estate, and losses shall be charged against the funds on deposit
therein.
(b) On or prior to the Closing Date, the Transferor shall
deposit an amount equal to the Reserve Fund Initial Deposit into the Reserve
Fund. The Transferor also does hereby grant to the Indenture Trustee a security
interest in such initial deposit, and the Indenture Trustee shall have all the
rights, powers and privileges of a secured party under the UCC. Amounts on
deposit in the Reserve Fund shall be supplemented from time to time by the
deposit therein of other funds as and to the extent described elsewhere in this
Agreement. Within 60 days after receipt of notice that an RV Insurer Trigger
Event exists and is continuing, the Transferor shall deposit into the Reserve
Fund an additional cash amount equal to the RV Insurer Reserve Fund Supplemental
Requirement. Within 60 days after the occurrence of a Downgrade Trigger Event,
then either: (i) the Transferor shall (A) cause one or more policies with
substantially similar coverage and provisions to the Residual Value Insurance
Policy to be issued by an insurer acceptable to each Rating Agency (as evidenced
by confirmation (written or oral) from each to the effect that such change would
not result in its then-current rating of any Rated Securities being qualified,
reduced or withdrawn), provided that the Origination Trustee and the Indenture
Trustee shall at all times have the same rights with respect to any replacement
policy as with respect to the original policy, or (B) cause an alternative
mechanism to support the Booked Residual Values of the 1999-A Leased Vehicles to
be implemented and approved in accordance with the procedures set forth in
Section 9.01 for the amendment hereof; or (ii) the Transferor shall deposit into
the Reserve Fund an additional cash amount equal to the Downgrade Reserve Fund
Supplemental Requirement; provided that if the Transferor cannot comply with
either clause (i) or clause (ii) or determines in good faith that such
compliance would be commercially unreasonable, Excess Collections shall be
deposited into the Reserve Fund as provided in Section 3.03(c). In addition, on
each Deposit Date relating to a Distribution Date on which a Reserve Fund
Deficiency will exist, the Transferor shall deposit into the Reserve Fund an
additional cash amount equal to the lesser of (i) such Reserve Fund Deficiency
and (ii) the Reserve Fund Supplemental Requirement. On each Distribution Date
the amounts on deposit in the Reserve Fund shall be available for distribution
as provided in Section 3.03 and, on each Distribution Date, if the amount on
deposit in the Reserve Fund (after giving effect to all deposits thereto or
withdrawals therefrom on such Distribution Date) is greater than the Reserve
Fund Cash Requirement and Excess Collections are not required to be deposited
into the Reserve Fund pursuant to Section 3.03(c), the Indenture Trustee will
distribute any remaining amounts to the Transferor.
(c) In the event there is a Downgrade Trigger Event, the 60
day period set forth in the fifth sentence of Section 3.04(b) has elapsed and
the Transferor has elected to comply with the requirements of clause (ii)
thereof rather than clause (i), or complies with neither of such clauses, the
Rating Agencies may impose additional conditions to the maintenance of their
then-current ratings on any Class of Notes, including conditions that may
require that this Agreement or any other Transaction Document be amended in
accordance with the provisions of Section 9.01(b) hereof or the relevant
provisions thereof.
(d) Upon termination of the Trust pursuant to Section 7.01,
any amounts on deposit in the Reserve Fund shall be available for payment of any
remaining amounts due to the Noteholders, and for payment of any remaining
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amounts due to the Indenture Trustee and the Owner Trustee, and after payment of
such amounts due, shall be paid to the Transferor.
(e) Amounts properly received by the Transferor pursuant to
this Agreement shall be free of any claim of the Trust, the Indenture Trustee,
the Owner Trustee, the Class A Cap Provider, the Class B Cap Provider or the
Noteholders and shall not be available to the Indenture Trustee, the Owner
Trustee or the Trust for the purpose of making deposits to the Reserve Fund or
making payments to the Class A Cap Provider, the Class B Cap Provider or the
Noteholders, nor shall the Transferor be required to refund any amount properly
received by it.
(f) On the respective Final Scheduled Maturity Date for any
Class, to the extent that the Class A-1 Note Balance, the Class A-2 Note
Balance, the Class A-3 Note Balance, the Class A-4 Note Balance or the Class B
Note Balance has not been reduced to zero the Indenture Trustee shall withdraw
funds from the Reserve Fund, if available, in an amount equal to the lesser of
(A) the Class A-1 Note Balance, the Class A-2 Note Balance, the Class A-3 Note
Balance, the Class A-4 Note Balance or the Class B Note Balance, as applicable,
and (B) the amount in the Reserve Fund, and shall pay such funds to the Holders
of such Class of Notes.
Section 3.05. Net Deposits.
For so long as WOFCO shall be the Servicer, the Servicer and the
Indenture Trustee may make all remittances to the Distribution Account pursuant
to this Article net of amounts to be distributed by the applicable recipient to
such remitting party. The Transferor may make remittances to the Distribution
Account pursuant to this Article net of amounts distributable to the Transferor
on the related Distribution Date, provided that such amounts were to be paid
directly to the Transferor on such Distribution Date rather than deposited into
the Reserve Fund pursuant to Section 3.04. Nonetheless, each such party shall
account for all of the above described remittances and distributions as if the
amounts were deposited and/or transferred separately, and the net remittance may
only be made to the extent that the net result thereof is the same as if the
amounts were deposited and/or transferred separately.
Section 3.06. Statements to Noteholders.
(a) On each Distribution Date, the Indenture Trustee shall
include with each distribution to each Noteholder of record, a statement,
prepared by the Servicer, based on information in the Servicer's Certificate
furnished pursuant to Section 10.01 of the 1999-A Servicing Supplement, setting
forth for the related Collection Period and distribution the following
information as of the related Record Date or Deposit Date or such Distribution
Date, as the case may be:
(i) the Investor Percentage for such Collection
Period, stated separately for Interest Collections and Loss Amounts, and for
Principal Collections;
(ii) the total amount being distributed to
Noteholders in such distribution;
(iii) the total amount being distributed to each
Class of Noteholders in such distribution that is allocable to interest and to
principal on each Class of Notes;
(iv) the amount, if any, of Class A-1 Interest
Carryover Shortfall, Class A-2 Interest Carryover Shortfall, Class A-3 Interest
Carryover Shortfall, Class A-4 Interest Carryover Shortfall and Class B Interest
Carryover Shortfall included in such distribution;
(v) the amount, if any, of the remaining unpaid Class
A-1 Interest Carryover Shortfall, Class A-2 Interest Carryover Shortfall, Class
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A-3 Interest Carryover Shortfall, Class A-4 Interest Carryover Shortfall and
Class B Interest Carryover Shortfall after giving effect to such distribution;
(vi) the Note Balance, the Class A-1 Note Balance,
the Class A-2 Note Balance, the Class A-3 Note Balance, the Class A-4 Note
Balance, the Class B Note Balance, the Class A-1 Note Factor, the Class A-2 Note
Factor, the Class A-3 Note Factor, the Class A-4 Note Factor and the Class B
Note Factor, each after giving effect to such distribution;
(vii) the Class A-1 Allocation Percentage, the Class
A-2 Allocation Percentage, the Class A-3 Allocation Percentage, the Class A-4
Allocation Percentage and the Class B Allocation Percentage for that
Distribution Date
(viii) any Covered Loss Amounts and Uncovered Loss
Amounts for that Distribution Date, as well as the amount of Charged-off
Amounts, Residual Value Loss Amounts and Additional Loss Amounts included in
each;
(ix) the amount, if any, of the reimbursement of
Class A-1 Uncovered Loss Amounts, Class A-2 Uncovered Loss Amounts, Class A-3
Uncovered Loss Amounts, Class A-4 Uncovered Loss Amounts and Class B Uncovered
Loss Amounts included in such distribution;
(x) the amount, if any, of accrued Class A-1
Uncovered Loss Interest Amounts, Class A-2 Uncovered Loss Interest Amounts,
Class A-3 Uncovered Loss Interest Amounts, Class A-4 Uncovered Loss Interest
Amounts and Class B Uncovered Loss Interest Amounts included in such
distribution;
(xi) the amount, if any, of the aggregate of
unreimbursed Class A-1 Uncovered Loss Amounts, Class A-2 Uncovered Loss Amounts,
Class A-3 Uncovered Loss Amounts, Class A-4 Uncovered Loss Amounts and Class B
Uncovered Loss Amounts after giving effect to such distribution;
(xii) the amount, if any, of accrued and unpaid Class
A-1 Uncovered Loss Interest Amounts, Class
A-2 Uncovered Loss Interest Amounts, Class A-3 Uncovered Loss Interest Amounts,
Class A-4 Uncovered Loss Interest Amounts and Class B Uncovered Loss Interest
Amounts after giving effect to such distribution;
(xiii) the amount, if any, of accrued and unpaid
Class B Note Principal Carryover Shortfall after
giving effect to such distribution;
(xiv) the Investor Percentage of the Servicing Fee
allocable to the 1999-A SUBI Interest for such Distribution Date and any unpaid
previous such amounts with respect to prior Distribution Dates;
(xv) the Required Amount, if any, included in such
distribution, the amount on deposit in the
Reserve Fund on such Distribution Date, after giving effect to such
distributions, the change in such balance from the immediately preceding
Distribution Date, the Reserve Fund Cash Requirement, the Reserve Fund
Supplemental Requirement (if any), the RV Insurer Reserve Fund Supplemental
Requirement (if any) and the Downgrade Reserve Fund Supplemental Requirement (if
any);
(xvi) the Transferor Amount, if any, included in such
distribution and the amount of the Transferor
Interest, after giving effect to all payments made on such Distribution Date;
(xvii) the Aggregate Net Investment Value as of the
end of such Collection Period;
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(xviii) the amount of Payments Ahead on deposit in
the 1999-A SUBI Collection Account and
representing Monthly Lease Payments due in one or more immediately subsequent
Collection Periods and the change in such balance from the immediately preceding
Distribution Date;
(xix) the amount of Outstanding Advances on such
Distribution Date and the changes in such amount
from the immediately preceding Distribution Date;
(xx) the weighted average Lease Rate of the Leases in
the 1999-A SUBI Portfolio for the immediately preceding Collection Period and
the Charge-off Rate and Delinquency Rate for each of the three immediately
preceding Collection Periods;
(xxi) the Insured Residual Value Loss Amount, if any,
for such Distribution Date;
(xxii) the Class A Cap Receipt, if any, for such
Distribution Date; and
(xxiii) the Class B Cap Receipt, if any, for such
Distribution Date.
Each amount set forth pursuant to subclauses (ii) through (v) and
(viii) through (xiii) above shall be expressed as a dollar amount per $1,000 of
original principal balance of a Note. Any Note Owner may obtain a copy of any
such statement, of any Servicer's Certificate required pursuant to Section 10.01
of the 1999-A Servicing Supplement, any annual report of Independent Accountants
required pursuant to Section 3.02 of the Servicing Agreement and Section 10.02
of the 1999-A Servicing Supplement, and of any annual Officer's Certificate
required pursuant to Section 3.03 of the Servicing Agreement and Section
10.03(a) of the 1999-A Servicing Supplement, upon written request to the
Indenture Trustee at the Corporate Trust Office of the Indenture Trustee.
(b) Within a reasonable period of time after the end of each
calendar year, but not later than the latest date permitted by law, the
Indenture Trustee shall mail to each Person who at any time during such calendar
year shall have been a Holder of a Note, a statement or statements which in the
aggregate contain the sum of the amounts set forth in clauses (a)(ii) through
(vii) and (ix) through (xiv) above for such calendar year or, in the event such
Person shall have been a Holder of a Note during a portion of such calendar
year, for the applicable portion of such year, for the purposes of such
Noteholder's preparation of federal income tax returns. In addition, the
Servicer shall furnish to the Indenture Trustee for distribution to such Person
at such time any other information reasonably necessary under applicable law for
the preparation of such income tax returns.
ARTICLE FOUR. THE TRANSFEROR CERTIFICATE
Section 4.01. The Transferor Certificate.
A single Transferor Certificate shall be issued. The Transferor
Certificate shall be executed by the Owner Trustee on behalf of the Trust by
manual or facsimile signature of a Responsible Officer under the Owner Trustee's
seal imprinted thereon and attested on behalf of the Owner Trustee by the manual
or facsimile signature of a Responsible Officer. A Transferor Certificate
bearing the manual or facsimile signatures of an individual who was, at the time
when such signature was affixed, a Responsible Officer of the Owner Trustee
shall be a valid and binding obligation of the Trust, notwithstanding that such
individual ceased to be so authorized prior to the authentication and delivery
of such Transferor Certificate or was not a Responsible Officer at the date of
such Transferor Certificate. The Transferor Certificate shall be dated the date
of its authentication.
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Section 4.02. Authentication and Delivery of Transferor
Certificate.
In exchange for, and simultaneously with the sale, assignment and
transfer to the Trust of the 1999-A SUBI Interest, the 1999-A SUBI Certificate
and the other assets of the Trust, the Transferor shall receive the Transferor
Certificate and the Notes. The Owner Trustee shall, on behalf of the Trust,
execute and deliver to or upon the order of the Transferor, and shall
authenticate, the Transferor Certificate. The Transferor Certificate shall not
be entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on such Certificate a certificate of authentication
substantially in the form set forth in Exhibit A to this Agreement executed by
the Owner Trustee by manual signature, and such certificate upon the Transferor
Certificate shall be conclusive evidence, and the only evidence, that such
Transferor Certificate has been duly authenticated and delivered under this
Agreement.
Section 4.03. No Transfer of Transferor Certificate.
Subject to Section 5.03, the Transferor Certificate shall be owned by
the Transferor and may not be transferred, as provided by Section 5.06.
Section 4.04. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Transferor Certificate is surrendered to the Owner
Trustee, or the Owner Trustee receives evidence to its satisfaction of the
destruction, loss or theft of the Transferor Certificate, and (ii) there is
delivered to the Owner Trustee such security or indemnity as may be required by
it to save itself and the Trust harmless, then, in the absence of notice that
such Transferor Certificate has been acquired by a bona fide 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 Transferor Certificate, a new Transferor Certificate
of like tenor and fractional undivided interest. Any duplicate Transferor
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Transferor Certificate shall be
found at any time, and any such lost, stolen or destroyed Transferor Certificate
shall, upon issuance of any such duplicate Transferor Certificate, be null, void
and of no effect.
Section 4.05. Persons Deemed Owners.
The Owner Trustee shall treat the Transferor as the owner of the
Transferor Certificate for the purpose of receiving distributions pursuant to
Section 3.03 and for all other purposes whatsoever.
ARTICLE FIVE. THE TRANSFEROR
Section 5.01. Representations of Transferor.
The Transferor hereby makes the following representations on which the
Owner Trustee relies in accepting the 1999-A SUBI Interest and 1999-A SUBI
Certificate in trust and executing and authenticating the Transferor Certificate
and executing the Notes and on which the Indenture Trustee relies in
authenticating the Notes. The representations speak as of the execution and
delivery of this Agreement, but shall survive the sale, transfer and assignment
of the 1999-A SUBI Interest and 1999-A SUBI Certificate to the Indenture Trustee
and the Owner Trustee.
(a) Organization and Good Standing. The Transferor is a
limited partnership validly organized and existing and 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 shall be currently
owned and such business is presently conducted, and has power, authority and
legal right to acquire, own and sell the 1999-A SUBI Interest and 1999-A SUBI
Certificate.
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(b) Due Registration. The Transferor is duly registered 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 requires such qualifications, except
where the failure to so qualify or to have obtained such licenses and approvals
would not have a material adverse effect on the earnings, business affairs or
business prospects of the Transferor.
(c) Power and Authority. The Transferor has the power and
authority to execute and deliver this Agreement and to carry out its terms, the
Transferor has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Owner Trustee as part of the Trust
and has duly authorized such sale and assignment to the Owner Trustee by all
necessary partnership action; and the execution, delivery and performance of
this Agreement have been duly authorized by the Transferor by all necessary
partnership action.
(d) Valid Sale; Binding Obligations. This Agreement evidences
a valid sale, transfer and assignment of the 1999-A SUBI Interest and 1999-A
SUBI Certificate, enforceable against creditors of and purchasers from the
Transferor; and constitutes a legal, valid and binding obligation of the
Transferor enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability shall be
considered in a proceeding in equity or at law.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms of this
Agreement do not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time) a
default under, the certificate of limited partnership or limited partnership
agreement of the Transferor, or conflict with or violate any of the material
terms or provisions of, or constitute (with or without notice or lapse of time)
a default under, any indenture, agreement or other instrument to which the
Transferor 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 this Agreement); nor
violate any law or, to the best of the Transferor's knowledge, any order, rule
or regulation applicable to the Transferor of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Transferor or its properties; which
breach, default, conflict, lien or violation would have a material adverse
effect on the earnings, business affairs or business prospects of the
Transferor.
(f) No Proceedings. There are no proceedings or investigations
pending, or to the Transferor's best knowledge, threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Transferor or its properties: (i) asserting the
invalidity of this Agreement or the Transferor Certificate, (ii) seeking to
prevent the issuance of the Transferor Certificate or the consummation of any of
the transactions contemplated by this Agreement, (iii) seeking any determination
or ruling that might materially and adversely affect the performance by the
Transferor of its obligations under, or the validity or enforceability of, this
Agreement or the Transferor Certificate or (iv) relating to the Transferor and
which might adversely affect the federal or Alabama income tax attributes of the
Transferor Certificate.
(g) Title to the 1999-A SUBI Certificate. The Transferor has
good title to, and is the sole legal and beneficial owner of, the 1999-A SUBI
Certificate, free and clear of Liens.
(h) Consents and Approvals. The Transferor has obtained or
made all necessary licenses, consents, approvals, waivers and notifications of
creditors, lessors and other nongovernmental Persons, in each case in connection
with the execution and delivery of this Agreement and the consummation of all
the transactions herein contemplated, and the Transferor is not required to
obtain the consent of any other party or the consent, license, approval, or
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authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement.
Section 5.02. Liability of Transferor; Indemnities.
The Transferor shall be liable in accordance with this Agreement only
to the extent of the obligations in this Agreement specifically undertaken by
the Transferor in such capacity under this Agreement and shall have no other
obligations or liabilities hereunder. The Transferor agrees, on demand, to
indemnify and defend the Owner Trustee and its directors, officers, employees,
agents, successors and assigns against, and hold each of them harmless from, any
liability, costs and expenses (including reasonable attorneys' fees) that may
arise out of or in connection with the Owner Trustee acting as Owner Trustee
under this Trust Agreement, except for any liability arising out of the
negligence, bad faith or willful misconduct on the part of any such person or
persons; provided, however, that in the event any person alleges such
negligence, bad faith or willful misconduct, the indemnification provided for
herein shall nonetheless be paid on demand, subject to later adjustment or
reimbursement when and if a court of competent jurisdiction enters a final
judgment as to the extent of such negligence, bad faith or willful misconduct.
Section 5.03. Merger or Consolidation of, or Assumption of the
Obligations of, Transferor; Certain Limitations.
(a) Any Person (i) into which the Transferor may be merged or
consolidated, (ii) which may result from any merger, conversion or consolidation
to which the Transferor shall be a party or (iii) which may succeed to all or
substantially all of the business of the Transferor, shall be the successor to
the Transferor under this Agreement without the execution or filing of any
document or any further act on the part of any of the parties to this Agreement,
except that if the Transferor in any of the foregoing cases is not the surviving
entity, then the surviving entity shall execute an agreement of assumption to
perform every obligation of the Transferor either generally or specifically as
provided herein. The Transferor shall provide notice of any merger,
consolidation or succession pursuant to this Section to each Rating Agency and
shall receive confirmation (written or oral) from each Rating Agency to the
effect that such merger, consolidation, or succession will not result in a
qualification, downgrading or withdrawal of the then-current rating assigned to
any Rated Securities.
(b) (i) Subject to subparagraph (ii) below, the purpose of the
Transferor shall be to engage in any lawful activity for which a limited
partnership may be formed under the laws of the State of Delaware other than the
practice of a profession permitted to be operated through a limited partnership
under Delaware law.
(ii) Notwithstanding subparagraph (b)(i) above, the
purpose of the Transferor shall be limited to the following purposes:
(A) to act as settlor or grantor of one or more
securitization trusts formed pursuant to a trust agreement or other
agreement for the purpose of acquiring interests in the Origination
Trust, which securitization trust may issue certificates of beneficial
interest in the assets of such securitization trust;
(B) to acquire, own, hold, sell, transfer, convey, dispose
of, pledge, assign, borrow money against, finance, refinance or
otherwise deal with, publicly or privately and whether with unrelated
third parties or with affiliated entities, beneficial interests in the
Origination Trust, including without limitation any undivided trust
interests or special units of beneficial interest created with respect
to the Origination Trust, and certificates of the securitization trust;
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(C) to loan or otherwise invest funds received as a result
of the Transferor's beneficial interest in the Origination Trust or
certificates in the securitization trust and any other income, as
determined by the general partner of the Transferor from time to time;
(D) to borrow money other than pursuant to clause (B)
above, but only to the extent that any such borrowing is permitted by
the terms of the transactions contemplated by clauses (A) and (B); and
(E) to engage in any lawful act or activity and to
exercise any powers permitted to limited partnerships organized under
Delaware law that are incidental to and necessary or convenient for the
accomplishment of the foregoing purposes.
(c) Notwithstanding any other provision of this Section and
any provision of law, neither the Transferor nor its general partner, on behalf
of the Transferor, shall do any of the following:
(i) engage in any business or activity other than as
set forth in clause (b) above;
(ii) without the affirmative vote of a majority of
the members of the Board of Directors of the Transferor's general partner (which
must include the affirmative vote of all Independent Directors of the
Transferor's general partner, as required by the limited partnership agreement
of the Transferor), (A) dissolve or liquidate, in whole or in part, or institute
proceedings to be adjudicated bankrupt or insolvent, (B) consent to the
institution of bankruptcy or insolvency proceedings against it, (C) file a
petition seeking or consent to reorganization or relief under any applicable
federal or state law relating to bankruptcy, (D) consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Transferor or a substantial part of its property, (E) make a
general assignment for the benefit of creditors, (F) admit in writing its
inability to pay its debts generally as they become due, or (G) take any
corporate action or partnership action in furtherance of the actions set forth
in clauses (A) through (F) above; provided, however, that the general partner
shall in no event consent to the institution of bankruptcy or insolvency
proceedings against the Transferor so long as it is solvent; or
(iii) merge or consolidate with any other limited
partnership, corporation, company or entity or
sell all or substantially all of its assets or acquire all or substantially all
of the assets or partnership interests or capital stock or other ownership
interest of any other limited partnership, corporation, company or entity
(except for the acquisition of beneficial interests in the Origination Trust and
the sale, transfer, conveyance, disposition, pledge, assignment, financing, and
refinancing of, or otherwise dealing with, beneficial interests in the
Origination Trust in accordance with the terms of subparagraph (b)(ii) above,
which shall not be otherwise restricted by this Section 5.03(c)).
Section 5.04. Limitation on Liability of Transferor and Others.
The Transferor and any director or officer or employee or agent of the
Transferor may rely in good faith on the advice of counsel or on any document of
any kind, prima facie properly executed and submitted by any Person respecting
any matters arising under this Agreement.
Section 5.05. Transferor May Own Notes.
Each of the Transferor and any Person controlling, controlled by or
under common control with the Transferor may in its individual or any other
capacity become the owner or pledgee of Notes with the same rights as it would
have if it were not the Transferor or such an affiliate thereof except as
otherwise specifically provided in the definition of the term "Noteholder".
Notes so owned by or pledged to the Transferor or such controlling or commonly
controlled Person shall have an equal and proportionate benefit under the
provisions of this Agreement, without preference, priority or distinction as
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among all of the Notes. The Transferor will give notice to each Rating Agency if
any such controlling or commonly controlled Person shall at any time become the
owner or pledgee of Notes.
Section 5.06. No Transfer.
Subject to Section 5.03, the Transferor on behalf of itself and its
successors and assigns hereby covenants that it will not transfer, pledge or
assign to any Person the Transferor Certificate or any part of its right to
receive any Excess Collections pursuant to Section 3.03(c).
Section 5.07. Tax Matters Partner.
If at any time the Trust has two or more beneficial owners and is
treated as a partnership for tax purposes, the Transferor shall act as "Tax
Matters Partner" within the meaning of section 6231 of the Code (i) to represent
the partners before taxing authorities or courts of competent jurisdiction in
any tax matters affecting the Trust as a tax partnership; and (ii) to execute
any agreements or other documents relating to or affecting such tax matters,
including, but not limited to, extending the statute of limitations for
assessment of tax deficiencies and adjusting the Trust's federal, state or local
tax returns. The Transferor shall not be liable to the Trust or to any
Noteholder for any action taken or omitted by the Transferor with regard to such
tax matters or otherwise as a result of its holding the position of Tax Matters
Partner.
ARTICLE SIX. THE OWNER TRUSTEE
Section 6.01. Duties of Owner Trustee.
(a) The Owner Trustee, both prior to and after the occurrence
of a 1999-A Servicer Event of Default under the Servicing Agreement and the
1999-A Servicing Supplement, undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement.
(b) The Owner Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Owner Trustee that shall be specifically required
to be furnished pursuant to any provision of this Agreement, shall examine them
to determine whether they conform on their face to the requirements of this
Agreement.
(c) No provision of this Agreement shall be construed to
relieve the Owner Trustee from liability for its own negligent action, its own
negligent failure to act, its own bad faith or its own willful misfeasance;
provided, however, that
(i) the duties and obligations of the Owner Trustee
shall be determined solely by the express provisions of this Agreement, the
Owner Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the Owner
Trustee, the permissive right of the Owner Trustee to do things enumerated in
this Agreement shall not be construed as a duty and, in the absence of bad faith
on the part of the Owner Trustee, the Owner Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Owner Trustee and
conforming to the requirements of this Agreement;
(ii) the Owner Trustee shall not be personally liable
for an error of judgment made in good faith
by a Responsible Officer, unless it shall be proved that the Owner Trustee was
negligent in performing its duties in accordance with the terms of this
Agreement; and
(iii) the Owner Trustee shall not be personally
liable with respect to any action taken, suffered or omitted to be taken in good
faith in accordance with the direction of the Transferor relating to the time,
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method and place of conducting any proceeding for any remedy available to the
Owner Trustee, or exercising any trust or power conferred upon the Owner
Trustee, under this Agreement or the Origination Trust Agreement (as
supplemented by the 1999-A SUBI Supplement) or any other matter.
(iv) the Owner Trustee shall not be personally
responsible for the validity or insufficiency of this Agreement, the Indenture,
the Notes or the Certificate or for the preparation, content and sufficiency of
any document required to be filed with the Securities and Exchange Commission or
for the due execution hereof by the Transferor and the Indenture Trustee or for
the form, character, genuineness, sufficiency, value or validity of the Trust
property, and the Owner Trustee will not assume or incur any personal liability,
duty or obligation to the Transferor, other than as expressly provided for
herein;
(v) the Owner Trustee shall not be required, either
in its individual capacity or in its capacity as trustee, to perform any
obligation or duty under this Agreement, the Indenture, the Servicing Agreement
or any other Transaction Document which is to be performed by any party other
than the Trust or the Owner Trustee and shall have no liability for the acts or
omissions of such party.
(d) The Owner Trustee shall not be required to advance, expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties under this Agreement, or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) All information obtained by the Owner Trustee regarding
the Obligors and the Leases contained in the 1999-A SUBI, whether upon the
exercise of its rights under this Agreement or any other Transaction Document,
shall be maintained by the Owner Trustee in confidence and shall not be
disclosed to any other Person, unless such disclosure is required by any
applicable law or regulation or pursuant to subpoena.
Section 6.02. Certain Matters Affecting the Owner Trustee.
Except as otherwise provided in Section 6.01:
(i) the Owner Trustee may rely and shall be protected
in acting or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) the Owner Trustee may consult with counsel and
any Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken or suffered or omitted by it under this Agreement
or any other Transaction Document in good faith and in accordance with such
Opinion of Counsel;
(iii) the Owner Trustee shall be under no obligation
to exercise any of the rights or powers vested in it, or to institute, conduct
or defend any litigation, at the request, order or direction of the Indenture
Trustee or the Transferor, unless the Noteholders, the Indenture Trustee or the
Transferor shall have offered to the Owner Trustee reasonable security or
indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby;
(iv) the Owner Trustee shall not be personally liable
for any action taken, suffered or omitted by it in good faith and believed by it
to be authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
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(v) the Owner Trustee may execute any of the trusts
or powers under this Agreement or perform any duties under this Agreement either
directly or by or through agents or attorneys or a custodian;
(vi) the Owner Trustee, in the exercise or
administration of the trusts and powers hereunder and in the performance of any
duties or obligations hereunder may, at the expense of the Trust, employ agents,
attorneys, accountants and auditors and enter into agreements with any of them,
and the Owner Trustee will not be liable for the default or misconduct of any
such agents, attorneys, accountants or auditors if such agents, attorneys,
accountants or auditors have been selected by it with reasonable care; and
(vii) if, in performing its duties under this
Agreement, (i) the Owner Trustee is required to
decide between alternative courses of action or (ii) the Owner Trustee is unsure
of the application of any provision of this Agreement or any Transaction
Document, then the Owner Trustee may deliver a notice to the Transferor
requesting written instructions as to the course of action desired by it; and
any action taken by the Owner Trustee in reliance on such instructions shall be
full and complete authorization and protection; in the event that the Transferor
fails to provide such instruction within 10 days, or such shorter period as may
be specified in such written notice, the Owner Trustee may take or omit to take
such action as it deems to be appropriate, and shall have no liability for such
action or omission.
Section 6.03. Owner Trustee Not Liable for Notes, Transferor
Certificate or Leases.
The Owner Trustee shall make no representations as to the validity,
enforceability or sufficiency of this Agreement, the Indenture, the Notes, the
Transferor Certificate (other than the execution by the Owner Trustee on behalf
of the Trust of the Indenture, the Notes and the Transferor Certificate, and the
certificate of authentication on, the Transferor Certificate), or of the 1999-A
SUBI Interest or 1999-A SUBI Certificate. The Owner Trustee shall have no
obligation to perform any duty unless explicitly set forth in this Agreement or
directed pursuant to Section 6.17. The Owner Trustee shall at no time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of the Indenture, the Notes, the 1999-A SUBI Interest or 1999-A
SUBI Certificate or any 1999-A Lease, any ownership interest in any 1999-A
Leased Vehicle, or the maintenance of any such ownership interest, or for or
with respect to the efficacy of the Trust or its ability to generate the
payments to be distributed to the Noteholders or the Certificateholder under
this Agreement, including without limitation the validity of the assignment of
the 1999-A SUBI Interest or 1999-A SUBI Certificate to the Trust or of any
intervening assignment; the existence, condition, location and ownership of any
1999-A Lease or 1999-A Leased Vehicle; the existence and enforceability of any
physical damage or credit life or credit disability insurance; the existence and
contents of any 1999-A Lease or any computer or other record thereof; the
completeness of any 1999-A Lease; the performance or enforcement of any Lease;
the compliance by the Transferor with any covenant or the breach by the
Transferor of any warranty or representation made under this Agreement or in any
related document and the accuracy of any such warranty or representation; the
acts or omissions of the Transferor or the Servicer; or any action or failure to
act by the Owner Trustee taken at the instruction of the Servicer; provided,
however, that the foregoing shall not relieve the Owner Trustee of its
obligation to perform its duties under this Agreement. Except with respect to a
claim based on the failure of the Owner Trustee to perform its duties under this
Agreement or based on the Owner Trustee's willful misconduct, bad faith or
negligence, no recourse shall be had for any claim based on any provision of
this Agreement, the Transferor Certificate, the 1999-A SUBI Interest or 1999-A
SUBI Certificate or assignment thereof against the institution serving as Owner
Trustee in its individual capacity. The Owner Trustee shall not have any
personal obligation, liability or duty whatsoever to any Noteholder, the
Indenture Trustee, the Transferor or any other Person with respect to any such
claim, and any such claim shall be asserted solely against the Trust or any
indemnitor who shall furnish indemnity as provided in this Agreement. The Owner
Trustee shall not be accountable for the use or application by the Transferor of
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any of the Notes or the Transferor Certificate or of the proceeds of the Notes
or the Transferor Certificate, or for the use or application of any funds paid
to the Servicer in respect of the 1999-A SUBI Interest or 1999-A SUBI
Certificate.
Section 6.04. Owner Trustee May Own Notes.
The Owner Trustee in its individual or any other capacity may become
the owner or pledgee of Notes with the same rights as it would have if it were
not Owner Trustee.
Section 6.05. Owner Trustee's Fees and Expenses.
The Owner Trustee shall be entitled to reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts created by this Agreement and in the exercise and performance of any
of the powers and duties of the Owner Trustee under this Agreement, and payment
or reimbursement upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Owner Trustee in its capacity as Owner Trustee
in accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all professional service providers or other persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence, willful misfeasance or bad faith or that is the responsibility of
the Indenture Trustee, the Noteholders or the Transferor under this Agreement or
any other Transaction Document. Such compensation and reimbursement shall be
paid as set forth in Section 3.03(b) hereof or Section 10.01 of the 1999-A SUBI
Supplement (in the definitions of the terms "Principal Collections" and
"Interest Collections"). Additionally, the Transferor, pursuant to Section
6.02(iii), may agree to indemnify the Owner Trustee under certain circumstances.
Section 6.06. Eligibility Requirements for Owner Trustee.
The Owner Trustee under this Agreement shall at all times be a national
banking association or corporation having its corporate trust office in the same
State as the location of the Corporate Trust Office of the Owner Trustee as
specified in this Agreement; and organized and doing business under the laws of
such State or the United States; authorized under such laws to exercise
corporate trust powers; having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authorities; and having a long-term deposit rating no lower than Baa3 by
Moody's, so long as Moody's is a Rating Agency, or be otherwise acceptable to
each Rating Agency, as evidenced by a letter to such effect from each of them.
If the Owner Trustee 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, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Owner Trustee shall cease to be eligible in accordance with
the provisions of this Section, the Owner Trustee shall resign immediately in
the manner and with the effect specified in Section 6.07.
Section 6.07. Resignation or Removal of Owner Trustee.
(a) The Owner Trustee may at any time resign and be discharged
from the trusts created by this Agreement by giving written notice thereof to
the Transferor. Upon receiving such notice of resignation, the Transferor 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 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.
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(b) If at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of Section 6.06 and shall fail to
resign after written request therefor by the Transferor, or if at any time the
Owner Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Transferor may remove the Owner Trustee.
If it shall remove the Owner Trustee under the authority of the immediately
preceding sentence, the Transferor shall promptly appoint a successor Owner
Trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the Owner Trustee so removed and one copy to the successor Owner
Trustee, and payment of all fees owed to the outgoing Owner Trustee.
(c) Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions of
this Section shall not become effective until acceptance of appointment by the
successor Owner Trustee as provided in Section 6.08. The Servicer shall give the
Indenture Trustee and each Rating Agency notice of any such resignation or
removal of the Owner Trustee and appointment and acceptance of a successor Owner
Trustee.
Section 6.08. Successor Owner Trustee.
Any successor Owner Trustee appointed as provided in Section 6.07 shall
execute, acknowledge and deliver to the Transferor and to its predecessor Owner
Trustee an instrument accepting such appointment under this Agreement, and
thereupon the resignation or removal of the predecessor Owner Trustee shall
become effective and 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 deliver
to the successor Owner Trustee all documents and statements held by it under
this Agreement; and the Transferor and the predecessor Owner Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully and certainly vesting and confirming in the successor
Owner Trustee all such rights, powers, duties and obligations. No successor
Owner Trustee shall accept appointment as provided in this Section unless at the
time of such acceptance such successor Owner Trustee shall be eligible under the
provisions of Section 6.06. Upon acceptance of appointment by a successor Owner
Trustee as provided in this Section, the Servicer shall cause notice of the
successor of such Owner Trustee under this Agreement to be given by mail to the
Indenture Trustee and each Rating Agency. If the Servicer fails to mail or cause
to be mailed such notice within ten 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 Servicer.
Section 6.09. Merger or Consolidation of Owner Trustee.
Any corporation (i) into which the Owner Trustee may be merged or
consolidated, (ii) which may result from any merger, conversion, or
consolidation to which the Owner Trustee shall be a party, or (iii) which may
succeed to the corporate trust business of the Owner Trustee, shall be the
successor of the Owner Trustee hereunder, provided such corporation shall be
eligible pursuant to Section 6.06, 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, except that if the Owner Trustee in any
of the foregoing cases is not the surviving entity, then the surviving entity
shall execute an agreement of assumption to perform every obligation of the
Owner Trustee, either generally or particularly as provided herein. Notice of
any such event shall be given by the Owner Trustee to each Rating Agency.
Section 6.10. Appointment of Co-Trustee or Separate Owner 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 Trust may at the time be located, the Transferor and the Owner
Trustee acting jointly shall have the power and shall execute and deliver all
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instruments to appoint one or more Persons approved by the Owner Trustee to act
as 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 and for the benefit of the Noteholders and the Transferor
Certificateholder, such title to the Trust, or any part thereof, and, subject to
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Transferor and the Owner Trustee may consider necessary or
desirable. If the Transferor shall not have joined in such appointment within 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 Owner Trustee pursuant to Section 6.06 and no notice of a successor
Owner Trustee pursuant to Section 6.08 and no notice to Noteholders or the
Indenture Trustee of the appointment of any co-trustee or separate trustee shall
be required pursuant to Section 6.08.
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 Transferor and the Owner Trustee acting
jointly may at any time accept the resignation 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 Section. 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 Transferor and the Servicer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee. Notwithstanding anything to the contrary in this
Agreement, the appointment of any separate trustee or co-trustee shall not
relieve the Owner Trustee of its obligations and duties under this Agreement.
Section 6.11. Representations and Warranties of Owner Trustee.
The Owner Trustee makes the following representations and warranties on
which the Transferor and the Noteholders may rely:
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(i) Organization and Good Standing. The Owner Trustee
is a Delaware banking corporation organized, existing and in good standing under
the laws of the State of Delaware.
(ii) Power and Authority. The Owner Trustee has full
power, authority and right to execute,
deliver and perform this Agreement and has taken all necessary action to
authorize the execution, delivery and performance by it of this Agreement.
(iii) Due Execution. This Agreement has been duly
executed and delivered by the Owner Trustee.
(iv) Enforceability. This Agreement constitutes the
legal, valid and binding obligation of the
Owner Trustee, enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting enforcement of creditors' rights
generally and by general principles of equity.
Section 6.12. Tax Returns.
The Servicer shall on behalf of the Trust, the Owner Trustee and the
Transferor, prepare or shall cause to be prepared any required federal tax
information returns (in a manner consistent with the treatment of the Notes as
indebtedness) and the Owner Trustee shall file and distribute such forms as
required by law in accordance with the Servicer's instructions. If and to the
extent the Trust is treated as a partnership for federal income tax purposes,
the Servicer shall prepare or cause to be prepared any federal and state income
tax returns that may be required with respect to the Trust or the Trust assets
and shall deliver any such returns to the Owner Trustee for signature by the
Transferor at least five days prior to the date such returns are required by law
to be filed.
Section 6.13. Owner Trustee May Enforce Claims Without Possession
of Transferor Certificate.
All rights of action and claims under this Agreement or the Transferor
Certificate may be prosecuted and enforced by the Owner Trustee without the
possession of the Transferor Certificate or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Owner
Trustee shall be brought in its own name as trustee. Any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Owner Trustee, its agents and counsel, be for
the ratable benefit of the Noteholders and the Certificateholder in respect of
which such judgment has been obtained.
Section 6.14. Suit for Enforcement.
If a 1999-A Servicer Event of Default shall occur and be continuing
under the Servicing Agreement, as supplemented by the 1999-A Servicing
Supplement with respect to the 1999-A SUBI Portfolio, or if the RV Insurer shall
have failed to comply with its obligations to the Indenture Trustee or the Owner
Trustee as an insured party under the Residual Value Insurance Policy, the
Indenture Trustee or the Owner Trustee, in its discretion may, subject to the
provisions of Sections 6.01 and 6.02 hereof, and Section 11.01(b) of the 1999-A
Servicing Supplement (with respect to the Servicer), and the terms of the
Residual Value Insurance Policy (with respect to the RV Insurer) proceed to
protect and enforce its rights and the rights of the Noteholders and
Certificateholder under this Agreement, the Servicing Agreement and the
Servicing Supplement, or the Residual Value Insurance Policy, as applicable, by
a suit, action or proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained herein or therein or
in aid of the execution of any power granted herein or therein or for the
enforcement of any other legal, equitable or other remedy as the Indenture
Trustee or the Owner Trustee, being advised by counsel, shall deem most
effectual to protect and enforce any of the rights of the Indenture Trustee or
the Owner Trustee or the Noteholders and Certificateholder.
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Section 6.15. Rights of Indenture Trustee to Direct Owner Trustee.
The Indenture Trustee (and, after payment in full of the Notes, the
Transferor) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Owner Trustee under
this Agreement, or exercising any trust or power conferred on the Owner Trustee
by this Agreement; provided, however, that (a) subject to Sections 6.01 and
6.02, the Owner Trustee shall have the right to decline to follow any such
direction if the Owner Trustee being advised by counsel determines that the
action so directed may not lawfully be taken, or if the Owner Trustee in good
faith shall, by a Responsible Officer, determine that the proceedings so
directed would be illegal or subject it to personal liability and (b) nothing in
this Agreement shall impair the right of the Owner Trustee to take any action
deemed proper by the Owner Trustee and which is not inconsistent with such
direction by the Indenture Trustee (and, after payment in full of the Notes, the
Transferor).
Section 6.16. No Petition.
Each of the Owner Trustee and the Indenture Trustee covenants and
agrees that prior to the date which is one year and one day after the last date
upon which (a) each Class of Notes has been paid in full, and (b) all
obligations due under any other Securitized Financing have been paid in full,
neither the Owner Trustee nor the Indenture Trustee will institute against, or
join any other Person in instituting against (i) ALF LP, the Transferor or any
other Special Purpose Affiliate, (ii) ALF LLC, World Omni Lease Securitization
or any other general partner of a Special Purpose Affiliate that is a
partnership, (iii) any manager (other than WOFCO) of a limited liability company
that is a general partner of a Special Purpose Affiliate that is a partnership
or that itself is a Special Purpose Affiliate, or (iv) the Origination Trustee
or the Origination Trust, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding or other proceedings under any federal or
state bankruptcy or similar law. This Section shall survive the termination of
this Agreement or the resignation or removal of the Owner Trustee or the
Indenture Trustee under this Agreement or the Indenture, respectively.
Section 6.17. Authority to Execute.
The Transferor hereby authorizes and directs the Owner Trustee (i) to
execute and deliver, on behalf of the Trust, the Indenture, the Notes, the
Transferor Certificate and any other document as the Transferor or the Indenture
Trustee may from time to time direct, (ii) to execute and deliver all other
documents contemplated by the documents referred to in clause (i) above, and
(iii) subject to the terms of this Agreement, to take such other actions in
connection with the foregoing as the Transferor, the Servicer or the Indenture
Trustee may from time to time direct.
Section 6.18. Management of the Trust
The business and affairs of the Trust shall be managed by the Owner
Trustee at the direction of the Transferor, the Servicer and the Indenture
Trustee.
ARTICLE SEVEN. TERMINATION
Section 7.01. Termination of the Trust.
The Trust and the respective obligations and responsibilities of the
Transferor, the Indenture Trustee and the Owner Trustee shall terminate upon the
earliest of (i) the purchase as of any Distribution Date by the Transferor of
the corpus of the Trust as described in Section 7.02 (ii) the day following the
Distribution Date upon which all Notes have been paid in full and after which
there is no unreimbursed Class A-1 Uncovered Loss Amount, Class A-2 Uncovered
Loss Amount, Class A-3 Uncovered Loss Amount, Class A-4 Uncovered Loss Amount,
Class B Uncovered Loss Amount, Class A-1 Uncovered Loss Interest Amount, Class
A-2 Uncovered Loss Interest Amount, Class A-3 Uncovered Loss Interest Amount,
Class A-4 Uncovered Loss Interest Amount, Class B Uncovered Loss Interest
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Amount, Class B Note Principal Carryover Shortfall or Class B Note Principal
Carryover Shortfall Interest Amount or (iii) the expiration, disposition or
termination of the 1999-A SUBI Interest; provided, however, that in no event
shall the trust created by this Agreement continue beyond the expiration of 21
years from the death of the last survivor of the descendants of William
Jefferson Clinton of the State of Arkansas, living on the date of the Agreement.
The Transferor shall promptly notify the Owner Trustee and each Rating Agency of
any prospective termination of the Trust.
Section 7.02. Optional Purchase of the 1999-A SUBI Interest.
(a) On each Distribution Date as of which the Note Balance
shall be less than or equal to ten percent (10%) of the Initial Note Balance,
either before or after giving effect to any payment of principal required to be
made on such Distribution Date, the Transferor shall have the option to purchase
the corpus of the Trust. To exercise such option, the Transferor shall notify
the Indenture Trustee, the Owner Trustee and the Servicer, in writing, no later
than the third Business Day of the month in which such purchase is to be
effected and shall deposit in the Distribution Account an amount equal to the
greater of (i) the Aggregate Net Investment Value as of the last day of the
related Collection Period, and (ii) the sum of (A) the Note Balance, (B) the
accrued and unpaid Class A-1 Interest Distributable Amount, Class A-2 Interest
Distributable Amount, Class A-3 Interest Distributable Amount, Class A-4
Interest Distributable Amount and Class B Interest Distributable Amount, (C) any
accrued and unpaid Class A-1 Interest Carryover Shortfall, Class A-2 Interest
Carryover Shortfall, Class A-3 Interest Carryover Shortfall, Class A-4 Interest
Carryover Shortfall and Class B Interest Carryover Shortfall, (D) any unpaid
Class A-1 Uncovered Loss Amount, unpaid Class A-2 Uncovered Loss Amount, unpaid
Class A-3 Uncovered Loss Amount, unpaid Class A-4 Uncovered Loss Amount, unpaid
Class B Uncovered Loss Amount and unpaid Class B Note Principal Carryover
Shortfall, and (E) any accrued and unpaid Class A-1 Uncovered Loss Interest
Amount, accrued and unpaid Class A-2 Uncovered Loss Interest Amount, accrued and
unpaid Class A-3 Uncovered Loss Interest Amount, accrued and unpaid Class A-4
Uncovered Loss Interest Amount, accrued and unpaid Class B Uncovered Loss
Interest Amount and accrued and unpaid Class B Note Principal Carryover
Shortfall Interest Amount through the day preceding the final Distribution Date.
The Transferor also shall pay to the Servicer the aggregate amount of any
unreimbursed Advances. Thereupon the Transferor shall succeed to all of the
Trust corpus.
(b) The corpus of the Trust may only be purchased pursuant to
this Section 7.02 if the Indenture Trustee and each Rating Agency receives an
Opinion of Counsel from the Transferor's counsel to the effect that such
purchase would not constitute a fraudulent conveyance, or each Rating Agency is
otherwise satisfied (as evidenced by written notice from each to the Indenture
Trustee).
ARTICLE EIGHT. EARLY AMORTIZATION EVENTS
Section 8.01. Early Amortization Events.
If any one of the following events shall occur during the Revolving
Period:
(a) failure on the part of the Servicer (i) to make any
payment or deposit required with respect to the 1999-A SUBI, the 1999-A SUBI
Interest, or the Notes under this Agreement, the Origination Trust Agreement or
the 1999-A SUBI Supplement, or the Servicing Agreement or the 1999-A Servicing
Supplement, on or before the date occurring five Business Days after the payment
or deposit is required to be made, or (ii) to deliver a Servicer's Certificate
within ten Business Days after any Determination Date;
(b) failure on the part of the Transferor or the Servicer duly
to observe or perform in any material respect any other covenants or agreements
of the Transferor or the Servicer set forth in this Agreement, the Origination
Trust Agreement or the 1999-A SUBI Supplement, or the Servicing Agreement or the
1999-A Servicing Supplement, which failure materially and adversely affects the
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rights of the holder of the 1999-A SUBI Interest or of the Notes and which
continues unremedied and continues to affect materially and adversely the rights
of the holder of the 1999-A SUBI Interest or of the Notes for a period of 60
days after the date on which written notice of such failure, requiring the same
to be remedied, is given (i) to the Transferor or the Servicer, as the case may
be, by the Indenture Trustee, Owner Trustee or the Origination Trustee, or (ii)
to the Transferor or the Servicer, as the case may be, and to the Indenture
Trustee by the Holders of Notes evidencing not less than 25% of the aggregate
Percentage Interest;
(c) any representation or warranty made by ALF LP in the SUBI
Certificate Agreement, by the Transferor in this Agreement, or the
representation and warranty made by the Servicer in Section 8.01(c) of the
1999-A Servicing Supplement or any certificate given pursuant to Section 8.02(b)
of the 1999-A Servicing Supplement, shall prove to have been incorrect in any
material respect when made or given, as a result of which the interests of the
holder of the 1999-A SUBI Interest or of the Noteholders are materially and
adversely affected and which continues to be incorrect in any material respect
and continues to affect materially and adversely affect the interests of the
holder of the 1999-A SUBI Interest or of the Noteholders for a period of 60 days
after the date on which written notice of such failure, requiring the same to be
remedied, is given (i) to ALF LP, the Transferor or the Servicer, as the case
may be, by the Indenture Trustee, Owner Trustee or the Origination Trustee, or
(ii) to ALF LP, the Transferor or the Servicer, as the case may be, and to the
Indenture Trustee by the Holders of Notes evidencing not less than 25% of the
aggregate Percentage Interest; provided, however, that an Early Amortization
Event pursuant to this subparagraph (b) shall not be deemed to have occurred
hereunder if the Servicer has made the deposit contemplated by Section 8.03 of
the 1999-A Servicing Supplement and has reallocated the relevant 1999-A Lease
and 1999-A Leased Vehicle to the UTI Portfolio within the time provided
therefor;
(d) the Transferor shall file a petition commencing a
voluntary case under any chapter of the Federal bankruptcy laws; or the
Transferor shall file a petition or answer or consent seeking reorganization,
arrangement, adjustment, or composition under any other similar applicable
Federal law, or shall consent to the filing of any such petition, answer, or
consent; or the Transferor shall appoint, or consent to the appointment of a
custodian, receiver, liquidator, trustee, assignee, sequestrator or other
similar official in bankruptcy or insolvency of it or of any substantial part of
its property, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due;
(e) any order for relief against the Transferor shall have
been entered by a court having jurisdiction in the premises under any chapter of
the Federal bankruptcy laws; or a decree or order by a court having jurisdiction
in the premises shall have been entered approving as properly filed a petition
seeking reorganization, arrangement, adjustment, or composition of the
Transferor under any other similar applicable Federal law; or a decree or order
of a court having jurisdiction in the premises for the appointment of a
custodian, receiver, liquidator, trustee, assignee, sequestrator or other
similar official in bankruptcy or insolvency of the Transferor or of any
substantial part of its property, or for the winding up or liquidation of its
affairs, shall have been entered;
(f) any Lien, other than Liens permitted under this Agreement,
the Indenture, the Origination Trust Agreement or the 1999-A SUBI Supplement,
the Servicing Agreement or the 1999-A Servicing Supplement, or the Backup
Security Agreement, shall be created on or extend to or otherwise arise upon or
burden the 1999-A SUBI Interest, the 1999-A SUBI Certificate, or the 1999-A
Leases or 1999-A Leased Vehicles, or any part thereof or any interest therein or
the proceeds thereof, and not be released or bonded over within 60 days
thereafter;
(g) the Transferor, the Trust or the Origination Trust shall
become subject to registration as an "investment company" under the Investment
Company Act;
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(h) on the twenty-fifth calendar day of any calendar month
(commencing September 25, 1999) the aggregate amount of Principal Collections
(and amounts treated as Principal Collections pursuant to the last sentence of
Section 3.03(b)) collected through the last day of the related Collection Period
that have not been reinvested in new 1999-A Leases and 1999-A Leased Vehicles,
as contemplated by Section 11.02 of the 1999-A SUBI Supplement, exceeds
$[______________];
(i) a 1999-A Servicer Event of Default has occurred;
(j) an Indenture Event of Default has occurred;
(k) on any Distribution Date the aggregate amount withdrawn
from the Reserve Fund and deposited in the Distribution Account on or prior to
such Distribution Date (without reference to any subsequent deposits to the
Reserve Fund from any source) exceeds $[__________];
(l) any 1999-A Leased Vehicle shall no longer be covered by
(i) the Residual Value Insurance Policy, (ii) one or more policies with
substantially similar coverage and provisions issued by an insurer acceptable to
each Rating Agency (as evidenced by a letter from each to the effect that such
change would not result in its then-current rating of any Rated Securities being
qualified, reduced or withdrawn); provided that the Origination Trustee, the
Indenture Trustee and the Owner Trustee shall at all times have the same rights
with respect to any replacement policy as with respect to the original policy,
or (iii) any alternative mechanism to support the Booked Residual Value of such
1999-A Leased Vehicle that has been approved in accordance with the procedures
set forth in Section 9.01 for the amendment hereof; or
(m) the failure of the Class A Cap Provider to make a required
payment within five calendar days of the date such payment was due,
then (but in the case of any event described in subparagraph (a), (b), (c), (f),
(g) or (m) after any applicable grace period) an early amortization event (an
"Early Amortization Event") shall have occurred.
ARTICLE NINE. MISCELLANEOUS PROVISIONS
Section 9.01. Amendment.
(a) This Agreement and the other Transaction Documents may be
amended by the respective parties thereto, without the consent of any of the
Noteholders, to cure any ambiguity, to correct or supplement any provisions
herein or therein, to add, change or eliminate any other provisions hereof or
thereof with respect to matters or questions arising hereunder or thereunder
that shall not be inconsistent with the provisions hereof or thereof, or to add
or amend any provision therein in connection with permitting transfers of the
Class B Notes; provided, however, that any such action shall not, in the good
faith judgment of the parties hereto or thereto, adversely affect in any
material respect the interests of the Noteholders, and the Origination Trustee
and the Indenture Trustee shall have received an Opinion of Counsel to the
effect that such action shall not affect the legal interests or positions of the
Noteholders.
(b) This Agreement and the other Transaction Documents may
also be amended from time to time by the respective parties hereto or thereto
including with respect to (i) changing the formula for determining the Reserve
Fund Cash Requirement, the Reserve Fund Supplemental Requirement, the RV Insurer
Reserve Fund Supplemental Requirement and/or the Downgrade Reserve Fund
Supplemental Requirement (including changing the Reserve Fund Tests) which
change would result in a decrease in the amount of the Reserve Fund Cash
Requirement, the Reserve Fund Supplemental Requirement, the RV Insurer Reserve
Fund Supplemental Requirement and/or the Downgrade Reserve Fund Supplemental
Requirement, (ii) changing the manner by which the Reserve Fund is funded, which
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changes could include borrowings by the Transferor to fund all or a portion of
the Reserve Fund Initial Deposit (which borrowings would be payable from assets
or cash flow otherwise payable to the Transferor), (iii) changing the remittance
schedule for collection deposits in the Distribution Account, (iv) changing the
definition of "Permitted Investments", or (v) replacing the Residual Value
Insurance Policy with an alternate mechanism to support the Booked Residual
Value of the 1999-A Leased Vehicles and Early Termination Amounts, if either (A)
the Indenture Trustee has been furnished with written confirmation from each
Rating Agency to the effect that such amendment would not cause its then-current
rating of any Rated Securities to be qualified, reduced or withdrawn, or (B) the
Indenture Trustee has received the consent of the Holders of Notes representing
more than 50% of the aggregate Percentage Interests, acting as a single Class
(which consent of any Holder of a Note given pursuant to this Section or
pursuant to any other provision of this Agreement shall be conclusive and
binding on such Holder and on all future Holders of such Note and of any Note
issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Note); provided,
however, that: (1) any amendment (x) eliminating the Reserve Fund or the
Residual Value Insurance Policy, (y) reducing the Reserve Fund Cash Requirement
to less than the lesser of the Reserve Fund Initial Deposit and the Note Balance
as of the related Distribution Date (after giving effect to reductions in the
Note Balance on such Distribution Date), or (z) eliminating or reducing the RV
Insurer Reserve Fund Supplemental Requirement, shall also require that the
Indenture Trustee and each Rating Agency receive an Opinion of Counsel to the
effect that, after such amendment, for Federal income tax purposes the Class A
Notes will properly be characterized as indebtedness that is secured by the
assets of the Trust; (2) with respect to an amendment replacing the Residual
Value Insurance Policy with an alternate mechanism, the Servicer also shall have
provided to the Indenture Trustee and the Origination Trustee an Officer's
Certificate to the effect that the 1999-A Leases may properly be treated as
finance leases for purposes of generally accepted accounting principles,
consistently applied, by virtue of some reason other than maintenance of that
policy, and describing such reasons (which shall be in accordance with generally
accepted accounting principles, consistently applied); and (3) no such amendment
shall (y) except as otherwise provided in Section 9.01(a), increase or reduce in
any manner the amount of, or accelerate or delay the timing of, collections of
payments on the 1999-A SUBI or any 1999-A SUBI Certificate or distributions that
shall be required to be made on any Note or the applicable Note Rate or (z)
reduce the aforesaid percentage of the aggregate Percentage Interest of the
Notes of each Class required to consent to any such amendment, without the
consent of the Holders of all Notes of such Class then outstanding.
(c) The Indenture Trustee shall provide each Rating Agency
prior notice of any proposed amendment hereto and copies of an Opinion of
Counsel, if relevant, whether or not such amendment requires its approval. Any
notice of any such amendment or modification as to which notice is required to
be given to any Rating Agency shall contain both the substance and substantial
form of the proposed amendment or modification.
(d) Promptly after the execution of any such amendment or
consent, the Indenture Trustee shall furnish written notification of the
substance of such amendment or consent to each Noteholder. It shall not be
necessary for the consent of Noteholders pursuant to Section 9.01(b) 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 of evidencing the authorization by Noteholders of
the execution thereof shall be subject to such reasonable requirements as the
Indenture Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement,
the Indenture Trustee and 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 Indenture Trustee and the Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects such Trustee's own rights, duties or immunities under this Agreement or
otherwise.
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Section 9.02. Protection of Title to Trust.
(a) The Transferor shall execute and file, or cause to be
executed and filed, such financing statements and such continuation and other
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the interest of the Noteholders and the
Owner Trustee under this Agreement in the 1999-A SUBI Interest, the 1999-A SUBI
Certificate and in the proceeds thereof. The Transferor shall deliver (or cause
to be delivered) to the Owner Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) The Transferor shall not change its name, identity or
partnership structure in any manner that would, could or might make any
financing statement or continuation statement filed by the Transferor in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Owner Trustee
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.
(c) The Transferor shall give the Owner Trustee prior written
notice of any relocation of its principal executive office if, as a result of
such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation statement or
of any new financing statement and shall promptly make any such filing.
(d) The Transferor shall deliver to the Owner Trustee promptly
after the execution and delivery of each amendment to this Agreement, an Opinion
of Counsel either (i) stating that, in the opinion of such Counsel, all
financing statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the Owner
Trustee in the 1999-A SUBI Interest, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details are given, or (ii)
stating that, in the opinion of such Counsel, no such action is necessary to
preserve and protect such interest.
(e) The Transferor shall, to the extent required by applicable
law, cause the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4
Notes to be registered with the Commission pursuant to Section 12(b) or Section
12(g) of the Exchange Act within the time periods specified in such Sections.
(f) This Agreement may be executed simultaneously in any
number of counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute but one and the same
instrument.
Section 9.03. Limitation on Rights of Transferor.
The incapacity, bankruptcy or insolvency of the Transferor shall not
operate to terminate this Agreement or the Trust, nor entitle the Transferor's
legal representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect (except to the extent set forth herein or in the other
Transaction Documents) the rights, obligations and liabilities of the parties to
this Agreement, the other Transaction Documents or any of them.
Section 9.04. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT THAT THE GRANT OF A SECURITY
INTEREST IN ANY ACCOUNT AND THE FUNDS AND PROPERTY THEREIN AND THE PERFECTION,
EFFECT OF PERFECTION, AND PRIORITY OF SUCH SECURITY INTEREST SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK.
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Section 9.05. Notices.
All demands, notices and communications under this Agreement shall be
in writing, personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (i) in the
case of the Transferor, to the agent for service as specified in this Agreement,
or at such other address as shall be designated by the Transferor in a written
notice to the Owner Trustee and the Indenture Trustee; (ii) in the case of the
Indenture Trustee, at the Corporate Trust Office of the Indenture Trustee; (iii)
in the case of the Owner Trustee, at the Corporate Trust Office of the Owner
Trustee; (iv) in the case of Standard & Poor's, at 25 Broadway, 20th Floor, New
York, New York 10004, Attention: Asset Backed Surveillance Department; (v) in
the case of Moody's, at 99 Church Street, New York, New York 10007 Attention:
ABS Monitoring Department; and (vi) in the case of Fitch, at Fitch Information
Services, 1201 E. Seventh Street, Powell, Wyoming 82435 Attention: Asset Backed
Surveillance. Any notice required or permitted to be mailed to a Noteholder
shall be given as provided in Section 1.05 of the Indenture. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Noteholder shall receive
such notice.
Section 9.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Securities or the rights of the Holders thereof.
Section 9.07. Assignment.
Notwithstanding anything to the contrary contained in this Agreement,
except as provided in Section 5.03, this Agreement may not be assigned by the
Transferor without the prior written consent of Holders of Notes evidencing more
than 50% of the aggregate Percentage Interests (acting as a single Class). The
Transferor shall provide a copy of any such assignment to each Rating Agency.
Section 9.08. Transferor Certificate Nonassessable and Fully Paid.
Except as provided in Section 5.02(b) with regard to the Transferor,
the Transferor shall not be personally liable for obligations of the Trust. The
interest represented by the Transferor Certificate shall be nonassessable for
any losses or expenses of the Trust or for any reason whatsoever, and, upon the
execution and authentication thereof by the Owner Trustee pursuant to Section
4.02, 4.03 or 4.04, the Transferor Certificate is and shall be deemed fully
paid.
Section 9.09. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Further,
all references herein to Persons or entities other than parties hereto shall be
deemed to refer to the successors and permitted assigns of such persons, to the
extent that such construction is reasonably possible; to the extent that such
construction is not reasonably possible, the parties hereto shall amend this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner.
ARTICLE TEN. AGENT FOR SERVICE
Section 10.01. Agent for Service of Transferor.
The agent for service of process for the Transferor shall be its
Treasurer, at 6150 Omni Park Drive, Mobile, Alabama 36609.
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Section 10.02. Agent of Owner Trustee.
The Owner Trustee shall maintain an office or offices or agency or
agencies where notices and demands to or upon the Owner Trustee in respect of
the Transferor Certificate and this Agreement may be served. The initial such
office shall be the Corporate Trust Office. The Owner Trustee shall give prompt
written notice to the Transferor, the Servicer and the Indenture Trustee of any
change in the location of any such office or agency.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.
WORLD OMNI LEASE SECURITIZATION L.P., as Transferor
By: World Omni Lease Securitization LLC, its general
partner
By:
----------------------------------------
Patrick C. Ossenbeck
Assistant Treasurer
CHASEMANHATTAN BANK DELAWARE, not in its
individual capacity except as expressly provided
herein, but solely as Owner Trustee
By:
----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
HARRIS TRUST AND SAVINGS BANK, not in its
individual capacity except as expressly provided
herein, but solely as Indenture Trustee
By:
----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
55
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EXHIBIT A
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE APPLICABLE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED.
WORLD OMNI 1999-A AUTOMOBILE LEASE SECURITIZATION TRUST
AUTOMOBILE LEASE ASSET BACKED TRANSFEROR CERTIFICATE
evidencing the undivided equity interest in the Trust, as defined
below, the property of which includes, among other things, a 100%
interest in a special unit of beneficial interest in World Omni LT, an
Alabama business trust, which special unit of beneficial interest
represents a beneficial interest in a pool of retail lease contracts
for new and used automobiles and light duty trucks (and the related
automobiles and light-duty trucks) entered into by various automobile
and light duty truck dealers pursuant to contractual arrangements with
World Omni Financial Corp. and thereafter assigned to World Omni LT,
and which interest was originally issued to Auto Lease Finance L.P.,
and then sold to World Omni Lease Securitization L.P., and then to the
Trust.
(This Certificate does not represent an obligation of, or an interest
in, Auto Lease Finance, Inc., World Omni Lease Securitization LLC,
World Omni LT, World Omni Financial Corp., or any of their respective
affiliates.)
THIS CERTIFIES THAT WORLD OMNI LEASE SECURITIZATION L.P. (the
"Transferor") is the registered owner of the undivided equity interest in the
World Omni 1999-A Automobile Lease Securitization Trust (the "Trust") formed by
the Transferor. The Trust was created pursuant to a Securitization Trust
Agreement dated as of August 1, 1999 (the "Agreement"), among the Transferor,
Chase Manhattan Bank Delaware, a Delaware banking corporation, as trustee (the
"Owner Trustee"), and Harris Trust and Savings Bank, as indenture trustee (the
"Indenture Trustee"). A summary of certain of the pertinent provisions of the
Agreement is set forth below. To the extent not otherwise defined herein the
capitalized terms used herein have the meanings assigned to them in the
Agreement.
This Certificate is the Transferor Certificate issued under the
Agreement and designated as the "World Omni 1999-A Automobile Lease
Securitization Trust Automobile Lease Asset Backed Transferor Certificate" (the
"Transferor Certificate"). This Transferor Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Transferor Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
The property of the Trust includes, among other things, a 100% interest
in a special unit of beneficial interest (the "1999-A SUBI Interest") in World
Omni LT, an Alabama business trust (the "Origination Trust"), which 1999-A SUBI
Interest represents a beneficial interest in, among other things, a pool of
retail automobile and light duty truck lease contracts ("Leases") and the new
and used automobiles and light duty trucks leased thereby ("Leased Vehicles")
(such pool of Leases and Leased Vehicles, the "1999-A SUBI Portfolio") entered
into by various automobile and light duty truck dealers pursuant to contractual
arrangements with World Omni Financial Corp., which also acts as servicer (in
that capacity, the "Servicer") of the 1999-A SUBI Portfolio. During the
Revolving Period, Principal Collections allocable to the 1999-A SUBI Interest
generally will be applied towards the allocation to the 1999-A SUBI Portfolio of
additional qualifying Leases and Leased Vehicles from among all other
unallocated Leases and Leased Vehicles owned by the Origination Trust.
A-1
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Payments in respect of the 1999-A SUBI Interest will be allocated
between the Notes and this Transferor Certificate and paid to the registered
Holder of this Transferor Certificate as provided in the Agreement.
It is the intention of the Transferor, as the Holder of this
Certificate, that the Notes will be indebtedness for federal, state and local
income and franchise tax purposes and for purposes of any other tax imposed on
or measured by income. The Owner Trustee and the Transferor, as the Holder of
this Certificate, by acceptance of this Certificate, agree to treat the Notes,
for purposes of federal, state and local income or franchise taxes and any other
tax imposed on or measured by income, as indebtedness and to report the
transactions contemplated by the Agreement on all applicable tax returns in a
manner consistent with such treatment.
By accepting this Certificate, the Holder hereof waives any claim to
any proceeds or assets of the Origination Trustee and to all assets of the
Origination Trust other than those from time to time included within the 1999-A
SUBI Portfolio as 1999-A SUBI Assets and those proceeds or assets derived from
or earned by such 1999-A SUBI Assets.
In the event that, notwithstanding the statement of intentions and
undertakings set forth in Section 4.12(a) of the Agreement and herein, it is
finally determined that the Notes do not evidence indebtedness of the Transferor
for all income and franchise tax purposes, but rather represent an equity
interest in the assets of the Trust, then the Transferor, as Holder hereof,
agrees (i) to treat the Notes, together with this Certificate, as representing
an interest in a partnership for all tax purposes, (ii) to treat all payments in
respect of such Certificate (to the extent not a return of capital) as a
"guaranteed payment" thereon made pursuant to Section 707(c) of the Code, and
(iii) to allocate all other items of income, gain, deduction, loss or credit
with respect to the assets and operations of the Trust to the Transferor.
This Certificate does not represent an obligation of, or an interest
in, the Transferor, the Servicer, the Indenture Trustee, the Owner Trustee, the
Origination Trust or any of their respective affiliates. This Certificate is
limited in right of payment to certain collections and recoveries respecting the
1999-A SUBI Interest and the 1999-A SUBI Certificate, Insured Residual Value
Loss Amounts paid under the Residual Value Insurance Policy and certain monies
on deposit in the Reserve Fund and in certain other accounts, in each case to
the extent and as more specifically set forth in the Agreement. A copy of the
Agreement may be examined during normal business hours at the Corporate Trust
Office of the Owner Trustee, and at such other places, if any, designated by the
Owner Trustee, by the Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholder under the Agreement at
any time by the Transferor, the Servicer, the Indenture Trustee and the Owner
Trustee. In certain limited circumstances, the Agreement may only be amended
with the consent of the Holders of Notes evidencing more than 50% of the
aggregate Percentage Interests of all Notes, voting together as a single class.
As provided in the Agreement, this Certificate shall be owned by the
Transferor and may not be transferred.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Noteholders of all
amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held as part of the Trust. The Transferor may at its
option purchase the corpus of the Trust at a price specified in the Agreement,
and such purchase of the 1999-A SUBI Interest and the 1999-A SUBI Certificate
and other property of the Trust will effect early retirement of this
Certificate; provided, however, such right of purchase is exercisable only on
A-2
<PAGE>
the Distribution Date following the last day of a Collection Period as of which
the Note Balance shall be less than or equal to ten percent (10%) of the Initial
Note Balance.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Transferor Certificate shall not entitle the Holder hereof to any benefit
under the Agreement or be valid for any purpose.
A-3
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee on behalf of the Trust and not in
its individual capacity has caused this Transferor Certificate to be duly
executed.
Dated: September __, 1999 WORLD OMNI 1999-A AUTOMOBILE LEASE
SECURITIZATION TRUST
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity, but solely
as Owner Trustee
(SEAL) By:
----------------------------------
Authorized Officer
A-4
<PAGE>
This is the Transferor Certificate referred
to in the within-mentioned Agreement.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity, but solely
as Owner Trustee
By:
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A-5
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EXHIBIT B
[FORM OF]
CERTIFICATE OF TRUST OF
WORLD OMNI 1999-A AUTOMOBILE LEASE SECURITIZATION TRUST
THIS Certificate of Trust of World Omni 1999-A Automobile Lease
Securitization Trust (the "Trust"), dated as of August 1, 1999 is being duly
executed and filed by Chase Manhattan Bank Delaware, a Delaware banking
corporation, as trustee, to form a business trust under the Delaware Business
Trust Act (12 Del. Code, ss. 3801 et seq.).
1. Name. The name of the business trust formed hereby is WORLD OMNI
1999-A AUTOMOBILE LEASE SECURITIZATION TRUST.
2. Delaware Trustee. The name and business address of the trustee of
the Trust resident in the State of Delaware is Chase Manhattan Bank Delaware,
1201 N. Market Street, 8th Floor, Wilmington, Delaware, 19801.
3. This Certificate of Trust will be effective ____________, 1999.
IN WITNESS WHEREOF, the undersigned, being the trustee of the Trust,
has executed this Certificate of Trust as of the date first above written.
