AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 24, 2000
REGISTRATION NO. 333-35542
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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WORLD OMNI AUTO RECEIVABLES TRUSTS
(ISSUER OF THE SECURITIES)
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WORLD OMNI AUTO RECEIVABLES LLC
(ORIGINATOR OF THE TRUST DESCRIBED HEREIN)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 52-2184798
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
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120 N.W. 12TH AVENUE JAMES R. FOSTER, TREASURER
DEERFIELD BEACH, FLORIDA 33442 120 N.W. 12TH AVENUE
(954) 429-2200 DEERFIELD BEACH, FLORIDA 33442
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, (954) 429-2200
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
OFFICES) INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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Copy to:
RAY I. SHIRAZI
CADWALADER, WICKERSHAM & TAFT
100 MAIDEN LANE
NEW YORK, NEW YORK 10038
(212) 504-6376
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time on or after the effective date of this registration statement, as
determined by market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
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, other than securities offered only in connection with dividend or interest
reinvestment plans, 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 of 1933, 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 of 1933, please 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. / /
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CALCULATION OF REGISTRATION FEE
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PROPOSED
MAXIMUM OFFERING PROPOSED
TITLE OF OF SECURITIES AMOUNT TO BE PRICE PER MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED(1) SECURITY* OFFERING PRICE* REGISTRATION FEE
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Auto Receivables Backed Securities.. $1,650,000,000 100% $1,650,000,000 $395,736(1)
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* Estimated solely for the purpose of calculating the registration fee.
(1) $264.00 previously paid.
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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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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INTRODUCTORY NOTE
This Registration Statement contains (i) a form of prospectus relating to
the offering of series of Auto Receivables Backed Securities by various trusts
created from time to time by World Omni Auto Receivables LLC and (ii) forms of
prospectus supplement relating to series of Auto Receivables Backed Securities
described therein. The forms of prospectus supplement for the securities follow
immediately after this introductory note, followed thereafter by the base
prospectus.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until we deliver a final prospectus. 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.
SUBJECT TO COMPLETION, DATED MAY 23, 2000
PROSPECTUS
AUTO RECEIVABLES BACKED NOTES AND CERTIFICATES (ISSUABLE IN SERIES)
WORLD OMNI AUTO RECEIVABLES LLC
SELLER
THE TRUSTS:
1. A new trust will be formed to issue each series of
securities.
2. Each trust will consist primarily of:
o retail installment sale contracts secured by new and
used automobiles and light trucks; and
o other assets as described in this prospectus and to
be specified in the related prospectus supplement
THE SECURITIES:
1. will be asset-backed securities sold periodically in
one or more series and each series will be secured by
the assets of the trust or will evidence beneficial
ownership interests in the trust;
2. will be offered in separate series;
3. if specified in the related prospectus supplement,
all of the classes may not be offered in a particular
series;
4. of a series may be divided into two or more classes
which may have different interest rates and which may
receive principal payments in differing proportions
and at different times;
5. will consist of:
o notes (which will be treated as indebtedness of the
trust) and/or
o certificates (which will represent an undivided
ownership interest in the trust); and
6. of any series are not obligations of World Omni Auto
Receivables LLC, World Omni Financial Corp. or any of
their affiliates, and neither the securities nor the
underlying receivables are insured or guaranteed by
any governmental agency.
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THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED OF THE OFFERED SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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No secondary market will exist for a series of securities prior its offering. We
cannot assure you that a secondary market will develop for the securities of any
series or, if it does develop, that it will continue.
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Investing in the offered securities involves risks. We refer you to "Risk
Factors" beginning on page 4 of this prospectus. For each series, see "Risk
Factors" in the related prospectus supplement.
The date of this prospectus is , 2000
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THE SECURITIES MAY BE
OFFERED THROUGH ONE OR MORE
DIFFERENT METHODS,
INCLUDING OFFERINGS THROUGH
UNDERWRITERS, AS MORE FULLY
DESCRIBED UNDER "PLAN OF
DISTRIBUTION" ON PAGE OF
THIS PROSPECTUS AND IN THE
RELATED PROSPECTUS
SUPPLEMENT. OFFERINGS OF
CERTAIN CLASSES OF THE
SECURITIES, AS SPECIFIED IN
THE RELATED PROSPECTUS
SUPPLEMENT, MAY BE MADE IN
ONE OR MORE TRANSACTIONS
EXEMPT FROM THE
REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT OF
1933, AS AMENDED. SUCH
OFFERINGS ARE NOT BEING
MADE PURSUANT TO THIS
PROSPECTUS OR THE RELATED
REGISTRATION STATEMENT.
This prospectus may not be
used to consummate sales of
the offered securities
unless accompanied by a
prospectus supplement.
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IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS AND EACH ACCOMPANYING PROSPECTUS SUPPLEMENT
Information about the offered securities is contained in two separate
documents that progressively provide more detail: (a) this prospectus, which
provides general information, some of which may not apply to the offered
securities; and (b) the accompanying prospectus supplement for each series,
which describes the specific terms of the offered securities. If the terms of
the offered securities vary between this prospectus and the accompanying
prospectus supplement, you should rely on the information in the prospectus
supplement.
You should rely only on the information contained in this prospectus and
the accompanying prospectus supplement. We have not authorized anyone to provide
you with information that is different from that contained in this prospectus
and the prospectus supplement. The information in this prospectus is accurate
only as of the date of this prospectus.
Certain capitalized terms are defined and used in this prospectus to assist
you in understanding the terms of the offered securities and this offering. The
capitalized terms used in this prospectus are defined on the pages indicated
under the caption "Index of Terms" beginning on page in this prospectus.
In this prospectus, the terms "seller," "we," "us" and "our" refer to World
Omni Auto Receivables LLC.
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If you require additional information, the mailing address of our principal
executive offices is World Omni Auto Receivables LLC, 120 N.W. 12th Avenue
Deerfield Beach, Florida 33442 and the telephone number is (954) 429-2200. For
other means of acquiring additional information about us or a series of
securities, see "Incorporation of Certain Information By Reference" beginning on
page 56 of this prospectus.
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TABLE OF CONTENTS
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SECTION PAGE
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RISK FACTORS...................................... 4
PROSPECTUS SUPPLEMENT............................. 10
THE ISSUERS....................................... 10
THE TRUST ASSETS.................................. 10
THE RECEIVABLES POOL.............................. 11
General......................................... 11
Receivables Pools............................... 11
Pre-Funding Accounts............................ 12
The Receivables................................. 12
Delinquencies, Repossessions and Net Losses..... 13
Maturity and Prepayment Considerations.......... 13
THE SELLER........................................ 13
WORLD OMNI FINANCIAL CORP......................... 14
General......................................... 14
Certain Administrative and Legal Proceedings.... 14
WORLD OMNI FINANCIAL CORP.'S AUTOMOBILE FINANCE
BUSINESS........................................ 15
General......................................... 15
Underwriting.................................... 15
Risk Based Pricing.............................. 16
Servicing....................................... 17
Insurance....................................... 18
POOL FACTORS...................................... 18
USE OF PROCEEDS................................... 19
THE TRUSTEE....................................... 19
DESCRIPTION OF THE SECURITIES..................... 19
General......................................... 19
General Payment Terms of Securities............. 20
Book-Entry Registration......................... 20
Definitive Securities........................... 22
Reports to Securityholders...................... 23
DESCRIPTION OF THE TRUST DOCUMENTS................ 24
Sale and Assignment of Receivables.............. 24
Accounts........................................ 24
The Servicer.................................... 25
Servicing Procedures............................ 26
Payments on Receivables......................... 26
Servicing Compensation.......................... 26
Distributions................................... 27
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SECTION PAGE
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Credit and Cash Flow Enhancements............... 27
Evidence as to Compliance....................... 28
Certain Matters Regarding the Servicers......... 28
Servicer Termination Event...................... 28
Rights upon Servicer Termination Event.......... 29
Waiver of Past Defaults......................... 29
Amendments...................................... 29
Termination..................................... 30
DESCRIPTION OF THE NOTES.......................... 31
General......................................... 31
Principal and Interest on the Notes............. 31
The Indenture................................... 32
DESCRIPTION OF THE CERTIFICATES................... 34
General......................................... 34
DISTRIBUTIONS OF PRINCIPAL AND INTEREST........... 35
SOME LEGAL ASPECTS OF THE RECEIVABLES............. 35
General......................................... 35
Interests in the Receivables.................... 35
Security Interests in the Financed Vehicles..... 36
Repossession.................................... 37
Notice of Sale; Redemption Rights............... 37
Deficiency Judgments and Excess Proceeds........ 37
Consumer Protection Laws........................ 38
Other Limitations............................... 39
FEDERAL INCOME TAX CONSEQUENCES................... 40
FASITs.......................................... 40
Trust Treated as Partnerships................... 40
Tax Consequences to Holders of the Notes........ 41
Tax Consequences to Holders of the
Certificates.................................... 45
TRUSTS TREATED AS GRANTOR TRUSTS.................. 49
ERISA CONSIDERATIONS.............................. 55
PLAN OF DISTRIBUTION.............................. 55
FINANCIAL INFORMATION............................. 55
INCORPORATION OF CERTAIN INFORMATION BY
REFERENCE....................................... 56
LEGAL MATTERS..................................... 56
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RISK FACTORS
You should carefully consider the following risks and the risks described
under "RISK FACTORS" in the prospectus supplement for the securities before
making an investment decision. In particular, distributions on your securities
will depend on payments received on and other recoveries with respect to the
receivables. Therefore, you should carefully consider the risk factors relating
to the receivables and the financed vehicles.
Your investment could be materially and adversely affected if any of the
following risks are realized.
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YOU MUST RELY FOR REPAYMENT ONLY UPON
THE TRUST'S ASSETS WHICH MAY NOT BE
SUFFICIENT TO MAKE FULL PAYMENTS ON
YOUR SECURITIES. Your securities are either secured by or represent beneficial ownership
interests solely in the assets of the related trust. Your securities will not
represent an interest in or obligation of us, the trustee, World Omni
Financial Corp., or any other person. We or another entity may have a limited
obligation to repurchase some receivables under some circumstances as
described in the agreements relating to a particular series. Distributions on
any class of securities will depend solely on the amount and timing of
payments and other collections in respect of the related receivables. We
cannot assure you that these amounts, together with other payments and
collections in respect of the related receivables, will be sufficient to make
full and timely distributions on any offered securities. The offered
securities and the receivables will not be insured or guaranteed, in whole or
in part, by the United States or any governmental entity or by any provider of
credit enhancement unless specified in the related prospectus supplement.
YOU MAY EXPERIENCE REDUCED RETURNS AND
DELAYS ON YOUR SECURITIES RESULTING
FROM CHANGES IN DELINQUENCY LEVELS AND
LOSSES. There can be no assurance that the historical levels of delinquencies and
losses experienced by World Omni Financial Corp. on its loan portfolio will be
indicative of the performance of the receivables included in the trust or that
the levels will continue in the future. Delinquencies and losses could
increase significantly for various reasons, including changes in the local,
regional or national economies or due to other events.
YOU MAY EXPERIENCE REDUCED RETURNS ON
YOUR SECURITIES RESULTING FROM
PREPAYMENTS. You may receive payment of principal on the securities earlier than you
expected for the reasons set forth below. You may not be able to reinvest the
principal paid to you earlier than you expected at a rate of return that is
equal to or greater than the rate of return on the securities. Prepayments on
the receivables by the related obligors and purchases of the receivables by
the seller and the
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servicer will shorten the life of the securities to an extent that cannot be
fully predicted. Any reinvestment risks resulting from a faster or slower
incidence of prepayment of receivables will be borne entirely by you.
All of the receivables are prepayable at any time. The rate of prepayments on
the receivables may be influenced by a variety of economic, social and other
factors, including:
o other events which have the same effect as prepayments in full of
receivables, including liquidations due to default, as well as receipts of
proceeds from insurance policies and repurchases of receivables;
o repurchases of receivables by World Omni Financial Corp. as a result of
breaches of representations and warranties, and/or breaches of particular
covenants;
o the application of any remaining amounts on deposit in any pre-funding
accounts not applied to the purchase of additional receivables; and
o the purchase by the seller or the servicer of the receivables when the
aggregate principal balance thereof is 10% or less of the initial aggregate
principal balance.
The rate of prepayments of receivables cannot be predicted and therefore, no
assurance can be given as to the level of prepayments that a trust will
experience.
YOU MAY EXPERIENCE REDUCED RETURNS ON
YOUR SECURITIES RESULTING FROM
DISTRIBUTION OF AMOUNTS IN THE
PRE-FUNDING ACCOUNT. A trust may have a pre-funding account. The trust will purchase receivables
from the seller (which, in turn, will acquire these receivables from World
Omni Financial Corp.) with funds on deposit in the pre-funding account.
You will receive as a prepayment of principal to you on the date specified in
the prospectus supplement any amounts remaining in the pre-funding account
that have not been used to purchase receivables. This prepayment of principal
could have the effect of shortening the weighted average life of the
securities of the related series. The inability of the seller to obtain
receivables meeting the requirements for sale to the trust will increase the
likelihood of a prepayment of principal. In addition, you will bear the risk
that you may be unable to reinvest any principal prepayment at yields at least
equal to the yield on the securities.
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INTERESTS OF OTHER PERSONS IN THE
RECEIVABLES AND FINANCED VEHICLES COULD
BE SUPERIOR TO THE TRUST'S INTEREST,
WHICH MAY RESULT IN REDUCED PAYMENTS ON
YOUR SECURITIES. Many federal and state laws, including the Uniform Commercial Code, govern the
transfer of the receivables by the seller to the trustee, the perfection of
the security interests in the receivables and the enforcement of security
interests in the financed vehicles.
Upon the origination of a receivable, World Omni Financial Corp. takes a
security interest in the financed vehicle by placing a lien on the title to
the financed vehicle. In connection with each sale of receivables, World Omni
Financial Corp. will assign its security interests in the financed vehicles to
the seller. Due to the administrative burden and expense of retitling each of
the financed vehicles, World Omni Financial Corp. will not amend or reissue
the certificates of title to the financed vehicles to reflect the assignment
to the trust. In the absence of an amendment or reissuance, the trust may not
have a perfected security interest in the financed vehicles securing the
receivables in some states. World Omni Financial Corp. will be obligated to
repurchase any receivable sold to a trust which did not have a perfected
security interest in the name of World Omni Financial Corp. in the financed
vehicle on the closing date. World Omni Financial Corp. will purchase any
receivable sold to a trust as to which it failed to maintain a perfected
security interest in the name of World Omni Financial Corp. in the financed
vehicle securing the receivable. All repurchases by World Omni Financial Corp.
are limited to breaches that materially and adversely affect the receivable,
subject to the expiration of the applicable cure period. If the security
interest of World Omni Financial Corp. is perfected, the trust will have a
prior claim over subsequent purchasers of the financed vehicle and holders of
subsequently perfected security interests.
Due to, among other things, liens for repairs of a financed vehicle or for
unpaid taxes of an obligor, the trust could lose the priority of its security
interest in a financed vehicle. Neither World Omni Financial Corp. nor the
servicer will have any obligation to purchase a receivable if these liens
result in the loss of the priority of the security interest in the financed
vehicle after the issuance of securities by the trust. Generally, no action
will be taken to perfect the rights of the trustee in proceeds of any
insurance policies covering individual financed vehicles or obligors.
Therefore, the rights of a third party with an interest in the proceeds could
prevail against the rights of the trust prior to the time the proceeds are
deposited by the servicer into an account controlled by the trustee. We refer
you to "Some Legal Aspects of the Receivables--Security Interests in the
Financed Vehicles."
The servicer will maintain possession of the original contracts for of each of
the receivables. If the servicer sells or pledges and delivers
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the original contracts for the receivables to another party, in violation of
its obligations under the documents for the securities, this party could
acquire an interest in the receivable having a priority over the trust's
interest. Furthermore, if the servicer becomes insolvent, competing claims to
ownership or security interests in the receivables could arise. These claims,
even if unsuccessful, could result in delays in payments on the securities. If
successful, the attempt could result in losses or delays in payment to you or
an acceleration of the repayment of the securities.
RECEIVABLES THAT FAIL TO COMPLY WITH
CONSUMER PROTECTION LAWS MAY RESULT IN
LOSSES ON YOUR INVESTMENT. Federal and state consumer protection laws impose requirements on creditors in
connection with extensions of credit and collections of retail installment
loans. These laws may also make an assignee of a loan (such as the trust)
liable to the obligor for any violation by the lender. To the extent specified
herein and in the related prospectus supplement, World Omni Financial Corp.
will be obligated to repurchase any receivable that fails to comply with these
legal requirements from the trust. We refer you to "Some Legal Aspects of the
Receivables--Consumer Protection Laws."
In some circumstances, the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended and similar state legislation may limit the interest payable on a
receivable during an obligor's active military duty. This legislation could
adversely affect the ability of the servicer to collect full amounts of
interest on these receivables as well as to foreclose on an affected
receivable during the obligor's period of active military duty. This
legislation may thus cause delays and losses in payments to holders of the
securities.