Chase Manhattan Bank Delaware,
a Delaware banking corporation, not in its
individual capacity, but solely as owner
trustee of the Trust.
By:
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Name:
---------------------------
Title:
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B-1
EXHIBIT 4.1
(All Floating Notes)
- --------------------------------------------------------------------------------
WORLD OMNI 1999-A AUTOMOBILE
LEASE SECURITIZATION TRUST
Floating Rate Automobile Lease Asset Backed Notes, Class A-1
Floating Rate Automobile Lease Asset Backed Notes, Class A-2
Floating Rate Automobile Lease Asset Backed Notes, Class A-3
Floating Rate Automobile Lease Asset Backed Notes, Class A-4
Floating Rate Automobile Lease Asset Backed Notes, Class B
INDENTURE
Dated as of August 1, 1999
HARRIS TRUST AND SAVINGS BANK
as Indenture Trustee
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<PAGE>
TRUST INDENTURE ACT
CROSS-REFERENCE CHART/1
TIA SECTION REFERENCE IN THE INDENTURE
310(a)(1)................................................. 6.08(a)
................................................. 6.08(b)
310(a)(2)................................................. 6.08(b)
310(a)(3)................................................. 6.13
310(a)(4).................................................Not applicable
310(a)(5)................................................. 6.08(c)
310(b).................................................... 6.08(d)
310(c).................................................... Not applicable
311(a).................................................... 6.16
311(b).................................................... 6.16
311(c)....................................................Not applicable
312(a).................................................... 7.01
.................................................... 7.02(a)
312(b).................................................... 7.02(b), 7.02(c)
312(c).................................................... 7.02(b)
313(a).................................................... 7.03(a)
313(b).................................................... 7.03(a)
313(c).................................................... 7.03(a)
313(d).................................................... 7.03(b)
314(a).................................................... 3.09, 7.04
314(b).................................................... 3.06
314(c)(1).................................................11.01
314(c)(2).................................................11.01
314(c)(3)..................................................Not applicable
314(d).................................................... 3.09(b), 8.04
314(e)....................................................11.01(b)
315(a).................................................... 6.01(a)
315(b).................................................... 6.02
315(c).................................................... 6.01(b)
315(d).................................................... 6.01
315(d)(1)................................................. 6.01(a), 6.01(c)(i)
315(d)(2)................................................. 6.01(c)(ii)
315(d)(3)................................................. 6.01(c)(iii)
315(e).................................................... 5.16
316(a).................................................... 5.14; 5.15
316(a)(1)(A).............................................. 5.14
316(a)(1)(B).............................................. 5.15
316(a)(2)................................................. Not applicable
316(b).................................................... 5.10
316(c).................................................... 5.09(b)
317(a)(1)................................................. 5.03
317(a)(2)................................................. 5.06
317(b).................................................... 3.03
318(a)....................................................11.07
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1/ This Trust Indenture Act Cross-Reference Chart is not a part of this
Indenture.
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TABLE OF CONTENTS
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RECITALS .............................................................................................1
GRANTING CLAUSE .............................................................................................1
Article One. DEFINITIONS..................................................................................2
Section 1.01. Definitions..................................................................................2
Article Two. THE NOTES....................................................................................6
Section 2.01. Form Generally...............................................................................6
Section 2.02. Denominations................................................................................6
Section 2.03. Execution, Authentication, Delivery and Dating...............................................7
Section 2.04. Registration of Notes........................................................................7
Section 2.05. Mutilated, Destroyed, Lost or Stolen Notes...................................................9
Section 2.06. Payment of Interest and Principal; Principal and Interest Rights Preserved...................9
Section 2.07. Persons Deemed Owners.......................................................................11
Section 2.08. Cancellation................................................................................11
Section 2.09. Authentication and Delivery of Notes........................................................11
Section 2.10. Book-Entry Notes............................................................................11
Section 2.11. Notices to the Clearing Agency..............................................................12
Section 2.12. Definitive Notes............................................................................12
Section 2.13. Tax Treatment...............................................................................12
Article Three. COVENANTS AND REPRESENTATIONS...............................................................12
Section 3.01. Payment of Notes............................................................................12
Section 3.02. Maintenance of Office or Agency.............................................................13
Section 3.03. Money for Note Payments to be Held in Trust.................................................13
Section 3.04. Existence...................................................................................14
Section 3.05. Protection of Trust Estate..................................................................14
Section 3.06. Opinions as to Trust Estate.................................................................14
Section 3.07. Performance of Obligations..................................................................15
Section 3.08. Negative Covenants..........................................................................15
Section 3.09. Statements as to Compliance.................................................................16
Article Four. SATISFACTION AND DISCHARGE..................................................................17
Section 4.01. Satisfaction and Discharge of Indenture.....................................................17
Section 4.02. Application of Trust Money..................................................................18
Article Five. DEFAULTS AND REMEDIES.......................................................................18
Section 5.01. Events of Default...........................................................................18
Section 5.02. Acceleration of Maturity; Rescission and Annulment..........................................19
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee...................20
Section 5.04. Remedies....................................................................................20
Section 5.05. Optional Preservation of Trust Estate.......................................................20
Section 5.06. Indenture Trustee May File Proofs of Claim..................................................21
Section 5.07. Indenture Trustee May Enforce Claims Without Possession of Notes............................21
Section 5.08. Application of Money Collected..............................................................21
Section 5.09. Limitation on Suits.........................................................................22
Section 5.10. Unconditional Rights of Noteholders to Receive Note Payments................................22
Section 5.11. Restoration of Rights and Remedies..........................................................23
Section 5.12. Rights and Remedies Cumulative..............................................................23
Section 5.13. Delay or Omission Not Waiver................................................................23
Section 5.14. Control by Noteholders......................................................................23
Section 5.15. Waiver of Past Defaults.....................................................................23
Section 5.16. Undertaking for Costs.......................................................................24
Section 5.17. Sale of Trust Estate........................................................................24
Section 5.18. Action on Notes.............................................................................25
Section 5.19. Notes held by Issuer or Affiliates Not to Share in Distribution.............................25
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Article Six. THE INDENTURE TRUSTEE.......................................................................25
Section 6.01. Certain Duties and Responsibilities.........................................................25
Section 6.02. Notice of Unmatured Event of Default........................................................26
Section 6.03. Certain Rights of Indenture Trustee.........................................................26
Section 6.04. Not Responsible for Recitals or Issuance of Notes...........................................27
Section 6.05. May Hold Notes..............................................................................27
Section 6.06. Money Held in Trust.........................................................................27
Section 6.07. Indenture Trustee's Fees and Expenses.......................................................28
Section 6.08. Eligibility; Corporate Indenture Trustee Required...........................................28
Section 6.09. Cessation of Eligibility....................................................................29
Section 6.10. Resignation and Removal; Appointment of Successor...........................................29
Section 6.11. Acceptance of Appointment by Successor......................................................30
Section 6.12. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee............30
Section 6.13. Co-Trustees and Separate Trustees...........................................................30
Section 6.14. Authenticating Agent........................................................................32
Section 6.15. Withholding Taxes...........................................................................32
Section 6.16. Preferential Collection of Claims against the Issuer........................................32
Section 6.17. No Petition.................................................................................32
Article Seven. NOTEHOLDERS'LISTS AND REPORTS...............................................................33
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders......................33
Section 7.02. Preservation of Information; Communications to Noteholders..................................33
Section 7.03. Reports by Indenture Trustee; Responses to Noteholder Inquiries.............................33
Section 7.04. Reports by the Issuer.......................................................................34
Article Eight. ACCOUNTS, DISBURSEMENTS AND RELEASES........................................................34
Section 8.01. Collection of Moneys........................................................................34
Section 8.02. Trust Accounts..............................................................................35
Section 8.03. General Provisions Regarding the Accounts...................................................35
Section 8.04. Release of Trust Estate.....................................................................36
Section 8.05. Opinion of Counsel..........................................................................36
Article Nine. SUPPLEMENTAL INDENTURES.....................................................................36
Section 9.01. Supplemental Indentures.....................................................................36
Section 9.02. Execution of Supplemental Indentures........................................................37
Section 9.03. Effect of Supplemental Indentures...........................................................37
Section 9.04. Reference in Notes to Supplemental Indentures...............................................37
Section 9.05. Compliance With TIA.........................................................................37
Section 9.06. Successors and Assigns......................................................................37
Article Ten. OPTIONAL REDEMPTION OF NOTES................................................................37
Section 10.01. General.....................................................................................37
Section 10.02. Form of Redemption Notice...................................................................38
Section 10.03. Notes Payable on Redemption Date............................................................38
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<TABLE>
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Article Eleven. MISCELLANEOUS...............................................................................38
Section 11.01. Compliance Certificates and Opinions........................................................38
Section 11.02. Form of Documents Delivered to Indenture Trustee............................................39
Section 11.03. Acts of Noteholders.........................................................................39
Section 11.04. Notices, etc., to Indenture Trustee and Issuer..............................................40
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.......................................40
Section 11.06. Rules by Indenture Trustee and Agents.......................................................41
Section 11.07. Conflict with Trust Indenture Act...........................................................41
Section 11.08. Effect of Headings and Table of Contents....................................................41
Section 11.09. Successors and Assigns......................................................................41
Section 11.10. Severability................................................................................41
Section 11.11. Benefits of Indenture.......................................................................41
Section 11.12. Legal Holidays..............................................................................41
Section 11.13. Governing Law...............................................................................41
Section 11.14. Counterparts................................................................................41
Section 11.15. Recording of Indenture......................................................................42
Section 11.16. Trust Obligation............................................................................42
Section 11.17. Inspection..................................................................................42
Section 11.18. Waiver of Stay, Extension Laws, Trial by Jury...............................................42
Section 11.19. Maximum Interest Payable....................................................................42
EXHIBIT A - FORM OF CLASS A-1 NOTE..............................................................................A-1
EXHIBIT B - FORM OF CLASS A-2 NOTE..............................................................................B-1
EXHIBIT C - FORM OF CLASS A-3 NOTE..............................................................................C-1
EXHIBIT D - FORM OF CLASS A-4 NOTE..............................................................................D-1
EXHIBIT E - FORM OF CLASS B NOTE................................................................................E-1
EXHIBIT F-1 - FORM OF NON-RULE 144A REPRESENTATION LETTER...................................................... F-1
EXHIBIT F-2 - FORM OF RULE 144A REPRESENTATION LETTER...........................................................F-2
</TABLE>
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INDENTURE, dated as of August 1, 1999, between WORLD OMNI 1999-A
AUTOMOBILE LEASE SECURITIZATION TRUST, a Delaware business trust (the "Issuer"),
and Harris Trust and Savings Bank, an Illinois banking corporation, solely as
indenture trustee and not in its individual capacity (the "Indenture Trustee").
RECITALS
WHEREAS, the Issuer intends to issue notes of substantially the tenor
hereinafter provided; and, to secure the notes and to provide for the
authentication and delivery thereof, the Issuer will execute and deliver of this
Indenture;
WHEREAS, the notes, to be known as Floating Rate Automobile Lease Asset
Backed Notes, Class A-1 (the "Class A-1 Notes"), Floating Rate Automobile Lease
Asset Backed Notes, Class A-2 (the "Class A-2 Notes"), Floating Rate Automobile
Lease Asset Backed Notes, Class A-3 (the "Class A-3 Notes"), Floating Rate
Automobile Lease Asset Backed Notes, Class A-4 (the "Class A-4 Notes" and,
together with the Class A-1 Notes, Class A-2 Notes and Class A-3 Notes, the
"Class A Notes") and Floating Rate Automobile Lease Asset Backed Notes, Class B
(the "Class B Notes" and, together with the Class A Notes, the "Notes"), and the
certificate of authentication for the Notes, are to be substantially in the
forms set forth in Exhibits A, B, C, D and E attached hereto, respectively, with
such variations as are permitted in this Indenture; and
WHEREAS, all acts necessary to make the Notes, when executed,
authenticated and issued, the valid obligations of the Issuer, and to constitute
this Indenture a valid and binding instrument for the security of the Notes, in
accordance with its and their terms, have been done; NOW, THEREFORE,
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee or its nominee all of
the Issuer's right, title and interest in, to and under the following property:
(i) all right, title and interest of the Issuer in and to the 1999-A
SUBI and SUBI Assets and the 1999-A SUBI Certificate evidencing the 1999-A SUBI
Interest and all monies due thereon and paid thereon or in respect thereof;
(ii) the right to realize upon any property that may be deemed to
secure the 1999-A SUBI Interest;
(iii) all rights accruing to the holder of the 1999-A SUBI Interest as
a third-party beneficiary under the Origination Trust Agreement, the 1999-A SUBI
Supplement, the Servicing Agreement and the 1999-A Servicing Supplement;
(iv) the Residual Value Insurance Policy;
(v) the Class A Interest Rate Cap Agreement and the Class B Interest
Rate Cap Agreement;
(vi) the Accounts and the funds therein; and
(vii) all proceeds of the foregoing.
Such Grants are made, however, in trust, to secure the Notes equally
and ratably without prejudice, priority or distinction, except as expressly
provided in the Transaction Documents, between any Note and any other Note by
reason of difference in time of issuance or otherwise, and to secure (i) the
payment of all amounts due on the Notes in accordance with their terms; (ii) the
payment of all other sums payable under this Indenture; and (iii) compliance
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with the provisions of this Indenture, all as provided in this Indenture. To the
extent that the Issuer may be deemed to have a security interest in, rather than
to own, any of the foregoing property, the Issuer hereby assigns to the
Indenture Trustee or its nominee all of the Issuer's right, title and interest
in such property.
The Indenture Trustee acknowledges such Grants, accepts the trusts
hereunder in accordance with the provisions hereof and agrees to perform the
duties herein required to the end that the interests of the Noteholders may be
adequately and effectively protected.
Article One. DEFINITIONS
Section 1.01. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires, (a) the terms defined in this
Article have the meanings assigned to them in this Article and include (i) the
plural as well as the singular and (ii) all genders; (b) all other terms used
herein which are defined in the TIA, either directly or by reference therein,
have the meanings assigned to them therein; (c) all accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
generally accepted accounting principles as at the time applicable in the United
States; (d) all references in this instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of this instrument as originally executed and amended from
time to time; and (e) the words "herein", "hereof", "hereunder" and other words
of similar import refer to this Indenture as a whole. Capitalized terms used
herein which are not defined herein shall have the meanings set forth in the
Securitization Trust Agreement dated as of the date hereof (the "Securitization
Trust Agreement") among the Transferor, Chase Manhattan Bank Delaware, as Owner
Trustee and the Indenture Trustee, the Origination Trust Agreement, the 1999-A
SUBI Supplement or the 1999-A Servicing Supplement (as such terms are defined in
the Securitization Trust Agreement), as applicable.
"Account" means any of the 1999-A SUBI Collection Account, the
Distribution Account, the Reserve Account and any 1999-A SUBI Lease Account.
"Accountant" means a Person qualified to pass upon accounting
questions, whether or not (unless herein required to be Independent) such Person
shall be an officer or employee of the Issuer or of an Affiliate of the Issuer.
"Act", with respect to any Noteholder, has the meaning specified in
Section 11.03.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicants" shall have the meaning specified in Section 7.02(b).
"Authenticating Agent" means any Authenticating Agent appointed as such
pursuant to Section 6.14, and includes any successor thereto.
"Book-Entry Note" means the direct or indirect interest beneficially
owned by any Note Owner in any Note held by or on behalf of DTC as Noteholder
pursuant to Section 2.10 hereof.
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"Cash" means such coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Cede" means Cede & Co., as the nominee of DTC, the initial Clearing
Agency.
"Class A-1 Stated Maturity" means the [__________] 200_ Distribution
Date.
"Class A-2 Stated Maturity" means the [__________] 200_ Distribution
Date.
"Class A-3 Stated Maturity" means the [__________] 200_ Distribution
Date.
"Class A-4 Stated Maturity" means the [__________] 200_ Distribution
Date.
"Class B Stated Maturity" means the [__________] 200_ Distribution
Date.
"Corporate Trust Office" means (a) with respect to the Indenture
Trustee, the Corporate Trust Department of the Indenture Trustee located at 311
W. Monroe, 12th Floor, Chicago, Illinois 60606, Attention: Corporate Trust
Office, or at such other address as the Indenture Trustee may designate from
time to time by notice to the Noteholders, the Servicer and the Issuer, or the
principal corporate trust office of any successor Indenture Trustee, except
that, with respect to presentation of Notes for payment, for registration of
transfer or for exchange, and with respect to the location of the Note Register,
such term shall mean the office or agency of the Indenture Trustee maintained
for that purpose, which as of the date of this Indenture is the same as set
forth above, and (b) with respect to the Owner Trustee, shall have the meaning
set forth in the Securitization Trust Agreement.
"Definitive Notes" shall have the meaning specified in Section 2.10.
"DTC" means The Depository Trust Company and its successors.
"Event of Default" has the meaning specified in Section 5.01.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Trust Estate 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 principal
and interest payments in respect of the Trust Estate and all other moneys
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. Other forms of the verb "to Grant"
shall have correlative meanings.
"Indenture" or "this Indenture" means this instrument as originally
executed, as the same may from time to time be amended or modified and in
effect.
"Indenture Trustee" means Harris Trust and Savings Bank, until a
successor Person shall have become the Indenture Trustee pursuant to Article Six
of this Indenture, and thereafter "Indenture Trustee" shall mean such successor
Person.
"Independent" means, when used with respect to any specified Person,
such a Person who (a) is in fact independent of the Issuer, any other obligor
upon the Notes and any of their respective Affiliates; (b) does not have any
direct financial interest or any material indirect financial interest in the
Issuer, any such other obligor or any of their respective Affiliates; and (c) is
not connected with the Issuer, any such other obligor or any of their respective
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Affiliates as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions. "Independent" when used with
respect to any Accountant means such an Accountant, who may also be the
Accountant who audits the books of the Issuer, any other obligor upon the Notes
or any of their respective Affiliates, who is independent with respect to the
Issuer, any other obligor upon the Notes and their respective Affiliates as
contemplated by Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants. Whenever it is herein provided that
any Independent Person's opinion or certificate shall be furnished to the
Indenture Trustee, such Person shall be acceptable to the Indenture Trustee if
selected in the exercise of reasonable care, and such opinion or certificate
shall state that the signer has read this direction and that the signer is
independent within the meaning thereof.
"Issuer" means the World Omni 1999-A Automobile Lease Securitization
Trust and its successors.
"Issuer Order" and "Issuer Request" means a written order or request
signed by any officer of Owner Trustee who is authorized to act for the Issuer,
and delivered to the Indenture Trustee.
"Lien" means a mortgage, pledge, lien, security interest or other
charge or encumbrance of any kind, including the retained interest of a
conditional vendor or lessor.
"Maturity" means the date on which the entire unpaid principal amount
of the Class A-1 Notes, Class A-2 Notes, Class A-3, Class A-4 Notes or Class B
Notes becomes due and payable as therein or herein provided, whether at the
Class A-1 Stated Maturity, Class A-2 Stated Maturity, Class A-3 Stated Maturity,
Class A-4 Stated Maturity or Class B Stated Maturity, respectively, or
otherwise.
"Note Register" and "Note Registrar" shall have the respective meanings
specified in Section 2.04 hereof.
"Notes" means the Class A Notes and the Class B Notes.
"Outstanding" means, with respect to the Notes, as of any date of
determination, all Notes theretofore authenticated and delivered under this
Indenture except:
(a) Notes theretofore canceled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation;
(b) Notes or portions thereof for whose payment or redemption
Cash in the necessary amount has been theretofore irrevocably deposited with the
Indenture Trustee or any Paying Agent in trust for the Holders of such Notes;
provided, however, that, if such Notes or portions thereof are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Indenture Trustee has been made; and
(c) 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 holder in due course;
provided, however, that for purposes of determining required
percentages for voting rights, consents and other actions of the Noteholders
hereunder, Notes owned by the Transferor or any Affiliate of the Transferor, as
shown on the Note Register, shall not be deemed to be Outstanding.
"Overdue Interest Rate" means the lesser of (1) the highest legally
permissible interest rate per annum and (2) the greater of (a) the Class A-1
Note Rate, Class A-2 Note Rate, Class A-3 Note Rate, Class A-4 Note Rate or
Class B Note Rate, as applicable, plus [____] basis points ([___]%), or (b) the
monthly interest rate announced from time to time by the Indenture Trustee as
its reference rate.
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"Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.08 hereof and is authorized by the Issuer to pay on behalf of the Issuer the
principal or any interest that may become payable on any Notes.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint stock company, trust, bank, trust
company or estate (including any beneficiaries thereof), unincorporated
organization or government or any agency or political subdivision thereof.
"Predecessor Notes" means, 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 the purpose of this definition, any Note
authenticated and delivered under Section 2.05 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.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Redemption Date" means, with respect to any Note to be redeemed
pursuant to Article Ten hereof, any date fixed for such redemption pursuant to
this Indenture, which date shall be a Distribution Date.
"Redemption Price" means:
(a) with respect to any Class A-1 Note to be redeemed, the sum
of (A) the Class A-1 Note Balance, (B) the accrued and unpaid Class A-1 Interest
Distributable Amount, (C) any accrued and unpaid Class A-1 Interest Carryover
Shortfall, (D) any unpaid Class A-1 Uncovered Loss Amount, and (E) any accrued
and unpaid Class A-1 Uncovered Loss Interest Amount, in each case through the
day preceding the final Distribution Date;
(b) with respect to any Class A-2 Note to be redeemed, the sum
of (A) the Class A-2 Note Balance, (B) the accrued and unpaid Class A-2 Interest
Distributable Amount, (C) any accrued and unpaid Class A-2 Interest Carryover
Shortfall, (D) any unpaid Class A-2 Uncovered Loss Amount, and (E) any accrued
and unpaid Class A-2 Uncovered Loss Interest Amount, in each case through the
day preceding the final Distribution Date;
(c) with respect to any Class A-3 Note to be redeemed, the sum
of (A) the Class A-3 Note Balance, (B) the accrued and unpaid Class A-3 Interest
Distributable Amount, (C) any accrued and unpaid Class A-3 Interest Carryover
Shortfall, (D) any unpaid Class A-3 Uncovered Loss Amount, and (E) any accrued
and unpaid Class A-3 Uncovered Loss Interest Amount, in each case through the
day preceding the final Distribution Date;
(d) with respect to any Class A-4 Note to be redeemed, the sum
of (A) the Class A-4 Note Balance, (B) the accrued and unpaid Class A-4 Interest
Distributable Amount, (C) any accrued and unpaid Class A-4 Interest Carryover
Shortfall, (D) any unpaid Class A-4 Uncovered Loss Amount, and (E) any accrued
and unpaid Class A-4 Uncovered Loss Interest Amount, in each case through the
day preceding the final Distribution Date; and
(e) with respect to any Class B Note to be redeemed, the sum
of (A) the Class B Note Balance, (B) the accrued and unpaid Class B Interest
Distributable Amount, (C) any accrued and unpaid Class B Interest Carryover
Shortfall, (D) any unpaid Class B Uncovered Loss Amount, (E) any accrued and
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unpaid Class B Uncovered Loss Interest Amount, (F) any unpaid Class B Note
Principal Carryover Shortfall, and (G) any Class B Note Principal Carryover
Shortfall Interest Amount, in each case through the day preceding the final
Distribution Date.
"Residual Note" has the meaning set forth in Section 2.02(b).
"Sale" has the meaning specified in Section 5.17(a).
"Stated Maturity" means, with respect to any Note, as applicable, the
Class A-1 Stated Maturity, the Class A-2 Stated Maturity, the Class A-3 Stated
Maturity, the Class A-4 Stated Maturity or the Class B Stated Maturity.
"Transferor" means World Omni Lease Securitization L.P. and its
successors.
"Trust Estate" means the interests granted to the Indenture Trustee in
the Granting Clause of this Indenture.
"Trustees" means the Indenture Trustee and the Owner Trustee.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Unmatured Event of Default" means any occurrence which with notice or
the lapse of time or both would become an Event of Default.
Article Two. THE NOTES
Section 2.01. Form Generally. The Class A-1 Notes, Class A-2 Notes,
Class A-3 Notes, Class A-4 Notes and Class B Notes, and the certificates of
authentication thereon, shall be in substantially the forms set forth in
Exhibits A, B, C, D and Exhibit E hereto, respectively with such appropriate
insertions, omissions, substitutions and other variations as are required by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution thereof. Any portion of the text of any Note may be
set forth on the reverse thereof, in which case the following reference to the
portion of the text appearing on the reverse of the Note shall be inserted on
the face of the Note, immediately prior to the paragraph stating that the
certificate of authentication on the Note must be executed by manual signature
of the Indenture Trustee or an Authenticating Agent as a condition to the
validity of such Note:
"Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof which provisions shall for all purposes
have the same effect as if set forth at this place."
The Notes shall be printed, lithographed, typewritten, mimeographed,
photocopied or otherwise produced or may be produced in any other manner as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution thereof.
Section 2.02. Denominations.
(a) Subject to Section 2.12 hereof, the Notes will be issued in
book-entry form.
(b) The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes shall be issuable in minimum denominations of $1,000 and
integral multiples in excess thereof and the Class B Notes shall be issuable in
minimum denominations of $250,000 and integral multiples of $1,000 in excess
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thereof (provided that no Class B Note may be issued or transferred in a
denomination that would cause there to be, immediately after such issuance or
transfer, one hundred (100) or more Class B Noteholders); provided, however,
that one Class A-1 Note, one Class A-2 Note, one Class A-3 Note, one Class A-4
Note and one Class B Note may be issued in a denomination that includes any
remaining portion of the Initial Class A-1 Note Balance, the Initial Class A-2
Note Balance, the Initial Class A-3 Note Balance, the Initial Class A-4 Note
Balance and the Initial Class B Note Balance, respectively (each, a "Residual
Note").
Section 2.03. Execution, Authentication, Delivery and Dating. The Notes
shall be executed on behalf of the Issuer by a Responsible Officer of the Owner
Trustee, which signature may be in facsimile form and be imprinted or otherwise
reproduced thereon.
Notes bearing the manual or facsimile signature of individuals who were
at any time the Responsible Officers of the Owner Trustee shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of issuance of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture and the collateral assignment to the Indenture Trustee of the
portion of the Trust Estate to be Granted to the Indenture Trustee on the
Closing Date, the Issuer may deliver Notes executed by the Issuer to the
Indenture Trustee for authentication, and the Indenture Trustee shall
authenticate and deliver such Notes as provided in this Indenture and not
otherwise.
Notes that are authenticated and delivered by the Indenture Trustee or
the Authenticating Agent to or upon the order of the Issuer on the Closing Date
shall be dated as of the Closing Date. All other Notes that are authenticated
after the Closing Date for any other purpose hereunder shall be dated the date
of their authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee or the Authenticating Agent by the manual
signature of one of its authorized officers, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder.
Section 2.04. Registration of Notes. The Issuer shall cause to be kept
a register (the "Note Register") in which, subject to such reasonable
regulations as it may prescribe, the Issuer shall provide for the registration
of Notes and the registration of transfers of Notes. The Indenture Trustee is
hereby initially appointed "Note Registrar" for the purposes of maintaining the
Note Register and registering Notes and transfers of Notes as herein provided,
and the Indenture Trustee hereby accepts such appointment.
Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.02 hereof, the
Issuer shall execute, and the Indenture Trustee shall authenticate and deliver,
in the name of the designated transferee or transferees, one or more new Notes
of any authorized denominations and of the same aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes in
any authorized denominations, of the same class and of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, the Issuer shall
execute, and the Indenture Trustee shall authenticate and deliver, the Notes
which the Noteholder making the exchange is entitled to receive.
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All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Issuer or the Indenture Trustee) be duly
endorsed, or be accompanied by such other documentation reasonably satisfactory
to the Issuer and the Indenture Trustee, duly executed by the Holder thereof or
its attorney-in-fact duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge which may be imposed in connection
with any registration of transfer or exchange of Notes.
No transfer of a Class B Note shall be made unless the registration
requirements of the Securities Act and any applicable state securities laws are
complied with, or such transfer is exempt from the registration requirements
under the Securities Act and such state securities laws. In the event that a
transfer is to be made in reliance upon an exemption from the Securities Act and
such state securities laws, the Indenture Trustee shall require one of the
following, at the option of the Noteholder desiring to effect such transfer: (i)
that such Noteholder and its prospective transferee jointly deliver an Opinion
of Counsel with respect to the Securities Act and a memorandum of law with
respect to any applicable state securities laws acceptable to and in form and
substance satisfactory to the Indenture Trustee and the Transferor upon which
the Indenture Trustee and the Transferor may conclusively rely, to the effect
that such transfer may be made pursuant to an exemption, describing the
applicable exemption and the basis therefor, from the Securities Act and such
state securities laws or is being made pursuant to the Securities Act and such
state securities laws, which Opinion of Counsel and memorandum of law, as the
case may be, shall not be an expense of the Issuer, the Indenture Trustee, the
Transferor or the Servicer; or (ii) that the transferee execute a representation
letter acceptable to and in form and substance satisfactory to the Transferor
and the Indenture Trustee (provided that the forms attached as Exhibits F-1 and
F-2 shall be deemed acceptable if completed in a manner acceptable to the
Indenture Trustee) certifying to the Issuer, the Indenture Trustee, the
Transferor and the Servicer the facts surrounding such transfer, which
representation letter shall not be an expense of the Issuer, the Indenture
Trustee, the Transferor or the Servicer. The Holder of a Class B Note desiring
to effect such transfer shall, and does hereby agree to, indemnify the Issuer,
the Indenture Trustee, the Transferor and the Servicer against any liability
that may result if the transfer is not so exempt or is not made in accordance
with the Securities Act and such state laws. Neither the Issuer, the Transferor,
the Servicer nor the Indenture Trustee is under any obligation to register the
Class B Notes under the Securities Act or any state securities laws.
Notwithstanding anything to the contrary contained herein, no resale or
other transfer of a Class B Note or any interest therein shall be made unless
(i) immediately after giving effect to such resale or other transfer, there
would be less than 100 Class B Noteholders and (ii) the Indenture Trustee shall
have received either a representation letter or Opinion of Counsel from the
prospective transferee of such Class B Note, in form and substance satisfactory
to the Transferor and the Indenture Trustee (provided that the forms attached as
Exhibits F-1 and F-2 shall be deemed acceptable if completed in a manner
acceptable to the Indenture Trustee), to the effect that (A) (1) such transferee
will not acquire such Class B Note on behalf of or with the assets of any
"employee benefit plan" as defined in Section 3(3) of ERISA, or (2) no
"prohibited transaction" under ERISA or the Internal Revenue Code of 1986, as
amended, will occur in connection with such transferee's acquisition or holding
of such Class B Notes because the relevant conditions for exemptive relief under
one or more of the following prohibited transaction class exemptions have been
satisfied: Prohibited Transaction Class Exemption ("PTCE") 96-23, regarding
transactions effected by "In-House Asset Managers"; PTCE 95-60, regarding
transactions for insurance company general accounts; PTCE 90-1, regarding
transactions effected for insurance company separate accounts; PTCE 91-38,
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regarding transactions affected for bank collective investment funds; or PTCE
84-14, regarding transactions effected by "Qualified Professional Asset
Managers", and (B) if the transferee (or any person or entity for whom such
transferee is acting as agent or custodian in connection with the acquisition of
such Class B Note) is a partnership, grantor trust or S corporation for federal
income tax purposes (a "Flow-Through Entity"), any Class B Notes owned by or on
behalf of such Flow-Through Entity will represent less than 50% of the value of
all the assets owned by or on behalf of such Flow-Through Entity and no special
allocation of income, gain, loss, deduction or credit from such Class B Notes
will be made among the beneficial owners of such Flow-Through Entity. Each
prospective transferee of any Class B Note will be required to represent to the
Indenture Trustee whether it will purchase such Class B Note with the assets of
an "employee benefit plan" as defined under ERISA or other benefit plan
investor.
The Class B Notes, this Indenture and related documents may be amended
or supplemented from time to time to modify restrictions on and procedures for
resale and other transfer of such Class B Notes to reflect any change in
applicable law or regulation (or the interpretation thereof) or practices
relating to the resale or transfer of restricted securities generally.
No Class B Note shall be listed for trading on any recognized
securities exchange or treated as traded on an "established securities market"
as defined in Treas. Reg. ss.1.7704-1(b) (including an interdealer quotation
system that regularly disseminates firm buy or sell quotations by identified
brokers or dealers by electronic means or otherwise).
Section 2.05. Mutilated, Destroyed, Lost or Stolen Notes. If (a) any
mutilated Note is surrendered to the Indenture Trustee, or the Issuer and the
Indenture Trustee receive evidence to their mutual satisfaction of the
mutilation, destruction, loss or theft of any Note, and (b) there is delivered
to the Issuer and the Indenture Trustee such security or indemnity as may be
reasonably required by them to save each of them harmless, then the Issuer shall
execute and, upon receipt of an Issuer Request, the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a new Class A-1 Note, Class A-2 Notes, Class A-3
Note, Class A-4 Note or Class B Note, as the case may be, of the same tenor and
principal amount (expressed in terms of the principal amount on the date the
original Note was first issued and authenticated) bearing a number not
contemporaneously outstanding; provided, however, that if any such mutilated,
destroyed, lost or stolen Note shall have become or shall be about to become due
and payable, or shall have been selected or called for redemption in full,
instead of issuing a new Note, the Issuer may pay such Note without surrender
thereof, except that any mutilated Note shall be surrendered.
Upon the issuance of any new Note under this Section, the Issuer may
require the payment of a sum sufficient to cover any transfer tax or other
governmental charge that may be imposed in relation thereto.
Every new Note issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
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Section 2.06. Payment of Interest and Principal; Principal and Interest
Rights Preserved.
(a) Interest and principal, if any, payable on any Note on any
Distribution Date shall be paid to the Person in whose name such Note is
registered at the close of business on the Record Date for such Distribution
Date by (i) check mailed to such Person's address as it appears in the Note
Register on such Record Date, (ii) if DTC, its nominee or a Clearing Agency is
such Person, by wire transfer of immediately available funds or pursuant to
other arrangements, or (iii) with respect to a registered owner of a Class B
Notes having an aggregate initial denomination of $250,000 or more, upon written
instructions received by the Indenture Trustee not later than five days prior to
the related Record Date, by wire transfer of immediately available funds to an
account maintained by such Person at a depositary institution in the United
States having appropriate facilities therefor except in any case for the final
payment of principal of and interest on a Note, which shall be payable only upon
presentation and surrender of such Note as provided in subsection (b) of this
Section.
Any payments on the Notes and checks for amounts that include
principal on a Note shall be paid to the Person entitled thereto at the address
of such Person as it appears on the Note Register as of the applicable Record
Date or, in the event such payment is to be paid by wire transfer, to the Person
entitled thereto at the wire transfer account as specified in clause (a)(ii) or
(a)(iii) of this Section 2.06, in either case without requiring that such Note
be submitted for notation of payment, and checks returned undelivered will be
held for payment to the Person entitled thereto, subject to the terms of Section
3.03 hereof, at the office or agency in the United States designated by the
Issuer for such purpose pursuant to Section 3.02 hereof. Any reduction in the
principal amount of a Note (or any one or more Predecessor Notes) effected by
any payments made on any Distribution Date shall be binding upon all future
Holders of such Note and of any Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, whether or not noted
thereon.
(b) Interest and principal of each Note shall be payable in
accordance with Section 3.03 of the Securitization Trust Agreement, but no later
than the Class A-1 Stated Maturity, Class A-2 Stated Maturity, Class A-3 Stated
Maturity, Class A-4 Stated Maturity or Class B Stated Maturity, as applicable,
unless such Note becomes due and payable at an earlier date by declaration of
acceleration, call for redemption or otherwise. The final payment of principal
of and interest on each Note (or the payment of the Redemption Price thereof in
the case of a Note called for redemption pursuant to Article Ten hereof) shall
be payable only upon presentation and surrender thereof on or after the Maturity
of the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes or
Class B Notes, as applicable, at the Corporate Trust Office of the Indenture
Trustee or at the office of any Paying Agent. The Indenture Trustee shall notify
the Person in whose name a Note is registered at the close of business on the
Distribution Date immediately preceding the month in which the Distribution Date
on which the Issuer expects that the final payment of principal of and interest
on such Note will be paid is to occur. Such notice shall be given no earlier
than the thirtieth day and no later than the fifteenth day prior to such final
Distribution Date, shall specify that such final payment will be payable only
upon presentation and surrender of such Note, and shall specify the place where
such Note may be presented and surrendered for such final payment.
(c) No further interest will accrue with respect to any Note
from and after the final Distribution Date with respect thereto.
(d) The rights of the Class B Noteholders shall be and hereby
are subordinated to the rights of the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders and the Class A-4 Noteholders to the
extent provided in Section 3.03 of the Securitization Trust Agreement and
Section 5.08 of this Indenture.
(e) Subject to the foregoing provisions of this Section, each
Note delivered under this Indenture upon registration or transfer of or in
exchange for or in lieu of any other Note shall carry the rights to unpaid
principal and interest, if any, that were carried by such other Note.
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Section 2.07. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or of the Indenture Trustee may treat the Person in whose
name any Note is registered as the owner of such Note for the purpose of
receiving payments of the principal and interest on such Note and for all other
purposes whatsoever, whether or not such Note is overdue, and neither the
Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture
Trustee shall be affected by notice to the contrary.
Section 2.08. Cancellation. All Notes surrendered for payment,
registration of transfer or exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly canceled by it. The Issuer may at any time deliver to the
Indenture Trustee for cancellation any Note previously authenticated and
delivered hereunder that the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly canceled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes canceled
as provided in this Section, except as expressly permitted by this Indenture.
All canceled Notes held by the Indenture Trustee shall be destroyed unless the
Issuer shall direct by an Issuer Order that they be returned to it.
Section 2.09. Authentication and Delivery of Notes. The aggregate
principal amount of Notes that may be authenticated and delivered under this
Indenture is limited to an amount equal to the Initial Note Balance, and the
aggregate principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3 Notes,
Class A-4 Notes and Class B Notes respectively, that may be issued and delivered
under this Indenture is limited to an amount equal to the Initial Class A-1 Note
Balance, the Initial Class A-2 Note Balance, the Initial Class A-3 Note Balance,
the Initial Class A-4 Note Balance and the Initial Class B Note Balance,
respectively, except for Notes authenticated and delivered upon registration and
transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections
2.04 or 2.05 hereof.
Notes complying with the foregoing requirements may from time to time
be executed by the Issuer and delivered to the Indenture Trustee for
authentication, and the same shall be authenticated and delivered by the
Indenture Trustee upon Issuer Request.
Section 2.10. Book-Entry Notes. Unless otherwise specified, the Class A
Notes (except for any Residual Notes), upon original issuance, will be issued in
the form of one or more Notes representing the Book-Entry Notes, to be delivered
to the Indenture Trustee, as agent for DTC, the initial Clearing Agency, by, or
on behalf of, the Issuer. The Class A Notes delivered to DTC evidencing the
Book-Entry Notes shall initially be registered on the Note Register in the name
of Cede, and no Note Owner will receive an individual definitive,
fully-registered note (collectively, the "Definitive Notes") representing such
Note Owner's interest in the Class A Notes, except as provided in Section 2.12
hereof. Subject to Section 2.12 hereof, unless and until Definitive Notes have
been issued to Note Owners of Class A Notes pursuant to Section 2.12:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Issuer, the Transferor, the Servicer, the Note
Registrar and the Indenture Trustee may deal with the Clearing Agency for all
purposes (including the making of distributions on the Notes) as the authorized
representative of the Class A Note Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the provisions of this
Section shall control;
(iv) the rights of Note Owners of Class A Notes shall be
exercised only through (or through procedures established by) the Clearing
Agency and shall be limited to those established by law and agreements between
such Note Owners and the Clearing Agency and/or the Clearing Agency Participants
and, unless and until Definitive Notes are issued pursuant to Section 2.12
hereof, the Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit distributions of principal and
interest on such Notes to such Clearing Agency Participants; and
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(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Noteholders of Class A Notes
evidencing a specified aggregate Percentage Interest of Class A-1 Notes, Class
A-2 Notes, Class A-3 Notes, Class A-4 Notes, the Clearing Agency shall be deemed
to represent such percentage (if and to the extent that it will act on behalf of
Note Owners and/or Clearing Agency Participants) only to the extent that it has
received instructions to such effect from Note Owners and/or Clearing Agency
Participants owning or representing, respectively, such required percentages of
the beneficial interest in such Notes and has delivered such instructions to the
Indenture Trustee.
Section 2.11. Notices to the Clearing Agency. Whenever notice or other
communication to any Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued pursuant to Section 2.12 hereof,
the Indenture Trustee and the Servicer shall give solely to the Clearing Agency
all such notices and communications specified herein to be given to the Holders.
Section 2.12. Definitive Notes. If (i)(A) the Transferor advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Class A
Notes and (B) the Indenture Trustee or the Issuer is unable to locate a
qualified successor, (ii) the Transferor, at its option, advises the Indenture
Trustee in writing that it elects to terminate the book-entry system through the
Clearing Agency, or (iii) after the occurrence of an Event of Default, Note
Owners representing beneficial interests in the Class A Notes aggregating more
than 50% of the aggregate Percentage Interests (voting as a single Class)
thereof advise the Indenture Trustee through the Clearing Agency, in writing
that the continuation of a book-entry system through the Clearing Agency is no
longer in the best interests of such Note Owners, then the Indenture Trustee
shall notify all Note Owners of such Notes, through the Clearing Agency, of the
occurrence of any such event and of the availability of Definitive Notes to such
Note Owners requesting the same. Upon surrender to the Indenture Trustee of the
Class A Notes by the Clearing Agency, accompanied by registration instructions
from the Clearing Agency for registration, the Indenture Trustee shall issue
Definitive Notes and deliver such Definitive Notes in accordance with the
instructions of the Clearing Agency. Neither the Issuer, the Transferor, the
Servicer, the Note Registrar nor the Indenture Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of such
Definitive Notes, the Indenture Trustee shall recognize the holders of such
Definitive Notes as Noteholders hereunder. The Indenture Trustee shall not be
liable if the Indenture Trustee or the Issuer is unable to locate a qualified
successor to DTC.
Section 2.13. Tax Treatment. Issuer has entered into this Indenture,
and the Notes shall be issued, with the intention that, for federal, state and
local income and franchise tax purposes, the Notes shall qualify as indebtedness
of the Issuer secured by the Trust Estate. Issuer, by entering into this
Indenture, and each Noteholder, by its acceptance of a Note (and each Note Owner
by its acceptance of an interest in the applicable Book-Entry Note), agree to
treat the Notes for federal, state and local income and franchise tax purposes
as indebtedness of Issuer.
Article Three. COVENANTS AND REPRESENTATIONS
Section 3.01. Payment of Notes. The Issuer will cause to be duly and
punctually paid the principal and interest on the Notes in accordance with the
terms of the Notes, the Securitization Trust Agreement and this Indenture.
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Section 3.02. Maintenance of Office or Agency. The Issuer will maintain
at least one office or agency, which may be changed in the discretion of the
Issuer, within the United States at which Notes may be presented or surrendered
for payment, Notes may be surrendered for registration of transfer or exchange
and notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee at its Corporate Trust Office as such office or agency. The Issuer will
give prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If at any time the Issuer
shall fail to maintain any such office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office, and the
Issuer hereby appoints the Indenture Trustee at its Corporate Trust Office its
agent to receive all such presentations, surrenders, notices and demands.
Section 3.03. Money for Note Payments to be Held in Trust. All payments
of amounts due and payable with respect to the Notes that are to be made from
amounts withdrawn from the Accounts pursuant to Section 8.02(b) hereof shall be
made on behalf of the Issuer by the Indenture Trustee or by a Paying Agent, and
no amounts so withdrawn from any Account shall be paid over to or at the
direction of the Issuer except as provided in the Transaction Documents.
Whenever the Issuer shall have a Paying Agent other than the Indenture
Trustee, it will, on or before the Business Day next preceding each Distribution
Date, direct the Indenture Trustee to deposit with such Paying Agent an
aggregate sum sufficient to pay the amounts then becoming due or payable, such
sum to be held in trust for the benefit of the Persons entitled thereto.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee, subject to the
provisions of this Section 3.03, that such Paying Agent, in acting as Paying
Agent, is an express agent of the Indenture Trustee and, further, that such
Paying Agent will:
(a) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided and pay such sums to such Persons as herein provided;
(b) give the Indenture Trustee notice of any default by the
Issuer (or any other obligor upon the Notes) in the making of any payment
required to be made with respect to the Notes;
(c) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(d) immediately resign as a Paying Agent and forthwith pay to
Indenture Trustee all sums held by it in trust for the payment of Notes if at
any time it ceases to meet the standards required to be met by a Paying Agent at
the time of its appointment; and
(e) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which such sums were held by such Paying Agent;
and upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
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Any money held by the Indenture Trustee or any Paying Agent in trust
for the payment of any amount due with respect to any Note and remaining
unclaimed for three years after the Maturity of the Class A-1 Notes, Class A-2
Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes, as the case may be,
upon receipt of an Issuer Request, shall be paid to the Issuer (or, after
termination of the Issuer, the Transferor) and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer (or, after
termination of the Issuer, the Transferor) for payment thereof (but only to the
extent of the amounts so paid to the Issuer (or, after termination of the
Issuer, the Transferor)), and all liability of the Indenture Trustee or such
Paying Agent with respect to such trust money shall thereupon cease. The
Indenture Trustee may adopt and employ, at the expense of the Issuer, any
reasonable means of notification of such payment by the Indenture Trustee to the
Issuer (or, after termination of the Issuer, the Transferor) (including, but not
limited to, mailing notice of such payment to Holders whose Notes have been
called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from records
of the Indenture Trustee or any Paying Agent, at the last address of record for
each such Holder).
Section 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware and the Issuer will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, and each instrument or agreement
included in the Trust Estate.
Section 3.05. Protection of Trust Estate. The Issuer and (at the
request of the Issuer, the Servicer or the Indenture Trustee) the Owner Trustee
will from time to time execute, deliver and file all financing statements,
continuation statements, instruments of further assurance, the 1999-A SUBI
Certificate and other instruments reasonably required or necessary to maintain
the Lien and security interest created by this Indenture or to protect the Trust
Estate generally, and will take such other action necessary or advisable to:
(i) Grant more effectively all or any portion of the
Trust Estate to or for the benefit of the Indenture Trustee;
(ii) maintain or preserve the Lien of this Indenture
or carry out more effectively the purposes hereof;
(iii) perfect, publish notice of, or protect the
validity of, any Grant made or to be made by this Indenture;
(iv) enforce any of the Contracts; or
(v) preserve and defend title to the Trust Estate and
the rights of the Indenture Trustee and the Noteholders in such Trust
Estate against the claims of all persons and parties.
Each of the Issuer and the Owner Trustee hereby designates the
Indenture Trustee its agent and attorney-in-fact to execute and file any
financing statement, continuation statement or other instrument designated in
writing by the Issuer or the Servicer pursuant to this Section. It is understood
that in no event will the Issuer or the Owner Trustee be required to take any
action to cause any Lien notation on, or any other action with respect to, any
Certificate of Title for any 1999-A Leased Vehicle.
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Section 3.06. Opinions as to Trust Estate. On or before November 15 in
each calendar year commencing with the November 15 occurring at least six months
after the Closing Date, the Issuer shall furnish to the Indenture Trustee
Opinions of Counsel, either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re-recording and
re-filing of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
Liens and security interests created by this Indenture and the Backup Security
Agreement and reciting the details of such action or stating that in the opinion
of such counsel no such action is necessary to so maintain such Liens and
security interests. Such Opinions of Counsel shall also describe the recording,
filing, re-recording and re-filing of this Indenture, any indentures
supplemental hereto and any other requisite documents and the execution and
filing of any financing statements and continuation statements that will, in the
opinion of such counsel, be required to maintain the Liens and security
interests of this Indenture and the Backup Security Agreement until November 15
in the following calendar year.
Section 3.07. Performance of Obligations.
(a) The Issuer will punctually perform and observe all of its
obligations and agreements contained in each of the Transaction Documents to
which it is a party or by which it is bound, including without limitation its
obligation under Section 3.05 hereof.
(b) The Issuer will not take any action that would release any Person
from any of such Person's material covenants or obligations under any instrument
included in the Trust Estate, or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument, except as expressly provided
in the Transaction Documents or any such instrument.
(c) If the Issuer shall have knowledge of the occurrence of (i) an
Event of Default or an Unmatured Event of Default, or (ii) a 1999-A Servicer
Event of Default, the Issuer shall promptly notify the Indenture Trustee and
each Rating Agency thereof by means of an Officer's Certificate specifying the
action, if any, the Issuer is taking in respect of such Event of Default,
Unmatured Event of Default or 1999-A Servicer Event of Default.
Section 3.08. Negative Covenants. So long as any Notes are outstanding,
the Issuer shall not:
(a) sell, transfer, exchange or otherwise dispose of any of the Trust
Estate except as expressly permitted by the Transaction Documents;
(b) claim any credit on, or make any deduction from, the principal or
interest on the Notes by reason of the payment of any taxes levied or assessed
upon any part of the Trust Estate;
(c) without the consent of the Noteholders representing 100% of the
aggregate Percentage Interests (voting as a single Class) (with respect to which
the Issuer promptly shall notify the Rating Agencies), (i) engage in any
business or activity other than financing, owning, managing and selling the
Trust Estate and the issuance of the Notes pursuant to this Indenture and the
other Transaction Documents or (ii) create, incur, assume or in any manner
become liable in respect of any indebtedness for money borrowed other than the
Notes, or as otherwise contemplated by the Transaction Documents;
(d) dissolve, reorganize or liquidate in whole or in part;
(e) merge or consolidate with any corporation;
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(f) (to the extent that it may lawfully so covenant) without the
consent of the Indenture Trustee, voluntarily commence any proceeding or file
any petition under any bankruptcy, insolvency or similar law or seek dissolution
or reorganization or the appointment of a receiver, trustee, custodian or
liquidator for itself or a substantial portion of its property, assets or
business or to effect such a plan or other arrangement with its creditors;
(g) (i) permit the validity or effectiveness of this Indenture to be
impaired, or permit the Lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released from
any covenants or obligations under this Indenture, except as may be expressly
permitted hereby; (ii) permit any Lien, charge, security interest, mortgage or
other encumbrance (other than the Lien of this Indenture) to be created on or
extend to or otherwise arise upon or burden the Trust Estate or any part thereof
or any interest therein or the proceeds thereof; or (iii) permit the Lien of
this Indenture not to constitute a valid first priority perfected security
interest in the Trust Estate; or
(h) without the consent of Class A Noteholders representing 100% of the
aggregate Percentage Interests (other than any Percentage Interests held by the
Class A Cap Provider or any affiliate of the Class A Cap Provider), voting as a
single Class, terminate the Class A Interest Rate Cap Agreement following (i) an
Event of Default under the Class A Interest Rate Cap Agreement (other than
pursuant to clause (i), (vii) or (viii) of Section 5(a) of the Class A Interest
Rate Cap Agreement) or (ii) a Termination Event under the Class A Interest Rate
Cap Agreement (other than a Termination Event pursuant to Section 5(b)(i) of the
Class A Interest Rate Cap Agreement).
(i) without the consent of Class B Noteholders representing 100% of the
aggregate Percentage Interests (other than any Percentage Interests held by the
Class B Cap Provider or any affiliate of the Class B Cap Provider), voting as a
single Class, terminate the Class B Interest Rate Cap Agreement following (i) an
Event of Default under the Class B Interest Rate Cap Agreement (other than
pursuant to clause (i), (vii) or (viii) of Section 5(a) of the Class B Interest
Rate Cap Agreement) or (ii) a Termination Event under the Class B Interest Rate
Cap Agreement (other than a Termination Event pursuant to Section 5(b)(i) of the
Class B Interest Rate Cap Agreement).
Section 3.09. Statements as to Compliance.
(a) The Issuer will deliver to the Indenture Trustee and each
Rating Agency, within 120 days after December 31 of each year, an Officer's
Certificate stating, as to the signer thereof, that
(i) a review of the activities of the Issuer during
such year (or since the Closing Date in the case of the first such
statement) and of performance of the Issuer under this Indenture has
been made under such officer's supervision; and
(ii) to the best of such officer's knowledge, based
on such review, the Issuer has fulfilled all its obligations under this
Indenture throughout such year (or since the Closing Date in the case
of the first such statement), or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known
to such officer and the nature and status thereof.
(b) In lieu of the certificates and opinions that would be
required by Section 314(d)(1) of the TIA, the Issuer will deliver to the
Indenture Trustee, within thirty days after June 30 and December 31 of each year
commencing with December 31, 1999, an Officer's Certificate of the Transferor,
stating that (i) a review of all releases and reallocations of 1999-A SUBI
Assets during the preceding semi-annual period has been made under the signing
officer's supervision; (ii) to the best of his or her knowledge, all of such
releases and reallocations complied with all of the requirements of the relevant
provisions of the Indenture and were made in the ordinary course of the
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businesses of the Issuer; (iii) all proceeds from the disposition of the related
released 1999-A SUBI Leased Vehicles were used in the business of the Issuer to
make payments on the Notes or as otherwise permitted by the Indenture; and (iv)
in his or her opinion, such releases and reallocations did not impair the
security under the Indenture in contravention of the provisions thereof.
Article Four. SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture.
(a) This Indenture shall cease to be of further effect, and the
Indenture Trustee, at the request of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when:
(i) either
(A) all Notes theretofore authenticated and delivered
(other than (1) Notes which have been mutilated, destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.05
hereof, and (2) Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust and thereafter
repaid or discharged from such trust, as provided in Section 3.03
hereof) have been delivered to the Indenture Trustee for cancellation;
or
(B) all Notes not theretofore delivered to the
Indenture Trustee for cancellation (other than Notes described in
clauses (i)(A)(1) or (i)(A)(2) above)
(1) have become due and payable, or
(2) are to be called for redemption pursuant to
Article Ten within one year under arrangements satisfactory to
the Indenture Trustee for the giving of notice of redemption
by the Indenture Trustee in the name, and at the expense, of
the Issuer, and the Issuer, in the case of either of clauses
(i)(B)(1) or (i)(B)(2) above, has irrevocably deposited or
caused to be irrevocably deposited in a segregated account
with the Indenture Trustee, in trust for such purpose, an
amount of Cash sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the
Indenture Trustee for cancellation, for principal and interest
to the Class A-1 Stated Maturity, the Class A-2 Stated
Maturity, the Class A-3 Stated Maturity, the Class A-4 Stated
Maturity or Class B Stated Maturity, as applicable, or the
applicable Redemption Date, as the case may be, and in the
case of Notes which were not paid at the Class A-1 Stated
Maturity, the Class A-2 Stated Maturity, the Class A-3 Stated
Maturity, the Class A-4 Stated Maturity or Class B Stated
Maturity, as applicable, for all overdue principal and all
interest payable on such Notes through the next succeeding
Distribution Date therefor, in each case without reliance upon
anticipated investment earnings on such Cash, and if any Notes
are to be redeemed prior to the Class A-1 Stated Maturity, the
Class A-2 Stated Maturity, the Class A-3 Stated Maturity, the
Class A-4 Stated Maturity or Class B Stated Maturity, as
applicable, the Issuer has made irrevocable arrangements
satisfactory to the Indenture Trustee for the giving of notice
of redemption by the Indenture Trustee in the name and at the
expense of the Issuer;
(ii) the Issuer has paid or caused to be paid all other
amounts payable hereunder or under any of the Transaction Documents by
the Issuer; and
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(iii) the Issuer has delivered to the Indenture Trustee and
the Servicer an Officer's Certificate and an Opinion of Counsel stating
that all conditions precedent herein provided for the satisfaction and
discharge of this Indenture have been complied with.
(b) Notwithstanding the satisfaction and discharge of this Indenture,
the provisions of Articles Eight and Nine hereof, the obligations of the
Indenture Trustee to Noteholders and the Issuer under Section 3.03 hereof, of
the Issuer to the Indenture Trustee under Section 6.07 hereof, of the Indenture
Trustee to Noteholders under Section 4.02 hereof, and of the Indenture Trustee
under Section 6.17 hereof, and the provisions of this Indenture with respect to
registration of transfers of Notes, replacement of mutilated, destroyed, lost or
stolen Notes, and rights to receive payments of principal of and interest on the
Notes, shall survive the termination of this Indenture.
Section 4.02. Application of Trust Money. All money deposited with the
Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust and
applied by the Indenture Trustee, in accordance with the provisions of the Notes
and this Indenture, as the case may be, to the payment, either directly or
through any Paying Agent, as the Indenture Trustee may determine, to the Persons
entitled thereto, of the principal and any interest for whose payment such money
has been deposited with the Indenture Trustee.
Article Five. DEFAULTS AND REMEDIES
Section 5.01. Events of Default. "Event of Default", wherever used
herein, means, with respect to the Notes, any one of the following events
(whatever the reason for such Event of Default, and whether it shall be
voluntary or involuntary, or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) if the Issuer shall fail to make any interest payment on
any Class A Note due to the lack of available funds to make such payment under
Section 3.03(b)(ii) of the Securitization Trust Agreement, within five Business
Days after such payment would have been due had such funds been available;
(b) after the Class A Notes have been paid in full, if the
Issuer shall fail to make any interest payment on any Class B Note due to the
lack of available funds to make such payment under Section 3.03(b)(iv) of the
Securitization Trust Agreement, within five Business Days after such payment
would have been due had such funds been available;
(c) if the Issuer shall default in the payment of any interest
or principal on any Note for a period of five Business Days after any such
payment is due;
(d) failure on the part of the Issuer duly to observe or
perform in any material respect any other covenants or agreements of the Issuer
set forth in any of the Transaction Documents, or any representation or warranty
made by the Issuer in any Transaction Document shall fail to have been correct
in any material respect when made or given, which failure materially and
adversely affects the rights of the Holders of the Notes and which continues
unremedied and continues to affect materially and adversely the rights of the
Holders of the Notes for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, is given (i) to the
Issuer by the Indenture Trustee, or (ii) to the Issuer and to the Indenture
Trustee by the Holders of Notes representing not less than 25% of the aggregate
Percentage Interests (voting as a single Class);
(e) the Issuer shall file a petition commencing a voluntary
case under any chapter of the Federal bankruptcy laws; or the Issuer shall file
a petition or answer or consent seeking reorganization, arrangement, adjustment,
or composition under any other similar applicable Federal law, or shall consent
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to the filing of any such petition, answer, or consent; or the Issuer shall
appoint, or consent to the appointment of a custodian, receiver, liquidator,
trustee, assignee, sequestrator or other similar official in bankruptcy or
insolvency of it or of any substantial part of its property, or shall make an
assignment for the benefit of creditors, or shall admit in writing its inability
to pay its debts generally as they become due; or
(f) any order for relief against the Issuer shall have been
entered by a court having jurisdiction in the premises under any chapter of the
Federal bankruptcy laws, or a decree or order by a court having jurisdiction in
the premises shall have been entered approving as properly filed a petition
seeking reorganization, arrangement, adjustment, or composition of the Issuer
under any other similar applicable Federal law, or a decree or order of a court
having jurisdiction in the premises for the appointment of a custodian,
receiver, liquidator, trustee, assignee, sequestrator or other similar official
in bankruptcy or insolvency of the Issuer or of any substantial part of its
property, or for the winding up or liquidation of its affairs, shall have been
entered, and any such order or decree shall remain unstayed and in effect for a
period of 60 consecutive days.
Section 5.02. Acceleration of Maturity; Rescission and Annulment.
(a) If an Event of Default occurs and is continuing and no
election to act in accordance with the provisions of Section 5.05 shall have
been made (or, if made, have been rescinded), then and in every such case the
Indenture Trustee or Noteholders representing not less than 25% of the aggregate
Percentage Interests (voting as a single Class) may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by Noteholders), and upon any such declaration the
Notes shall become immediately due and payable; provided, that, if an Event of
Default specified in Section 5.01(e) or (f) hereof shall occur, the Notes shall
become immediately due and payable automatically without the giving of any
notice.
(b) At any time after such a declaration of acceleration of
maturity has been made and before a judgment or decree for payment of the money
due has been obtained by the Indenture Trustee as hereinafter in this Article
provided, Noteholders representing more than 50% of the aggregate Percentage
Interests (voting as a single Class), by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its consequences
if:
(i) (A) the Issuer has paid or deposited with the
Indenture Trustee a sum sufficient to pay:
(1) all payments of principal and interest
on the Notes and all other amounts which would then be due
hereunder or upon the Notes if the Event of Default giving
rise to such acceleration had not occurred; and
(2) all sums paid or advanced by the
Indenture Trustee hereunder and the reasonable compensation
and reasonable and documented expenses, disbursements and
advances of the Indenture Trustee, its agents and counsel; and
(B) all Events of Default, other than the
nonpayment of the interest on or the principal of the Notes
which have become due solely by such acceleration, have been
cured or waived as provided in Section 5.15 hereof; or
(ii) the Indenture Trustee elects or is required to
act in accordance with the provisions of Section 5.05 with respect to
the Event of Default that gave rise to such declaration.
(c) No such rescission shall affect any subsequent Event of
Default or impair any right consequent thereon.
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Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. The Issuer covenants that if an Event of Default shall occur
and be continuing, the Issuer will, upon demand of the Indenture Trustee in
accordance with the provisions of this Indenture, pay to it, for the benefit of
the Noteholders, (a) the entire unpaid principal amount of all Notes; (b)
interest on the entire unpaid principal amount of all Notes and interest on any
principal and accrued interest on such Notes that was not paid when due, at the
applicable Overdue Interest Rate but only to the extent that payments of
interest at such rate shall be legally enforceable; and (c) in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation and reasonable and documented
expenses, disbursements and advances of the Indenture Trustee and its agents and
counsel (including in-house counsel).
If the Issuer fails to pay such amounts forthwith upon such demand, the
Indenture Trustee, in its own name and as Indenture Trustee of an express trust,
may institute a Proceeding for the collection of the sums so due and unpaid, and
may prosecute such Proceeding to judgment or final decree, and may enforce the
same against the Issuer or any other obligor upon the Notes and collect the
moneys adjudged or decreed to be payable in the manner provided by law.
If an Event of Default occurs and is continuing, the Indenture Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Noteholders by such appropriate Proceedings as the Indenture Trustee
shall deem most effective to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or enforce any other proper
remedy.
Section 5.04. Remedies. If an Event of Default shall have occurred and
be continuing, the Indenture Trustee may, to the extent not inconsistent with
the provisions of Section 5.05 hereof, if applicable, do one or more of the
following:
(a) institute Proceedings for the collection of all amounts
then payable on the Notes, or under this Indenture, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Issuer and the
Trust Estate moneys adjudged due;
(b) subject to Section 5.17 hereof, sell the Trust Estate or
any portion thereof or rights or interest therein, at one or more public or
private Sales called and conducted in any manner permitted by law;
(c) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust Estate;
(d) exercise any remedies of a secured party under the UCC or
other applicable law and take any other appropriate action to protect and
enforce the rights and remedies of the Indenture Trustee or the Holders of the
Notes hereunder; and
(e) as provided in Section 6.15 of the Securitization Trust
Agreement, direct the Owner Trustee with regard to appropriate actions
thereunder.
Section 5.05. Optional Preservation of Trust Estate. Notwithstanding
anything in this Indenture to the contrary (including, without limitation,
Sections 5.14 and 5.17), if the Notes have been declared due and payable (and
such declaration shall not have been rescinded or annulled), then the Indenture
Trustee may, in its sole discretion, retain the Trust Estate and apply all
amounts receivable with respect to the Trust Estate to the payment of principal
and interest on the Notes as and when such principal and interest would have
become due pursuant to the terms of the Notes and the Transaction Documents as
if there had not been a declaration of acceleration of the Maturity of the
Notes.
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Section 5.06. Indenture Trustee May File Proofs of Claim. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, composition or other similar Proceeding relative to
the Issuer or any other obligor upon any of the Notes or the property of the
Issuer or of such other obligor or their respective creditors, the Indenture
Trustee (irrespective of whether the Notes shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Indenture Trustee shall have made any demand on the Issuer for the payment of
overdue principal of or any interest on the Notes) and the Owner Trustee shall
be entitled and empowered, by intervention in such Proceeding or otherwise:
(i) to file such proofs of claim for the whole amount
owing and unpaid in respect of the Notes and to file such other papers
or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee and the Owner Trustee (including any
claim for the reasonable compensation and reasonable and documented
expenses, disbursements and advances of the Indenture Trustee and the
Owner Trustee and their respective agents and counsel, including
in-house counsel) and of the Noteholders allowed in such Proceeding,
and
(ii) to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute
the same; and any receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such Proceeding is hereby authorized
by each Noteholder to make such payments to the Indenture Trustee and
the Owner Trustee and, in the event that the Indenture Trustee shall
consent to the making of such payments directly to the Noteholders, to
pay to the Indenture Trustee and the Owner Trustee any amount due to it
for the reasonable compensation and reasonable and documented expenses,
disbursements and advances of the Indenture Trustee and the Owner
Trustee and their respective agents and counsel (including in-house
counsel), and any other Capped Indenture Trustee Administrative
Expenses due the Indenture Trustee and Capped Owner Trustee
Administrative Expenses due the Owner Trustee.
Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment, or composition
affecting any of the Notes or the rights of any Holder thereof, or to authorize
the Indenture Trustee to vote in respect of the claim of any Noteholder in any
such Proceeding.
Section 5.07. Indenture Trustee May Enforce Claims Without Possession
of Notes. All rights of action and claims under this Indenture or any of the
Notes may be prosecuted and enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any Proceeding
relating thereto, and any such Proceeding instituted by the Indenture Trustee
shall be brought in its own name as Indenture Trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation and reasonable and documented expenses, disbursements
and advances of the Indenture Trustee, its agents and counsel (including
in-house counsel), be for the ratable benefit of the Noteholders in respect of
which such judgment has been recovered.
Section 5.08. Application of Money Collected. Except as provided in
Section 5.05 hereof, if applicable, any money collected by the Indenture Trustee
pursuant to this Article Five shall be applied in the order provided for
Principal Collections and Interest Collections received during the Amortization
Period under the Securitization Trust Agreement at the date or dates fixed by
the Indenture Trustee and, in case of the distribution of the entire amount due
on account of principal of and any interest on the Notes, upon presentation and
surrender thereof; provided that amounts received upon a Sale of all or any
portion of the Trust Estate and treated as Principal Collections will be
distributed first, upon the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes
and Class A-4 Notes, based on the respective Class A Note Balances, ratably,
without preference or priority of any kind, according to such amounts due and
payable on such Notes; second, upon the Class B Notes, based on the Class B Note
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Balance, according to such amounts due and payable on such Notes; and, provided,
further, that the Servicer, on behalf of the Indenture Trustee, shall determine
conclusively without liability for such determination the amount of the proceeds
of such Sale which are allocable to Interest Collections and the amount of such
proceeds which are allocable to Principal Collections.
Section 5.09. Limitation on Suits.
(a) No Noteholder shall have any right to institute any
Proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder unless:
(i) such Holder has previously given written notice
to the Indenture Trustee of a continuing Event of Default;
(ii) Noteholders representing not less than 25% of
the aggregate Percentage Interests (voting as a single Class) shall
have made a written request to the Indenture Trustee to institute
Proceedings in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the
Indenture Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
(iv) the Indenture Trustee for 60 days after its
receipt of such notice, request and offer of indemnity has failed to
institute any such Proceeding; and
(v) no direction inconsistent with such written
request has been given to the Indenture Trustee during such 60-day
period by Noteholders representing more than 50% of the aggregate
Percentage Interests (voting as a single Class);
it being understood and intended that no one or more
Noteholders shall have any right in any manner whatever by virtue of, or by
availing themselves of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Noteholders or to obtain or to seek to obtain
priority or preference over any other Holders (other than the subordination of
the Class B Notes to the extent set forth in the Transaction Documents) or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all Noteholders.
(b) No Noteholder shall have any right to vote (except as
provided in the Transaction Documents) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties to any
of the Transaction Documents, nor shall any Noteholder be under any liability to
any third person by reason of any action pursuant to any provision of the
Transaction Documents. However, in connection with any action as to which
Noteholders are entitled to vote or consent under the Transaction Documents, the
Issuer may set a record date for purposes of determining the identity of
Noteholders entitled to vote or consent in accordance with TIA Section 316(c).
(c) No Noteholder shall have any right to institute a
Proceeding for the enforcement of the payment of principal of or interest on any
Note prior to the Maturity of such Note, unless such Note becomes due and
payable at an earlier date by declaration of acceleration, call for redemption
or otherwise.
Section 5.10. Unconditional Rights of Noteholders to Receive Note
Payments. Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right which is absolute and unconditional to receive
payment of the principal of and interest on such Note, on or after the due date
therefor as specified in such Note, and to institute suit for the enforcement of
any such payment, and such right shall not be impaired without the consent of
such Holder.
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Section 5.11. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture or any other Transaction Document and such
Proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Indenture Trustee or to such Noteholder, then and in
every such case the Issuer, the Indenture Trustee and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee and the Noteholders shall continue as though
no such Proceeding had been instituted.
Section 5.12. Rights and Remedies Cumulative. Except as otherwise
expressly provided in Section 2.05 hereof, no right or remedy herein conferred
upon or reserved to the Indenture Trustee or to the Noteholders is intended to
be exclusive of any other right or remedy, and every right and remedy shall to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 5.13. Delay or Omission Not Waiver. No delay or omission of the
Indenture Trustee or of any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article Five or by law to the Indenture
Trustee or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as
the case may be.
Section 5.14. Control by Noteholders. Subject to the provisions of
Sections 5.09, 6.03(d) and 6.03(e) hereof, the Holders of Notes representing
more than 50% of the aggregate Percentage Interests (voting as a single Class)
shall have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee with respect to the
Notes or with respect to exercising any trust power conferred on the Indenture
Trustee, including without limitation the Indenture Trustee's power to direct
the action of the Owner Trustee pursuant to Section 6.15 of the Securitization
Trust Agreement; provided that:
(a) such direction shall not, as determined by the Indenture
Trustee based on the advice of counsel, be in conflict with any rule of law or
with this Indenture;
(b) any Sale of the Trust Estate shall be subject to Section
5.17 hereof;
(c) if any other provision of the Transaction Documents
requires the vote of a greater Percentage Interest for a particular action, or
Class voting, such greater Percentage Interest or Class voting shall be
required; and
(d) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee which is not inconsistent with such direction;
provided, however, that, subject to Section 6.01 hereof, the Indenture Trustee
need not take any action which it determines might involve it in liability or be
unjustly prejudicial to the Noteholders not consenting.
Section 5.15. Waiver of Past Defaults. The Holders of Notes
representing more than 50% of the aggregate Percentage Interests (voting as a
single Class), may on behalf of the Holders of all the Notes waive any past
Unmatured Event of Default or Event of Default hereunder and its consequences,
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except that Holders of Notes representing 100% of the aggregate Percentage
Interest shall be required to waive an Unmatured Event of Default or Event of
Default:
(a) in the payment of principal of or interest due on any
Note, or
(b) in respect of a covenant or provision hereof which under
Section 9.01 hereof cannot be modified or amended without the consent of the
Holder of each Outstanding Note affected.
Upon any such waiver, such Unmatured Event of Default or Event of
Default shall cease to exist and shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Unmatured Event of Default or Event of Default or impair any right
consequent thereon.
Section 5.16. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, including those of the Indenture
Trustee (except that the Indenture Trustee need not be required to post an
undertaking to pay its costs of any such suit), and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Indenture Trustee, to any suit instituted by any Noteholder, or group of
Noteholders, holding in the aggregate Notes representing more than 10% of the
then aggregate Percentage Interests, or to any suit instituted by any Noteholder
for the enforcement of the payment of the principal of or interest on any Note
on or after the Maturity of such Note.
Section 5.17. Sale of Trust Estate.
(a) If an Event of Default shall have occurred and be
continuing, the Indenture Trustee may, and, subject to paragraph (b) of this
Section 5.17, upon receipt of a notice from Noteholders representing more than
50% of the aggregate Percentage Interests of the Class A Notes (voting as a
single Class) or 50% of the aggregate Percentage Interests of all Notes (voting
as a single Class), shall (i) publish a notice in Authorized Newspapers that the
Indenture Trustee intends to sell, dispose of or otherwise liquidate (a "Sale")
the 1999-A SUBI Interest, the 1999-A SUBI Certificate and the other property of
the Trust Estate in a commercially reasonable manner. Following such
publication, the Indenture Trustee shall, unless otherwise prohibited by
applicable law from any such action, sell, dispose of, or otherwise liquidate
the 1999-A SUBI Interest, the 1999-A SUBI Certificate and the other property of
the Trust Estate, in a commercially reasonable manner and on commercially
reasonable terms, which shall include the solicitation of competitive bids, and
shall proceed to consummate the sale, liquidation or disposition thereof as
provided above with the highest bidder. The Transferor and the Servicer shall be
permitted to bid for the Trust Estate. The Indenture Trustee may obtain a prior
determination from the conservator, receiver, or trustee in bankruptcy of the
Issuer that the terms and manner of any proposed sale, disposition or
liquidation are commercially reasonable. The power to effect any Sale of any
portion of the Trust Estate pursuant to Section 5.04 hereof and this Section
5.17 shall not be exhausted by any one or more Sales as to any portion of such
Trust Estate remaining unsold, but shall continue unimpaired until the entire
Trust Estate shall have been sold or all amounts payable on the Notes and under
this Indenture shall have been paid. The Indenture Trustee may from time to time
postpone any Sale by public announcement made at the time and place of such
Sale.
(b) Notwithstanding the foregoing, the Indenture Trustee shall
not sell or otherwise dispose of the Trust Estate following an Event of Default
(i) unless the anticipated proceeds of such Sale or other disposition
distributable to the Noteholders will be sufficient to discharge in full the
amounts then due and unpaid upon the Notes for principal and interest, or (ii)
if such proceeds will not be sufficient, unless the Indenture Trustee obtains
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the consent of the Holders of all Notes then Outstanding, provided that without
the consent or direction to the contrary by the Holders of all Notes then
Outstanding, at any Sale at which no other Person bids an amount equal to or
greater than the amount described in clause (i) above, the Indenture Trustee
shall bid on behalf of the Noteholders an amount at least equal to $1.00 more
than the highest other bid.
(c) The Indenture Trustee may bid for and acquire any portion
of the Trust Estate in connection with a Sale thereof, and may pay all or part
of the purchase price by crediting against amounts owing on the Notes or other
amounts secured by this Indenture, all or part of the net proceeds of such Sale
after deducting the costs, charges and expenses incurred by the Indenture
Trustee in connection with such Sale notwithstanding the provisions of any other
Section hereof. The Notes need not be produced in order to complete any such
Sale. The Indenture Trustee may, subject to this Indenture, hold, lease,
operate, manage or otherwise deal with any property so acquired in any manner
permitted by law.
(d) The Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any portion of
a Trust Estate in connection with a Sale thereof. In addition, the Indenture
Trustee is hereby irrevocably appointed the agent and attorney-in-fact of the
Issuer to transfer and convey its interest in any portion of a Trust Estate in
connection with a Sale thereof (including changing the designation of the
secured party on any financing or continuation statements), and to take all
action necessary to effect such Sale. No purchaser or transferee at such a Sale
shall be bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
moneys.
Section 5.18. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the Lien of this Indenture nor any rights or
remedies of the Indenture Trustee or Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Trust Estate.
Section 5.19. Notes held by Issuer or Affiliates Not to Share in
Distribution. Notes owned or held by, or for the account or benefit of, the
Issuer or any Affiliate thereof shall not be entitled to share in any payment or
distribution provided for in this Article.
Article Six. THE INDENTURE TRUSTEE
Section 6.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this
Indenture and, pursuant to clause (f) below, the other Transaction
Documents specifically referred to in such clause, and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part or as
otherwise required by the TIA, the Indenture Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates, opinions or reports
furnished to the Indenture Trustee and conforming to the requirements
of this Indenture, but in the case of any such certificates or opinions
that by any provision hereof are specifically required to be furnished
to the Indenture Trustee, the Indenture Trustee shall be under a duty
to examine the same to determine whether or not they conform to the
requirements of this Indenture, but need not verify the accuracy of the
contents thereof or whether procedures specified by or pursuant to the
provisions of this Indenture have been followed in the preparation
thereof.
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(b) In case an Event of Default has occurred and is
continuing, the Indenture Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances.
(c) No provision of this Indenture shall be construed to
relieve the Indenture Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) this subsection shall not be construed to limit
the effect of subsection (a) of this Section;
(ii) the Indenture Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer,
unless it shall be proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of Noteholders representing more than
50% of the aggregate Percentage Interests (voting as a single Class)
relating to the time, method and place of conducting any Proceeding for
any remedy available to the Indenture Trustee, or exercising any trust
or power conferred upon the Indenture Trustee, under this Indenture.
(d) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of and affording protection to the Indenture Trustee shall be subject to the
provisions of this Section.
(f) The Indenture Trustee agrees to comply with all of the
provisions of and to perform all of the obligations under the Trust Agreement,
the Servicing Agreement, the SUBI Supplement, the Servicing Supplement and the
Backup Security Agreement required to be complied with or performed by the
Indenture Trustee, whether or not the Indenture Trustee is expressly a party
thereto.
Section 6.02. Notice of Unmatured Event of Default. Within 60 days
after the occurrence of any Unmatured Event of Default known to a Responsible
Officer of the Indenture Trustee, the Indenture Trustee shall transmit by mail
notice of such Unmatured Event of Default hereunder to all Noteholders, unless
such Unmatured Event of Default shall have been cured or waived; provided,
however, that except in the case of an Unmatured Event of Default in the payment
of the principal of or any interest on any Note, the Indenture Trustee shall be
protected in withholding such notice if and so long as a corporate trust
committee of the Corporate Trust Department and/or Responsible Officers of the
Indenture Trustee in good faith determine(s) that the withholding of such notice
is in the interests of the Noteholders.
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Section 6.03. Certain Rights of Indenture Trustee. Except as otherwise
provided in Section 6.01 hereof:
(a) in the absence of negligence or bad faith, the Indenture
Trustee may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, note or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Issuer mentioned herein
shall be sufficiently evidenced by an Issuer Request or Issuer Order;
(c) whenever in the administration of this Indenture the
Indenture Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Indenture
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officer's Certificate;
(d) the Indenture Trustee may consult with counsel, and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Indenture Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Noteholders pursuant to this Indenture,
unless such Noteholders shall have offered to the Indenture Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note or other paper or document;
(g) the Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, and the Indenture Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder; and
(h) the Indenture Trustee shall not be liable for any action
taken, suffered or omitted by it without negligence and in good faith and
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture.
Section 6.04. Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein and in the Notes, except the certificates of
authentication on the Notes, shall be taken as the statements of the Issuer, and
the Indenture Trustee assumes no responsibility for their correctness. The
Indenture Trustee makes no representations as to the validity or sufficiency of
this Indenture or of the Notes. The Indenture Trustee shall not be accountable
for the use or application by the Issuer of Notes or the proceeds thereof.
Section 6.05. May Hold Notes. The Indenture Trustee, any Paying Agent,
Note Registrar, Authenticating Agent or any other agent of the Issuer, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Issuer with the same rights it would have if it were
not Indenture Trustee, Paying Agent, Note Registrar, Authenticating Agent or
such other agent.
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Section 6.06. Money Held in Trust. Money held by the Indenture Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by this Indenture or by law. The Indenture Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Issuer and except to the extent of income or other gain on
investments which are obligations of the Indenture Trustee and income or other
gain actually received by the Indenture Trustee on Permitted Investments.
Section 6.07. Indenture Trustee's Fees and Expenses.
(a) The Indenture Trustee shall be entitled to reasonable
compensation for all services rendered by it pursuant to the Transaction
Documents and in the exercise and performance of any of the powers and duties of
the Indenture Trustee under this Indenture, and payment or reimbursement upon
its request for all reasonable expenses, disbursements and advances incurred or
made by the Indenture Trustee in its capacity as Indenture Trustee in accordance
with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ) except any such expense, disbursement or
advance as may arise from its negligence, willful misfeasance or bad faith or
that is paid by the Transferor or the Issuer under the Transaction Documents.
Such compensation and reimbursement shall be paid as set forth in Section
3.03(b) of the Securitization Trust Agreement or Section 10.01 of the 1999-A
SUBI Supplement (in the definitions of the terms "Principal Collections" and
"Interest Collections"). Additionally, the Transferor, pursuant to Section
6.02(iii) of the Securitization Trust Agreement, may agree to indemnify the
Indenture Trustee under certain circumstances.
(b) The Indenture Trustee shall not institute any Proceeding,
or make any filing, on account of the Issuer failing to perform its obligations
under this Section that might result, with the giving of notice or the passage
of time or both, in the occurrence of any Event of Default specified in Sections
5.01(e) or 5.01(f) hereof. Notwithstanding the failure of the Issuer to perform
any of its obligations under this Section, the Indenture Trustee shall continue
to perform its obligations under this Indenture.
(c) Prior to the termination of this Indenture, the
obligations of the Indenture Trustee hereunder shall not be subject to any
defense, counterclaim or right of offset which the Indenture Trustee in its
individual capacity has or may have against the Issuer, the Transferor or the
Servicer, whether in respect of this Indenture, the Notes, the Transaction
Documents or otherwise, and the Indenture Trustee hereby waives any and all
statutory or common law rights of setoff or banker's lien against the Issuer or
any of its assets that the Indenture Trustee may have in any capacity other than
on behalf of the Noteholders, including without limitation, any rights under UCC
Section 9-306(4)(d) as enacted in the State of New York.
Section 6.08. Eligibility; Corporate Indenture Trustee Required.
(a) This Indenture shall always have a Indenture Trustee who
satisfies the requirements of TIA Section 310(a)(1).
(b) There shall at all times be a Indenture Trustee hereunder
that shall (i) be a corporation organized and doing business under the laws of
the United States or of any State, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$100,000,000, and subject to supervision or examination by federal or State
authority and (ii) either have a rating from Moody's for its long term deposits
of at least Baa3 or be otherwise acceptable to each of Moody's, Standard &
Poor's and Fitch, as evidenced by a letter to such effect from each of Moody's,
Standard & Poor's and Fitch. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published.
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(c) Neither the Issuer nor any affiliate thereof may serve as
Indenture Trustee.
(d) The Indenture Trustee shall at all times be subject to TIA
Section 310(b).
Section 6.09. Cessation of Eligibility. If at any time the Indenture
Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Indenture
Trustee under Section 6.11 hereof.
(b) The Indenture Trustee may resign at any time by giving
written notice thereof to the Issuer and the Noteholders. If an instrument of
acceptance by a successor Indenture Trustee shall not have been delivered to the
Indenture Trustee within 30 days after the giving of such notice of resignation,
the resigning Indenture Trustee may petition any court of competent jurisdiction
for the appointment of a successor Indenture Trustee.
(c) The Indenture Trustee may be removed at any time by Act of
Noteholders representing more than 50% of the aggregate Percentage Interests
(voting as a single Class) delivered to the Indenture Trustee and to the Issuer.
(d) If at any time:
(i) the Indenture Trustee shall cease to be eligible
under Section 6.08 hereof and shall fail to resign after written
request therefor by the Issuer or by any Noteholder, or
(ii) the Indenture Trustee shall become incapable of
acting or shall be adjudged bankrupt or insolvent, or a receiver of the
Indenture Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Indenture Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case (A) the Issuer may remove the Indenture
Trustee, or (B) subject to Section 5.16 hereof, any Noteholder who has been a
bona fide Noteholder for at least six months may, on behalf of such Noteholder
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Indenture Trustee and the appointment of a successor
Indenture Trustee. In any event, should the Indenture Trustee cease to be
eligible under Section 6.08(b), the Issuer shall, within thirty (30) days after
notice thereof, remove the Indenture Trustee and replace the Indenture Trustee
with a successor Indenture Trustee meeting the eligibility requirements of
Section 6.08.
(e) If the Indenture Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of the
Indenture Trustee for any cause, the Issuer shall promptly appoint a successor
Indenture Trustee, provided that Noteholders representing more than 50% of the
aggregate Percentage Interests (voting as a single class) shall not have
objected to such appointment. If within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Indenture
Trustee shall be appointed by Act of Noteholders representing more than 50% of
the aggregate Percentage Interests (voting as a single Class) delivered to the
Issuer and the retiring Indenture Trustee, the successor Indenture Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Indenture Trustee and supersede the successor Indenture Trustee
appointed by the Issuer. If no successor Indenture Trustee shall have been so
appointed by the Issuer or Noteholders and shall have accepted appointment in
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the manner hereinafter provided, any Noteholder who has been a bona fide
Noteholder for at least six months may, on behalf of such Noteholder and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee. The appointment by the Noteholders
or a court of a successor Indenture Trustee shall not invalidate or void any act
taken by a prior successor Indenture Trustee appointed by the Issuer.
(f) The Issuer shall give notice of each resignation and each
removal of the Indenture Trustee and each appointment of a successor Indenture
Trustee by mailing written notice of such event to the Noteholders and each of
Moody's, Standard & Poor's and Fitch. Each such notice shall include the name of
the successor Indenture Trustee and the address of its Corporate Trust Office.
Section 6.11. Acceptance of Appointment by Successor.
(a) Every successor Indenture Trustee appointed hereunder
shall execute, acknowledge and deliver to the Issuer and the retiring Indenture
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Indenture Trustee shall become effective and such
successor Indenture Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Indenture Trustee; but, on request of the Issuer or the successor Indenture
Trustee, such retiring Indenture Trustee shall, upon payment of its charges in
connection therewith and all amounts owing under Section 6.07(a) hereof, execute
and deliver an instrument transferring to such successor Indenture Trustee all
the rights, powers and trusts of the retiring Indenture Trustee, and shall duly
assign, transfer and deliver to such successor Indenture Trustee all property
and money held by such retiring Indenture Trustee hereunder. Upon request of any
such successor Indenture Trustee, the Issuer shall execute and deliver any and
all instruments necessary or appropriate for more fully and certainly vesting in
and confirming to such successor Indenture Trustee all such rights, powers and
trusts.
(b) No successor Indenture Trustee shall accept its
appointment unless at the time of such acceptance such successor Indenture
Trustee shall be qualified and eligible under this Article.
(c) Upon any successor Indenture Trustee being appointed and
accepting its appointment, the Issuer shall, within 120 days thereafter, cause
all acts to be done and file all instruments in each jurisdiction to the extent
necessary to perfect in the name of the successor Indenture Trustee the Lien in
the Trust Estate Granted by this Indenture to the same extent as such Lien had
previously been perfected in the Indenture Trustee.
Section 6.12. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee. Any corporation into which the Indenture 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
Indenture Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. Upon request of any successor to the Indenture
Trustee pursuant to this Section 6.12, the Issuer shall execute any and all
instruments necessary or appropriate for more fully and certainly vesting in and
confirming to such successor Indenture Trustee all rights, powers and trusts of
the Indenture Trustee. In case any Notes have been authenticated, but not
delivered, by the Indenture Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Indenture Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Indenture Trustee had itself authenticated such Notes.
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Section 6.13. Co-Trustees and Separate Trustees. At any time or times,
for the purpose of meeting the legal requirements of any jurisdiction in which
any of the Trust Estate may at any time be located, the Issuer and the Indenture
Trustee shall have power to appoint, and, upon the written request of the
Indenture Trustee or of Noteholders representing at least 25% of the aggregate
Percentage Interests (acting as a single Class), the Issuer shall for such
purpose join with the Indenture Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint one
or more banks or trust companies approved by the Indenture Trustee either to act
as co-trustee, jointly with the Indenture Trustee, of all or any part of such
Trust Estate, or to act as separate trustee of any such property, in either case
with such powers as may be provided in the instrument of appointment, and to
vest in such Person or Persons in the capacity aforesaid any property, title,
right or power deemed necessary or desirable, subject to the other provisions of
this Section. If the Issuer does not join in such appointment within 15 days
after the receipt by it of a request to do so, or in case an Event of Default
has occurred and is continuing, the Indenture Trustee alone shall have the power
to make such appointment.
Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Issuer.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(a) The Notes shall be authenticated and delivered and all
rights, powers, duties and obligations hereunder in respect of the custody of
securities, Cash and other personal property held by, or required to be
deposited or pledged with, the Indenture Trustee hereunder, shall be exercised
solely by the Indenture Trustee.
(b) The rights, powers, duties and obligations hereby
conferred or imposed upon the Indenture Trustee shall be conferred or imposed
upon and exercised or performed by the Indenture Trustee or by the Indenture
Trustee and such co-trustee or separate trustee jointly, as shall be provided in
the instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular act is to
be performed, the Indenture Trustee shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties and obligations
shall be exercised and performed by such co-trustee or separate trustee.
(c) The Indenture Trustee at any time, by an instrument in
writing executed by it, may accept the resignation of or remove any co-trustee
or separate trustee appointed under this Section, and, in case an Event of
Default has occurred and is continuing, the Indenture Trustee shall have power
to accept the resignation of, or remove, any such co-trustee or separate trustee
without the concurrence of the Issuer. Upon the written request of the Indenture
Trustee, the Issuer shall join with the Indenture Trustee in the execution,
delivery and performance of all instruments and agreements necessary or proper
to effectuate such resignation or removal. A successor to any co-trustee or
separate trustee so resigned or removed may be appointed in the manner provided
in this Section.
(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Indenture Trustee, or
any other such Indenture Trustee hereunder, and each co-trustee or separate
trustee hereunder shall not be liable for any action taken, suffered or omitted
by it without negligence and in good faith and believed by it to be authorized
or within the discretion or powers conferred upon it by this Indenture.
(e) Any Act of Noteholders delivered to the Indenture Trustee
shall be deemed to have been delivered to each such co-trustee and separate
trustee.
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Section 6.14. Authenticating Agent. Upon the request of the Issuer, the
Indenture Trustee shall appoint an Authenticating Agent with power to act on its
behalf and subject to its direction in the authentication and delivery of the
Notes designated for such authentication by the Issuer and containing provisions
therein for such authentication (or with respect to which the Issuer has made
other arrangements, satisfactory to the Indenture Trustee and such
Authenticating Agent, for notation on the Notes of the authority of an
Authenticating Agent appointed after the initial authentication and delivery of
such Notes) in connection with transfers and exchanges of Notes under Sections
2.04 and 2.05 hereof, as fully to all intents and purposes as though the
Authenticating Agent had been expressly authorized by those Sections to
authenticate and deliver Notes. For all purposes of this Indenture, the
authentication and delivery of Notes by the Authenticating Agent pursuant to
this Section shall be deemed to be the authentication and delivery of Notes by
the Indenture Trustee. Such Authenticating Agent shall at all times be a Person
that meets the requirements of Section 6.08 hereof for the Indenture Trustee
hereunder.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any further act on the part of the
parties hereto or the Authenticating Agent or such successor corporation.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Indenture Trustee and the Issuer. The Indenture
Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Issuer. Upon receiving such a notice of resignation or upon such a termination,
or in case at any time any Authenticating Agent shall cease to be eligible under
this Section, the Indenture Trustee may promptly appoint a successor
Authenticating Agent, shall give written notice of such appointment to the
Issuer and shall mail notice of such appointment to all Noteholders as the names
and addresses of such Holders appear on the Note Register.
The Indenture Trustee agrees to pay to the Authenticating Agent from
time to time reasonable compensation for its services and the Indenture Trustee
shall be entitled to be reimbursed for such payments, subject to Section 6.07
hereof. The provisions of Sections 2.09, 6.04 and 6.05 hereof shall be
applicable to any Authenticating Agent.
Section 6.15. Withholding Taxes. Whenever it is acting as a Paying
Agent for the Notes, the Indenture Trustee shall comply with all requirements of
the Code, and all regulations thereunder, with respect to the withholding from
any payments made on such Notes of any withholding taxes imposed thereon and
with respect to any reporting requirements in connection therewith.
Section 6.16. Preferential Collection of Claims against the Issuer. The
Indenture Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
Section 6.17. No Petition. The Indenture Trustee covenants and agrees
that prior to the date which is one year and one day after the date upon which
(a) each Class of Notes has been paid in full, and (b) all obligations due under
any other Securitized Financing have been paid in full, the Indenture Trustee
will not institute against, or join any other Person in instituting against (i)
the Issuer, (ii) ALF LP, the Transferor or any other Special Purpose Affiliate,
(iii) ALF LLC, World Omni Lease Securitization LLC or any other general partner
of a Special Purpose Affiliate that is a partnership, (iv) any manager (other
than WOFCO) of a limited liability company that is a general partner of a
Special Purpose Affiliate that is a partnership or that itself is a Special
Purpose Affiliate, or (v) the Origination Trustee or the Origination Trust, any
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bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or
other proceedings under any federal or state bankruptcy or similar law. This
Section shall survive the termination of this Indenture or the resignation or
removal of the Indenture Trustee under this Indenture.
Article Seven. NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses
of Noteholders. The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) quarterly, not more than 45 days after each March 15, June
15, September 15, and December 15 Distribution Date, a list in such form as the
Indenture Trustee may reasonably require, of the names and addresses of
Noteholders, and (b) at such other times, as the Indenture Trustee may
reasonably request in writing, within 30 days after receipt by the Issuer of any
such request, a list of similar form and content; provided, however, that so
long as either (y) the Indenture Trustee is the Note Registrar or (z) a Class of
Notes is issued in book-entry form, no such list (with respect to such Class, if
applicable) shall be required to be furnished. Any such list which is required
to be furnished may be dated as of a date not more than 15 days prior to the
time such list is furnished and need not include information received after such
date.
Section 7.02. Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of Noteholders contained
in the most recent list furnished to the Indenture Trustee as provided in
Section 7.01 hereof and the names and addresses of Noteholders received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in said Section 7.01 upon receipt
of a new list so furnished.
(b) If three or more Noteholders or holders of Notes
evidencing not less than 25% of the aggregate Percentage Interests of any Class
(hereinafter referred to as "Applicants") apply in writing to the Indenture
Trustee, and such application states that the Applicants desire to communicate
with other Noteholders with respect to their rights under this Agreement or
under the Notes and such application is accompanied by a copy of the
communication that such Applicants propose to transmit, then the Indenture
Trustee shall, within five Business Days after the receipt of such application,
afford such Applicants access, during normal business hours, to the current list
of Noteholders. Every Noteholder, by receiving and holding a Note, agrees with
the Servicer, the Transferor, the Issuer and the Indenture Trustee that neither
the Servicer, the Transferor, the Issuer nor the Indenture Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Noteholders under the Indenture, regardless of the source
from which such information was derived.
(c) The Note Registrar shall furnish or cause to be furnished
to the Servicer, within 15 days after receipt by the Note Registrar of a written
request therefor from the Servicer, a list, in such form as the Servicer may
reasonably require, of the names and addresses of the Noteholders as of the most
recent Record Date.
Section 7.03. Reports by Indenture Trustee; Responses to Noteholder
Inquiries.
(a) Within 60 days after December 31 in each year, commencing
with the December 31 that is six months after the Closing Date, the Indenture
Trustee shall mail to the Holders a brief report dated as of such reporting date
that complies with TIA Section 313(a); provided, however, if no event described
in TIA Section 313(a) shall have occurred within such calendar year no report
need be transmitted. The Indenture Trustee also shall comply with TIA Section
313(b). The Indenture Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).
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(b) A copy of each such report shall, at the time of such
transmission to Noteholders, be filed by the Indenture Trustee with each stock
exchange upon which the Notes are listed, and also with the Commission. The
Issuer will notify the Indenture Trustee when the Notes are listed on any stock
exchange.
(c) Copies of the above reports need not be mailed to
Noteholders who have previously requested that they not receive copies of such
reports.
(d) The Indenture Trustee shall acknowledge and respond to any
reasonable inquiry of any Noteholder relating to the Trust Estate or this
Indenture, provided, however, that in making such response, the Indenture
Trustee shall have no obligation to (i) seek or obtain information not otherwise
within its possession or control or (ii) expend its own funds.
Section 7.04. Reports by the Issuer. The Issuer will:
(a) File with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) that the Issuer may be required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act; or, if the
Issuer is not required to file information, documents or reports pursuant to
either of said Sections, then it will either (i) file with the Indenture Trustee
such information, documents and reports as may be required by any exemption from
the requirements of the TIA granted by the Commission or (ii) file with the
Indenture Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports that may be required pursuant to
Section 13 or 15 of the Exchange Act in respect of a security listed and
registered on a national securities exchange as may be prescribed from time to
time in such rules and regulations;
(b) File with the Indenture Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with respect to
compliance by the Issuer with the conditions and covenants of this Indenture as
may be required from time to time by such rules and regulations; and
(c) Transmit by mail to all Noteholders, as their names and
addresses appear in the Note Register, within 30 days after the filing thereof
with the Indenture Trustee, such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to Subsections (a) and (b)
of this Section as may be required by rules and regulations prescribed from time
to time by the Commission.
Article Eight. ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Moneys. Except as otherwise expressly
provided herein or in the Transaction Documents, the Indenture Trustee shall
have the right, but not the obligation, to demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture and the other
Transaction Documents. The Indenture Trustee shall hold all such money and
property received by it as part of the Trust Estate, and shall apply them as
provided in this Indenture. Except as otherwise expressly provided in this
Indenture, if any default occurs in the making of any payment or performance
under any of the Transaction Documents, the Indenture Trustee may, and upon the
request of Noteholders representing more than 50% of the aggregate Percentage
Interests (voting as a single Class) shall, take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate Proceedings, and including directing the Owner
Trustee under Section 6.15 of the Securitization Trust Agreement with regard to
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appropriate action thereunder. Any such action shall be without prejudice to any
right to claim an Unmatured Event of Default or Event of Default under this
Indenture and to proceed thereafter as provided in Article Five hereof.
Section 8.02. Trust Accounts.
(a) On or prior to the Closing Date, the Issuer shall cause
the Servicer (on behalf of the Origination Trustee or Owner Trustee) to
establish, in the name of the Indenture Trustee, for the benefit of the
Noteholders the Distribution Account pursuant to Section 3.01 of the
Securitization Trust Agreement, the 1999-A SUBI Collection Account pursuant to
Section 12.01 of the 1999-A SUBI Supplement, the 1999-A SUBI Lease Account
pursuant to Section 12.02 of the 1999-A SUBI Supplement and the Reserve Account
pursuant to Section 3.04 of the Securitization Trust Agreement.
(b) On each Distribution Date, subject to the provisions of
Article Five, the Indenture Trustee shall make all of the distributions set
forth in Section 3.03 of the Securitization Trust Agreement in the order of
priority set forth therein.
Section 8.03. General Provisions Regarding the Accounts.
(a) All Accounts and all deposits therein shall constitute a
portion of the Trust Estate. Other than as expressly provided for in this
Indenture or the other Transaction Documents, neither the Issuer nor the
Servicer shall have any claim upon or rights in such Accounts or the deposits
therein or any right to cause the withdrawal of funds therefrom. So long as no
Event of Default shall have occurred and be continuing, but subject to the
remaining provisions of this Section 8.03, all or a portion of the funds in the
Accounts shall be separately invested and reinvested by the Indenture Trustee at
the Servicer's direction in one or more Permitted Investments. All income or
other gain from investment of moneys deposited in any Account shall be deposited
therein immediately upon receipt, and any loss resulting from such investment
shall be charged to such respective account, as the case may be.
(b) Absent negligence or bad faith on its part, the Indenture
Trustee shall not in any way be held liable by reason of any insufficiency in
any Accounts resulting from any loss on any Permitted Investment included
therein.
(c) All investments of funds in any Account and all sales of
Permitted Investments held in any such Account shall, except as otherwise
expressly provided in this Indenture, be made by the Indenture Trustee as
directed by the Servicer. Such direction may specify specific actions or may be
a general, standing order authorizing the Indenture Trustee to act within
certain general parameters or to act on written, telegraphic or telephonic
instructions of specified personnel or agents of the Servicer.
In the event that:
(i) the Servicer shall have failed to give investment
directions to the Indenture Trustee by 11:00 a.m., New York City time,
on any Business Day authorizing the Indenture Trustee to invest the
funds then in any Account;
(ii) an Event of Default shall have occurred but the
Notes shall not have been declared due and payable, or if the Notes
shall have been declared due and payable following an Event of Default,
amounts collected or receivable from the related Trust Estate are being
applied in accordance with Section 5.05 hereof; or
(iii) an Event of Default shall have occurred, the
Notes shall have been declared due and payable, and amounts collected
or receivable from the related Trust Estate are being applied in
accordance with Section 5.08 hereof,
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the Indenture Trustee shall invest and reinvest the funds then
in each such account in United States Treasury Bills maturing no later than the
Business Day immediately preceding the next succeeding Distribution Date.
(d) Upon the satisfaction and discharge of this Indenture in
accordance with Article Four hereof, the Indenture Trustee shall pay or transfer
to the Issuer all remaining money or Permitted Investments then in the Accounts.
Section 8.04. Release of Trust Estate.
(a) The Indenture Trustee may, and when required by the
provisions of this Indenture or the Transaction Documents shall, execute
instruments to release property from the lien of this Indenture and the Backup
Security Agreement, or convey the Indenture Trustee's interest in the same, in a
manner and under circumstances that are not inconsistent with the provisions of
this Indenture. No party relying upon an instrument executed by the Indenture
Trustee as provided in this Article Eight shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no
Notes outstanding, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture, release to Issuer or any
other Person entitled thereto any funds then on deposit in the Accounts and
release any property subject to the lien of the Backup Security Agreement.
(c) In particular, but without limitation of subparagraphs (a)
and (b), it is understood that the Servicer shall have the authority to sell
and/or reallocate out of the 1999-A SUBI free and clear of any Lien under this
Indenture and the Backup Security Agreement, 1999-A SUBI Assets in accordance
with the provisions of the Transaction Documents. In all circumstances other
than the foregoing, the Indenture Trustee shall release property from the lien
of this Indenture and the Backup Security Agreement pursuant to this paragraph
only upon receipt of an Issuer Request accompanied by an Officer's Certificate,
an Opinion of Counsel and (if required by the TIA) a certificate or opinion of
an Independent appraiser in accordance with TIA ss.ss. 314(c) and 314(d)(1), in
each case meeting any applicable requirements of Section 11.1.
Section 8.05. Opinion of Counsel. The Indenture Trustee shall receive
at least seven days' notice when requested by Issuer to take any action pursuant
to Section 8.04(a) (other than as set forth in the first sentence of Section
8.04(c)), accompanied by copies of any instruments involved, and (also except as
set forth in the first sentence of Section 8.04(c)) the Indenture Trustee may
also require as a condition to such action, an Opinion of Counsel, in form and
substance satisfactory to the Indenture Trustee, stating the legal effect of any
such action, outlining the steps required to complete the same, and concluding
that all conditions precedent to the taking of such action have been complied
with and such action will not materially and adversely impair the legal
interests of the Noteholders in contravention of the provisions of this
Indenture; provided that in no event shall such Opinion of Counsel be required
to express an opinion as to the fair value of the Trust Estate. Counsel
rendering any such opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument delivered to
Indenture Trustee in connection with any such action.
Article Nine. SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures. The Issuer and the Indenture
Trustee, at any time and from time to time, may amend the Indenture or enter
into one or more indentures supplemental hereto, only as to the extent provided
in Section 9.01 of the Securitization Trust Agreement.
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Section 9.02. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, in addition to any opinion of Counsel required pursuant to Section
9.01 of the Securitization Trust Agreement, the Indenture Trustee also shall be
entitled to receive an Opinion of Counsel stating that the execution of such
supplemental indenture conforms to the requirements of TIA, to the extent
applicable. Subject to Section 9.01 of the Securitization Trust Agreement, the
Indenture Trustee shall be fully protected in relying on any such Opinion of
Counsel. The Indenture Trustee may, but shall not be obligated to, enter into
any such supplemental indenture which affects the Indenture Trustee's own
rights, duties or immunities under this Indenture or otherwise.
Section 9.03. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Notes which have
theretofore been or thereafter are authenticated and delivered hereunder shall
be bound thereby.
Section 9.04. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer shall so determine,
new Notes so modified as to conform, in the opinion of the Indenture Trustee,
the Issuer and the Company, to any such supplemental indenture may be prepared
and executed by the Issuer and authenticated and delivered by the Indenture
Trustee in exchange for Outstanding Notes.
Section 9.05. Compliance With TIA. Each supplemental indenture shall
comply with the applicable requirements therefor contained in TIA.
Section 9.06. Successors and Assigns.
This Indenture shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Further,
all references herein to Persons or entities other than parties hereto shall be
deemed to refer to the successors and permitted assigns of such persons, to the
extent that such construction is reasonably possible; to the extent that such
construction is not reasonably possible, the parties hereto shall amend this
Indenture so as to effect the original intent of the parties as closely as
possible in an acceptable manner.
Article Ten. OPTIONAL REDEMPTION OF NOTES
Section 10.01. General. (a) The Notes are subject to redemption in
whole, but not in part, at the direction of Transferor pursuant to Section 7.02
of the Securitization Trust Agreement, on any Distribution Date on which the
Transferor exercises its option to purchase the corpus of the Trust pursuant to
said Section, for a redemption price equal to the Redemption Price for such
Notes. If the Notes are to be redeemed pursuant to this Section, the Issuer
shall furnish notice of such election to the Indenture Trustee not later than
the time required for the delivery of its notice that it desires to purchase the
corpus of the Trust pursuant to Section 7.02 of the Securitization Trust
Agreement. The Issuer shall deposit with the Indenture Trustee in the
Distribution Account the Redemption Price of the Notes to be redeemed together
with any other payments as required pursuant to Section 7.02 of the
Securitization Trust Agreement, whereupon all such Notes shall be due and
payable on the Redemption Date upon the furnishing of a notice complying with
Section 10.02 to each Holder of a Note. The Issuer shall promptly notify each
Rating Agency of any prospective redemption of the Notes.
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Section 10.02. Form of Redemption Notice. Notice of redemption shall be
given by the Issuer or by the Indenture Trustee pursuant to Section 11.05 in the
name of and at the expense of the Issuer, not more than 30 days and not less
than 15 days prior to the applicable Redemption Date to each Holder of Class A-1
Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, or Class B Notes, as
applicable, such Holders being determined as of the most recent Record Date.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) that on the Redemption Date the Redemption Price will
become due and payable upon each such Note, and that, upon the irrevocable
deposit of such funds with the Indenture Trustee on or before such Redemption
Date, the amount payable on each such Note shall be limited to the Redemption
Price therefor and that no interest shall accrue on such Redemption Price or the
Notes for any period after the date fixed for redemption; and
(d) the place where such Notes are to be surrendered for
payment of the Redemption Price, which shall be the office or agency of the
Issuer to be maintained as provided in Section 3.02 hereof.
Failure to give notice of redemption, or any defect therein, to any
Holder of any Note selected for redemption shall not impair or affect the
validity of the redemption of any other Note.
Section 10.03. Notes Payable on Redemption Date. Notice of redemption
having been given as provided in Section 10.02 hereof, the Notes so to be
redeemed shall, on the applicable Redemption Date, become due and payable at the
Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Notes for any period after
such Redemption Date. Upon surrender of such Notes for redemption in accordance
with said notice, such Notes shall be paid by the Issuer at the Redemption
Price.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the amount of the Redemption Price shall, until paid,
bear interest from the Redemption Date at the applicable Overdue Interest Rate
(but only to the extent permitted by applicable law).
Article Eleven. MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions.
(a) Upon any application or request by the Issuer to the
Indenture Trustee to take any action under any provision of this Indenture, the
Issuer shall furnish to the Indenture Trustee (with a copy to the other party
hereto) an Officer's Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with, and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
(b) Every certificate or opinion (other than any Opinion of
Counsel) with respect to compliance with a condition or covenant provided for in
this Indenture (including one furnished pursuant to specific requirements of
this Indenture relating to a particular application or request) shall include:
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(i) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
individual, such individual has made such examination or investigation
as is necessary to enable him or her to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(iv) a statement as to whether, in the opinion of
each such individual, such condition or covenant has been complied
with.
Section 11.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an officer of the Issuer may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Issuer stating that the
information with respect to such factual matters is in the possession of the
Issuer, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Wherever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted and to the
sufficiency of such certificate or report.
Section 11.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture or any other
Transaction Document to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by an agent duly appointed in writing; and, except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee and, where
it is hereby or thereby expressly required, to the Issuer, the Owner Trustee or
other applicable party. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
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the Noteholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture or any other Transaction Document
and (subject to Section 6.01 hereof) conclusive in favor of the Indenture
Trustee, the Issuer, the Owner Trustee or other applicable party if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the Holder
of every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee the Issuer, the Owner Trustee or other applicable party in
reliance thereon, whether or not notation of such action is made upon such
Notes.
(e) In the event of any vote to be taken pursuant thereto by
Noteholders or Note Owners, no vote may be cast by the Holder or Note Owner of
any Note issued to or held on behalf of the Issuer, or any Affiliate thereof,
and the outstanding principal balance of each such Note shall be deducted from
the aggregate Percentage Interest before making any calculation of whether the
necessary percentage of such aggregate Percentage Interest has been met with
respect to any vote.
Section 11.04. Notices, etc., to Indenture Trustee and Issuer. All
demands notices or communications under this Indenture shall be in writing,
personally delivered, sent by facsimile or mailed by overnight delivery service
or by certified mail, return receipt requested, and shall be deemed to have been
duly given upon receipt (i) in the case of Indenture Trustee, at the Corporate
Trust Office of the Indenture Trustee; (ii) in the case of the Issuer or Owner
Trustee on behalf of the Issuer, at the Corporate Trust Office of the Owner
Trustee, with a copy to the Servicer at the address set forth in Section 5.04 of
the Servicing Agreement. Any notice required or permitted to be mailed to a
Noteholder shall be given as provided in Section 11.05 hereof. Any notice so
mailed within the time prescribed in this Indenture shall be conclusively
presumed to have been duly given, whether or not the Noteholder shall receive
such notice.
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.
Where this Indenture or any other Transaction Document provides for notice to
Noteholders of any event or the mailing of any report to Noteholders, such
notice or report shall be sufficiently given (unless otherwise herein expressly
provided) if mailed, first-class postage prepaid, sent by facsimile, or
delivered by prepaid courier service to each Noteholder affected by such event
or to whom such report is required to be mailed, at the address of such
Noteholder as it appears on the Note Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such notice
or the mailing of such report. In any case where notice or report to Noteholders
is mailed or transmitted in the matter provided above, neither the failure to
mail or transmit such notice or report, nor any defect in any notice or report
so mailed or transmitted, to any particular Noteholder shall affect the
sufficiency of such notice or report with respect to other Noteholders, and any
notice or report which is mailed or transmitted in the manner herein provided
shall be conclusively presumed to have been duly given or provided.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
40
<PAGE>
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be reasonable under the circumstances to the Indenture
Trustee shall be deemed to be a sufficient giving of such notice.
Section 11.06. Rules by Indenture Trustee and Agents. The Indenture
Trustee may make reasonable rules for any meeting of Noteholders. Each of the
Note Registrar, Paying Agent or any Authenticating Agent may make reasonable
rules and set reasonable requirements for its respective functions.
Section 11.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in this Indenture by any of the provisions of the TIA,
such required provision shall control.
Section 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 11.09. Successors and Assigns. All covenants and agreements in
this Indenture shall bind, and inure to the benefit of, the parties hereto and
their successors and permitted assigns, whether so expressed or not.
Section 11.10. Severability. In case one or more of the provisions
contained in this Indenture or in the Notes should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall not in any way be
affected or impaired thereby.
Section 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, expressed or implied, shall give to any Person, other than the
parties hereto and their successors and permitted assigns hereunder, any
separate Indenture Trustee or co-Indenture Trustee appointed under Section 6.13
hereof and the Noteholders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
Section 11.12. Legal Holidays. In any case where the date of any
Distribution Date or Redemption Date, or any date on which principal of or
interest on any Note is proposed to be paid shall not be a Business Day, then
(notwithstanding any other provision of the Notes or this Indenture) payment
shall be made on the next succeeding Business Day with the same force and effect
as if made on the nominal date of any such Distribution Date or Redemption Date,
as the case may be, and no interest shall accrue for the period from and after
any such nominal date, provided such payment is made in full on such next
succeeding Business Day.
Section 11.13. Governing Law. THIS INDENTURE AND EACH NOTE SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF
LAWS.
Section 11.14. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
41
<PAGE>
Section 11.15. Recording of Indenture. This Indenture is subject to
recording in all appropriate public recording offices, such recording to be
effected by the Issuer and at its expense on direction by the Indenture Trustee
accompanied by an Opinion of Counsel to the Indenture Trustee and the
Noteholders (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or for the
enforcement of any right or remedy granted to the Indenture Trustee under this
Indenture.
Section 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer on the Notes or the
obligations of the Indenture Trustee, the Servicer, the Transferor, the Issuer
or the Owner Trustee under any Transaction Document or any certificate or other
writing delivered in connection herewith or therewith, against (i) the Servicer,
the Transferor, the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of the
Servicer, the Transferor, the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Servicer, the Transferor, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Servicer, the Transferor, the Indenture Trustee or
the Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacity). For all purposes
of this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article Six of the Securitization Trust
Agreement.
Section 11.17. Inspection. The Issuer agrees that it will permit any
representative of the Indenture Trustee, during the Issuer's normal business
hours and, except during the continuation of an Event of Default, upon
reasonable notice, to examine all of the books of account, records, reports and
other papers of the Issuer relating to the Notes, to make copies and extracts
therefrom, to cause such books to be audited by Independent Accountants selected
by the Indenture Trustee, and to discuss the Issuer's finances and accounts with
its officers, employees and Independent Accountants (and by this provision the
Issuer hereby authorizes its Independent Accountants to discuss with such
representatives such affairs, finances and accounts). Such rights shall include,
but shall not be limited to, any off-site storage facilities at which any data
(including, without limitation, computerized records), together with all
operating software and appropriate documentation, may be held. The Indenture
Trustee shall keep confidential all confidential information of the Issuer and
the Servicer acquired during any such examination as if such information were
its own confidential information, except to the extent necessary for the
purposes of this Indenture.
Section 11.18. Waiver of Stay, Extension Laws, Trial by Jury. The
Issuer covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants in or its performance
of this Indenture; and the Issuer (to the extent that it may lawfully do so)
hereby expressly waive all benefit or advantage of any such law, including any
right to trial by jury to which it may be entitled in any such proceeding; and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 11.19. Maximum Interest Payable. Anything herein to the
contrary notwithstanding, the sum of all interest and all other amounts that
would be deemed interest under New York or other applicable law which may be
paid to a Noteholder pursuant to this Indenture shall not exceed the maximum
lawful interest rate permitted by such law from time to time. The Issuer and the
Indenture Trustee intend and agree that under no circumstances shall the Issuer
be required to pay interest on the Notes at a rate in excess of the maximum
42
<PAGE>
interest rate permitted by applicable law from time to time, and in the event
any such interest is received by the Noteholders in excess of that rate, the
Issuer shall be entitled to an immediate refund of any such excess interest by a
credit to and payment toward the unpaid principal of the Notes (such credit to
be considered to have been made at the time of the payment of the excess
interest) with any excess interest retained by the Indenture Trustee or
recovered from any Noteholder and not so credited to be immediately paid to the
Issuer by the Indenture Trustee.
[SIGNATURES APPEAR ON NEXT PAGE]
43
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers thereunto duly
authorized, all as of the day and year first above written.
WORLD OMNI 1999-A AUTOMOBILE LEASE
SECURITIZATION TRUST
By: Chase Manhattan Bank Delaware, a Delaware
banking corporation, not in its individual
capacity but solely as Owner Trustee,
By:
-----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
Harris Trust and Savings Bank
an Illinois banking corporation, not in its
individual capacity but solely as Indenture
Trustee,
By:
-----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
44
<PAGE>
EXHIBIT A
FORM OF CLASS A-1 NOTES
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
REGISTERED $ /2
-----------------
No. R- CUSIP NO.
--------------------- -----------------
ISIN NO.
-----------------
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
WORLD OMNI 1999-A AUTOMOBILE LEASE SECURITIZATION TRUST
FLOATING RATE AUTOMOBILE LEASE ASSET BACKED NOTES, CLASS A-1
The World Omni 1999-A Automobile Lease Securitization Trust, a business
trust organized and existing under the laws of the State of Delaware (including
any successor, the "Issuer"), for value received, hereby promises to pay to CEDE
& CO., or registered assigns, the principal sum of __________________ DOLLARS
($_____________ ), in monthly installments on each Distribution Date, commencing
on September 15, 1999, and to pay interest at a rate of One-Month LIBOR plus
____% (as described in the Securitization Trust Agreement) on the Class A-1 Note
Balance, each as and to the extent described below; provided that the entire
Class A-1 Note Balance shall be due and payable on the earlier of the Class A-1
Stated Maturity and the Redemption Date, if any.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
- ---------------
2/ Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
A-1
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Responsible Officer.
Dated: , 1999
-------------------
WORLD OMNI 1999-A AUTOMOBILE LEASE
SECURITIZATION TRUST
By: CHASE MANHATTAN BANK DELAWARE, a
Delaware banking corporation, not in its
individual capacity but solely as Owner
Trustee under the Securitization Trust
Agreement
By:
-----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
A-2
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: , 1999
-------------------
Harris Trust and Savings Bank, an Illinois
banking corporation, not in its individual
capacity but solely as Indenture Trustee,
By:
-----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
A-3
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Automobile Lease Asset Backed Notes, Class A-1
(herein called the "Class A-1 Notes" or the "Notes"), all issued under an
Indenture dated as of August 1, 1999 (such Indenture, as supplemented or
amended, is herein called the "Indenture"), between the Issuer and Harris Trust
and Savings Bank, an Illinois banking corporation, not in its individual
capacity but solely as indenture trustee (the "Indenture Trustee"), which term
includes any successor Indenture Trustee under the Indenture, to which Indenture
and all indentures supplemental thereto reference is hereby made for a statement
of the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Notes are subject to all terms of the
Indenture and to all terms of that certain Securitization Trust Agreement dated
as of August 1, 1999 (the "Agreement"), among Chase Manhattan Bank Delaware, not
in its individual capacity but solely as owner trustee (the "Owner Trustee"),
World Omni Lease Securitization, L.P. (the "Transferor") and the Indenture
Trustee. All capitalized terms used in this Note, whether first used above or
below, that are not otherwise defined herein shall have the meanings assigned to
them pursuant to the Indenture.
Under the Indenture, there will be distributed on each Distribution
Date (i.e., the fifteenth day of each month or, if such fifteenth day is not a
Business Day, the next succeeding Business Day), commencing on September 15,
1999, to the Person in whose name this Class A-1 Note is registered at the close
of business on the last calendar day immediately preceding the related
Distribution Date or, if Definitive Notes are issued, the last day of the
immediately preceding calendar month, such Class A-1 Noteholder's Percentage
Interest multiplied by (i) the Class-A-1 Distributable Amount for such
Distribution Date and (ii) the amount of any repayment of any outstanding Class
A-1 Interest Carryover Shortfall, Class A-1 Uncovered Loss Amounts and Class A-1
Uncovered Loss Interest Amounts being made on such Distribution Date, all to the
extent and as more specifically set forth in the Indenture and the Agreement.
The Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4
Notes are and will be equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture. However, to the extent provided
in the Indenture and the Agreement, no principal payments shall be made in
respect of the Class A-2 Notes until the Class A-1 Notes have been paid in full,
no principal payments shall be made in respect of the Class A-3 Notes until the
Class A-2 Notes have been paid in full, and no principal payments shall be made
in respect of the Class A-4 Notes or the Class B Notes until the Class A-3 Notes
have been paid in full. The Class B Notes are subordinated to the Class A Notes,
and the Transferor Certificate is subordinated to the Notes to the extent
described in the Indenture and the Agreement.
Each Holder or Note Owner, by acceptance of a Note, or, in the case of
a Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Transferor, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under the Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Transferor, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the
Transferor, the Servicer, the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Transferor, the Servicer, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Transferor, the Servicer, the Indenture Trustee or
the Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that Indenture Trustee and Owner Trustee
have no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
A-4
<PAGE>
It is the intent of the Transferor, the Servicer, the Noteholders and
the Note Owners that, for purposes of Federal and State income tax and any other
tax measured in whole or in part by income, the Notes will qualify as
indebtedness of the Issuer. The Noteholders, by acceptance of a Note, and the
Note Owners, by acceptance of a beneficial interest in a Note, agree to treat,
and to take no action inconsistent with the treatment of, the Notes for such tax
purposes as indebtedness of the Issuer.
By accepting a Note, each Holder (and by accepting a beneficial
interest in a Note, each Note Owner) waives any claim to any proceeds or assets
of the Origination Trustee and to all assets of the Origination Trust other than
those from time to time included within the 1999-A SUBI Portfolio as 1999-A SUBI
Assets and those proceeds or assets derived from or earned by such 1999-A SUBI
Assets.
By accepting a Note, each Holder (and by accepting a beneficial
interest in a Note, each Note Owner) covenants and agrees that prior to the date
which is one year and one day after the last date upon which (a) each Class of
Notes has been paid in full, and (b) all obligations due under any other
Securitized Financing have been paid in full, the Holder or Note Owner will not
institute against, or join any other Person in instituting against the
Transferor, World Omni Lease Securitization LLC, ALF LLC, ALF LP, the
Origination Trustee or the Origination Trust any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under any
federal or state bankruptcy or similar law. The foregoing shall not limit the
Holder's right to file any claim in or otherwise take actions with respect to
any such proceeding instituted by any Person not under such a constraint. This
non-petition covenant shall survive the termination of the Indenture.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture or the Agreement and no provision
of this Note or of the Indenture or the Agreement shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency, herein prescribed.
A-5
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated: /*
------------------- ---------------------------------------------
Signature Guaranteed:
---------------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Note Registrar, which
requirements include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Note Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
- ---------------
*/ NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular without alteration, enlargement or any change whatsoever.
A-6
<PAGE>
EXHIBIT B
FORM OF CLASS A-2 NOTES
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
REGISTERED $ /3
------------------
No. R- CUSIP NO.
--------------------- ------------------
ISIN NO.
------------------
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
WORLD OMNI 1999-A AUTOMOBILE LEASE SECURITIZATION TRUST
FLOATING RATE AUTOMOBILE LEASE ASSET BACKED NOTES, CLASS A-2
The World Omni 1999-A Automobile Lease Securitization Trust, a business
trust organized and existing under the laws of the State of Delaware (including
any successor, the "Issuer"), for value received, hereby promises to pay to CEDE
& CO., or registered assigns, the principal sum of _____________ DOLLARS
($__________), in monthly installments on each Distribution Date, commencing on
September 15, 1999, and to pay interest at a rate of One-Month LIBOR plus ____%
(as described in the Securitization Trust Agreement) on the Class A-2 Note
Balance, each as and to the extent described below; provided that the entire
Class A-2 Note Balance shall be due and payable on the earlier of the Class A-2
Stated Maturity and the Redemption Date, if any.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
- ---------------
3/ Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
B-1
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Responsible Officer.
Dated: , 1999
--------------------
WORLD OMNI 1999-A AUTOMOBILE LEASE
SECURITIZATION TRUST
By: CHASE MANHATTAN BANK DELAWARE, a
Delaware banking corporation, not in its
individual capacity but solely as Owner
Trustee under the Securitization Trust
Agreement
By:
-----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
B-2
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: , 1999
--------------------
Harris Trust and Savings Bank, an Illinois
banking corporation, not in its individual
capacity but solely as Indenture Trustee,
By:
-----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
B-3
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Automobile Lease Asset Backed Notes, Class A-2
(herein called the "Class A-2 Notes" or the "Notes"), all issued under an
Indenture dated as of August 1, 1999 (such Indenture, as supplemented or
amended, is herein called the "Indenture"), between the Issuer and Harris Trust
and Savings Bank, an Illinois banking corporation, not in its individual
capacity but solely as indenture trustee (the "Indenture Trustee"), which term
includes any successor Indenture Trustee under the Indenture, to which Indenture
and all indentures supplemental thereto reference is hereby made for a statement
of the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Notes are subject to all terms of the
Indenture and to all terms of that certain Securitization Trust Agreement dated
as of August 1, 1999 (the "Agreement"), among Chase Manhattan Bank Delaware, not
in its individual capacity but solely as owner trustee (the "Owner Trustee"),
World Omni Lease Securitization, L.P. (the "Transferor") and the Indenture
Trustee. All capitalized terms used in this Note, whether first used above or
below, that are not otherwise defined herein shall have the meanings assigned to
them pursuant to the Indenture.
Under the Indenture, there will be distributed on each Distribution
Date (i.e., the fifteenth day of each month or, if such fifteenth day is not a
Business Day, the next succeeding Business Day), commencing on September 15,
1999, to the Person in whose name this Class A-2 Note is registered at the close
of business on the last calendar day immediately preceding the related
Distribution Date or, if Definitive Notes are issued, the last day of the
immediately preceding calendar month, such Class A-2 Noteholder's Percentage
Interest multiplied by (i) the Class A-2 Distributable Amount for such
Distribution Date and (ii) the amount of any repayment of any outstanding Class
A-2 Interest Carryover Shortfall, Class A-2 Uncovered Loss Amounts and Class A-2
Uncovered Loss Interest Amounts being made on such Distribution Date, all to the
extent and as more specifically set forth in the Indenture and the Agreement.
The Notes, the Class A-1 Notes, the Class A-3 Notes and the Class A-4
Notes are and will be equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture. However, to the extent provided
in the Indenture and the Agreement, no principal payments shall be made in
respect of the Class A-2 Notes until the Class A-1 Notes have been paid in full,
no principal payments shall be made in respect of the Class A-3 Notes until the
Class A-2 Notes have been paid in full, and no principal payments shall be made
in respect of the Class A-4 Notes or the Class B Notes until the Class A-3 Notes
have been paid in full. The Class B Notes are subordinated to the Class A Notes,
and the Transferor Certificate is subordinated to the Notes to the extent
described in the Indenture and the Agreement.
Each Holder or Note Owner, by acceptance of a Note, or, in the case of
a Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Transferor, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under the Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Transferor, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the
Transferor, the Servicer, the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Transferor, the Servicer, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Transferor, the Servicer, the Indenture Trustee or
the Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that Indenture Trustee and Owner Trustee
have no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
B-4
<PAGE>
It is the intent of the Transferor, the Servicer, the Noteholders and
the Note Owners that, for purposes of Federal and State income tax and any other
tax measured in whole or in part by income, the Notes will qualify as
indebtedness of the Issuer. The Noteholders, by acceptance of a Note, and the
Note Owners, by acceptance of a beneficial interest in a Note, agree to treat,
and to take no action inconsistent with the treatment of, the Notes for such tax
purposes as indebtedness of the Issuer.
By accepting a Note, each Holder (and by accepting a beneficial
interest in a Note, each Note Owner) waives any claim to any proceeds or assets
of the Origination Trustee and to all assets of the Origination Trust other than
those from time to time included within the 1999-A SUBI Portfolio as 1999-A SUBI
Assets and those proceeds or assets derived from or earned by such 1999-A SUBI
Assets.
By accepting a Note, each Holder (and by accepting a beneficial
interest in a Note, each Note Owner) covenants and agrees that prior to the date
which is one year and one day after the last date upon which (a) each Class of
Notes has been paid in full, and (b) all obligations due under any other
Securitized Financing have been paid in full, the Holder or Note Owner will not
institute against, or join any other Person in instituting against the
Transferor, World Omni Lease Securitization LLC, ALF LLC, ALF LP, the
Origination Trustee or the Origination Trust any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under any
federal or state bankruptcy or similar law. The foregoing shall not limit the
Holder's right to file any claim in or otherwise take actions with respect to
any such proceeding instituted by any Person not under such a constraint. This
non-petition covenant shall survive the termination of the Indenture.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture or the Agreement and no provision
of this Note or of the Indenture or the Agreement shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency, herein prescribed.
B-5
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated: /*
-------------------- ---------------------------------------------
Signature Guaranteed:
---------------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Note Registrar, which
requirements include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Note Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
- ---------------
*/ NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular without alteration, enlargement or any change whatsoever.
B-6
<PAGE>
EXHIBIT C
FORM OF CLASS A-3 NOTES
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
REGISTERED $ /4
-----------------
No. R- CUSIP NO.
--------------------- -----------------
ISIN NO.
-----------------
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
WORLD OMNI 1999-A AUTOMOBILE LEASE SECURITIZATION TRUST
FLOATING RATE AUTOMOBILE LEASE ASSET BACKED NOTES, CLASS A-3
The World Omni 1999-A Automobile Lease Securitization Trust, a business
trust organized and existing under the laws of the State of Delaware (including
any successor, the "Issuer"), for value received, hereby promises to pay to CEDE
& CO., or registered assigns, the principal sum of __________________ DOLLARS
($____________ ), in monthly installments on each Distribution Date, commencing
on September 15, 1999, and to pay interest at a rate of One-Month LIBOR plus
____% (as described in the Securitization Trust Agreement) on the Class A-3 Note
Balance, each as and to the extent described below; provided that the entire
Class A-3 Note Balance shall be due and payable on the earlier of the Class A-3
Stated Maturity and the Redemption Date, if any.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
- ---------------
4/ Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
C-1
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Responsible Officer.
Dated: , 1999
--------------------
WORLD OMNI 1999-A AUTOMOBILE LEASE
SECURITIZATION TRUST
By: CHASE MANHATTAN BANK DELAWARE, a
Delaware banking corporation, not in its
individual capacity but solely as Owner
Trustee under the Securitization Trust
Agreement
By:
-----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
C-2
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: , 1999
---------------------
Harris Trust and Savings Bank, an Illinois
banking corporation, not in its individual
capacity but solely as Indenture Trustee,
By:
-----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
C-3
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Automobile Lease Asset Backed Notes, Class A-3
(herein called the "Class A-3 Notes" or the "Notes"), all issued under an
Indenture dated as of August 1, 1999 (such Indenture, as supplemented or
amended, is herein called the "Indenture"), between the Issuer and Harris Trust
and Savings Bank, an Illinois banking corporation, not in its individual
capacity but solely as indenture trustee (the "Indenture Trustee"), which term
includes any successor Indenture Trustee under the Indenture, to which Indenture
and all indentures supplemental thereto reference is hereby made for a statement
of the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Notes are subject to all terms of the
Indenture and to all terms of that certain Securitization Trust Agreement dated
as of August 1, 1999 (the "Agreement"), among Chase Manhattan Bank Delaware, not
in its individual capacity but solely as owner trustee (the "Owner Trustee"),
World Omni Lease Securitization, L.P. (the "Transferor") and the Indenture
Trustee. All capitalized terms used in this Note, whether first used above or
below, that are not otherwise defined herein shall have the meanings assigned to
them pursuant to the Indenture.
Under the Indenture, there will be distributed on each Distribution
Date (i.e., the fifteenth day of each month or, if such fifteenth day is not a
Business Day, the next succeeding Business Day), commencing on September 15,
1999, to the Person in whose name this Class A-3 Note is registered at the close
of business on the last calendar day immediately preceding the related
Distribution Date or, if Definitive Notes are issued, the last day of the
immediately preceding calendar month, such Class A-3 Noteholder's Percentage
Interest multiplied by (i) the Class A-3 Distributable Amount for such
Distribution Date and (ii) the amount of any repayment of any outstanding Class
A-3 Interest Carryover Shortfall, Class A-3 Uncovered Loss Amounts and Class A-3
Uncovered Loss Interest Amounts being made on such Distribution Date, all to the
extent and as more specifically set forth in the Indenture and the Agreement.
The Notes, the Class A-1 Notes, the Class A-2 Notes and the Class A-4
Notes are and will be equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture. However, to the extent provided
in the Indenture and the Agreement, no principal payments shall be made in
respect of the Class A-2 Notes until the Class A-1 Notes have been paid in full,
no principal payments shall be made in respect of the Class A-3 Notes until the
Class A-2 Notes have been paid in full, and no principal payments shall be made
in respect of the Class A-4 Notes or the Class B Notes until the Class A-3 Notes
have been paid in full. The Class B Notes are subordinated to the Class A Notes,
and the Transferor Certificate is subordinated to the Notes to the extent
described in the Indenture and the Agreement.
Each Holder or Note Owner, by acceptance of a Note, or, in the case of
a Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Transferor, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under the Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Transferor, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the
Transferor, the Servicer, the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Transferor, the Servicer, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Transferor, the Servicer, the Indenture Trustee or
the Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that Indenture Trustee and Owner Trustee
have no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
C-4
<PAGE>
It is the intent of the Transferor, the Servicer, the Noteholders and
the Note Owners that, for purposes of Federal and State income tax and any other
tax measured in whole or in part by income, the Notes will qualify as
indebtedness of the Issuer. The Noteholders, by acceptance of a Note, and the
Note Owners, by acceptance of a beneficial interest in a Note, agree to treat,
and to take no action inconsistent with the treatment of, the Notes for such tax
purposes as indebtedness of the Issuer.
By accepting a Note, each Holder (and by accepting a beneficial
interest in a Note, each Note Owner) waives any claim to any proceeds or assets
of the Origination Trustee and to all assets of the Origination Trust other than
those from time to time included within the 1999-A SUBI Portfolio as 1999-A SUBI
Assets and those proceeds or assets derived from or earned by such 1999-A SUBI
Assets.
By accepting a Note, each Holder (and by accepting a beneficial
interest in a Note, each Note Owner) covenants and agrees that prior to the date
which is one year and one day after the last date upon which (a) each Class of
Notes has been paid in full, and (b) all obligations due under any other
Securitized Financing have been paid in full, the Holder or Note Owner will not
institute against, or join any other Person in instituting against the
Transferor, World Omni Lease Securitization LLC, ALF LLC, ALF LP, the
Origination Trustee or the Origination Trust any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under any
federal or state bankruptcy or similar law. The foregoing shall not limit the
Holder's right to file any claim in or otherwise take actions with respect to
any such proceeding instituted by any Person not under such a constraint. This
non-petition covenant shall survive the termination of the Indenture.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture or the Agreement and no provision
of this Note or of the Indenture or the Agreement shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency, herein prescribed.
C-5
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________, attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: /*
-------------------- ---------------------------------------------
Signature Guaranteed:
---------------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Note Registrar, which
requirements include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Note Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
- ----------------
*/ NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular without alteration, enlargement or any change whatsoever.
C-6
<PAGE>
EXHIBIT D
FORM OF CLASS A-4 NOTES
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
REGISTERED $ /5
-----------------
No. R- CUSIP NO.
--------------------- -----------------
ISIN NO.
-----------------
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
WORLD OMNI 1999-A AUTOMOBILE LEASE SECURITIZATION TRUST
FLOATING RATE AUTOMOBILE LEASE ASSET BACKED NOTES, CLASS A-4
The World Omni 1999-A Automobile Lease Securitization Trust, a business
trust organized and existing under the laws of the State of Delaware (including
any successor, the "Issuer"), for value received, hereby promises to pay to CEDE
& CO., or registered assigns, the principal sum of ____________________ DOLLARS
($_______________), in monthly installments on each Distribution Date,
commencing on September 15, 1999, and to pay interest at a rate of One-Month
LIBOR plus ____% (as described in the Securitization Trust Agreement) on the
Class A-4 Note Balance, each as and to the extent described below; provided that
the entire Class A-4 Note Balance shall be due and payable on the earlier of the
Class A-4 Stated Maturity and the Redemption Date, if any.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
- ---------------
5/ Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
D-1
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Responsible Officer.
Dated: , 1999
--------------------
WORLD OMNI 1999-A AUTOMOBILE LEASE
SECURITIZATION TRUST
By: CHASE MANHATTAN BANK DELAWARE, a
Delaware banking corporation, not in its
individual capacity but solely as Owner
Trustee under the Securitization Trust
Agreement
By:
-----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
D-2
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: , 1999
---------------------
Harris Trust and Savings Bank, an Illinois
banking corporation, not in its individual
capacity but solely as Indenture Trustee,
By:
-----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
D-3
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Automobile Lease Asset Backed Notes, Class A-4
(herein called the "Class A-4 Notes" or the "Notes"), all issued under an
Indenture dated as of August 1, 1999 (such Indenture, as supplemented or
amended, is herein called the "Indenture"), between the Issuer and Harris Trust
and Savings Bank, an Illinois banking corporation, not in its individual
capacity but solely as indenture trustee (the "Indenture Trustee"), which term
includes any successor Indenture Trustee under the Indenture, to which Indenture
and all indentures supplemental thereto reference is hereby made for a statement
of the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Notes are subject to all terms of the
Indenture and to all terms of that certain Securitization Trust Agreement dated
as of August 1, 1999 (the "Agreement"), among Chase Manhattan Bank Delaware, not
in its individual capacity but solely as owner trustee (the "Owner Trustee"),
World Omni Lease Securitization, L.P. (the "Transferor") and the Indenture
Trustee. All capitalized terms used in this Note, whether first used above or
below, that are not otherwise defined herein shall have the meanings assigned to
them pursuant to the Indenture.
Under the Indenture, there will be distributed on each Distribution
Date (i.e., the fifteenth day of each month or, if such fifteenth day is not a
Business Day, the next succeeding Business Day), commencing on September 15,
1999, to the Person in whose name this Class A-4 Note is registered at the close
of business on the last calendar day immediately preceding the related
Distribution Date or, if Definitive Notes are issued, the last day of the
immediately preceding calendar month, such Class A-4 Noteholder's Percentage
Interest multiplied by (i) the Class A-4 Distributable Amount for such
Distribution Date and (ii) the amount of any repayment of any outstanding Class
A-4 Interest Carryover Shortfall, Class A-4 Uncovered Loss Amounts and Class A-4
Uncovered Loss Interest Amounts being made on such Distribution Date, all to the
extent and as more specifically set forth in the Indenture and the Agreement.
The Notes, the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes are and will be equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture. However, to the extent provided
in the Indenture and the Agreement, no principal payments shall be made in
respect of the Class A-2 Notes until the Class A-1 Notes have been paid in full,
no principal payments shall be made in respect of the Class A-3 Notes until the
Class A-2 Notes have been paid in full, and no principal payments shall be made
in respect of the Class A-4 Notes or the Class B Notes until the Class A-3 Notes
have been paid in full. The Class B Notes are subordinated to the Class A Notes,
and the Transferor Certificate is subordinated to the Notes to the extent
described in the Indenture and the Agreement.
Each Holder or Note Owner, by acceptance of a Note, or, in the case of
a Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Transferor, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under the Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Transferor, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the
Transferor, the Servicer, the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Transferor, the Servicer, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Transferor, the Servicer, the Indenture Trustee or
the Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that Indenture Trustee and Owner Trustee
have no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
D-4
<PAGE>
It is the intent of the Transferor, the Servicer, the Noteholders and
the Note Owners that, for purposes of Federal and State income tax and any other
tax measured in whole or in part by income, the Notes will qualify as
indebtedness of the Issuer. The Noteholders, by acceptance of a Note, and the
Note Owners, by acceptance of a beneficial interest in a Note, agree to treat,
and to take no action inconsistent with the treatment of, the Notes for such tax
purposes as indebtedness of the Issuer.
By accepting a Note, each Holder (and by accepting a beneficial
interest in a Note, each Note Owner) waives any claim to any proceeds or assets
of the Origination Trustee and to all assets of the Origination Trust other than
those from time to time included within the 1999-A SUBI Portfolio as 1999-A SUBI
Assets and those proceeds or assets derived from or earned by such 1999-A SUBI
Assets.
By accepting a Note, each Holder (and by accepting a beneficial
interest in a Note, each Note Owner) covenants and agrees that prior to the date
which is one year and one day after the last date upon which (a) each Class of
Notes has been paid in full, and (b) all obligations due under any other
Securitized Financing have been paid in full, the Holder or Note Owner will not
institute against, or join any other Person in instituting against the
Transferor, World Omni Lease Securitization LLC, ALF LLC, ALF LP, the
Origination Trustee or the Origination Trust any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under any
federal or state bankruptcy or similar law. The foregoing shall not limit the
Holder's right to file any claim in or otherwise take actions with respect to
any such proceeding instituted by any Person not under such a constraint. This
non-petition covenant shall survive the termination of the Indenture.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture or the Agreement and no provision
of this Note or of the Indenture or the Agreement shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency, herein prescribed.
D-5
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated: /*
--------------------- ---------------------------------------------
Signature Guaranteed:
---------------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Note Registrar, which
requirements include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Note Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
- ---------------
*/ NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular without alteration, enlargement or any change whatsoever.
D-6
<PAGE>
EXHIBIT E
FORM OF CLASS B NOTES
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1 NOTES,
THE CLASS A-2 NOTES, THE CLASS A-3 NOTES AND THE CLASS A-4 NOTES AS DESCRIBED IN
THE INDENTURE AND THE TRANSACTION DOCUMENTS REFERRED TO HEREIN.
THIS NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR WITH ANY STATE SECURITIES OR BLUE SKY AUTHORITY UNDER ANY STATE SECURITIES
LAWS IN RELIANCE ON EXEMPTIONS PROVIDED BY THE SECURITIES ACT AND SUCH STATE
SECURITIES LAWS. NO RESALE OR OTHER TRANSFER OF THIS NOTE MAY BE MADE UNLESS
SUCH RESALE OR TRANSFER (A) IS MADE IN ACCORDANCE WITH SECTION 2.04 OF THE
INDENTURE REFERRED TO HEREIN AND (B) IS MADE (i) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, (iii) TO WORLD OMNI LEASE SECURITIZATION, L.P. (THE
"TRANSFEROR") OR (iv) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT THAT IS AWARE THAT THE RESALE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A. NEITHER THE TRANSFEROR NOR HARRIS TRUST & SAVING BANK, AS
INDENTURE TRUSTEE (THE "INDENTURE TRUSTEE"), IS OBLIGATED TO REGISTER THE NOTES
UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS. IN THE EVENT
THAT THE TRANSFER OF A CLASS B NOTE IS TO BE MADE, EITHER (A) AN OPINION OF
COUNSEL OR (B) A REPRESENTATION LETTER FROM THE PROSPECTIVE INVESTOR, IN EITHER
CASE IN FORM AND SUBSTANCE SATISFACTORY TO THE INDENTURE TRUSTEE AND THE
TRANSFEROR, IS REQUIRED TO BE DELIVERED TO THE INDENTURE TRUSTEE AND THE
TRANSFEROR, TO THE EFFECT THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS.