BANKRUPTCY OF WORLD OMNI FINANCIAL
CORP. AND WORLD OMNI AUTO RECEIVABLES
LLC (SELLER) COULD RESULT IN LOSSES OR
DELAYS IN PAYMENTS ON YOUR SECURITIES. Non-Consolidation
The seller has structured the securities with the intent that the voluntary or
involuntary application for relief by World Omni Financial Corp., as the sole
member of the seller under the United States Bankruptcy Code or similar state
laws will not result in consolidation of the assets and liabilities of the
seller with those of World Omni Financial Corp. These steps include:
o the creation of the seller as a separate limited purpose limited liability
company, with a limited liability company agreement restricting the seller's
business; and
o restricting the seller's ability to commence a voluntary case or proceeding
under any insolvency law without the consent of the managing member, and the
unanimous approvals of all the
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members of the board of directors of the seller, including, without
limitation, the affirmative vote of the two independent directors.
The seller has received advice of counsel to the effect that, subject to
particular facts, assumptions and qualifications, it would not be a proper
exercise by a court of its equitable discretion to disregard the separate
existence of the seller and World Omni Financial Corp. and to require the
consolidation of the assets and liabilities of the seller with those of World
Omni Financial Corp. in the event of the application of the federal bankruptcy
laws to World Omni Financial Corp. Notwithstanding these steps, a court might
consolidate the assets and liabilities of the seller with those of World Omni
Financial Corp. in a proceeding under an insolvency law. Delays or reductions
in distributions on the related securities could result from a consolidation.
True Sale
If the sale of the receivables from World Omni Financial Corp. to the seller
is treated as a sale, the receivables would not be part of the bankruptcy
estate of World Omni Financial Corp. and would not be available to creditors
of World Omni Financial Corp. We refer you to "World Omni Financial Corp."
World Omni Financial Corp. will warrant to the seller that its sale of the
receivables is a valid sale of the receivables. In addition, World Omni
Financial Corp. and the seller will treat these sales as a sale of the
receivables to the seller. The seller will take all actions that are required
to perfect the seller's ownership interest in the receivables. Upon issuance
of each series of securities, the seller will receive the advice of counsel to
the effect that in the event World Omni Financial Corp. were to become the
subject of a voluntary or involuntary case under the United States Bankruptcy
Code subsequent to the transfer of receivables to the seller, the transfer of
these receivables by World Omni Financial Corp. to the seller would be
characterized as a "true sale" of these receivables from World Omni Financial
Corp. to the seller and these receivables and the proceeds thereof would not
form part of World Omni Financial Corp.'s bankruptcy estate pursuant to
Section 541 of the United States Bankruptcy Code. This advice of counsel will
be subject to facts, assumptions and qualifications.
Notwithstanding the foregoing, if World Omni Financial Corp. were to become a
debtor in a bankruptcy case and a creditor or trustee-in-bankruptcy of World
Omni Financial Corp. or World Omni Financial Corp. took the position that the
sale of receivables to the seller should be recharacterized as a pledge of the
receivables to secure a borrowing of the seller, then you could be adversely
affected by delays or reductions in payments of collections of receivables.
In 1993, the U.S. Court of Appeals for the Tenth Circuit concluded that
accounts sold by a debtor prior to the filing for bankruptcy
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remain property of the debtor's bankruptcy estate. Although the receivables
are likely "chattel paper", as defined under the Uniform Commercial Code
rather than accounts, the rationale behind the decision is equally applicable
to chattel paper. Considerable legal uncertainty exists concerning this
decision. While World Omni Financial Corp. is not located in the Tenth
Circuit, it is impossible to predict whether other courts will follow this
decision. If a court applied the rule in this decision in a bankruptcy of
World Omni Financial Corp., notwithstanding that the transfer of receivables
to the seller was treated as a sale, the receivables would be part of World
Omni Financial Corp.'s bankruptcy estate. This could result in delays and
reductions in payments to you.
A RATING OF THE SECURITIES IS NOT A
RECOMMENDATION TO PURCHASE, HOLD OR
SELL SECURITIES. On the date of the issuance of the securities the rating agencies will rate
the securities. A rating is not a recommendation to purchase, hold or sell
securities, and it does not comment as to market price or suitability for a
particular investor. The ratings of the securities address the likelihood of
the payment of principal and interest on the securities pursuant to their
terms. There is no assurance that a rating will remain for any given period of
time or that a rating agency rating the securities will not lower or withdraw
its rating if in its judgment circumstances in the future so warrant.
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PROSPECTUS SUPPLEMENT
The prospectus supplement for each series of securities to be offered, will
describe, among other things, with respect to the series of securities:
o a description of structural features of each class of securities;
o the identity of each class within the series;
o the initial aggregate principal amount, the interest rate (or the method
for determining the rate) and the authorized denominations of each class
of offered securities;
o certain information concerning the receivables relating to the series,
including the principal amount, type and characteristics of the
receivables on the cutoff date;
o the existence of any pre-funding account for the purchase of additional
receivables and its material terms;
o additional information with respect to any credit enhancement and, if the
holder of the securities will be materially dependent upon any provider
of credit enhancement for timely payment of interest and/or principal,
information regarding the provider or counterparty;
o the order of the application of principal and interest payments to each
class of offered securities and the allocation of principal to be so
applied;
o the extent of subordination of any subordinate securities;
o the payment date for the securities;
o information regarding the servicer for the receivables;
o the circumstances, if any, under which the offered securities are subject
to redemption prior to maturity;
o the trustee for the securities;
o information regarding tax considerations; and
o additional information with respect to the method of distribution of the
securities.
THE ISSUERS
With respect to each series of securities, the seller will establish a
separate trust that will issue the securities.
THE TRUST ASSETS
To the extent specified in the prospectus supplement for a trust, the
assets of a trust will include:
o a pool of retail installment sale contracts secured by new and used
automobiles and light trucks;
o moneys received under the receivables after the applicable cutoff date;
o amounts as from time to time may be held in one or more trust accounts
established and maintained on behalf of the trust by a trustee;
o the rights of the seller under the sale and servicing agreement or
pooling and servicing agreement pursuant to which seller sold the
receivables to the trust and the servicer services the receivables on
behalf of the trust;
10
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o security interests in the financed vehicles;
o the rights of the seller to receive any proceeds with respect to the
receivables from claims on certain insurance policies covering the
financed vehicles or the obligors;
o any credit enhancement (including any interest rate and currency
protection agreements) provided for the benefit of holders of the
securities of the trust;
o any pre-funding account; and
o any and all proceeds of the foregoing.
If so provided in the related prospectus supplement, the property of a
trust may also include a pre-funding account, into which the seller will deposit
to a trust cash and which will be used by the trust to purchase receivables from
the seller during a specified period. Any receivables so conveyed to a trust
will also be assets of the trust.
The receivables comprising the trust assets will be, as specifically
described in the related prospectus supplement:
o originated by various dealers and acquired by World Omni Financial Corp.,
o acquired by World Omni Financial Corp. from other originators or owners
of receivables, or
o originated by World Omni Financial Corp.
The underwriting criteria applicable to the receivables included in any
trust is described under "World Omni Financial Corp.'s Automobile Finance
Business--Underwriting", or to the extent different, in the related prospectus
supplement.
THE RECEIVABLES POOL
GENERAL
Information with respect to the pool of receivables (the receivables pool)
will be described in the related prospectus supplement.
RECEIVABLES POOLS
On or prior to each closing date, World Omni Financial Corp. will sell and
assign to the seller, without recourse its entire interest in the receivables
pool, together with its security interests in the financed vehicles, pursuant to
a purchase agreement between World Omni Financial Corp. and the seller.
In each purchase agreement, World Omni Financial Corp. will represent and
warrant to the seller, among other things, that:
o the information provided with respect to the receivables is correct in
all material respects;
o at the origination date of the receivable, physical damage insurance
covering each financed vehicle is in effect in accordance with World Omni
Financial Corp.'s normal requirements;
o at the closing date each of the related receivables are free and clear of
all security interests, liens, charges, and encumbrances and no offsets,
defenses, or counterclaims against dealers have been asserted or
threatened;
o at the closing date each of the receivables is secured by a
first-priority perfected security interest in the financed vehicle in
favor of World Omni Financial Corp.; and
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o each receivable, at origination and, at the closing date, complies in all
material respects with applicable federal and state laws, including
consumer credit, truth in lending, equal credit opportunity and
disclosure laws.
As of the last day of the second (or, if World Omni Financial Corp. elects,
the first) month following the discovery by or notice to the seller and World
Omni Financial Corp. of a breach of any representation or warranty that
materially and adversely affects a receivable, unless the breach is cured, World
Omni Financial Corp. will purchase the receivable from the trust for a purchase
amount equal to the unpaid principal balance owed by the obligor plus interest
thereon at the respective annual percentage rate to the last day of the month of
repurchase. The repurchase obligation will constitute the sole remedy against
the seller for any uncured breach.
To the extent indicated in the related prospectus supplement, the seller or
the trust may purchase the receivables from warehouse facilities or structured
commercial paper issuers.
PRE-FUNDING ACCOUNTS
If the related prospectus supplement indicates, the property of a trust
will include cash in an amount not to exceed 25% of the initial aggregate
principal balance of the securities. The seller will deposit this amount into a
pre-funding account. For a maximum of 90 days after the closing date, the trust
will use this cash to purchase additional receivables; the seller will be
obligated to sell additional receivables to the related trust, subject only to
the availability of additional receivables. It is expected that the additional
receivables will have an aggregate principal balance approximately equal to the
amount deposited to the pre-funding account on the closing date (the "PRE-FUNDED
AMOUNT"). The trust will purchase the additional receivables (subject to the
satisfaction of conditions specified in the prospectus supplement) from time to
time during the funding period specified in the prospectus supplement. The
funding period will not exceed three months. Any funds on deposit in the
pre-funding account and not yet invested in additional receivables will be
invested in eligible investments. If the Pre-Funded Amount is not fully utilized
by the end of the funding period, the remaining Pre-Funded Amount will be
applied to prepay securities.
We refer you to "Description of the Trust Documents--Sale and Assignment of
Receivables."
Any conveyance of additional receivables to a trust is subject to the
satisfaction of the conditions precedent and conditions subsequent specified in
the related prospectus supplement. If any of these conditions are not met with
respect to any additional receivables within the time period specified in the
related prospectus supplement, World Omni Financial Corp. will be required to
repurchase the additional receivables from the related trust, at the purchase
amounts therefor.
The characteristics of the entire receivables pool included in any trust
may vary from those described in the related prospectus supplement as additional
receivables are conveyed to the trust from time to time during the funding
period. Unless the prospectus supplement indicates otherwise, the
characteristics of the additional receivables are not expected to be materially
different from the receivables included in the trust as of the closing date. The
related prospectus supplement will indicate any restrictions on the
characteristics of the additional receivables.
THE RECEIVABLES
As specified in the related prospectus supplement, the receivables consist
of simple interest receivables. "SIMPLE INTEREST RECEIVABLES" provide for the
amortization of the amount financed under the receivable over a series of fixed
level monthly payments. Each monthly payment consists of an installment of
interest which is calculated on the basis of the outstanding principal balance
of the receivable multiplied by the stated annual percentage rate and further
multiplied by the period elapsed (as a fraction of a calendar year) since the
preceding payment of interest was made. As payments are
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received under a Simple Interest Receivable, the amount received is applied
first to interest accrued to the date of payment and the balance is applied to
reduce the unpaid principal balance. Accordingly, if an obligor pays a fixed
monthly installment before its scheduled due date, the portion of the payment
allocable to interest for the period since the preceding payment was made will
be less than it would have been had the payment been made as scheduled, and the
portion of the payment applied to reduce the unpaid principal balance will be
correspondingly greater. Conversely, if an obligor pays a fixed monthly
installment after its scheduled due date, the portion of the payment allocable
to interest for the period since the preceding payment was made will be greater
than it would have been had the payment been made as scheduled, and the portion
of the payment applied to reduce the unpaid principal balance will be
correspondingly less. In either case, the obligor pays a fixed monthly
installment until the final scheduled payment date, at which time the amount of
the final installment is increased or decreased as necessary to repay the then
outstanding principal balance.
DELINQUENCIES, REPOSSESSIONS AND NET LOSSES
Certain information relating to World Omni Financial Corp.'s delinquency,
repossession and net loss experience with respect to receivables it has
originated or acquired will be described in each prospectus supplement. This
information may include, among other things, the experience with respect to all
receivables in World Omni Financial Corp.'s portfolio during some specified
periods. There can be no assurance that the delinquency, repossession and net
loss experience with respect to any trust will be comparable to World Omni
Financial Corp.'s prior experience.
MATURITY AND PREPAYMENT CONSIDERATIONS
Prepayment of receivables, together with accelerated payments resulting
from defaults or required repurchases of receivables will shorten the weighted
average life of the related pool of receivables and the weighted average life of
the related securities. A variety of economic, financial and other factors may
influence the rate of prepayments on the receivables. Any reinvestment risks
resulting from a faster or slower amortization of the related securities which
results from prepayments will be borne entirely by you.
The related prospectus supplement may describe some additional information
with respect to the maturity and prepayment considerations applicable to a
particular pool of receivables and the related series of securities.
THE SELLER
World Omni Auto Receivables LLC was formed as a Delaware limited liability
company on April 13, 1999 and is a wholly-owned subsidiary of World Omni
Financial Corp. The principal executive offices of the seller are located at 120
N.W. 12th Avenue, Deerfield Beach, Florida 33442, and its telephone number is
(305) 429-2200. The Managing Member is located at 120 N.W. 12th Avenue,
Deerfield Beach, Florida 33442.
The seller was organized solely for the purpose of acquiring receivables
and associated rights, issuing securities and engaging in related transactions.
The seller's limited liability company agreement limits the activities of the
seller to the foregoing purposes and to any activities incidental to and
necessary for these purposes.
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WORLD OMNI FINANCIAL CORP.
GENERAL
World Omni Financial Corp. is a Florida corporation and a wholly owned
subsidiary of JM Family Enterprises, Inc. ("JMFE"), a Delaware corporation.
World Omni Financial Corp. provides installment contract and lease contract
financing to retail customers of some automotive dealers within and outside the
Alabama, Florida, Georgia, North Carolina and South Carolina area ("FIVE STATE
AREA"). World Omni Financial Corp. services auto related receivables for its own
account and for others. World Omni Financial Corp. also provides wholesale
floorplan financing and capital and mortgage loans to some dealers of Southeast
Toyota Distributors, Inc. ("SET"), World Omni Financial Corp.'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. As such, 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 2004, with Toyota Motor Sales, USA, Inc.
World Omni Financial Corp. initiated operations in 1982, and as of
December 31, 1999, December 31, 1998, December 31, 1997 and December 31, 1996,
World Omni Financial Corp. and its affiliates had approximately 106,337, 76,883,
56,442 and 46,897 retail installment sale contracts outstanding, respectively.
The aggregate outstanding principal balances of retail installment sale
contracts at the above dates (including retail installment contracts that were
sold but are still being serviced by World Omni Financial Corp.), were
approximately $1,235 million, $818 million, $608 million and $475 million,
respectively.
CERTAIN ADMINISTRATIVE AND LEGAL PROCEEDINGS
As part of its regular examination process of the consolidated federal
income tax returns of JMFE and its subsidiaries (including World Omni Financial
Corp.) for certain prior years, the Internal Revenue Service (the "IRS") is
reviewing, among other things, some transactions that were consummated in prior
years relating to retail lease contracts. The IRS has proposed treating these
transactions as sales rather than financings for federal income tax purposes,
which would affect World Omni Financial Corp.'s depreciation deductions. It has
also 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 Financial Corp. received an opinion of tax counsel to
the effect that these transactions were properly treated as financings for
federal income tax purposes and that neither the origination trust nor the
relevant securitization trusts would be treated as an association taxable as a
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.
The IRS has also proposed changes to 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 the issues will not have a material adverse effect
on securityholders, JMFE's or World Omni Financial Corp.'s operations and
financial condition. 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
Financial Corp.'s operations and financial condition. Nevertheless, 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 Financial Corp.'s ability to
perform its obligations and its duties as servicer under the trust documents. We
cannot however, assure you of this result.
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WORLD OMNI FINANCIAL CORP.'S AUTOMOBILE FINANCE BUSINESS
GENERAL
World Omni Financial Corp. primarily purchases retail installment sale
contracts in the five state area (and currently to a limited extent other states
in which it conducts business) from dealers pursuant to existing dealer
agreements in the ordinary course of business. We refer you to "World Omni
Financial Corp." The contracts were originated by participating dealers in
accordance with World Omni Financial Corp.'s requirements and were purchased in
accordance with World Omni Financial Corp.'s underwriting standards, which
emphasize among other things, the prospective purchaser's ability to make timely
payments and creditworthiness.
World Omni Financial Corp. purchases retail installment sale contracts from
over 600 dealers. Pursuant to written agreements with World Omni Financial
Corp., each dealer offers automobile and light duty truck financing pursuant to
World Omni Financial Corp. approved terms and a World Omni Financial Corp.
supplied or approved form of retail motor vehicle installment sale contract and
disclosure statement. Each dealer is responsible for obtaining credit-related
information about a prospective purchaser and for forwarding the information for
review and credit evaluation to either World Omni Financial Corp.'s offices,
located in St. Louis, Missouri ("ST. LOUIS CENTER") or to offices at Deerfield
Beach, Florida ("DEERFIELD OFFICE"), as applicable. At the St. Louis center or
the Deerfield office, each application is reviewed, evaluated and "scored" as
described under "World Omni Financial Corp.'s Automobile Finance
Business-Underwriting." The results of this computer-based evaluation are sent
to the purchase office located in the St. Louis center or Deerfield office, as
applicable for final review and credit evaluation. The purchase office then
advises the dealer if the applicant is acceptable to World Omni Financial Corp.