NO RESALE OR OTHER TRANSFER OF THIS NOTE MAY BE MADE UNLESS THE
INDENTURE TRUSTEE SHALL HAVE RECEIVED A REPRESENTATION LETTER OR OPINION OF
COUNSEL FROM THE TRANSFEREE OF THIS NOTE, ACCEPTABLE TO AND IN FORM AND
SUBSTANCE SATISFACTORY TO THE TRANSFEROR AND THE INDENTURE TRUSTEE, TO THE
EFFECT THAT: (A)(1) SUCH TRANSFEREE WILL NOT ACQUIRE THIS NOTE ON BEHALF OR WITH
THE ASSETS OF ANY "EMPLOYEE BENEFIT PLAN" AS DEFINED IN SECTION 3(3) OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR (2) NO
"PROHIBITED TRANSACTION" UNDER ERISA OR THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, WILL OCCUR IN CONNECTION WITH SUCH TRANSFEREE'S ACQUISITION OR HOLDING
OF THIS CLASS B NOTE BECAUSE THE RELEVANT CONDITIONS FOR EXEMPTIVE RELIEF UNDER
ONE OR MORE OF THE FOLLOWING PROHIBITED TRANSACTION CLASS EXEMPTIONS HAS BEEN
SATISFIED: PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, REGARDING
TRANSACTIONS EFFECTED BY "IN-HOUSE ASSET MANAGERS"; PTCE 95-60, REGARDING
TRANSACTIONS FOR INSURANCE COMPANY GENERAL ACCOUNTS; PTCE 90-1, REGARDING
TRANSACTIONS EFFECTED FOR INSURANCE COMPANY SEPARATE ACCOUNTS; PTCE 91-38,
REGARDING TRANSACTIONS EFFECTED FOR BANK COLLECTIVE INVESTMENT FUNDS; OR PTCE
84-14, REGARDING TRANSACTIONS EFFECTED BY "QUALIFIED PROFESSIONAL ASSET
MANAGERS" AND (B) IF SUCH TRANSFEREE (OR ANY PERSON OR ENTITY FOR WHOM SUCH
TRANSFEREE IS ACTING AS AGENT OR CUSTODIAN IN CONNECTION WITH THE ACQUISITION OF
E-1
<PAGE>
THIS NOTE) IS A PARTNERSHIP, GRANTOR TRUST OR S CORPORATION FOR FEDERAL INCOME
TAX PURPOSES (A "FLOW-THROUGH ENTITY"), ANY CLASS B NOTES OWNED BY OR ON BEHALF
OF SUCH FLOW-THROUGH ENTITY WILL REPRESENT LESS THAN 50% OF THE VALUE OF ALL THE
ASSETS OWNED BY SUCH FLOW-THROUGH ENTITY AND NO SPECIAL ALLOCATION OF INCOME,
GAIN, LOSS, DEDUCTION OR CREDIT FROM SUCH CLASS B NOTES WILL BE MADE AMONG THE
BENEFICIAL OWNERS OF SUCH FLOW-THROUGH ENTITY.
THE RESTRICTIONS ON RESALE OR TRANSFER DESCRIBED ABOVE ARE SUBJECT TO
ANY REQUIREMENT OF LAW THAT THE DISPOSITION OF THE HOLDER'S PROPERTY SHALL AT
ALL TIMES BE AND REMAIN WITHIN ITS CONTROL.
REGISTERED $ \6
No. R- -----------------
--------------------- CUSIP NO.
-----------------
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS SUBORDINATED TO THE CLASS A NOTES
TO THE EXTENT PROVIDED IN THE INDENTURE AND THE TRANSACTION DOCUMENTS.
WORLD OMNI 1999-A AUTOMOBILE LEASE SECURITIZATION TRUST
FLOATING RATE AUTOMOBILE LEASE ASSET BACKED NOTES, CLASS B
The World Omni 1999-A Automobile Lease Securitization Trust, a trust
organized and existing under the laws of the State of Delaware (including any
successor, the "Issuer"), for value received, hereby promises to pay to _______,
or registered assigns, the principal sum of _________________ DOLLARS
($_____________ ), in monthly installments on each Distribution Date, commencing
on September 15, 1999, and to pay interest at a rate of One-Month LIBOR plus
____% (as described and subject to the limitations in the Securitization Trust
Agreement) on the Class B Note Balance, each as and to the extent described
below; provided that the entire Class B Note Balance shall be due and payable on
the earlier of the Class B Stated Maturity and the Redemption Date, if any.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
- ---------------
6/ Denominations of $250,000 and integral multiples of $1,000 in excess thereof.
E-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Responsible Officer.
Dated: , 1999
--------------------
WORLD OMNI 1999-A AUTOMOBILE LEASE
SECURITIZATION TRUST
By: CHASE MANHATTAN BANK DELAWARE, a
Delaware banking corporation, not in its
individual capacity but solely as Owner
Trustee under the Securitization Trust
Agreement
By:
-----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
E-3
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: , 1999
---------------------
Harris Trust and Savings Bank, an Illinois
banking corporation, not in its individual
capacity but solely as Indenture Trustee,
By:
-----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
E-4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Automobile Lease Asset Backed Notes, Class B
(herein called the "Class B Notes" or the "Notes"), all issued under an
Indenture dated as of August 1, 1999 (such Indenture, as supplemented or
amended, is herein called the "Indenture"), between the Issuer and Harris Trust
and Savings Bank, an Illinois banking corporation, not in its individual
capacity but solely as indenture trustee (the "Indenture Trustee"), which term
includes any successor Indenture Trustee under the Indenture, to which Indenture
and all indentures supplemental thereto reference is hereby made for a statement
of the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Notes are subject to all terms of the
Indenture and to all terms of that certain Securitization Trust Agreement dated
as of August 1, 1999 (the "Agreement"), among Chase Manhattan Bank Delaware, not
in its individual capacity but solely as owner trustee (the "Owner Trustee"),
World Omni Lease Securitization, L.P. (the "Transferor") and the Indenture
Trustee. All capitalized terms used in this Note, whether first used above or
below, that are not otherwise defined herein shall have the meanings assigned to
them pursuant to the Indenture.
Under the Indenture, there will be distributed on each Distribution
Date (i.e., the fifteenth day of each month or, if such fifteenth day is not a
Business Day, the next succeeding Business Day), commencing on September 15,
1999, to the Person in whose name this Class B Note is registered at the close
of business on the last day of the immediately preceding calendar month, such
Class B Noteholder's Percentage Interest multiplied by (i) the Class B
Distributable Amount for such Distribution Date and (ii) the amount of any
repayment of any outstanding Class B Interest Carryover Shortfall, Class B
Uncovered Loss Amounts, Class B Uncovered Loss Interest Amounts, Class B Note
Principal Carryover Shortfall and Class B Note Principal Carryover Shortfall
Interest Amount being made on such Distribution Date, all to the extent and as
more specifically set forth in the Indenture and the Agreement.
The Notes are subordinated to the Class A Notes and are secured by the
collateral pledged as security therefor on a subordinated basis as provided in
the Indenture and the Transaction Documents.
Each Holder, by acceptance of a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Transferor, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under the Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Transferor, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the
Transferor, the Servicer, the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Transferor, the Servicer, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Transferor, the Servicer, the Indenture Trustee or
the Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that Indenture Trustee and Owner Trustee
have no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
It is the intent of the Transferor, the Servicer and the Noteholders
that, for purposes of Federal and State income tax and any other tax measured in
whole or in part by income, the Notes will qualify as indebtedness of the
Issuer. The Noteholders, by acceptance of a Note, agree to treat, and to take no
action inconsistent with the treatment of, the Notes for such tax purposes as
indebtedness of the Issuer.
By accepting this Note, the Holder hereof covenants and agrees that
prior to the date which is one year and one day after the last date upon which
(a) each Class of Notes has been paid in full, and (b) all obligations due under
any other Securitized Financing have been paid in full, the Holder will not
E-5
<PAGE>
institute against, or join any other Person in instituting against the
Transferor, World Omni Lease Securitization LLC, ALF LLC, ALF LP, the
Origination Trustee or the Origination Trust any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under any
federal or state bankruptcy or similar law. The foregoing shall not limit the
Holder's right to file any claim in or otherwise take actions with respect to
any such proceeding instituted by any Person not under such a constraint. This
non-petition covenant shall survive the termination of the Agreement.
By accepting this Note, the Holder hereof waives any claim to any
proceeds or assets of the Origination Trustee and to all assets of the
Origination Trust other than those from time to time included within the 1999-A
SUBI Portfolio as 1999-A SUBI Assets and those proceeds or assets derived from
or earned by such 1999-A SUBI Assets.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
E-6
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated: /*
--------------------- ---------------------------------------------
Signature Guaranteed:
---------------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Note Registrar, which
requirements include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Note Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
- ---------------
*/ NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular without enlargement or any change whatsoever.
E-7
<PAGE>
EXHIBIT F-1
NON-RULE 144A REPRESENTATION LETTER
World Omni Lease Securitization L.P.,
c/o World Omni Lease Securitization LLC,
its general partner
120 N.W. 12th Avenue
Deerfield Beach, Florida 33442
Harris Trust and Savings Bank
311 W. Monroe
12th Floor
Chicago, Illinois 60606
[PLACEMENT AGENT]
[ADDRESS]
Re: World Omni 1999-A Automobile Lease Securitization Trust
Floating Rate Automobile Lease Asset Backed Notes, Class B
Ladies and Gentlemen:
The undersigned purchaser (the "Purchaser") understands that the
purchase of the above-referenced Notes (the "Notes") may be made only by
institutions which are "Accredited Investors" under Regulation D, as promulgated
under the Securities Act of 1933, as amended (the "Securities Act"), which
includes banks, savings and loan associations, registered brokers and dealers,
insurance companies, investment companies and organizations described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"),
corporations, business trusts and partnerships, not formed for the specific
purpose of acquiring the Notes offered, with total assets in excess of
$5,000,000. The undersigned represents on behalf of the Purchaser that the
Purchaser is an "Accredited Investor" within the meaning of such definition. The
Purchaser is urged to review carefully the responses, representations and
warranties it is making herein. Capitalized terms not defined herein have the
meanings assigned to such terms in or pursuant to the Indenture described below.
Representations and Warranties
The Purchaser makes the following representations and warranties in
order to permit Harris Trust and Savings Bank, as indenture trustee (the
"Indenture Trustee"), World Omni 1999-A Automobile Lease Securitization Trust
(the "Trust"), World Omni Lease Securitization L.P. (the "Transferor") and
[Placement Agent] to determine its suitability as a purchaser of Notes and to
determine that the exemption from registration relied upon by the Transferor
under Section 4(2) of the Securities Act is available to it.
1. The Purchaser understands that the Notes have not been, and
throughout their term will not be, registered or qualified under the Securities
Act or the securities law of any state and may be resold (which resale is not
currently contemplated) only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration under the Securities Act and
other applicable state securities laws are available, that neither the
Transferor nor the Indenture Trustee is required to register the Notes under the
Securities Act or any applicable state securities laws and that any transfer
must comply with Section 2.04 of the Indenture dated as of August 1, 1999 (the
"Indenture") between the Trust and the Indenture Trustee.
F-1-1
<PAGE>
2. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Notes.
3. The Purchaser is an "accredited investor" within the meaning of Rule
501(a) under the Securities Act and a sophisticated institutional investor and
has knowledge and experience in financial and business matters (and, in
particular, in such matters related to securities similar to the Notes) and is
capable of evaluating the merits and risks of its investment in the Notes and is
able to bear the economic risk of such investment. The Purchaser has been given
such information concerning the Notes, the Trust, World Omni Financial Corp. and
the Transferor as it has requested.
4. The Purchaser is acquiring the Notes as principal for its own
account (or for the account of one or more other sophisticated institutional
investors for which it is acting as duly authorized fiduciary or agent) for the
purpose of investment and not with a view to or for sale in connection with any
distribution thereof, subject nevertheless to any requirement of law that the
disposition of the Purchaser's property shall at all times be and remain within
its control.
5. Neither the Purchaser nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Note, any interest in
any Note or any other similar security of the Transferor to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of any Note, any
interest in any Note or any other similar security of the Transferor with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, which would
constitute a distribution of the Notes under the Securities Act or which would
render the disposition of any Note a violation of Section 5 of the Securities
Act or any state securities law, require registration or qualification pursuant
thereto, or require registration of the Trust or the Transferor as an
"investment company" under the Investment Company Act of 1940, as amended, nor
will it act, nor has it authorized or will it authorize any person to act in
such manner with respect to the Notes.
6. The Purchaser has reviewed the Private Placement Memorandum with
respect to the Notes dated September [___], 1999, including the Prospectus
attached thereto as Exhibit A (the "Private Placement Memorandum"), and the
agreements and other materials referred to therein, and has had the opportunity
to ask questions and receive answers concerning the terms and conditions of the
transaction contemplated by the Private Placement Memorandum and to obtain
additional information necessary to verify the accuracy and completeness of any
information furnished to the Purchaser or to which the Purchaser had access.
7. Purchaser required to select applicable sentence:
_____ The Purchaser will not acquire the Notes on behalf of or with the
assets of any "employee benefit plan" as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
_____ No "prohibited transaction" under ERISA or the Internal Revenue
Code of 1986, as amended, will occur in connection with such transferee's
acquisition or holding of the Class B Notes because the relevant conditions for
exemptive relief under one or more of the following prohibited transaction class
exemptions have been satisfied: Prohibited Transaction Class Exemption ("PTCE")
96-23, regarding transactions effected by "In-House Asset Managers"; PTCE 95-60,
regarding transactions for insurance company general accounts; PTCE 90-1,
regarding transactions effected for insurance company separate accounts; PTCE,
regarding transactions affected for bank collective investment funds; or PTCE
84-14, regarding transactions effected by "Qualified Professional Asset
Managers".
8. The Purchaser understands that the Notes will bear a legend
substantially as set forth in the form of Note included as Exhibit E to the
Indenture.
F-1-2
<PAGE>
9. The Purchaser understands that there is no market, nor is there any
assurance that a market will develop, for the Notes and that the Transferor does
not have any obligation to make or facilitate any such market (or to otherwise
repurchase the Notes from the Purchaser) under any circumstances.
10. The Purchaser has consulted with its own legal counsel, independent
accountants and financial advisors to the extent it deems necessary regarding
the tax consequences to it of ownership of the Notes, is aware that its taxable
income with respect to the Notes in any accounting period may not correspond to
the cash flow (if any) from the Notes for such period, and is not purchasing the
Notes in reliance on any representations of the Transferor or its counsel with
respect to tax matters.
11. The Purchaser represents, on behalf of itself (or any person or
entity for whom the Purchaser is acting as agent or custodian in connection with
the acquisition of the Notes) that if the Purchaser or any such other person or
entity is a partnership, grantor trust or S corporation for federal income tax
purposes (a "Flow-Through Entity"), any Notes owned by or on behalf of such
Flow-Through Entity will represent less than 50% of the value of all the assets
owned by such Flow-Through Entity and no special allocation of income, gain,
loss, deduction or credit from such Notes will be made among the beneficial
owners of such Flow-Through Entity.
12. The Purchaser agrees that it will obtain from any subsequent
purchaser of the Notes substantially the same representations, warranties and
agreements contained in the foregoing paragraphs 1 through 11 and in this
paragraph 12.
Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Indenture or the Private Placement
Memorandum, as the case may be.
The representations and warranties contained herein shall be binding
upon the successors of the undersigned.
F-1-3
<PAGE>
Executed at , this day of 199
------------------ -------- ------------ ---
---------------------------------------------
Purchaser's Name (Print)
By
------------------------------------------
Signature
Its
------------------------------------------
---------------------------------------------
Address of Purchaser
---------------------------------------------
Purchaser's Taxpayer
Identification Number
F-1-4
<PAGE>
EXHIBIT F-2
RULE 144A REPRESENTATION LETTER
World Omni Lease Securitization L.P.,
c/o World Omni Lease Securitization, Inc.,
its general partner
120 N.W. 12th Avenue
Deerfield Beach, Florida 33442
Harris Trust and Savings Bank
311 W. Monroe
12th Floor
Chicago, Illinois 60606
[Placement Agent]
[Address]
Re: World Omni 1999-A Automobile Lease Securitization Trust
Floating Rate Automobile Lease Asset Backed Notes, Class B
Ladies and Gentlemen:
_______________ (the "Purchaser") is today purchasing in a private
resale from ________________ (the "Transferor") $_______________ aggregate
principal amount of the above-captioned Notes (the "Notes"), issued pursuant to
the Indenture dated as of August 1, 1999 (the "Indenture") between World Omni
1999-A Automobile Lease Securitization Trust (the "Trust") and Harris Trust and
Savings Bank, as indenture trustee (the "Indenture Trustee").
In connection with the purchase of the Notes, the Purchaser hereby
represents and warrants to each of you as follows:
1. The Purchaser understands that the Notes have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or the
securities laws of any state.
2. The Purchaser is acquiring the Notes for its own account only for
investment and not for any other person, and not with a view to, or for resale
in connection with, a distribution that would constitute a violation of the
Securities Act or any state securities laws (subject to the understanding that
disposition of the Purchaser's property will remain at all times within its
control). The Purchaser is not an affiliate of the Transferor, World Omni, the
Indenture Trustee, the Owner Trustee, any custodian of the Notes or any of their
respective affiliates.
3. The Purchaser agrees that the Notes must be held indefinitely by it
unless (i) the Notes are subsequently registered under the Securities Act or
(ii) an exemption from the registration requirements of the Securities Act is
available.
4. The Purchaser agrees that if at some time it wishes to dispose of or
exchange any of the Notes, it will not transfer or exchange any of the Notes
unless such transfer or exchange is in accordance with the provisions of Section
2.04 of the Indenture.
5. The Purchaser is a qualified institutional buyer as defined in Rule
144A of the Securities Act and has completed and is delivering herewith either
of the forms of certification to that effect attached as Annexes hereto, it is
aware that the sale to it is being made in reliance on Rule 144A, it is
F-2-1
<PAGE>
acquiring the Notes for its own account or for the account of a qualified
institutional buyer and it understands that such Notes may be resold, pledged or
transferred only (i) to a person who the Transferor reasonably believes is a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A or (ii)
pursuant to another exemption from registration under the Securities Act and
applicable state securities laws.
6. Neither the Purchaser nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Note, any interest in
any Note or any other similar security of the Transferor to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of any Note any
interest in any Note or any other similar security of the Transferor with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, which would
constitute a distribution of the Notes under the Securities Act or which would
render the disposition of any Note a violation of Section 5 of the Securities
Act or any state securities law, require registration or qualification pursuant
thereto, or require registration of the World Omni 1999-A Automobile Lease
Securitization Trust (the "Trust") or the Transferor as an "investment company"
under the Investment Company Act of 1940, as amended, nor will it act, nor has
it authorized or will it authorize any person to act in such manner with respect
to the Notes.
7. Purchaser required to select applicable sentence:
_____ The Purchaser will not acquire the Notes on behalf of or with the
assets of any "employee benefit plan" as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
_____ No "prohibited transaction" under ERISA or the Internal Revenue
Code of 1986, as amended, will occur in connection with such transferee's
acquisition or holding of the Class B Notes because the relevant conditions for
exemptive relief under one or more of the following prohibited transaction class
exemptions have been satisfied: Prohibited Transaction Class Exemption ("PTCE")
96-23, regarding transactions effected by "In-House Asset Managers"; PTCE 95-60,
regarding transactions for insurance company general accounts; PTCE 90-1,
regarding transactions effected for insurance company separate accounts; PTCE
91-38 regarding transactions effected for bank collective investment funds; or
PTCE 84-14, regarding transactions effected by "Qualified Professional Asset
Managers".
8. The Purchaser understands that there is no market, nor is there any
assurance that a market will develop, for the Notes and that the Transferor does
not have any obligation to make or facilitate any such market (or to otherwise
repurchase the Notes from the Purchaser) under any circumstances.
9. The Purchaser has consulted with its own legal counsel, independent
accountants and financial advisors to the extent it deems necessary regarding
the tax consequences to it of ownership of the Notes, is aware that its taxable
income with respect to the Notes in any accounting period may not correspond to
the cash flow (if any) from the Notes for such period, and is not purchasing the
Notes in reliance on any representations of the Transferor or its counsel with
respect to tax matters.
10. The Purchaser has reviewed the Private Placement Memorandum with
respect to the Notes dated September [___], 1999, including the Prospectus
attached as Exhibit A thereto (the "Private Placement Memorandum"), and the
agreements and other materials referred to therein, and has had the opportunity
to ask questions and receive answers concerning the terms and conditions of the
transaction contemplated by the Private Placement Memorandum and to obtain
additional information necessary to verify the accuracy and completeness of any
information furnished to the Purchaser or to which the Purchaser had access.
F-2-2
<PAGE>
11. The Purchaser understands that the Notes will bear a legend
substantially as set forth in the form of Note included as Exhibit E to the
Indenture.
12. The Purchaser hereby further agrees to be bound by all the terms
and conditions of the Notes as provided in the Indenture.
13. The Purchaser represents that if the Purchaser (or any other person
or entity for whom the Purchaser is acting as agent or custodian in connection
with the acquisition of the Notes) is a partnership, grantor trust or S
corporation for federal income tax purposes (a "Flow-Through Entity"), any Notes
owned by such Flow-Through Entity will represent less than 50% of the value of
all the assets owned by such Flow-Through Entity and no special allocation of
income, gain, loss deduction or credit from such Notes will be made among the
beneficial owners of such Flow-Through Entity.
14. If the Purchaser sells any of the Notes, the Purchaser will obtain
from any subsequent purchaser substantially the same representations contained
in this Representation Letter.
Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Indenture or the Private Placement
Memorandum, as the case may be.
The representations and warranties contained herein shall be binding
upon the successors of the undersigned.
F-2-3
<PAGE>
Executed at , this day of 199
------------------ -------- ------------ ---
---------------------------------------------
Purchaser's Name (Print)
By
------------------------------------------
Signature
Its
------------------------------------------
---------------------------------------------
Address of Purchaser
---------------------------------------------
Purchaser's Taxpayer
Identification Number
F-2-4
<PAGE>
ANNEX 1 TO EXHIBIT F-2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Purchaser") hereby certifies as follows to the
addressees of the Rule 144A Representation Letter to which this certification is
attached with respect to the Notes described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Purchaser.
2. In connection with purchases by the Purchaser, the Purchaser is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144 A") because (i) the Purchaser
owned and/or invested on a discretionary basis $_________/7 in securities
(except for the excluded securities referred to below) as of the end of the
Purchaser's most recent fiscal year (such amount being calculated in accordance
with Rule 144A) and (ii) the Purchaser satisfies the criteria in the category
marked below.
___ Corporation. etc. The Purchaser is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Purchaser (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements.
___ Savings and Loan. The Purchaser (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
___ Broker-dealer. The Purchaser is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Purchaser is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
- ---------------
7/ Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
A-1-F-2-1
<PAGE>
___ State or Local Plan. The Purchaser is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Purchaser is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ Investment Advisor. The Purchaser is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. The Purchaser is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
___ Business Development Company. The Purchaser is a business
development company as defined in Section 202(a) (22) of the
Investment Advisors Act of 1940.
___ Trust Fund. The Purchaser is a trust fund whose trustee is a
bank or trust company and whose participants are exclusively
State or Local Plans or ERISA Plans as defined above, and no
participant of the Purchaser is an individual retirement
account or an H.R. 10 (Keogh) plan.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Purchaser, (ii) securities that are part
of an unsold allotment to or subscription by the Purchaser, if the Purchaser is
a dealer, (iii) bank deposit notes and Notes of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Purchaser, the Purchaser used
the cost of such securities to the Purchaser and did not include any of the
securities referred to in the preceding paragraph, except (i) where the
Purchaser reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Purchaser may have included securities
owned by subsidiaries of the Purchaser, but only if such subsidiaries are
consolidated with the Purchaser in its financial statements prepared in
accordance with generally accepted accounting principles and if the investments
of such subsidiaries are managed under the Purchaser's direction. However, such
securities were not included if the Purchaser is a majority owned, consolidated
subsidiary of another enterprise and the Purchaser is not itself a reporting
company under the Securities Exchange Act of 1934, as amended.
5. The Purchaser acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Notes are
relying and will continue to rely on the statements made herein because one or
more sales to the Purchaser may be in reliance on Rule 144A.
6. Until the date of purchase of the Notes, the Purchaser will notify
each of the parties to which this certification is made of any changes in the
information and conclusions herein. Until such notice is given, the Purchaser's
purchase of the Notes will constitute a reaffirmation of this certification as
of the date of such purchase. In addition, if the Purchaser is a bank or savings
and loan is provided above, the Purchaser agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
A-1-F-2-2
<PAGE>
---------------------------------------------
Name of Purchaser or Adviser
By:
---------------------------------------
Name:
Title:
Date:
---------------------------------------
A-1-F-2-3
<PAGE>
ANNEX 2 TO EXHIBIT F-2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Purchaser") hereby certifies as follows to the
addressees of the Rule 144A Representation Letter which this certification is
attached with respect to the Transferor Notes described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Purchaser or, if the Purchaser
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("Rule 144A") because the Purchaser is
part of a Family of Investment Companies (as defined below), is such an officer
of the Adviser.
2. In connection with purchases by the Purchaser, the Purchaser is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Purchaser is an investment company registered under the Investment Company Act
of 1940, as amended and (ii) as marked below, the Purchaser alone, or the
Purchaser's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Purchaser's most recent fiscal year. For purposes of determining the
amount of securities owned by the Purchaser or the Purchaser's Family of
Investment Companies, the cost of such securities was used, except (i) where the
Purchaser or the Purchaser's Family of Investment Companies reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market.
___ The Purchaser owned $____________ in securities (other than
the excluded securities referred to below) as of the end of
the Purchaser's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
___ The Purchaser is part of a Family of Investment Companies
which owned in the aggregate $__________ in securities (other
than the excluded securities referred to below) as of the end
of the Purchaser's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Purchaser or are part of the Purchaser's
Family of Investment Companies, (ii) bank deposit notes and Notes of deposit,
(iii) loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps.
5. The Purchaser is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Representation Letter to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Purchaser will be in reliance on
Rule 144A. In addition, the Purchaser will only purchase for the Purchaser's own
account.
A-1-F-2-1
<PAGE>
6. Until the date of purchase of the Transferor Notes, the undersigned
will notify the parties listed in the Rule 144A Transferee Note to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Purchaser's purchase of the Notes will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
---------------------------------------------
Name of Purchaser or Adviser
By:
---------------------------------------
Name:
Title:
Date:
---------------------------------------
IF AN ADVISER:
---------------------------------------------
Name of Adviser
Date:
---------------------------------------
A-1-F-2-2
EXHIBIT 5.1
[LETTERHEAD OF MCDERMOTT, WILL & EMERY]
August 19, 1999
World Omni Lease Securitization L.P.
6150 Omni Park Avenue
Mobile, Alabama 36609
Re: World Omni 1999-A Automobile Lease Securitization Trust
Floating Rate Automobile Lease Asset Backed Notes, Class A-1
(the "Class A-1 Notes"), World Omni 1999-A Automobile Lease
Securitization Trust Floating Rate Automobile Lease Asset
Backed Notes, Class A-2 (the "Class A-2 Notes"), World Omni
1999-A Automobile Lease Securitization Trust Floating Rate
Automobile Lease Asset Backed Notes, Class A-3 (the "Class A-3
Notes"), and World Omni 1999-A Automobile Lease Securitization
Trust Floating Rate Automobile Lease Asset Backed Notes, Class
A-4 (the "Class A-4 Notes" and, together with the Class A-1
Notes, the Class A-2 Notes and the Class A-3 Notes, the "Class
A Notes")
Ladies and Gentlemen:
We have acted as special Illinois and New York counsel for World Omni
Financial Corp., a Florida corporation ("WOFCO"), and World Omni Lease
Securitization L.P., a Delaware limited partnership (the "Transferor"), in
connection with the proposed offering by the Transferor of $330,000,000 initial
principal amount of Class A-1 Notes, $310,000,000 initial principal amount of
Class A-2 Notes, $249,000,000 initial principal amount of Class A-3 Notes and
$182,472,000 initial principal amount of Class A-4 Notes, in each case to be
issued pursuant to an Indenture, dated as of August 1, 1999 (the "Indenture"),
between Harris Trust and Savings Bank, as indenture trustee (in such capacity,
the "Indenture Trustee"), and Chase Manhattan Bank Delaware, a Delaware banking
corporation, as owner trustee (in such capacity, the "Owner Trustee"). The Class
A Notes are to be acquired by Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as representative of the several underwriters (collectively, the
"Underwriters") named in the Underwriting Agreement (the "Underwriting
Agreement"), dated August __, 1999, among the Transferor, Auto Lease Finance
L.P., WOFCO and the Underwriters and offered by the Underwriters as provided in
the Registration Statement on Form S-1 (File No. 33374455), filed with the
Securities and Exchange Commission ("SEC") on March 16,
<PAGE>
1999, as amended by Amendment No. 1, filed with the SEC on August 19, 1999 (the
"Registration Statement").
In connection with this opinion, we have relied as to matters of fact,
without investigation, upon (a) certificates of public officials and others and
(b) the representations and warranties contained in the Securitization Trust
Agreement (as defined in the Indenture) and the Underwriting Agreement. We have
also examined originals or copies, certified or otherwise identified to our
satisfaction, of the Registration Statement, the form of Indenture filed as
Exhibit 4.1 to the Registration Statement, including the form of each Class A
Note attached thereto, and the form of Underwriting Agreement filed as Exhibit
1.1 to the Registration Statement.
In connection with this opinion, we have assumed the accuracy and
completeness of all documents and records that we have reviewed, the genuineness
of all signatures, the authenticity of the documents submitted to us as
originals and the conformity to authentic original documents of all documents
submitted to us as certified, conformed or reproduced copies.
We have also assumed that the Securitization Trust Agreement, the
Underwriting Agreement and the Indenture have each been duly and validly
executed and delivered and constitutes the legal, valid and binding obligation
of each party thereto in accordance with its terms. In addition, we have assumed
that each Class A Note, when issued, will conform to the form thereof attached
to the Indenture, each Class A Note has been duly and validly executed and
delivered in accordance with the terms of the Indenture and the Underwriting
Agreement, and each Class A Note constitutes the legal, valid and binding
obligation of the Issuer in accordance with its terms.
Based upon and subject to the foregoing, it is our opinion that when
each Class A Note is executed by Chase Manhattan Bank Delaware, as owner
trustee, on behalf of the Issuer and is issued and authenticated by the
Indenture Trustee, in each case in accordance with the terms of the Indenture,
and sold and delivered to the Underwriters in accordance with the provisions of
the Underwriting Agreement, it will be legally issued, fully paid and
nonassessable.
Our opinions expressed above are limited to the laws of the State of
New York (excluding the state securities laws thereof), and we do not express
any opinion herein concerning any other law. Specifically and without limiting
the generality of the preceding sentence, we express no opinion herein as to the
applicability of or compliance with any state securities laws, federal
securities laws or other federal laws, including without limitation the
Securities Act of 1933, as amended, and the Trust Indenture Act of 1939, as
amended. This opinion letter is given as of the date hereof and we assume no
obligation to advise you of changes that may hereafter be brought to our
attention. This opinion letter is solely for the information of the addressees
hereof and is not to be quoted in whole or in part or otherwise referred to, nor
is it to be filed with any governmental agency or any other person, without our
prior written consent. No one other than the addressees hereof is entitled to
rely on this opinion letter.
<PAGE>
We hereby consent to (a) the use of this opinion for filing as Exhibit
5.1 to the Registration Statement and (b) to the use of our name under the
heading "Legal Matters" in the Prospectus included in the Registration
Statement, as the same may be further amended and declared effective by the SEC.
Very truly yours,
/s/ McDermott, Will & Emery
----------------------------------
McDermott, Will & Emery
EXHIBIT 8.1
[CADWALADER LETTERHEAD]
August 19, 1999
World Omni Lease Securitization L.P.
6150 Omni Park Drive
Mobile, Alabama 36609
Re: World Omni 1999-A Automobile Lease Securitization Trust
Dear Sirs:
We have acted as special federal income tax counsel to World Omni Lease
Securitization, L.P. (the "Transferor") in connection with the filing of a
Registration Statement on Form S-1 (File No. 333-74455) with the Securities and
Exchange Commission (the "Commission") as originally filed on March 16, 1999
(such registration statement, together with the exhibits and any amendments
thereto, the "Registration Statement"), including a form of prospectus contained
therein (the "Prospectus"), relating to the offering of approximately
$330,000,000 aggregate principal amount of World Omni 1999-A Automobile Lease
Securitization Trust Floating Rate Automobile Lease Asset Backed Notes, Class
A-1 (the "Class A-1 Notes"), approximately $310,000,000 aggregate principal
amount of World Omni 1999-A Automobile Lease Securitization Trust Floating Rate
Automobile Lease Asset Backed Notes, Class A-2 (the "Class A-2 Notes"),
approximately $249,000,000 aggregate principal amount of World Omni 1999-A
Automobile Lease Securitization Trust Floating Rate Automobile Lease Asset
Backed Notes, Class A-3 (the "Class A-3 Notes") and approximately $184,472,000
aggregate principal amount of World Omni 1999-A Automobile Lease Securitization
Trust Floating Rate Automobile Lease Asset Backed Notes, Class A-4 (the "Class
A-4 Notes") and, together with the Class A-1 Notes, the Class A-2 Notes and the
Class A-3 Notes, the "Notes") to be issued pursuant to an Indenture dated as of
August 1, 1999 (the "Indenture"), between Chase Manhattan Bank, Delaware, as
owner trustee and Harris Trust & Savings Bank, as indenture trustee (the
"Trustee").
As such counsel, we have reviewed the Registration Statement, the
Prospectus, the form of the Indenture filed as an exhibit to the Registration
Statement, the forms of the Notes included in the Indenture and such agreements,
instruments, certificates and other documents as we have deemed necessary for
the
<PAGE>
World Omni Lease -2- August 19, 1999
Securitization L.P.
purposes of this opinion. In addition, we have examined such questions of law as
we have deemed necessary for purposes of this opinion.
We have advised the Registrant with respect to material federal income
tax consequences of the proposed issuance of the Notes. This advice is
summarized under the headings "Summary -- Tax Status" and "Material Income Tax
Considerations -- Federal Taxation" in the Prospectus. Such description does not
purport to discuss all possible Federal income tax ramifications of the proposed
issuance, but with respect to those material federal income tax consequences
that are discussed, in our opinion the description is accurate in all material
respects.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and to the use of our name under the headings "Material
Income Tax Considerations -- Federal Taxation" and "Legal Matters" in the
Prospectus, without implying or admitting that we are "experts" within the
meaning of the Securities Act of 1933, as amended, or the rules and regulations
of the Commission promulgated thereunder, with respect to any part of the
Registration Statement, including this exhibit.
Very truly yours,
/s/ Cadwalader, Wickersham & Taft
EXHIBIT 8.2
[LETTERHEAD OF ENGLISH, MCCAUGHAN & O'BRYAN, P.A.]
JUDITH L. KEISER
Admitted in Florida and New York
August 19, 1999
World Omni Lease Securitization L.P., Auto Lease Finance, L.P.,
6150 Omni Park Drive Limited Partnership
Mobile, Alabama 36609 6150 Omni Park Drive
Mobile, Alabama 36609
World Omni LT, an Alabama Trust
6150 Omni Park Drive
Mobile, Alabama 36609
Re: World Omni 1999-A
Automobile Lease Securitization Trust
Ladies and Gentlemen:
We have acted as special Florida tax counsel for: World Omni Financial
Corp., a Florida corporation ("WOFCO"); World Omni Lease Securitization L.P., a
Delaware limited partnership ("WOLS LP" or "Transferor"); World Omni Lease
Securitization, LLC, a Delaware limited liability company ("WOLS LLC"); Auto
Lease Finance, LLC, a Delaware limited liability company ("ALF LLC"); Auto Lease
Finance L.P., Limited Partnership, a Delaware limited partnership ("ALF LP");
World Omni LT, an Alabama trust (the "Origination Trust"); and World Omni 1999-A
Automobile Lease Securitization Trust, a Delaware business trust (the "Trust")
(WOFCO, Transferor, WOLS LLC, ALF LLC, ALF LP, the Origination Trust and the
Trust are referred to collectively as the "Clients"), in connection with certain
matters of Florida law arising in connection with the offering by Transferor of:
(a) $330,000,000.00 principal amount of floating rate Automobile Lease Asset
Backed Notes, Class A-1; $310,000,000.00 principal amount of floating rate
Automobile Lease Asset Backed Notes, Class A-2; $249,000,000.00 principal amount
of floating rate Automobile Lease Asset Backed Notes, Class A-3; and
$184,472,000.00 principal amount of floating rate Automobile Lease Asset Backed
Notes, Class A-4 (collectively, the "Class A Notes"); and (b) $60,927,000.00
principal amount of floating rate Automobile Lease Asset Backed Notes, Class B
(the "Class B Notes", and together with the Class A Notes, the "Notes"), to be
issued pursuant to an Indenture, dated August 1, 1999 (the "Indenture"), between
Chase Manhattan Bank Delaware, a Delaware banking corporation ("Chase") as Owner
Trustee on behalf of the Trust (the
<PAGE>
World Omni Lease Securitization, L.P.
Auto Lease Finance, L.P.
World Omni LT
August 19, 1999
Page 2
"Owner Trustee") and Harris Trust and Savings Bank, an Illinois banking
association ("Harris") as Indenture Trustee (the "Indenture Trustee"). The Trust
will be formed pursuant to a Securitization Trust Agreement dated as of August
1, 1999 (the "Securitization Trust Agreement") among Transferor, the Owner
Trustee, and the Indenture Trustee. Simultaneously with the issuance of the
Notes, pursuant to the Securitization Trust Agreement, the Trust will issue a
certificate representing the interest in the Trust not evidenced by the Notes
(the "Transferor Certificate" and together with the Notes, the "Securities").
This Opinion is solely for the benefit of and may be relied upon only
by you in connection with the transactions contemplated by the Indenture and the
Securitization Trust Agreement.
This Opinion may not be relied upon by, nor may copies be delivered to,
any other Person or used for any other purpose without our prior written consent
except as required by any bank regulatory agency.
Capitalized terms for which meanings are provided in the Indenture or
the Securitization Trust Agreement, unless otherwise defined herein, are used
herein with such meanings. The term "Florida Contract" shall refer to any of the
Contracts, in the forms attached hereto as Exhibit A, entered into on or after
October 1, 1995, in the State of Florida, and governed by the laws of the State
of Florida. All references in this Opinion to Florida Statutes ("F.S.") shall
refer to F.S. 1997, 1998 Supplement, and the Laws of 1999 in effect as of the
date hereof. As used in this Opinion, the phrase "to our knowledge" shall mean
to the actual knowledge and conscious attention of the attorneys of this firm
who are materially involved in this matter, without any further independent
investigation of any kind except as set forth herein.
We are members of the Bar of the State of Florida and do not express
any opinion with respect to the applicability of the laws of any jurisdiction
other than the State of Florida. We do not express any opinion with respect to
the application or applicability of:
(a) the securities laws, the tax laws, and the regulations of
Florida (or any other state) and the federal government
(except as provided in numbered paragraphs 1 and 2 of this
Opinion);
(b) laws or regulations relating to commodity and other futures
indices and other similar instruments;
(c) pension and employee benefit laws and regulations;
<PAGE>
World Omni Lease Securitization, L.P.
Auto Lease Finance, L.P.
World Omni LT
August 19, 1999
Page 3
(d) state or federal antitrust and unfair competition laws and
regulations;
(e) state or federal laws and regulations concerning filing and
notice requirements;
(f) fraudulent transfer and fraudulent conveyance laws; or
(g) other federal laws,
to the transactions contemplated by the Reviewed Documents (as hereinafter
defined) (the "Transactions").
DOCUMENTS REVIEWED; INVESTIGATIONS; AND ASSUMPTIONS
In connection with this Opinion, we have examined copies of the
following documents (the "Reviewed Documents"):
(a) the Securitization Trust Agreement, the Indenture and the
other Transaction Documents;
(b) the Underwriting Agreement dated August __, 1999 (the
"Underwriting Agreement"), among Transferor, ALF LP, WOFCO,
and the Underwriters;
(c) the registration statement on Form S-1 (No. 333-74455) filed
by Transferor with the Securities and Exchange Commission (the
"Commission") on March 16, 1999, pursuant to the Securities
Act of 1933, as amended (the "Act"), as amended by Amendment
No. 1 thereto filed with the Commission on August 19, 1999
(the registration statement in the amended form in which it
became effective on _________, 1999 and the related prospectus
contained therein, the "Registration Statement" and the
"Prospectus"); and
(d) the Florida Contracts.
In addition to the Reviewed Documents, we have reviewed originals or
copies certified or authenticated to our satisfaction of all such corporate
records, agreements, instruments and documents of the Clients, certificates of
public officials, any certificates provided to us by the
<PAGE>
World Omni Lease Securitization, L.P.
Auto Lease Finance, L.P.
World Omni LT
August 19, 1999
Page 4
officers of any of the Clients (the "Officer's Certificates"), and other
certificates and opinions, and have made such other investigations, as we have
deemed necessary in connection with the opinions set forth herein. In our
examination, we have assumed the capacity of natural persons, the genuineness of
all documents submitted to us as originals, the conformity to originals of all
documents submitted to us as copies, and the authenticity of the originals from
which any such copies were made, none of which assumptions have we independently
confirmed.
We have assumed without further investigation that all Officer's
Certificates (which expressly permit our reliance on such certificates) and
other information and documentation provided to us by any of the Clients are
true, complete and not misleading and that all statements and assumptions of
fact set forth therein and herein are and will remain true and valid. Each
assumption specifically described in this Opinion is made with your express
consent and approval. However, with respect to the assumptions we have made and
as to our reliance upon such matters of fact and information, to our knowledge,
there is no information that conflicts with such assumptions or that would make
such reliance unwarranted.
This Opinion is given as of the date hereof, and we expressly disclaim
any obligation to update this Opinion or to give notice to any Reliance Party or
any third party of any future changes in facts or law, including changes that
might affect the opinions set forth herein.
OPINIONS
Based on the foregoing, it is our opinion that/1:
1. The Notes as Debt; Classification as a Partnership
(a) Based upon the assumptions, authorities and reasoning set forth
below, upon their issuance in accordance with the Reviewed Documents the Class A
Notes and the Class B Notes will represent debt (i.e., will be treated as
indebtedness) under Florida law.
- ----------
1/ In rendering this opinion as of the date hereof, we are assuming that
the Transactions will occur as set forth in the versions of the
Transaction Documents (as defined in the Securitization Trust
Agreement) which have been delivered to us as of the date hereof, and
that the facts and circumstances known to us concerning the
Transactions and the parties thereto will be the same as of the date
the Transactions occur as known by us to exist as of the date hereof.
<PAGE>
World Omni Lease Securitization, L.P.
Auto Lease Finance, L.P.
World Omni LT
August 19, 1999
Page 5
Florida law references standard accepted definitions and sources in
defining the term "debt." For example, in Holman et al. v. Hollis, 94 Fla. 614
(1927), the court stated that the accepted definition of "debt" is: "That which
is due from one person to another, whether money, goods, or services; that which
one person is bound to pay to another; a thing owed." Similarly, in Turner v.
Gruver, 168 So.2d 192 (Fla. 3rd DCA 1964), after citing Holman with approval,
the court cited Black's Law Dictionary for the proposition that a debt is: "...
an obligation to pay a sum certain; or a sum which may be ascertained by simple
mathematical calculation from known facts, regardless of whether the liability
arises by contract or by operation of law." See, also, Waters' Dictionary of
Florida Law. The Notes will represent debt under all such definitions and,
accordingly, the Notes will represent debt under Florida law generally.
Cadwalder, Wickersham & Taft, special federal income tax counsel to
WOLS LP has opined and, with the consent of the Reliance Parties, we have
assumed, that the Class A Notes and the Class B Notes will represent debt rather
than equity for federal income tax purposes, and we know of no reason why we
should not so assume. Accordingly, because Florida income tax law utilizes
federal definitions and concepts, the Class A Notes and the Class B Notes will
represent debt rather than equity for Florida income tax purposes. Moreover,
because the factors utilized in distinguishing debt from equity for federal
income tax purposes are well developed and based upon standard, accepted
criteria, the Class A Notes and the Class B Notes will represent debt, rather
than equity for purposes of Florida law generally.
In addition to generally defining the term "debt", Florida law also
uses it in several specific contexts, none of which is inconsistent with finding
that the Notes represent debt for purposes of Florida law. For example, it is
clear that the Notes will represent debt for purposes of the Florida Statutes
governing attachment and garnishment. Similarly, it is clear that the Notes will
represent debt for purposes of the Florida Statutes governing fraudulent
conveyances.
A debt is distinguished from an advancement in that a debt is
founded on a valuable consideration, entails the obligation of repayment, and
confers on the creditor the right to enforce it in the courts. See 17 Fla. Jur.
2d, Decedents' Property, Section 92, citing 3 Am. Jur. 2d, Advancements, Section
2. It is clear that the Notes will be based upon valuable consideration, compel
repayment and permit enforcement in a Florida court.
In distinguishing a debt from a trust, it has been held that the
matter depends upon the manifested intention of the parties, and that, if it is
intended that the person receiving money shall have unrestricted use thereof,
being liable to pay a similar amount with or without interest, a debt is
created. Bankers Life & Casualty Co. v. Gaines Constr. Co., 199 So.2d 482 (Fla.
<PAGE>
World Omni Lease Securitization, L.P.
Auto Lease Finance, L.P.
World Omni LT
August 19, 1999
Page 6
3rd DCA 1967). It is manifestly clear on the face of the Reviewed Documents that
the Transactions contemplate the creation of a debtor-creditor relationship
between the Issuer and the holders of the Notes.
In light of the foregoing, and because the Notes will represent
unconditional promises to pay sums certain plus interest on definitely
ascertainable dates, it is our opinion that the Class A Notes and the Class B
Notes will represent debt (i.e., will be treated as indebtedness) for purposes
of Florida law.
(b) Based on the opinion set forth in subsection (a) above, and
based on the principle that Florida tax law utilizes federal tax law definitions
and concepts, we are further of the opinion that the Trust will not be
classified as an association or publicly traded partnership taxable as a
corporation under Florida law.
2. Florida Loan Rule
Although the matter is not free from doubt, and assuming that the Notes
are deemed to be debt pursuant to numbered paragraph 1 herein, if the matter
were properly presented to a Florida court having jurisdiction, and assuming
interpretation of relevant law on a basis consistent with existing authority,
such Florida court would hold that Florida Administrative Code Section
12C-1.011(1)(s) (the "Loan Rule") will not be applied so as to subject the
holders of Notes, which holders are financial organizations with absolutely no
other Florida contacts/2, to Florida income or franchise taxation solely as a
result of an investment in the Notes.
The Loan Rule provides that a financial organization is subject to
Florida income or franchise taxation if it earns or receives interest from loans
secured by real or tangible property located in Florida, even if it has no other
Florida contacts. Section 220.15(6), F.S., defines the term "financial
organization" to include any bank, trust company, savings bank, industrial bank,
land bank, safe deposit company, private banker, savings and loan association,
credit union, cooperative bank, small loan company, sales finance company and
investment company.
- ----------
2/ Other Florida contacts, which might require a different opinion than
the one given herein, might include the purchase of any other
asset-backed security from a Florida issuer, or the making of any
secured loan in Florida, or other minimal contacts, such as sending
into Florida any employee, agent or contractor, or having any affiliate
in Florida. No opinion is given herein as to such circumstances.
<PAGE>
World Omni Lease Securitization, L.P.
Auto Lease Finance, L.P.
World Omni LT
August 19, 1999
Page 7
A threshold issue is the meaning of the term "loans" under the Loan
Rule. In this regard, some guidance is provided in TAA 90(M)-005 (December 12,
1990)./3 At issue there was a Massachusetts investment company, which was to
invest in a portfolio of tax-exempt municipal securities of Florida issuers,
including the State, counties, municipalities and political subdivisions,
agencies and instrumentalities of the State of Florida. It was found that, under
the scenario described, the company would not be subject to Florida income
taxation. It also was noted that, should the company obtain any loans secured by
real or tangible property located in Florida, the company would become subject
to Florida income tax.
The class of securities described in the TAA includes some that might
be secured by real or tangible property located in Florida, such as industrial
development bonds. Thus, the TAA suggests a distinction between bonds or other
debt securities, which should not be subject to the Loan Rule, and loans arising
out of more traditional commercial settings, which would be subject to the Loan
Rule.
Such a distinction was further suggested by TAA 93(M)-003 (April 2,
1993). At issue there was a Massachusetts Business Trust, which included a fund
invested in tax-exempt municipal securities of Florida issuers. The TAA noted
that the Fund would become subject to Florida income taxation if the Fund held
loans secured by mortgages, deeds of trust, or other liens upon real or tangible
personal property located in Florida. However, the TAA then noted that:
"Investment in Florida Bonds, including general obligation bonds ('GOs'),
revenue bonds ('RBs'), and industrial revenue bonds ('IRBs') will not in itself
subject the Fund to Florida income tax. While these bonds may be secured, the
investment in these publicly traded bonds is to be distinguished from a private
loan secured by a mortgage, deed of trust, or other lien upon real or tangible
personal property located within Florida."
- ----------
3/ A Technical Assistance Advisement or TAA is a particular response by
the Florida Department of Revenue to an inquiry made by a particular
taxpayer, and generally may not be relied upon by any other taxpayer.
However, the reasoning of a particular TAA may be instructive.
<PAGE>
World Omni Lease Securitization, L.P.
Auto Lease Finance, L.P.
World Omni LT
August 19, 1999
Page 8
A similar distinction, one between bonds and notes arising in
traditional commercial transactions, has been made under Rev. Rul. 79-251.
1979-2 Cum. Bull. 271. The Ruling considered a taxpayer, which purchased
mortgage-backed, pass-through trust certificates, and which would have been
subject to tax if it were deemed to be receiving interest from mortgage notes.
However, the Ruling determined that, in part because the certificates were
freely transferrable, the certificates were bonds rather than notes; the
taxpayer was not subject to federal income tax, because it was receiving
interest on a bond rather than interest on the underlying mortgage notes./4
A similar distinction has been made under the federal and Florida
securities laws. Although the applicable statutes treat notes as securities,
applicable case law has created a distinction between securities and certain
notes arising in traditional commercial settings. See Reves v. Ernst & Young,
110 S.Ct. 945 (1990); Chemical Bank v. Arthur Andersen & Co., 726 F.2d 930 at
939 (CA2 1984); Hunssinger v. Rockford Business Credits, Inc., 745 F.2d 484, 488
(CA7 1984); Exchange Nat'l Bank of Chicago v. Touche Ross & Co., 544 F.2d 1126,
1137 (CA2 1976); Juanita McClure v. First National Bank of Lubbock, Texas, 497
F.2d 490, 492-494 (1974); and State v. Fried, 357 So.2d 211 (1978). In our
opinion the Notes would be treated as a security rather than a mere note under
the federal and Florida securities laws.
Although the TAA and the Loan Rule might be interpreted differently,
the most rational and compelling interpretation is that which differentiates
between obligations evidenced by bonds or other debt instruments, defined as
"securities" under federal and Florida securities laws, which should be subject
to the Loan Rule, and loans arising in more traditional commercial settings,
which might be subject to the Loan Rule. Moreover, such a distinction would
likely provide a basis for preserving the Loan Rule from invalidation on
constitutional grounds, discussed below.
The Loan Rule is subject to constitutional attack both under the Due
Process Clause of the Fourteenth Amendment to the U.S. Constitution and under
the Commerce Clause (Article I, sec. 8, cl. 3 of the U.S. Constitution). Both
the Due Process and the Commerce Clauses require that there be some connection
or "nexus" between a state and a person sought to be taxed by the state, and
both
- ----------
4/ Also of note is the fact that the Ruling dealt with a pass-through,
"grantor" trust. Although each beneficiary of a grantor trust generally
is "treated as the owner" of a portion of the trust, the Ruling did not
extend the legal "fiction" so as to treat the taxpayer as the owner of
and the recipient of interest on any of the underlying mortgages (the
trust assets).
<PAGE>
World Omni Lease Securitization, L.P.
Auto Lease Finance, L.P.
World Omni LT
August 19, 1999
Page 9
of those nexus requirements were recently reviewed by the U.S. Supreme Court in
Quill Corporation v. North Dakota, 112 S.Ct. 1904 (1992).
The nexus requirement under the Due Process Clause is the more easily
met of the two nexus requirements. Generally, it will be met if a person
purposefully directs its activities towards the residents of a state, so as to
establish some definite link or minimum connection with the state, such that the
person has fair warning that it may be subject to the jurisdiction of the state
and such that requiring the person to defend a suit in the state would be
reasonable and would not offend traditional notions of fair play and substantial
justice. See Quill, at pages 1909 through 1911, and the cases therein cited.
It seems questionable to suggest that a single purchase of a single
security in a nationally marketed public offering (or in a private offering
derivative to such nationally distributed public offering) constitutes
purposeful direction of one's activities toward Florida residents, or otherwise
establishes a definite link or minimal connection with the State of Florida, so
as to give one fair warning and cause it to be reasonable and inoffensive to
require one to defend a suit in the State of Florida.
While the Due Process Clause focuses on concerns over fundamental
fairness, the Commerce Clause is concerned with the effects of state regulation
on the national economy. Accordingly, the nexus requirement under the Commerce
Clause is different from and more stringent than the nexus requirement under the
Due Process Clause. Under the Commerce Clause, there must, among other things,
be a "substantial nexus" between the person and the state and a tax must be
"fairly related" to services provided by the state. See Quill, at pages 1911 et
seq., and the cases there cited, including Complete Auto Transit, Inc. v. Brady,
430 U.S. 274 (1977).
At issue in Quill was a North Dakota law which on its face imposed a
use tax collection duty on every vendor who advertised in North Dakota three
times in a single year. The Supreme Court stated that the North Dakota law
illustrated well how a state tax might unduly burden interstate commerce. See
Quill, at footnote 6, and accompanying text.
The Loan Rule is subject to the same objections as the North Dakota law
found to be unconstitutional in Quill. The Supreme Court found it unreasonably
burdensome that the North Dakota law required only three contacts per year. On
its face, the Loan Rule requires only one contact with Florida at any time. The
Supreme Court found it unreasonably burdensome that the North Dakota law might
subject a person to similar laws in multiple jurisdictions, thus leading to a
plethora of filing requirements. The same is true of the Loan Rule. Moreover, it
is also true that
<PAGE>
World Omni Lease Securitization, L.P.
Auto Lease Finance, L.P.
World Omni LT
August 19, 1999
Page 10
the Loan Rule presents the very real possibility of a person being subjected to
multiple taxation. In addition, without diminishing the significance of the
interests which the Supreme Court protected in Quill, we note that the free flow
of credit and free access to sources of credit are of particular and vital
importance to interstate commerce and the national economy. The Loan Rule might
strangle that flow by making it more difficult, more expensive or, in some
cases, perhaps even impossible to access national or regional credit markets
through public offerings of securities or through nationally or regionally
marketed private placements of securities./5
The dubious constitutional status of the Loan Rule is exacerbated by
its uncertain scope and its uncertain statutory underpinning./6 For example,
although it may be argued that the concept of "doing business" in Florida, for
purposes of the Florida income and franchise tax, need not be entirely the same
as the concept of "transacting business" in Florida, for purposes of the Florida
intangible tax, it is nevertheless of note that Section 199.175(b)3, F.S., an
intangible tax statute, provides that the "ownership of any interest in a
participation or syndication loan or pool of loans, notes, or receivables shall
not be sufficient to support a finding that the owner of such interest is
transacting business" in Florida.
Under the circumstances, a Florida court should determine that it is
entitled to the benefit of a clear and reasonable statute, rather than a vague
and questionable administrative pronouncement, and should refuse to enforce the
Loan Rule pending some specific action on the part of the Florida legislature.
- ----------
5/ The Loan Rule also might fail under the Commerce Clause by causing the
tax to be "discriminatory" against interstate commerce because it is
not "fairly apportioned." For example, on its face, the Loan Rule might
cause all of the income from a loan to be apportioned to Florida, even
if only a very small part of the security for the loan consists of
Florida real or tangible property.
6/ It is true that Section 220.15, F.S., includes somewhat similar
provisions relating to financial organizations. However, it is an
apportionment statute, which presupposes that the financial
organizations are subject to tax. It does not address the nexus issue.
It is interesting to note, however, that its provisions include some
which are at least partially consistent with those of the intangible
tax statute discussed in the text following this footnote.
<PAGE>
World Omni Lease Securitization, L.P.
Auto Lease Finance, L.P.
World Omni LT
August 19, 1999
Page 11
Further, even if the Notes were deemed to be loans for purposes of the
Loan Rule, and even if the Loan Rule were upheld on constitutional grounds, the
Notes should not be taxable under the Loan Rule since the Notes are not secured
directly by real or tangible personal property located in Florida. The holders
of the Notes merely have a beneficial interest in the Trust which in turn has a
beneficial interest in the Origination Trust. Consequently, the corpus of the
Origination Trust does contain vehicles, some of which are located in Florida,
the Notes are not directly secured by those vehicles.
Our opinions in this numbered paragraph 2 are limited to the possible
subjugation of the holders of Notes, which holders are financial organizations
with no other Florida contacts, to Florida income or franchise taxation solely
as a result of their investment in the Notes. The opinions in this numbered
paragraph 2 do not purport to deal with any other aspect of the Florida tax
laws, do not address the tax consequences to any other natural or other person
or persons, and do not address any federal tax consequences, any other state tax
consequences or any local tax consequences.
We hereby consent to the filing of this Opinion as an exhibit to the
Registration Statement. We also consent to the use of our name under the
headings "Legal Matters" and "Material Income Tax Considerations - Florida
Income Taxation" in the Prospectus constituting part of the Registration
Statement.
The opinions expressed herein are limited to the matters expressly set
forth herein, and no opinion is to be inferred or implied beyond the matters so
stated. Captions used in this Opinion are for convenience only, and should not
be regarded as having any independent meaning. The foregoing Opinion is
expressly subject to there being no material change in the law after the date
hereof.
Very truly yours,
ENGLISH, McCAUGHAN & O'BRYAN, P.A.
By: /s/ Judith L. Keiser
-----------------------------------
Judith L. Keiser, Vice President
EXHIBIT 10.4
(All Float)
- --------------------------------------------------------------------------------
AUTO LEASE FINANCE L.P.,
VT INC.,
AS TRUSTEE OF WORLD OMNI LT,
AND
FOR CERTAIN LIMITED PURPOSES ONLY
U.S. BANK NATIONAL ASSOCIATION
(FORMERLY KNOWN AS FIRST BANK NATIONAL ASSOCIATION AND SUCCESSOR
TRUSTEE TO BANK OF AMERICA ILLINOIS)
SUPPLEMENT 1999-A TO THE
TRUST AGREEMENT
DATED AS OF AUGUST 1, 1999
- --------------------------------------------------------------------------------
This instrument prepared by:
Charles A. Sweet
Williams & Connolly
725 Twelfth Street
Washington, D.C. 20005
202-434-5000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
RECITALS................................................................................................1
Part X. DEFINITIONS.................................................................................3
Section 10.01. Definitions........................................................................3
Section 10.02. Rights in Respect of 1999-A SUBI..................................................13
Part XI. CREATION OF 1999-A SUBI....................................................................14
Section 11.01. Initial Creation of 1999-A SUBI Portfolio and 1999-A SUBI.........................14
Section 11.02. Subsequent Additions to 1999-A SUBI Portfolio.....................................15
Section 11.03. Issuance and Form of the 1999-A SUBI Certificate..................................16
Section 11.04. Actions and Filings...............................................................16
Section 11.05. Termination of 1999-A SUBI........................................................17
Section 11.06. Merger or Consolidation of Trustee................................................17
Section 11.07. Representations and Warranties of Trustee.........................................17
Section 11.08. Other SUBIs.......................................................................18
Section 11.09. Minimum Net Worth.................................................................18
Part XII. SUBI ACCOUNTS..............................................................................18
Section 12.01. 1999-A SUBI Collection Account....................................................18
Section 12.02. 1999-A SUBI Lease Account.........................................................19
Section 12.03. Servicer Calculations.............................................................20
Part XIII. MISCELLANEOUS PROVISIONS................................................................20
Section 13.01. Amendment, Etc....................................................................20
Section 13.02. Governing Law.....................................................................20
Section 13.03. Notices...........................................................................21
Section 13.04. Severability of Provisions........................................................21
Section 13.05. Effect of Supplement on Trust Agreement...........................................21
Section 13.06. Successors and Assigns............................................................22
EXHIBITS:
EXHIBIT A - Schedule of 1999-A Leases and 1999-A Leased
Vehicles as of the Initial Cutoff Date........................................... A-1
EXHIBIT B - Form of 1999-A SUBI Certificate.......................................................... B-1
EXHIBIT C - Forms of 1999-A Leases .................................................................. C-1
</TABLE>
i
<PAGE>
SUPPLEMENT 1999-A TO
TRUST AGREEMENT
SUPPLEMENT 1999-A TO TRUST AGREEMENT (the "Supplement"), dated and
effective as of August 1, 1999, among AUTO LEASE FINANCE L.P., a Delaware
limited partnership ("ALF LP" or, in its capacity as grantor, the "Grantor" and
in its capacity as beneficiary, the "Beneficiary"), VT INC., an Alabama
corporation, as trustee (in such capacity, together with any successor or
permitted assign, the "Trustee"), and for certain limited purposes only, U.S.
BANK NATIONAL ASSOCIATION, a national banking association (formerly known as
First Bank National Association and successor to Bank of America Illinois, an
Illinois banking corporation) (together with any predecessor or successor,
("U.S. Bank").
RECITALS
A. The Grantor, the Trustee and U.S. Bank have entered into that
certain Second Amended and Restated Trust Agreement dated as of July 1, 1994
(amending and restating that certain original Trust Agreement among Auto Lease
Finance, Inc., a Delaware corporation ("ALFI" or, in its capacity as initial
grantor, the "Initial Grantor"), the Trustee and U.S. Bank dated as of November
1, 1993, and that certain Amended and Restated Trust Agreement dated as of June
1, 1994 among the Initial Grantor, the Grantor, the Trustee and U.S. Bank, as
amended by that certain Amendment No. 1 to Second Amended and Restated Trust
Agreement dated as of November 1, 1994 among the same parties and as amended by
that certain Amendment No. 2 to Second Amended and Restated Trust Agreement
dated as of September 23, 1998 among the same parties (as so amended and
restated, and as it may be further amended, supplemented or modified, the "Trust
Agreement"), pursuant to which the Initial Grantor and the Trustee formed World
Omni LT, an Alabama trust (the "Trust"), for the purpose of taking assignments
and conveyances of, holding in trust and dealing in, various Trust Assets (as
defined in the Trust Agreement) in accordance with the Trust Agreement. The
Initial Grantor and World Omni Financial Corp. ("WOFCO"), the sole parent of
ALFI, have entered into that certain Limited Partnership Agreement dated as of
June 1, 1994, as amended and restated by that certain Amended and Restated
Limited Partnership Agreement dated as of July 1, 1994, pursuant to which the
Grantor was created and ALFI contributed to the Grantor all of its right, title
and interest in and to the Trust both as Initial Grantor and as the Initial
Beneficiary thereof.
B. On September 23, 1998, ALFI was merged with and into Auto Lease
Finance, LLC ("ALF LLC"), a Delaware single member limited liability company the
sole member of which is WOFCO, pursuant to that certain Assignment of General
Partnership Interest and Amendment to Amended and Restated Limited Partnership
Agreement of Auto Lease Finance L.P. dated as of September 23, 1998 among the
WOFCO, ALFI and ALF LLC and that certain Certificate of Merger dated September
23, 1998 filed by WOFCO with the Secretary of State for the State of Delaware
whereby ALF LLC succeeded to all of the rights and obligations of ALFI,
including but not limited to those as general partner of ALF LP, as reflected in
the Amended and Restated Certificate of Limited Partnership of ALF LP filed with
the Delaware Secretary of State as of September 23, 1998.
C. The Trustee, on behalf of the Trust, and WOFCO (in its capacity as
servicer, the "Servicer") also have entered into that certain Second Amended and
Restated Servicing Agreement dated as of July 1, 1994, as amended by that
certain Amendment No. 1 to Second Amended and Restated Servicing Agreement dated
as of September 23, 1998, among the same parties (as the same has been amended
and may be further amended, supplemented or modified, the "Servicing
Agreement"), amending and restating that certain original Servicing Agreement
dated as of November 1, 1993, and that certain Amended and Restated Servicing
Agreement dated as of June 1, 1994, which provides, among other things, for the
servicing of the Trust Assets by the Servicer.
D. The Trust Agreement contemplates that, from time to time the
Trustee, on behalf of the Trust and at the direction of the Beneficiary, will
identify and allocate on the Trust's books and records
1
<PAGE>
certain Trust Assets within a separate SUBI Portfolio (as defined in the Trust
Agreement) and create and issue to the Beneficiary a separate special unit of
beneficial interest in the Trust or "SUBI" (as defined in the Trust Agreement),
whose beneficiaries generally will be entitled to the net cash flow arising
from, but only from, the related SUBI Portfolio (as defined in the Trust
Agreement), all as set forth in the Trust Agreement.
E. The parties hereto desire to supplement the terms of the Trust
Agreement to cause the Trustee to identify and allocate such a SUBI Portfolio
(the "1999-A SUBI Portfolio") and to create and issue to the Beneficiary a SUBI
Certificate (as defined in the Trust Agreement) (such SUBI Certificate, together
with any replacements thereof, the "1999-A SUBI Certificate") that evidences a
100% beneficial interest in the related SUBI (the "1999-A SUBI"), and to set
forth the terms and conditions thereof.
F. Concurrently herewith, the Beneficiary and World Omni Lease
Securitization L.P. (the "Transferor") are entering into that certain SUBI
Certificate Purchase and Sale Agreement dated as of August 1, 1999 (as it may be
amended, modified or supplemented from time to time, the "SUBI Certificate
Agreement"), pursuant to which the Beneficiary will sell to the Transferor,
without recourse, all of the Beneficiary's right, title and interest in and to
the 1999-A SUBI and the 1999-A SUBI Certificate, all moneys due thereon and paid
thereon or in respect thereof and the right to realize on any property that may
be deemed to secure the 1999-A SUBI, and all proceeds thereof, all in
consideration of the cash payment to the Beneficiary of an amount equal to the
Aggregate Net Investment Value (as defined in the Securitization Trust
Agreement, as defined below) of the 1999-A SUBI Portfolio as of the Initial
Cutoff Date (as defined below).
G. Also concurrently herewith, and as contemplated by the Servicing
Agreement and the Trust Agreement, the Transferor, Chase Manhattan Bank
Delaware, as owner trustee (in such capacity, and not individually, together
with its successors and assigns, the "Owner Trustee") and Harris Trust and
Savings Bank, as indenture trustee (the "Indenture Trustee") are entering into
that certain Securitization Trust Agreement dated as of August 1, 1999 (as it
may be amended, modified or supplemented from time to time, the "Securitization
Trust Agreement"), pursuant to which the 1999-A SUBI Certificate representing a
100% beneficial interest in the 1999-A SUBI will be transferred by the
Transferor to the World Omni 1999-A Automobile Lease Securitization Trust (the
"Securitization Trust") in connection with a Securitized Financing (as defined
in the Trust Agreement).
H. Also concurrently herewith, the Indenture Trustee and the
Securitization Trust, are entering into that certain Indenture dated as of
August 1, 1999 (the "Indenture") pursuant to which, among other things, the
Securitization Trust will issue the Notes (as defined in the Indenture) and the
Securitization Trust will grant a security interest to the Indenture Trustee
with respect to all of the assets held by the Securitization Trust, including
the 1999-A SUBI Certificate.
I. Also concurrently herewith, the Trustee, on behalf of the Trust, and
the Servicer also are entering into that certain Supplement 1999-A to Servicing
Agreement dated as of August 1, 1999 (the "Servicing Supplement") pursuant to
which, among other things, the terms of the Servicing Agreement will be
supplemented insofar as they apply to the 1999-A SUBI Portfolio, providing for
further specific servicing obligations that will benefit the holder of the
1999-A SUBI Certificate and the parties to the Securitized Financing (as defined
in the Trust Agreement) contemplated by the Securitization Trust Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained and in the Trust Agreement, the parties hereto agree
to the following supplemental obligations and provisions with regard to the
1999-A SUBI Portfolio:
2
<PAGE>
Part X. DEFINITIONS
Section 10.01. Definitions.
For all purposes of this Supplement, except as otherwise expressly
provided or unless the context otherwise requires, (a) unless otherwise defined
herein, all capitalized terms used herein shall have the meanings attributed to
them by the Trust Agreement, (b) the capitalized terms expressly defined in this
Supplement have the meanings assigned to them in this Supplement and include (i)
all genders and (ii) the plural as well as the singular, (c) all references to
words such as "herein", "hereof" and the like shall refer to this Supplement as
a whole and not to any particular article or section within this Supplement, (d)
the term "include" and all variations thereon shall mean "include without
limitation", and (e) the term "or" shall include "and/or".
"Accountant" means a Person qualified to pass upon accounting
questions, whether or not (unless herein required to be Independent) such person
shall be an officer or employee of the Grantor, the Trust or the Transferor or
of an Affiliate thereof.
"Additional Loss Amount" means, with respect to any Collection Period,
all payments (including any indemnification or reimbursement of the Trustee or
any Trust Agent) with respect to Claims by Persons other than the Trustee, the
Trust Agent, the Servicer, the Indenture Trustee, the Owner Trustee, the
Certificateholder, and any other beneficiary of the Trust against or with
respect to the 1999-A SUBI Assets paid during that Collection Period, including
reasonable fees and expenses of attorneys incurred in defending or settling such
Claims, all as allocated by the Trustee pursuant to Section 7.01(c) of the Trust
Agreement, and the amount of reserves for future possible such payments that the
Servicer, on behalf of the Trustee, deems advisable (after consultation with
Independent Accountants) to retain in the 1999-A SUBI Collection Account out of
moneys that otherwise would constitute Collections for that Collection Period.
"Administrative Expense" means any reasonable administrative cost or
expense associated with the Trust, including reasonable fees and expenses of
attorneys and accountants (other than such fees and expenses as constitute an
Additional Loss Amount).
"Advance" means those advances required or permitted to be made by the
Servicer pursuant to Section 9.04 of the Servicing Supplement.
"ALFI" has the meaning set forth in Recital A.
"ALF LLC" has the meaning set forth in Recital B.
"ALF LP" has the meaning set forth in the Preamble.
"Amortization Period" has the meaning set forth in the Securitization
Trust Agreement.
"Backup Security Agreement" means that certain Backup Security
Agreement dated as of August 1, 1999, among WOFCO, the Grantor, the Trustee on
behalf of the Trust, the Transferor and the Securitization Trustee on behalf of
the Securitization Trust, as it may be amended, supplemented or modified from
time to time.
"Bankrupt Lease" means a Lease as to which a voluntary or involuntary
case has commenced against the related Obligor under the federal bankruptcy
laws, as now or hereafter in effect, or under another present or future federal
or State bankruptcy, insolvency or similar laws, after the date of origination
of the related Lease.
"Beneficiary" has the meaning set forth in the Preamble.
3
<PAGE>
"Booked Residual Value" means the stipulated fair market value of a
1999-A Leased Vehicle as of the Maturity Date of the related 1999-A Lease, as
originally set forth on the face of the 1999-A Lease, and as subsequently
adjusted to reflect any additional scheduled Monthly Lease Payments added by
virtue of any non-credit-related extension of the Maturity Date pursuant to
Section 2.02(b)(ii) of the Servicing Agreement and Section 9.02(a) of the
Servicing Supplement.
"Capped Contingent and Excess Liability Premiums" means, as of any
Deposit Date, an amount sufficient to pay the premiums then due on the portion
of any Contingent and Excess Liability Insurance Policies allocable to the
1999-A SUBI Portfolio, provided, however, that to the extent that the portion of
such amount allocable to the 1999-A SUBI Certificate, together with all such
portions since the beginning of the calendar year, exceeds $[__________], such
portion shall not constitute a Capped Contingent and Excess Liability Premium
but instead shall constitute an "Uncapped Administrative Expense" (as defined in
the Securitization Trust Agreement).
"Capped Origination Trust Administrative Expenses" means, as of any
Deposit Date, Administrative Expenses with respect to the Trust due on or before
such Deposit Date as are allocable to the 1999-A SUBI Portfolio, but
specifically not including any premiums on any portion of the Contingent and
Excess Liability Insurance Policies allocable to the 1999-A SUBI Portfolio;
provided, however, that to the extent the portion of such Administrative
Expenses allocable to the 1999-A SUBI Certificate, together with all such
portions since the beginning of the calendar year, exceeds $[__________], such
portion shall not constitute a Capped Origination Trust Administrative Expense
but instead shall constitute an "Uncapped Administrative Expense" (as defined in
the Securitization Trust Agreement).
"Certificateholder" has the meaning set forth in the Securitization
Trust Agreement.
"Certificate" has the meaning set forth in the Securitization Trust
Agreement.
"Charged-off Lease" means a Lease (a) with respect to which the related
Leased Vehicle has been repossessed and sold or otherwise disposed of, or (b)
the Lease has been written off by the Servicer in accordance with its normal
policies for writing off lease contracts other than with respect to
repossessions and Early Termination Leases.
"Closing Date" means September [__], 1999.
"Collection Period" means, with respect to any Distribution Date, the
period from and including the first day of the calendar month immediately
preceding the calendar month in which such Distribution Date occurs (or, with
respect to the first Distribution Date, from and including the Initial Cutoff
Date) to and including the last day of the calendar month immediately preceding
the calendar month in which the Distribution Date occurs.
"Collections" means, with respect to any Collection Period, all
collections received on or in respect of the 1999-A Leases and 1999-A Leased
Vehicles in respect of that Collection Period, including the following, but
subject to any limitations set forth therein: (i) Monthly Lease Payments
(including amounts that previously were Payments Ahead but which became due
during that Collection Period, Prepayments, Extension Fees, and any other
payment by an Obligor under a 1999-A Lease); (ii) Net Matured Leased Vehicle
Proceeds, Net Repossessed Vehicle Proceeds, and all other Net Liquidation
Proceeds; (iii) any Net Insurance Proceeds not included in Net Liquidation
Proceeds; (iv) Advances; and (v) any Undistributed Transferor Excess Collections
with respect to the Distribution Date occurring during that Collection Period;
provided, however, that Collections (A) shall in no event include proceeds of
claims made under the Residual Value Insurance Policy, and (B) shall in no event
include, and shall be net of, the following, which shall be retained in the
1999-A SUBI Collection Account or paid to the appropriate party: (1) any portion
of any of the foregoing that represents late payment charges, or collections
allocable to payments to be made by Obligors for payment of insurance premiums,
excise
4
<PAGE>
taxes or similar items; (2) Payments Ahead; (3) the amount of all Advances,
Matured Leased Vehicle Expenses, Repossessed Vehicle Expenses and other
Liquidation Expenses, and Insurance Expenses reimbursed pursuant to Section
9.02(g) of the Servicing Supplement; (4) Additional Loss Amounts; and (5) any
amounts required to be retained in the 1999-A SUBI Collection Account in order
to maintain that account in good standing.
"Contingent and Excess Liability Insurance Policy" means [that certain
policy numbered 5353934 issued to the Servicer and the Trustee, on behalf of the
Trust, by Lexington Insurance Company and that certain policy numbered BE
932-41-16 issued to the Servicer and the Trustee on behalf of the Trust by
National Union Fire Insurance Company of Pittsburgh, PA and that certain policy
numbered XLUMB-00260 issued to J.M. Family Enterprises, Inc. by X.L. Insurance
Company, Ltd. with the Origination Trustee named as an additional insured or
loss payee], plus all excess or umbrella policies from time to time issued with
the Origination Trustee named as an additional insured or loss payee, in each
case to the extent applicable to any 1999-A Lease or 1999-A Leased Vehicle.
"Contract Rights" means all of the Trustee's right, title, and interest
in, to, and under any 1999-A Leases and the proceeds therefrom, which right,
title, and interest include without limitation: the Lease Documents; all Monthly
Lease Payments received on or due on or after the related Cutoff Date; Security
Deposits paid by any Obligor to secure the obligations of such Obligor to the
Obligee in the amount and to the extent provided in the related 1999-A Lease;
partial prepayments and Prepayments (regardless of whether made by the related
Obligor or by any other Person) received on or after the related Cutoff Date and
Matured Leased Vehicle Proceeds, Repossessed Vehicle Proceeds and other
Liquidation Proceeds and Insurance Proceeds received on or after the related
Cutoff Date; subject, however, to the limitations set forth in Section 11.01(a).
"Credit and Collection Policy" means those lease origination and credit
and collection policies and practices of the Servicer as applied by the Servicer
with respect to Leases and Leased Vehicles.
"Cutoff Date" means the Initial Cutoff Date or a Subsequent Cutoff
Date, as the context may require.
"Defaulted Lease" means a Lease (a) as to which any Monthly Lease
Payment or part thereof in excess of $40.00, remains unpaid for more than 90
days from the original due date for such payment, or (b) that is a Charged-off
Lease.
"Delinquent Lease" means, with respect to any Lease as of any Due Date,
a Lease as to which all or any part of a Monthly Lease Payment in excess of
$40.00 is unpaid (including without limitation because of a check being returned
for insufficient funds) 61 days or more after its Due Date (other than a
Defaulted Lease or a Lease as to which an extension has been granted with
respect to such Due Date by the Servicer pursuant to clause (ii) of Section
2.02(b) of the Servicing Agreement) (and, if applicable, Section 9.02(a) of the
Servicing Supplement).
"Deposit Date" means, with respect to a Collection Period, the Business
Day preceding the related Distribution Date.
"Discount Rate" means [____]% per annum.
"Discounted Lease" means a 1999-A Lease with a Lease Rate of less than
[____]%.
"Discounted Principal Balance" means (i) with respect to any 1999-A
Lease that is a Discounted Lease, an amount equal to the present value of the
sum of all remaining Monthly Lease Payments on such Lease paid on a timely
basis, plus the Booked Residual Value of the related 1999-A Leased Vehicle,
calculated by discounting such Monthly Lease Payments and Booked Residual Value
by the Discount Rate, and (ii) with respect to any other 1999-A Lease, its
Outstanding Principal Balance at such time.
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"Distribution Date" has the meaning set forth in the Securitization
Trust Agreement.
"Due Date" means, as to any Monthly Lease Payment, the date during each
month upon which such payment is due, which date is specified in the related
1999-A Lease.
"Early Termination Lease" means a 1999-A Lease which is terminated
prior to its Maturity Date in connection with the retention of the related
1999-A Leased Vehicle by the Obligor or the Obligee, by the Servicer accepting
payment (excluding payments in the form of non-cash items) of less than 100% of
the Outstanding Principal Balance of a 1999-A Lease; provided, however, that
such agreement is part of a lease termination program sponsored by WOFCO (or the
Servicer, if other than WOFCO) specifically for the purpose of mitigating
residual value losses, and not primarily for any other purpose, and pursuant to
which WOFCO or the Servicer offers incentives to terminate such a 1999-A Lease
prior to its Maturity Date; and provided, further, that such a 1999-A Lease will
not constitute an Early Termination Lease if such deficit is less than $200.00.
"Eligible Account" means either (a) an account that is maintained with
a depository institution or trust company organized under the laws of the United
States or of any State, the commercial paper or other short-term unsecured debt
obligations of which have credit ratings from Moody's at least equal to "P-1"
(so long as Moody's is a Rating Agency), from Standard & Poor's at least equal
to "A-1" (so long as Standard & Poor's is a Rating Agency) and if such
commercial paper or short term unsecured debt obligations are rated by Fitch,
credit ratings from Fitch at least equal to "F-1" (so long as Fitch is a Rating
Agency); or (b) a segregated trust account bearing a designation clearly
indicating that funds deposited therein are held in trust for the benefit of the
Noteholders, the holders of the 1999-A SUBI Certificate or the
Certificateholder, as the case may be, maintained in the corporate trust
department of a depositary institution or trust company organized under the laws
of the United States or of any State and having corporate trust powers, which
institution or trust company has a rating from Moody's for its long term
deposits of at least Baa3 (so long as Moody's is a Rating Agency).
"Eligible Lease" means a Lease as to which the following are true as of
the Closing Date or Transfer Date, as applicable (unless otherwise specified
below):
(a) that was originated by a Dealer (i) in the ordinary course
of its business, (ii) on a form of Lease attached as Exhibit C, (iii)
pursuant to a form of Dealer Agreement which provides for recourse to
the Dealer in the event of certain defects in the Lease but not for
default by the Obligor, and (iv) in compliance with the Credit and
Collection Policy;
(b) which Lease and the related Leased Vehicle are owned by
the Trustee, on behalf of the Trust, free of all Liens (including tax
liens, mechanics' liens and liens that arise by operation of law, but
other than any lien on the title of such Vehicle noted solely to
provide for delivery of title documentation to the Trustee or its
designee);
(c) that was originated in compliance with, and complies with,
all material applicable legal requirements, including, to the extent
applicable, the Federal Consumer Credit Protection Act, as amended,
Regulations M and Z of the Board of Governors of the Federal Reserve
System, as amended, all state leasing and consumer protection laws and
all state and federal usury laws;
(d) as to which all material consents, licenses, approvals or
authorizations of, or registrations or declarations with, any
governmental authority required to be obtained, effected or given by
the originator of such Lease in connection with (i) the origination of
such Lease, (ii) the execution, delivery and performance by such
originator of such Lease, and (iii) the acquisition by the Trustee, on
behalf of the Trust, of such Lease and the related Leased Vehicle, have
been duly obtained, effected or given and are in full force and effect
as of such date of creation or acquisition;
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(e) that is the legal, valid and binding full-recourse payment
obligation of the Obligor thereunder, enforceable against such Obligor
in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws, now or hereafter in effect, affecting
the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);
(f) that, to the knowledge of the Servicer, is not subject to
any right of rescission, setoff, counterclaim or any other defense
(including defenses arising out of violations of usury laws) of the
Obligor thereof to payment of the amounts due thereunder, and no such
right of rescission, setoff, counterclaim or other defense has been
asserted or threatened;
(g) as to which each of the originator of such Lease, the
Servicer and the Trustee, on behalf of the Trust, have each satisfied
all obligations required to be fulfilled on its part with respect to
such Lease and the related Leased Vehicle;
(h) that is payable solely in United States dollars in the
United States;
(i) the Obligor of which is a Person located in one or more of
the 50 states of the United States, the District of Columbia or a
territory of the United States and is not (i) ALF LLC (or its
predecessor), the Grantor, World Omni Lease Securitization, LLC (or its
predecessor) or the Transferor, or an Affiliate thereof or (ii) the
United States of America or any state or local government or any agency
or political subdivision thereof;
(j) that requires the Obligor thereunder to maintain insurance
against loss or damage to the related Leased Vehicle under an insurance
policy that names the Trustee, on behalf of the Trust, as loss payee,
and the related Leased Vehicle is covered by the Residual Value
Insurance Policy;
(k) the related Leased Vehicle of which is titled in the name
of the Trustee on behalf of the Trust (or properly completed
applications for such title have been submitted to the appropriate
titling authority) and all transfer and similar taxes imposed in
connection therewith have been paid;
(l) that arises under a closed-end Lease that (i) requires
equal monthly payments to be made within a fixed time period from the
date of origination of such Lease, such time period to be at least 24
months and no more than 60 months, and (ii) requires such payments to
be made by the Obligor thereof within 30 days after the billing date
for such payment;
(m) that is fully assignable and that does not require the
consent of the Obligor thereunder as a condition to any transfer, sale
or assignment of the rights of the originator under such Lease;
(n) as to which the Booked Residual Value of the related
Vehicle does not exceed the lesser of (i) $60,000, and (ii) the amount
reasonably established by the Servicer consistent with its policies and
practices regarding the setting of residual values as applied with
respect to closed-end retail automobile and light duty truck leases;
(o) that, as of the related Cutoff Date, has not been extended
by more than five months in the aggregate or been otherwise
compromised, adjusted or modified except in accordance with the Credit
and Collection Policy;
(p) as to which the Obligor thereof has not made a claim under
the Soldiers' and Sailors' Relief Act of 1940;
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(q) that satisfies all applicable requirements of the Credit
and Collection Policy;
(r) that is not allocated to any other SUBI Portfolio other
than the 1999-A SUBI Portfolio;
(s) that, as of the related Cutoff Date, is not a Delinquent
Lease, a Defaulted Lease or a Bankrupt Lease;
(t) that is a finance lease for purposes of generally accepted
accounting principles, consistently applied;
(u) that is a "true lease", as opposed to a lease intended as
security, under the laws of the State in which it was originated;
(v) as to which the Servicer has not exercised any right of
set off against the originating Dealer as contemplated by Section
2.01(b)(ii)(A) of the Servicing Agreement;
(w) the related Leased Vehicle of which was produced by the
original manufacturer to U.S. specifications and standards, as
evidenced by the vehicle identification number which is within the
approved series for the make and model at the time of origination of
the Lease;
(x) the related Leased Vehicle of which has not been used
commercially as a taxi cab, public omnibus, livery, sightseeing
conveyance or for any carrying of goods or passengers for hire; and
(y) which Lease, as of the related Cutoff Date, (i) is written
with respect to a Leased Vehicle that was, at the time of origination
of the Lease, a new vehicle, a dealer demonstrator vehicle driven fewer
than 6,000 miles, or a manufacturer's program vehicle; (ii) was
originated in the United States after November 1, 1993 (in the case of
Leases allocated to the 1999-A SUBI Portfolio as of the Initial Cutoff
Date) or on or before September 30, 2000 (in the case of Leased
Vehicles allocated to the 1999-A SUBI Portfolio as of a Subsequent
Cutoff Date); (iii) has a Maturity Date on or after May 1, 2000 and no
later than February 28, 2004 (in the case of Leases allocated to the
1999-A SUBI Portfolio as of the Initial Cutoff Date) or no later than
September 30, 2005 (in the case of Leases allocated to the 1999-A SUBI
Portfolio as of a Subsequent Cutoff Date); and (iv) fully amortizes to
an amount equal to the Booked Residual Value of the related Leased
Vehicle based on a fixed Lease Rate calculated on a constant yield
basis and provides for level payments over its term (except for payment
of such Booked Residual Value).
"Extension Fee" means, with respect to any 1999-A Lease that has had
its Maturity Date extended pursuant to the Servicing Agreement and the Servicing
Supplement, any payment required to be made with respect to such 1999-A Lease by
the Obligor in exchange for the extension.
"Grantor" has the meaning set forth in the Preamble.
"Indenture" has the meaning set forth in Recital H.
"Indenture Trustee" has the meaning set forth in Recital G.
"Independent" means, when used with respect to any specified Person,
such a Person who (a) is in fact independent of the Grantor, the Trustee, the
Transferor and any of their respective Affiliates; (b) does not have any direct
financial interest or any material indirect financial interest in the Grantor,
the Trust, the Transferor or any of their respective Affiliates; and (c) is not
connected with the Grantor, the Trust, the Transferor or any of their respective
Affiliates as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions. "Independent" when used with
respect
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to any Accountant means such an Accountant, who may also be the Accountant who
audits the books of the Grantor, the Trust, the Transferor or any of their
respective Affiliates, who is Independent with respect to the Grantor, the
Trustee, the Transferor, and their respective Affiliates as contemplated by Rule
101 of the Code of Professional Conduct of the American Institute of Certified
Public Accountants. Whenever it is herein provided that any Independent Person's
opinion or certificate shall be furnished to the Trustee, such Person shall be
acceptable to the Trustee if such opinion or certificate shall state that the
signer has read this direction and that the signer is independent within the
meaning thereof.
"Initial Beneficiary" and "Initial Grantor" shall have the meanings set
forth in the Preamble.
"Initial Cutoff Date" means April 1, 1999.
"Insurance Expenses" means any amount of Insurance Proceeds (a) applied
to the repair of the related 1999-A Leased Vehicle, (b) released to an Obligor
in accordance with the normal servicing procedures of the Servicer, or (c)
representing other related expenses incurred by the Servicer not otherwise
included in Liquidation Expenses and recoverable under the Servicing Agreement
or the Servicing Supplement.
"Insurance Policy" means, with respect to a 1999-A Lease, 1999-A Leased
Vehicle or Obligor, any policy of comprehensive, collision, public liability,
physical damage, personal liability, credit health or accident, credit life or
employment insurance, or any other form of insurance.
"Insurance Proceeds" means, with respect to any 1999-A Lease, 1999-A
Leased Vehicle or Obligor, proceeds paid to the Servicer or the Trustee, on
behalf of the Trust, pursuant to an Insurance Policy and amounts paid to the
Trustee, on behalf of the Trust, or the Servicer under any other insurance
policy related to such 1999-A Lease, 1999-A Leased Vehicle or Obligor (including
but not limited to any contingent and excess liability insurance policy
maintained by or on behalf of the Trustee, on behalf of the Trust, but not
including the Residual Value Insurance Policy).
"Interest Collections" means, with respect to any Collection Period,
all Collections received during or allocable to such Collection Period other
than Principal Collections, less the following, which shall be paid to the
appropriate parties or retained in the 1999-A SUBI Collection Account, as
appropriate, in the following order and priority for so long as WOFCO is the
Servicer: (a) Capped Contingent and Excess Liability Premiums, but with regard
to the Investor Percentage (as defined in the Securitization Trust Agreement) of
Interest Collections allocable to the 1999-A SUBI Certificate, only to the
extent such deduction and payment would have the same effect as if it followed
item (iv) of Section 3.03(b) of the Securitization Trust Agreement; (b) Capped
Origination Trust Administrative Expenses, but with regard to the Investor
Percentage of Interest Collections allocable to the 1999-A SUBI Certificate,
only to the extent that such deduction and payment would have the same effect as
if it followed item (iv) of Section 3.03(b) of the Securitization Trust
Agreement and then followed the deduction and payment set forth in clause (a)
above; and (c) the Servicing Fee and any unpaid Servicing Fee with respect to
one or more prior Collection Periods, but with regard to the Investor Percentage
of Interest Collections allocable to the 1999-A SUBI Certificate, only to the
extent that such deduction and payment would be made with the same effect as if
it followed item (x) of Section 3.03(b) of the Securitization Trust Agreement
and the deductions and payments in clauses (a) and (b) have been made as
indicated. If WOFCO is not the Servicer, the deduction and payment in clause (c)
shall instead be made only to the extent that it would have with the same effect
as if it followed item (v) of Section 3.03(b) of the Securitization Trust
Agreement and the deductions and payments in clauses (a) and (b) of the
preceding sentence have been made as indicated. Without limiting the generality
of the foregoing, Interest Collections with respect to any Collection Period
shall include any excess of Net Matured Leased Vehicle Proceeds for that
Collection Period over the sum of the Booked Residual Values of all Matured
Vehicles sold or otherwise disposed of from Matured Leased Vehicle Inventory
during the Collection Period.
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"Lease Documents" means, with respect to each 1999-A Lease, the fully
executed 1999-A Lease and any agreement(s) modifying such 1999-A Lease
(including, without limitation, any extension agreement(s) relating to extended
1999-A Lease(s)).
"Lease Rate" means, with respect to each Lease, the implicit rate,
calculated on the basis of an approximate annual percentage rate, included in
the calculation of the Monthly Lease Payment due with respect to such Lease.
"Lien" means any security interest, lien, charge, pledge, equity or
encumbrance of any kind other than tax liens, mechanics' liens and any liens
that attach to the 1999-A SUBI Interest or any other property, as the context
may require, by operation of law.
"Liquidation Expenses" means Matured Leased Vehicle Expenses,
Repossessed Vehicle Expenses, and all other reasonable out-of-pocket expenses
incurred by the Servicer in connection with the attempted realization of the
full amounts due or to become due under any 1999-A Lease, including expenses
incurred in connection with any collection effort (whether or not resulting in a
lawsuit against the Obligor under such 1999-A Lease) or an application or
request for Insurance Proceeds.
"Liquidation Proceeds" means Matured Leased Vehicle Proceeds,
Repossessed Vehicle Proceeds, and all other gross amounts received by the
Servicer or the Trustee, on behalf of the Trust (before reimbursement for
Liquidation Expenses) in connection with the realization of the full amounts due
or to become due under any 1999-A Lease, whether from the proceeds of any
collection effort (whether or not resulting in a lawsuit against the Obligor
under such Lease), receipt of Insurance Proceeds, or collection of amounts due
under the Servicing Agreement (including but not limited to the application of
Security Deposits pursuant to Section 2.04 thereof), the Servicing Supplement
(including but not limited to any amount required to be deposited by the
Servicer into the 1999-A SUBI Collection Account pursuant to Section 8.03
thereof) or otherwise.
"Matured Lease" means any 1999-A Lease that has reached its scheduled
Maturity Date and as to which all scheduled Monthly Lease Payments and other
payments due thereunder have been made.
"Matured Leased Vehicle Expenses" means reasonable out-of-pocket
expenses incurred by the Servicer in connection with the sale or other
disposition of a 1999-A Leased Vehicle included in Matured Leased Vehicle
Inventory.
"Matured Leased Vehicle Inventory" as of any date means all Matured
Vehicles that first became Matured Vehicles within the three immediately
preceding Collection Periods (or during the months of June, July and August 1999
in respect of any date during the September 1999 Collection Period, the months
of July and August 1999 and the September 1999 Collection Period in respect of
any date during the October 1999 Collection Period, the month of August and the
September and October 1999 Collection Periods in respect of any date during the
November 1999 Collection Period), and that, as of the last day of the most
recent calendar month or Collection Period, as applicable, have remained unsold
and not otherwise disposed of by the Servicer for no more than two full calendar
months and/or Collection Periods, as applicable.
"Matured Leased Vehicle Proceeds" means gross amounts received by the
Servicer or the Trustee, on behalf of the Trust (before reimbursement for
Matured Leased Vehicle Expenses and including any charges for excess mileage and
excess wear and tear) in connection with the sale or other disposition of a
1999-A Leased Vehicle included in Matured Leased Vehicle Inventory.
"Matured Vehicle" as of any date means any 1999-A Leased Vehicle the
related 1999-A Lease of which has reached its Maturity Date and as to which all
scheduled Monthly Lease Payments and other payments due thereunder have been
made, and which Leased Vehicle has been returned to the Servicer
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on behalf of the Origination Trustee, on behalf of the Origination Trust,
regardless of the status of the sale or other disposition of such 1999-A Leased
Vehicle as of such date.
"Maturity Date" means, with respect to any 1999-A Lease, the date on
which the last scheduled Monthly Lease Payment shall be due and payable, as such
date may be extended pursuant to Section 2.02(b) of the Servicing Agreement and
Section 9.02(a) of the Servicing Supplement.
"Monthly Lease Payment" means, with respect to any Lease, the amount of
each fixed monthly payment payable to the Obligee of such Lease in accordance
with the terms thereof, net of any portion of such monthly payment that
represents late payment charges, Extension Fees or collections allocable to
payments to be made by Obligors for payment of insurance premiums, excise taxes
or similar items.
"Net Insurance Proceeds" means Insurance Proceeds less Insurance
Expenses.
"Net Liquidation Proceeds" means Liquidation Proceeds less Liquidation
Expenses.
"Net Matured Leased Vehicle Proceeds" means Matured Leased Vehicle
Proceeds less Matured Leased Vehicle Expenses.
"Net Repossessed Vehicle Proceeds" means Repossessed Vehicle Proceeds
less Repossessed Vehicle Expenses.
"1999-A Lease" has the meaning set forth in Section 11.01(a).
"1999-A Leased Vehicle" has the meaning set forth in Section 11.01(a).
"1999-A SUBI" has the meaning set forth in Recital E.
"1999-A SUBI Asset" has the meaning set forth in Section 11.01(a).
"1999-A SUBI Certificate" has the meaning set forth in Recital E.
"1999-A SUBI Collection Account" means the separate account established
and maintained by the Indenture Trustee as the initial repository of all
proceeds received with respect to all 1999-A SUBI Assets, pursuant to Section
12.01(a).
"1999-A SUBI Lease Account" has the meaning set forth in Section
12.02(a).
"1999-A SUBI Portfolio" has the meaning set forth in Recital E.
"1999-A SUBI Certificate" has the meaning set forth in Recital G.
"Noteholders" has the meaning set forth in the Indenture.
"Notes" has the meaning set forth in the Indenture.
"Obligee" means each Person who is the lessor under a 1999-A Lease or
the assignee thereof, including the Trustee on behalf of the Trust.
"Obligor" means each Person who is the lessee under a Lease.
"Outstanding Principal Balance" means, with respect to any 1999-A Lease
as of any date, an amount equal to (a) the sum of all Monthly Lease Payments
remaining to be made (provided, however, that Payments Ahead received but not
yet applied are deemed to be Monthly Lease Payments remaining
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to be made), less any unearned finance or other charges relating to the period
beginning after the next succeeding Due Date on such 1999-A Lease (determined in
accordance with the actuarial method as applied to the Lease Rate for such
1999-A Lease in accordance with the Servicer's usual practices), plus (b) the
Booked Residual Value of the related Leased Vehicle.
"Owner Trustee" has the meaning set forth in Recital G.
"Payment Ahead" means any payment of one or more Monthly Lease Payments
(other than in connection with a Prepayment) remitted by an Obligor with respect
to a 1999-A Lease in excess of the Monthly Lease Payment due during such
Collection Period with respect to such 1999-A Lease, which sums the Obligor has
instructed the Servicer to apply to Monthly Lease Payments due in one or more
immediately subsequent Collection Periods.
"Permitted Investments" has the meaning set forth in the Securitization
Trust Agreement.
"Person" means any legal person, including any individual, corporation,
partnership, joint venture, limited liability company, association, joint stock
company, trust, bank, trust company, estate (including any beneficiaries
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Prepayment" means: (a) payment to the Servicer of 100% of the
Outstanding Principal Balance of a 1999-A Lease (exclusive of any 1999-A Lease
referred to in the definition of the term "Charged-off Lease") or such lesser
amount as may be provided for in such 1999-A Lease, including any related
payment of interest, or (b) payment by the Servicer to the Trustee, on behalf of
the Trust, of any amount required to be deposited by the Servicer into the
1999-A SUBI Collection Account pursuant to Section 8.03 of the Servicing
Supplement.
"Principal Collections" means, with respect to any Collection Period,
all Collections received during or allocable to such Collection Period allocable
to the principal component of any 1999-A Lease (including any payment in respect
of the Booked Residual Value of the related 1999-A Leased Vehicle, but expressly
not including Collections with regard to which a Loss Amount (as defined in the
Securitization Trust Agreement) has already accrued); provided, however, that,
solely for purposes of calculating Principal Collections, the principal portion
of Monthly Lease Payments included in such Collections arising from a Discounted
Lease will be discounted on a present value basis at the Discount Rate.
"Repossessed Vehicle Expenses" means reasonable out-of-pocket expenses
incurred by the Servicer in connection with the sale or other disposition of a
1999-A Leased Vehicle that has been repossessed by the Servicer or has been
returned to the Servicer for sale or other disposition, other than for inclusion
in Matured Leased Vehicle Inventory.
"Repossessed Vehicle Proceeds" means gross amounts received by the
Servicer or the Trustee, on behalf of the Trust (before reimbursement for
Repossessed Vehicle Expenses) in connection with the sale or other disposition
of a 1999-A Leased Vehicle that has been repossessed by the Servicer or has been
returned to the Servicer for sale or other disposition in connection with a
Prepayment of the related 1999-A Lease.
"Revolving Period" means the period from the Initial Cutoff Date to but
not including the earlier of [October] 1, 2000 and the day on which an Early
Amortization Event (as defined in the Securitization Trust Agreement) occurs.
"Securitization Trust Agreement" has the meaning set forth in Recital
G.
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"Securitization Trust Documents" means and includes the Trust
Agreement, the Servicing Agreement, this Supplement, the Servicing Supplement,
the SUBI Certificate Agreement, the Securitization Trust Agreement, the
Indenture, the Backup Security Agreement, the 1999-A SUBI Certificate, the Notes
and the Certificates, as the same may be amended, supplemented or modified from
time to time, and each to the extent that it relates to the 1999-A SUBI (but
specifically not including any such amendment, supplement or modification that
relates only to the UTI or to one or more SUBIs other than the 1999-A SUBI).
"Security Deposit" means, with respect to any 1999-A Lease, the
refundable security deposit specified in such 1999-A Lease.
"Servicer" has the meaning set forth in Recital C.
"Servicer Reimbursement" has the meaning set forth in the Servicing
Supplement.
"Servicing Agreement" has the meaning set forth in Recital C.
"Servicing Fee" has the meaning set forth in the Servicing Agreement,
as modified or waived pursuant to Section 9.06 of the Servicing Supplement.
"Servicing Supplement" has the meaning set forth in Recital I.
"SUBI Certificate Agreement" has the meaning set forth in Recital F.
"Subsequent Cutoff Date" means, with respect to any Lease and Leased
Vehicle allocated to the 1999-A SUBI Portfolio on a Transfer Date, the last day
of the preceding calendar month.
"Transfer Date" means any Business Day in any calendar month following
a Collection Period in the Revolving Period, on or prior to the twenty-fifth
calendar day of that calendar month (beginning October 25, 1999) specified as
such by the Servicer in its notice and certificate pursuant to Section 8.02(b)
of the Servicing Supplement.
"Transferor" has the meaning set forth in Recital F.
"Trust" has the meaning set forth in Recital A.
"Trust Agreement" has the meaning set forth in Recital A.
"Trustee" has the meaning set forth in the Preamble.
"Unallocated Principal Collections" has the meaning set forth in
Section 11.02(d).
"Undistributed Transferor Excess Collections" has the meaning set forth
in the Securitization Trust Agreement.
"U.S. Bank" has the meaning set forth in the Preamble.
"WOFCO" has the meaning set forth in the Recital A.
Section 10.02. Rights in Respect of 1999-A SUBI.
Each holder of a 1999-A SUBI Certificate (including the Owner Trustee)
and each pledgee of a 1999-A SUBI Certificate (including the Indenture Trustee,
on behalf of the Noteholders) is a third-party beneficiary of the Trust
Agreement and this Supplement, insofar as they apply to the 1999-A SUBI and
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the holders or pledgees of the 1999-A SUBI Certificate. Therefore, to that
extent, references in the Trust Agreement to the ability of any "holder of a
SUBI Certificate", "assignee of a SUBI Certificate" or the like to take any
action shall be deemed to refer to the Owner Trustee acting with the consent or
upon the instruction of the Indenture Trustee acting at its own instigation or
upon the instruction of Noteholders representing more than 50% of the aggregate
Percentage Interests (acting as a single class) during such time as any Note
shall remain outstanding and, if no Notes remain outstanding, shall be deemed to
refer to the Owner Trustee acting at its own instigation or upon the instruction
of the Transferor.
Part XI. CREATION OF 1999-A SUBI
Section 11.01. Initial Creation of 1999-A SUBI Portfolio and 1999-A
SUBI.
(a) Pursuant to Section 4.02(a) of the Trust Agreement, the
Beneficiary hereby directs the Trustee to identify and allocate or cause to be
identified and allocated on the books and records of the Trust an initial
separate portfolio of SUBI Assets consisting of Leases, related Leased Vehicles
and other associated Trust Assets to be accounted for and held in trust
independently from all other Trust Assets within the Trust, all of which Trust
Assets shall consist of: (i) Leases that are Eligible Leases as of the Initial
Cutoff Date, including the related Contract Rights and the related Leased
Vehicles, with an Aggregate Net Investment Value (as defined in the
Securitization Trust Agreement) as of the Initial Cutoff Date of $[__________];
(ii) all other Trust Assets related to the foregoing, including (A) the 1999-A
SUBI Collection Account, including all cash and Permitted Investments therein
and all income from the investment of funds therein; (B) the Residual Value
Insurance Policy and all Contingent and Excess Liability Insurance Policies to
the extent applicable to such Leases and Leased Vehicles; (C) the right to
proceeds from physical damage, credit life and disability insurance policies, if
any, covering such Leases, Leased Vehicles or Obligors with respect thereto, as
the case may be; (D) the right to receive the proceeds of all Dealer repurchase
obligations, if any, relating to any such Lease or Leased Vehicle; and (E) all
proceeds from the conversion, voluntary or involuntary, of any of the foregoing
into cash or other property. Based upon their identification and allocation by
the Servicer pursuant to the Servicing Supplement, the Trustee hereby identifies
and allocates as SUBI Assets the portfolio of Leases and Leased Vehicles more
particularly described on Exhibit A hereto, and the related Trust Assets
described above, each such SUBI Asset to be identified on the books and accounts
of the Trust as belonging to the 1999-A SUBI Portfolio (such Leases and Leased
Vehicles, together with those additional Leases and Leased Vehicles allocated to
the 1999-A SUBI Portfolio during the Revolving Period, the "1999-A Leases" and
the "1999-A Leased Vehicles", respectively, and, together with those other Trust
Assets so allocated either initially or during the Revolving Period pursuant to
Section 2.02 hereof, the "1999-A SUBI Assets"). In addition to the conveyance of
such 1999-A SUBI Assets to the Trust pursuant to Section 2.01 of the Trust
Agreement, the Grantor does hereby grant to the Trustee a security interest
therein, and the Trustee shall have all of the rights, powers and privileges of
a secured party under the UCC.
(b) Also pursuant to Section 4.02(a) of the Trust Agreement,
the Trustee hereby creates a SUBI which shall be known as the "1999-A SUBI". The
1999-A SUBI shall represent a specific divided beneficial interest solely in the
1999-A SUBI Portfolio and the 1999-A SUBI Assets.
(c) As required by Section 4.02(d) of the Trust Agreement, the
Beneficiary will certify to the Trustee as of the date of execution and delivery
hereof that (i) the sole pledgee of the Undivided Trust Interest has received
prior notice of the creation of the 1999-A SUBI Portfolio and of the terms and
provisions of (x) this Supplement and (y) the Securitized Financing contemplated
by the 1999-A Securitization Trust Agreement and (ii) after giving effect to the
creation of the 1999-A SUBI, the transfer to the Beneficiary of both the 1999-A
SUBI Certificate and the application by the Beneficiary of the proceeds of that
Securitized Financing, no event of default (matured or unmatured) shall exist
under any Securitized Financing involving a UTI Pledge.
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Section 11.02. Subsequent Additions to 1999-A SUBI Portfolio.
(a) The Beneficiary hereby directs the Trustee, as of each
Transfer Date, to cause to be (i) identified on the books and records of the
Trust from among all those Leases, Leased Vehicles and other associated Trust
Assets then owned by the Trustee on behalf of the Trust and not allocated to, or
reserved for allocation to, any SUBI (or, in the circumstances contemplated in
Section 7.03 of the Trust Agreement or Section 11.02(e) below, acquired by the
Trustee on behalf of the Trust but not yet allocated to, or reserved for
allocation to, any specific Portfolio) and (ii) allocated to the 1999-A SUBI
Portfolio effective as of the relevant Subsequent Cutoff Date as additional
1999-A Leases, 1999-A Leased Vehicles and 1999-A SUBI Assets, such further
Eligible Leases, related Leased Vehicles and other associated Trust Assets (as
described in clauses (i) and (ii) of the first sentence of Section 11.01(a)) as
shall have an aggregate Discounted Principal Balance of not more than the
aggregate amount of all Principal Collections (and amounts treated as Principal
Collections pursuant to the last sentence of Section 3.03(b)) received from the
Initial Cutoff Date through the end of the most recent Collection Period that
have not yet been so reinvested in additional 1999-A Leases, 1999-A Leased
Vehicles and related 1999-A SUBI Assets (as provided in Section 11.08 herein);
provided, however, that (x) after giving effect to such reallocation, no event
of default (matured or unmatured) shall exist under any Securitized Financing
involving a UTI Pledge; (y) prior to such reallocation, the Servicer shall have
provided the Officer's Certificate required by Section 8.02(b) of the Servicing
Supplement; and (z) Eligible Leases booked from [__________________] through
[____________________], shall be reserved by the Trustee for allocation to the
1999-A SUBI Portfolio, and allocation will first be made of such Eligible Leases
to the 1999-A SUBI Portfolio to the extent available as of the relevant
Subsequent Cutoff Date.
(b) Pursuant to subsection (a) above, the Trustee agrees, as
of each Transfer Date, to cause the Servicer to identify such further Eligible
Leases, related Leased Vehicles and other associated Trust Assets as described
in Section 11.02(a) and thereafter to allocate them to the 1999-A SUBI
Portfolio.
(c) Except in the circumstances set forth in Section 7.03 of
the Trust Agreement or Section 12.02 below, the Trustee shall direct the
Servicer, pursuant to Section 8.02(c) of the Servicing Supplement, effective as
of each Transfer Date, to transfer or cause to be transferred from the 1999-A
SUBI Collection Account to the Lease Funding Account an amount equal to the
aggregate Discounted Principal Balance as of the related Subsequent Cutoff Date
of the 1999-A Leases then being added to the 1999-A SUBI Portfolio pursuant to
Section 11.02(a) hereof.
(d) To the extent that, for any reason, the additional 1999-A
Leases allocated to the 1999-A SUBI Portfolio on any Transfer Date shall have an
aggregate Discounted Principal Balance, measured as of the Subsequent Cutoff
Date, that is less than the aggregate amount of all Principal Collections (and
amounts treated as Principal Collections pursuant to the last sentence of
Section 3.03(b) of the Securitization Trust Agreement) received since the
Initial Cutoff Date and prior to the termination of the Revolving Period which
have not yet been reinvested in additional 1999-A Leases, 1999-A Leased Vehicles
and related 1999-A SUBI Assets, the balance of such Principal Collections and
other amounts ("Unallocated Principal Collections") shall continue to be
invested and reinvested in Permitted Investments as part of the 1999-A SUBI
Portfolio until the earlier of (i) the reinvestment of such unallocated
Principal Collections on a subsequent Transfer Date and (ii) the start of the
Amortization Period, at which time such funds shall be treated as Principal
Collections collected during the Amortization Period.
(e) In the circumstances set forth in Section 7.03 of the
Trust Agreement or Section 12.02 of this Supplement, the Trustee shall direct
the Servicer, pursuant to Section 8.02(d) of the Servicing Supplement, effective
as of each Transfer Date, to transfer from the 1999-A SUBI Collection Account to
the 1999-A SUBI Lease Account those Principal Collections (and amounts treated
as Principal Collections pursuant to the last sentence of Section 3.03(b) of the
Securitization Trust Agreement) received since the Initial Cutoff Date that have
not yet been reinvested in additional 1999-A Leases,
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1999-A Leased Vehicles and related 1999-A SUBI Assets, to be applied in
accordance with Section 7.03 of the Trust Agreement.
(f) Neither any interest in the 1999-A SUBI nor the 1999-A
SUBI Certificate may be transferred or assigned by the Beneficiary, and any such
purported transfer or assignment shall be deemed null, void and of no effect
herewith, provided, however, that (i) the 1999-A SUBI and the 1999-A SUBI
Certificate may be sold to the Transferor pursuant to the SUBI Certificate
Agreement, and (ii) the 1999-A SUBI Certificate and the interest in the 1999-A
SUBI represented thereby may be assigned by the Transferor absolutely or a
security interest therein granted in connection with a Securitized Financing, in
each case in the circumstances contemplated in Section 4.02(c) of the Trust
Agreement. Such a transfer is registrable upon surrender of the relevant 1999-A
SUBI Certificate for registration of transfer at the corporate trust office of
the Trustee (or the Trust Agent, if applicable) or by any successor Trustee,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the holder thereof or such holder's attorney duly
authorized in writing, and thereupon one or more new 1999-A SUBI Certificates of
a like aggregate fractional undivided interest will be issued to the designated
permitted transferee.
Section 11.03. Issuance and Form of the 1999-A SUBI Certificate.
(a) The 1999-A SUBI shall be represented by the 1999-A SUBI
Certificate representing a 100% beneficial interest in the 1999-A SUBI and the
1999-A SUBI Portfolio, as further set forth herein. The 1999-A SUBI Certificate
shall be substantially in the form of Exhibit B attached hereto, with such
appropriate insertions, omissions, substitutions and other variations as are
required by this Supplement and may have such letters, numbers or other marks of
identification and such legends and endorsements placed thereon as may,
consistently herewith and with the Trust Agreement, be directed by the
Beneficiary. Any portion of the 1999-A SUBI Certificate may be set forth on the
reverse thereof, in which case the following reference to the portion of the
text on the reverse shall be inserted on the face thereof, in relative proximity
to and prior to the signature of the Trustee executing such certificate:
"Reference is hereby made to the further provisions of this SUBI
Certificate set forth on the reverse hereof, which provisions shall for
all purposes have the same effect as if set forth at this place."
The 1999-A SUBI Certificate shall be printed, lithographed,
typewritten, mimeographed, photocopied or otherwise produced or may be produced
in any other manner as may, consistently herewith and with the Trust Agreement,
be determined by the Beneficiary.
(b) As required by Section 4.02(b) of the Trust Agreement, the
1999-A SUBI Certificate shall contain an express written waiver of any claim by
any holder thereof or owner of a beneficial interest or security interest
therein to any proceeds or assets of the Trustee and to all of the Trust Assets
other than those from time to time included within the 1999-A SUBI Portfolio as
1999-A SUBI Assets and those proceeds or assets derived from or earned by such
1999-A SUBI Assets.
(c) It is the intention of the parties to this Agreement that
the 1999-A SUBI Certificate be governed by Article 8 of the Uniform Commercial
Code as in effect in any relevant jurisdiction.
Section 11.04. Actions and Filings.
The Beneficiary hereby directs the Trustee to enter into the Backup
Security Agreement as a protective device. The Grantor and the Trustee will
undertake all other and future actions and activities as may be deemed
reasonably necessary by the Servicer (pursuant to Section 8.04 of the Servicing
Supplement) to perfect (or evidence) and confirm the foregoing allocations of
Trust Assets to the 1999-A
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SUBI Portfolio and the backup security interest therein of the Indenture
Trustee, including without limitation filing or causing to be filed UCC
financing statements and executing and delivering all related filings, documents
or writings as may be deemed reasonably necessary by the Servicer hereunder or
under any other Securitization Trust Documents (including the Indenture and the
Backup Security Agreement); provided, however, that in no event will the Grantor
or the Trustee be required to take any action to perfect any security interest
that may be held by the Owner Trustee or the Indenture Trustee in any 1999-A
Leased Vehicle. The Grantor hereby irrevocably makes and appoints each of the
Trustee and the Servicer, and any of their respective officers, employees or
agents, as the true and lawful attorney-in-fact of the Grantor (which
appointment is coupled with an interest and is irrevocable) with power to sign
on behalf of the Grantor any financing statements, continuation statements,
security agreements, mortgages, assignments, affidavits, letters of authority,
notices or similar documents necessary or appropriate to be executed or filed
pursuant to this Section.
Section 11.05. Termination of 1999-A SUBI.
In connection with any purchase by the Transferor of the corpus of the
Securitization Trust pursuant to Section 7.02 of the Securitization Trust
Agreement, and the succession of the Transferor to all of the interest in the
1999-A SUBI represented by the 1999-A SUBI Certificate, should all of the
interest in the 1999-A SUBI thereafter be transferred to the UTI Holder, whether
by sale or otherwise, then upon the direction of the UTI Holder the 1999-A SUBI
shall be terminated, the 1999-A SUBI Certificate shall be returned to the
Trustee and canceled thereby, and (pursuant to Section 12.01(a) of the Servicing
Supplement) the Servicer shall reallocate all 1999-A Leases, 1999-A Leased
Vehicles and related 1999-A SUBI Assets to the UTI Portfolio.
Section 11.06. Merger or Consolidation of Trustee.
The Trustee shall give notice to each Rating Agency (as defined in the
Securitization Trust Agreement) prior to effecting any merger, consolidation, or
other transaction set forth in Section 6.05 of the Trust Agreement.
Section 11.07. Representations and Warranties of Trustee.
The Trustee hereby makes the following representations and warranties
on which the Grantor and Beneficiary, each of their permitted assignees and
pledgees, and each pledgee or holder of a 1999-A SUBI Certificate (and
beneficial owner of any portion thereof in connection with a Securitized
Financing, including the Owner Trustee, the Indenture Trustee and the
Noteholders) may rely:
(a) Organization and Good Standing. The Trustee is a
corporation, duly organized, validly existing and in good standing under the law
of the State of Alabama and is qualified to do business as a foreign corporation
and is in good standing in each of Florida, Georgia, North Carolina and South
Carolina;
(b) Power and Authority. The Trustee has full power, authority
and right to execute, deliver and (assuming that the filings set forth on
Schedule A to the Trust Agreement are sufficient to allow the Trustee to act as
a trustee with respect to the Trust Assets and otherwise perform this Supplement
in each of [Alabama, Florida, Georgia, North Carolina, South Carolina,
California, Illinois, New Jersey, and Pennsylvania], and in all material
respects in any other jurisdiction) perform this Supplement (in all material
respects outside of the [nine] states set forth above) and has taken all
necessary action to authorize the execution, delivery and performance by it of
this Supplement;
(c) Due Execution. This Supplement has been duly executed and
delivered by the Trustee, and is a legal, valid and binding instrument
enforceable against the Trustee in accordance with its terms;
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(d) No Conflict. Neither the execution and delivery of this
Supplement nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof, will conflict with or result in a breach
of, or constitute a default (with notice or passage of time or both) under any
provision of any law, governmental rule, regulation, judgment, decree or order
binding on the Trustee or the articles of incorporation or bylaws of the Trustee
or any provision of any mortgage, indenture, contract, agreement or other
instrument to which the Trustee is a party or by which it is bound; and
(e) Single Purpose. The Trustee has not engaged, is not
currently engaged, and will not engage during the term of this Agreement in any
other activity other than serving as Trustee and in such ancillary activities as
are necessary and proper in order to act as Trustee in accordance with the Trust
Agreement and this Supplement.
Section 11.08. Other SUBIs.
The Trustee will not create any SUBI other than the 1999-A SUBI during
the Revolving Period unless the Trustee has received from the Servicer an
Officer's Certificate certifying that the creation of such other SUBI would not
cause an Early Amortization Event (as defined in the Securitization Trust
Agreement). In the event that the Trustee at any time during the Revolving
Period also is allocating Trust Assets to one or more other SUBIs pursuant to
similar revolving periods (from the Trust Assets generally, not from blocks of
Trust Assets reserved for allocation to particular SUBIs), the Trustee first
shall allocate available Trust Assets to SUBIs created prior to the 1999-A SUBI
before allocating Trust Assets to the 1999-A SUBI.
Section 11.09. Minimum Net Worth.
Notwithstanding anything to the contrary in Section 4.03 of the Trust
Agreement, the Grantor (or if Grantor is a partnership, the general partner of
Grantor) shall at all times maintain a minimum net worth of $10 million.
Part XII. SUBI ACCOUNTS
Section 12.01. 1999-A SUBI Collection Account.
(a) The Servicer on behalf of the Trustee shall establish and
maintain with respect to the 1999-A SUBI a "1999-A SUBI Collection Account" in
the name of the Indenture Trustee, for the benefit of the holders of the Notes
and the holder of 1999-A SUBI Certificate, which account shall constitute a SUBI
Collection Account. The 1999-A SUBI Collection Account initially shall be
established with the Indenture Trustee, and at all times shall be an Eligible
Account. In the event that the Indenture Trustee no longer meets the
requirements stated in the definition of "Eligible Account", then the Servicer
shall, with the Trustee's assistance as necessary, cause the 1999-A SUBI
Collection Account to be moved to a bank or trust company that satisfies those
requirements. The 1999-A SUBI Collection Account shall relate solely to the
1999-A SUBI and the 1999-A SUBI Portfolio, and funds therein shall not be
commingled with any other moneys, except as otherwise provided for or
contemplated in the Trust Agreement as supplemented by this Supplement or in the
Servicing Agreement as supplemented by the Servicing Supplement. All amounts
held in the 1999-A SUBI Collection Account shall be invested in Permitted
Investments in accordance with Section 7.01(d) of the Trust Agreement, Section
11.02(d) hereof and Section 8.03 of the Indenture until distributed or otherwise
applied in accordance with the Trust Agreement or this Supplement. The Trustee
hereby grants a security interest in the 1999-A SUBI Collection Account, and all
amounts on deposit therein including Permitted Investments and all proceeds of
the foregoing, to the Indenture Trustee for the benefit of the holders of the
Notes.
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(b) On each Deposit Date the Indenture Trustee shall transfer
or cause the transfer of all Principal Collections and Interest Collections in
the 1999-A SUBI Collection Account with respect to the related Collection Period
to the holder of the 1999-A SUBI Certificate (and more particularly, to the
Distribution Account); provided, however, that on each Deposit Date related to a
Collection Period in the Revolving Period, the Indenture Trustee shall withhold
from any such transfers all Principal Collections, all of which shall be applied
solely as provided for in Section 11.02 hereof. After the last Deposit Date
related to a Collection Period in the Revolving Period, Principal Collections
shall be included in calculating and making any such transfers.
(c) The Trustee shall provide in the Servicing Supplement that
the Servicer shall prepare all such calculations and provide for all such
transfers as are provided for in this Section 12.01.
(d) Any transfer to the holder of the 1999-A SUBI Certificate
shall be made as directed pursuant to the Securitization Trust Documents.
(e) Notwithstanding Section 7.01(b) of the Trust Agreement and
Section 2.02 of the Servicing Agreement, the Trustee may provide in the
Servicing Supplement that, in the event the Servicer provides to the
Beneficiary, the Transferor, the Trustee, the Owner Trustee and the Indenture
Trustee a letter from each Rating Agency to the effect that the utilization by
the Servicer of an alternative remittance schedule with respect to collections
arising out of the 1999-A SUBI Portfolio to be deposited in the 1999-A SUBI
Collection Account pursuant to Section 2.02(c) or (d) of the Servicing Agreement
(including but not limited to the use of an alternative remittance schedule
pursuant to which the obligations of the Servicer to make such remittances are
secured by a Servicer Letter of Credit (as defined in such Servicing Supplement)
satisfactory to each such Rating Agency (as defined in the Securitization Trust
Agreement)) will not result in a qualification, downgrading or withdrawal of the
then-current rating assigned to the Rated Securities (as defined in the
Securitization Trust Agreement) by such Rating Agency, (i) the Servicing
Supplement may be so modified without the consent of any Noteholders pursuant to
Section 12.02 thereof and (ii) the Servicer may remit such collections to the
1999-A SUBI Collection Account in accordance with that alternative remittance
schedule.
(f) Notwithstanding Section 5.05 or 7.01(c) or any other
provision of the Trust Agreement, the rights of the Trustee to be indemnified or
reimbursed for Administrative Expenses of the Trust incurred in connection with
or allocated to the 1999-A SUBI shall be limited to those Capped Origination
Trust Administrative Expenses as may be deducted from Collections in accordance
with the definition of "Interest Collections", any reimbursement of Uncapped
Administrative Expenses (as defined in the Securitization Trust Agreement) as
may be available pursuant to Section 3.03(b) of the Securitization Trust
Agreement, any advance of Administrative Expenses as may be available pursuant
to Section 9.05(a) of the Servicing Supplement, and any indemnity as may be
available pursuant to Section 2.07(g) of the Servicing Agreement.
Section 12.02. 1999-A SUBI Lease Account.
(a) In the circumstances set forth in Section 7.03 of the
Trust Agreement, the Trustee shall establish and maintain with respect to the
1999-A SUBI a "1999-A SUBI Lease Account" in the name of the Indenture Trustee,
for the benefit of the holders of the Notes and the holder of the 1999-A SUBI
Certificate, which account shall constitute a SUBI Lease Account. Any 1999-A
SUBI Lease Account initially shall be established with the Indenture Trustee and
at all times shall be an Eligible Account. In the event that the Indenture
Trustee no longer meets the requirements stated in the definition of "Eligible
Account", then the Servicer shall, with the Indenture Trustee's assistance as
necessary, cause the 1999-A SUBI Lease Account to be moved to a bank or trust
company that satisfies those requirements. The 1999-A SUBI Lease Account shall
relate solely to the 1999-A SUBI and the 1999-A SUBI Portfolio, and funds
therein shall not be commingled with any other moneys, except as otherwise
provided for or contemplated in the Trust Agreement as supplemented by this
Supplement or in the Servicing Agreement as supplemented by the Servicing
Supplement. All amounts held in the 1999-A SUBI Lease Account shall be invested
in Permitted Investments in accordance with Section 7.01(d) of the Trust
Agreement, Section 11.02(d) hereof and Section 8.03 of the Indenture until
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distributed or otherwise applied in accordance with the Trust Agreement or this
Supplement. The Trustee hereby grants a security interest in any 1999-A SUBI
Lease Account, and all Permitted Investments therein and all proceeds of the
foregoing, to the Indenture Trustee for the benefit of the holders of the Notes.
(b) All transfers of funds into and out of the 1999-A SUBI
Lease Account shall be made in accordance with Section 7.03 of the Trust
Agreement.
Section 12.03. Servicer Calculations.
Neither the Trustee nor the Indenture Trustee shall be under any
obligation to recalculate or reverify any calculations made by the Servicer with
respect to any amounts to be transferred by the Indenture Trustee pursuant to
this Part XII.
Part XIII. MISCELLANEOUS PROVISIONS
Section 13.01. Amendment, Etc.
(a) Notwithstanding Section 9.01 of the Trust Agreement, the
Trust Agreement, as supplemented by this Supplement, to the extent that it deals
solely with the 1999-A SUBI and the 1999-A SUBI Portfolio, may be amended from
time to time only in a writing signed by the Trustee and the Beneficiary (and by
U.S. Bank to the extent that any such amendment affects it as Trust Agent), with
the prior written consent of the Indenture Trustee and the Owner Trustee (which
shall be given only in the circumstances contemplated by Section 9.01 of the
Securitization Trust Agreement).
(b) ALF LP shall provide each Rating Agency (as defined in the
Securitization Trust Agreement) prior notice of the content of any proposed
amendment to the Trust Agreement, whether or not such amendment relates to the
1999-A SUBI or requires approval by any Rating Agency.
(c) No resignation or removal of the Trustee pursuant to
Section 6.03 of the Trust Agreement shall be effective unless and until each
Rating Agency has confirmed, in writing, that such resignation or removal would
not cause it to downgrade, withdraw, or otherwise adversely modify its
then-current rating of the Rated Notes.
(d) The holder from time to time of the Trustee Stock pursuant
to Section 6.10 of the Trust Agreement shall at all times be a corporation,
trust company or bank organized and doing business under the laws of such State
or the United States; authorized under such laws to exercise corporate trust
powers; having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authorities; and
having a long-term deposit rating no lower than Baa3 by Moody's, so long as
Moody's is a Rating Agency or be otherwise acceptable to each Rating Agency, as
evidenced by a letter to such effect from each of them. If such holder 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, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time such holder shall
cease to be eligible in accordance with the provisions of this subsection (d),
it will immediately so notify the Beneficiary in the manner and with the effect
specified in Section 6.10(b) of the Trust Agreement.
Section 13.02. Governing Law.
THIS SUPPLEMENT SHALL BE CREATED UNDER AND GOVERNED BY AND CONSTRUED
UNDER THE INTERNAL LAWS OF THE STATE OF ALABAMA, WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS.
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Section 13.03. Notices.
The notice provisions of Section 9.03 of the Trust Agreement shall
apply equally to this Supplement, provided, that any notice to the Indenture
Trustee shall be addressed as follows (unless notice of a change of address is
given in accordance with this Section or Section 9.03 of the Trust Agreement:
Harris Trust and Savings Bank
311 W. Monroe
12th Floor
Chicago, Illinois 60606
Attention: Corporate Trust Office
and any notice to the Owner Trustee shall be addressed as follows:
Chase Manhattan Bank Delaware
1201 N. Market Street
8th Floor
Wilmington, DE 19801
Attention: Mr. Michael McCarthy, Corporate Trust Department
A copy of each notice or other writing required to be delivered to the
Trustee pursuant to the Trust Agreement or this Supplement also shall be
delivered to the Owner Trustee and the Indenture Trustee.
Section 13.04. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Supplement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Supplement and
shall in no way affect the validity or enforceability of the other provisions of
this Supplement or of the 1999-A SUBI Certificate or the rights of the holder
thereof. To the extent permitted by law, the parties hereto waive any provision
of law that renders any provision of this Supplement invalid or unenforceable in
any respect.
Section 13.05. Effect of Supplement on Trust Agreement.
(a) Except as otherwise specifically provided herein: (i)
the parties shall continue to be bound by all provisions of the Trust Agreement;
and (ii) the provisions set forth herein shall operate either as additions to or
modifications of the already-extant obligations of the parties under the Trust
Agreement, as the context may require. In the event of any conflict between the
provisions of this Supplement and the Trust Agreement with respect to the 1999-A
SUBI, the provisions of this Supplement shall prevail.
(b) For purposes of determining the parties' obligations
under this Supplement with respect to the 1999-A SUBI, general references in the
Trust Agreement to: (i) a SUBI Account shall be deemed to refer more
specifically to the 1999-A SUBI Account; (ii) a SUBI Asset shall be deemed to
refer more specifically to a 1999-A SUBI Asset; (iii) an appropriate or
applicable SUBI Collection Account shall be deemed to refer more specifically to
the 1999-A SUBI Collection Account; (iv) an appropriate or applicable SUBI Lease
Account shall be deemed to refer more specifically to a 1999-A SUBI Lease
Account; (v) a SUBI Portfolio shall be deemed to refer more specifically to the
1999-A SUBI Portfolio; (vi) a SUBI Supplement shall be deemed to refer more
specifically to this Supplement; and (vii) a SUBI Servicing Agreement Supplement
shall be deemed to refer more specifically to the Servicing Supplement.
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Section 13.06. Successors and Assigns.
The Trust Agreement and this Supplement, insofar as they
relate to the 1999-A SUBI Portfolio, shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns, the Trustee on behalf of the Trust, and the Securitization Trustee.
Further, all references herein to Persons or entities other than parties hereto
shall be deemed to refer to the successors and permitted assigns of such
persons, to the extent that such construction is reasonably possible; to the
extent that such construction is not reasonably possible, the parties hereto
shall amend this Supplement so as to effect the original intent of the parties
as closely as possible in an acceptable manner.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the Grantor, the Trustee, and (solely for the
limited purposes set forth in Sections 5.03(e), 6.10 and 9.03 of the Trust
Agreement) U.S. Bank, have caused this Supplement to be duly executed by their
respective officers as of the day and year first above written.
AUTO LEASE FINANCE, L.P., Grantor and Beneficiary
By: Auto Lease Finance LLC, its general partner
By:
______________________________________________
Name: ________________________________________
Title:________________________________________
VT INC., as Trustee
By:
______________________________________________
Name: ________________________________________
Title:________________________________________
U.S. BANK NATIONAL ASSOCIATION, as Trust Agent
By:
______________________________________________
Name: ________________________________________
Title:________________________________________
Harris Trust and Savings Bank, as Indenture Trustee
(solely to acknowledge the provisions of
Sections 10.02, 11.04, 11.07, 12.01, 12.02,
12.03, 13.01 and 13.03 hereof)
By:
______________________________________________
Name: ________________________________________
Title:________________________________________
WORLD OMNI LEASE SECURITIZATION L.P., assignee of
Beneficiary (solely to acknowledge the
provisions hereof)
By: World Omni Lease Securitization LLC, its
general partner
By:
______________________________________________
Name: ________________________________________
Title:________________________________________
23
<PAGE>
COUNTY OF )
)
STATE OF )
I, the undersigned, a Notary Public in and for said jurisdiction,
hereby certify that________________, whose name as _______________ of Auto Lease
Finance LLC, a Delaware limited liability company, in its capacity as the
general partner of Auto Lease Finance, L.P., a Delaware limited partnership, is
signed to the foregoing instrument, and who is known to me, acknowledged before
me on this day, that, being informed of the contents thereof, he, as such
officer and with full authority, executed the same voluntarily for and as the
act of said corporation, acting in its capacity as general partner as aforesaid.
Given under my hand and official seal, this the ___ day of __________,
1999.
(SEAL) ---------------------------------
NOTARY PUBLIC
My Commission Expires: __________
24
<PAGE>
COUNTY OF )
)
STATE OF )
I, the undersigned, a Notary Public in and for said jurisdiction,
hereby certify that ___________________, whose name as ______________________ of
World Omni Lease Securitization LLC, a Delaware limited liability company, in
its capacity as the general partner of World Omni Lease Securitization, L.P., a
Delaware limited partnership, is signed to the foregoing instrument, and who is
known to me, acknowledged before me on this day, that, being informed of the
contents thereof, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said corporation, acting in its capacity as
general partner as aforesaid.
Given under my hand and official seal, this the ___ day of __________,
1999.
(SEAL) ----------------------------------
NOTARY PUBLIC
My Commission Expires: __________
25
<PAGE>
COUNTY OF )
)
STATE OF )
I, the undersigned, a Notary Public in and for said County, in said
State, hereby certify that _________________________, whose name as
_________________________ of VT Inc., an Alabama corporation, is signed to the
foregoing instrument, and who is known to me, acknowledged before me on this
day, that, being informed of the contents thereof, he, as such officer and with
full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand and official seal, this the ___ day of __________,
1999.
(SEAL) ---------------------------------
NOTARY PUBLIC
My Commission Expires: __________
26
<PAGE>
COUNTY OF )
)
STATE OF )
I, the undersigned, a Notary Public in and for said County, in said
State, hereby certify that _________________________, whose name as
_________________________ of U.S. Bank National Association, a national banking
association, is signed to the foregoing instrument, and who is known to me,
acknowledged before me on this day, that, being informed of the contents
thereof, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said national banking association.
Given under my hand and official seal, this the ___ day of __________,
1999.
(SEAL) ---------------------------------
NOTARY PUBLIC
My Commission Expires: __________
27
<PAGE>
COUNTY OF )
)
STATE OF )
I, the undersigned, a Notary Public in and for said County, in said
State, hereby certify that _________________________, whose name as
_________________________ of Harris Trust and Savings Bank, an Illinois banking
corporation, is signed to the foregoing instrument, and who is known to me,
acknowledged before me on this day, that, being informed of the contents
thereof, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said Illinois banking corporation.
Given under my hand and official seal, this the ___ day of __________,
1999.
(SEAL) ---------------------------------
NOTARY PUBLIC
My Commission Expires: __________
28
<PAGE>
EXHIBIT A
SCHEDULE OF 1999-A LEASES AND
1999-A LEASED VEHICLES AS OF THE INITIAL CUTOFF DATE
[Omitted. Copies on file with the Servicer, the Trustee, the Indenture
Trustee and the Owner Trustee.]
A-1
<PAGE>
EXHIBIT B
FORM OF 1999-A SUBI CERTIFICATE
WORLD OMNI LT
SPECIAL UNIT OF BENEFICIAL INTEREST 1999-A CERTIFICATE
evidencing an undivided 100% interest in all 1999-A SUBI Assets
(as defined below).
(This 1999-A SUBI Certificate does not represent an obligation of, or
an interest in, World Omni Financial Corp., Auto Lease Finance LLC, Auto Lease
Finance L.P. or any of their respective affiliates.)
Number 1999-A SUBI- __________________________________
THIS CERTIFIES THAT __________________________________ is the
registered owner of a nonassessable, fully-paid, undivided interest in the
1999-A SUBI Assets (such interest, a "1999-A SUBI Interest"), of World Omni LT,
an Alabama business trust (the "Trust") formed by Auto Lease Finance L.P., a
Delaware limited partnership, as grantor ("ALF LP" or, in its capacity as
grantor thereunder, and, together with any successor or assign, the "Grantor"),
and VT Inc., an Alabama corporation, as trustee (the "Trustee"). The Trust was
created pursuant to a Trust Agreement dated and effective as of November 1,
1993, as amended and restated pursuant to an Amended and Restated Trust
Agreement dated and effective as of June 1, 1994, as further amended and
restated pursuant to a Second Amended and Restated Trust Agreement dated and
effective as of July 1, 1994, as further amended by that certain Amendment No. 1
to Second Amended and Restated Trust Agreement dated as of November 1, 1994, and
as further amended by that certain Amendment No. 2 to Second Amended and
Restated Trust Agreement dated as of September 23, 1998 (as so amended and
restated, the "Trust Agreement"), among the Grantor, ALF LP as the sole initial
beneficiary (in such capacity, and, together with any successor or permitted
assign, the "Beneficiary"), the Trustee, and, for certain limited purposes set
forth therein, U.S. Bank National Association, a national banking association
(formerly known as First Bank National Association and successor to Bank of
America Illinois, an Illinois banking corporation) ("U.S. Bank"), as
supplemented by that certain 1999-A Supplement to Trust Agreement dated and
effective as of August 1, 1999 among the Grantor, the Beneficiary, the Trustee,
U.S. Bank, Harris Trust and Savings Bank and World Omni Lease Securitization L.P
(the "Transferor") (the Trust Agreement, as so supplemented, the "Agreement"). A
summary of certain of the pertinent portions of the Agreement is set forth
below. To the extent not otherwise defined herein, the capitalized terms herein
have the meanings set forth in the Agreement.
This 1999-A SUBI Certificate is the duly authorized certificate issued
under the Agreement and designated as the "World Omni LT Special Unit of
Beneficial Interest 1999-A Certificate" (the "1999-A SUBI Certificate"). This
1999-A SUBI Certificate is issued under and is subject to the terms, provisions
and conditions of the Agreement, to which Agreement the holder of this 1999-A
SUBI Certificate by virtue of the acceptance hereof assents and by which such
holder is bound. Also to be issued under the Agreement are various other series
of SUBI and UTI Certificates, the first designated as the "World Omni LT
Undivided Trust Interest Certificate" (the "Undivided Trust Interest
Certificate"), and the others each designated as "World Omni LT Special Unit of
Beneficial Interest Certificates" (together with the 1999-A SUBI Certificate,
the "SUBI Certificates" and, together with the Undivided Trust Interest
Certificate, the "SUBI & UTI Certificates"). The Undivided Trust Interest
Certificate evidences an exclusive, undivided interest in the Trust Assets,
other than SUBI Assets (each as defined below); each other series of SUBI
Certificates, taken together, will evidence an exclusive undivided interest in a
separate SUBI Portfolio (as defined below) other than the 1999-A SUBI Portfolio.
B-1
<PAGE>
The property of the Trust includes, or will include, among other
things: cash capital; certain fixed rate retail closed-end lease contracts (the
"Leases") of automobile and light-duty trucks (the "Leased Vehicles") originated
on or after November 1, 1993 by vehicle dealers ("Dealers") located within the
United States (to the extent permitted by law applicable to the Trustee or
otherwise) pursuant to dealer agreements entered into with the initial Grantor's
parent company, World Omni Financial Corp. ("WOFCO") (or, in certain
circumstances, by dealers or other Persons unaffiliated with WOFCO), and the
proceeds thereof; the Leased Vehicles and the proceeds thereof, including the
residual values thereof and the titles thereto; the right to proceeds of any
Dealer repurchase obligations relating to any Lease or Leased Vehicle; and
certain insurance policies or proceeds therefrom covering any Lease, Leased
Vehicles or a lessee under a Lease (such assets, together with any other assets
of the Trust, the "Trust Assets"). The Agreement provides that, from time to
time, certain of the Trust Assets will be identified and allocated on the
records of the Trust into one or more separate portfolios of Trust Assets (such
assets, "SUBI Assets" and each such portfolio, a "SUBI Portfolio"). The
beneficial interest in each such SUBI Portfolio will constitute a separate
"special unit of beneficial interest" (a "SUBI") in the Trust. Pursuant to the
1999-A SUBI Supplement, various SUBI Assets (the "1999-A SUBI Assets") were
identified and allocated on the records of the Trust into a separate SUBI
Portfolio (the "1999-A SUBI Portfolio"), and the beneficial interest in the
1999-A SUBI Portfolio was designated as a separate SUBI known as the "1999-A
SUBI". The rights of the holder of this 1999-A SUBI Certificate to certain of
the proceeds of the 1999-A SUBI Assets are and will be further set forth in the
Agreement.
The SUBI & UTI Certificates do not represent an obligation of, or an
interest in, the Grantor, WOFCO or any of their respective Affiliates. The
1999-A SUBI Certificate is limited in right of payment to certain collections
and recoveries respecting the Leases (and the related Obligors) and the Leased
Vehicles allocated to the 1999-A SUBI Portfolio, all to the extent and as more
specifically set forth in the Agreement. A copy of the Agreement may be examined
during normal business hours at the principal office of the Trustee, and at such
other places, if any, designated by the Trustee, by the holder hereof upon
request.
By accepting this 1999-A SUBI Certificate, the holder hereof and all
owners of beneficial interests herein waives any claim to any proceeds or assets
of the Trustee and to all of the Trust Assets other than those from time to time
included within the 1999-A SUBI Portfolio as 1999-A SUBI Assets and those
proceeds or assets derived from or earned by such 1999-A SUBI Assets.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
parties thereto with respect to the 1999-A SUBI Assets, the 1999-A SUBI
Portfolio and the 1999-A SUBI and the rights of the holder of the 1999-A SUBI
Certificate at any time by the Beneficiary and the Trustee, only with the
consent of Harris Trust and Savings Bank, as trustee (the "Indenture Trustee")
under that certain Indenture dated as of August 1, 1999 between Chase Manhattan
Bank Delaware, as trustee (the "Owner Trustee") of the World Omni 1999-A
Automobile Lease Securitization Trust, and the Indenture Trustee, as set forth
in that certain Securitization Trust Agreement dated as of August 1, 1999 (the
"Securitization Trust Agreement"), among the Transferor, the Indenture Trustee
and the Owner Trustee, and with the consent of the Owner Trustee. The
Securitization Trust Agreement further provides that, in certain limited
circumstances, such consent may be given only with the consent of the Holders of
Notes evidencing more than 50% of the aggregate Percentage Interests (as all
such terms are defined in the Securitization Trust Agreement), voting together
as a single class. If approval of any holder of this 1999-A SUBI Certificate is
required, any such consent shall be conclusive and binding on such holder and on
all future holders hereof and of any 1999-A SUBI Certificate issued upon the
permitted transfer hereof or in exchange herefor or in lieu hereof whether or
not notation of such consent is made upon this 1999-A SUBI Certificate.