If a prospective buyer is accepted, the dealer will prepare all necessary
paperwork to sell the vehicle from its inventory to the customer, including
entering into a retail installment sale contract with its customer. The dealer
then verifies the existence of insurance and thereafter sells the contract to
World Omni Financial Corp. The St. Louis center and the Deerfield office verify
that all documents supplied by a dealer with respect to a retail installment
sale contract conform with World Omni Financial Corp.'s requirements. For
further information regarding the underwriting of retail installment sale
contracts, see "World Omni Financial Corp.'s Automobile Finance Business-
Underwriting" below.
The St. Louis center and a center located in Mobile, Alabama ("MOBILE
CENTER"), service World Omni Financial Corp.'s retail installment sale
contracts. The Mobile center and St. Louis center handle collection activities,
operational accounting and dealer and customer inquiries for World Omni
Financial Corp.
The principal executive offices of World Omni Financial Corp. are located
at 120 N.W. 12th Avenue, Deerfield Beach, Florida 33442 and its telephone number
is (954) 429-2200.
UNDERWRITING
The World Omni Financial Corp. underwriting standards are intended to
evaluate a prospective buyer's credit standing and repayment ability. Generally,
a prospective buyer is required by the dealer to complete a credit application
on a form prepared or approved by World Omni Financial Corp. As part of the
description of the applicant's financial condition, the applicant is required to
provide current information enumerating, among other things, employment history,
residential status and annual income. Upon receipt by the applicable office, all
application data is entered into a centralized computer network that
automatically obtains an independent credit bureau report and then "scores" the
application with the use of a scorecard. The scorecard enables World Omni
Financial Corp. to review an application and establish the probability that the
proposed installment 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
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will be delinquent or repossessed. The application also is evaluated against a
"cutoff score" established by World Omni Financial Corp. as the minimum
acceptable score to purchase an installment contract, which is revised from time
to time as changes occur in economic conditions and World Omni Financial Corp.'s
installment contract portfolio.
Generally, the score card provides a means of analysis to assist in
decision making, but the final decision generally rests with World Omni
Financial Corp.'s credit specialists. Under World Omni Financial Corp.'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 the applications. Both the number of overrides granted by each
credit specialist and the aggregate number of overrides granted by all credit
specialists are tracked by World Omni Financial Corp. in order to insure the
statistical validity of the scoring models. Detailed reporting on aspects of the
numerical scoring model is utilized to track performance of World Omni Financial
Corp.'s retail automobile and light duty truck installment sales contract
portfolio and to enable World Omni Financial Corp. to fine tune the scoring
model according to statistical indications to continually assure the statistical
validity of the scoring models. In certain circumstances, World Omni Financial
Corp. may pre-approve applicants with established World Omni Financial Corp.
credit histories based on a credit bureau score and other credit criteria
without the use of a custom scorecard. World Omni may also automatically approve
or deny applicants based on a credit bureau score, custom score and other credit
criteria. Applicants not automatically approved will be reviewed by a credit
specialist and may be subsequently approved.
World Omni Financial Corp. also originates retail installment sale
contracts under a lease termination program where it offers to obligors who
lease financed vehicles from its affiliates the option of financing the purchase
of the leased vehicle at lease expiration. These loans are originated primarily
through the Mobile center. The "lease-to-retail" loan origination process
relies, in large part, on the applicant's past payment history and credit bureau
score and potential residual value exposure under the lease. In the past, lease
obligors could qualify for pre-approval based on payment history and other
credit criteria. More recently, the pre-approval process was changed, with lower
credit criteria applied to leases with higher potential residual value exposure.
All lease-to-retail applicants not pre-approved are required to go through the
credit approval process at the Mobile center. This process is generally the same
as used at the St. Louis center and Deerfield office, though credit criteria may
be relaxed in cases of increased potential residual value exposure.
Historically, the credit bureau scores for lease-to-retail originations
have approximated credit bureau scores booked on World Omni Financial Corp.'s
overall portfolio of used retail installment contracts.
RISK BASED PRICING
World Omni Financial Corp. has used risk based pricing since 1997. This
includes a tier-based system of interest rates and loan to value ratios
representing the varying degrees of credit risk assigned to different ranges of
credit scores. The amount of a retail installment sale contract secured by a new
vehicle or used vehicle generally will not exceed 120% of the dealer invoice
cost of the related vehicle or 120% of clean black book value, respectively,
plus select accessories at the dealer cost (for new only), sales tax, title and
registration fees, any insurance premiums for credit life and credit disability
insurance, and certain fees for extended service contracts. However, the amount
advanced may be less, or in limited circumstances more, than the maximum
permissible amount due to a number of factors, including, but not limited to,
down payment and trade-in equity.
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SERVICING
Collection efforts are primarily performed through the Mobile center and
St. Louis center. These efforts are enhanced by the use of automated dialing and
collections systems. Independent contractors are employed in connection with
repossessions. General guidelines for retail installment sale contract
collection and repossession of the related financed vehicles include the
following:
<TABLE>
<CAPTION>
NUMBER OF
DAYS DELINQUENT ACTION
- ---------------------------------- ---------------------------------------------------------------
<S> <C>
10................................ The obligor automatically is mailed a past due notice
12-22............................. Telephone contact with the obligor is initiated
23-120............................ Additional personal contact regarding collection is made
75................................ The vehicle is normally repossessed
</TABLE>
Generally, after a contract is 75 days delinquent, the related financed
vehicle is repossessed, although under some circumstances repossession may occur
prior or later than this time. Repossessions are conducted by independent
contractors who are engaged in the business of repossessing vehicles. Generally,
repossessed vehicles are disposed of by auction. Upon repossession and
disposition of the financed vehicle, to the extent permitted by state law, any
remaining deficiency is pursued by World Omni Financial Corp. to the extent the
obligor is deemed to have sufficient assets to cover the deficiency. We refer
you to "Some Legal Aspects of the Receivables--Deficiency Judgments and Excess
Proceeds".
World Omni Financial Corp. follows detailed procedures with respect to
rescheduling of delinquent accounts and extensions of contracts. Generally a
rescheduling or an extension requires the demonstration of financial
difficulties, an ability to repay and approval by management. The legal
documents for the securities will permit the servicer to reschedule or extend a
receivable, or grant a rebate or other adjustment, only in accordance with the
customary procedures of the servicer and otherwise in accordance with these
agreements. We refer you to "The Description of the Trust Documents--Servicing
Procedures".
World Omni Financial Corp. from time to time implements a program whereby
obligors meeting the eligibility criteria specified below may be permitted, at
the option of the related obligor, to defer one month's payment of principal
during the December/January holiday period or July/August summer period (the
"PAYMENT EXTENSION PROGRAM"). In connection with the Payment Extension Program,
the obligor must pay an extension fee calculated generally at the APR of the
related retail installment sale contract for the month in which the contract is
extended. As a result, the obligor would pay the equivalent of an additional
interest payment in exchange for receiving a non-credit related extension.
The criteria for making an extension pursuant to the Payment Extension
Program generally include the following:
o the obligor is not currently 20 days or more delinquent and never has
been more than 60 days past due;
o the obligor has made six or more scheduled monthly payments and has more
than six remaining scheduled monthly payments;
o fewer than ten percent (in number) of the obligor's payments have been
greater than 30 days past due;
o the obligor cannot have extended the contract during the previous 90
days;
o the receivable must have a certain APR; and
o the obligor must not currently be in bankruptcy or litigation status.
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The agreement will provide that no receivable can be extended more than six
times during the life of the receivable (excluding Payment Extension Programs)
or extended beyond the month immediately preceding the month in which the final
scheduled payment date occurs and that all related extension fees must be
deposited into the collection account within two business days of receipt by the
servicer.
INSURANCE
World Omni Financial Corp. requires each obligor under a receivable to
obtain comprehensive and collision insurance with respect to the related
financed vehicle and requires the selling dealer to verify the existence of the
insurance before it will purchase the contract from the related dealer.
Following the purchase, World Omni Financial Corp. performs no ongoing
verification of insurance coverage. Commencing in August, 1998, World Omni
Financial Corp. stopped maintaining vendor's single interest physical damage
insurance with respect to newly originated retail installment sale contracts.
World Omni Financial Corp. does not require obligors to maintain credit
disability or life or credit health insurance or other similar insurance
coverage which provides for payments to be made on the automobile and light duty
truck retail installment sale contracts which it purchases on behalf of the
obligors in the event of disability or death. To the extent that any insurance
coverage is obtained on behalf of an obligor, payments received in respect of
coverage may be applied to payments on the related receivable to the extent that
the obligor's beneficiary chooses to do so.
POOL FACTORS
The pool factor for each class of securities will be a seven-digit decimal,
which the servicer will compute prior to each distribution with respect to the
class of securities, indicating the remaining outstanding principal balance of
the class of securities as of the applicable payment date, as a fraction of the
initial outstanding principal balance of the class of securities. Each pool
factor will be initially 1.0000000, and thereafter will decline to reflect
reductions in the outstanding principal balance of the applicable class of
securities. A securityholder's portion of the aggregate outstanding principal
balance of the related class of securities is the product of (i) the original
aggregate purchase price of the securityholder's securities and (ii) the
applicable pool factor.
As more specifically described in the related prospectus supplement
securityholders will receive reports on or about each payment date concerning
the payments received on the receivables, the principal balance of the
receivables pool, each pool factor and various other items of information. In
addition, securityholders of record during any calendar year will be furnished
information for tax reporting purposes not later than the latest date permitted
by law.
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USE OF PROCEEDS
Unless otherwise provided in the related prospectus supplement, the trust
will use the net proceeds from the sale of the securities of a series to
purchase the receivables from the seller and to make the deposit of any
pre-funded amount to the pre-funding account and make any other required
deposits to trust accounts. The seller will in turn use its net proceeds to
purchase the receivables pool from World Omni Financial Corp. World Omni
Financial Corp. may use all or a portion of the proceeds to reacquire the
receivables from affiliates of World Omni Financial Corp. or from warehouse
facilities or structured commercial paper issuers who in turn will repay
indebtedness secured by the receivables. World Omni Financial Corp. will use any
remainder of the proceeds for general corporate purposes.
THE TRUSTEE
The trustee or trustees for each series of securities will be specified in
the related prospectus supplement. The trustee's liability in connection with
the issuance and sale of the related securities is limited solely to the express
obligations of the trustee described in the agreement related to the securities.
With respect to each series of securities, the procedures for the
resignation or removal of the trustee and the appointment of a successor trustee
shall be specified in the related prospectus supplement.
DESCRIPTION OF THE SECURITIES
GENERAL
The securities will be issued in series. The trust may issue securities in
one or more classes. Each class of securities will either evidence beneficial
interests in a segregated pool of assets or will represent debt of the trust
secured by the trust assets. The following summaries (together with additional
summaries under "Description of the Trust Documents" below) describe all
material terms and provisions common to all securities. The summaries do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all of the provisions of the documentation for the related
securities and the related prospectus supplement.
All of the securities offered pursuant to this prospectus and the related
prospectus supplement will be rated in one of the four highest rating categories
by one or more nationally recognized statistical rating agencies (the "RATING
AGENCIES").
Each series or class of securities offered pursuant to this prospectus may
have a different interest rate, which may be a fixed or adjustable interest
rate. The related prospectus supplement will specify the interest rate for each
series or class of securities described in the related prospectus supplement, or
the initial interest rate and the method for determining subsequent changes to
the interest rate.
A series may include one or more classes of "strip securities" which are
securities that are entitled (i) to principal distributions, with
disproportionate, nominal or no interest distributions, or (ii) to interest
distributions, with disproportionate, nominal or no principal distributions. In
addition, a series of securities may include two or more classes of securities
that differ as to timing, sequential order, priority of payment, interest rate
or amount of distribution of principal or interest or both. Distributions of
principal or interest or both on any class also may be made upon the occurrence
of specified events, in accordance with a schedule or formula, or on the basis
of collections from designated portions of the receivables pool. Any series may
include one or more classes of "accrual securities," which are securities for
which all or some of the interest is added to the principal balance instead of
currently distributed.
If so provided in the related prospectus supplement, a series may include
one or more other classes of securities that are senior to one or more other
classes of subordinate securities in respect of distributions of principal and
interest and allocations of losses on receivables.
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In addition, some classes of senior (or subordinate) securities may be
senior to other classes of senior (or subordinate) securities in respect of
distributions or losses.
GENERAL PAYMENT TERMS OF SECURITIES
As described in the related prospectus supplement, the trust will make
payments to holders of the securities on specified payment dates. Payment dates
with respect to the securities will occur monthly, quarterly or semi-annually,
as described in the related prospectus supplement. For example, in the case of
quarterly-pay securities, the payment date would be a specified day of every
third month. The related prospectus supplement will describe the record date
preceding the payment date, as of which the trustee or its paying agent will fix
the identity of the securityholders for the purpose of receiving payments on the
next succeeding payment date.
The prospectus supplement will specify a collection period preceding each
payment date. For example, in the case of monthly-pay securities, the collection
period would be the calendar month preceding the month of the relevant payment
date. The servicer will remit collections received on or with respect to the
related receivables held by a trust during a collection period to the related
trustee prior to the related payment date. These amounts will fund payments to
securityholders on the payment date. As may be described in the related
prospectus supplement, the trustee may apply all or a portion of the payments
collected on or with respect to the related receivables to acquire additional
receivables during a specified period (rather than be used to fund payments of
principal to securityholders during the period). In this case, the related
securities will possess an interest-only period, also commonly referred to as a
revolving period, which will be followed by an amortization period. These
interest only or revolving periods may terminate prior to the scheduled date and
result in an early amortization of the related securities. The retention and
temporary investment by the trustee of the collected payments:
o slows the amortization rate of the related securities relative to the
installment payment schedule of the related receivables, or
o attempts to match the amortization rate of the related securities to an
amortization schedule established at the time the securities are issued.
Any of these features may terminate prior to the scheduled date and result
in distributions to the securityholders and an acceleration of the amortization
of the securities.
If specified in the related prospectus supplement, the trustee may retain
all or a portion of the collected payments (and held in some eligible
investments, including receivables) for a specified period prior to being used
to fund payments of principal to securityholders. In addition, the related
prospectus supplement may provide that for purposes of determining payments on
the securities, specified portions of principal payments on indicated
receivables will be deemed interest payments on those receivables.
Eligible investments are generally limited to investments acceptable to the
Rating Agencies rating the securities as being consistent with the rating of the
securities. We refer you to "Description of the Trust Documents-- Accounts."
Neither the securities nor the underlying receivables will be guaranteed or
insured by any governmental agency or instrumentality or any other person unless
specifically described in the related prospectus supplement.
BOOK-ENTRY REGISTRATION
Holders of securities may hold their securities through DTC (in the United
States) or Clearstream Banking, societe anonyme ("CLEARSTREAM") or Euroclear (in
Europe) if they are participants of the system, or indirectly through
organizations that are participants in the systems. Clearstream and Euroclear
will hold omnibus positions on behalf of the Clearstream participants and the
Euroclear
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participants, respectively, through customers' securities accounts in
Clearstream's and Euroclear's names on the books of their respective
depositories (collectively, the "DEPOSITORIES") which in turn will hold the
positions in customers' securities accounts in the Depositories' names on the
books of 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 the New York Uniform Commercial Code and a "clearing
agency" registered pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. DTC was created to hold securities for its participants and to
facilitate the clearance and settlement of securities transactions between
participants through electronic computerized book-entries, thereby eliminating
the need for physical movement of securities. Participants include securities
brokers and dealers, banks, trust companies and clearing corporations. Indirect
access to the DTC system also is available to others such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly ("INDIRECT
PARTICIPANTS").
Transfers between DTC participants will occur in accordance with DTC rules.
Transfers between Clearstream participants and Euroclear participants will occur
in accordance with their applicable rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly through Clearstream participants or
Euroclear participants, on the other, will be effected in DTC in accordance with
DTC rules on behalf of the relevant European international clearing system by
its Depository; however, the cross-market transactions will require delivery of
instructions to the relevant European international clearing system by the
counterparty in the system in accordance with its rules and procedures. If the
transaction complies with all relevant requirements, Euroclear or Clearstream,
as the case may be, will then deliver instructions to the Depository to take
action to effect final settlement on its behalf.
Because of time-zone differences, credits of securities in Clearstream or
Euroclear as a result of a transaction with a DTC participant will be made
during the subsequent securities settlement processing, dated the business day
following the DTC settlement date, and the credits or any transactions in the
securities settled during the processing will be reported to the relevant
Clearstream participant or Euroclear participant on the same business day. Cash
received in Clearstream or Euroclear as a result of sales of securities by or
through a Clearstream participant or a Euroclear participant to a DTC
participant will be received with value on the DTC settlement date but will be
available in the relevant Clearstream or Euroclear cash account only as of the
business day following settlement in DTC.