As provided in the Agreement, this 1999-A SUBI Certificate and the
underlying interests represented hereby may not be transferred or assigned, and
any such purported transfer or assignment shall be null, void, and of no effect,
except in connection with an absolute assignment or the grant of a
B-2
<PAGE>
security interest pledge by the Transferor in connection with (i) a sale by the
Beneficiary to the Transferor, or (ii) a Securitized Financing. Such a transfer
of this 1999-A SUBI Certificate is registrable upon surrender of this 1999-A
SUBI Certificate for registration of transfer at the corporate trust office of
the Trustee (or the Trust Agent, if applicable) or by any successor Trustee,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon a new 1999-A SUBI Certificate of a like
undivided interest will be issued to the designated permitted transferee.
Prior to due presentation of this 1999-A SUBI Certificate for
registration of a permitted transfer, the Trustee, the certificate registrar and
any of their respective agents may treat the person or entity in whose name this
1999-A SUBI Certificate is registered as the owner hereof for the purpose of
receiving distributions and for all other purposes, and, except as provided for
in the Agreement, neither the Trustee, the certificate registrar nor any such
agent shall be affected by any notice to the contrary.
Unless this 1999-A SUBI Certificate shall have been executed by an
authorized officer of the Trustee, by manual signature, this 1999-A SUBI
Certificate shall not entitle the holder hereof to any benefit under the
Agreement or be valid for any purpose.
B-3
<PAGE>
IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in its
individual capacity has caused this 1999-A SUBI Certificate to be duly executed.
Dated: WORLD OMNI LT
By: VT INC., as Trustee
(SEAL)
------------------------------
Authorized Officer
ATTEST:
- -------------------------
B-4
<PAGE>
EXHIBIT C
FORMS OF 1999-A LEASE
C-1
EXHIBIT 10.7
(All Float)
- --------------------------------------------------------------------------------
VT INC.,
AS TRUSTEE OF
WORLD OMNI LT
AND
WORLD OMNI FINANCIAL CORP.
SUPPLEMENT 1999-A TO
SERVICING AGREEMENT
DATED AS OF AUGUST 1, 1999
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
RECITALS..........................................................................................................2
ARTICLE SIX.......................................................................................................4
Section 6.01. Definitions............................................................................4
ARTICLE SEVEN.....................................................................................................6
Section 7.01. Organization and Standing..............................................................6
Section 7.02. Authorization, Execution and Delivery; No Conflicts....................................6
Section 7.03. Approvals..............................................................................6
Section 7.04. Enforceability.........................................................................7
Section 7.05. Litigation.............................................................................7
Section 7.06. Representations to the RV Insurer......................................................7
ARTICLE EIGHT.....................................................................................................7
Section 8.01. Initial Creation of 1999-A SUBI Portfolio..............................................7
Section 8.02. Subsequent Additions to 1999-A SUBI Portfolio..........................................8
Section 8.03. Servicer Payment in Respect of Certain.................................................9
Section 8.04. Filings................................................................................9
ARTICLE NINE.....................................................................................................10
Section 9.01. Servicer Bound by Servicing Agreement.................................................10
Section 9.02. Collection of Monthly Lease Payments and Remittances; Application of
Proceeds; Accounts....................................................................10
Section 9.03. Records...............................................................................13
Section 9.04. Advances..............................................................................14
Section 9.05. Payment of Certain Fees and Expenses; No Offset.......................................14
Section 9.06. Servicing Compensation................................................................14
Section 9.07. Repossession and Sale of Leased Vehicles..............................................15
Section 9.08. Indemnification by Servicer...........................................................15
Section 9.09. Third Party Claims....................................................................15
Section 9.10. Insurance Policies....................................................................16
Section 9.11. Servicer Not to Resign; Assignment....................................................16
Section 9.12. Obligor Insurance Coverage in Respect of..............................................17
Section 9.13. Corporate Existence; Status; Merger...................................................17
Section 9.14. Mobile Leased Premises................................................................17
Section 9.15. Servicer Administrative Duties under the Transaction Documents........................18
ARTICLE TEN......................................................................................................18
Section 10.01. Reporting by the Servicer.............................................................18
Section 10.02. Annual Accountants'Reports............................................................18
Section 10.03. Other Certificates and Notices from Servicer..........................................18
Section 10.04. Tax Returns...........................................................................19
ARTICLE ELEVEN...................................................................................................19
Section 11.01. Events of Default; Termination of.....................................................19
Section 11.02. No Effect on Other Parties............................................................22
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE TWELVE...................................................................................................22
Section 12.01. Termination of Agreement..............................................................22
Section 12.02. Amendment.............................................................................22
Section 12.03. Governing Law.........................................................................23
Section 12.04. Notices...............................................................................23
Section 12.05. Severability..........................................................................23
Section 12.06. Inspection and Audit Rights...........................................................23
Section 12.07. Binding Effect........................................................................24
Section 12.08. Article and Section Headings..........................................................24
Section 12.09. Execution in Counterparts.............................................................24
Section 12.10. Rights Cumulative.....................................................................24
Section 12.11. Further Assurances....................................................................24
Section 12.12. Third-Party Beneficiaries.............................................................24
EXHIBITS
EXHIBIT A - Schedule of 1999-A Leases and 1999-A
Leased Vehicles as of the Initial Cutoff Date...................................................... A-1
EXHIBIT B - Form of Servicer's Certificate..................................................................... B-1
</TABLE>
ii
<PAGE>
SUPPLEMENT 1999-A TO
SERVICING AGREEMENT
SUPPLEMENT 1999-A TO SERVICING AGREEMENT (the "Supplement"),
dated as of August 1, 1999, between VT INC., an Alabama corporation, as trustee
(hereinafter, together with its successors and assigns, the "Origination
Trustee") of WORLD OMNI LT, an Alabama business trust (the "Origination Trust"),
and WORLD OMNI FINANCIAL CORP., a Florida corporation (the "Servicer").
RECITALS
A. Auto Lease Finance L.P. ("ALF LP"), the Origination Trustee
and, for certain limited purposes set forth therein, U.S. Bank National
Association (formerly known as First Bank National Association and successor
trustee to Bank of America Illinois, an Illinois banking corporation) (together
with its successors, "U.S. Bank" and, in its capacity as Trust Agent as defined
in the Servicing Agreement (as defined herein), the "Trust Agent") have entered
into that certain Second Amended and Restated Trust Agreement dated as of July
1, 1994 (amending and restating that certain original Trust Agreement dated as
of November 1, 1993, among Auto Lease Finance, Inc. ("ALFI"), the Origination
Trustee and U.S. Bank, and that certain Amended and Restated Trust Agreement
dated as of June 1, 1994 among ALFI, ALF LP, the Origination Trustee and U.S.
Bank) as amended by that certain Amendment No. 1 to Second Amended and Restated
Trust Agreement dated as of November 1, 1994, among the same parties and as
amended by that certain Amendment No. 2 to Second Amended and Restated Trust
Agreement dated as of September 23, 1998, among the same parties (as so amended
and restated, and as it may be further amended, supplemented or modified, the
"Origination Trust Agreement"), pursuant to which ALFI and the Origination
Trustee formed the Origination Trust for the purpose of taking assignments and
conveyances of, holding in trust and dealing in, various Trust Assets (as
defined in the Origination Trust Agreement) in accordance with the Origination
Trust Agreement. ALFI and the Servicer have entered into that certain Limited
Partnership Agreement dated as of June 1, 1994, as amended and restated by that
certain First Amended and Restated Limited Partnership Agreement dated as of
July 1, 1994, pursuant to which ALF LP was formed and ALFI contributed to ALF LP
all of its right, title and interest in and to the Origination Trust.
B. On September 23, 1998, ALFI was merged with and into Auto
Lease Finance LLC ("ALF LLC"), a Delaware single member limited liability
company the sole member of which is WOFCO, pursuant to that certain Assignment
of General Partnership Interest and Amendment to Amended and Restated Limited
Partnership Agreement of Auto Lease Finance L.P. dated as of September 23, 1998
among the Servicer, ALFI and ALF LLC and that certain Certificate of Merger
dated September 23, 1998 filed by WOFCO with the Secretary of State for the
State of Delaware whereby ALF LLC succeeded to all of the rights and obligations
of ALFI, including but not limited to those as general partner of ALF LP, as
reflected in the Amended and Restated Certificate of Limited Partnership of ALF
LP filed with the Delaware Secretary of State as of September 23, 1998.
C. The parties hereto also have entered into that certain
Second Amended and Restated Servicing Agreement dated as of July 1, 1994 as
amended by that certain Amendment No. 1 to Second and Amended Restated Servicing
Agreement dated as of September 23, 1998, among the same parties (as the same
has been supplemented, is supplemented hereby and may be further amended,
supplemented or modified, the "Servicing Agreement"), amending and restating
that certain original Servicing Agreement dated as of November 1, 1993, and that
certain Amended and Restated Servicing Agreement dated as of June 1, 1994, which
provides for, among other things, the servicing of the Trust Assets by the
Servicer.
2
<PAGE>
D. Concurrently herewith, and as contemplated by the Servicing
Agreement and the Origination Trust Agreement, ALF LP, the Origination Trustee,
U.S. Bank and World Omni Lease Securitization L.P. (the "Transferor") are
entering into that certain Supplement 1999-A to Trust Agreement dated as of
August 1, 1999 (the "1999-A SUBI Supplement"), pursuant to which the Origination
Trustee, on behalf of the Origination Trust and at the direction of ALF LP,
which also will be at that time a beneficiary of the Origination Trust, will
create and issue to ALF LP a special unit of beneficial interest in the
Origination Trust, or SUBI (as defined in the Origination Trust Agreement) (such
SUBI, the "1999-A SUBI"), whose beneficiaries generally will be entitled to the
net cash flow arising from, but only from, the related SUBI Portfolio (as
defined in the Origination Trust Agreement) (such SUBI Portfolio, the "1999-A
SUBI Portfolio"), a SUBI Certificate (as defined in the Origination Trust
Agreement) representing a 100% beneficial interest in the 1999-A SUBI (such SUBI
Certificate, the "1999-A SUBI Certificate"), all as set forth in the Origination
Trust Agreement and the 1999-A SUBI Supplement.
E. Also concurrently herewith, ALF LP and the Transferor are
entering into that certain SUBI Certificate Purchase and Sale Agreement dated as
of August 1, 1999, pursuant to which ALF LP is selling to the Transferor,
without recourse, all of ALF LP's right, title and interest in and to the 1999-A
SUBI and the 1999-A SUBI Certificate, all moneys due thereon and paid thereon or
in respect thereof and the right to realize on any property that may be deemed
to secure the 1999-A SUBI, and all proceeds thereof, all in consideration of the
cash payment to ALF LP of an amount equal to the Aggregate Net Investment Value
(as defined in the Securitization Trust Agreement) of the 1999-A SUBI Portfolio
as of the Initial Cutoff Date (as defined in the 1999-A SUBI Supplement).
F. Also concurrently herewith, and as contemplated by the
Servicing Agreement and the Origination Trust Agreement, the Transferor, Chase
Manhattan Bank Delaware, as owner trustee (the "Owner Trustee") and Harris Trust
and Savings Bank, as indenture trustee (the "Indenture Trustee") are entering
into that certain Securitization Trust Agreement dated as of August 1, 1999 (the
"Securitization Trust Agreement") pursuant to which the 1999-A SUBI Certificate
will be transferred to the Securitization Trust and then pledged to the
Indenture Trustee, in that capacity, in connection with a Securitized Financing
(as defined in the Origination Trust Agreement) by the Transferor.
G. Also concurrently herewith, the Indenture Trustee and the
Securitization Trust are entering into that certain Indenture dated as of August
1, 1999 (the "Indenture") pursuant to which, among other things, the
Securitization Trust will issue the Notes (as defined below) and the
Securitization Trust will grant a security interest to the Indenture Trustee
with respect to all of the Trust Estate.
H. The parties desire to supplement the terms of the Servicing
Agreement insofar as they apply to the 1999-A SUBI, the 1999-A SUBI Portfolio,
and the 1999-A SUBI Certificate to provide for further specific servicing
obligations that will benefit the holders of the 1999-A SUBI Certificate and the
parties to and the beneficiaries of the Securitized Financing contemplated by
the Securitization Trust Agreement, all as generally contemplated by the
Servicing Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained and in the Servicing Agreement, the parties hereto
agree to the following supplemental obligations with regard to the 1999-A SUBI
Portfolio:
3
<PAGE>
ARTICLE SIX
DEFINITIONS
Section 6.01. Definitions.
For all purposes of this Supplement, except as otherwise
expressly provided or unless the context otherwise requires, (a) unless
otherwise defined herein, all capitalized terms used herein shall have the
meanings attributed to them by Section 1.01 of the Servicing Agreement, by
Section 0.01 of the Origination Trust Agreement, by Section 13.01 of the 1999-A
SUBI Supplement, or by Section 1.01 of the Securitization Trust Agreement, as
applicable, (b) the capitalized terms defined in this Supplement have the
meanings assigned to them in this Supplement and include (i) all genders and
(ii) the plural as well as the singular, (c) all references to words such as
"herein", "hereof" and the like shall refer to this Supplement as a whole and
not to any particular article or section within this Supplement, (d) the term
"include" and all variations thereon shall mean "include without limitation",
(e) the term "or" shall include "and/or", and (f) any reference herein to the
"Origination Trustee, acting on behalf of the Origination Trust," or words of
similar import, shall be deemed to mean the Origination Trustee, acting on
behalf of the Origination Trust and all beneficiaries thereof.
"Advance" means, (i) with respect to all Delinquent Leases
included in the 1999-A SUBI Portfolio during a Collection Period, an aggregate
advance required to be made with respect to such Delinquent Leases, the amount
of which shall equal the sum of all Monthly Lease Payments due but not received
during such Collection Period; provided, however, that for purposes of this
definition, the term "Delinquent Lease" shall have the meaning set forth in the
1999-A SUBI Supplement, except that it shall refer to 1999-A Leases that are 31
days or more past due, not 61 days or more past due; and (ii) with respect to
Leases that are included in the 1999-A SUBI Portfolio during a Collection Period
but which are not Delinquent Leases, an aggregate advance permitted (but not
required) to be made with respect to any Monthly Lease Payments under such
Leases that are one or more days, but less than 31 days, past due.
"ALFI" and "ALF LP " have the respective meanings set forth in
Recital A.
"ALF LLC" has the meaning set forth in Recital B.
"Code" means the Internal Revenue Code of 1986, as amended.
"Current Liability" means, with respect to any Plan, the
present value of the accrued benefits under the Plan, as set forth in the most
recent audited consolidated financial statements of JM Family Enterprises, Inc.
and its subsidiaries.
"Eligible Servicer" means the Trust Agent or an entity that is
currently servicing a portfolio of automobile and/or light truck retail
installment lease contracts, that is legally qualified and has the capacity to
service the 1999-A Leases and that has demonstrated the ability to service a
portfolio of similar lease contracts professionally and competently in
accordance with high standards of skill and care.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute of similar import,
together with the regulations thereunder, in each case as in effect from time to
time. References to sections of ERISA shall be construed to refer also to any
successor sections.
"ERISA Affiliate" means each person (as defined in Section
3(9) of ERISA) which, together with the identified person, would be deemed to be
a member of the same "controlled group" within the meaning of Section 414(b),
(c), (m) and (o) of the Code or Section 4001 of ERISA.
4
<PAGE>
"Indenture" has the meaning set forth in Recital G.
"Indenture Trustee" has the meaning set forth in Recital F.
"1999-A SUBI" has the meaning set forth in Recital D.
"1999-A SUBI Account" means any SUBI Account related to the
1999-A SUBI.
"1999-A Servicer Event of Default" means any of the acts,
events or occurrences set forth in Section 11.01.
"1999-A SUBI Portfolio" has the meaning set forth in Recital
D.
"1999-A SUBI Supplement" has the meaning set forth in Recital
D.
"Nonrecoverable Advance" means any Advance that, in the
Servicer's reasonable judgment, may not be ultimately recoverable by the
Servicer from Matured Leased Vehicle Proceeds, Repossessed Vehicle Proceeds or
other Liquidation Proceeds or Insurance Proceeds, any Residual Value Insurance
Policy or otherwise.
"Origination Trust" has the meaning set forth in the Preamble.
"Origination Trust Agreement" has the meaning set forth in
Recital A.
"Origination Trust Expenses" has the meaning set forth in
Section 9.02(f).
"Origination Trustee" has the meaning set forth in the
Preamble.
"Owner Trustee" has the meaning set forth in Recital F.
"Plan" means an "employee benefit plan," as such term is
defined in Section 3(3) of ERISA.
"Prospectus" means that certain prospectus dated August [___],
1999 relating to the public offering of the Class A Notes issued by the
Securitization Trust.
"Residual Value Loss Determination Date" means, with respect
to a Collection Period, the [tenth] day of the following month, or if that day
is not a Business Day, the next Business Day, or (with respect to the first
Residual Value Loss Determination Date) [October 10], 1999.
"Securitization Trust" means the trust created by the
Securitization Trust Agreement.
"Securitization Trust Agreement" has the meaning set forth in
Recital F.
"Servicer Letter of Credit" means a letter of credit, surety
bond or insurance policy under which demands for payment may be made to secure
timely remittance by the Servicer of monthly collections received in respect of
the 1999-A SUBI Assets to the 1999-A SUBI Collection Account.
"Servicer Reimbursement" has the meaning set forth in Section
9.02(g).
"Servicer's Certificate" has the meaning set forth in Section
10.01.
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"Servicing Agreement" has the meaning set forth in Recital C.
"Supplement" has the meaning set forth in the Preamble.
"Transferor" has the meaning set forth in Recital D.
"Trust Agent" has the meaning set forth in Recital A.
"Unfunded Current Liability" of any Plan means the amount, if
any, by which the present value of the accrued benefits under the Plan as of the
close of its most recent Plan year exceeds the value of the Plan's assets, which
value shall be determined as set forth in the most recent audited consolidated
financial statements of JM Family Enterprises, Inc. and its subsidiaries.
"U.S. Bank" has the meaning set forth in Recital A.
ARTICLE SEVEN
REPRESENTATIONS AND WARRANTIES OF SERVICER
The Servicer represents and warrants to the Owner Trustee and
Indenture Trustee as follows:
Section 7.01. Organization and Standing.
The Servicer: (i) is a corporation validly organized and
existing and in good standing under the laws of the State of Florida; (ii) has
qualified to do business as a foreign corporation and is in good standing in the
State of Alabama and any other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not have a
material adverse effect on the ability of the Servicer to carry out its
obligations as Servicer under the Servicing Agreement or this Supplement; (iii)
has full power, authority and legal right to own its property, to carry on its
business as presently conducted, and to enter into and perform its obligations
under the Servicing Agreement and this Supplement; and (iv) holds all requisite
licenses and permits, the absence of which would have a material adverse effect
on its ability to carry on its business as presently conducted.
Section 7.02. Authorization, Execution and Delivery; No
Conflicts.
The execution and delivery by the Servicer of this Supplement
are within the corporate power of the Servicer and have been duly authorized by
all necessary corporate action on the part of the Servicer. Neither the
execution and delivery of this Supplement, nor the consummation of the
transactions herein contemplated, nor compliance with the provisions hereof,
will conflict with or result in a breach of, or constitute a default (with
notice or passage of time or both) under any provision of any law, governmental
rule, regulation, judgment, decree or order binding on the Servicer or its
properties or the articles of incorporation or bylaws of the Servicer, or any
provision of any indenture, mortgage, contract or other instrument to which the
Servicer is a party or by which it is bound, or result in the acceleration of
any obligation under, or the creation or imposition of any Lien upon, any of its
property pursuant to the terms of any such indenture, mortgage, contract or
other instrument.
Section 7.03. Approvals.
The Servicer has obtained or made all necessary licenses,
consents, approvals, waivers and notifications of creditors, lessors and other
nongovernmental persons, in each case in connection with the execution and
delivery of this Supplement and the consummation of all the transactions herein
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contemplated, and the Servicer is not required to obtain the consent of any
other party or the consent, license, approval, waiver or authorization from, or
registration or declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Supplement.
Section 7.04. Enforceability.
This Supplement constitutes a legal, valid and binding
instrument enforceable against the Servicer in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance, and other similar laws
relating to the enforcement of creditors' rights generally and to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
Section 7.05. Litigation.
There are no actions, suits or proceedings pending or, to the
knowledge of the Servicer, threatened against or affecting the Servicer or any
Affiliate thereof, before or by any court, administrative agency, arbitrator or
governmental body with respect to any of the transactions contemplated by this
Supplement, or which will, if determined adversely to the Servicer or any such
Affiliate, materially and adversely affect the Servicer's ability to perform its
obligations hereunder. The Servicer is not in default with respect to any order
of any court, administrative agency, arbitrator or governmental body so as
materially and adversely to affect the transactions contemplated by this
Supplement.
Section 7.06. Representations to the RV Insurer.
The Servicer has made no material misrepresentations to the RV
Insurer regarding any matter in the process of arranging for and negotiating the
terms of the Residual Value Insurance Policy.
ARTICLE EIGHT
CREATION OF 1999-A SUBI
Section 8.01. Initial Creation of 1999-A SUBI Portfolio.
(a) Pursuant to Section 4.02 of the Origination Trust
Agreement and Section 11.01 of the 1999-A SUBI Supplement, the Origination
Trustee has been directed to cause to be identified and allocated on the books
and records of the Origination Trust an initial separate portfolio of SUBI
Assets consisting of Leases, related Leased Vehicles and other associated Trust
Assets, which Trust Assets shall meet the criteria specified therein. Pursuant
to Section 2.02(f) of the Servicing Agreement, the Origination Trustee, on
behalf of the Origination Trust, hereby directs that the Servicer so identify
and allocate such a separate portfolio of SUBI Assets consisting of Leases,
related Leased Vehicles and other associated Trust Assets from among all those
Leases, related Leased Vehicles and other associated Trust Assets owned by the
Origination Trustee, on behalf of the Origination Trust, and currently accounted
for as part of the Undivided Trust Interest.
(b) Pursuant to subsection (a) above and Section 2.02(f) of
the Servicing Agreement, the Servicer hereby identifies and allocates the
portfolio of Leases, related Leased Vehicles and other associated Trust Assets
(as described in clauses (i) through (ii) of the first sentence of Section
11.01(a) of the 1999-A SUBI Supplement) more particularly described on Exhibit A
hereto (which is in substantially the form of a Schedule of Leases and Leased
Vehicles), in order to create the initial 1999-A SUBI Portfolio.
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(c) The Servicer hereby represents and warrants to the
Origination Trustee, on behalf of the Origination Trust, to the Owner Trustee,
on behalf of the Certificateholder, and to the Indenture Trustee, on behalf of
the Noteholders, that (i) all 1999-A Leases as of the Initial Cutoff Date were
Eligible Leases as of the Initial Cutoff Date, (ii) no adverse selection
procedures were employed in selecting such 1999-A Leases, and (iii) it is not
aware of any bias in the selection of such 1999-A Leases that would cause the
delinquencies or losses therein to be worse than those of other Leases.
Section 8.02. Subsequent Additions to 1999-A SUBI Portfolio.
(a) Pursuant to Section 11.02 of the 1999-A SUBI Supplement,
the Origination Trustee has been directed to cause to be identified and
allocated on the books and records of the Origination Trust on or before each
Transfer Date certain additional Eligible Leases, related Leased Vehicles and
other associated Trust Assets not then allocated, or reserved for allocation to,
any SUBI Portfolio, with an aggregate Discounted Principal Balance determined as
provided for in such Section. Pursuant to Section 2.02(f) of the Servicing
Agreement, the Origination Trustee, on behalf of the Origination Trust, hereby
directs that the Servicer identify such additional Eligible Leases, related
Leased Vehicles and other associated Trust Assets (as described in clauses (i)
and (ii) of the first sentence of Section 11.01(a) of the 1999-A SUBI Supplement
and as meet the other requirements set forth in Section 11.02 thereof) on or
before each Transfer Date, and cause such Leases and Leased Vehicles to be
specifically identified on the revised Schedule of Leases and Leased Vehicles to
be delivered pursuant to Section 10.01 hereof. On each such Transfer Date, but
effective as of the related Subsequent Cutoff Date, such additional Eligible
Leases, Leased Vehicles and other associated Trust Assets shall be added to the
1999-A SUBI Portfolio as additional 1999-A SUBI Assets.
(b) The Servicer shall give one Business Day's prior notice to
the Indenture Trustee of each Transfer Date. On each Transfer Date, prior to the
reallocation described in the last sentence of subparagraph (a), the Servicer
also shall provide to the Origination Trustee, on behalf of the Origination
Trust, and the Indenture Trustee, on behalf of the Noteholders, an Officer's
Certificate certifying that (i) all 1999-A Leases added to the 1999-A SUBI
Portfolio on that date were Eligible Leases as of the relevant Subsequent Cutoff
Date, (ii) no adverse selection procedures were employed in selecting such
1999-A Leases, (iii) it is not aware of any bias in the selection of such 1999-A
Leases that would cause the delinquencies or losses thereof to be worse than
other Leases, other than the fact that such 1999-A Leases were selected from all
Eligible Leases not then allocated to any SUBI Portfolio or reserved for
allocation to another SUBI Portfolio (as provided in Section 11.08 of the 1999-A
SUBI Supplement) and (iv) unless the Indenture Trustee receives confirmation
(written or oral) from each Rating Agency to the effect that the use of
different criteria would not result in the qualification, reduction or
withdrawal of its then current rating on any Rated Notes, after giving effect to
such reallocation (A) each such 1999-A Lease will be allocated to the 1999-A
SUBI Portfolio based upon its Discounted Principal Balance as of the relevant
Subsequent Cutoff Date, (B) the weighted average remaining term of all 1999-A
Leases will be not greater than [__] months, and (C) the weighted average Booked
Residual Value of all 1999-A Leases, as a percentage of the aggregate
Outstanding Principal Balance of the 1999-A Leases, will be not greater than
[__]%, based on the characteristics of each 1999-A Lease as of its date of
origination.
(c) Except in the circumstances set forth in Section 11.02(e)
of the 1999-A SUBI Supplement, on each Transfer Date, the Servicer shall
transfer from the 1999-A SUBI Collection Account to the Lease Funding Account an
amount equal to the aggregate Discounted Principal Balance as of the relevant
Subsequent Cutoff Date of the 1999-A Leases then being added to the 1999-A SUBI
Portfolio pursuant to Section 11.02(a) of the 1999-A SUBI Supplement.
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(d) In the circumstances set forth in Section 11.02(e) of the
1999-A SUBI Supplement, the Servicer shall transfer from the 1999-A SUBI
Collection Account to the 1999-A SUBI Lease Account the amounts specified in
such Section.
Section 8.03. Servicer Payment in Respect of Certain Leases
and Leased Vehicles.
(a) The representation and warranty of the Servicer set forth
in Section 8.01(c), and the certifications of the Servicer pursuant to Section
8.02(b)(i), with respect to each 1999-A Lease shall survive delivery of the
related Lease Documents to the Servicer and shall continue so long as such
1999-A Lease remains outstanding, or until the termination of the Securitization
Trust Agreement pursuant to Section 7.01 thereof, whichever occurs earlier. Upon
discovery by the Origination Trustee, the Owner Trustee, the Indenture Trustee
or the Servicer that any such representation or warranty was incorrect as of the
time effective and materially and adversely affects such 1999-A Lease, the party
discovering such incorrectness shall give prompt written notice to the others.
Within 60 days of its discovery of such incorrectness or notice to such effect
to the Servicer, the Servicer shall cure in all material respects the
circumstances or condition in respect of which the representation or warranty
was incorrect as of the time effective. If the Servicer is unable or unwilling
to do so timely, it shall, as the sole remedy for such breach, promptly (i)
deposit (or cause to be deposited) into the 1999-A SUBI Collection Account an
amount equal to the then Discounted Principal Balance of such Lease as of the
Deposit Date related to the Collection Period in which the 60-day cure period
ended, plus an amount equal to the imputed interest, or lease charge, portion of
any Monthly Lease Payments with respect thereto at the related Lease Rate that
was delinquent as of that Collection Period, (ii) reallocate such Lease and the
related Leased Vehicle from the 1999-A SUBI Portfolio to the UTI Portfolio, and
(iii) indemnify, defend and hold harmless the holders of any 1999-A SUBI
Certificate (including without limitation the Owner Trustee on behalf of the
Certificateholder and the Indenture Trustee on behalf of the Noteholders) and
any subsequent servicer (if other than the current Servicer) from and against,
any and all loss or liability with respect to or resulting from any such Lease
or Leased Vehicle (including without limitation the reasonable fees and expenses
of counsel). Notwithstanding the foregoing, if any reallocation described in
clause (ii) would cause the Transferor Interest to be equal to or less than
zero, the Servicer also shall deposit promptly into the 1999-A SUBI Collection
Account an amount so that the Transferor Interest will not be reduced to less
than zero, and the reallocation will not be made until such deposit has been
made.
(b) In the event that the Servicer receives funds from a
Dealer required pursuant to such Dealer's obligation under a Dealer Agreement
with the Servicer to repurchase a misrepresented Lease or Leased Vehicle
included in the 1999-A SUBI Portfolio, the Servicer shall, within two Business
Days of receipt thereof, deposit such funds into the 1999-A SUBI Collection
Account, which deposit shall satisfy the Servicer's obligations pursuant to
Section 8.03(a)(i), and return to the repurchasing Dealer the Certificate of
Title and Lease with respect to such Leased Vehicle.
(c) The obligations of the Servicer pursuant to this Section
8.03 shall survive any termination of the Servicer with respect to the 1999-A
SUBI Portfolio under this Supplement or the Servicing Agreement.
Section 8.04. Filings.
The Servicer will undertake all other and future actions and
activities as may be reasonably necessary to perfect (or evidence) and confirm
the foregoing allocations of Trust Assets to the 1999-A SUBI Portfolio and the
backup security interest therein of the Indenture Trustee including without
limitation filing or causing to be filed UCC financing statements and executing
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and delivering all related filings, documents or writings as may be reasonably
necessary hereunder or under any other Securitization Trust Documents (including
the Indenture and the Backup Security Agreement), whether on its own behalf or
pursuant to the power of attorney granted by the Grantor pursuant to Section
11.04 of the 1999-A SUBI Supplement; provided, however, that in no event shall
the Servicer be required to take any action to perfect a security interest that
may be held by the Securitization Trust or the Indenture Trustee in any 1999-A
Leased Vehicle.
ARTICLE NINE
SPECIFIC REQUIREMENTS FOR
ADMINISTRATION AND SERVICING OF LEASES
IN 1999-A SUBI PORTFOLIO
Section 9.01. Servicer Bound by Servicing Agreement.
(a) Except as otherwise specifically provided herein: (i) the
Servicer shall continue to be bound by all provisions of the Servicing Agreement
with respect to the Leases, Leased Vehicles and other associated Trust Assets in
the 1999-A SUBI Portfolio, including without limitation the provisions of
Article Two thereof relating to the administration and servicing of Leases; and
(ii) the provisions set forth herein shall operate either as additions to or
modifications of the already-extant obligations of the Servicer under the
Servicing Agreement, as the context may require. In the event of any conflict
between the provisions of this Supplement and the Servicing Agreement with
respect to the 1999-A SUBI, the provisions of this Supplement shall prevail.
(b) For purposes of determining the Servicer's obligations
with respect to the servicing of the 1999-A SUBI Portfolio under this Supplement
(including without limitation pursuant to Article Two thereof), general
references in the Servicing Agreement to: (i) a SUBI Account shall be deemed to
refer more specifically to the 1999-A SUBI Account; (ii) a SUBI Asset shall be
deemed to refer more specifically to a 1999-A SUBI Asset; (iii) an appropriate
or applicable SUBI Collection Account shall be deemed to refer more specifically
to the 1999-A SUBI Collection Account; (iv) an appropriate or applicable SUBI
Lease Account shall be deemed to refer more specifically to a 1999-A SUBI Lease
Account; (v) a SUBI Portfolio shall be deemed to refer more specifically to the
1999-A SUBI Portfolio; (vi) a SUBI Servicing Agreement Supplement shall be
deemed to refer more specifically to this Supplement; and (vii) a SUBI
Supplement shall be deemed to refer more specifically to the 1999-A SUBI
Supplement.
(c) Coincident with the execution and delivery of this
Supplement, the Servicer shall furnish the Indenture Trustee, on behalf of the
Noteholders with an Officer's Certificate listing the officers of the Servicer
currently involved in, or responsible for, the administration and servicing of
the Leases in the 1999-A SUBI Portfolio, which list shall from time to time be
updated by the Servicer.
Section 9.02. Collection of Monthly Lease Payments and
Remittances; Application of Proceeds; Accounts.
(a) With reference to Section 2.02(b) of the Servicing
Agreement:
i) the Servicer shall transfer into the 1999-A SUBI
Collection Account any Extension Fee that it may receive in connection with the
extension of a 1999-A Lease;
ii) except as provided in clause (iii) below, the extended
Maturity Date of any 1999-A Lease may not occur later than the last day of the
Collection Period related to the Final Scheduled Distribution Date;
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iii) for any extension of a 1999-A Lease for any
non-credit-related reason, the Servicer will reduce the Booked Residual Value of
the related 1999-A Leased Vehicle to reflect any additional scheduled Monthly
Lease Payments; and
iv) if the Servicer does extend the Maturity Date of a
Lease included in the 1999-A SUBI Portfolio by more than a total of five times
or by more than five months in the aggregate as described in Section 2.02(b) of
the Servicing Agreement, or extends the Maturity Date so that the extended
Maturity Date will occur later than the last day of the Collection Period
relating to the Final Scheduled Maturity Date, then, as the sole remedy
therefor, the Servicer shall, on the Deposit Date related to the Collection
Period in which such extension was granted or on the Deposit Date relating to
the Collection Period in which the Servicer discovers or is notified that an
improper extension was granted, (y) deposit into the 1999-A SUBI Collection
Account an amount equal to the then Discounted Principal Balance of such Lease
plus an amount equal to the interest, or lease charge, portion of any Monthly
Lease Payments with respect thereto at the related Lease Rate that were
delinquent as of the end of that Collection Period, and (z) reallocate such
Lease and the related Leased Vehicle from the 1999-A SUBI Portfolio to the UTI
Portfolio. The obligations of the Servicer pursuant to this Section 9.02(a)
shall survive any termination of the Servicer's obligations with respect to the
1999-A SUBI Portfolio under this Supplement or the Servicing Agreement.
(b) With reference to Section 2.02(c) of the Servicing
Agreement, the Servicer shall, within one (1) Business Day after receipt,
deposit all proceeds of claims made under the Residual Value Insurance Policy
(as described in Section 9.10(b)) (i) for Insured Residual Value Loss Amounts
with respect to the Revolving Period, into the 1999-A SUBI Collection Account
for reinvestment in additional Eligible Leases, related Leased Vehicles and
other associated Trust Assets as provided in Section 8.02, and (ii) for Insured
Residual Value Loss Amounts with respect to the Amortization Period, into the
Distribution Account for distribution as provided in clause (ii) of Section
3.03(e) of the Securitization Trust Agreement.
(c) With reference to Section 2.02(d) of the Servicing
Agreement, the Servicer shall treat all Repossessed Vehicle Proceeds and Matured
Leased Vehicle Proceeds in the manner provided for other Liquidation Proceeds;
provided, however, as set forth in Section 9.07, that the Servicer may be
reimbursed for related unreimbursed Repossessed Vehicle Expenses, Matured Leased
Vehicle Expenses, other Liquidation Expenses and Insurance Expenses as provided
in subsection (g).
(c) With reference to Section 2.04 of the Servicing Agreement,
the Servicer shall deposit into the 1999-A SUBI Collection Account on or before
each Deposit Date each Security Deposit that became Liquidation Proceeds during
the related Collection Period.
(e) The Servicer, on behalf of the Origination Trustee, shall
establish and maintain in the name of the Indenture Trustee the 1999-A SUBI
Collection Account as set forth in Section 12.01(a) of the 1999-A SUBI
Supplement. The Servicer, on behalf of the Owner Trustee, shall establish and
maintain the Distribution Account, in the name of the Indenture Trustee, as set
forth in Section 3.01 of the Securitization Trust Agreement. The Servicer, on
behalf of the Owner Trustee, shall establish and maintain the Reserve Fund, in
the name of the Indenture Trustee, as set forth in Section 3.04(a) of the
Securitization Trust Agreement.
(f) On each Determination Date the Servicer shall make the
calculations necessary to allow the distribution by the Indenture Trustee to the
holder of the 1999-A SUBI Certificate on the related Distribution Date in
accordance with Section 12.01(c) of the 1999-A SUBI Supplement. In connection
therewith, the Servicer shall determine the amount of Origination Trust expenses
and liabilities ("Origination Trust Expenses") incurred or suffered during the
preceding Collection Period and shall calculate the allocations of such
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Origination Trust Expenses among the various Portfolios, including the 1999-A
SUBI Portfolio, in good faith and so as not to disproportionately affect any
Portfolio, generally as provided for in Section 7.01(c) of the Origination Trust
Agreement. On each Determination Date, the Servicer also shall make the
calculations necessary to allow the distributions to Noteholders and others on
the related Distribution Date in accordance with Section 3.03 of the
Securitization Trust Agreement.
(g) On each Deposit Date, the Servicer shall cause the
transfer from the 1999-A SUBI Collection Account in respect of the 1999-A SUBI
Certificate to the Distribution Account at the direction of the Transferor, as
provided in Section 3.02(a) of the Securitization Trust Agreement and Section
12.01(c) of the 1999-A SUBI Supplement. On each Distribution Date, the Servicer
shall make the distributions from the Distribution Account and the Reserve Fund
in respect of the Notes, as provided in Section 3.03 of the Securitization Trust
Agreement, including without limitation any redeposit of Undistributed
Transferor Excess Collections into the 1999-A SUBI Collection Account upon
receipt of appropriate instructions from the Transferor pursuant to Section
3.03(c) of the Securitization Trust Agreement.
(h) To the extent that during any Collection Period: (i) the
Servicer has incurred Matured Leased Vehicle Expenses; (ii) the Servicer has
incurred any Repossessed Vehicle Expenses or other Liquidation Expenses or
Insurance Expenses; (iii) any Monthly Lease Payments arising from a Lease
allocated to the 1999-A SUBI Portfolio are received by the Origination Trustee
or the Servicer with respect to any prior Collection Period as to which the
Servicer has outstanding an unreimbursed Advance; or (iv) any amount of
unreimbursed Advances are reasonably determined by the Servicer to be
Nonrecoverable Advances, then, on the related Deposit Date, (1) the Servicer
shall provide to the Origination Trustee and the Indenture Trustee an Officer's
Certificate setting forth the basis for its determination of any such amount and
(2) the Indenture Trustee shall promptly transfer an amount equal to the
aggregate of such amounts from the 1999-A SUBI Collection Account to the Lease
Funding Account. Thereafter, the Origination Trustee shall remit to the Servicer
from the Lease Funding Account the total of such amounts set forth in the first
sentence above and clauses (i) through (iv) of the second sentence above,
without interest (the "Servicer Reimbursement"). In lieu of causing the
Indenture Trustee to transfer to the Lease Funding Account and then remit to the
Servicer all or part of any such Servicer Reimbursement, upon providing an
Officer's Certificate, the Servicer may deduct from deposits otherwise to be
made into the 1999-A SUBI Collection Account, as applicable, an amount up to but
not exceeding the total of such amounts as are due and owing to the Servicer.
(i) The Servicer shall account to the Origination Trustee, the
Indenture Trustee and the Owner Trustee with respect to the 1999-A SUBI
Portfolio separately from any other Portfolio.
(j) The Servicer shall direct the Indenture Trustee's
investments from time to time of funds in the 1999-A SUBI Accounts, the
Distribution Account and the Reserve Fund, all as provided for in (and subject
to the limitations of) the other Transaction Documents. The maximum permissible
maturities of any such investments pursuant to this clause on any date shall be
not later than the Business Day immediately preceding the Deposit Date (with
regard to investment of funds in 1999-A SUBI Accounts) or the Business Day
immediately preceding the Distribution Date (with regard to investment of funds
in the Distribution Account and the Reserve Fund) next succeeding the date of
such investment, except for (i) investments on which the Indenture Trustee is
the obligor (including repurchase agreements on which it, in its commercial
capacity, is liable as principal), which may mature on the Deposit Date or
Distribution Date, respectively, and (ii) investments during the Revolving
Period of Principal Collections on deposit in the 1999-A SUBI Collection
Account, which may mature on such dates as specified by the Indenture Trustee at
the Servicer's direction so as to maintain the availability of sufficient cash
to make the payments described in Sections 8.02(c) and (d) hereof.
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(k) In the event the Servicer obtains confirmation (written or
oral) from each Rating Agency, and provides evidence of such confirmation to the
UTI Holder, the Origination Trustee and the Indenture Trustee, to the effect
that the utilization by the Servicer of an alternative remittance schedule with
respect to collections arising out of the 1999-A SUBI Portfolio to be deposited
in the 1999-A SUBI Collection Account pursuant to Section 2.02(c) or (d) of the
Servicing Agreement (including but not limited to the use of an alternative
remittance schedule pursuant to which the obligations of the Servicer to make
such remittances are secured by a Servicer Letter of Credit satisfactory to each
such Rating Agency) will not result in a qualification, downgrading or
withdrawal of the then-current rating assigned to the Rated Notes by such Rating
Agency, (i) this Supplement may be so modified without the consent of any
Noteholders pursuant to Section 12.02 of this Agreement and 9.01 of the
Securitization Trust Agreement and (ii) the Servicer may remit such collections
to the 1999-A SUBI Collection Account in accordance with that alternative
remittance schedule.
(l) The Servicer may make remittances to the Distribution
Account net of certain other amounts, as and to the extent set forth in Section
3.05 of the Securitization Trust Agreement.
(m) The parties hereto acknowledge that the Origination
Trustee, on behalf of the Origination Trust, has made a complete transfer to the
Owner Trustee, on behalf of the Securitization Trust, of the initial proceeds of
the 1999-A SUBI Certificate contained in the Distribution Account and the
Reserve Fund and, except as provided in this Supplement, the 1999-A SUBI
Supplement and the Securitization Trust Agreement, neither the Origination
Trustee nor the Servicer has any right to direct such funds to a third party or
to receive such funds.
(n) In the event of a sale, disposition or other liquidation
of the 1999-A SUBI Certificate and the other property of the Securitization
Trust pursuant to Section 5.17 of the Indenture, the Servicer shall allocate the
net proceeds thereof between Principal Collections and Interest Collections as
set forth in Section 5.08 of the Indenture.
Section 9.03. Records.
Upon the occurrence and during the continuance of a 1999-A
Servicer Event of Default hereunder, the Servicer shall, on demand of the
Origination Trustee, on behalf of the Origination Trust (either at the request
of the Indenture Trustee or, as provided in Section 11.01(b) hereof, upon demand
of Noteholders representing more than 50% of the aggregate Percentage Interests
(acting as a single Class)), deliver to the Origination Trustee all such data,
operating software and appropriate documentation necessary for the servicing of
the 1999-A Leases, including but not limited to the related Lease Documents and
Title Documents, all moneys collected by it and required to be deposited in any
1999-A SUBI Account on behalf of the Origination Trust, or in the Distribution
Account or the Reserve Fund on behalf of the Securitization Trust, all Security
Deposits with respect to 1999-A Leases, and any 1999-A Leased Vehicle in the
possession of the Servicer that has been repossessed or is part of Matured
Leased Vehicle Inventory and in either case has not yet been sold or otherwise
disposed of pursuant to Section 2.06 of the Servicing Agreement. Without
limitation of the foregoing, if the rights of the Servicer with respect to the
1999-A SUBI Portfolio shall have been terminated in accordance with Section
4.01(b) of the Servicing Agreement and Section 11.01(b) hereof or if this
Supplement shall have been terminated pursuant to Section 12.01 hereof, the
Servicer shall, upon demand of the Origination Trustee, on behalf of the
Origination Trust (either at the request of the Indenture Trustee, the
Noteholders representing more than 50% of the aggregate Percentage Interests
(acting as a single Class), or otherwise), deliver to the Origination Trustee
all such data, operating software and appropriate documentation necessary for
the servicing of the 1999-A Leases and all moneys collected by it and required
to be deposited, as appropriate, in any 1999-A SUBI Account or the Distribution
Account or the Reserve Fund. In addition to delivering such data, operating
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software and appropriate documentation and moneys, the Servicer shall use its
commercially reasonable efforts to effect the orderly and efficient transfer of
the servicing of the 1999-A Leases to the party that will be assuming
responsibility for such servicing, including, without limitation, directing
Obligors to remit payments in respect of those Leases to an account or address
designated by the Origination Trustee or such new servicer.
Section 9.04. Advances.
(a) On or prior to each Deposit Date, the Servicer shall make
any Advance required by clause (i) of the definition thereof, and may make any
Advance permitted by clause (ii) of the definition thereof which the Servicer
chooses to make, into the 1999-A SUBI Collection Account.
(b) Notwithstanding any other provision of this Supplement,
the Servicer shall not be obligated to make any Advance if and to the extent
that the Servicer shall have reasonably determined that any such Advance, if
made, would constitute a Nonrecoverable Advance. Any such determination shall be
evidenced by an Officer's Certificate of the Servicer furnished to the UTI
Holder, the Origination Trustee and the Indenture Trustee setting out the basis
for such determination, which determination shall be conclusive and binding
absent manifest error.
Section 9.05. Payment of Certain Fees and Expenses; No Offset.
(a) As part of its obligations hereunder, to the extent that
cash flows arising from the 1999-A SUBI Portfolio, as set forth in Section
3.03(b) of the Securitization Trust Agreement, are insufficient to provide for
the payment of all fees and expenses due to the Origination Trustee, the Owner
Trustee or the Indenture Trustee as Capped Origination Trust Administrative
Expenses, Capped Owner Trustee Administrative Expenses, Capped Indenture Trustee
Administrative Expenses or Uncapped Administrative Expenses, the Servicer shall
advance an amount equal to such excess fees and expenses as they become payable
from time to time and agrees to indemnify the Origination Trustee, the Owner
Trustee and the Indenture Trustee and their respective agents for such amounts.
The Servicer shall be entitled to reimbursement of such advances as set forth in
Section 3.03(b) of the Securitization Trust Agreement. The obligations of the
Servicer pursuant to this Section 9.05(a) shall survive any termination of the
Servicer's rights and obligations with respect to the 1999-A SUBI Portfolio
under this Supplement or the Servicing Agreement.
(b) Prior to the termination of the Servicer's rights and
obligations with respect to the 1999-A SUBI Portfolio and thereafter if such
termination results from a 1999-A Servicer Event of Default, the obligations of
the Servicer with respect to the 1999-A SUBI Portfolio shall not be subject to
any defense, counterclaim or right of offset that the Servicer has or may have
against any UTI Holder, the Origination Trustee on behalf of the Origination
Trust, any Special Purpose Affiliate, the Owner Trustee or the Indenture
Trustee, whether in respect of this Supplement, the 1999-A SUBI Supplement, the
Servicing Agreement, any Securitization Trust Document, any 1999-A Lease, any
related Lease Document, any 1999-A Leased Vehicle or otherwise.
Section 9.06. Servicing Compensation.
(a) Notwithstanding anything to the contrary in Section 2.05
of the Servicing Agreement, (a) the Servicing Rate Portion with regard to the
1999-A SUBI Portfolio shall be calculated and (unless waived in accordance with
Section 9.06(b) hereof) paid on each Distribution Date based upon the Aggregate
Net Investment Value as of the first day of the related Collection Period,
rather than based upon the allocable portion of the Pool Balance, (b) the
portion of the Servicing Fee allocable to the 1999-A SUBI Portfolio shall be
paid out of cash flows arising from the 1999-A SUBI Portfolio as and to the
extent set forth in Section 12.01(c) of the 1999-A SUBI Supplement and the
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definition of the term "Collections" set forth in Section 10.01 thereof, (c) no
Extension Fee with respect to a Lease included in the 1999-A SUBI Portfolio
shall constitute part of the Servicing Fee, and (d) the Servicer may be
reimbursed for advancing certain Administrative Expenses as provided in Section
9.05(a). Further, as additional servicing compensation with regard to the 1999-A
SUBI Portfolio, the Servicer also shall receive income on investment of funds in
the Reserve Fund if and to the extent that the balance therein is greater than
the Reserve Fund Cash Requirement (and so long as all Excess Collections are not
required to be retained in the Reserve Fund pursuant to Section 3.03(c) of the
Securitization Trust Agreement) as and to the extent provided in Section 3.04(b)
of the Securitization Trust Agreement.
(b) So long as World Omni Financial Corp. is the Servicer, the
Servicer may, by notice to the Origination Trustee and the Indenture Trustee on
or prior to any Determination Date, waive its Servicing Fee with respect to the
related Collection Period, so long as the Servicer believes that sufficient
collections will be available from Interest Collections on one or more future
Distribution Dates (other than from amounts on deposit in the Reserve Fund) to
pay such waived Servicing Fee, without interest. If the Servicer so waives such
Servicing Fee, the Servicing Fee with respect to such Collection Period shall be
deemed to be zero for all purposes, provided, however, that for purposes of
clause (c) of the definition of "Interest Collections" in the 1999-A SUBI
Supplement and Section 3.03 of the Securitization Trust Agreement, any such
waived Servicing Fee thereafter shall be treated as an unpaid Servicing Fee with
respect to a prior Collection Period (unless the Servicer continues to waive
such Servicing Fee).
Section 9.07. Repossession and Sale of Leased Vehicles.
Notwithstanding Section 2.06 of the Servicing Agreement, the
Servicer need not deduct from Repossessed Vehicle Proceeds, Matured Leased
Vehicle Proceeds or other Liquidation Proceeds or Insurance Proceeds with
respect to any particular 1999-A Leased Vehicle all related unreimbursed
Repossessed Vehicle Expenses, Matured Leased Vehicle Expenses or other
Liquidation Expenses or Insurance Expenses prior to transferring such funds out
of its operating account. Such expenses may instead be reimbursed as provided in
Section 9.02(g).
Section 9.08. Indemnification by Servicer.
The Servicer agrees to indemnify, defend and hold harmless the
Owner Trustee, the Indenture Trustee and their respective agents for any and all
liabilities, losses, damages and expenses (including without limitation
reasonable fees and expenses of counsel) that may be incurred by the Owner
Trustee, the Indenture Trustee or their respective agents as a result of any act
or omission by the Servicer in connection with its maintenance and custody of
the Lease Documents, Title Documents, and Lease Records with respect to 1999-A
Leases and 1999-A Leased Vehicles, the servicing of the 1999-A Leases, the
Servicer's undertakings in clause (e) of Section 2.07 of the Servicing Agreement
or any other activity undertaken or omitted by the Servicer with respect to any
Trust Asset included in the 1999-A SUBI Portfolio. The obligations set forth in
this Section 9.08 shall survive the termination of this Supplement or the
resignation or removal of the Servicer (generally or with respect to the 1999-A
SUBI Portfolio), the Origination Trustee, the Owner Trustee or the Indenture
Trustee.
Section 9.09. Third Party Claims.
The Servicer shall immediately notify the Owner Trustee and
the Indenture Trustee and any other holder of any 1999-A SUBI Certificate upon
its learning that a claim of whatever kind that would have a material adverse
impact on any UTI Holder, the Transferor, the Origination Trust, the
Securitization Trust, the Owner Trustee, the Indenture Trustee, any 1999-A SUBI
Asset or the Servicer is being made by a third party with respect to any Lease
or Leased Vehicle (whether or not included in the 1999-A SUBI Portfolio) or the
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servicing thereof or with respect to any other Trust Asset (whether or not
constituting a 1999-A SUBI Asset).
Section 9.10. Insurance Policies.
(a) So long as the 1999-A SUBI Certificate is outstanding, the
Servicer will maintain and pay when due all premiums with respect to, and the
Servicer may not terminate or cause the termination of, or permit any other
insured party to terminate or cause the termination of the following: (i) each
Contingent and Excess Liability Insurance Policy, all premiums with respect to
which shall constitute Administrative Expenses, unless (A) a replacement
insurance policy or policies is obtained providing coverage against third party
claims that may be raised against the Origination Trustee, on behalf of the
Origination Trust, with respect to any Leased Vehicle included in the 1999-A
SUBI Portfolio in an amount at least equal to $10 million per claim, not
subject, to this extent, to any annual or aggregate cap (which policy or
policies may be a blanket insurance policy or policies covering the Servicer and
one or more of its Affiliates), and (B) either each Rating Agency has confirmed
(orally or in writing) to the Indenture Trustee to the effect that the obtaining
of any such replacement insurance policy or policies, in and of itself, will not
cause its then-current rating of any of the Rated Notes to be qualified, reduced
or withdrawn, or alternatively (with respect to Moody's only, so long as Moody's
is a Rating Agency) such replacement policy is issued by a carrier with a claims
paying ability rating of A-2 or better; or (ii) the Residual Value Insurance
Policy, all premiums with respect to which shall be an expense of the Servicer,
except in the case of compliance with clause (ii) or (iii) of Section 8.01(m) of
the Securitization Trust Agreement. Further, the Servicer shall provide each
Rating Agency prior notice of the content of any proposed amendment,
modification or waiver of the terms of the Residual Value Insurance Policy,
whether or not such action requires the approval of any Rating Agency. On or
before December 31 of each year, the Servicer shall provide to the Origination
Trustee one or more insurance certificates certifying that each of the
particular policies it is required to maintain pursuant to this Section 9.10
remains in full force and effect. The obligations of the Servicer pursuant to
this Section 9.10 shall survive any termination of the Servicer's obligations
with respect to the 1999-A SUBI Portfolio under this Supplement or the Servicing
Agreement.
(b) On or prior to each Residual Value Loss Determination
Date, the Servicer shall determine the Insured Residual Value Loss Amount for
the related Collection Period, if any, and shall make a claim under the Residual
Value Insurance Policy for any such Insured Residual Value Loss Amount. The
proceeds of such claim shall be deposited as set forth in Section 2.02(c) hereof
for application as set forth in clause (ii) of Section 3.03(e) of the
Securitization Trust Agreement.
(c) Once established, the Servicer shall not change the
insured residual value of any 1999-A Leased Vehicle under the Residual Value
Insurance Policy except (i) in accordance with its customary and usual
procedures and (ii) in a manner as will not result in such 1999-A Leased Vehicle
not being covered by the Residual Value Insurance Policy.
Section 9.11. Servicer Not to Resign; Assignment.
(a) If the Servicer resigns in the circumstances contemplated
by Section 2.10(a) of the Servicing Agreement, in addition to the requirements
set forth therein, the Opinion of Counsel required thereby also shall be
reasonably satisfactory to the Indenture Trustee. Any servicing agreement
entered into by a new servicer pursuant to that Section 2.10(a) also must
contain substantially the same provisions as this Supplement. The Indenture
Trustee shall not unreasonably fail to consent to a servicing agreement with a
new servicer that proposes to enter into a servicing agreement that meets the
standards required by Section 2.10 of the Servicing Agreement and this
Supplement. No such resignation shall affect the obligation of the Servicer to
remit moneys to the 1999-A SUBI Collection Account (in lieu of unrecoverable
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insurance proceeds) as set forth in Section 2.11 of the Servicing Agreement and
Section 9.11 hereof, or the obligations of the Servicer pursuant to Section
8.03(c) hereof, Section 2.07(g) of the Servicing Agreement or Section 9.07
hereof, Section 9.02(a) hereof (as to any 1999-A Lease the Maturity Date of
which has been extended beyond the specified limit by the Servicer), Section
9.05(a) hereof, or Section 9.09 hereof; no successor Servicer shall be required
to undertake any of the foregoing, other than the obligation set forth in
Section 9.05(a) (which shall remain a joint and several obligation of the
initial Servicer and any successor Servicer). The Origination Trustee shall give
prompt notice to each Rating Agency of any such resignation of the Servicer, and
the Origination Trustee and Indenture Trustee must obtain from each Rating
Agency a letter approving each substitute servicer.
(b) The Servicer may not assign this Supplement or any of its
rights, powers, duties or obligations hereunder except in connection with an
assignment of the Servicing Agreement as permitted thereby.
(c) Except as provided in paragraphs (a) and (b) above, the
duties and obligations of the Servicer under this Supplement shall continue
until they shall have been terminated as provided in Section 12.01 hereof or in
the Servicing Agreement and shall survive the exercise by the Origination
Trustee, on behalf of the Origination Trust, of any right or remedy under this
Supplement or the Servicing Agreement or the enforcement by the Origination
Trustee, on behalf of the Origination Trust, of any provision of the Origination
Trust Documents.
Section 9.12. Obligor Insurance Coverage in Respect of Leased
Vehicles
With reference to Section 2.11 of the Servicing Agreement,
except as provided in Section 9.02 hereof, the required deposits of insurance
proceeds with respect to 1999-A Leased Vehicles into the 1999-A SUBI Collection
Account shall be made within two Business Days after receipt thereof.
Section 9.13. Corporate Existence; Status; Merger.
(a) With reference to Section 2.13(a) of the Servicing
Agreement, the Servicer also will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of, or to permit the Servicer to perform its obligations under,
this Supplement, the Servicing Agreement and the Securitization Trust Agreement.
(b) With reference to Section 2.13(b) of the Servicing
Agreement, whenever the consent of the Origination Trustee is required, so also
shall the consent of the Indenture Trustee be required, and whenever a successor
to the Servicer by merger or consolidation is required to execute and deliver to
the Origination Trustee an agreement in form and substance reasonably
satisfactory to the Origination Trustee as to the assumption by the successor of
the Servicer's obligations under the Servicing Agreement and the other
Origination Trust Documents, such agreement also must be reasonably satisfactory
to the Indenture Trustee and must contain a similar assumption of the Servicer's
obligations under this Supplement.
Section 9.14. Mobile Leased Premises.
The Servicer as "Lessor," hereby leases to the Transferor and
its general partner, World Omni Lease Securitization LLC, each as "Lessee," and
Lessee hereby hires and takes as tenant, for a rental of $100 per year for
Lessee, certain premises located at 6150 Omni Park Drive, Mobile, Alabama of the
minimum dimensions of five (5) feet by eleven (11) feet and surrounded on at
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least three (3) sides by walls or moveable partitions (the "Mobile Leased
Premises"), to be used as the Alabama office of Lessee. The lease of the Mobile
Leased Premises to the Lessee pursuant to this Section 9.14 shall continue
throughout the term of this Supplement, except in the case of a change in the
Servicer's principal Alabama offices, in which case the lease of functionally
equivalent premises in the new location from time to time shall continue
throughout such term.
Section 9.15. Servicer Administrative Duties under the
Transaction Documents.
The Servicer shall be obligated to perform on behalf of the
Securitization Trust all administrative duties required to be performed by the
Securitization Trust pursuant to any of the Transaction Documents (including
without limitation the preparation, delivery and filing of any and all
certificates, reports, filings, and other documents required by law or the
Transaction Documents) within the time period specified by and otherwise in
compliance with the requirements of such Transaction Documents; provided that
nothing in this Section will be deemed to cause the Servicer to be obligated to
make payments on the Notes, or to be an obligor or guarantor with respect to the
Notes. Without limiting the generality of the foregoing, the Servicer shall, on
behalf of the Securitization Trust, perform any and all of the actions required
by Section 7.04 of the Indenture.
ARTICLE TEN
STATEMENTS AND REPORTS
Section 10.01. Reporting by the Servicer.
On or prior to each Determination Date and each Transfer Date,
the Servicer shall cause to be delivered to the Indenture Trustee a revised
Schedule of Leases and Leased Vehicles, containing data as of the last day of
the prior Collection Period (in the case of each Determination Date) or as of
the related Subsequent Cutoff Date (in the case of each Transfer Date), and
which shall contain in addition to the data required by the definition of the
term "Schedule of Leases and Leased Vehicles" an identification of all Leases
and Leased Vehicles that are 1999-A Leases and 1999-A Leased Vehicles, the
Discounted Principal Balance of each 1999-A Lease and the related Cutoff Date
for each 1999-A Lease, and on or prior to each Determination Date, shall cause
to be delivered to the Origination Trustee, the Indenture Trustee and each
Rating Agency a certificate in respect of such Collection Period (the
"Servicer's Certificate") substantially in the form attached as Exhibit B (and
setting forth such additional information as requested by each Rating Agency
from time to time which information the Servicer is able to reasonably provide),
containing all information necessary to make the distributions required by
Sections 9.02(f) hereof, 12.01(c) of the 1999-A SUBI Supplement, 3.03 of the
Securitization Trust Agreement and Section 8.02(b) of the Indenture in respect
of the Collection Period immediately preceding such Determination Date. On or
prior to each Deposit Date, the Servicer shall cause to be delivered to the
Indenture Trustee the statement required by Section 3.06(a) of the
Securitization Trust Agreement. Within the time required by Section 3.06(b) of
the Securitization Trust Agreement, the Servicer shall cause to be delivered to
the Indenture Trustee the statements required by that Section. Any Noteholder or
Note Owner may obtain a copy of a Servicer's Certificate upon written request.
Section 10.02. Annual Accountants' Reports.
The annual report of the Independent Accountants of the
Servicer required by Section 3.02 of the Servicing Agreement, to the extent that
it refers to the Servicing Agreement, shall also specifically refer to the
Servicing Agreement as supplemented by this Supplement, and shall additionally
be delivered to the Indenture Trustee and each Rating Agency.
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Section 10.03. Other Certificates and Notices from Servicer.
(a) The annual Officer's Certificate of the Servicer required
by Section 3.03 of the Servicing Agreement, to the extent that it refers to the
Servicing Agreement, shall also specifically refer to the Servicing Agreement as
supplemented by this Supplement, and shall additionally be delivered to the
Indenture Trustee and each Rating Agency.
(b) The Servicer shall deliver to the Indenture Trustee, the
Origination Trustee and each Rating Agency, promptly after having obtained
knowledge thereof, but in no event later than five Business Days thereafter, an
Officer's Certificate specifying the nature and status of any event which with
the giving of notice or lapse of time, or both, would become a 1999-A Servicer
Event of Default.
(c) On or prior to each Determination Date, the Servicer shall
cause to be delivered to the Indenture Trustee and each Rating Agency an
Officer's Certificate stating that neither the Trust nor any of its ERISA
Affiliates: (i) maintains a Plan, which, as of its last valuation date, has
Unfunded Current Liability; (ii) anticipates that the value of the assets of any
Plan it maintains would not be sufficient to cover any Current Liability; or
(iii) is contemplating benefit improvements with respect to any Plan then
maintained by any such entity or the establishment of any new Plan, either of
which would cause any such entity to maintain a Plan with Unfunded Current
Liability.
Section 10.04. Tax Returns.
As contemplated by Section 6.12 of the Securitization Trust
Agreement, the Servicer shall prepare or cause to be prepared, on behalf of the
Transferor, any required federal tax information returns (in a manner consistent
with the treatment of the Notes as indebtedness), and the Owner Trustee shall
file and distribute such forms as required by law in accordance with the
Servicer's instructions. Also as contemplated by Section 6.12 of the
Securitization Trust Agreement, if and to the extent the Trust is treated as a
partnership for federal income tax purposes, the Servicer shall prepare or cause
to be prepared any federal and state income tax returns that may be required
with respect to the Securitization Trust or the assets thereof and shall deliver
any such returns to the Owner Trustee for signature by the Transferor at least
five days prior to the date such returns are required by law to be filed.
ARTICLE ELEVEN
SERVICER DEFAULT
Section 11.01. Events of Default; Termination of Servicer as
to 1999-A SUBI Portfolio.
(a) Any of the following acts or occurrences shall constitute
a 1999-A Servicer Event of Default under the Servicing Agreement, as
supplemented by this Supplement:
i) The Servicer shall have failed to deliver to the
Origination Trustee for distribution to or for the account of the holders of the
1999-A SUBI Certificate or to the Indenture Trustee for distribution to the
Noteholders any amounts required to be so distributed pursuant to the Servicing
Agreement or this Supplement, which failure continues for five Business Days
after discovery of such failure by an officer of the Servicer or receipt by the
Servicer of written notice thereof from the Origination Trustee, the Indenture
Trustee or Noteholders representing not less than 25% of the aggregate
Percentage Interests;
ii) The Origination Trustee or the Indenture Trustee shall
not have received any report relating to the 1999-A SUBI Portfolio and required
to be delivered to it pursuant to the Servicing Agreement or this Supplement
within ten Business Days after the date any such report is due;
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(iii) The Servicer shall default in the due performance
and observance of any other provision of the Servicing Agreement or this
Supplement with regard to the 1999-A SUBI Portfolio, which default materially
and adversely affects the rights of the holder of the 1999-A SUBI Certificate,
the Certificate or the Noteholders, and such default shall have continued for a
period of 60 days after written notice thereof shall have been given to the
Servicer by the Origination Trustee, the Indenture Trustee or by Noteholders
representing not less than 25% of the aggregate Percentage Interests;
(iv) The Event of Default set forth in Section 4.01(a)(iv)
of the Servicing Agreement;
(v) The Event of Default set forth in Section 4.01(a)(v)
of the Servicing Agreement;
(vi) Any representation, warranty or statement of the
Servicer made in the Servicing Agreement or this Supplement relating to the
1999-A SUBI Portfolio or any certificate, report or other writing delivered
pursuant hereto or thereto relating to the 1999-A SUBI Portfolio shall prove to
be incorrect in any material respect as of the time when the same shall have
been made and, within 30 days after written notice thereof shall have been given
to the Servicer by the Origination Trustee, the Indenture Trustee or Noteholders
representing not less than 25% of the aggregate Percentage Interests, the
circumstance or condition in respect of which such representation, warranty or
statement was incorrect shall not have been eliminated or otherwise cured;
(vii) The Servicer shall have failed to make an Advance
(other than any Nonrecoverable Advance) at the time and in the amount required
by Section 9.04(a) hereof, which failure continues for five Business Days after
discovery of such failure by an officer of the Servicer or receipt by the
Servicer of written notice thereof from the Origination Trustee, the Indenture
Trustee or Noteholders representing not less than 25% of the aggregate
Percentage Interests;
(viii) The Servicer shall have failed to pay promptly any
Insurance Proceeds pursuant to Section 9.12 hereof and Section 2.11 of the
Servicing Agreement at the time such moneys would otherwise be recoverable under
the comprehensive, collision, public liability and property damage policy
required to be maintained by an Obligor under the related Lease, which failure
continues for five Business Days after discovery of such failure by an officer
of the Servicer or receipt by the Servicer of written notice thereof from the
Origination Trustee, the Indenture Trustee or Noteholders representing not less
than 25% of the aggregate Percentage Interests;
(ix) The Servicer shall have failed to perform its
obligations under Section 9.10(a) hereof with respect to the Contingent and
Excess Liability Insurance Policies or the Residual Value Insurance Policy; or
(x) The Transferor shall have failed to timely perform its
obligations under the fourth sentence of Section 3.04(b) of the Securitization
Trust Agreement with regard to the deposit into the Reserve Fund of an amount
equal to the RV Insurer Reserve Fund Supplemental Requirement in the event of an
RV Insurer Trigger Event.
Notwithstanding the foregoing, a delay or failure in the
performance referred to under clause (i), (vii) or (viii) above for a period of
ten Business Days, or referred to in clause (ii) above for a period of 20
Business Days, or referred to in clause (iii) for a period of 90 days, or
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referred to in clause (vi) for a period of 60 days, shall not constitute a
1999-A Servicer Event of Default if arising from a Force Majeure. Upon the
occurrence of a Force Majeure, the Servicer shall not be relieved from using all
commercially reasonable efforts to perform its obligations in a timely manner,
and the Servicer shall provide to the Indenture Trustee, the Origination
Trustee, the Transferor and the Noteholders prompt notice of such failure or
delay, together with a description of its efforts to perform its obligations.
(b) Notwithstanding anything to the contrary in the Servicing
Agreement, the rights and powers of the Servicer may not be terminated with
regard to the 1999-A SUBI Portfolio absent a 1999-A Servicer Event of Default,
as further set forth below. The consequences of a 1999-A Servicer Event of
Default shall be as set forth in Section 4.01(b) of the Servicing Agreement with
respect to an Event of Default, as modified by this Section 11.01(b). For those
purposes, references in Section 4.01(b) of the Servicing Agreement, to an Event
of Default shall mean a 1999-A Servicer Event of Default. Further, in the case
of the 1999-A SUBI, references to "the holder of the requisite percentage of any
SUBI" shall refer either to the Indenture Trustee, or to Noteholders
representing more than 50% of the aggregate Percentage Interests (acting as a
single Class). If a 1999-A Servicer Event of Default shall have occurred and be
continuing, the Origination Trustee, on behalf of the Origination Trust, upon
the direction of the Indenture Trustee or Noteholders representing more than 50%
of the aggregate Percentage Interests (acting as a single class), shall, by
notice given to the Servicer, terminate the portion of the rights and powers of
the Servicer under the Servicing Agreement, as supplemented by this Supplement,
with respect to the 1999-A SUBI Portfolio. Upon the giving of any such notice
described in the preceding sentence or in Section 4.01(b) of the Servicing
Agreement, all rights, powers, duties and responsibilities of the Servicer under
the Servicing Agreement, as supplemented by this Supplement with respect to the
1999-A SUBI Portfolio, whether with respect to the related Lease Documents, the
related Title Documents or Lease Records, the 1999-A SUBI Collection Account,
the Distribution Account, any 1999-A Lease Funding Account, the Reserve Fund,
the Servicing Fee or otherwise, but excluding the obligations set forth below as
being retained by the Servicer, shall vest in and be assumed by the Trust Agent
or, if the Trust Agent declines to act as successor servicer as permitted below,
a new servicer as provided in Section 4.01(b) of the Servicing Agreement, and
each of the Trust Agent and the Origination Trustee is each hereby irrevocably
authorized and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments (including
any notices to Obligors deemed necessary or advisable by the Trust Agent or
Origination Trustee), and to do or accomplish all other acts or things necessary
or appropriate to effect such vesting and assumption, including, without
limitation, directing the Obligors to remit Monthly Contract Payments,
Prepayments and all other payments on or in respect of the 1999-A Leases and the
1999-A Leased Vehicles to an account or address designated by the Trust Agent or
such new servicer. Further, in such event, the Servicer shall use commercially
reasonable efforts to effect the orderly and efficient transfer of the servicing
of the 1999-A Leases to the Trust Agent or new servicer, and as promptly as
practicable, the Servicer shall provide to the Trust Agent or new servicer, as
the case may be, a current computer tape containing all information from the
Lease Records required for the proper servicing of the 1999-A Leases, together
with documentation containing any and all information necessary for use of the
tape. The Trust Agent may resign or decline to serve as the Servicer of the
1999-A SUBI Portfolio by giving written notice of such resignation or
declination to the Origination Trustee and the Indenture Trustee and in such
event will be released from such duties and obligations, such resignation or
declination and such release not to be effective until the date a new servicer
enters into a servicing agreement with the Origination Trustee as provided in
Section 4.01(b) of the Servicing Agreement and the Origination Trustee and
Indenture Trustee receive from each Rating Agency a letter approving such
substitute servicer. Upon delivery of any such notice to the Origination
Trustee, the Origination Trustee shall use its commercially reasonable efforts,
upon not less than 30 days' prior written notice to the Indenture Trustee and
the Noteholders, to obtain a new servicer for the 1999-A SUBI Portfolio, which
shall be an Eligible Servicer, and which shall enter into a servicing agreement
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with the Origination Trustee as provided in Section 4.01(b) of the Servicing
Agreement. If, within 30 days after the delivery of the notice to the
Origination Trustee and the Indenture Trustee referred to above, the Origination
Trustee shall not have obtained such a new servicer for the 1999-A SUBI
Portfolio, the Indenture Trustee may appoint, or may petition a court of
competent jurisdiction to appoint, a successor servicer to service the 1999-A
Leases.
No termination of the Servicer as to the 1999-A SUBI Portfolio
shall affect the obligations of the Servicer pursuant to Section 2.01(b)(i) of
the Servicing Agreement, Section 2.11 of the Servicing Agreement or Section 9.10
hereof, Section 2.07(g) of the Servicing Agreement or Section 9.08 hereof,
Section 8.03 hereof, Section 9.02(a) hereof (as to any 1999-A Lease the Maturity
Date of which has been extended beyond the specified limit by the Servicer), or
Section 9.01(a) hereof.
The Origination Trustee shall give prompt notice to each
Rating Agency of any termination of the Servicer affecting the 1999-A SUBI
Portfolio pursuant to this Section 11.01(b) or pursuant to Section 4.01(b) of
the Servicing Agreement.
Section 11.02. No Effect on Other Parties.
Upon any termination of the rights and powers of the Servicer
with respect to the 1999-A SUBI Portfolio from time to time pursuant to Section
11.01 hereof or Section 4.01 of the Servicing Agreement, or upon any appointment
of a successor to the Servicer with respect to the 1999-A SUBI Portfolio, all
the rights, powers, duties and obligations of the Origination Trustee, the
Indenture Trustee, the Owner Trustee, the Securitization Trust, the UTI Holder
and the Transferor under this Agreement, the Securitization Trust Agreement, the
Indenture, the 1999-A SUBI Supplement, or any other Origination Trust Document
shall remain unaffected by such termination or appointment and shall remain in
full force and effect thereafter, except as otherwise expressly provided herein
or therein.
ARTICLE TWELVE
MISCELLANEOUS
Section 12.01. Termination of Agreement.
In connection with any purchase by the Transferor of the
corpus of the Securitization Trust pursuant to Section 7.02 of the
Securitization Trust Agreement, and the Transferor's then succeeding to all of
the interest in the 1999-A SUBI represented by the 1999-A SUBI Certificate, and
if the UTI Holder shall thereafter succeed to such interest in the 1999-A SUBI,
the Servicer, upon the direction of the UTI Holder as provided in Section 11.05
of the 1999-A SUBI Supplement, shall reallocate all 1999-A Leases, 1999-A Leased
Vehicles and related 1999-A SUBI Assets to the UTI Portfolio.
Except as provided in this Section 12.01, the respective
duties and obligations of the Servicer and the Origination Trustee with respect
to the 1999-A SUBI Portfolio created by the Servicing Agreement and this
Supplement shall terminate upon the termination of the Securitization Trust
Agreement pursuant to Section 7.01 thereof or upon the earlier termination of
the Servicing Agreement pursuant to Section 5.01 thereof. Upon such a
termination, the Servicer shall pay over to the Origination Trustee or any other
Person entitled thereto all moneys held by the Servicer with respect to the
1999-A SUBI Portfolio pursuant to the Servicing Agreement and this Supplement.
22
<PAGE>
Section 12.02. Amendment.
(a) Notwithstanding Section 5.02(a) of the Servicing
Agreement, the Servicing Agreement, as supplemented by this Supplement, to the
extent that it deals with the 1999-A SUBI Portfolio, may be amended from time to
time in a writing signed by the Origination Trustee, on behalf of the
Origination Trust, the Trust Agent (but only to the extent that such amendment
deals with Section 11.01(b)) and the Servicer, with the prior written consent of
the Indenture Trustee, which shall be given only in the circumstances
contemplated by Section 9.01 of the Securitization Trust Agreement.
(b) The Servicer shall provide each Rating Agency prior notice
of the content of any proposed amendment to the Servicing Agreement, whether or
not such amendment relates to the 1999-A SUBI or requires approval of any Rating
Agency.
Section 12.03. Governing Law.
THIS SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO
ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
Section 12.04. Notices.
The notice provisions of Section 5.04 of the Servicing
Agreement shall apply equally to this Supplement, provided that any notice to
the Indenture Trustee shall be addressed as follows:
Harris Trust and Savings Bank
311 W. Monroe
12th Floor
Chicago, Illinois 60606
Attention: Corporate Trust Office
and any notice to the Owner Trustee shall be addressed as follows:
Chase Manhattan Bank Delaware
1201 N. Market Street
8th Floor
Wilmington, DE 19801
Attention: Mr. Michael McCarthy,
Corporate Trust Office
Section 12.05. Severability.
If one or more of the provisions of this Supplement shall be
for any reason whatever held invalid or unenforceable, such provisions shall be
deemed severable from the remaining covenants, agreements and provisions of this
Supplement, and such invalidity or unenforceability shall in no way affect the
validity or enforceability of such remaining covenants, agreements and
provisions, or the rights of any parties hereto. To the extent permitted by law,
the parties hereto waive any provision of law that renders any provision of this
Supplement invalid or unenforceable in any respect.
Section 12.06. Inspection and Audit Rights.
The Servicer agrees to afford the same inspection and audit
rights to any representative or designee of the Owner Trustee or Indenture
Trustee as granted to any representative or designee of the Origination Trustee
23
<PAGE>
pursuant to Section 5.06 of the Servicing Agreement, but only with respect to
the books of account, records, reports and other papers of the Servicer relating
to the 1999-A SUBI Portfolio.
Section 12.07. Binding Effect.
The provisions of the Servicing Agreement and this Supplement,
insofar as they relate to the 1999-A SUBI Portfolio, shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, and all such provisions also shall inure to the benefit of
the Origination Trustee, on behalf of the Origination Trust, and the
Securitization Trustee. Further, all references herein to Persons or entities
other than parties hereto shall be deemed to refer to the successors and
permitted assigns of such persons, to the extent that such construction is
reasonably possible; to the extent that such construction is not reasonably
possible, the parties hereto shall amend this Supplement to as to effect the
original intent of the parties as closely as possible in an acceptable manner.
Section 12.08. Article and Section Headings.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
Section 12.09. Execution in Counterparts.
This Supplement may be executed in any number of counterparts,
each of which so executed and delivered shall be deemed to be an original, but
all of which counterparts shall together constitute but one and the same
instrument.
Section 12.10. Rights Cumulative.
All rights and remedies from time to time conferred upon or
reserved to the Origination Trustee, on behalf of the Origination Trust, the
Servicer, the Owner Trustee or the Indenture Trustee or to any or all of the
foregoing are cumulative, and none is intended to be exclusive of another. No
delay or omission in insisting upon the strict observance or performance of any
provision of this Agreement, or in exercising any right or remedy, shall be
construed as a waiver or relinquishment of such provision, nor shall it impair
such right or remedy. Every right and remedy may be exercised from time to time
and as often as deemed expedient.
Section 12.11. Further Assurances.
Each party will do such acts, and execute and deliver to any
other party such additional documents or instruments as may be reasonably
requested in order to effect the purposes of this Supplement and to better
assure and confirm unto the requesting party its rights, powers and remedies
hereunder.
Section 12.12. Third-Party Beneficiaries.
The Servicing Agreement and this Supplement, insofar as they
relate to the 1999-A SUBI Portfolio, will inure to the benefit of and be binding
upon the parties hereto, and each of the holders of any legal or beneficial
interest in the 1999-A SUBI Certificate (including without limitation the
Indenture Trustee, the Owner Trustee, the Securitization Trust, the
Certificateholder and the Noteholders), who shall be considered to be
third-party beneficiaries hereof. Except as otherwise provided in this
Agreement, no other Person will have any right or obligation hereunder.
[SIGNATURES ON NEXT PAGE]
24
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers duly authorized as of the day and
year first above written.
WORLD OMNI FINANCIAL CORP.
By:
-------------------------------------------
Name:
------------------------------------
Title:
------------------------------------
VT INC., as trustee of World Omni LT
By:
-------------------------------------------
Name:
------------------------------------
Title:
------------------------------------
WORLD OMNI LEASE SECURITIZATION L.P.
(solely for purposes of Section 9.14)
By: WORLD OMNI LEASE SECURITIZATION
LLC, its general partner
By:
-------------------------------------------
Name:
------------------------------------
Title:
------------------------------------
U.S. BANK NATIONAL ASSOCIATION, as Trust Agent
(solely for purposes of Section 11.01(b))
By:
-------------------------------------------
Name:
------------------------------------
Title:
------------------------------------
25
<PAGE>
Acknowledged and Agreed:
Harris Trust and Savings Bank, as Indenture Trustee (solely for purposes of
acknowledging the provisions of Articles Seven, Eight and Eleven and Sections
9.01, 9.02, 9.03, 9.04, 9.05, 9.06, 9.08, 9.09, 9.10, 9.11, 9.13, 10.01, 10.02,
10.03, 12.02, 12.04, 12.06, 12.10 and 12.12 hereof)
By:
-------------------------------------------
Name:
------------------------------------
Title:
------------------------------------
World Omni 1999-A Automobile Lease Securitization Trust
By: Chase Manhattan Bank Delaware, not in its individual capacity
but solely as Owner Trustee
By:
-------------------------------------------
Name:
------------------------------------
Title:
------------------------------------
26
<PAGE>
EXHIBIT A
SCHEDULE OF 1999-A LEASES AND
1999-A LEASED VEHICLES AS OF THE INITIAL CUTOFF DATE
[Omitted. Copies on file with the Servicer, the Origination Trustee, the Owner
Trustee and the Indenture Trustee.]
2
<PAGE>
EXHIBIT B
FORM OF SERVICER'S CERTIFICATE
EXHIBIT 10.13
AMENDMENT NO. 3
TO
SUPPORT AGREEMENT
AMENDMENT NO. 3 TO SUPPORT AGREEMENT dated as of April 1, 1997
(the "Amendment") made by World Omni Financial Corp., a Florida corporation
("World Omni") having its principal place of business at 120 N.W. 12th Avenue,
Deerfield Beach, FL 33442, and World Omni Lease Securitization L.P., a Delaware
limited partnership ("WOLS LP").
World Omni is the sole limited partner of WOLS LP. The sole
general partner of WOLS LP is World Omni Lease Securitization, Inc., a Delaware
corporation ("WOLSI") and a wholly owned subsidiary of World Omni. In order to
better assure WOLS LP that it will be able to meet its financial obligations as
and when they become due and payable, and therefore to assist WOLS LP in
inducing third parties to enter into financial arrangements with it as it deems
desirable, the undersigned have entered into a Support Agreement dated as of
October 1, 1995, as amended by Amendment No. 1 to Support Agreement dated as of
May 1, 1996 and Amendment No. 2 to Support Agreement dated as of October 1, 1996
(as so amended, the "Support Agreement") to provide support to WOLS LP in
maintaining a favorable financial condition, and desires to amend the Support
Agreement to provide additional support to WOLS LP.
For the foregoing reasons, and for other good and valuable
consideration, receipt of which is hereby acknowledged, World Omni, having a
financial interest in WOLS LP, and WOLS LP, intending to be legally bound,
hereby agree as follows:
Section 1. Definitions.
For all purposes of this Amendment, except as otherwise
expressly provided for or unless the context otherwise requires, (a) unless
otherwise defined herein, all capitalized terms used herein shall have the
meanings attributed to them by the Second Amended and Restated Assignment
Agreement, (b) all terms used in this Amendment include (i) all genders and (ii)
the plural as well as the singular, (c) all references to words such as
"herein", "hereof" and the like shall refer to this Amendment as a whole and not
to any particular article or sections within this Amendment, (d) the term
"include" and all variations thereon shall mean "include without limitation",
and (e) the term "or" shall include "and/or".
<PAGE>
Section 2. Amendment of Section 3
Section 3 of the Support Agreement is hereby amended by
deleting the proviso contained at the end of the second full sentence thereof
that reads "provided that such obligations of World Omni under this Support
Agreement shall not exceed $30 million in the aggregate" and inserting in its
place "provided that such obligations of World Omni under this Support Agreement
shall not exceed $60 million in the aggregate."
Section 3. Effect of Amendment.
Other than as specifically amended in this Amendment, the
Support Agreement remains in full force and effect and is hereby reaffirmed in
all respects, and all references therein to the "Agreement" shall be deemed to
refer to the Support Agreement, as amended by this Amendment.
Section 4. Governing Law.
THIS AMENDMENT SHALL BE CREATED UNDER THE LAWS AND GOVERNED BY
AND CONSTRUED UNDER THE INTERNAL LAWS OF THE STATE OF FLORIDA, WITHOUT REGARD TO
ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
Section 5. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Amendment shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provision or terms of this Amendment and
shall in no way affect the validity or enforceability of the other provisions of
this Amendment. To the extent permitted by law, the parties hereto waive any
provision of law that renders any provision of this Amendment invalid or
unenforceable in any respect.
[SIGNATURES ON FOLLOWING PAGE]
2
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Amendment No. 3 to
Support Agreement to be duly executed as of the date first set forth above.
WORLD OMNI FINANCIAL CORP.
By: /s/ Patrick C. Ossenbeck
-------------------------------
Patrick C. Ossenbeck
Assistant Treasurer
WORLD OMNI LEASE SECURITIZATION L.P.
By: World Omni Lease Securitization,
Inc., its general partner
By: /s/ Patrick C. Ossenbeck
-------------------------------
Patrick C. Ossenbeck
Assistant Treasurer
3
EXHIBIT 10.15
AMENDMENT NO. 5
TO
SUPPORT AGREEMENT
AMENDMENT NO. 5 TO SUPPORT AGREEMENT, dated as of September
23, 1998 (the "Amendment"), made by World Omni Financial Corp., a Florida
corporation ("World Omni") having its principal place of business at 120 N.W.
12th Avenue, Deerfield Beach, FL 33442, and World Omni Lease Securitization
L.P., a Delaware limited partnership ("WOLS LP").
RECITALS
A. World Omni is the sole limited partner of WOLS LP. The sole
general partner of WOLS LP was World Omni Lease Securitization, Inc., a Delaware
corporation ("WOLSI") and a wholly owned subsidiary of World Omni. As of
September 23, 1998, the sole general partner of WOLS LP is World Omni Lease
Securitization, LLC, a Delaware limited liability company ("WOLS LLC") and a
wholly owned subsidiary of World Omni into which WOLSI was merged. In order to
better assure WOLS LP that it will be able to meet its financial obligations as
and when they become due and payable, and therefore to assist WOLS LP in
inducing third parties to enter into financial arrangements with it as it deems
desirable, the undersigned have entered into a Support Agreement dated as of
October 1, 1995, as amended by Amendment No. 1 to Support Agreement dated as of
May 1, 1996, Amendment No. 2 to Support Agreement dated as of October 1, 1996,
Amendment No. 3 to Support Agreement dated as of May 1, 1997, and Amendment No.
4 to Support Agreement dated as of October 1, 1997 (as so amended, the "Support
Agreement") to provide support to WOLS LP in maintaining a favorable financial
condition, and desires to amend the Support Agreement to provide additional
support to WOLS LP.
B. For the foregoing reasons, and for other good and valuable
consideration, receipt of which is hereby acknowledged, World Omni, having a
financial interest in WOLS LP, and WOLS LP, intending to be legally bound,
hereby agree as follows:
Section 1. Definitions.
For all purposes of this Amendment, except as otherwise
expressly provided for or unless the context otherwise requires, (a) unless
otherwise defined herein, all capitalized terms used herein shall have the
meanings attributed to them by the Second Amended and Restated Assignment
Agreement, (b) all terms used in this Amendment include (i) all genders and (ii)
the plural as well as the singular, (c) all references to words such as
"herein", "hereof" and the like shall refer to this Amendment as a whole and not
to any particular article or sections
<PAGE>
within this Amendment, (d) the term "include" and all variations thereon shall
mean "include without limitation", and (e) the term "or" shall include "and/or".
Section 2. Amendment of Section 1.
Section 1 of the Support Agreement is hereby amended by
deleting the term "WOLSI" in the second line thereof and inserting in its place
the term "WOLS LLC" and by deleting the statement beginning on the third line
thereof that reads "and World Omni owns all capital stock of WOLSI" and
inserting in its place "and World Omni owns all membership interests in WOLS
LLC".
Section 3. Amendment of Section 2.
Section 2 of the Support Agreement is hereby amended by
deleting the statement beginning on the third line thereof that reads "100% of
the capital stock of WOLSI" and inserting in its place "100% of the membership
units of WOLS LLC" and by deleting the term "WOLSI" in the fourth line thereof
and inserting in its place the term "WOLS LLC".
Section 4. Amendment of Section 5.
Section 5 of the Support Agreement is hereby amended by
deleting the term "WOLSI" in the second line thereof and inserting in its place
the term "WOLS LLC".
Section 5. Effect of Amendment.
Other than as specifically amended in this Amendment, the
Support Agreement remains in full force and effect and is hereby reaffirmed in
all respects, and all references therein to the "Agreement" shall be deemed to
refer to the Support Agreement, as amended by this Amendment.
Section 6. Governing Law.
THIS AMENDMENT SHALL BE CREATED UNDER THE LAWS AND GOVERNED BY
AND CONSTRUED UNDER THE INTERNAL LAWS OF THE STATE OF FLORIDA, WITHOUT REGARD TO
ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
Section 7. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Amendment shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provision or terms of this Amendment and
shall in no way affect the validity or enforceability of the other provisions of
this
<PAGE>
Amendment. To the extent permitted by law, the parties hereto waive any
provision of law that renders any provision of this Amendment invalid or
unenforceable in any respect.
[SIGNATURES ON FOLLOWING PAGE]
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Amendment
No. 5 to Support Agreement to be duly executed as of the date first set forth
above.
WORLD OMNI FINANCIAL CORP.
By: /s/ Patrick C. Ossenbeck
-----------------------------------
Patrick C. Ossenbeck
Assistant Treasurer
WORLD OMNI LEASE SECURITIZATION L.P.
By: World Omni Lease Securitization,
LLC, its general partner
By: World Omni Financial Corp., as managing
member
By: /s/ Patrick C. Ossenbeck
-----------------------------------
Patrick C. Ossenbeck
Assistant Treasurer
EXHIBIT 10.16
AMENDMENT NO. 6
TO
SUPPORT AGREEMENT
AMENDMENT NO. 6 TO SUPPORT AGREEMENT, dated as of October 1, 1998 (the
"Amendment"), made by WORLD OMNI FINANCIAL CORP., a Florida corporation ("World
Omni") having its principal place of business at 120 N.W. 12th Avenue, Deerfield
Beach, FL 33442, and WORLD OMNI LEASE SECURITIZATION L.P., a Delaware limited
partnership ("WOLS LP").
RECITALS
A. World Omni is the sole limited partner of WOLS LP. The sole general
partner of WOLS LP was World Omni Lease Securitization, Inc., a Delaware
corporation ("WOLSI") and a wholly owned subsidiary of World Omni. As of
September 23, 1998, the sole general partner of WOLS LP is World Omni Lease
Securitization LLC, a Delaware limited liability company ("WOLS LLC") and a
wholly owned subsidiary of World Omni into which WOLSI was merged. In order to
better assure WOLS LP that it will be able to meet its financial obligations as
and when they become due and payable, and therefore to assist WOLS LP in
inducing third parties to enter into financial arrangements with it as it deems
desirable, the undersigned have entered into a Support Agreement dated as of
October 1, 1995, as amended by Amendment No. 1 to Support Agreement dated as of
May 1, 1996, Amendment No. 2 to Support Agreement dated as of October 1, 1996,
Amendment No. 3 to Support Agreement dated as of May 1, 1997, Amendment No. 4 to
Support Agreement dated as of October 1, 1997 and Amendment No. 5 to Support
Agreement dated as of September 23, 1998 (as so amended, the "Support
Agreement") to provide support to WOLS LP in maintaining a favorable financial
condition, and desires to amend the Support Agreement to provide additional
support to WOLS LP.
B. For the foregoing reasons, and for other good and valuable
consideration, receipt of which is hereby acknowledged, World Omni, having a
financial interest in WOLS LP, and WOLS LP, intending to be legally bound,
hereby agree as follows:
Section 1. Definitions.
For all purposes of this Amendment, except as otherwise expressly
provided for or unless the context otherwise requires, (a) unless otherwise
defined herein, all capitalized terms used herein shall have the meanings
attributed to them by the Second Amended and Restated Assignment Agreement, (b)
all terms used in this Amendment include (i) all genders and (ii) the plural as
well as the singular, (c) all references to words such as "herein", "hereof" and
the like shall refer to this Amendment as a whole and not to any particular
article or sections within this Amendment, (d) the term "include" and all
variations thereon shall mean "include without limitation", and (e) the term
"or" shall include "and/or".
Section 2. Amendment of Section 3.
Section 3 of the Support Agreement is hereby amended by deleting the
proviso contained at the end of the second full sentence thereof that reads
"provided that such obligations of World Omni under this Support Agreement shall
not exceed $90 million in the aggregate" and inserting in its place term
"provided that such obligations of World Omni under this Support Agreement shall
not exceed $100 million in the aggregate."
<PAGE>
Section 3. Effect of Amendment.
Other than as specifically amended in this Amendment, the Support
Agreement remains in full force and effect and is hereby reaffirmed in all
respects, and all references therein to the "Agreement" shall be deemed to refer
to the Support Agreement, as amended by this Amendment.
THIS AMENDMENT SHALL BE CREATED UNDER THE LAWS AND GOVERNED BY AND
CONSTRUED UNDER THE INTERNAL LAWS OF THE STATE OF FLORIDA, WITHOUT REGARD TO ANY
OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
Section 7. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Amendment shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provision or terms of this Amendment and shall
in no way affect the validity or enforceability of the other provisions of this
Amendment. To the extent permitted by law, the parties hereto waive any
provision of law that renders any provision of this Amendment invalid or
unenforceable in any respect.
[SIGNATURES ON FOLLOWING PAGE]
2
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Amendment No. 6 to
Support Agreement to be duly executed as of the date first set forth above.
WORLD OMNI FINANCIAL CORP.
By: /s/ Eric Gebhard
---------------------------
Name: Eric Gebhard
Title: Assistant Secretary
WORLD OMNI LEASE SECURITIZATION L.P.
By: World Omni Lease Securitization
LLC, its general partner
By: /s/ Eric Gebhard
----------------------------
Name: Eric Gebhard
Title: Assistant Secretary
EXHIBIT 10.17
AMENDMENT NO. 7
TO
SUPPORT AGREEMENT
AMENDMENT NO. 6 TO SUPPORT AGREEMENT, dated as of October 1, 1998 (the
"Amendment"), made by WORLD OMNI FINANCIAL CORP., a Florida corporation ("World
Omni") having its principal place of business at 120 N.W. 12th Avenue, Deerfield
Beach, FL 33442, and WORLD OMNI LEASE SECURITIZATION L.P., a Delaware limited
partnership ("WOLS LP").
RECITALS
A. World Omni is the sole limited partner of WOLS LP. The sole general
partner of WOLS LP was World Omni Lease Securitization, Inc., a Delaware
corporation ("WOLSI") and a wholly owned subsidiary of World Omni. As of
September 23, 1998, the sole general partner of WOLS LP is World Omni Lease
Securitization LLC, a Delaware limited liability company ("WOLS LLC") and a
wholly owned subsidiary of World Omni into which WOLSI was merged. In order to
better assure WOLS LP that it will be able to meet its financial obligations as
and when they become due and payable, and therefore to assist WOLS LP in
inducing third parties to enter into financial arrangements with it as it deems
desirable, the undersigned have entered into a Support Agreement dated as of
October 1, 1995, as amended by Amendment No. 1 to Support Agreement dated as of
May 1, 1996, Amendment No. 2 to Support Agreement dated as of October 1, 1996,
Amendment No. 3 to Support Agreement dated as of May 1, 1997, Amendment No. 4 to
Support Agreement dated as of October 1, 1997 and Amendment No. 5 to Support
Agreement dated as of September 23, 1998 (as so amended, the "Support
Agreement") to provide support to WOLS LP in maintaining a favorable financial
condition, and desires to amend the Support Agreement to provide additional
support to WOLS LP.
B. For the foregoing reasons, and for other good and valuable
consideration, receipt of which is hereby acknowledged, World Omni, having a
financial interest in WOLS LP, and WOLS LP, intending to be legally bound,
hereby agree as follows:
Section 1. Definitions.
For all purposes of this Amendment, except as otherwise expressly
provided for or unless the context otherwise requires, (a) unless otherwise
defined herein, all capitalized terms used herein shall have the meanings
attributed to them by the Second Amended and Restated Assignment Agreement, (b)
all terms used in this Amendment include (i) all genders and (ii) the plural as
well as the singular, (c) all references to words such as "herein", "hereof" and
the like shall refer to this Amendment as a whole and not to any particular
article or sections within this Amendment, (d) the term "include" and all
variations thereon shall mean "include without limitation", and (e) the term
"or" shall include "and/or".
Section 2. Amendment of Section 3.
Section 3 of the Support Agreement is hereby amended by deleting the
proviso contained at the end of the second full sentence thereof that reads
"provided that such obligations of World Omni under this Support Agreement shall
not exceed $90 million in the aggregate" and inserting in its place term
"provided that such obligations of World Omni under this Support Agreement shall
not exceed $100 million in the aggregate."
<PAGE>
Section 3. Effect of Amendment.
Other than as specifically amended in this Amendment, the Support
Agreement remains in full force and effect and is hereby reaffirmed in all
respects, and all references therein to the "Agreement" shall be deemed to refer
to the Support Agreement, as amended by this Amendment.
Section 6. Governing Law.
THIS AMENDMENT SHALL BE CREATED UNDER THE LAWS AND GOVERNED BY AND
CONSTRUED UNDER THE INTERNAL LAWS OF THE STATE OF FLORIDA, WITHOUT REGARD TO ANY
OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
Section 7. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Amendment shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provision or terms of this Amendment and shall
in no way affect the validity or enforceability of the other provisions of this
Amendment. To the extent permitted by law, the parties hereto waive any
provision of law that renders any provision of this Amendment invalid or
unenforceable in any respect.
[SIGNATURES ON FOLLOWING PAGE]
2
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Amendment No. 6 to
Support Agreement to be duly executed as of the date first set forth above.
WORLD OMNI FINANCIAL CORP.
By: _______________________________
Name: _____________________________
Title: ____________________________
WORLD OMNI LEASE SECURITIZATION L.P.
By: World Omni Lease Securitization
LLC, its general partner
By: _______________________________
Name: _____________________________
Title: ____________________________
EXHIBIT 10.18
Form of Residual Value Insurance Policy
INSURANCE AMERICAN INTERNATIONAL
[AISL-LOGO] SPECIALTY LINES INSURANCE COMPANY
A Member
Company
Of American A Capital Stock Insurance Company
International c/o American International Surplus Lines Agency, Inc.
Group, Inc. Harborside Financial Center, 401 Plaza 3
Jersey City, NJ 07311
DECLARATIONS
ITEM 1. INSURED: Harris Trust & Savings Bank, solely as Indenture Trustee
pursuant to the Indenture acting on behalf of the
Noteholders and the other parties entitled to
distributions pursuant to Section 3.03(b) of the
Securitization Trust Agreement.
ADDRESS: 311 W. Monroe
12th Floor
Chicago, Illinois 60606
Attn: Corporate Trust Office
Fax:
ITEM 2. POLICY
PERIOD: 12:00 A.M., April 1, 1999 (the "Inception Date") to
11:59 P.M., May 1, 2006 standard time at the address of
the Insured.
ITEM 3. LIMIT OF
LIABILITY: The maximum Limit of Liability for any one Insured
Leased Vehicle is the lesser of: (A) $60,000; or (B) the
Booked Residual Value of such Insured Leased Vehicle.
Notwithstanding the previous sentence, in no event shall
the maximum aggregate Limit of Liability for all Insured
Leased Vehicles exceed twenty percent (20%) of the Total
Booked Residual Value.
ITEM 4. INSURED LEASED
VEHICLES: Those Leased Vehicles allocated to the 1999-A SUBI
Portfolio as of the Inception Date and listed on the
Vehicle Schedule attached to the Policy as Schedule 1
("Initial Insured Leased Vehicles"), together with those
additional Leased Vehicles allocated to the 1999-A SUBI
Portfolio during
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Form of Residual Value Insurance Policy
the Transfer Period and listed on a Supplement to the
Vehicle Schedule provided to the Insurer in the form of
Schedule 2 attached to the Policy, which additional
Leased Vehicles shall have been selected from the pool
of Leased Vehicles listed on the Revolving Period
Vehicle Pool attached to the Policy as Schedule 3,
unless such pool shall have been exhausted ("Additional
Insured Leased Vehicles"). In no event shall a Leased
Vehicle with an initial Lease term of less than twenty
four (24) months or more than sixty (60) months
constitute an Insured Leased Vehicle, unless agreed to
in advance, in writing, by the Insurer. In the event
that an Insured Leased Vehicle is reallocated from the
1999-A SUBI Portfolio to the UTI Portfolio, including,
without limitation, pursuant to Section 9.02(a)(iii) of
the Servicing Agreement, it shall cease to be an Insured
Lease Vehicle.
ITEM 5. PREMIUM: [___]% of the Total Booked Residual Value payable as
follows:
A. [$____], being [___]% of the Total Booked Residual Value
of all Initial Insured Leased Vehicles, payable on or
prior to the Inception Date; and
B. [___]% of the Booked Residual Value of each Additional
Insured Leased Vehicle, payable within thirty (30) days
of the end of the month during which such Additional
Insured Leased Vehicle is allocated to the 1999-A SUBI
Portfolio.
Date: _____________ _________________________________
Authorized Representative
THESE DECLARATIONS, TOGETHER WITH THE INSURANCE POLICY FORM (INCLUDING THE
SCHEDULES AND EXHIBITS) ATTACHED HERETO, CONSTITUTE THE INSURANCE POLICY.
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Form of Residual Value Insurance Policy
INSURANCE AMERICAN INTERNATIONAL
[AISL-LOGO] SPECIALTY LINES INSURANCE COMPANY
A Member
Company
Of American A Capital Stock Insurance Company
International c/o American International Surplus Lines Agency, Inc.
Group, Inc. Harborside Financial Center, 401 Plaza 3
Jersey City, NJ 07311
RESIDUAL VALUE INSURANCE POLICY
SECTION 1 - INSURING CLAUSE
In consideration of the Premium, and subject to the Declarations, conditions,
exclusions, provisions and other terms of this Policy, the Insurer agrees to
indemnify the Insured for Insured Residual Value Loss Amounts arising during the
Policy Period with respect to only Insured Leased Vehicles.
SECTION 2 - DEFINITIONS
Capitalized terms in bold shall have the meanings ascribed to them below, and
those specifically set forth in the Declarations.
A. Additional Insured Leased Vehicles mean those Leased Vehicles allocated
to the 1999-A SUBI Portfolio during the Transfer Period and listed on a
Supplement to the Vehicle Schedule in the form of Schedule 2 hereof,
which additional Leased Vehicles shall have been selected from the pool
of Leased Vehicles listed on the Revolving Period Vehicle Pool attached
as Schedule 3 hereto, unless such pool shall have been exhausted.
B. Approved Residual Value Publication means any of the following:
1. World Omni National VT Accounts Residual Lease Guide/Dealer
Bulletins;
2. World Omni/Southeast Toyota Finance Residual Lease
Guide/Dealer Bulletins; or
3. other residual lease guides/dealer bulletins published
by the Servicer and furnished to its Dealers from time to
time.
C. Booked Residual Value means the stipulated fair market value of a
Leased Vehicle as of the Maturity Date of the related Lease (which
stipulated value shall have been calculated utilizing the Approved
Residual Value Publication), as originally set forth on the face of the
Lease, and as subsequently adjusted to reflect any additional scheduled
Monthly Lease Payments added by virtue of any non-credit-related
extension of the Maturity Date pursuant to Section 2.02(b)(ii) of the
Servicing Agreement and Section 9.02(a) of the Supplement to the
Servicing Agreement.
Such published value shall be the Booked Residual Value for purposes of
this Policy, unless a lower Booked Residual Value is designated in the
Vehicle Schedule or Supplement to the Vehicle
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Form of Residual Value Insurance Policy
Schedule applicable to the Leased Vehicle, in which case the lower
Booked Residual Value shall be the Booked Residual Value.
D. Business Day means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York, Palisades Park, New
Jersey, Chicago, Illinois, Wilmington, Delaware, Deerfield Beach,
Florida, or Mobile, Alabama are authorized or obligated by law,
executive order or governmental decree to be closed.
E. Claims Deadline means the Claims Deadline specified in Section 4.B
hereof.
F. Collection Period means with respect to any Distribution Date, the
period from and including the first day of the calendar month
immediately preceding the calendar month in which such Distribution
Date occurs (or, with respect to the first Distribution Date, from and
including the Initial Cutoff Date) to and including the last day of the
calendar month immediately preceding the calendar month in which the
Distribution Date occurs.
G. Dealer shall have the meaning ascribed to it in the Origination Trust
Agreement.
H. Declarations mean the attachment hereto headed "DECLARATIONS."
I. Discounted Principal Balance shall have the meaning ascribed to it
in the Supplement to the Origination Trust Agreement.
J. Distribution Date means, with respect to a Collection Period, the
fifteenth (15th) day of the following month, or if that day is not a
Business Day, the next Business Day, beginning with September 15, 1999.
K. Early Termination Amount means, as of any Distribution Date, an amount
equal to (i) the sum of the Discounted Principal Balances, as of the
end of the related Collection Period, of any Early Termination Leases
that became Early Termination Leases during the related Collection
Period, such Discounted Principal Balances reflecting all payments of
(or in lieu of) Monthly Lease Payments other than non-cash items, less
(ii) the Net Liquidation Proceeds arising from payments made in
connection with the realization of the Booked Residual Values (and the
retention by Lessees or Dealers) of the related Leased Vehicles,
including any charges for excess mileage and excess wear and use, but
excluding payments in the form of non-cash items.
L. Early Termination Lease means a Lease which is terminated prior to its
Maturity Date in connection with the retention of the related Insured
Leased Vehicle by the Lessee or a Dealer, by the Servicer accepting
payments (excluding payments in the form of non-cash items) of less
than 100% of the Outstanding Principal Balance of the Lease; provided,
however, that such agreement is part of a lease termination program
sponsored by World Omni Financial Corp. (or the Servicer, if other than
World Omni Financial Corp.) specifically for the purpose of mitigating
residual value losses, and not primarily for any other purpose, and
pursuant to which World Omni Financial Corp. or the Servicer offers
incentives to terminate such a Lease prior to its Maturity Date; and
provided, further, that such a Lease will not constitute an Early
Termination Lease if such deficit is less than $200.00.
M. Inception Date means the Inception Date set forth in Item 2 of the
Declarations.
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Form of Residual Value Insurance Policy
N. Indenture means that certain INDENTURE dated as of August 1, 1999 by
and between WORLD OMNI 1999-A AUTOMOBILE LEASE SECURITIZATION TRUST and
the Insured, a copy of which has been provided to the Insurer.
O. Industrial Insured means an "insured" as defined in ss. 121-2.08 of the
Illinois Insurance Code.
P. Initial Cutoff Date means April 1, 1999.
Q. Insured means the Insured set forth in Item 1 of the Declarations.
R. Insured Leased Vehicles means those Insured Leased Vehicles described
in Item 4 of the Declarations.
S. Initial Insured Leased Vehicles mean those Leased Vehicles allocated to
the 1999-A SUBI Portfolio as of the Inception Date and listed on the
Vehicle Schedule attached hereto as Schedule 1.
T. Insured Residual Value Loss Amount means, as of any Distribution Date,
the lesser of: (i) the product of (A) the Investor Percentage with
respect to Loss Amounts for the related Collection Period, and (B) the
Residual Value Loss Amount incurred during such Collection Period; and
(ii) the shortfall if any, described in clause (ii) of Section 3.03(e)
of the Securitization Trust Agreement.
U. Insurer means American International Specialty Lines Insurance Company.
V. Investor Percentage shall have the meaning ascribed to it in the
Securitization Trust Agreement.
W. Lease means a 1999-A Lease as such term is defined in the Supplement to
the Origination Trust Agreement.
X. Lease Origination Date means, with respect to any Lease, the date on
which a Lease becomes effective.
Y. Lease Termination Date means, with respect to any Lease, the date on
which a Lease terminates as set forth at the time such Lease is
allocated to the 1999-A SUBI Portfolio, exclusive of any extensions of
such Lease. Extensions of up to five (5) months beyond the Lease
Termination Date may be granted by the Servicer in accordance with
Section 2.02(b) of the Servicing Agreement.
Z. Leased Vehicle means an automobile or light duty truck which is the
subject of a Lease and which, as of the Lease Origination Date was a
new vehicle, a dealer demonstrated vehicle or a manufacturers' program
vehicle.
AA. Lessee means the person with whom the Dealer has entered into a Lease.
BB. Loss Amount shall have the meaning ascribed to it in the Securitization
Trust Agreement.
CC. Matured Lease Vehicle Expenses means reasonable out-of-pocket expenses
incurred by the Servicer in connection with the sale or other
disposition of an Insured Leased Vehicle included in Matured Leased
Vehicle Inventory.
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Form of Residual Value Insurance Policy
DD. Matured Leased Vehicle Inventory as of any date means all Matured
Vehicles that first became Matured Vehicles within the three
immediately preceding Collection Periods (or during the months of June,
July and August 1999 in respect of any date during the September 1999
Collection Period, the months of July and August 1999 and the September
1999 Collection Period in respect of any date during the October 1999
Collection Period, the month of August and the September and October
1999 Collection Periods in respect of any date during the November 1999
Collection Period), and that, as of the last day of the most recent
calendar month or Collection Period, as applicable, have remained
unsold and not otherwise disposed of by the Servicer for no more than
two full calendar months and/or Collection Periods, as applicable.
EE. Matured Leased Vehicle Proceeds means gross amounts received by the
Servicer or the Origination Trustee on behalf of the Origination Trust
(before reimbursement for Matured Leased Vehicle Expenses and including
any charges for excess mileage and excess wear and tear) in connection
with the sale or other disposition of an Insured Lease Vehicle included
in Matured Leased Vehicle Inventory, which sale by the Servicer or
Origination Trustee shall be in accordance with the standards set forth
in the first paragraph of Section 2.06 of the Servicing Agreement.
FF. Matured Vehicle as of any date means any Insured Leased Vehicle the
related Lease of which has reached its Maturity Date and as to which
all scheduled Monthly Lease Payments and other payments due thereunder
have been made, and which Insured Leased Vehicle has been returned to
the Servicer on behalf of the Origination Trustee (on behalf of the
Origination Trust), regardless of the status of the sale or disposition
of such Insured Leased Vehicle as of such date.
GG. Maturity Date means, with respect to any Lease, the date on which the
last scheduled Monthly Lease Payment shall be due and payable, as such
date may be extended pursuant to Section 2.02(b) of the Servicing
Agreement and Section 9.02(a) of the Supplement to the Servicing
Agreement.
HH. Monthly Lease Payment shall have the meaning ascribed to it in the
Supplement to the Origination Trust Agreement.
II. Net Liquidation Proceeds shall have the meaning ascribed to it in
the Supplement to the Origination Trust Agreement.
JJ. Net Matured Leased Vehicle Proceeds means Matured Leased Vehicle
Proceeds less Matured Leased Vehicle Expenses.
KK. 1999-A SUBI Portfolio means that SUBI Portfolio identified by the
Origination Trustee pursuant to the Supplement to the Origination Trust
Agreement to be accounted for independently within the Origination
Trust as the 1999-A SUBI Portfolio.
LL. Noteholders shall have the meaning ascribed to it in the Indenture.
MM. Operative Documents means the Securitization Trust Agreement, the
Indenture, the Servicing Agreement, and the Origination Trust
Agreement.
NN. Origination Trust means the Alabama business trust known as World
Omni LT.
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Form of Residual Value Insurance Policy
OO. Origination Trust Agreement means that certain SECOND AMENDED AND
RESTATED TRUST AGREEMENT dated as of July 1, 1994 by and between AUTO
LEASE FINANCE L.P., VT INC. and, for certain limited purposes only,
CONTINENTAL BANK, as supplemented by the Supplement to the Origination
Trust Agreement, copies of which have been provided to the Insurer.
PP. Origination Trustee means VT INC., an Alabama corporation, as trustee
(in such capacity, together with any successor or permitted assign) of
the Origination Trust.
QQ. Outstanding Principal Balance shall have the meaning ascribed to it in
the Servicing Agreement.
RR. Policy means this Residual Value Insurance Policy agreed to and
underwritten by the Insurer for the benefit of the Insured.
SS. Policy Period means the Policy Period specified in Item 2 of the
Declarations.
TT. Proof of Loss means a Proof of Loss in the form of Exhibit A of this
Policy.
UU. Residual Value Loss Amount means, as of any Distribution Date, the sum
of the following: (a) the Booked Residual Values of all Insured Leased
Vehicles included in Matured Lease Vehicle Inventory as of the last day
of the related Collection Period but which as of such day had remained
unsold and not otherwise disposed of by the Servicer for at least two
full Collection Periods; (b) any excess of the sum of the Booked
Residual Values of all Matured Vehicles sold or otherwise disposed of
from Matured Leased Vehicle Inventory during the related Collection
Period over Net Matured Leased Vehicle Proceeds; and (c) any Early
Termination Amount for the related Collection Period.
VV. Revolving Period shall have the meaning ascribed to it by the
Supplement to the Origination Trust Agreement.
WW. Revolving Period Vehicle Pool means the Revolving Period Vehicle Pool
attached hereto as Schedule 3 which lists the pool of Leased Vehicles
from which, until such pool is exhausted, Additional Insured Leased
Vehicles will be selected.
XX. Securitization Trust Agreement means that certain SECURITIZATION TRUST
AGREEMENT dated as of August 1, 1999 by and between WORLD OMNI LEASE
SECURITIZATION L.P., CHASE MANHATTAN BANK, DELAWARE, as Owner Trustee
and the INSURED, as Indenture Trustee, a copy of which has been
provided to the Insurer.
YY. Servicer means World Omni Financial Corp., in its capacity as servicer
of the Leases and Leased Vehicles, and each successor thereto (in the
same capacity) appointed pursuant to Sections 2.10 of the Servicing
Agreement and 9.11 of the Supplement to the Servicing Agreement,
respectively.
ZZ. Servicing Agreement means that certain SECOND AMENDED AND RESTATED
SERVICING AGREEMENT dated as of July 1, 1994 by and between VT INC., as
Trustee of WORLD OMNI LT and WORLD OMNI FINANCIAL CORP., as
supplemented by the Supplement to the Servicing Agreement, copies of
which have been provided to the Insurer.
AAA. SUBI Portfolio means a separate portfolio of Trust Assets identified
and allocated on the books
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Form of Residual Value Insurance Policy
and records of the Origination Trust by the Origination Trustee to be
accounted for independently within the Origination Trust.
BBB. Supplement to the Servicing Agreement means that certain SUPPLEMENT
1999-A TO SERVICING AGREEMENT dated as of August 1, 1999 by and between
VT INC., as Trustee of WORLD OMNI LT and WORLD OMNI FINANCIAL CORP.
CCC. Supplement to the Origination Trust Agreement means that certain
SUPPLEMENT 1999-A TO TRUST AGREEMENT dated as of August 1, 1999 by and
among AUTO LEASE FINANCE L.P., VT INC. and U.S. BANK NATIONAL
ASSOCIATION.
DDD. Supplement to the Vehicle Schedule means a monthly schedule provided to
the Insurer in the form of Schedule 2 hereof.
EEE. Termination Report means a monthly report provided to the Insurer in
the form of Schedule 4 hereof.
FFF. Total Booked Residual Value means the sum of the Booked Residual Values
for all Insured Leased Vehicles.
GGG. Transfer Period means the period beginning on the Inception Date and
ending on the last day of the Collection Period immediately following
the end of the Revolving Period.
HHH. Trust Assets shall have the meaning ascribed to it in the Origination
Trust Agreement.
III. UTI Portfolio means all Trust Assets (including without limitation
Leases and Leased Vehicles) other than those divided, identified Trust
Assets that are from time to time allocated by the Origination Trustee
into or earned by one or more separate SUBI Portfolio(s).
JJJ. Vehicle Schedule means the Vehicle Schedule attached hereto as Schedule
1 which list those Leased Vehicles which have been allocated to the
1999-A SUBI Portfolio as of the Inception Date.
SECTION 3 - LIMIT OF LIABILITY
The Insurer's maximum liability hereunder shall be as specified in Item 3 of the
Declarations.
SECTION 4 - POLICY PERIOD and CLAIMS DEADLINE
A. POLICY PERIOD
Subject to Section 4.C. below, the Policy Period is the period, both days
inclusive, specified in Item 2 of the Declarations.
B. CLAIMS DEADLINE
With respect to a particular Collection Period, a claim in the form of a Proof
of Loss must be filed by 11:59 P.M. standard time at the principal address of
the Insured on the fifth (5th) calendar day preceding the
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Form of Residual Value Insurance Policy
Distribution Date for the applicable Collection Period; provided, however, that
the Insured's delay in submitting a Proof of Loss shall not relieve the Insurer
of its obligations under this Policy but shall extend the period of time for
compliance by the Insurer with its obligations under this Policy until five (5)
calendar days following receipt of such Proof of Loss. Notwithstanding anything
to the contrary, the Insurer shall have no obligation to pay Insured Residual
Value Loss Amount pursuant to any Proof of Loss unless such Proof of Loss shall
have been filed by June 10, 2006.
C. CANCELLATION
This Policy will automatically be canceled upon the termination of the Trust in
accordance with section 7.01 of the Securitization Trust Agreement. Under no
other circumstances may this Policy be canceled by the Insured or the Insurer.
SECTION 5 - CONDITIONS PRECEDENT TO LIABILITY
The Insurer shall not be liable for any Insured Residual Value Loss Amount with
respect to any Insured Leased Vehicle hereunder, unless the following conditions
precedent shall have been fulfilled (for Sections 5.A, 5.B., 5.D, 5.E and 5.F
below, with regard to only that particular Insured Leased Vehicle):
A. VEHICLE SCHEDULE, SUPPLEMENT TO THE VEHICLE SCHEDULE AND PREMIUM
PAYMENT
On or prior to the Inception Date, the Insured shall furnish to the Insurer a
Vehicle Schedule and shall simultaneously tender [_____ (__)] basis points of
the Total Booked Residual Value of all Initial Insured Leased Vehicles. Within
thirty (30) days of the end of each month during the Transfer Period, the
Insured shall furnish to the Insurer a Supplement to the Vehicle Schedule and
shall simultaneously tender [____ (__)] basis points of the Total Booked
Residual Value of all Additional Insured Leased Vehicles included thereon;
provided, however, that the Insurer shall be liable under this Policy for
Insured Residual Value Loss Amounts with respect to any Additional Insured
Leased Vehicle arising from and after such Leased Vehicle's allocation to the
1999-A SUBI Portfolio but before it is listed on a Supplement to the Vehicle
Schedule and the payment of such Premium so long as it is listed and such
Premium is paid within thirty (30) days of the end of the month during which
such Leased Vehicle is allocated to the 1999-A SUBI Portfolio. A monthly
Supplement to the Vehicle Schedule must be provided irrespective of whether or
not any Leased Vehicle was allocated to the 1999-A SUBI Portfolio during the
applicable month.
B. TERMINATION REPORT
On a monthly basis throughout the Policy Period, the Insured shall furnish to
the Insurer a Termination Report. Such Termination Report shall be submitted
within thirty (30) days after the end of each month irrespective of whether or
not any Lease terminated in the prior month.
C. AMENDMENTS TO OPERATIVE DOCUMENTS
No Operative Document, irrespective of whether or not the Insured is a party to
such document, shall have been amended, without first having obtained the
written consent of the Insurer, which consent shall not be unreasonably
withheld, if such amendment could reasonably be expected to materially and
adversely affect the Insurer's rights and obligations under this Policy.
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Form of Residual Value Insurance Policy
D. DISPOSITION OF MATURED VEHICLES
All Matured Vehicles shall be sold in accordance with the procedures and
standards specified in the Servicing Agreement.
E. PRO-ACTIVE EARLY LEASE TERMINATION
With respect to any Insured Leased Vehicle for which the related Lease is
terminated prior to its Maturity Date pursuant to the World Omni Pro-active
Early Termination Program, such Lease shall have been terminated specifically
for the purpose of mitigating residual value loss, and not primarily for any
other purpose.
F. PROOF OF LOSS
A signed, sworn Proof of Loss shall have been received by the Insurer by the
Claims Deadline.
SECTION 6 - EXCLUSIONS
The Insurer shall not be liable hereunder for any portion of any Insured
Residual Value Loss Amount directly or indirectly caused by or attributable to:
a. physical or mechanical damage, destruction or disappearance of
any Leased Vehicle;
b. fraudulent, dishonest, criminal, or malicious acts of the
Insured, the Servicer, the Lessee, the Dealer or any agent,
servant, or employee of the Insured, the Servicer, the Lessee
or the Dealer;
c. the failure of the Insured to obtain possession of any Leased
Vehicle on or after the Lease Termination Date (subject to any
rights of the Lessee to extend the Lease as permitted therein,
or purchase of the Leased Vehicle);
d. any vehicle, other than an Insured Leased Vehicle for which
the Premium applicable to such Insured Leased Vehicle was or
is paid to the Insurer on the date which the Vehicle Schedule,
or Supplement to the Vehicle Schedule listing such Insured
Leased Vehicle was or is submitted to the Insurer;
e. any vehicle which is not produced by the original manufacturer
to U.S. specifications and standards; or
f. commercial use of any vehicle for any carrying of goods or
passengers for hire.
SECTION 7 - PAYMENT OF LOSS
The Insurer shall pay to the Insured or such other person designated in the
Proof of Loss the Insured Residual Value Loss Amount within five (5) calendar
days after the Insured provides a signed, sworn Proof of Loss.
<PAGE>
Form of Residual Value Insurance Policy
In the event the Insured submits a Proof of Loss, the Insurer shall have the
right to investigate, audit and otherwise verify any Insured Residual Value Loss
Amount calculations. In the event the Insurer asserts a basis for not paying a
claim for Insured Residual Value Loss Amount hereunder, the Insurer shall,
notwithstanding any other provision hereunder, pay such claimed Insured Residual
Value Loss Amount and thereafter assert its rights for non-payment of such claim
under Section 8.I. hereof.
SECTION 8 - GENERAL POLICY PROVISIONS
A. NOTICE
Any notice or other communication to be given to the Insured shall be given
effectively if made in writing and delivered by either courier or facsimile to
the Insured at its address specified in Item 1 of the Declarations.
Any notice or other communication to be given to the Insurer shall be given
effectively if made in writing and delivered by either courier or facsimile to
the Insurer at American International Specialty Lines Insurance Company, c/o
American International Surplus Lines Agency, Inc., Harborside Financial Center,
401 Plaza 3, Jersey City, New Jersey, 07311, Attention: Michael Mitrovic, Esq.
Either the Insured or the Insurer may by notice to the other in accordance with
the applicable of the two previous sentences, change the address at which
notices or other communications are to be given to it.
B. PREMIUM
The Insured shall pay the Premium as specified in Item 5 of the Declarations.
Premium due to or received by the Insurer shall be non-refundable and fully
earned. Premium under this Policy shall be payable net of any taxes, including
without limitation, premium taxes.
C. EXAMINATION AND INSPECTION
The Insured shall, by mutual agreement with the Insurer as to time and place,
and as often as may be reasonably required during the Policy Period and
thereafter for up to one year following the date the last Insured Leased Vehicle
reaches its Lease Termination Date, produce for examination by the Insurer or
its duly authorized representatives, all notes and records, inventories and
accounts relating to this Policy.
The Insurer, or its designee or representative, shall have the right, but not
the obligation, to inspect any Insured Leased Vehicle at any time; and the
Insured, insofar as it is within the Insured's power, shall cooperate with the
Insurer in any such inspection. However, under no circumstances shall the
Insurer, or its designee or representative, have the right to inspect an Insured
Leased Vehicle which is in the possession of a Lessee.
Neither the Insurer's right to make inspections nor the making thereof nor any
report thereon shall constitute an undertaking, on behalf of or for the benefit
of the Insured or other, to determine or warrant that any property or operations
are safe or healthful, or are in compliance with any law, rule or regulation.
D. HISTORICAL LOSS DATA; ADDITIONAL INFORMATION
The Insured shall provide to the Insurer on a monthly basis a Lease Contract
Residual Value Loss Analysis,
<PAGE>
Form of Residual Value Insurance Policy
or similar report, substantially in the form of Exhibit B hereof, showing
historical residual value loss data through such date.
In addition to any information required to be included in a Supplement to the
Vehicle Schedule or in a Termination Report, the Insured shall provide such
other information with respect to Additional Insured Leased Vehicles or Leased
Vehicles for which the related Leases have terminated, as the case may be, as
may reasonably be requested by the Insurer.
E. ASSIGNMENT
This Policy shall not be assigned or transferred by the Insured without the
prior written consent of the Insurer, except to a successor permitted under
Article VI of the Indenture.
F. SUBROGATION
In the event of any payment under this Policy in addition to all other rights or
remedies available to the Insurer, the Insurer shall be subrogated to all the
Insured's rights of recovery therefore against any person or entity other than
the Insured, and the Insured shall execute and deliver all instruments and
papers and do whatever else is necessary to secure such rights. The Insured
shall do nothing to prejudice such rights.
G. MISREPRESENTATION
No misrepresentation or breach of warranty made by the Insured or its
representative on its behalf in the negotiation of this Policy, shall affect the
Insurer's obligations under this Policy, unless the Insurer relies on it, and
(i) it is material, (ii) it is made with intent to deceive, or (iii) the facts
misrepresented or falsely warranted materially contribute to the Insured
Residual Value Loss Amount.
No failure of a condition under Section 5 of this Policy, or breach of a
warranty, shall affect the Insurer's obligation under this Policy unless such
failure or breach exists at the time of a claim being made for Insured Residual
Value Loss Amount, and either (i) materially increases the risk to the Insurer
at the time of the claim, or (ii) materially contributes to the Insured Residual
Value Loss Amount. The provisions of this condition do not apply to failure to
tender payment of Premium.
H. ACTION AGAINST THE INSURER
No actions shall lie against the Insurer unless, as a condition precedent
thereto, there shall have been full compliance by the Insured with all the terms
of this Policy.
I. ARBITRATION
It is hereby understood and agreed that all disputes or differences which may
arise under or in connection with this Policy, whether arising before or after
termination of this Policy, including any determination of the amount of the
Insured Residual Value Loss Amount, shall be submitted to the American
Arbitration Association under and in accordance with its then prevailing
commercial arbitration rules. The arbitrators shall be chosen in the manner and
within the time frames provided by such rules. Unless prohibited by such rules,
the arbitrators shall be three (3) disinterested individuals having knowledge of
the legal, corporate and insurance issues relevant to the matters in dispute.
<PAGE>
Form of Residual Value Insurance Policy
The arbitration proceeding shall take place in New York, New York; provided,
however, that the terms, conditions, provisions and exclusions of this Policy
are to be construed in an evenhanded fashion as between the parties, including
without limitation, where the language of this Policy is alleged to be ambiguous
or otherwise unclear, and the issue shall be resolved in the manner most
consistent with the relevant terms, conditions, provisions or exclusions of the
Policy (without regard to the authorship of the language, without regard to the
doctrine of reasonable expectation of the parties and without any presumption or
arbitrary interpretation or construction in favor of either party or parties,
and in accordance with the intent of the parties).
The written decision of the arbitrators shall be provided to both parties and
shall be binding on them. The arbitrators' award shall not include punitive
damages, attorney fees or other costs.
Each party shall equally bear the expenses of arbitration.
The provisions of this Section 8.I. shall survive the termination of this
Policy.
J. CONFORMITY WITH STATUTE
Where the terms of this Policy and forms attached thereto are in conflict with
the statutes of the State wherein this Policy is issued, such are hereby amended
to conform to the minimum requirements of those statutes. This Policy shall be
deemed to be issued under, and shall be governed by or construed under the laws
of the State of Illinois, as applicable to insurance contracts entered into in
that State between citizens of that State and without reference to conflicts of
law principles.
K. BANKRUPTCY
Bankruptcy or insolvency of the Insured or the Insured's estate shall not
relieve the Insurer of any of its obligations hereunder. If, however, the
Insured shall be adjudged bankrupt or insolvent within the Policy Period, this
Policy, subject to the Declarations, conditions, exclusions, provisions and
other terms of this Policy, shall cover the Insured's legal representatives for
the unexpired portion of such Policy Period.
L. WAIVER
No waiver or modification of this Policy shall be effective unless it be in
writing and signed by a duly authorized representative of the Insurer and the
Insured. The failure of the Insurer to enforce any provision of this Policy
shall not constitute a waiver by the Insurer of any such provision. The past
waiver of a provision by the Insurer shall not constitute a course of conduct or
a waiver in the future of that same provision.
M. SERVICE OF SUIT
Subject to Section 8.I. of this Policy, it is agreed that in the event of
failure of the Insurer to pay any amount claimed to be due hereunder, the
Insurer, at the request of the Insured, will submit to the jurisdiction of a
court of competent jurisdiction within the United States. Nothing in this
condition constitutes or should be understood to constitute or waiver of the
Insurer's right to commence an action in any court of competent jurisdiction in
the United States, to remove an action to a United States District Court or to
seek a transfer of a case to another court as permitted by the laws of the
United States or of any state in the United States. It is further agreed that
service of process in such suit may be made upon Counsel, Legal Department,
American International Specialty Lines Insurance Company, c/o American
International Surplus Lines
<PAGE>
Form of Residual Value Insurance Policy
Agency, Inc., Harborside Financial Center, 401 Plaza 3, Jersey City, NJ 07311,
or his or her representative, and that in any suit instituted against the
Insurer upon this Policy, the Insurer will abide by the final decision of such
court or of any appellate court in the event of any appeal.
Further, pursuant to any statute of any state, territory, or districts of the
United States which makes provision therefor, the Insurer hereby designated the
Superintendent, Commissioner, or Director of Insurance, or other officer
specified for that purpose in the statute, or his or her successor or successors
in office as its true and lawful attorney upon whom may be served any lawful
process in any action, suit, or proceeding instituted by or on behalf of the
Insurer or any beneficiary hereunder arising out of this Policy of insurance,
and hereby designates the above Counsel as the person to whom the said officer
is authorized to mail such process or a true copy thereof.
In the event of an inconsistency between this Section and the arbitration
provision in Section 8.I. above, the arbitration provision shall take priority
as the exclusive dispute resolution mechanism agreed to by the parties.
N. ILLINOIS INDUSTRIAL INSURED
The Insured represents and warrants that it is an Industrial Insured, that is
has obtained this Policy directly from the Insurer, that it has done so without
the use of an insurance broker, producer, or surplus broker, and that it
understands that the Insurer has issued this Policy in reliance thereon.
O. NO RELIANCE ON THE INSURER
The Insured has reviewed the terms, conditions and significance of this Policy
with the legal and tax counsel and accountants of its choice, and is accepting
this Policy with full knowledge of its terms, conditions and significance. In
accepting this Policy, the Insured agrees that it is not relying upon any
representation or warranty by the Insurer regarding the legal, tax or accounting
implications of this Policy for the Insured.
P. TITLES OF SECTIONS
The titles of the various Sections and paragraphs of this Policy and
endorsements, if any, attached to this Policy are inserted solely for
convenience or reference and are not to be deemed in any way to limit or affect
the provision to which they relate.
IN WITNESS WHEREOF, the Insurer has caused this Policy to be signed by its
President and Secretary and signed on the Declarations by its duly authorized
representative.
______________________________ ________________________________
<PAGE>
Form of Residual Value Insurance Policy
Exhibit A
Form of Proof of Loss
PROOF OF LOSS
To: American International Specialty Lines Insurance Company (the "Insurer")
c/o American International Surplus Lines Agency, Inc., Harborside Financial
Center, 401 Plaza 3, Jersey City, New Jersey, 07311, Attention: Michael
Mitrovic, Esq. with a copy to: Richard Brown, AI Management and Professional
Liability Claim Adjusters (AIMPLCA) Finite Risk Unit, 70 Pine Street, 5th Floor,
New York, New York 10270
In accordance with the terms of the Residual Value Insurance Policy,
Policy No. __________, dated as of ________ __, 1999 ("Policy"), this Proof of
Loss is being filed pursuant to Section 5.F of the Policy.
As an authorized representative of the Insured, I hereby certify that
an Insured Residual Value Loss Amount in the amount of US$___________ occurred
from the period _________ __, to _____________ ___, . Relevant information
pertaining to the Insured Residual Value Loss Amount, together with all relevant
supporting documentation follows.
This Proof of Loss verifies that each condition precedent to payment
under the Policy has been satisfied in all respects and the no exclusion
contained in the Policy bars this claim.
Payment should be made to _____________________________.
Effective upon receipt of payment in accordance with the terms of the
Policy, the Insured discharges the Insurer for all liability with respect to the
Insured Residual Value Loss Amount claimed hereunder.
[With respect to the final Proof of Loss to be submitted to the
Insurer, the following paragraph should be inserted in lieu of the preceding
paragraph:
All Insured Leased Vehicles have been sold or otherwise disposed of and
there can be no further Insured Residual Value Loss Amount. Effective upon
receipt of payment in accordance with the terms of the Policy, the Insured
discharges the Insurer from any and all liability under the Policy.]
IN WITNESS WHEREOF, this Proof of Loss has been completed as of the
date below.
WORLD OMNI FINANCIAL CORP., as agent for
INSURED NOTARY
By: __________________________
Name:
Date:
Title:
<PAGE>
Form of Residual Value Insurance Policy
1. Detailed calculation of Insured Residual Value Loss Amount including:
a. Investor Percentage with respect to Loss Amounts for the
related Collection Period.
b. The Shortfall, if any, described in clause (ii) of Section
3.03(e) of the Securitization Trust Agreement.
2. Detailed Calculation of Residual Value Loss Amount including:
a. The sum of:
(i) the Booked Residual Values of all Insured Leased
Vehicles included in Matured Lease Vehicle Inventory
as of the last day of related Collection Period but
which as of such day had remained unsold and not
otherwise disposed of by the Servicer for at least
two full Collection Periods;
(ii) any excess, if any, of the sum of the Booked Residual
Values of all Matured Vehicles sold or otherwise
disposed of from Matured Lease Vehicle Inventory
during the related Collection Period over Net Matured
Vehicle Proceeds for such Collection Period; or
(iii) the Early Termination Amount (i.e., the sum of the
remaining Discounted Principal Balances, as of the
end of the related Collection Period, of Early
Termination Leases that became Early Termination
Leases during the related Collection Period, such
Discounted Principal Balance calculated without
reference to payments made in the form of non-cash
items).
b. Individual Leased Vehicle Detail for 2.a.(i) as follows:
(i) Vehicle Identification Number
(ii) Vehicle Year
(iii) Vehicle Make
(iv) Vehicle Model
(v) Original Equipment Cost
(vi) Original Booked Residual Value
(vii) If the applicable Lease was extended beyond the Lease
Termination Date by virtue of any non-credit-related
extension of the Maturity Date pursuant to Section
2.02(b)(ii) of the Servicing Agreement and Section
9.02(a) of the Supplement to the Servicing Agreement,
the adjusted Booked Residual Value reflecting a pro
rata reduction for the extension
(viii) Lease Termination Date
<PAGE>
Form of Residual Value Insurance Policy
(ix) If the applicable Lease was extended beyond the Lease
Termination Date, the Maturity Date. If the Lease has
been extended beyond the Lease Termination Date, a
copy of the written extension agreement must be
attached to the Proof of Loss.
(x) Days Not Sold, beginning on the date with the Leased
Vehicle became a Matured Vehicle
c. Individual Leased Vehicle Detail for 2.a.(ii) follows:
(i) Vehicle Identification Number
(ii) Vehicle Year
(iii) Vehicle Make
(iv) Vehicle Model
(v) Original Equipment Cost
(vi) Original Booked Residual Value
(vii) If the applicable Lease was extended beyond the Lease
Termination Date by virtue of any non-credit-related
extension of the Maturity Date pursuant to Section
2.02(b)(ii) of the Servicing Agreement and Section
9.02(a) of the Supplement to the Servicing Agreement,
the adjusted Booked Residual Value reflecting a pro
rata reduction for the extension.
(viii) Lease Termination Date
(ix) If the applicable Lease was extended beyond the Lease
Termination Date, the Maturity Date. If the Lease has
been extended beyond the Lease Termination Date, a
copy of the written extension agreement must be
attached to the Proof of Loss.
(x) Vehicle Proceeds
(xi) Total Loss
d. Individual Leased Vehicle Default for 2.a.(iii) as follows:
(i) Vehicle Identification Number
(ii) Vehicle Year
(iii) Vehicle Make
(iv) Vehicle Model
<PAGE>
Form of Residual Value Insurance Policy
(v) Original Equipment Cost
(vi) Original Booked Residual Value
(vii) Lease Termination Date
(viii) Pay Off Amount
(ix) Total Loss
<PAGE>
Form of Residual Value Insurance Policy
Schedule 2
[FORM OF SUPPLEMENT TO THE VEHICLE SCHEDULE]
SUPPLEMENT TO THE VEHICLE SCHEDULE
To: American International Specialty Lines Insurance Company (the
"Insurer")
In accordance with the terms of the Residual Value Insurance Policy,
Policy No. _____________, dated as of ___________ __, 1999 ("Policy"), this
Supplement to the Vehicle Schedule is being filed pursuant to Section 5.A of the
Policy.
As an authorized representative of the Insured, I hereby certify that
following Leased Vehicles were allocated to the 1999-A SUBI Portfolio during the
month of _____________. Relevant information pertaining to the these Leased
Vehicles, together with all relevant supporting documentation follows.
Such schedule shall list the following as respects each Leased Vehicle:
1. make, model, year and Vehicle Identification Number;
2. Manufacturer's Suggested Retail Price and Capitalized Cost;
3. Original Booked Residual Value;
4. Lease Origination Date and Lease Termination Date; and
5. amount of Premium due.
IN WITNESS WHEREOF, this Schedule 2 has been completed as of the date
below.
WORLD OMNI FINANCIAL CORP., as agent for
INSURED
By: ________________________
Name:
Date:
Title:
<PAGE>
Form of Residual Value Insurance Policy
Schedule 4
[FORM OF TERMINATION REPORT]
TERMINATION REPORT
To: American International Specialty Lines Insurance Company (the
"Insurer")
In accordance with the terms of the Residual Value Insurance Policy,
Policy No. ____________, dated as of ____________ __, 1999 ("Policy"), this
Termination Report is being filed pursuant to Section 5.B of the Policy.
As an authorized representative of the Insured, I hereby certify that
the Leases for the following Leased Vehicles terminated during the month of
____________ and that such Leased Vehicles are now Matured Vehicles. Relevant
information pertaining to the these Leased Vehicles, together with all relevant
supporting documentation follows.
Such schedule shall list the following as respects each Leased Vehicle:
1. make, model, year and Vehicle Identification Number;
2. Manufacturer's Suggested Retail Price and Capitalized Cost;
3. Original Booked Residual Value;
4. Lease Origination Date and Lease Termination Date; and
5. date Lease was terminated.
IN WITNESS WHEREOF, this Schedule 4 has been completed as of the date
below.
WORLD OMNI FINANCIAL CORP., as agent for
INSURED
By: ______________________
Name:
Date:
Title:
EXHIBIT 10.19
CONFIDENTIAL AND PROPRIETARY
SCHEDULE
to the
MASTER AGREEMENT
dated as of ____________
between
Credit Lyonnais New York Branch ("CLNY"),
a New York licensed branch of Credit Lyonnais, S.A.
("Credit Lyonnais"),
a banking corporation organized and existing
under the laws of the Republic of France
and
World Omni 1999-A Automobile Lease Securitization Trust
("Counterparty"), a business trust organized and existing under the laws of
the State of Delaware under the Securitization Trust
Agreement dated as of ___________
This Master Agreement is part of the Credit Lyonnais Derivatives
Program, and Transactions entered into pursuant hereto will benefit
from a guarantee issued by CLFG, as defined in Part 6 below.
Part 1. Termination Provisions.
(a) "Specified Entity" will not apply to CLNY and will not apply to
Counterparty.
(b) "Specified Transaction" will have the meaning specified in Section 14.
(c) All of the Events of Default specified in Section 5(a), including, but
not limited to, the "Cross Default" provision of Section 5(a)(vi) will
apply to CLNY. No Events of Default will apply to Counterparty.
"Specified Indebtedness" will have the meaning specified in Section 14.
"Threshold Amount" means, with respect to CLNY, USD 35,000,000 or the
equivalent in any other currency, currency unit or combination thereof.
(d) All of the Termination Events specified in Section 5(b), including but
not limited to, the "Credit Event Upon Merger" provision of Section
5(b)(iv) and the "Additional Termination Event" provision of Section
5(b)(v), will apply to CLNY. No Termination Events will apply to
Counterparty.
(e) The "Automatic Early Termination" provision of Section 6(a) will not
apply to CLNY and will not apply to Counterparty.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement, the Second Method and Market Quotation will apply.
(g) "Termination Currency" means United States Dollars.
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<PAGE>
(h) Additional Termination Events will apply.
The occurrence of a Program Event shall constitute an Additional
Termination Event with CLNY as the Affected Party, and the provisions of
Part 6 of this Schedule shall apply.
(i) After the occurrence of an Event of Default (other than one under clause
(i), (vii) or (viii) of Section 5(a)) or a Termination Event (other than
one under Section 5(b)(i)) with respect to CLNY, no Early Termination
Date shall be designated by Counterparty without the prior approval of
all of the Class A Noteholders.
(j) Section 5(a)(i) of this Agreement is amended by deleting the words
"third local Business Day" and inserting the words "fifth calendar day".
(k) Section 6(b)(ii) of this Agreement is hereby amended by adding at the
end of the first paragraph the following:
"; provided that the party seeking to make the transfer to avoid a
Termination Event shall deliver to Counterparty (in the case of
transfers by CLNY) written confirmation from each Rating Agency that
such transfer will not result in the then current rating of the Class A
Notes being withdrawn or lowered."
Part 2. Tax Representations.
(a) Payer Representations. For the purpose of Section 3(e), each of CLNY and
Counterparty represents that it is not required by any applicable law,
as modified by the practice of any relevant governmental revenue
authority, of any Relevant Jurisdiction to make any deduction or
withholding for or on account of any Tax from any payment (other than
interest under Section 2(e), 6(d)(ii) or 6(e) or Part 6 of this
Schedule) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representation made by the other party pursuant to Section 3(f), (ii)
the satisfaction of the agreement contained in Section 4(a)(i) or
4(a)(iii) and the accuracy and effectiveness of any document provided by
the other party pursuant to Section 4(a)(i) or 4(a)(iii) and (iii) the
satisfaction of the agreement of the other party contained in Section
4(d), provided that it shall not be a breach of this representation
where reliance is placed on clause (ii) and the other party does not
deliver a form or document under Section 4(a)(iii) by reason of material
prejudice to its legal or commercial position.