The holders of securities that are not participants or indirect
participants but desire to purchase, sell or otherwise transfer ownership of, or
other interests in, securities may do so only through participants and indirect
participants. In addition, holders of securities will receive all distributions
of principal and interest from the trustee through the participants who in turn
will receive them from DTC. Under a book-entry format, holders of securities may
experience some delay in their receipt of payments, since the payments will be
forwarded by the trustee to Cede & Co., as nominee for DTC. DTC will forward the
payments to its participants, which thereafter will forward them to indirect
participants or beneficial owners of securities.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "RULES"), DTC is required to make book-entry transfers of
securities among participants on whose behalf it acts with respect to the
securities and to receive and transmit distributions of principal of, and
interest on, the securities. Participants and indirect participants with which
the holders of securities have accounts with respect to the securities similarly
are required to make book-entry transfers and receive and transmit the payments
on behalf of their respective holders of securities. Accordingly, although the
holders of securities will not possess the securities, the Rules provide a
mechanism by which participants will receive payments on securities and will be
able to transfer their interest.
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Because DTC can only act on behalf of participants, who in turn act on
behalf of indirect participants and some banks, the ability of a holder of
securities to pledge the securities to persons or entities that do not
participate in the DTC system, or to otherwise act with respect to the
securities, may be limited due to the lack of a physical certificate for the
securities.
DTC has advised the seller that it will take any action permitted to be
taken by a holder of a security only at the direction of one or more
participants to whose accounts with DTC the securities are credited. DTC may
take conflicting actions with respect to other undivided interests to the extent
that the actions are taken on behalf of participants whose holdings include
undivided interests.
Clearstream is incorporated under the laws of Luxembourg as a professional
depository. Clearstream holds securities for its participating organizations and
facilitates the clearance and settlement of securities transactions between
Clearstream participants through electronic book-entry changes in accounts of
Clearstream participants, thereby eliminating the need for physical movement of
securities.
Euroclear was created in 1968 to hold securities for participants of the
Euroclear system and to clear and settle transactions between Euroclear
participants through simultaneous electronic book-entry delivery against
payment.
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 and applicable Belgian law
(collectively, the "TERMS AND CONDITIONS"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear system, withdrawal of
securities and cash from the Euroclear system, and receipts of payments with
respect to securities in the Euroclear system.
Although DTC, Euroclear and Clearstream have implemented the foregoing
procedures in order to facilitate transfers of interests in book-entry
securities among participants of DTC, Euroclear and Clearstream, they are under
no obligation to perform or to continue to comply with the procedures, and the
procedures may be discontinued at any time. None of the seller nor any other
person will have any responsibility for the performance by DTC, Euroclear or
Clearstream or their respective direct or indirect participants of their
respective obligations under the rules and procedures governing their
operations. The information herein concerning DTC, Clearstream and Euroclear and
their book-entry systems has been obtained from sources believed to be reliable,
but the seller takes no responsibility for the accuracy or completeness of the
information.
DEFINITIVE SECURITIES
Unless the related prospectus supplement provides otherwise, the securities
will be issued in fully registered, certificated form (definitive securities) to
the securityholders of a given series or their nominees, only if:
o the trustee in respect of the related series advises in writing that DTC
is no longer willing or able to discharge properly its responsibilities
as depository with respect to the securities and the trustee is unable to
locate a qualified successor,
o the trustee, at its option, elects to terminate the book-entry-system
through DTC, or
o after the occurrence of an event of default under the related indenture
or a default by the servicer under the related sale and servicing
agreement or pooling and servicing agreement, securityholders
representing at least a majority of the outstanding principal amount of
the securities advise the applicable trustee through DTC in writing that
the continuation of a book-entry system through DTC (or its successor) is
no longer in the securityholders' best interest.
Upon the occurrence of any event described in the immediately preceding
paragraph, the applicable trustee will be required to notify all the
securityholders through participants of the availability of
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definitive securities. Upon surrender by DTC of the definitive securities
representing the securities and receipt of instructions for re-registration, the
applicable trustee will reissue the securities as definitive securities to the
securityholders.
Distributions of principal of, and interest on, the securities will
thereafter be made by the applicable trustee in accordance with the procedures
described in the related indenture, pooling and servicing agreement or trust
agreement directly to holders of definitive securities in whose names the
definitive securities were registered at the close of business on the applicable
record date.
The distributions will be made by check mailed to the address of the holder
as it appears on the register maintained by the applicable trustee. The final
payment on any the security, however, will be made only upon presentation and
surrender of the security at the office or agency specified in the notice of
final distribution to the applicable securityholders.
Definitive securities in respect of a given series of securities will be
transferable and exchangeable at the offices of the applicable trustee or of a
certificate registrar named in a notice delivered to holders of the definitive
securities. No service charge will be imposed for any registration of transfer
or exchange, but the applicable trustee may require payment of a sum sufficient
to cover any tax or other governmental charge imposed.
REPORTS TO SECURITYHOLDERS
On each payment date, the applicable trustee will include with each
distribution to each securityholder as of the related record date a statement
generally setting forth the following:
(i) the amount of the distribution allocable to principal of each
class of securities;
(ii) the amount of the distribution allocable to interest on each
class of securities;
(iii) the principal balance of the receivables pool and the pool
factor for each class of securities as of the last day of the preceding
collection period;
(iv) the aggregate principal balance of each class of securities as of
the last day of the preceding collection period, after giving effect to
payments of principal under (i) above;
(v) the amount of the servicing fee paid to the servicer with respect
to the related collection period, the amount of any unpaid servicing fees
and the change in the amount from that of the prior payment date;
(vi) the amount of any interest and principal carryover shortfall, on
the payment date and any change from the prior payment date;
(vii) the amount paid to the securityholders from the reserve account
for the payment date, its balance and any change from the prior payment
date; and
(viii) the number and the aggregate purchase amount of receivables
repurchased by World Omni Financial Corp. or purchased by the servicer.
DTC will supply these reports to securityholders in accordance with its
procedures. The report will also indicate each amount described under subclauses
(i), (ii), (v), (vi), (vii) and (viii) above in the aggregate and as a dollar
amount per $1,000 of original principal balance of a security.
After the end of each calendar year, the applicable trustee will mail to
each person who was a securityholder during the year, a statement (prepared by
the servicer) containing certain information needed in the preparation of
federal income tax returns.
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DESCRIPTION OF THE TRUST DOCUMENTS
The following summary describes the material terms of the documents used to
create a trust and issue the related securities. The trust documents for notes
will generally consist of a purchase agreement, generally between World Omni
Financial Corp., as seller and World Omni Auto Receivables LLC, as purchaser, a
sale and servicing agreement, generally between the trust, as issuer and the
seller, as seller and World Omni Financial Corp., as servicer, an indenture,
generally between the trust and the applicable trustee, and a trust agreement,
generally between the seller and the applicable trustee. The trust documents for
certificates will generally consist of a purchase agreement, generally between
World Omni Financial Corp., as seller and World Omni Auto Receivables LLC, as
purchaser and a pooling and servicing agreement or a trust agreement between the
seller and the trustee. The prospectus supplement for a given series will
specify the trust documents utilized for that series of securities. We have
filed forms of the trust documents as an exhibit to the registration statement
of which this prospectus forms a part. This summary does not purport to be
complete.
SALE AND ASSIGNMENT OF RECEIVABLES
On or prior to the closing date for each series of securities, World Omni
Financial Corp. will sell and assign to the seller, without recourse, except for
representations and warranties, its entire interest in the receivables to be
included in the trust, together with its security interests in the financed
vehicles. At the time of issuance of the securities, the seller will transfer
the receivables to a trust pursuant to a sale and servicing agreement or a
pooling and servicing agreement.
As more fully described in the related prospectus supplement, World Omni
Financial Corp. will purchase from the related trust any receivable transferred
to a trust if the interest of the securityholders in that receivable is
materially adversely affected by a breach of any representation or warranty made
by World Omni Financial Corp. with respect to that receivable, which breach has
not been cured following the discovery by or notice to World Omni Financial
Corp. of the breach. In addition, if so specified in the related prospectus
supplement, World Omni Financial Corp. may from time to time reacquire
receivables or substitute other receivables for the defective receivables.
Pending sale to the seller, World Omni Financial Corp. may finance the
receivables in warehouse facilities provided to affiliates of World Omni
Financial Corp. On or prior to the closing date, for each series of securities,
these affiliates or any related warehouse provider will transfer the receivables
to World Omni Financial Corp. for sale to the seller. To the extent indicated in
a prospectus supplement for a series, these World Omni Financial Corp.
affiliates or any related warehouse provider may sell the receivables directly
to the seller. In all cases, World Omni Financial Corp. will make the
representations and warranties on the receivables as described in "Description
of the Trust Documents--The Servicer" in this prospectus.
ACCOUNTS
With respect to each series of securities, the servicer will establish and
maintain with the applicable trustee one or more accounts, in the name of the
trustee on behalf of the related securityholders. The servicer will deposit all
payments made on or with respect to the related receivables into a collection
account. The trustee will deposit amounts released from the collection account
and any reserve account or other credit enhancement for distribution to the
securityholders into a distribution account. The trustee will make distributions
to the securityholders from the distribution account.
If the related prospectus supplement so provides, the trustee will maintain
a pre-funding account solely to hold funds to pay to the seller for additional
receivables during the funding period. Monies on deposit in the pre-funding
account will not be available to cover losses on or in respect of the
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receivables. On the closing date, the seller will deposit the initial pre-funded
amount from the sale proceeds of the securities.
If the related prospectus supplement so provides, the seller will establish
and maintain the interest reserve account in the name of the applicable trustee
on behalf of the securityholders. On the closing date, the seller will deposit
cash in the interest reserve account. On payment dates specified in the related
prospectus supplement, the trustee will withdraw funds on deposit in the
interest reserve account in excess of the required amount and will deposit such
funds in the distribution account for distribution.
The related prospectus supplement will describe any other accounts to be
established with respect to a trust, including any other reserve account, yield
supplement account or interest reserve account.
Funds in the collection account, the distribution account, any pre-funding
account, any reserve account and other accounts identified in the related
prospectus supplement (collectively, the "TRUST ACCOUNTS") will be invested in
eligible investments. Eligible investments are generally limited to investments
acceptable to the Rating Agencies rating the securities as being consistent with
the rating of the securities. Subject to certain conditions, eligible
investments may include securities issued by the servicer or its affiliates or
other trusts created by World Omni Financial Corp. or its affiliates. Eligible
investments must generally mature on the related payment date. However, funds in
the reserve account may be invested in securities that will mature after the
next payment date and will not be sold to meet any shortfalls. Thus, the amount
of cash in any reserve account at any time may be less than the balance of the
reserve account. If required withdrawals from any reserve account exceeds the
amount of cash in the reserve account a temporary shortfall in the amounts
distributed to the related securityholders could result. The average life of the
securities could then increase. Except as otherwise specified in the related
prospectus supplement, the trustee will deposit investment earnings on funds in
the Trust Accounts, net of losses and investment expenses, in the collection
account on each payment date.
If so provided in the prospectus supplement, on or before the business day
prior to each applicable payment date, the servicer will deposit into the
related collection account as an advance an amount equal to the amount of
interest that would have been due on the receivables related to a series at
their respective APRs for the related collection period minus the amount of
interest actually received on the receivables during the related collection
period. The servicer will not be required to make any advances to the extent
that it does not expect to recoup the advance from subsequent collections or
recoveries. If the servicer makes an advance that becomes a non-recoverable
advance, the trust will pay the servicer an amount equal to the non-recoverable
advance prior to paying the holders of securities. Unless otherwise specified in
the prospectus supplement, the servicer will make no advances of principal on
the receivables.
The applicable trustee will maintain the Trust Accounts so long as either:
o the short-term unsecured debt obligations of the applicable trustee meet
the criteria of each Rating Agency; or
o the applicable trustee is a depository institution or trust company
having a minimum long-term unsecured debt rating specified in the related
prospectus supplement and corporate trust powers and the related Trust
Account is maintained in a segregated trust account in the corporate
trust department of the applicable trustee.
If the applicable trustee at any time does not qualify under either of these
criteria, the servicer will move the Trust Accounts to a depository institution
meeting these requirements.
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THE SERVICER
World Omni Financial Corp. will be the servicer under each sale and
servicing agreement or pooling and servicing agreement. Any servicer may
delegate its servicing responsibilities to one or more subservicers, but will
not be relieved of its liabilities with respect thereto.
The servicer will make representations and warranties regarding its
authority to enter into, and its ability to perform its obligations under, the
related sale and servicing agreement or pooling and servicing agreement. An
uncured breach of a representation or warranty that in any respect materially
and adversely affects the interests of the securityholders will constitute a
default by the servicer under the related sale and servicing agreement or
pooling and servicing agreement.
SERVICING PROCEDURES
The servicer will service, administer and make reasonable efforts to
collect all amounts due on or in respect of the receivables. The servicer will
make reasonable efforts to collect all the amounts and, in a manner consistent
with the trust documents, will service the receivables generally in accordance
with customary and usual procedures of institutions which service retail
installment sale contracts secured by new and used automobiles and light trucks
and, to the extent more exacting, the procedures used by the servicer in respect
of retail installment sale contracts secured by new and used automobiles and
light trucks serviced for its own account. Consistent with its normal
procedures, the servicer may, in its sole discretion, arrange with the obligor
on a receivable to extend the payment schedule. The sale and servicing agreement
or pooling and servicing agreement will provide that no more than six extensions
may be granted and will provide for the timing of the extensions. The servicer
may not modify the original due dates or the amount of the scheduled payments,
or extend the final payment date on any receivable beyond the last day of the
collection period before the final scheduled payment date occurs. If the
servicer grants an extension with respect to a receivable other than in
accordance with the aforementioned limitations, the servicer must purchase the
receivable. Following any purchase of a receivable by the servicer, the
receivable will be released from the trust and conveyed to the servicer. The
servicer may sell the financed vehicle securing a defaulted receivable, if any,
at a public or private sale, or take any other action permitted by applicable
law. We refer you to "Some Legal Aspects of the Receivables."
PAYMENTS ON RECEIVABLES
Obligors will generally make payments on the receivables by mail for
deposit into a lock box and account maintained by the servicer. The servicer
will deposit in the collection account amounts attributable to the receivables
within two business days after receipt. The servicer will deposit all other
payments it receives on or in respect of the receivables into the collection
account not later than two business days after receipt.
SERVICING COMPENSATION
The trust will pay to the servicer a servicing fee on each payment date
equal to the product of one-twelfth of the specified percentage per annum and
the principal balance of the receivables pool as of the close of business on the
first day of the related collection period. With respect to the first payment
date, the servicing fee will be based on the original principal balance of the
receivables pool. The related prospectus supplement will describe the servicing
fee. The servicer will also collect and retain, as additional servicing
compensation, any late fees, prepayment charges, and other administrative fees
or similar charges allowed by applicable law with respect to the receivables
that are part of the trust, and will be entitled to reimbursement from the trust
for certain liabilities. The servicer will allocate the payments by or on behalf
of obligors to scheduled payments, late fees and other charges and principal
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and interest in accordance with the servicer's normal practices and procedures.
The trust will pay the servicing fee out of collections from the receivables,
prior to distributions to securityholders.
The servicing fee and additional servicing compensation will compensate the
servicer for performing the functions of a third party servicer of automotive
receivables as an agent for the trust. Servicing duties include collecting and
posting all payments, responding to inquiries of obligors on the receivables,
investigating delinquencies, sending payment coupons to obligors, reporting tax
information to obligors, paying costs of disposition of defaults and policing
the collateral. The servicing fee also compensates the servicer for
administering the receivables, including accounting for collections and
furnishing monthly and annual statements as required with respect to a series of
securities regarding distributions and generating federal income tax
information.
As long as World Omni Financial Corp. believes that sufficient collections
will be available from interest collections on one or more future payment dates
to pay the servicing fee, World Omni Financial Corp. may, as servicer, elect to
waive the servicing fee with respect to the related collection period, without
interest. The servicing fee for the related collection period will be deemed to
equal zero for all purposes of the trust documents.
DISTRIBUTIONS
Beginning on the payment date specified in the related prospectus
supplement, the trust will make distributions of principal and interest (or,
where applicable, of principal or interest only) on each class of securities to
the holders of notes and certificates of the series. The prospectus supplement
will describe the timing, amount, priorities and other specifics of
distributions to each class of noteholders and certificateholders of each
series.
On each payment date the trustee will transfer collections on the related
receivables from the collection account to the distribution account for
distribution to securityholders. To the extent described in the related
prospectus supplement, distributions in respect of principal of a class of
securities of a given series may be subordinate to distributions in respect of
interest on the class, and distributions in respect of the certificates of the
series may be subordinate to payments in respect of the notes of the series.
CREDIT AND CASH FLOW ENHANCEMENTS
The related prospectus supplement will describe the amounts and types of
credit enhancement arrangements and any provider of credit enhancement with
respect to each class of securities of a given series. This credit enhancement
may consist of:
(i) financial guaranty insurance policies or surety bonds;
(ii) subordination of one or more classes of securities or
overcollateralization, letters of credit, credit or liquidity
facilities;
(iii) reserve funds, third party payments, guaranteed cash deposits;
or
(iv) other arrangements as may be described in the related prospectus
supplement or any combination of two or more of the foregoing.
Credit enhancement for a class of securities may cover one or more other
classes of securities of the same series. Credit enhancement for a series of
securities may cover one or more other series of securities.
Credit enhancement increases the likelihood of receipt by the relevant
securityholders of their full amount of principal and interest and decreases the
likelihood that these securityholders will experience losses. Credit enhancement
may not provide protection against all risks of loss and may not guarantee
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repayment of the entire principal balance and interest thereon. If losses exceed
the amount covered by any credit enhancement or are not covered by any credit
enhancement, the relevant securityholders will bear their allocable share of
deficiencies, as described in the related prospectus supplement. If credit
enhancement covers more than one series of securities, securityholders of any
series will be subject to the risk that the credit enhancement will be exhausted
by the claims of securityholders of other series.
To the extent provided in the related prospectus supplement, cash flow
enhancement may be in the form of swaps (including without limitation currency
swaps) and other interest rate protection agreements, repurchase obligations
(including without limitation put options), yield supplement agreements, other
agreements with respect to third party payments or other support or other
arrangements as the related prospectus supplement may describe.
EVIDENCE AS TO COMPLIANCE
Annually, the servicer will furnish to the related trust and trustee a
statement from a firm of independent public accountants as to the compliance by
the servicer during the preceding twelve months with standards relating to the
servicing of receivables.
The servicer will also deliver to the related trust and the trustee an
officer's certificate stating that the servicer has fulfilled its obligations
under the sale and servicing agreement or pooling and servicing agreement in all
material respects throughout the preceding 12 months. If there has been a
default in the fulfillment of any of these obligations in any material respect,
the officer's certificate will describe the default. The servicer also will
agree to give the trustee notice of defaults by the servicer under the related
sale and servicing agreement or pooling and servicing agreement.
Securityholders may obtain copies of the statements and certificates by
written request addressed to the trustee.
CERTAIN MATTERS REGARDING THE SERVICERS
The servicer may not resign from its obligations and duties under any sale
and servicing agreement or pooling and servicing agreement unless it determines
that its duties are no longer permissible by reason of a change in applicable
law or regulations. No resignation will become effective until a successor
servicer has assumed the servicer's obligations and duties under the applicable
sale and servicing agreement or pooling and servicing agreement. The servicer
may not assign the sale and servicing agreement or pooling and servicing
agreement or any of its rights, powers, duties or obligations under the
applicable sale and servicing agreement or pooling and servicing agreement
except as otherwise provided or except in connection with a permitted
consolidation, merger, conveyance, transfer or lease.
Neither the servicer nor any of its directors, officer, employees, and
agents will be liable to the trust or the securityholders for taking any action
or for refraining from taking any action pursuant to the sale and servicing
agreement or pooling and servicing agreement, or for errors in judgment. This
provision will not protect the servicer nor any of these persons against any
liability imposed by reason of negligence, willful misfeasance or bad faith. The
servicer is under no obligation to appear in, prosecute, or defend any legal
action that is not incidental to its servicing responsibilities under the
applicable sale and servicing agreement or pooling and servicing agreement and
that, in its opinion, may cause it to incur any expense or liability.
Any entity into which the servicer may be merged or consolidated, or any
entity resulting from merger or consolidation or any entity succeeding to the
business of the servicer will succeed the servicer under the applicable sale and
servicing agreement or pooling and servicing agreement.
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SERVICER TERMINATION EVENT
Except as otherwise provided in the related prospectus supplement, a
servicer termination event under the related trust documents will include, among
others:
o any failure by the servicer to deliver to the applicable trustee for
deposit in any of the related Trust Accounts any required payment or to
direct the trustee to make any required distributions therefrom, which
failure continues unremedied for more than five (5) business days after
written notice from the trustee is received by the servicer or after
discovery by the servicer;
o any failure by the servicer duly to observe or perform in any material
respect any other covenant or agreement in the trust documents, among
others which materially and adversely affects the rights of the related
securityholders and which continues unremedied for more than sixty
(60) days after written notice of the failure (1) to the servicer by the
applicable trustee or (2) to the servicer, and to the applicable trustee
by holders of the controlling securities evidencing not less than 50% of
the voting rights of the controlling securities; and
o events of financial insolvency, readjustment of debt, marshaling of
assets and liabilities, or similar proceedings with respect to the
servicer.
RIGHTS UPON SERVICER TERMINATION EVENT
Except as otherwise provided in the related prospectus supplement, as long
as a servicer termination event under the related trust documents remains
unremedied, the applicable trustee or holders of the controlling securities
evidencing not less than 50% of the voting rights of the controlling securities
may terminate all the rights and obligations of the servicer, if any, under the
sale and servicing agreement or pooling and servicing agreement, whereupon a
successor servicer appointed by the trustee or the trustee will become servicer
under the trust documents. If, however, a bankruptcy trustee or similar official
has been appointed for the servicer, and no servicer termination event has
occurred, the bankruptcy trustee or official may have the power to prevent the
trustee or the securityholders from effecting a transfer of servicing.
WAIVER OF PAST DEFAULTS
With respect to the trust, except as otherwise provided in the prospectus
supplement, the holders of the controlling securities evidencing not less than
50% of the voting rights of the controlling securities may, on behalf of all
securityholders of the related securities, waive any default by the servicer in
the performance of its obligations under the related trust documents and its
consequences, except a default in making any required deposits to or payments
from any of the Trust Accounts in accordance with the trust documents. No waiver
will impair the securityholders' rights with respect to subsequent defaults.
AMENDMENTS
Unless otherwise specified in the related prospectus supplement, each of
the trust documents may be amended by the parties to each agreement, without the
consent of the related securityholders, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of the trust
documents or of modifying in any manner the rights of the securityholders. These
amendments require:
o a confirmation from each Rating Agency then rating the related securities
that the amendment will not result in a reduction or withdrawal of its
rating on the securities of that class, and
o the servicer shall have delivered an officer's certificate stating that
the amendment will not materially and adversely affect the interest of
any securityholder.
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Unless otherwise specified in the related prospectus supplement, World Omni
Financial Corp., the servicer, and the applicable trustee with the consent of
the holders of the controlling securities evidencing not less than 50% of the
voting rights of the controlling securities may amend the trust documents for
the purpose of adding, changing, modifying or eliminating any of the provisions
of the trust documents. The consent of all securityholders is required for any
amendment that:
o increases or reduces the amount or priority of, or accelerates or delays
the timing of, collections of payments on the related receivables or
distributions to securityholders; or
o reduces the required percentage of the securities which are required to
consent to these amendments.
TERMINATION
With respect to each trust, the obligations of the servicer, World Omni
Financial Corp. and the applicable trustee pursuant to the related trust
documents will terminate upon the earlier to occur of:
o the maturity or other liquidation of the last related receivable and the
disposition of any amounts received upon liquidation of any remaining
receivables;
o the payment to securityholders of the related series of all amounts
required to be paid to them pursuant to the trust documents; and
o the exercise by the seller or servicer of its option to purchase all the
remaining receivables as of the end of any collection period immediately
preceding a payment date to the extent the principal balance of the
receivables pool of the related contracts is less than 10% of the initial
principal balance of the receivables pool in respect of the trust assets,
for a price equal to the aggregate of the principal balance of the
remaining receivables, plus accrued and unpaid interest during the
related collection period.
Unless otherwise specified in the related prospectus supplement, any
outstanding securities of the related series will be redeemed concurrently with
the events specified above. The resulting distribution to the related
securityholders of proceeds may affect the prepayment rate of the securities.
Voting Rights; Controlling Securities.
Voting rights will be exercised by the holders of the controlling
securities as identified in the related prospectus supplement. If specified in
the related prospectus supplement, holders of senior securities may be the
controlling securities until they are repaid in full.
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DESCRIPTION OF THE NOTES
GENERAL
With respect to each trust that issues notes, one or more classes of notes
of the related series will be issued pursuant to the terms of an indenture, the
form of which has been filed as an exhibit to the registration statement of
which this prospectus forms a part. We have filed a form of the indenture as an
exhibit to the registration statement related to this prospectus. This summary
does not purport to be complete.
PRINCIPAL AND INTEREST ON THE NOTES
The timing and priority of payment, seniority, allocations of losses,
interest rate and amount of or method of determining payments of principal and
interest with respect to each class of notes of a series will be described in
the related prospectus supplement. The right of holders of any class of notes of
a series to receive payments of principal and interest may be senior or
subordinate to the rights of holders of any other class or classes of notes of
such series, as described in the related prospectus supplement. Unless otherwise
provided in the related prospectus supplement, payments of interest on the notes
of the related series will be made prior to payments of principal. To the extent
provided in the related prospectus supplement, a series may include one or more
classes of strip notes entitled to:
o principal payments with disproportionate, nominal or no interest
payments; or
o interest payments with disproportionate, nominal or no principal
payments.
Each class of notes may have a different interest rate, which may be a
fixed, variable or adjustable interest rate (and which may be zero for some
classes of strip notes), or any combination of the foregoing. The related
prospectus supplement will specify the interest rate for each class of notes of
a series or the method for determining the interest rate. One or more classes of
notes of a series may be redeemable in whole or in part under the circumstances
specified in the related prospectus supplement, including at the end of the
funding period (if any) or as a result of the servicer's exercising its option
to purchase the related receivables pool.
To the extent specified in any prospectus supplement, one or more classes
of notes of a given series may have fixed principal payment schedules, as set
forth in the related prospectus supplement. Noteholders of the notes would be
entitled to receive as payments of principal on any given payment date the
applicable amounts set forth on the schedule with respect to the notes, in the
manner and to the extent set forth in the related prospectus supplement. The
aggregate initial principal amount of the notes and certificates, if any, of a
series may, after giving effect to the purchase of all additional receivables,
if any, be greater or less than the aggregate initial principal balance of the
receivables in that series.
To the extent specified in the related prospectus supplement, payments of
interest to holders of two or more classes of notes within a series may have the
same priority. Under some circumstances, the amount available for the payments
could be less than the amount of interest payable on the notes on any of the
dates specified for payments in the related prospectus supplement, in which case
the holders of the classes of notes will receive their ratable share (based upon
the aggregate amount of interest due to the noteholders) of the aggregate amount
available to be distributed in respect of interest on the notes.
In the case of a series of notes which includes two or more classes of
notes, the sequential order and priority of payment in respect of principal and
interest, and any schedule or formula or other provisions applicable to the
determination of the order and priority of the payment, of each class will be
set forth in the related prospectus supplement. Payments in respect of principal
and interest of any class of notes will be made on a pro rata basis among all
the noteholders of the class. A series with notes may provide for a revolving
period, during which collections of principal in respect of the receivables
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are not applied to payments of principal of the notes, or may provide for a
liquidity facility or similar arrangement that permits one or more classes of
notes to be paid in planned amounts on scheduled payment dates.
THE INDENTURE
Events of Default; Rights upon Event of Default.
Unless otherwise specified in the prospectus supplement, "EVENTS OF
DEFAULT" under the indenture will consist of:
o a default for five days or more in the payment of any interest on any
note;
o a default in the payment of the principal of or any installment of the
principal of any such note when the same becomes due and payable to the
extent funds are available therefor and on the related final scheduled
payment date;
o a material default in the observance or performance of any covenant or
agreement of the trust, subject to notice and cure provisions;
o any representation or warranty made by the trust being materially
incorrect as of the date it was made, subject to notice and care
provisions; or
o some events of bankruptcy, insolvency, receivership or liquidation of
the trust.
Unless otherwise specified in the applicable prospectus supplement, the
indenture generally entitles noteholders to principal only to the extent of
amounts deposited in the distribution account. Therefore, the failure to pay
principal on a class of notes generally will not result in the occurrence of an
Event of Default until the final scheduled payment date for the class of notes.
If an Event of Default should occur and be continuing with respect to the
notes, the indenture trustee or holders of the controlling securities evidencing
not less than 50% of the voting rights of the controlling securities may
immediately declare the notes due and payable. This declaration of acceleration
may, under some circumstances, be rescinded by the holders of the controlling
securities evidencing not less than 50% of the voting rights of the controlling
securities.
If the notes are due and payable following an Event of Default, the
indenture trustee may institute proceedings to collect amounts due or foreclose
on the trust assets, exercise remedies as a secured party, sell the receivables
included or elect to have the trust maintain possession of the receivables and
continue to apply collections on such receivables as if there had been no
declaration of acceleration. The indenture trustee is generally prohibited from
selling the receivables following an Event of Default unless:
o the holders of all the outstanding notes consent to such sale,
o the proceeds of such sale are sufficient to fully pay the outstanding
notes, or
o the indenture trustee determines that the future collections on the
receivables would be insufficient to make payments on the notes and the
indenture trustee obtains the consent of the holders of the controlling
securities evidencing not less than 66 2/3% of the voting rights of the
controlling securities.
Unless otherwise specified in the applicable prospectus supplement, if an
Event of Default occurs and is continuing with respect to the notes, the
indenture trustee is generally under no obligation to exercise any of its rights
or powers at the request or direction of any of the holders of such notes, if
the indenture trustee reasonably believes it will not be adequately indemnified
against any resulting costs, expenses and liabilities. Subject to the provisions
for indemnification and some limitations contained in
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the indenture, the holders of the controlling securities evidencing not less
than 50% of the voting rights of the controlling securities will have the right
to direct the time, method and place of conducting any proceeding or any remedy
available to the indenture trustee. Holders of the controlling securities
evidencing not less than 50% of the voting rights of the controlling securities
may, generally, waive any default with respect to the notes, except a default in
the payment of principal or interest.
Unless otherwise specified in the applicable prospectus supplement, no
holder of a note will have the right to institute any proceeding with respect to
the indenture, unless (i) such holder previously has given to the indenture
trustee written notice of a continuing Event of Default, (ii) the holders of the
controlling securities evidencing not less than 25% of the voting rights of the
controlling securities have made a written request to such indenture trustee to
institute such proceeding in its own name as indenture trustee, (iii) such
holder or holders have offered such indenture trustee reasonable indemnity, (iv)
such indenture trustee has for 60 days failed to institute such proceeding and
(v) no direction inconsistent with such written request has been given to such
indenture trustee during such 60-day period by the holders of the controlling
securities evidencing not less than 50% of the voting rights of the controlling
securities.
In addition, the indenture trustee and the holders of notes, by accepting
such notes, will covenant, to the extent legally enforceable, that they will not
at any time institute against the trust any bankruptcy, reorganization or other
proceeding under any federal or state bankruptcy or similar law.
Certain Covenants. A trust may not consolidate with or merge into any
other entity, unless the trust meets specific conditions, including that the
rating of the notes then in effect would not be reduced or withdrawn by the
Rating Agencies rating the notes as a result of such merger or consolidation.
Each trust makes negative covenants. Unless otherwise specified in the
applicable prospectus supplement, these covenants generally provide that a trust
will not sell, transfer, exchange or otherwise dispose of any of the trust
assets, (i) except as expressly permitted by the trust documents or some related
documents with respect to the trust, (ii) claim any credit on or make any
deduction from the principal and interest payable in respect of the notes (other
than amounts withheld under the Code or applicable state law) or assert any
claim against any present or former holder of such notes because of the payment
of taxes levied or assessed upon the trust, (iii) dissolve or liquidate in whole
or in part, (iv) permit the validity or effectiveness of the indenture to be
impaired or permit any person to be released from any covenants or obligations
with respect to the notes under the indenture except as may be expressly
permitted by the indenture or (v) permit any lien, charge, excise, claim,
security interest, mortgage or other encumbrance to be created on or extend to
or otherwise arise upon or burden the trust assets or any part of the trust
assets, or any interest in the trust assets or the proceeds of the trust assets.
Each trust will engage only in the activities specified in this prospectus.
A trust will not incur, assume or guarantee any indebtedness other than
indebtedness incurred pursuant to the notes, the indenture or other related
documents.
Annual Compliance Statement. The indenture requires the trust to file
annually with the indenture trustee a written statement as to the fulfillment of
its obligations under the indenture.
Indenture Trustee's Annual Report. The indenture requires the indenture
trustee to mail each year to all noteholders a brief report relating to its
eligibility and qualification to continue as indenture trustee under the
indenture, any amounts advanced by it under the indenture, the amount, interest
rate and maturity date of some indebtedness owing by the trust to the indenture
trustee in its individual capacity, the property and funds physically held by
such indenture trustee as such and any action taken by it that materially
affects the notes and that has not been previously reported.
Modification of Indenture. Unless otherwise specified in the applicable
prospectus supplement, the trust and the indenture trustee may, with the consent
of the holders of the controlling securities
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evidencing not less than 50% of the voting rights of the controlling securities,
execute a supplemental indenture to add provisions to, change in any manner or
eliminate any provisions of, the indenture, or modify (except as provided below)
in any manner the rights of the noteholders.