(b) Payee Representations.
(i) CLNY Representation. For the purpose of Section 3(f), CLNY
represents that each payment received or to be received by it in
connection with this Agreement will be effectively connected with its
conduct of a trade or business in the United States of America.
(ii) Counterparty Representation. For the purpose of Section 3(f),
Counterparty represents that it is a business trust organized and
existing under the laws of the State of Delaware.
Part 3. Agreement to Deliver Documents.
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<PAGE>
For the purpose of Sections 4(a)(i) and (ii):
(a) Tax forms, documents or certificates to be delivered are:
CLNY agrees to execute and deliver to Counterparty a United States
Internal Revenue Service Form 4224, or any successor form, (1) upon
execution of this Agreement, (2) promptly upon reasonable demand by
Counterparty, and (3) promptly upon learning that any such form
previously provided by CLNY has become obsolete or incorrect.
(b) Other documents to be delivered are:
<TABLE>
<CAPTION>
Covered by
Party Required to Form\Document\ Date by Which Section 3(d)
Deliver Document Certificate to Be Delivered Representation
---------------- ----------- --------------- --------------
.
<S> <C> <C> <C>
CLNY A copy of a legal opinion issued by Credit Upon execution of this Not Applicable
Lyonnais, S.A. evidencing necessary corporate Agreement.
and other authorizations and approvals with
respect to the execution, delivery, and
performance by CLNY of this Agreement.
CLNY and A certificate of an authorized officer of the Upon execution of this Yes
Counterparty party certifying the names, true signatures and Agreement.
authority of the officers of the party signing
this Agreement and any applicable Credit
Support Document.
CLNY Annual audited financial statements in As soon as reasonably Yes
accordance with generally accepted practicable upon
accounting principles in the country in which request.
the party is organized.
CLNY and An opinion of legal counsel reasonably Upon execution of this Not Applicable
Counterparty acceptable to the other party. Agreement.
Counterparty All statements sent to the Depository Trust Promptly following the Yes
Company or the Class A Noteholders by the delivery thereof by the
Indenture Trustee. Indenture Trustee.
CLNY CLFG Guarantee in the form Upon execution of this Not Applicable
of Exhibit A. Agreement.
CLNY An opinion of legal counsel as to the Upon execution of Not Applicable
this enforceability of the CLFG Guarantee. Agreement.
</TABLE>
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purpose of Section 12(a):
Address for notices or communications to CLNY:
Address: 1301 Avenue of the Americas, New York, New York 10019
Attention: Treasury Documentation
Fax No.: (212) 459-3167
Telex No.: 62410
Answerback: CREDW
Telephone No: (212) 261-7223
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<PAGE>
Counterparty shall also send a copy of any notices or communications to
CLNY under Sections 5 or 6 or Part 6(c)(i) of this Schedule to each of:
Attention: Program Manager Att: Manager of TTD Derivative Products
Fax No.: (212) 459-3167 Fax No.: (212) 459-3168
Telex No.: 423494 Telex No.: 423494
Answerback: CLUSA UI Answerback: CLUSA UI
Telephone No: (212) 261-7435 Telephone No: (212) 261-7411
Attention: Manager of Treasury Operations Collateral Group
Fax No.: (212) 459-3166
Telex No.: 423494
Answerback: CLUSA UI
Telephone No: (212) 261-7590
Address for notices or communications to Counterparty under this
Agreement:
Address: World Omni 1999-A Automobile Lease Securitization Trust,
c/o Chase Manhattan Bank Delaware
1201 N. Market Street, 8thFloor
Wilmington, DE 19801
Attention: Corporate Trust Department
Telephone No.: 302-984-4987
With copies to the following:
Address: World Omni Financial Corp., 120 N.W. 12th Ave.,
Deerfield Beach, FL 33442
Attention: Treasurer
Fax No.: (954) 429-2685
Address: Harris Trust and Savings Bank
311 N. Monroe, 12th Floor
Chicago, IL 60606
Attention: Corporate Trust Department
Fax No.: 312- 461-3525
Telephone No.: 312-461-6030
Address for notices to the Collateral Trustee under Part 6 below:
Address: The Chase Manhattan Bank, 450 West 33rd Street, 15th Floor,
New York, NY 10001
Attention: Structured Finance Group
Fax No.: (212) 946-7776
Telex No.: 420120
Answerback: 62910 CMBUW or 42120 CMBUW
Telephone No.: (212) 946-7861
(b) Process Agent. For the purpose of Section 13(c), Counterparty appoints
as its Process Agent: Not applicable.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
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<PAGE>
(d) Multibranch Party. For the purpose of Section 10(c), CLNY is not a
Multibranch Party, and Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent shall be Counterparty. CLNY
agrees that Counterparty shall delegate all obligations in respect
thereof as Calculation Agent to World Omni Financial Corp. All
determinations and calculations by the Calculation Agent shall (a) be
made in good faith and in the exercise of its commercially reasonable
judgment and (b) be determined, where applicable, on the basis of then
prevailing market rates or prices; provided however, that all
determinations shall be subject to agreement by CLNY and Counterparty.
If CLNY and Counterparty are unable to agree on any calculations made
hereunder, another mutually acceptable Calculation Agent will be
appointed. Subject to the foregoing, all determinations shall be binding
and conclusive in the absence of manifest error.
(f) Credit Support Document and Credit Support Provider. The Credit Support
Document with respect to CLNY is the CLFG Guarantee issued by CLFG as
Credit Support Provider in favor of Counterparty and dated as of the
date of this Agreement.
(g) GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(h) Netting of Payments. Subparagraph (ii) of Section 2(c) will not apply.
(i) "Affiliate" will have the meaning specified in Section 14.
(j) Scope of Obligations of Trustee. The parties hereto agree that:
(i) This Agreement is executed and delivered by Chase Manhattan Bank
Delaware, not individually or personally but solely in its capacity as
Owner Trustee, for the exclusive benefit of the Class A Noteholders of
the World Omni 1999-A Automobile Lease Securitization Trust (the
"Trust") and in the exercise of the powers and authority conferred and
vested in the Trustee under the Securitization Trust Agreement;
(ii) Each of the representations, undertakings and agreements herein
made on the part of the Trust is made and intended not as a personal
representation, undertaking or agreement by the Trustee but is made and
intended for the purpose of binding only the Trust.
(k) No Bankruptcy Petition. Prior to the date that is one year and one day
after the date upon which the Trust created under the Securitization
Trust Agreement is terminated in accordance with the terms thereof, CLNY
shall not institute against, or join any other person in instituting
against, the trust created thereby, Auto Lease Finance L.P, Auto Lease
Finance LLC, World Omni Lease Securitization L.P. or World Omni Lease
Securitization LLC, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any
federal or state bankruptcy or similar law.
Part 5. Other Provisions.
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<PAGE>
(a) Waiver of Setoff. Notwithstanding Section 6(e) or any other existing or
future agreement, each of Counterparty and CLNY irrevocably waives any
and all rights it may have to set off, net, recoup or otherwise withhold
or suspend or condition payment or performance of any obligation between
CLNY and Counterparty hereunder against any obligations between CLNY and
Counterparty or any branch or Affiliate of Credit Lyonnais or of
Counterparty, under any other agreements or otherwise.
(b) Additional Representation. The following representation shall be added
to Section 3:
"Relationship Between the Parties. Absent a written agreement between
the parties that expressly imposes affirmative obligations to the
contrary for a particular Transaction:
(i) Non-Reliance. With respect to each Transaction hereunder, it is
acting for its own account, and it has made its own independent
decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgment
and upon advice from such advisors as it has deemed necessary. It is not
relying on any communication (written or oral) of the other party as
investment advice or as a recommendation to enter into that Transaction:
it being understood that information and explanations related to the
terms and conditions of a Transaction shall not be considered investment
advice or a recommendation to enter into that Transaction. No
communication (written or oral) received from the other party shall be
deemed to be an assurance or guarantee as to the expected results of
that Transaction.
(ii) Assessment and Understanding. It is capable of assessing the merits
of and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms, conditions
and risks of that Transaction. It is also capable of assuming, and
assumes, the financial and other risks of that Transaction.
(iii) Status of Parties. The other party is not acting as a fiduciary or
an advisor for it in respect of that Transaction."
(c) Procedures for Confirming Transactions. In addition to the provisions of
Section 9(e)(ii), CLNY will, on or promptly after the Trade Date of each
Transaction, send Counterparty a Confirmation for that Transaction.
Counterparty will promptly thereafter execute and return to CLNY, or
request the correction of, such Confirmation. Each confirmation of a
transaction between the parties hereto shall state in bold face type
whether it is a "Guaranteed Transaction" and thereby constitutes a
Transaction hereunder that benefits from the CLFG Guarantee or whether
it is "not guaranteed by CLFG Corp." and thereby does not constitute a
Transaction hereunder.
(d) Waiver of Jury Trial. Each party hereby waives its respective right to
jury trial with respect to any litigation arising under, or in
connection with, this Agreement or any Transaction.
(e) Amendments. Section 9(b) of this Agreement is hereby amended by adding
the following after the word "system" in the last line thereof:
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<PAGE>
"; provided however, that all such amendments, modifications or waivers
shall require the written affirmation of each Rating Agency that such
amendment modification or waiver shall not adversely affect the then
current rating of the Class A Notes."
(f) Local Business Days. For all purposes of this Agreement, "Local Business
Day" shall mean any day other than Saturday, Sunday or a day on which
banking institutions in (i) New York, New York, (ii) Chicago, Illinois,
(iii) Wilmington, Delaware, (iv) Deerfield Beach, Florida, or (v)
Mobile, Alabama, are authorized or obligated by law, executive order or
government decree to be closed.
(g) Transfer. Section 7 of this Agreement is hereby amended by:
(i) adding the phrase "(which consent may not be unreasonably withheld)"
after the word "party" and before the comma in the third line thereof;
and
(ii) adding at the end thereof: "Any party making any such transfer
shall deliver to the other party written confirmation from each Rating
Agency that such transfer will not result in the then current rating of
the Class A Notes being withdrawn or lowered."
(h) Additional Definitions. Unless otherwise defined below or in the
Confirmation, capitalized terms used in this Schedule or in the
Confirmation shall have the meanings set forth in the Securitization
Trust Agreement.
"Class A Notes" shall mean the World Omni 1999-A Automobile Lease Asset
Backed Floating Rate Automobile Lease Asset Backed Notes, Class A-1; the
Floating Rate Automobile Lease Asset Backed Notes, Class A-2; the
Floating Rate Automobile Lease Asset Backed Notes, Class A-3; and the
Floating Rate Automobile Lease Asset Backed Notes, Class A-4.
"Class A Noteholders" shall mean holders of the Class A Notes.
"Class B Notes" shall mean the World Omni 1999-A Automobile Lease
Securitization Trust Class B Floating Rate Automobile Lease Asset Backed
Notes.
"Class B Noteholders" means holders of the Class B Notes.
"Deposit Date" shall have the meaning assigned to such term in the
Securitization Trust Agreement.
"Distribution Account" shall have the meaning assigned to such term in
the Securitization Trust Agreement.
"Distribution Date" shall have the meaning assigned to such term in the
Securitization Trust Agreement.
"Indenture" shall mean that certain indenture dated as of August 1,
1999, as amended, between the World Omni 1999-A Automobile Lease
Securitization Trust and Harris Trust and Savings Bank, as Indenture
Trustee.
"Indenture Event of Default" shall have the meaning assigned to the term
"Event of Default" in the Indenture.
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<PAGE>
"Securitization Trust Agreement" shall mean that certain Securitization
Trust Agreement dated as of August 1, 1999, as amended, among World Omni
Lease Securitization L.P., as Transferor, Chase Manhattan Bank Delaware
and Harris Trust and Savings Bank, as Owner Trustee and as Indenture
Trustee.
"SUBI" shall have the meaning assigned to such term in the
Securitization Trust Agreement.
"Transferor" shall have the meaning assigned to such term in the
Securitization Trust Agreement.
Part 6. Program Provisions.
(a) Definitions. For purposes of this Schedule, the following terms shall
have the following meanings:
"Acceptance Date" means the New York Business Day on which
Counterparty's notice to CLNY of its acceptance of CLNY's offer to close
out all outstanding Transactions upon the occurrence of a Program
Downgrade is effective. The Acceptance Date shall be the Early
Termination Date with respect to all Accepted Transactions.
"Accepted Transactions" means all Transactions closed out on the
Acceptance Date.
"Anomalous Market Condition" means the existence of any of the following
occurrences:
(i) the suspension of trading on any one or more of the New York
Stock Exchange, Paris Stock Exchange, London Stock Exchange, Frankfurt
Stock Exchange or Tokyo Stock Exchange;
(ii) the suspension of normal banking operations by any U.S.
Federal authority, the Banque de France, the Bank of England, the
Deutsche Bundesbank or the Japanese Ministry of Finance; or
(iii) any other crisis event;
as the result of which the Collateral Trustee determines that the
orderly valuation of all transactions under the Program on the fifth
Global Business Day following a Trigger Date is impracticable or
inadvisable, after polling seven Eligible Reference Market-makers, if
the majority of such Eligible Reference Market-makers agrees with the
Collateral Trustee's determination.
"Assignment and Valuation Document" means the document to be completed
pursuant to Part 6(b)(i) below after a Trigger Date, a form of which is
attached hereto as Exhibit B. The Assignment and Valuation Document
shall constitute the statement required of Counterparty pursuant to
Section 6(d)(i) and will be "properly completed" if completed in
accordance with the instructions contained therein. For purposes of this
Part 6 the last sentence of Section 6(d)(i) shall have no effect, except
with respect to a Previously Valued Transaction.
-26-
<PAGE>
"Assignment Reference Market-maker" means the Eligible Reference
Market-maker providing, as of the Valuation Date, the quotation
remaining after disregarding the highest and lowest of three quotations.
"CLFG" means CLFG Corp. and any successors and permitted assigns. CLFG
is a special purpose corporation, initially wholly-owned by Financial
Security Assurance Holdings Ltd.
"CLFG Guarantee" means the guarantee issued by CLFG to Counterparty,
substantially in the form of Exhibit A.
"Collateral" means cash, securities and other property, together with
the income thereon, delivered to the Collateral Trustee under the
Security Agreement.
"Collateral Trustee" means The Chase Manhattan Bank, a New York
chartered bank, or such other financial institution appointed as such in
accordance with the Program.
"Eligible Reference Market-maker" means, subject to the review of the
Rating Agencies, any Reference Market-maker on a list of a minimum of
ten dealers designated by CLNY, attached hereto as Exhibit C, which list
may be changed from time to time by CLNY upon notice to Counterparty, so
long as such notice is effective prior to a Trigger Date.
"Extended Valuation Date" means a Global Business Day occurring after an
Anomalous Market Condition, which shall be no earlier than the fifth
Global Business Day after the Trigger Date and no later than the tenth
Global Business Day after the Trigger Date.
"Financial Insurer" means Financial Security Assurance Inc. and any
other financial insurer appointed as such in accordance with the Program
that is rated AAA by S&P and Aaa by Moody's. The Security Agreement
requires CLNY to deliver to the Collateral Trustee additional Collateral
equal to the amount of the Policy within three New York Business Days
after (i) the Financial Insurer's claims-paying ability rating is placed
on CreditWatch, is downgraded below AAA or is suspended or withdrawn by
S&P or its financial strength rating is placed on Watchlist, is
downgraded below Aaa or is suspended or withdrawn by Moody's or (ii) the
occurrence of certain other events (including insolvency) with respect
to the Financial Insurer.
"Global Business Day" means a day other than a Saturday or Sunday on
which banks in New York City, Paris, London, Frankfurt and Tokyo are
open for the conduct of regular banking activities.
"Independent Verifier" means Ernst & Young LLP or such other independent
verifier appointed as such in accordance with the Program.
"Investment Grade" means, with respect to Counterparty, a Long Term
Rating at or above BBB- and Baa3 from S&P and Moody's, respectively, and
the equivalent rating of any other Rating Agency. If Counterparty does
not have a published Long Term Rating from one or more Rating Agencies,
it shall nonetheless be considered to be Investment Grade if CLNY shall
have sent it notice that, subject to the prior review of the Rating
Agencies, it shall be considered Investment Grade for purposes
-27-
<PAGE>
of the Program and CLNY has not sent it notice to the contrary prior to
the Trigger Date.
"Long Term Rating" means (i) with respect to S&P, the "counterparty
rating" of Counterparty, or, if such rating is not available, the
senior, unsecured, unguaranteed long term rating assigned to
Counterparty or, if Counterparty is an insurance company, Counterparty's
claims-paying rating lowered by one rating subcategory, (ii) with
respect to Moody's, the "counterparty rating" of Counterparty or, if
such rating is not available, Counterparty's bank deposit rating or
senior, unsecured, unguaranteed long term rating, as applicable, or, if
Counterparty is an insurance company, Counterparty's financial strength
rating lowered by one rating subcategory and (iii) with respect to any
other Rating Agency, the equivalent rating.
"New York Business Day" means a day other than a Saturday or Sunday on
which banks in New York City are open for the conduct of regular banking
activities.
"Optional Trigger Date" means the date on which a Program Downgrade
occurs. If the date on which an Optional Trigger Date occurs is not a
Global Business Day, then the next following Global Business Day shall
be the Optional Trigger Date.
"Policy" means each unconditional and irrevocable insurance policy
issued by a Financial Insurer to CLFG.
"Previously Valued Transaction" means any Terminated Transaction for
which notice setting forth the amount payable, as described in Section
6(d)(i), was effective, but which amount was not paid, prior to a
Trigger Date.
"Program" means the Credit Lyonnais Derivatives Program under which this
Agreement and other CLFG-guaranteed master agreements and contracts with
other counterparties to CLNY and Credit Lyonnais are entered into, as
such Program may be amended, subject to the review of the Rating
Agencies and the Financial Insurer.
"Program Default Interest Rate" means the Program Interest Rate plus 3%
per annum.
"Program Downgrade" means the downgrade of the Program below a rating of
AAAt or Aaa, any subsequent downgrade (including by rating subcategory),
or the suspension or withdrawal of such rating by S&P or Moody's,
respectively, or the equivalent occurrence with respect to any other
Rating Agency.
"Program Event" means the occurrence of any of the following:
(i) Bankruptcy. (1) the commencement by CLNY or Credit Lyonnais of
voluntary proceedings under any bankruptcy, insolvency or similar law
seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it bankrupt or insolvent or seeking
reorganization, winding up, liquidation, dissolution, composition or
other relief with respect to it or its debts; (2) CLNY or Credit
Lyonnais admits in writing its inability to pay its debts as they become
due; (3) the commencement against CLNY or Credit Lyonnais of any
proceedings of a nature described in (1), and an order for relief is
granted or any such proceeding remains undismissed or undischarged for
thirty days; (4) the Superintendent of Banks of the State of New York
takes possession of the business and property of CLNY or is otherwise
appointed as a liquidator of CLNY; (5) Credit Lyonnais has its banking
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<PAGE>
license withdrawn or seeks or becomes subject to the appointment of a
provisional administrator or a liquidator under French banking law; or
(6) the appointment of an administrator, provisional liquidator,
conservator, receiver, trustee, custodian or other similar official for
CLNY, any branch of Credit Lyonnais that has entered into a transaction
then outstanding under the Program or the home office of Credit
Lyonnais; and
(ii) Failure to Deliver Collateral. The failure by CLNY to deliver
Collateral in such amount, at such time and in such manner as is
required by the Security Agreement.
"Program Interest Rate" means, for any day, the overnight LIBOR rate in
effect as of 11:00 a.m. New York time on such day, as set forth opposite
the caption "O/N" under the headings "Euro-Dollar" and "Ask" on Telerate
Page 314, or if not so quoted, the overnight LIBOR rate in effect for
such day, as set forth opposite the caption "O/N" on Reuters page MWMC
or, if neither of the foregoing sources is available, an equivalent
source as determined by the Collateral Trustee.
"Program Notice" means notice by tested telex message, facsimile message
with receipt confirmed by phone to the office of the recipient or
confirmed delivery by courier.
"Rating Agency" means any rating agency (which, in the case of a United
States rating agency, is a nationally recognized statistical rating
organization) which, upon CLNY's or Credit Lyonnais' request, has
provided a rating with respect to the Program. CLNY shall ensure that
there are always at least two Rating Agencies. Initially, the Rating
Agencies are Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. ("S&P") and Moody's Investors Service, Inc.
("Moody's"). The removal by CLNY of S&P or Moody's as a Rating Agency
requires the consent of the Financial Insurer. Upon any such removal,
references in Part 6 of this Schedule to S&P or Moody's, as applicable,
shall be deemed to be deleted. CLNY shall promptly notify Counterparty
of any change in the identity of the Rating Agencies.
"Security Agreement" means the intercreditor and security agreement
among CLNY, CLFG, the Financial Insurer, the Collateral Trustee and such
other entities as may from time to time become party thereto.
"Trigger Date" means the date on which a Program Event occurs. If the
date on which a Program Event occurs is not a Global Business Day, then
the next following Global Business Day shall be the Trigger Date.
"Valuation Date" means the fifth Global Business Day after a Trigger
Date or, in the event of an Anomalous Market Condition, the Extended
Valuation Date. The Valuation Date shall be the Early Termination Date
with respect to all Transactions outstanding on such date.
(b) The Effect of a Program Event. Notwithstanding anything to the contrary
in this Agreement, if a Program Event occurs the following provisions
shall apply:
(i) Notice of Program Event and Valuation Date. The Collateral
Trustee shall, by Program Notice to Counterparty no later than two
Global Business Days after the Trigger Date, notify Counterparty of the
occurrence of a Program Event and the Valuation Date, and the notice
shall attach an Assignment and Valuation
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<PAGE>
Document if Counterparty is Investment Grade on the Trigger Date and is
entitled to value any Transactions.
(ii) Counterparty Election to Assign or Terminate; Payment.
(1) Counterparty Election. Counterparty shall be entitled to
value Transactions if it is Investment Grade on the Trigger
Date, unless this Schedule or any Confirmation otherwise
designates. If Counterparty is entitled to value all
Transactions, it may elect in the Assignment and Valuation
Document, delivered pursuant to Part 6(b)(i) above, either to
assign all Transactions (including any Previously Valued
Transactions) to an Assignment Reference Market-maker or to
terminate all outstanding Transactions. If Counterparty is not
entitled, pursuant to this Schedule or any Confirmation, to
value one or more Transactions, it must elect to terminate all
outstanding Transactions.
(2) Payment. If Counterparty elects assignment in a properly
completed and timely delivered Assignment and Valuation
Document, all amounts payable shall be payable by or to the
Assignment Reference Market-maker, on behalf of Counterparty,
specified in such Assignment and Valuation Document to or from
the Collateral Trustee. If Counterparty (A) elects
termination, (B) is not entitled to elect assignment or (C) is
entitled to elect assignment but fails timely to deliver a
properly completed Assignment and Valuation Document electing
assignment with respect to all Transactions, all amounts
payable shall be payable by or to Counterparty to or from the
Collateral Trustee.
(iii) Calculation of Amounts Payable. Subject to Part 6(b)(iv)(2)
below (with respect to Previously Valued Transactions), the amount
payable pursuant to Section 6(e) after a Trigger Date shall be
determined in accordance with Section 6(e)(ii)(1) with CLNY as the
Affected Party, modified as follows:
(1) Counterparty Valuation. Subject to Part 6(b)(iii)(2)
below, if Counterparty properly completes and delivers an
Assignment and Valuation Document to the Collateral Trustee by
3:00 p.m. New York time on the Global Business Day following
the Valuation Date, the amount payable with respect to the
Transactions valued by Counterparty therein shall be the
amount calculated in accordance with the Assignment and
Valuation Document for such Transactions;
(2) Collateral Trustee Valuation. If Counterparty (A) is not
Investment Grade on the Trigger Date, (B) fails timely to
deliver a properly completed Assignment and Valuation
Document, (C) fails to value one or more Transactions in a
timely delivered and properly completed Assignment and
Valuation Document or (D) is not entitled, pursuant to this
Schedule or any Confirmation, to value one or more
Transactions, the Collateral Trustee shall value the amount
payable with respect to all Transactions in the case of (A) or
(B), or all Transactions which Counterparty has failed or is
not entitled to value as described in (C) or (D), by deriving
Market Quotations for all such Transactions and adding or
subtracting as appropriate any Unpaid Amounts, in accordance
with Section 6(e)(ii)(1). The valuation shall be made, with
CLNY as the Affected Party, in good faith and in accordance
with industry standards and practice using the arithmetic mean
of market prices, rates and volatilities as of 11:00 a.m. New
York time on
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<PAGE>
the Valuation Date (or, in the case of Accepted Transactions,
the Acceptance Date) from at least five Eligible Reference
Market-makers, without regard to the highest and lowest
prices, rates and volatilities. The market data and procedures
used by the Collateral Trustee in such valuation shall be
verified by the Independent Verifier; and
(3) Notice of Amounts Payable. The Collateral Trustee shall
by Program Notice notify Counterparty and, if applicable, the
Assignment Reference Market-maker by 3:00 p.m. New York time
on the second Global Business Day following the Valuation Date
of the amount payable, which shall be the sum of the amount
determined in accordance with Part 6(b)(iii)(1) above, if any,
and the amount determined in accordance with Part 6(b)(iii)(2)
above, if any.
(iv) Payment Date.
(1) Transactions Valued After Trigger Date and Accepted
Transactions.
(A) If the amount calculated pursuant to
Part 6(b)(iii) above is owed by Counterparty or an
Assignment Reference Market-maker to CLNY, it shall
be due and payable by 6:00 p.m. New York time on the
third Global Business Day after the Valuation Date,
together with interest thereon calculated from (and
including) the Valuation Date (or, in the case of
Accepted Transactions, the Acceptance Date) to (but
excluding) such due date at the Program Interest Rate
and shall be paid to the Collateral Trustee.
(B) If the amount calculated pursuant to
Part 6(b)(iii) above is owed by CLNY to Counterparty
or an Assignment Reference Market-maker, it shall be
due and payable by 3:00 p.m. New York time on the
seventh Global Business Day after the Valuation Date,
together with interest thereon calculated from (and
including) the Valuation Date (or, in the case of
Accepted Transactions, the Acceptance Date) to (but
excluding) such due date at the Program Interest Rate
and shall be paid by the Collateral Trustee on behalf
of CLNY.
(C) If either party fails to pay any such
amount when due, such failure shall be a breach of
this Agreement and interest shall be payable on such
amount, from (and including) the date due to (but
excluding) the date such amount is paid, at the
Program Default Interest Rate.
(2) Previously Valued Transactions. If the amount payable
(including Unpaid Amounts and Settlement Amounts) with respect
to any Previously Valued Transaction, together with interest
thereon calculated in accordance with Section 6(d)(ii) for
days prior to (but excluding) the Trigger Date (to the extent
not reflected in the statement delivered pursuant to Section
6(d)(i)):
(A) is owed by Counterparty or an Assignment
Reference Market-maker to CLNY, it shall be due and
payable by 6:00 p.m.
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<PAGE>
New York time on the third Global Business Day after
the Valuation Date to the Collateral Trustee, or
(B) is owed by CLNY to Counterparty or an
Assignment Reference Market-maker, it shall be due
and payable by 3:00 p.m. New York time on the seventh
Global Business Day after the Valuation Date,
together, in each case, with interest thereon calculated from
(and including) the Trigger Date to (but excluding) the due
date therefor at the Program Interest Rate.
(3) Set-off. Any amount payable pursuant to Part 6(b)(iv)(1)
above shall be subject to Set-off, pursuant to Section 6(e),
against any amount payable pursuant to Part 6(b)(iv)(2) above.
(v) Anomalous Market Condition. If an Anomalous Market Condition
exists on or occurs on or after the Trigger Date and prior to the fifth
Global Business Day following the Trigger Date:
(1) The Collateral Trustee shall promptly on the Global
Business Day it determines that an Anomalous Market Condition
has occurred notify Counterparty of such occurrence by Program
Notice; and
(2) The Valuation Date will be the Extended Valuation Date,
which shall be the tenth Global Business Day after the Trigger
Date, or such earlier Global Business Day that the Collateral
Trustee shall designate in a Program Notice delivered to
Counterparty no later than two Global Business Days prior to
such date.
(vi) Payments upon Assignment. Notwithstanding Counterparty's
right to elect to assign all Transactions, CLNY will not, due to any
Tax, be required to pay to the Assignment Reference Market-maker an
amount greater than the amount which CLNY would have been required to
pay to the Counterparty in the absence of such assignment, and the
Assignment Reference Market-maker, notwithstanding any Tax, will be
required to pay to CLNY an amount that is no less than the amount which
CLNY would have received from Counterparty in the absence of such
assignment.
(vii) Effectiveness of Notices. Any requirement in this Part 6 to
deliver a notice or communication (including a Program Notice or an
Assignment and Valuation Document) by a specified time shall be deemed
satisfied if such notice or communication is given in a manner so that
it is effective by such time in accordance with Section 12(a).
(viii) Interest. All interest due under this Part 6 shall be paid
in the Termination Currency and shall be calculated on the basis of
daily compounding and the actual number of days elapsed divided by 360.
(c) Effect of a Program Downgrade. (i) If a Program Downgrade occurs, CLNY
shall notify Counterparty of such occurrence by Program Notice no later
than two Global Business Days after the Optional Trigger Date. Within
nine Global Business Days, but in no event earlier than the third Global
Business Day, after the Optional Trigger Date, Counterparty may by
notice to CLNY require CLNY to offer to Counterparty a mid-market price,
determined in good faith and in accordance with industry
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<PAGE>
standards by CLNY on the basis of CLNY's valuation of all Transactions,
to close out all Transactions on the Global Business Day such notice is
effective. If Counterparty accepts such offer, it must confirm its
acceptance of the offer price by giving notice thereof to CLNY and the
Collateral Trustee on the Acceptance Date, indicating whether such
amount is owed by Counterparty or CLNY. The Accepted Transactions shall
be closed out on the Acceptance Date at such price and payment will be
made by the Collateral Trustee to Counterparty or by Counterparty to the
Collateral Trustee by the close of business on the second New York
Business Day following the Acceptance Date. Subject to Part 6(c)(ii)
below, failure to make such payment shall be an Event of Default and any
Early Termination Date that is designated as a result of such Event of
Default shall be deemed to have occurred as of the Acceptance Date.
(ii) In the event that a Program Event occurs after any Optional
Trigger Date, no payments shall be made pursuant to Part 6(c)(i) above
after such occurrence, and the provisions of Part 6(b) above shall
apply.
(d) Event of Default or Other Termination Event after a Program Event. If a
Program Event occurs and an event or circumstance which would otherwise
constitute or give rise to an Event of Default, a Termination Event or
Program Downgrade occurs after such Program Event, such Program Event
shall prevail and such event or circumstance shall not constitute an
Event of Default, Termination Event or Program Downgrade, as the case
may be.
(e) Consent to Grant of Security Interest. Counterparty is hereby notified
of, and, notwithstanding Section 7, irrevocably gives its consent to,
the grant by CLNY to the Collateral Trustee, for the benefit of CLFG,
the Financial Insurer, the Collateral Trustee, the Independent Verifier
and such other entities as may become a party to or a beneficiary of the
Security Agreement, of prior perfected security interests in (i) the
amount payable by Counterparty or, if Counterparty elects assignment,
the Assignment Reference Market-maker on Counterparty's behalf, upon
termination or assignment of the Transactions following a Program Event
and (ii) all other rights of CLNY hereunder and under any Credit Support
Document against Counterparty and, as the case may be, an Assignment
Reference Market-maker on Counterparty's behalf. Such grant first
supports the obligations of CLFG under the CLFG Guarantee and similar
obligations to other counterparties under the Program. The Collateral
Trustee may exercise any right or remedy of CLNY under this Agreement
after a Program Event, and Counterparty shall, upon receipt of notice
from CLNY or the Collateral Trustee, pay all amounts payable under this
Agreement to the Collateral Trustee directly.
(f) CLFG Guarantee. The CLFG Guarantee, the issuance of which is a condition
to Counterparty's entering into this Agreement, benefits from the Policy
and CLNY has entered into the Security Agreement to support its
reimbursement obligations to CLFG and the Financial Insurer.
(g) Other Agreement. In the event that CLNY or Counterparty are parties to
any other agreement that might be construed to govern Transactions
hereunder, any Transaction that benefits from a CLFG Guarantee shall be
governed exclusively by this Agreement and any Credit Support Document
hereunder.
Please confirm your agreement to the terms of the foregoing Schedule by
signing below.
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<PAGE>
CREDIT LYONNAIS WORLD OMNI 1999-A AUTOMOBILE
NEW YORK BRANCH LEASE SECURITIZATION TRUST
By: Chase Manhattan Bank Delaware
not in its individual capacity but
Solely as Owner Trustee
By: __________________________ By: __________________________
Name: Name:
Title: Title:
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<PAGE>
CONFIRMATION
TO: World Omni 1999-A Automobile Lease Securitization Trust
("Counterparty")
Att:
Tel.:_______________ Fax: _______________
FR: Credit Lyonnais New York Branch ("CLNY")
1301 Avenue of the Americas, 17th Floor
New York, New York 10019
Att: Kathrin W. Gray
Tel: 212-261-7349 Fax: 212-459-3167
RE: Transaction dated as of __________1999
(CLNY Ref: )
- --------------------------------------------------------------------------------
GUARANTEED TRANSACTION CONFIRMATION
-----------------------------------
The purpose of this letter agreement is to confirm the terms and conditions of
the Cap Transaction entered into between us on the Trade Date specified below
which constitutes a "Transaction" under the Master Agreement specified below.
This letter agreement constitutes a "Confirmation" under, and it
supplements, forms part of, and is subject to, the Master Agreement dated as of
August ____ 1999, as amended and supplemented from time to time (the
"Guaranteed Agreement"), between you and us. THE GUARANTEED AGREEMENT AND ALL
TRANSACTIONS ENTERED INTO THEREUNDER SHALL BENEFIT FROM A CLFG GUARANTEE ISSUED
BY CLFG (AS SUCH TERMS ARE DEFINED IN THE SCHEDULE TO THE GUARANTEED AGREEMENT)
IN FAVOR OF COUNTERPARTY.
CLNY'S AND COUNTERPARTY'S RIGHTS AND OBLIGATIONS IN RESPECT OF PAYMENTS
DUE HEREUNDER ARE SUBJECT ENTIRELY TO THE "WAIVER OF SETOFF" PROVISION IN PART 5
OF THE SCHEDULE TO THE GUARANTEED AGREEMENT.
1. The definitions and provisions contained in the 1991 ISDA Definitions and the
1998 Supplement to the 1991 ISDA Definitions (as published by the International
Swaps and Derivatives Association, Inc.) are incorporated into this
Confirmation. In the event of any inconsistency between those definitions and
provisions and this Confirmation, this Confirmation will govern. To the extent
not defined in the
Ref. # __________ Marketer: _________ Trader: _________ TD: _________
<PAGE>
Agreement, the capitalized terms used herein (including but not limited to
"Class A Notional Amount". "Initial Class A Notional Amount", "Distribution
Date", "Class A-4 Stated Maturity Date" and Deposit Date") have the meaning
ascribed to such terms in the Securitization Trust Agreement or, if not defined
therein, in that certain Indenture dated as of ____________1999, between the
World Omni 1999-A Automobile Lease Securitization Trust and Harris Trust and
Savings Bank, as Indenture Trustee.
________________________________________________________________________________
2. The terms of the particular guaranteed Transaction to which this Confirmation
relates are as follows:
Transaction Type: Interest Rate Cap
Notional Amount: For the first Calculation Period, the
Initial Class A Notional Amount, and
for each subsequent Calculation Period,
the Class A Notional Amount as of the
Distribution Date within each
Calculation Period (after giving effect
to reduction in such Class A Notional
Amount as of such Distribution Date).
Trade Date: ______________
Effective Date: ______________
Termination Date: The later of (x) the Distribution Date
on which the Class A Notional Amount is
reduced to zero and (y) the Class A-4
Stated Maturity Date
Fixed Amounts:
Fixed Rate Payer: Counterparty
Fixed Amount: USD ________________
Fixed Payment Date: _____________________
Floating Amounts:
Floating Rate Payer: CLNY
Floating Rate Payer Payment
Dates: Each Deposit Date
Cap Rate: _______%
Floating Rate Option: USD-LIBOR-BBA (Telerate 3750)
Ref. # __________ Marketer: _________ Trader: _________ TD: _________
<PAGE>
Designated Maturity: One (1) month
Floating Rate Day Count
Fraction: Actual/360
Spread: None
Compounding: Not applicable
Reset Date: The Distribution Date immediately
preceding each Floating Rate Payer
Payment Date
Floating Rate Payer Period End
Dates: Each Distribution Date (except that the
initial Calculation Period shall
commence on and include, the Effective
Date, and the final Calculation Period
shall end on, but exclude, the
Termination Date).
Business Days: Any day other than Saturday, Sunday or
a day on which banking institutions in
(i) New York, New York, (ii) Chicago,
Illinois, (iii) Wilmington, Delaware,
(iv) Deerfield Beach, Florida, or (v)
Mobil, Alabama, are authorized or
obligated by law, executive order or
government decree to be closed.
Calculation Agent: CLNY
3. Account Details:
USD Payment to CLNY: Credit Lyonnais, New York Branch
ABA#: 026008073
A/C#: 01-88180-3211-00-001-180
Ref: Triple A Derivative Products
USD Payment to Counterparty: Please Provide
4. Offices:
a) The office of Credit Lyonnais for this Transaction is New York, New York;
and
b) The office of Counterparty for this Transaction is Delaware.
Please provide confirmation that this letter correctly sets forth our Agreement
by responding within two (2) Business Days by returning an executed copy of this
Confirmation by telecopier (Att: Kathrin W. Gray - Documentation).
Ref. # __________ Marketer: _________ Trader: _________ TD: _________
<PAGE>
IN WITNESS WHEREOF the parties hereto accept and confirm the terms of this
Confirmation.
WORLD OMNI 1999-A AUTOMOBILE LEASE
SECURITIZATION TRUST
By: Chase Manhattan Bank Delaware
Not in its individual capacity but
Solely as Owner Trustee
Authorized Signature:
By:____________________________
Name:__________________________
Title:_________________________
CREDIT LYONNAIS
NEW YORK BRANCH
Marketing Signature:
_________________________________
Name: David Greenberg
---------------------------
Title: Vice President
---------------------------
CREDIT LYONNAIS
NEW YORK BRANCH
Authorized Signature"
By: _____________________________
Name: Omar Abukhadra
---------------------------
Title: Managing Director
---------------------------
Ref. # __________ Marketer: _________ Trader: _________ TD: _________
<PAGE>
EXHIBIT A
CLFG GUARANTEE
--------------
This CLFG Guarantee is part of the
Credit Lyonnais Derivatives Program
-----------------------------------
THIS GUARANTEE dated as of __________, 199_ (the "Guarantee")
made by CLFG Corp. ("CLFG"), a corporation organized under the laws of the State
of Delaware, in favor of ___________ ("Counterparty"), a [ ] organized under the
laws of [ ].
WHEREAS, Counterparty and Credit Lyonnais New York Branch
("CLNY") have entered into a Master Agreement dated as of even date herewith (as
amended, modified or supplemented by any Confirmation or otherwise, the
"Agreement") and it is a requirement of the Agreement that CLFG deliver this
Guarantee of CLNY's net payment obligation to Counterparty;
WHEREAS, CLFG has agreed pursuant to the terms of this
Guarantee to guarantee the net payment due to Counterparty, or, in the case of
assignment, an Assignment Reference Market-maker on behalf of Counterparty, from
CLNY under the Agreement, including any payment relating to the Fair Market
Value of collateral and expenses under any Credit Support Document thereunder,
as a result of the occurrence or effective designation of an Early Termination
Date on account of an Event of Default or a Termination Event (including a
Program Event) determined strictly in accordance with the terms of the
Agreement, without regard to whether any term of the Agreement is given effect
by a court in bankruptcy or otherwise (the "Guaranteed Amount");
NOW, THEREFORE, CLFG agrees as follows:
1. Certain Defined Terms. Each capitalized term used but not
otherwise defined herein shall have the meaning assigned to that term in the
Agreement.
2. Guarantee. (a) CLFG unconditionally and irrevocably
guarantees (as primary obligor and not merely as surety) to Counterparty the due
and punctual payment of the Guaranteed Amount, in accordance with the terms of
the Agreement (including interest as set forth in Section 7(a) of this
Guarantee). CLFG agrees that this is a continuing guarantee of payment in
accordance with its terms and not of collection, and it shall remain in full
force and effect until all amounts payable by CLNY under the Agreement have been
irrevocably paid in full.
(b) The liability of CLFG under this Guarantee shall be
absolute and unconditional and will not be discharged except by complete payment
of the Guaranteed Amount, irrespective of any claims as to the Agreement's
genuineness, validity, regularity or enforceability or the lack of competence or
authority of CLNY to execute or deliver the Agreement in accordance with the
terms thereof; any change in or amendment to the Agreement in accordance with
the terms thereof; any variation, modification, extension, waiver, compromise or
release of any or all of the obligations of CLNY under the Agreement; any waiver
or consent by Counterparty with respect to any provisions of the Agreement; the
absence of any action to enforce the Agreement (except as set forth herein) or
the recovery of any judgment against CLNY or Credit Lyonnais under the Agreement
or otherwise; the insolvency or bankruptcy of CLNY or Credit Lyonnais; any
exchange, release or nonperfection of any collateral securing payment of any
obligation under the Agreement; any other security or guarantee given for CLNY's
obligations under the Agreement; any law, regulation or order of any
jurisdiction affecting any term of any obligation under the Agreement or
Counterparty's rights with respect thereto; CLNY's or Credit Lyonnais' merger or
consolidation with or into another entity, loss of
<PAGE>
separate legal identity or ceasing to exist; or any other circumstance which
might vary the risk of or otherwise constitute a legal or equitable discharge or
defense available to a guarantor or surety generally. CLFG waives promptness,
diligence, presentment, demand on CLNY or Credit Lyonnais for payment or
otherwise, filing of claims, requirement of a prior proceeding against CLNY or
Credit Lyonnais, any collateral security or any other guarantor and protest or
notice, except as provided for in the Agreement or herein as a condition
precedent to the occurrence of an Event of Default, Termination Event and
effective designation of an Early Termination Date and the making of a claim
hereunder.
3. Claims Procedure After the Occurrence or Effective
Designation of an Early Termination Date. Unless a Program Event shall have
occurred, Counterparty may make a claim on this Guarantee upon the failure by
CLNY to pay any Guaranteed Amount by delivering a Guarantee Call Notice in the
form of Exhibit I hereto to CLFG and the other parties specified therein
claiming a payment under this Guarantee. Such Guarantee Call Notice may be
delivered on or after the New York Business Day on which CLNY fails to pay any
Guaranteed Amount when due.
4. Payment After Receipt of Guarantee Call Notice. (a) CLFG
shall pay the Guaranteed Amount to Counterparty by 10:00 a.m. New York time on
the third Global Business Day following the effective date of the Guarantee Call
Notice.
(b) In the event that a Program Event occurs subsequent to the
effective date of the Guarantee Call Notice and prior to a payment by CLFG
hereunder, CLFG, if it has been notified in writing or otherwise has actual
knowledge of the occurrence of such Program Event, shall make no payment to
Counterparty pursuant to this Section 4, and Section 5 below shall apply.
5. Payment After the Occurrence of a Program Event. Upon the
occurrence of a Program Event, the Collateral Trustee shall make, on behalf of
Counterparty, a claim on this Guarantee (and Counterparty shall not be entitled
to pursue or make a claim hereunder unless the Collateral Trustee fails to do
so) for the Guaranteed Amount, if any, on the seventh Global Business Day after
the Valuation Date. The Collateral Trustee shall make payments of such
Guaranteed Amount by 3:00 p.m. New York time on such Global Business Day to
Counterparty, or an Assignment Reference Market-maker on behalf of Counterparty,
to the extent the Collateral Trustee has received funds from CLFG or otherwise.
6. Payment to the Assignment Reference Market-Maker. In the
event that CLFG makes any payment to the Collateral Trustee for any amount due
to an Assignment Reference Market-maker on behalf of Counterparty, CLFG will
not, due to any Tax, be required to pay an amount greater than the amount which
CLNY would have been required to pay to Counterparty in the absence of an
assignment.
7. Interest; Termination Currency. (a) CLFG agrees to pay
interest to the extent that such interest is not paid by CLNY from (and
including) the date on which a payment is due from CLNY following the occurrence
or effective designation of an Early Termination Date to (but excluding) the
date of payment of such amount hereunder in full, such interest to be payable at
a rate equal to the rate of interest that is payable under the Agreement. All
interest due hereunder shall be paid in U.S. dollars and shall be calculated on
the basis of daily compounding and the actual number of days elapsed divided by
360.
(b) All payments under this Guarantee shall be paid in U.S.
dollars to such account of Counterparty or an Assignment Reference Market-maker
as is set forth in the Assignment and Valuation Document or as the payee shall
otherwise notify CLFG.
-2-
<PAGE>
8. Representations. (a) CLFG hereby makes the representations
set forth in subsections (a), (b), (c) and (e) of Section 3 of the Agreement to
Counterparty as if the references therein to the Agreement were references to
this Guarantee (which representations will be deemed to be repeated by CLFG on
each date on which a Transaction is entered into).
(b) For purposes of the representation deemed made by CLFG
contained in Section 3(e) of the Agreement as modified hereby, CLFG is relying
on (i) the representation of Counterparty contained in Section 3(f) of the
Agreement as if such representation were made to CLFG in respect of payments
received or to be received in connection with this Guarantee, (ii) the
satisfaction of the agreement of Counterparty contained in Section 4(a)(i) or
4(a)(iii) of the Agreement and the accuracy and effectiveness of any document
provided by Counterparty pursuant to Section 4(a)(i) or 4(a)(iii) of the
Agreement and (iii) the satisfaction of the agreement of Counterparty contained
in Section 4(d) of the Agreement.
9. Payments Free and Clear. The provisions of Section 2(d) of
the Agreement shall apply to this Guarantee as if set out in full herein, except
that (i) references therein to the Agreement shall be deemed to be references to
this Guarantee, (ii) references therein to X shall be deemed to be references to
CLFG, (iii) references therein to Y shall be deemed to be references to
Counterparty, (iv) references therein to representations made by Counterparty
pursuant to Section 3(f) of the Agreement shall include representations deemed
to be made pursuant to Section 8(b) of this Guarantee and (v) the phrase "had no
such deduction or withholding been required" in Section 2(d)(i)(4) shall be
deleted and replaced with "if payment had been made directly by CLNY."
10. Subrogation Rights. By accepting this Guarantee,
Counterparty acknowledges that CLFG shall be subrogated to all rights of
Counterparty against CLNY in respect of any amounts paid by CLFG hereunder,
provided that CLFG may enforce or receive any payment arising out of or based
upon such right of subrogation only to the extent of any payment made by CLFG
pursuant hereto and only after Counterparty, or an Assignment Reference
Market-maker on its behalf, has been paid in full all amounts payable by CLNY
under the Agreement.
11. Notices. (a) Except as otherwise provided herein, any
notice or communication in respect of this Guarantee will be sufficiently given
if in writing and delivered in person, sent by certified or registered mail
(airmail if overseas) or the equivalent (with return receipt requested) or by
overnight courier, sent by facsimile transmission or by electronic messaging
system, or given by telex (with answerback received) addressed to CLFG as set
forth below or the address of Counterparty set forth in the Agreement or to such
other address as either CLFG or Counterparty may notify to the other in writing.
Address for notices or communications to CLFG:
Address: c/o Financial Security Assurance Inc.
350 Park Avenue, 13th Floor
New York, New York 10022
Attention: General Counsel
Telephone No: 212-826-0100
Facsimile No: 212-339-3529
Addresses for notices sent pursuant to Section 3 above:
Address: Credit Lyonnais
Credit Lyonnais Building
1301 Avenue of the America
-3-
<PAGE>
New York, New York 10019
Attention: Chief Executive Officer of CLUSA
Telephone No: 212-261-7150
Facsimile No: 212-459-3188
Telex No: 62490 or 423494
Answerback: CREDIT UI or CLUSA UI
Address: Credit Lyonnais New York Branch
Credit Lyonnais Building
1301 Avenue of the America
New York, New York 10019
Attention: Program Manager
Telephone No: 212-261-7435
Facsimile No: 212-459-3167
Telex No: 43394
Answerback: CLUSA UI
Address: Credit Lyonnais New York Branch
Credit Lyonnais Building
1301 Avenue of the America
New York, New York 10019
Attention: Treasurer of CLNY
Telephone No: 212-261-7210
Facsimile No: 212-459-3168
Telex No: 62410 or 423494
Answerback: CREDIT UI or CLUSA UI
Address: Ernst & Young LLP
787 7th Avenue
New York, New York 10019
Attention: Credit Lyonnais Engagement Partner
Telephone No: 212-773-2067
Facsimile No: 212-773-1115
Address: The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Structured Finance Group
Telephone No: 212-946-7861
Facsimile No: 212-946-7776
(b) A notice or communication with respect to this Guarantee
will be deemed effective at the same time such notice or communication would
have been effective if given with respect to the Agreement as provided in
Section 12 thereof.
12. Assignment. Each reference herein to CLFG includes any
successors and permitted assigns, each of which shall be bound by the provisions
of this Guarantee, provided, however, that the obligations of CLFG under this
Guarantee may not be assigned or delegated without the prior written consent of
Counterparty, except for an assignment to an Affiliate of the Financial Insurer
or CLNY that would not result in a Program Downgrade. Any assignment made in
violation of this Guarantee shall be null and void. Each reference herein to
Counterparty includes any successors and permitted assigns. Counterparty may not
assign its rights under this
-4-
<PAGE>
Guarantee to Credit Lyonnais or any Affiliate of Credit Lyonnais (other than the
Republic of France or any person over which the Republic of France, alone or in
concert with any other person, exercises control, except for such persons
controlled by CLNY or Credit Lyonnais).
13. Termination. This Guarantee shall terminate (a) upon the
payment in full by CLNY or CLFG to Counterparty or an Assignment Reference
Market-maker of all Guaranteed Amounts or (b) if the senior, unsecured,
unguaranteed long-term rating of Credit Lyonnais is AAA by S&P, Aaa by Moody's
(in each case, if such entity is then a Rating Agency) and the equivalent
thereto by any other Rating Agency.
14. Governing Law and Jurisdiction. THIS GUARANTEE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK. CLFG IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS SPECIFIED
IN SECTION 13 OF THE AGREEMENT FOR PURPOSES OF ANY ACTION OR PROCEEDING RELATING
TO THIS GUARANTEE AND APPOINTS FINANCIAL SECURITY ASSURANCE HOLDINGS LTD., WITH
AN ADDRESS AS OF THE DATE HEREOF AT 350 PARK AVENUE, 13TH FLOOR; NEW YORK, NEW
YORK 10022; ATTENTION: GENERAL COUNSEL; TELEPHONE NO.: (212) 826-0100; FACSIMILE
NO.: (212) 339-3529, AS ITS AGENT TO RECEIVE SERVICE OF SUMMONS OR ANY OTHER
LEGAL PROCESS IN CONNECTION WITH ANY ACTION OR PROCEEDING RELATING TO THIS
GUARANTEE BROUGHT IN ANY SUCH COURT. CLFG IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY DEFENSE OR OBJECTION IT MAY HAVE THAT ANY SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
15. Contractual Currency. The provisions of Sections 8(a) and
(b) of the Agreement shall apply to amounts payable under this Guarantee as
fully as if they were set forth in and referred to this Guarantee.
16. Amendments. This Guarantee may only be amended by written
agreement between CLFG, Counterparty and CLNY.
17. Applicability and Scope of Guarantee. (a) The Financial
Insurer and its Affiliates, other than CLFG, shall not be liable under this
Guarantee except pursuant to an assignment of CLFG's obligations under Section
12 above.
(b) Each confirmation of a transaction between the parties to
the Agreement shall state in bold face type whether it is a "Guaranteed
Transaction" and thereby constitutes a Transaction under the Agreement that
benefits from this Guarantee or whether it is "not guaranteed by CLFG Corp." and
is not a Transaction under the Agreement and does not benefit from this
Guarantee. In the event that a transaction between the parties to the Agreement
is confirmed by means of, or consists of a printout of terms from, SWIFT or
another electronic messaging system, (1) if it contains the phrase "Guaranteed
Transaction" such Confirmation will constitute a "Confirmation" under the
Agreement, and the transaction shall constitute a Transaction under the
Agreement and shall benefit from this Guarantee and (2) if it contains the
phrase "not guaranteed by CLFG Corp." such transaction shall not constitute a
Transaction under the Agreement and shall not benefit from this Guarantee.
IN WITNESS WHEREOF CLFG has executed this Guarantee as of the
date first above written.
CLFG CORP.
-5-
<PAGE>
By: _________________________
Name:
Title:
-6-
<PAGE>
EXHIBIT I
FORM OF GUARANTEE CALL NOTICE
[Letterhead of Counterparty]
CLFG Corp.
c/o Financial Security Assurance Inc.
350 Park Avenue, 13th Floor
New York, New York 10022
Attention: General Counsel
Ladies and Gentlemen:
Pursuant to Section 3 of the Guarantee dated as of [ ],
relating to the Master Agreement between Credit Lyonnais New York Branch
("CLNY") and the undersigned dated as of [ ] (the "Agreement"), we hereby notify
you that CLNY has failed to pay the amount due upon [specify Event of Default or
failure to pay after Termination Event] to the [undersigned]. The amount unpaid
under the Agreement [including any payment relating to the Fair Market Value of
collateral and expenses under any Credit Support Document thereunder,] [minus
the net proceeds of any collateral pledged by CLNY to us and foreclosed on by
us, at our option,] not including interest due thereon, is [ ]. We hereby
represent that there is no dispute under the Agreement with respect to such
amount due.
We are therefore making this call on the Guarantee. Please
remit payment of such amount, together with interest thereon from (and
including) the date on which a payment was due from CLNY following the
occurrence or effective designation of an Early Termination Date to (but
excluding) the date payment is actually made at a rate equal to the rate of
interest that would be payable under the Agreement, which rate is [ ], to
[specify account].
Very truly yours,
[Counterparty]
cc: [Collateral Trustee]
[Chief Executive Officer of CLUSA]
[Treasurer of CLNY]
[Program Manager]
-7-
<PAGE>
EXHIBIT B
[Name of Counterparty]
[Date]
Assignment and Valuation Document
---------------------------------
This Assignment and Valuation Document
is part of the Credit Lyonnais Derivatives Program
--------------------------------------------------
This Assignment and Valuation Document, together with the annexes
attached hereto (the "Document") relates to the Master Agreement dated as of [ ]
(the "Agreement") between Credit Lyonnais New York Branch ("CLNY") and [ ]
("Counterparty"). Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Agreement.
1. Choice of Assignment or Termination. Please check the appropriate
selection. Pursuant to the Agreement, Counterparty hereby elects to:
A. __ Assign all rights and obligations of CLNY under all
Transactions, including any Previously Valued Transactions, to
the Assignment Reference Market-maker identified below and,
upon payment of the amount due to or from the Assignment
Reference Market-maker, terminate all of CLNY's rights and
obligations under all assigned Transactions and CLFG's
obligations under the CLFG Guarantee.
IMPORTANT: Assignment will be allowed only if Counterparty is entitled
to value all Transactions and Counterparty properly completes this
Document and returns it to the Collateral Trustee by 3:00 p.m. New York
time on the Global Business Day following the Valuation Date with
respect to all Transactions.
B. __ Terminate all Transactions outstanding on the Valuation Date
(or, in the case of Accepted Transactions, the Acceptance
Date).
IMPORTANT: Counterparty's valuation of a Transaction will be used only
if it properly completes this Document and returns it to the Collateral
Trustee by 3:00 p.m. New York time on the Global Business Day following
the Valuation Date.
2. Compulsory Terms of Termination and Assignment Agreement. If
Counterparty selected paragraph 1.A above, it must attach a termination
and assignment agreement, executed by Counterparty and the Assignment
Reference Market-maker, containing at least the following terms:
a. The Assignment Reference Market-maker shall agree to enter
into new transactions with Counterparty that preserve for
Counterparty the economic effect of the assigned Transactions
(including Unpaid Amounts in respect thereof and Previously
Valued Transactions).
b. The Assignment Reference Market-maker shall agree to pay to or
be paid from the Collateral Trustee, on Counterparty's behalf,
the Settlement Amount (including with respect to any
Previously Valued Transactions) plus or minus any Unpaid
Amounts, plus interest thereon at the Program Interest Rate
from and including the Valuation Date to but excluding: (i)
the third Global Business Day following the Valuation Date, if
owed by the Assignment Reference Market-maker, or (ii) the
seventh Global Business Day following the Valuation Date, if
owed to the Assignment Reference Market-maker.
c. The Assignment Reference Market-maker shall agree to make any
payment due to the Collateral Trustee by the third Global
Business Day after the Valuation Date. Each of Counterparty
and the Assignment Reference Market-maker shall
<PAGE>
acknowledge that failure to do so will constitute a breach
under the Agreement and will result in interest being imposed
at the Program Default Interest Rate.
d. Upon payment of such amount to or from the Assignment
Reference Market-maker, CLNY shall have no further rights
against or obligations to Counterparty, and Counterparty shall
have no further rights against or obligations to, and the
Assignment Reference Market-Maker shall have no rights
against, CLNY or CLFG under the Program.
e. Counterparty shall remain liable for any amount owed to CLNY
that the Assignment Reference Market-maker fails to pay.
f. The Assignment Reference Market-maker shall waive all rights
to set off amounts owed to CLNY under the termination and
assignment agreement against amounts owed by CLNY, Credit
Lyonnais or any Affiliate thereof, to the Assignment Reference
Market-maker or any Affiliate thereof under any other
agreement.
g. CLNY and the Collateral Trustee shall be expressly named as
third party beneficiaries of the termination and assignment
agreement.
3. Assignment Reference Market-maker. If Counterparty selected paragraph
1.A above, Counterparty must identify the Assignment Reference
Market-maker:__________________
4. Calculation of Settlement Amount. Using a separate work sheet,
substantially in the form of the Form of Calculation Sheet attached as
Annex II hereto, please provide the Settlement Amount (calculated in
accordance with Annex II on the basis of quotations from three Eligible
Reference Market-makers) with respect to the Transactions summarized on
Annex I:__________________________
Any Transaction that Counterparty fails to value will be valued by the
Collateral Trustee in accordance with Part 6 of the Schedule to the
Agreement.
5. Unpaid Amounts. Please provide with respect to the Transactions
summarized on Annex I:
A. The U.S. dollar equivalent of Unpaid Amounts due to
Counterparty:_____________________
B. The U.S. dollar equivalent of Unpaid Amounts due to CLNY:
___________________
6. Amounts Payable. Using the figures in paragraphs 4 and 5 above, please
provide the amount payable with respect to the Transactions summarized
on Annex I and calculated pursuant to Section 6(e)(ii)(1) of the
Agreement with CLNY as the Affected Party: ____________. The foregoing
amount is owed to (please select one of the following, as appropriate):
__ Collateral Trustee
__ Counterparty
__ Assignment Reference Market-maker
The amount payable will be as set forth above if Counterparty has
valued all Transactions in accordance with this Document. If
Counterparty has valued, in accordance with this Document, fewer than
all Transactions, the amount payable to the Collateral Trustee or to
Counterparty shall be as set forth above plus or minus, as appropriate,
the amount calculated by the Collateral Trustee in accordance with the
Agreement for Transactions that the Collateral Trustee values.
-2-
<PAGE>
7. Credit Support.
A. If Counterparty has pledged collateral under a Credit Support
Document:
1. The Fair Market Value of such collateral, calculated as of the
date that Counterparty received notice of the Program Event,
is ___________.
2. Such Fair Market Value shall be subtracted from any amounts
owing to the Collateral Trustee, or added to any amounts owing
to Counterparty or the Assignment Reference Market-maker. The
total amount payable after such computation is ________ and
shall be paid to (please select from among the following, as
appropriate):
__ Collateral Trustee
__ Counterparty
__ Assignment Reference Market-maker
Note: Counterparty may elect that the Collateral Trustee pay
any amount owed by CLNY under paragraph 6 above to the
Assignment Reference Market-maker and pay the Fair Market
Value of any collateral owed by CLNY to Counterparty.
B. If CLNY has pledged collateral under a Credit Support Document:
1. The net proceeds of any collateral against which Counterparty,
on or prior to the date hereof, has, at its option, foreclosed
is __________.
2. Such value shall be subtracted from any amounts owing to
Counterparty or the Assignment Reference Market-maker. The
total amount payable after such computation is __________ and
shall be paid to (please select one of the following, as
appropriate):
__ CLNY
__ Counterparty
__ Assignment Reference Market-maker
Any collateral against which Counterparty has, at its option,
not foreclosed shall be returned to CLNY.
8. No Third Party Beneficiary. Neither the Assignment Reference
Market-maker nor any other person is a third party beneficiary of this
Document.
The Collateral Trustee will notify Counterparty, by Program Notice no
later than 3:00 p.m. New York time on the second Global Business Day
following the Valuation Date, of the amount payable by or to
Counterparty or an Assignment Reference Market-maker.
The undersigned hereby confirms the accuracy of the above information.
[Name of Counterparty]
By:________________________
Name:
Title:
Date:
-3-
<PAGE>
ANNEX I
[SUMMARY OF TERMS OF TRANSACTIONS (INCLUDING ACCEPTED TRANSACTIONS AND
PREVIOUSLY VALUED TRANSACTIONS) VALUED BY COUNTERPARTY]
-4-
<PAGE>
ANNEX II
FORM OF CALCULATION SHEET
-------------------------
1. Identify Transaction(s):
2. Identify any Previously Valued Transactions, the Settlement Amount
calculated therefor, the Applicable Rate (which will be used to
calculate interest for days prior to but excluding the Trigger Date)
and the basis of the calculation thereof:
3. Provide three (and only three) Market Quotations (as defined below)
obtained from Eligible Reference Market-makers listed on Exhibit C to
the Agreement as of the Valuation Date (or, in the case of Accepted
Transactions, the Acceptance Date) and, to the extent reasonably
practicable, during the same time period on such date (a) if you have
elected to terminate your Transactions, for those Transactions you are
entitled to value, with respect to one or more Transactions (or all
Transactions as a whole) outstanding on the Valuation Date (or, in the
case of Accepted Transactions, the Acceptance Date) or (b) if you are
entitled to elect and have elected assignment of all Transactions, for
all Transactions as a whole outstanding on the Valuation Date:
"Market Quotation" means, with respect to one or more Transactions (or
all Transactions as a whole) outstanding on the Valuation Date (or, in
the case of Accepted Transactions, outstanding on the Acceptance Date),
in the case of termination, or with respect to all such Transactions as
a whole, in the case of assignment, a quotation from an Eligible
Reference Market-maker for an amount, if any, that would be paid to
Counterparty (expressed as a negative number) or by Counterparty
(expressed as a positive number) in consideration of an agreement
between Counterparty (taking into account any existing Credit Support
Document with respect to the obligations of Counterparty) and the
quoting Eligible Reference Market-maker to enter into a transaction
(the "Replacement Transaction") that would have the effect of
preserving for Counterparty the economic equivalent of any payment or
delivery (whether the underlying obligation was absolute or contingent
and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) of the Agreement in respect of
such Transaction or group of Transactions that would, but for the
occurrence of the Program Event, have been required after the Valuation
Date (or, in the case of Accepted Transactions, the Acceptance Date).
For this purpose, Unpaid Amounts in respect of the Transaction or group
of Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the Program Event, have been required
(assuming satisfaction of each applicable condition precedent) after
the Valuation Date (or, in the case of Accepted Transactions, the
Acceptance Date) is to be included. Subject to paragraph 2 of the
Assignment and Valuation Document, the Replacement Transaction would be
subject to such documentation as Counterparty and the Eligible
Reference Market-maker may, in good faith, agree.
4. Provide the Settlement Amount with respect to the Transaction(s)
(which, for purposes of this paragraph, shall be the sum of the amount,
if any, specified in 2 above and the sum of the Termination Currency
Equivalents of the middle Market Quotations specified in 3 above):
-5-
<PAGE>
EXHIBIT C
Eligible Reference Market-makers
--------------------------------
AIG Financial Products
Bank of America
Barclays
Citibank
Credit Suisse/ Credit Suisse Financial Products
Deutsche Bank
Goldman Sachs
Merrill Lynch/ Merrill Lynch Derivative Products
Morgan Guaranty
Nomura
Sumitomo
UBS
EXHIBIT 23.4
Williams & Connolly
725 Twelfth Street, N.W.
Washington, D.C. 20005
CONSENT OF WILLIAMS & CONNOLLY
We hereby consent to the use of our name under the headings "Legal
Matters" in the Prospectus included in the Registration Statement on Form S-1
(No. 333-74455) filed by World Omni 1999-A Automobile Lease Securitization
Trust, World Omni Lease Securitization L.P., World Omni LT and Auto Lease
Finance L.P. with the Securities and Exchange Commission (the "SEC") on March
16, 1999, as it may be further amended and declared effective by the SEC.
Date: August 19, 1999
WILLIAMS & CONNOLLY
By: /s/ Charles A. Sweet
-----------------------------
Charles A. Sweet, a partner
EXHIBIT 23.5
[LETTERHEAD OF HAND ARENDALL, L.L.C.]
CONSENT OF HAND ARENDALL, L.L.C.
We hereby consent to the use of our name under the heading "Legal
Matters" in the Prospectus included in the Registration Statement on Form S-1
(No. 333-74455) filed by World Omni Lease Securitization L.P. with the
Securities and Exchange Commission (the "SEC") on March 16, 1999 and as may be
further amended and declared effective by the SEC.
Hand Arendall, L.L.C.
By: /s/ T. Bruce McGowin
-------------------------
T. Bruce McGowin
As a Member
EXHIBIT 23.6
[LETTERHEAD OF PRICEWATERHOUSECOOPERS LLP]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Amendment No. 1
to Form S-1 of World Omni 1999-A Automobile Lease Securitization Trust of our
report dated May 26, 1999 (which report expresses an adverse opinion under
generally accepted accounting principles and an unqualified opinion as to the
statutory basis of accounting) relating to the statutory basis financial
statements of American International Specialty Lines Insurance Company as of
December 31, 1998 and 1997 and for each of the three years in the period ended
December 31, 1998, which appear in such Registration Statement. We also consent
to the references to us under the headings "Experts" and "Index to Financial
Statements of American Specialty Lines Insurance Company" in such Registration
Statement.
/s/ PricewaterhouseCoopers LLP
------------------------------------
PricewaterhouseCoopers LLP
New York, New York
August 18, 1999
EXHIBIT 25.1
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
-----------------------------
(Name of Trustee)
Illinois 36-1194448
----------------------- ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
111West Monroe Street, Chicago, Illinois 60603
----------------------------------------------
(Address of principal executive offices)
Megan Francis, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois 60606
312-461-6030 phone 312-461-3525 facsimile
---------------------------------------------------------
(Name, address and telephone number for agent for service)
World Omni 1999-A Automobile Lease Securitization Trust
-------------------------------------------------------
(Note Issuer)
Delaware To be applied for
------------------------ ----------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
C/O Chase Manhattan Bank Delaware
1201 North Market Street, 8th Floor
Wilmington, Delaware 19801
----------------------------------------
(Address of principal executive offices)
Floating Rate Automobile Lease Asset Backed Notes, Class A-1
Floating Rate Automobile Lease Asset Backed Notes, Class A-2
Floating Rate Automobile Lease Asset Backed Notes, Class A-3
Floating Rate Automobile Lease Asset Backed Notes, Class A-4
Floating Rate Automobile Lease Asset Backed Notes, Class B
(Title of indenture securities)
===============================================================================
<PAGE>
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of
Governors of the Federal Reserve System,Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise
corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. thru 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in
effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as
now in effect and includes the authority of the Trustee to
commence business and to exercise corporate trust powers was filed
in connection with the Registration Statement of Louisville Gas
and Electric Company, File No. 2-44295, and is incorporated herein
by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 19th day of August, 1999.
HARRIS TRUST AND SAVINGS BANK
By: _______________________________
/s/ Megan Francis
Assistant Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: _______________________________
/s/ Megan Francis
Assistant Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of March 31, 1998, as published in accordance with a
call made by the State Banking Authority and by the Federal Reserve Bank of the
Seventh Reserve District.
{LOGO} HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on March 31, 1998, a state banking institution organized and operating
under the banking laws of this State and a member of the Federal Reserve System.
Published in accordance with a call made by the Commissioner of Banks and Trust
Companies of the State of Illinois and by the Federal Reserve Bank of this
District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
OF DOLLARS
<S> <C> <C>
ASSETS
Cash and balances due from depository institution:
Non-interest bearing balances and currency and coin....................... $1,039,854
Interest bearing balances................................................. $290,921
Securities:....................................................................
a. Held-to-maturity securities................................................. $0
b. Available-for-sale securities $4,266,201
Federal funds sold and securities purchased under agreements to resell $82,000
Loans and lease financing receivables:
Loans and leases, net of unearned income.................................. $8,726,578
LESS: Allowance for loan and lease losses................................. $101,318
----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)...................................................... $8,625,260
Assets held in trading accounts................................................ $120,674
Premises and fixed assets (including capitalized leases)....................... $219,475
Other real estate owned........................................................ $699
Investments in unconsolidated subsidiaries and associated companies............ $120
Customer's liability to this bank on acceptances outstanding................... $46,688
Intangible assets.............................................................. $266,411
Other assets................................................................... $773,386
---------------------------
TOTAL ASSETS $15,731,689
===========================
</TABLE>
3
<PAGE>
LIABILITIES
<TABLE>
<S> <C> <C>
Deposits:
In domestic offices....................................................... $8,684,862
Non-interest bearing.............................................. $2,684,862
Interest bearing.................................................. $5,585,786
In foreign offices, Edge and Agreement subsidiaries, and IBF's............. $1,307,928
Non-interest bearing.............................................. $23,432
Interest bearing.................................................. $1,284,496
Federal funds purchased and securities sold under agreements to repurchase
in domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds purchased & securities sold under agreements to repurchase....... $3,599,510
Trading Liabilities 74,487
Other borrowed money:...........................................................
a. With remaining maturity of one year or less $471,092
b. With remaining maturity of more than one year 90
Bank's liability on acceptances executed and outstanding $46,688
Subordinated notes and debentures.............................................. $325,000
Other liabilities.............................................................. $386,442
---------------------------
TOTAL LIABILITIES $14,482,395
===========================
EQUITY CAPITAL
Common stock.................................................................. $100,000
Surplus....................................................................... $601,026
a. Undivided profits and capital reserves..................................... $645,185
b. Net unrealized holding gains (losses) on available-for-sale ecurities ---------------------------
TOTAL EQUITY CAPITAL $1,249,294
===========================
Total liabilities, limited-life preferred stock, and equity capital........... $15,731,689
===========================
</TABLE>
I, Pamela Piarowski, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
PAMELA PIAROWSKI
1/30/98
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
EDWARD W. LYMAN,
ALAN G. McNALLY,
RICHARD E. TERRY
Directors.
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