Unless otherwise specified in the applicable prospectus supplement, the
consent of each holder of outstanding notes affected thereby will generally be
required to:
o change the due date of any installment of principal of or interest on
any such note, reduce its principal amount, interest rate or the
redemption price;
o impair the right to institute suit for the enforcement of some
provisions of the indenture regarding payment or otherwise terminate or
impair the lien of the indenture trustee on the trust assets;
o reduce the percentage of the aggregate amount of the outstanding notes
required to consent to supplemental indentures or to waive compliance or
defaults;
o liquidate the receivables when the proceeds of such sale would be
insufficient to fully pay outstanding notes; or
o terminate the lien of the indenture on any collateral or deprive the
holder of the security afforded by the lien of the indenture.
Unless otherwise specified in the applicable prospectus supplement, a trust
and the indenture trustee may also enter into supplemental indentures, without
obtaining the consent of the noteholders for the purpose of, among other things,
adding any provisions to or changing in any manner or eliminating any of the
provisions of the indenture or of modifying in any manner the rights of such
noteholders; provided that such action will not materially and adversely affect
the interest of any such noteholder.
Satisfaction and Discharge of Indenture. An indenture will be discharged
with respect to the trust assets securing a series of notes upon the delivery to
the indenture trustee for cancellation of all such notes or, with some
limitations, upon deposit with such indenture trustee of funds sufficient for
the payment in full of all such notes.
The Indenture Trustee.
The indenture trustee may resign at any time, in which event the servicer
will appoint a successor trustee. The servicer may also remove any such
indenture trustee if such indenture trustee ceases to be eligible to continue as
such under the indenture or if such indenture trustee becomes insolvent. In such
circumstances, the servicer will appoint a successor trustee for the notes. Any
resignation or removal of the indenture trustee and appointment of a successor
trustee does not become effective until acceptance of the appointment by the
successor trustee.
DESCRIPTION OF THE CERTIFICATES
GENERAL
With respect to each trust that issues certificates, one or more classes of
certificates of the related series will be issued pursuant to the terms of a
pooling and servicing agreement or trust agreement, the forms of which have been
filed as exhibits to the registration statement of which this prospectus forms a
part. We have filed a form of the pooling and servicing agreement and trust
agreement as exhibits to the registration statement related to this prospectus.
This summary does not purport to be complete.
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DISTRIBUTIONS OF PRINCIPAL AND INTEREST
The timing and priority of distributions, seniority, allocations of losses,
interest rate and amount of or method of determining distributions with respect
to principal and interest of each class of certificates will be described in the
related prospectus supplement. Distributions of interest on the certificates
will be made on the dates specified in the related prospectus supplement and
will be made prior to distributions with respect to principal of the
certificates. To the extent provided in the related prospectus supplement, a
series may include one or more classes of strip certificates entitled to:
o distributions in respect of principal with disproportionate, nominal or
no interest distributions, or
o interest distributions with disproportionate, nominal or no
distributions in respect of principal.
Each class of certificates may have a different interest rate, which may be
a fixed, variable or adjustable interest rates (and which may be zero for some
classes of certificates) or any combination of the foregoing. The related
prospectus supplement will specify the interest rate for each class of
certificates of a series or the method for determining the interest rate. Unless
otherwise provided in the related prospectus supplement, distributions in
respect of the certificates of a series that includes notes may be subordinate
to payments in respect of the notes as more fully described in the related
prospectus supplement. Distributions in respect of interest on and principal of
any class of certificates will be made on a pro rata basis among all the
certificateholders of such class.
In the case of a series of certificates which includes two or more classes
of certificates, the timing, sequential order, priority of payment or amount of
distributions in respect of interest and principal, and any schedule or formula
or other provisions applicable to the determination of the order, priority of
payment or amount of each class shall be as set forth in the related prospectus
supplement. A series with certificates may provide for a revolving period,
during which collections of principal on the receivables are not applied to
distributions on the related securities, or may provide for a liquidity facility
or similar arrangement that permits one or more classes of the related
securities to be paid in planned amounts on scheduled distribution dates. The
aggregate initial principal amount of the certificates and the notes, if any, of
a series may, after giving effect to the purchase of all additional receivables,
if any, for a series be greater or less than the aggregate initial principal
balance of the receivables in that series.
SOME LEGAL ASPECTS OF THE RECEIVABLES
GENERAL
The transfer of receivables by World Omni Financial Corp. to the seller,
and by the seller to the trust, the perfection of the security interests in the
receivables and the enforcement of rights to realize on the financed vehicles as
collateral for the receivables are subject to a number of federal and state
laws, including the Uniform Commercial Code as in effect in various states.
INTERESTS IN THE RECEIVABLES
The trustee will appoint the servicer as custodian of the receivables and
all related documents. The servicer will not physically segregate the
receivables from the servicer's other receivables or other receivables that the
servicer services for others to reflect the sale to the trust. However, Uniform
Commercial Code financing statements reflecting the sale and assignment of the
receivables by World Omni Financial Corp. to the seller and by the seller to the
trust will be filed, and the respective accounting records and computer files of
World Omni Financial Corp. and the seller will reflect the sale and assignment.
The receivables will remain in the possession of the servicer and will not be
stamped or otherwise marked to reflect the assignment to the trustee. If,
through inadvertence or fraud, a third party purchases (including the taking of
a security interest in) a receivable for new value in the ordinary
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course of its business, without actual knowledge of the trust's interest, and
take possession of a receivable, this purchaser would acquire an interest in the
receivable superior to the interest of the trust.
The seller will take no action to perfect the rights of the trustee in
proceeds of any insurance policies covering individual financed vehicles or
obligors. Therefore, the rights of a third party with an interest in the
proceeds could prevail against the rights of the trust prior to the time the
proceeds are deposited by the servicer into a Trust Account.
SECURITY INTERESTS IN THE FINANCED VEHICLES
General.
In states in which retail installment sale contracts evidence the credit
sale of financed vehicles by dealers to obligors, the contracts also constitute
personal property security agreements and include grants of security interests
in the vehicles under the applicable Uniform Commercial Code. Perfection of
security interests in the financed vehicles is generally governed by the motor
vehicle registration laws of the state in which the vehicle is located. In all
states in which the receivables have been originated, a security interest in
financed vehicles is perfected by obtaining the certificate of title to the
financed vehicle or notation of the secured party's lien on the vehicles'
certificate of title.
Unless the related prospectus supplement specifies otherwise, each
receivable will name World Omni Financial Corp. as obligee or assignee and as
the secured party. World Omni Financial Corp. also takes all actions necessary
under the laws of the state in which the financed vehicle is located to perfect
World Omni Financial Corp.'s security interest in the financed vehicle,
including, where applicable, having a notation of its lien recorded on the
vehicle's certificate of title. The obligors on the receivables will not be
notified of the sale from World Omni Financial Corp. to the seller, or the sale
from the seller to the trust, and no action will be taken to record the transfer
of the security interest from World Omni Financial Corp., directly or
indirectly, to the seller or from the seller to the trust by amendment of the
certificates of title for the financed vehicles or otherwise.
Perfection.
World Omni Financial Corp. will transfer and assign its security interest
in the related financed vehicles to the seller, and the seller will transfer and
assign its security interest in the financed vehicles to the related trust.
However, because of the administrative burden and expense, neither World Omni
Financial Corp. nor the seller will amend the certificates of title of the
financed vehicles to identify the related trust as the new secured party.
In most states, these assignments are an effective conveyance of a security
interest without amendment of any lien noted on a vehicle's certificate of
title, and the assignee succeeds to the assignor's rights as secured party.
However, by not identifying the trust as the secured party on the certificate of
title, the security interest of the trust in the vehicle could be defeated
through fraud or negligence.
Continuation of Perfection.
Under the laws of most states, the perfected security interest in a vehicle
continues for four months after the vehicle is moved to a state other than the
state in which it is initially registered and thereafter until the owner
re-registers the vehicle in the new state. A majority of states generally
require surrender of a certificate of title to re-register a vehicle.
Accordingly, a secured party must surrender possession if it holds the
certificate of title to the vehicle. In the case of a vehicle registered in a
state providing for the notation of a lien on the certificate of title but not
possession by the secured party, the secured party will receive notice of
surrender if the security interest is noted on the certificate of title. Thus,
the
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secured party will have the opportunity to re-perfect its security interest in
the vehicle in the state of relocation. In states that do not require a
certificate of title for registration of a motor vehicle, re-registration could
defeat perfection. Under each sale and servicing agreement or pooling and
servicing agreement, the servicer will be obligated to take appropriate steps,
at the servicer's expense, to maintain perfection of security interests in the
financed vehicles and will be obligated to purchase the related receivable if it
fails to do so.
Priority of Certain Liens Arising by Operation of Law.
Under the laws of most states, liens for repairs performed on a motor
vehicle and liens for unpaid taxes take priority over even a perfected security
interest in a financed vehicle. Federal tax liens may have priority over the
lien of a secured party. The laws of some states and federal law permit the
confiscation of vehicles by government authorities under some circumstances if
used in unlawful activities, which may result in the loss of a secured party's
perfected security interest in the confiscated vehicle.
REPOSSESSION
In the event of default by vehicle purchasers, the holder of the motor
vehicle retail installment sale contract has all the remedies of a secured party
under the Uniform Commercial Code, except where specifically limited by other
state laws. Among the Uniform Commercial Code remedies, the secured party has
the right to perform self-help repossession unless the act would constitute a
breach of the peace. Unless the financed vehicle is voluntarily surrendered
self-help is the most likely method to be used by the servicer and is
accomplished by retaking possession of the financed vehicle. Some jurisdictions
require that the obligor be notified of the default and be given a time period
within which he may cure the default prior to repossession. Generally, the right
of reinstatement may be exercised on a limited number of occasions in any
one-year period. In cases where the obligor objects or raises a defense to
repossession, or applicable state law requires a court order from the
appropriate state court to repossess the financed vehicle in accordance with
that order.
NOTICE OF SALE; REDEMPTION RIGHTS
The Uniform Commercial Code and other state laws require the secured party
to provide the obligor with reasonable notice of the date, time and place of any
public sale and/or the date after which any private sale of the collateral may
be held. The obligor has the right to redeem the collateral prior to actual sale
by paying the secured party the unpaid principal balance of the obligation plus
reasonable expenses for repossessing, holding and preparing the collateral for
disposition and arranging for its sale, plus, in some jurisdictions, reasonable
attorneys' fees. In some states the obligor must pay any delinquent installments
or the unpaid balance.
DEFICIENCY JUDGMENTS AND EXCESS PROCEEDS
The proceeds of resale of the vehicles generally will be applied first to
the expenses of resale and repossession and then to the satisfaction of the
indebtedness. Some states impose prohibitions or limitations on deficiency
judgments if the net proceeds from resale do not cover the full amount of the
indebtedness. Other states do not prohibit or limit deficiency judgments.
However, a deficiency judgment is a personal judgment against the obligor for
the shortfall, and a defaulting obligor likely has little capital or sources of
income available following repossession. Therefore, in many cases, deficiency
judgments will provide little or no recoveries.
Courts have applied general equitable principles to secured parties
pursuing repossession and litigation involving deficiency balances. These
equitable principles may have the effect of relieving an obligor from some or
all of the legal consequences of a default.
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Occasionally, after resale of a vehicle and payment of all expenses and all
indebtedness, a surplus of funds exist. In that case, the Uniform Commercial
Code requires the creditor to remit the surplus to any other lienholder, with
respect to the vehicle. If they do not exist or there are remaining funds, the
Uniform Commercial Code requires the creditor to remit the surplus to the former
owner of the vehicle.
CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws and related regulations
impose substantial requirements upon lenders and servicers involved in consumer
finance. The application of these laws to particular circumstances is often
unclear and some courts and regulatory authorities have adopted new
interpretations of these often unclear laws. These laws include the
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Federal Trade
Commission Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the
Fair Debt Collection Procedures Act, the Magnuson-Moss Warranty Act, the Federal
Reserve Board's Regulations B and Z, the Solders' and Sailors' Civil Relief Act
of 1940, state adoptions of the National Consumer Act and the Uniform Consumer
Credit Code, and state motor vehicle retail installment sales act, retail
installment sales acts and other similar laws. Also, state laws impose finance
charge ceilings and other restrictions on consumer transactions and require
contract disclosures in addition to those required under federal law. These
requirements impose specific statutory liabilities upon creditors who fail to
comply with their provisions. In some cases, this liability could affect an
assignee's ability to enforce consumer finance contracts or result in the
imposition of penalties in excess of amounts owing on the receivables. If the
trust were obligated to pay any damages, its assets would be directly reduced,
resulting in a potential loss to the securityholders.
Under the laws of some states, finance charges with respect to motor
vehicle retail installment contracts may include the additional amount, if any,
that a purchaser pays as part of the purchase price for a vehicle solely because
the purchaser is buying on credit rather than for cash (a cash sale
differential). If a dealer charges a differential, applicable finance charge
ceilings could be exceeded.
The "holder-in-due-course" rule of the Federal Trade Commission (the "FTC
RULE"), subjects an assignee of a seller of goods in a consumer credit
transaction (and some related creditors) to all claims and defenses that the
obligor in the transaction could assert against the seller of the goods. Other
state laws may duplicate the effect of the FTC Rule. The FTC Rule limits
liability to the amounts paid by the obligor under the contract. The holder of
the contract may also be unable to collect any balance remaining due from the
obligor.
The FTC Rule applies to most of the receivables. Accordingly, the purchaser
for the applicable financed vehicle may assert claims or defenses against the
related trust as holder of the related receivables that the purchaser may assert
against the seller of the financed vehicle. The maximum liability under these
claims equals the amounts paid by the obligor on the receivable. If an obligor
were successful in asserting any claim or defense, the claim or defense would
constitute a breach of World Omni Financial Corp.'s warranties under the related
purchase agreement and would create an obligation of World Omni Financial Corp.
to repurchase the receivable unless the breach is cured. We refer you to
"Description of the Trust Documents--Sale and Assignment of Receivables."
In several cases, consumers have asserted that the self-help remedies of
secured parties under the Uniform Commercial Code and related laws violate the
due process protections provided under the 14th Amendment to the Constitution of
the United States. Courts have generally upheld the notice provisions of the
Uniform Commercial Code and related laws as reasonable or have found that the
repossession and resale by the creditor do not involve sufficient state action
to afford constitutional protection to borrowers.
Most state vehicle dealer licensing laws require sellers of vehicles to
have a license to sell vehicles at retail sale. In addition, with respect to
used vehicles, the Federal Trade Commission requires that all
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sellers of used vehicles prepare, complete and display a "buyer's guide" which
explains the warranty coverage for the vehicles. Furthermore, federal odometer
regulations promulgated under the Motor Vehicle Information and Cost Savings Act
and the motor vehicle title laws of most states require that all sellers of used
vehicles furnish a written statement signed by the seller certifying the
accuracy of the odometer reading. The obligor may be able to assert a defense
against the seller of the financed vehicle if a seller is not properly licensed
a seller failed to provide a buyer's guide or odometer disclosure statement to
the purchaser of a financed vehicle. If an obligor on a receivable were
successful in asserting any claim or defense, the servicer could pursue on
behalf of the related trust any reasonable remedies against the seller or the
manufacturer of the vehicle.
Under each purchase agreement, World Omni Financial Corp. will have
represented and warranted that each receivable complies with all requirements of
law in all material respects. Accordingly, if an obligor has a claim against a
trust for violation of any law and the claim materially and adversely affects
the trust's interest in a receivable, the violation would constitute a breach of
the warranties of World Omni Financial Corp. and would create an obligation of
World Omni Financial Corp. to repurchase the receivable unless the breach is
cured.
OTHER LIMITATIONS
In addition to the laws limiting or prohibiting deficiency judgments,
numerous other statutory provisions, including federal bankruptcy laws and
related state laws, may interfere with or affect the ability of a secured party
to realize upon collateral or to enforce a deficiency judgment. For example, in
a Chapter 13 proceeding under the federal bankruptcy law, a court may prevent a
creditor from repossessing a vehicle and, as part of the rehabilitation plan,
may reduce the amount of the secured indebtedness to the market value of the
vehicle at the time of bankruptcy (as determined by the court), leaving the
creditor as a general unsecured creditor for the remainder of the indebtedness.
A bankruptcy court may also reduce the monthly payments due under a contract or
change the rate of interest and time of repayment of the indebtedness. In
addition, the Soldiers' and Sailors' Civil Relief Act of 1940, as amended and
similar state legislation may limit the interest payable on a receivable during
and obligor's active duty in the military. We refer you to "Risk
Factors--Consumer Protection Laws May Adversely Affect the Receivables" in this
prospectus.
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FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material federal income tax consequences
of the purchase, ownership and disposition of the securities. However, the
summary does not purport to deal with federal income tax consequences applicable
to all categories of holders, some of which may be subject to special rules. For
example, it does not discuss the tax treatment of noteholders or
certificateholders that are insurance companies, regulated investment companies
or dealers in securities. This discussion is directed to prospective purchasers
who purchase securities in the initial distribution and who hold the securities
as "capital assets" within the meaning of Section 1221 of the Internal Revenue
Code of 1986, as amended (the "CODE"). Prospective investors are urged to
consult their own tax advisors in determining the federal, state, local, foreign
and any other tax consequences to them of the purchase, ownership and
disposition of the securities.
The following summary is based upon current provisions of the Code, the
Treasury regulations promulgated, judicial authority, and ruling authority, all
of which are subject to change, which change may be retroactive. Each trust will
be provided with an opinion of Cadwalader, Wickersham & Taft, special federal
tax counsel to the trust, regarding some federal income tax matters discussed
below. An opinion of federal tax counsel, however, is not binding on the IRS or
the courts. Moreover, there are no cases or IRS rulings on similar transactions
involving both debt and equity interests issued by a trust with terms similar to
those of the securities. As a result, the IRS may disagree with all or a part of
the discussion below. No ruling on any of the issues discussed below will be
sought from the IRS. For purposes of the following summary, references to the
trust, the securities and related terms, parties and documents shall be deemed
to refer, unless otherwise specified, to each trust and the securities and
related terms, parties and documents applicable to the trust.
The federal income tax consequences to certificateholders will vary
depending on whether the trust is treated as a partnership under the Code and
applicable Treasury regulations or whether the trust will be treated as a
grantor trust. The prospectus supplement for each series of certificates will
specify whether the trust will be treated as a partnership or as a grantor
trust.
FASITS
Section 860H through 860L of the Code provide for the creation of entity
for federal income tax purposes, referred to as a "financial asset
securitization investment trust" ("FASIT"). These provisions were effective as
of September 1, 1997 and Treasury regulations were proposed on February 4, 2000,
but many technical issues concerning FASITs remain. To qualify as a FASIT, an
entity must meet certain requirements under Section 860L of the Code and must
elect such treatment. The applicable sale and servicing agreement or pooling and
servicing agreement and indenture, if applicable, may provide for a FASIT
election with respect to the trust, or be amended in accordance with the
provisions thereof to provide that the seller and trustee will cause a FASIT
election to be made for the trust if the seller delivers to the trustee or the
indenture trustee and, if applicable, the insurer, an opinion of counsel to the
effect that, for federal income tax purposes, (1) the deemed issuance of FASIT
regular interests (occurring in connection with such election) will not
adversely affect the federal income tax treatment of the securities, (2)
following such election such trust will not be deemed to be an association (or
publicly traded partnership) taxable as a corporation and (3) such election will
not cause or constitute an event in which gain or loss would be recognized by
any securityholder or the trust.
TRUSTS TREATED AS PARTNERSHIPS
Tax Characterization of the Trust as a Partnership.
A trust which is not treated as a grantor trust and which does not
affirmatively elect to be treated as a corporation will be treated as a
partnership under applicable Treasury regulations as long as there are two or
more beneficial owners and will be ignored as a separate entity where there is a
single beneficial
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owner of all equity classes of the related series (including any class of notes
treated as equity for federal income tax purposes). Federal tax counsel will
deliver its opinion that a trust will not be an association (or publicity traded
partnership) taxable as a corporation for federal income tax purposes. This
opinion will be based on the assumption that the terms of the sale and servicing
agreement or pooling and servicing agreement and indenture and related documents
will be complied with, including the making of no affirmative election to be
treated as a corporation. Such counsel's opinion will also conclude that the
nature of the income of the trust will exempt it from the rule that certain
publicly traded partnerships are taxable as corporations.
If the trust were taxable as a corporation for federal income tax purposes,
the trust would be subject to corporate income tax on its taxable income. The
trust's taxable income would include all its income on the receivables, possibly
reduced by its interest expense on the notes. Any corporate income tax could
materially reduce cash available to make payments on the notes and distributions
on the securities, and certificateholders could be liable for any tax that is
unpaid by the trust.
TAX CONSEQUENCES TO HOLDERS OF THE NOTES
Treatment of the Notes as Indebtedness.
The seller will agree, and the noteholders will agree by their purchase of
notes, to treat the notes as debt for federal, state and local income and
franchise tax purposes. Prior to the sale of securities by the related trust,
federal tax counsel will deliver its opinion to the trust with respect to each
series of notes that either:
o the notes of the series will be characterized as debt for federal income
tax purposes; or
o the notes of the series should be characterized as debt for federal
income tax purposes, but if the notes are not characterized as debt, the
notes will be characterized as interests in a partnership.
Except as described below under the heading "--Possible Alternative Treatment of
the Notes" below, the discussion below assumes that the characterization of the
notes as debt for federal income tax purposes is correct.
OID.
The discussion below assumes that all payments on the notes are denominated
in U.S. dollars, and that the notes are not "interest only" or "principal only"
notes. To the extent we offer these notes, the related prospectus supplement
will describe the relevant federal income tax consequences. Moreover, the
discussion assumes that the interest formula for the notes meets the
requirements for "qualified stated interest" under Treasury regulations (the
"OID REGULATIONS") relating to debt instruments issued with original issue
discount ("OID"). Finally, the discussion assumes that any OID on the notes
(i.e., any excess of the principal amount of the notes over their issue price)
is de minimis (i.e., less than 1/4% of their principal amount multiplied by the
weighted average maturity of the notes), all within the meaning of the OID
Regulations. If these conditions are not satisfied with respect to any given
series of notes and as a result the notes are treated as issued with OID,
additional tax considerations with respect to the notes will be disclosed in the
applicable prospectus supplement.
Interest Income on the Notes.
Based on the above assumptions, except as discussed below, the notes will
not be considered issued with OID. The stated interest thereon generally will be
taxable to a noteholder as ordinary interest income when received or accrued in
accordance with the noteholder's method of tax accounting. Under the OID
Regulations, a holder of a note issued with a de minimis amount of OID generally
must include OID in income, on a pro rata basis, as principal payments are made
on the note. It is believed that any prepayment premium paid as a result of a
mandatory redemption will be taxable as ordinary income when it becomes fixed
and unconditionally payable. A purchaser who buys a note for more or less than
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its principal amount will generally be subject, respectively, to the premium
amortization or market discount rules of the Code.
A holder of a note that has a fixed maturity date of not more than one year
from the issue date of the note (a "SHORT-TERM NOTE") may be subject to special
rules. Under the OID Regulations, all stated interest will be treated as OID. An
accrual basis holder of a Short-Term Note (and some cash basis holders,
including regulated investment companies, as described in Section 1281 of the
Code) generally would be required to report interest income as OID accrues on a
straight-line basis over the term of each interest period. Other cash basis
holders of a Short-Term Note would, in general, be required to report interest
income as interest is paid (or, if earlier, upon the taxable disposition of the
Short-Term Note). However, a cash basis holder of a Short-Term Note reporting
interest income as it is paid may be required to defer a portion of any interest
expense otherwise deductible on indebtedness incurred to purchase or carry the
Short-Term Note until the taxable disposition of the Short-Term Note. A cash
basis taxpayer may elect under Section 1281 of the Code to accrue interest
income on all nongovernment debt obligations with a term of one year or less, in
which case the taxpayer would include OID on the Short-Term Note in income as it
accrues, but would not be subject to the interest expense deferral rule referred
to in the preceding sentence. Certain special rules apply if a Short-Term Note
is purchased for more or less than its principal amount.
Market Discount.
Whether or not the notes are issued with OID, a subsequent purchaser (i.e.,
a purchaser who acquires a note not at the time of original issue) of a note at
a discount will be subject to the "Market Discount Rules" of Sections 1276
through 1278 of the Code. In general, these rules provide that if the holder of
a note purchases the note at a market discount (i.e., a discount from its
original issue price plus any accrued OID that exceeds a de minimis amount
specified in the Code) and thereafter recognizes gain upon a disposition (or
receives a principal payment), the lesser of:
o the gain (or the principal payment); or
o the accrued market discount (not previously included in income) will be
taxed as ordinary income.
Generally, the accrued market discount for each interest accrual period will be
the total market discount (not previously included in income) on the note
multiplied by a fraction, the numerator of which is the interest (or OID, if the
note was issued with more than de minimis OID) for such period and the
denominator of which is the total interest (or OID) from the beginning of such
period to maturity date of the note. The holder may elect, however, to determine
accrued market discount under the constant yield method. The adjusted basis of a
note subject to the election will be increased to reflect market discount
included in gross income, thereby reducing any gain or increasing any loss on a
subsequent sale or taxable disposition. Holders should consult with their own
tax advisors as to the effect of making this election.
Limitations imposed by the Code, which are intended to match deductions
with the taxation of income, may defer deductions for interest on indebtedness
incurred or continued, or short-sale expenses incurred, to purchase or carry a
note with accrued market discount. A noteholder who elects to include market
discount in gross income as it accrues, however, is exempt from this rule.
Notwithstanding the above rules, market discount on a note will be
considered to be zero if it is less than a de minimis amount, which is 0.25% of
the remaining principal balance of the note multiplied by its expected weighted
average remaining life. If market discount is de minimis, the actual amount of
discount must be allocated to the remaining principal distributions on the note,
and when the distribution is received, capital gain will be recognized equal to
discount allocated to the distribution.
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Amortizable Bond Premium.
In general, if a subsequent purchaser acquires a note at a premium (i.e.,
an amount in excess of the amount payable upon the maturity of the note), the
noteholder will be considered to have purchased the note with "amortizable bond
premium" equal to the amount of the excess. A noteholder may elect to deduct the
amortizable bond premium as it accrues under a constant yield method over the
remaining term of the note. Accrued amortized bond premium may only be used as
an offset against qualified stated interest income when the income is included
in the holder's gross income under the holder's normal accounting method.
Election to Treat All Interest as Original Issue Discount.
A holder may elect to include in gross income all interest that accrues on
a note using constant yield method. For purposes of this election, interest
includes stated interest, OID, de minimis OID, market discount, de minimis
market discount and unstated interest, as adjusted by any amortizable bond
premium or acquisition premium. In applying the constant yield method to a note
with respect to which this election has been made, the issue price of the note
will equal the electing holder's adjusted basis in the note immediately after
its acquisition, the issue date of the note will be the date of its acquisition
by the electing holder, and no payments on the note will be treated as payments
of qualified stated interest. This election, if made, may not be revoked without
the consent of the IRS. Holders should consult with their own tax advisors as to
the effect of making this election in light of their individual circumstances.
Sale or Other Disposition.
If a noteholder sells a note, the holder will recognize gain or loss in an
amount equal to the difference between the amount realized on the sale and the
holder's adjusted tax basis in the note. The adjusted tax basis of a note to a
particular noteholder will equal the holder's cost for the note, increased by
any market discount, OID and gain previously included by the noteholder in
income with respect to the note and decreased by the amount of premium (if any)
previously amortized and by the amount of principal payments previously received
by the noteholder with respect to the note. Any gain or loss will be capital
gain or loss, except for gain representing accrued interest and accrued market
discount not previously included in income. Capital losses generally may be used
by a corporate taxpayer only to offset capital gains, and by an individual
taxpayer only to the extent of capital gains plus $3,000 of other income.
Capital gains realized by individual taxpayers from the sale or exchange of
capital assets held for more than one year are subject to preferential rates of
tax.
Non-U.S. Holders.
Interest paid (or accrued) to a noteholder who is other than a U.S. person
as defined in the Code and Treasury Regulations (a "non-U.S. person") generally
will be considered "portfolio interest," and generally will not be subject to
United States federal income tax and withholding tax, if the interest is not
effectively connected with the conduct of a trade or business within the United
States by the non-U.S. person and the non-U.S. person:
o is not actually or constructively a "10 percent shareholder" of the trust
or the seller (including a holder of 10% of the outstanding certificates)
or a "controlled foreign corporation" with respect to which the trust or
the seller is a "related person" within the meaning of the Code; and
o provides the trustee or other person who is otherwise required to
withhold U.S. tax with respect to the notes with an appropriate statement
(on Form W-8 or a similar form), signed under penalties of perjury,
certifying that the beneficial owner of the note is a foreign person and
providing the foreign person's name and address.
If the information provided in this statement changes, the non-U.S. person must
inform the trust within 30 days of the change. If a note is held through a
securities clearing organization or some other financial
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institutions, the organization or institution may provide the relevant signed
statement to the withholding agent; in that case, however, the signed statement
must be accompanied by a Form W-8 or substitute form provided by the non-U.S.
person that owns the note. If the interest is not portfolio interest, then it
will be subject to United States federal income and withholding tax at a rate of
30%, unless reduced or eliminated pursuant to an applicable tax treaty.
Any capital gain realized on the sale, redemption, retirement or other
taxable disposition of a note by a non-U.S. person will be exempt from United
States federal income and withholding tax; provided that:
o the gain is not effectively connected with the conduct of a trade or
business in the United States by the non-U.S. person; and
o in the case of an individual non-U.S. person, the non-U.S. person is not
present in the United States for 183 days or more in the taxable year.
For these purposes "U.S. person" means a citizen or resident of the United
States for U.S. federal income tax purposes, a corporation or partnership
(except to the extent provided in applicable Treasury regulations) created or
organized in or under the laws of the United States, any state or the District
of Columbia, including an entity treated as a corporation or partnership for
U.S. federal income tax purposes, an estate the income of which is subject to
U.S. federal income taxation regardless of its source, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of such trust, and one or more such U.S. persons have the
authority to control all substantial decisions of such trust (or, to the extent
provided in applicable Treasury regulations, certain trusts in existence on
August 20, 1996, which are eligible to elect to be treated as U.S. persons.
Final regulations dealing with withholding tax on income paid to non-U.S.
persons and related matters (the "NEW WITHHOLDING REGULATIONS") were issued by
the Treasury Department on October 6, 1997. The new withholding regulations will
generally be effective for payments made after December 31, 2000, subject to
some transition rules. Prospective noteholders who are non-U.S. persons are
strongly urged to consult their own tax advisors with respect to the new
withholding regulations.
Backup Withholding.
Each holder of a note (other than an exempt holder such as a corporation,
tax-exempt organization, qualified pension and profit-sharing trust, individual
retirement account or nonresident alien who provides certification as to status
as a nonresident) will be required to provide, under penalties of perjury, a
certificate containing the holder's name, address, correct federal taxpayer
identification number and a statement that the holder is not subject to backup
withholding. Should a nonexempt noteholder fail to provide the required
certification, the trust will be required to withhold 31% of the amount
otherwise payable to the holder, and remit the withheld amount to the IRS as a
credit against the holder's federal income tax liability.
Possible Alternative Treatment of the Notes.
In the opinion of federal tax counsel, in the event that any series of
notes were not treated as debt for federal income tax purposes, the series of
notes would be characterized for federal income tax purposes as interests in a
partnership. If any series of the notes did constitute interests in a
partnership, it is expected that stated interest payments on the notes would be
treated either as guaranteed payments under section 707(c) of the Code or as a
preferential allocation of net income of the trust (with all other items of
trust income, gain, loss, deduction and credit being allocated to the holders of
the securities). Although the federal income tax treatment of the notes for most
accrual basis taxpayers should not differ materially under the characterization
from the treatment of the notes as debt, the characterization could result in
adverse effects for some holders of notes. For example, holders of notes treated
as interests in a partnership could be subject to tax on income equal to the
entire amount of the stated interest payments
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on the notes (plus possibly some other items) even though the trust might not
have sufficient cash to make current cash distributions of the amount. Thus,
cash basis holders would in effect be required to report income in respect of
the notes on the accrual basis and holders of the notes could become liable for
taxes on trust income even if they have not received cash from the trust to pay
the taxes. Moreover, income allocable to a holder of a note treated as a
partnership interest that is a pension, profit-sharing or employee benefit plan
or other tax-exempt entity (including an individual retirement account) could
constitute "unrelated debt-financed income" generally taxable to a holder under
the Code. In addition, foreign persons holding the notes could be subject to
withholding or required to file a U.S. federal income tax return and to pay U.S.
federal income tax (and, in the case of a corporation, branch profits tax) on
their share of accruals of guaranteed payments and trust income, and individuals
holding the notes might be subject to some limitations on their ability to
deduct their share of trust expenses.
TAX CONSEQUENCES TO HOLDERS OF THE CERTIFICATES
Treatment of the Trust as a Partnership.
The seller and the servicer will agree, and the certificateholders will
agree by their purchase of certificates, to treat the trust as a partnership for
purposes of federal and state income tax, franchise tax and any other tax
measured in whole or in part by income, with the assets of the partnership being
the assets held by the trust, the partners of the partnership being the
certificateholders (including the seller in its capacity as recipient of
distributions from the Spread Account and any other account specified in the
related prospectus supplement in which the seller has an interest), and the
notes being debt of the partnership. However, the proper characterization of the
arrangement involving the trust, the certificates, the notes, the seller and the
servicer is not clear because there is no authority on transactions closely
comparable to those contemplated herein.
A variety of alternative characterizations are possible. For example,
because the certificates may have some features characteristic of debt, the
certificates might be considered debt of the seller or the trust. Any
characterization should not result in materially adverse tax consequences to
certificateholders as compared to the consequences from treatment of the
certificates as equity in a partnership, described below. The following
discussion assumes that the certificates represent equity interests in a
partnership.
The following discussion assumes that all payments on the certificates are
denominated in U.S. dollars, none of the certificates are strip securities and a
series of certificates includes a single class of certificates. If these
conditions are not satisfied with respect to any given series of certificates,
additional tax considerations with respect to the certificates will be disclosed
in the applicable prospectus supplement.
Partnership Taxation.
As a partnership, the trust will not be subject to federal income tax.
Rather, each certificateholder will be required to separately take into account
the holder's accruals of guaranteed payments (if any) from the trust and its
allocated share of other income, gains, losses, deductions and credits of the
trust. The trust's income will consist primarily of interest and finance charges
earned on the receivables (including appropriate adjustments for market
discount, OID and premium) and any gain upon collection or disposition of
receivables. The trust's deductions will consist primarily of interest accruing
with respect to the notes, guaranteed payments (if any) on the certificates,
servicing and other fees, and losses or deductions upon collection or
disposition of receivables.
Under the trust agreement, stated interest payments on the certificates
(including interest on amounts previously due on the certificates but not yet
distributed) will be treated as allocations of net interest income (that is,
interest income on the receivables less interest deductions on the notes) and,
to the extent distributions of the stated interest exceed the net interest
income, as "guaranteed payments" under Section 707(c) of the Code. Guaranteed
payments are payments to partners for the use of their
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capital and, in the present circumstances, are treated as deductible to the
trust and ordinary income to the certificateholders. The trust will have a
calendar year tax year and will deduct the guaranteed payments under the accrual
method of accounting. Certificateholders with a calendar year tax year are
required to include the accruals of net interest income and guaranteed payments
in income in their taxable year that corresponds to the year in which the net
income accrues or the trust deducts the guaranteed payments, and
certificateholders with a different taxable year are required to include the
amounts in income in their taxable year that includes the December 31 of the
trust year in which the net income accrues or the trust deducts the guaranteed
payments. It is possible that guaranteed payments will not be treated as
interest for all purposes of the Code.
In addition, the trust agreement will provide, in general, that the
certificateholders will be allocated taxable income of the trust for each
collection period equal to the sum of:
o any trust income attributable to discount on the receivables that
corresponds to any excess of the principal amount of the securities over
their initial issue price;
o prepayment premium, if any, payable to the certificateholders for the
month; and
o any other amounts of income payable to the certificateholders for the
month.
The allocation will be reduced by any amortization by the trust of premium on
receivables that corresponds to any excess of the issue price of securities over
their principal amount. All remaining items of income, gain, loss and deduction
of the trust will be allocated to the seller.
Based on the economic arrangement of the parties, this approach for
allocating trust income and accruing guaranteed payments should be permissible
under applicable Treasury regulations, although no assurance can be given that
the IRS would not require a greater amount of income to be allocated to
certificateholders. Moreover, even under the foregoing method of allocation,
certificateholders may be subject to tax on income equal to the entire amount of
stated interest payments on the certificates plus the other items described
above even though the trust might not have sufficient cash to make current cash
distributions of the amount. Thus, cash basis holders will in effect be required
to report income from the certificates on the accrual basis and
certificateholders may become liable for taxes on trust income even if they have
not received cash from the trust to pay the taxes. In addition, because tax
allocations and tax reporting will be done on a uniform basis for all
certificateholders but certificateholders may be purchasing securities at
different times and at different prices, certificateholders may be required to
report on their tax returns taxable income that is greater or less than the
amount reported to them by the trust.
Most of the taxable income and guaranteed payments allocated to a
certificateholder that is a pension, profit-sharing or employee benefit plan or
other tax-exempt entity (including an individual retirement account) will
constitute "unrelated debt-financed income" generally taxable to a holder under
the Code.
An individual taxpayer's share of expenses of the trust (including fees to
the servicer but not interest expense) would be miscellaneous itemized
deductions. The deductions might be disallowed to the individual in whole or in
part and might result in the holder being taxed on an amount of income that
exceeds the amount of cash actually distributed to the holder over the life of
the trust. It is not clear whether these rules would be applicable to a
certificateholder to the extent it received guaranteed payments.
The trust intends to make all tax calculations relating to income and
allocations to certificateholders on an aggregate basis. If the IRS were to
require that the calculations be made separately for each receivable, the trust
might be required to incur additional expense but it is believed that there
would not be a material adverse effect on certificateholders.
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Discount and Premium.
The purchase price paid by the trust for the receivables may be greater or
less than the remaining principal balance of the receivables at the time of
purchase. If so, the receivables will have been acquired at a premium or
discount, as the case may be. (As indicated above, the trust will make this
calculation on an aggregate basis, but might be required to recompute it on a
receivable-by-receivable basis.)
If the trust acquires the receivables at a market discount or premium, the
trust will elect to include any discount in income currently as it accrues over
the life of the receivables or to offset any premium against interest income on
the receivables. As indicated above, a portion of the market discount income or
premium deduction may be allocated to certificateholders.
Disposition of Certificates.
Generally, capital gain or loss will be recognized on a sale of
certificates in an amount equal to the difference between the amount realized
and the seller's tax basis in the certificates sold. A certificateholder's tax
basis in a certificate will generally equal the holder's cost increased by the
holder's share of trust income and accruals of guaranteed payments (includible
in income) and decreased by any distributions received with respect to the
certificate. In addition, both the tax basis in the certificates and the amount
realized on a sale of a certificate would include the holder's share of the
notes and other liabilities of the trust. A holder acquiring certificates at
different prices may be required to maintain a single aggregate adjusted tax
basis in the certificates, and, upon sale or other disposition of some of the
certificates, allocate a pro rata portion of the aggregate tax basis to the
certificates sold (rather than maintaining a separate tax basis in each
certificate for purposes of computing gain or loss on a sale of that
certificate).
Any gain on the sale of a certificate attributable to the holder's share of
unrecognized accrued market discount on the receivables would generally be
treated as ordinary income to the holder and would give rise to special tax
reporting requirements. The trust does not expect to have any other assets that
would give rise to the special reporting requirements. Thus, to avoid those
special reporting requirements, the trust will elect to include market discount
in income as it accrues.
If a certificateholder is required to recognize an aggregate amount of
income (not including income attributable to disallowed itemized deductions
described above) over the life of the certificates that exceeds the aggregate
cash distributions with respect thereto, the excess will generally give rise to
a capital loss upon the retirement of the certificates.
Allocations Between Transferors and Transferees.
In general, the trust's taxable income and losses will be determined
monthly and the tax items and accruals of guaranteed payments, if any, for a
particular calendar month will be apportioned among the certificateholders in
proportion to the principal amount of certificates owned by them as of the close
of the last day of the month. As a result, a holder purchasing certificates may
be allocated tax items and any accruals of guaranteed payments (which will
affect its tax liability and tax basis) attributable to periods before the
actual transaction.
The use of a monthly convention may not be permitted by existing
regulations. If a monthly convention is not allowed (or only applies to
transfers of less than all of the partner's interest), taxable income or losses
and accruals of guaranteed payments of the trust might be reallocated among the
certificateholders. The trust's method of allocation between transferors and
transferees may be required to conform to a method permitted by future
regulations.
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Section 754 Election.
In the event that a certificateholder sells its certificates at a profit
(loss), the purchasing certificateholder will have a higher (lower) basis in the
certificates than the selling certificateholder had. The tax basis of the
trust's assets will not be adjusted to reflect that higher (or lower) basis
unless the trust were to file an election under Section 754 of the Code. In
order to avoid the administrative complexities that would be involved in keeping
accurate accounting records, as well as potentially onerous information
reporting requirements, the trust will not make the election. As a result,
certificateholders might be allocated a greater or lesser amount of trust income
than would be appropriate based on their own purchase price for certificates.
Administrative Matters.
The trustee is required to keep or have kept complete and accurate books of
the trust. The books will be maintained for financial reporting and tax purposes
on an accrual basis and the fiscal year of the trust will be the calendar year.
The trustee will file a partnership information return (IRS Form 1065) with the
IRS for each taxable year of the trust issuing certificates and will report each
certificateholder's allocable share of items of trust income and expense and
accruals of guaranteed payments to holders and the IRS on Schedule K-1. The
trust will provide the Schedule K-1 information to nominees that fail to provide
the trust with the information statement described below and the nominees will
be required to forward the information to the beneficial owners of the
certificates. Generally, holders must file tax returns that are consistent with
the information return filed by the trust or be subject to penalties unless the
holder notifies the IRS of all the inconsistencies.
Under Section 6031 of the Code, any person that holds certificates as a
nominee at any time during a calendar year is required to furnish the trust with
a statement containing some information on the nominee, the beneficial owners
and the certificates so held. The information includes (i) the name, address and
taxpayer identification number of the nominee and (ii) as to each beneficial
owner (x) the name, address and taxpayer identification number of the person,
(y) whether the person is a United States person, a tax-exempt entity or a
foreign government, an international organization, or any wholly-owned agency or
instrumentality of either of the foregoing and (z) some information on
certificates that were held, bought or sold on behalf of the person throughout
the year. In addition, brokers and financial institutions that hold certificates
through a nominee are required to furnish directly to the trust information as
to themselves and their ownership of certificates. A clearing agency registered
under Section 17A of the Exchange Act is not required to furnish any information
statement to the trust. The information referred to above for any calendar year
must be furnished to the trust on or before the following January 31. Nominees,
brokers and financial institutions that fail to provide the trust with the
information described above may be subject to penalties.
The seller will be designated as the tax matters partner in the trust
agreement and will be responsible for representing the certificateholders in any
dispute with the IRS. The Code provides for administrative examination of a
partnership as if the partnership were a separate and distinct taxpayer.
Generally, the statute of limitations for partnership items does not expire
before three years after the date on which the partnership information return is
filed. Any adverse determination following an audit of the return of the trust
by the appropriate taxing authorities could result in an adjustment of the
returns of the certificateholders, and, under some circumstances, a
certificateholder may be precluded from separately litigating a proposed
adjustment to the items of the trust. An adjustment could also result in an
audit of a certificateholder's returns and adjustments of items not related to
the income and losses of the trust.
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Tax Consequences to Non-U.S. Certificateholders.
It appears under recent amendments to the Code that the trust would not be
considered to be engaged in the conduct of a trade or business in the United
States for purposes of federal withholding taxes with respect to non-U.S.
persons, and, although there is no clear authority dealing with that issue under
facts substantially similar to those described here, the trust intends to take
the position that it is not engaged in the conduct of a trade or business in the
United States. Non-U.S. persons that are partners in a partnership that is not
engaged in the conduct of a trade or business in the United States are subject
to U.S. withholding tax at a rate of 30 percent assessed on a gross basis on
certain items of fixed or determinable annual or periodical gains, profits and
income earned by the partnership from U.S. sources that are allocable to the
non-U.S. partners. To the extent that any income earned by a partnership is
allocable to partners that are non-U.S. persons, the partnership is obligated to
withhold the gross basis tax, unless the tax is eliminated by an income tax
treaty to which the United States is a signatory or another exemption applies.
It is not expected that interest earned by the trust would qualify as "portfolio
interest" that is not subject to U.S. withholding tax to the extent allocable to
a certificateholder that is a non-U.S. person. Assuming then that the trust is
not considered to be engaged in the conduct of a trade or business in the United
States, the trust would be required to withhold U.S. tax on interest earned by
the trust on the receivables that is allocable to certificateholders that are
non-U.S. persons, unless the tax is eliminated by an income tax treaty. Non-U.S.
persons holding certificates will therefore be required to provide to the
trustee an IRS Form 1001 or successor form establishing the non-U.S.
certificateholder's entitlement to benefits under an income tax treaty that
eliminates U.S. withholding tax on payments of interest from U.S. sources.
Subsequent adoption of Treasury regulations or the issuance of other
administrative pronouncements may require the trust to change its withholding
procedures.
Backup Withholding.
Distributions made on the certificates and proceeds from the sale of the
certificates will be subject to a "backup" withholding tax of 31% if, in
general, the certificateholder fails to comply with certain identification
procedures, unless the holder is an exempt recipient under applicable provisions
of the Code. We refer you to "Federal Income Tax Consequences to Holders of the
Notes--Backup Withholding."
TRUSTS TREATED AS GRANTOR TRUSTS
Tax Characterization of Grantor Trusts.
If specified in the related prospectus supplement, Cadwalader, Wickersham &
Taft will deliver its opinion that the trust will not be classified as an
association taxable as a corporation and that such trust will be classified as a
grantor trust under subpart E, Part I of subchapter J of the Code. In this case,
beneficial owners of grantor trust certificates will be treated for federal
income tax purposes as owners of a portion of the trust's assets as described
below. The certificates issued by a trust that is treated as a grantor trust are
referred to as grantor trust certificates.
Characterization of Certificates.
Each grantor trust certificateholder will be treated as the owner of a pro
rata undivided interest in the interest and principal portions of the trust
represented by the grantor trust certificates and will be considered the
equitable owner of a pro rata undivided interest in each of the receivables in
the trust. Any amounts received by a grantor trust certificateholder in lieu of
amounts due with respect to any receivable because of a default or delinquency
in payment will be treated for federal income tax purposes as having the same
character as the payments they replace.
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<PAGE>
Each grantor trust certificateholder will be required to report on its
federal income tax return in accordance with such grantor trust
certificateholder's method of accounting its pro rata share of the entire income
from the receivables in the trust represented by grantor trust certificates,
including interest, OID, if any, prepayment fees, assumption fees, any gain
recognized upon an assumption and late payment charges received by the servicer.
Under Code Section 162 or 212, each grantor trust certificateholder will be
entitled to deduct its pro rata share of servicing fees, prepayment fees,
assumption fees and late payment charges retained by the servicer, provided that
such amounts are reasonable compensation for services rendered to the trust.
Grantor trust certificateholders that are individuals, estates or trusts will be
entitled to deduct their share of expenses only to the extent such expenses plus
all other miscellaneous itemized deductions exceed two percent of their
respective adjusted gross incomes. A grantor trust certificateholder using the
cash method of accounting must take into account its pro rata share of income
and deductions as and when collected by or paid to the servicer. A grantor trust
certificateholder using an accrual method of accounting must take into account
its pro rata share of income and deductions as they become due or are paid to
the servicer, whichever is earlier. If the servicing fees paid to the servicer
are deemed to exceed reasonable servicing compensation, the amount of such
excess could be considered as an ownership interest retained by the servicer (or
any person to whom the servicer assigned for value all or a portion of the
servicing fees) in a portion of the interest payments on the receivables. The
receivables would then be subject to the "coupon stripping" rules of the Code
discussed below.
Stripped Bonds and Stripped Coupons.
Although the tax treatment of stripped bonds is not entirely clear, based
on recent guidance by the IRS, it appears that each purchaser of a grantor trust
certificate that bears non-pro rata portions of the principal and interest
payment on the receivables will be treated as the purchaser of a stripped bond
or stripped coupon, which generally should be treated as a single debt
instrument issued on the day it is purchased for purposes of calculating any
OID. Generally, under Treasury regulations issued under Section 1286 of the
Code, if the discount on a stripped bond is larger than a de minimis amount (as
calculated for purposes of the OID rules of the Code) such stripped bond will be
considered to have been issued with OID. For these purposes, OID is the excess
of the "stated redemption price at maturity" (generally, principal and any
interest which is not "qualified stated interest") of a debt instrument over its
issues-price. We refer you to "OID" below. Based on the preamble to the Section
1286 Treasury Regulations, federal tax counsel is of the opinion that, although
the matter is not entirely clear, the interest income on the certificates at the
sum of the pass-through rate and the portion of the servicing fee rate that does
not constitute excess servicing will be treated as "qualified stated interest"
within the meaning of the Section 1286 Treasury Regulations and such income will
be so treated in the trustee's tax information reporting. It is possible that
the treatment described in this paragraph will apply only to that portion of the
receivables in a particular trust as to which there is "excess servicing" and
that the remainder of such receivables will not be treated as stripped bonds,
but as undivided interests as described above. Unless indicated otherwise in the
applicable prospectus supplement, it is not anticipated that grantor trust
certificates which are stripped bonds will be issued with greater than de
minimis OID. Stripped coupons will have OID equal to the excess of all
anticipated payments thereon over their issue price, and that OID will not be de
minimis.
OID.
The rules of the Code relating to OID (currently Sections 1271 through 1273
and 1275) will be applicable to a grantor trust certificateholder that acquires
an undivided interest in a stripped bond or stripped coupon issued or acquired
with OID, and such person must include in gross income the sum of the "daily
portions," as defined below, of the OID on such stripped bond or stripped coupon
for each day on which it owns a certificate, including the date of purchase but
excluding the date of disposition.
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<PAGE>
Because payments on such stripped bonds and stripped coupons may be accelerated
by prepayments on the underlying obligations, OID will be determined as required
under Code Section 1272(a)(6). Pursuant to Code Section 1272 (a)(6), OID
accruals will be calculated based on a constant interest method and a prepayment
assumption indicated in such prospectus supplement. In the case of an original
grantor trust certificateholder, the daily portions of OID generally would be
determined as follows. A calculation will be made of the portion of OID that
accrues on the stripped bond or stripped coupon during each successive monthly
accrual period (or shorter period in respect of the date of original issue or
the final payment date). This will be done, in the case of each full monthly
accrual period, by adding (1) the present value of all remaining payments to be
received on the stripped bond or stripped coupon under the prepayment assumption
used in respect of the grantor trust certificates and (2) any payments (other
than qualified stated interest) received during such accrual period, and
subtracting from the total the "adjusted issue price" of the stripped bond or
stripped coupon at the beginning of such accrual period. No representation is
made that the grantor trust certificates will prepay at any prepayment
assumption. The "adjusted issue price" of a stripped bond or stripped coupon at
the beginning of the first accrual period is its issue price (as determined for
purposes of the OID rules of the Code) and the "adjusted issue price" of a
stripped bond or stripped coupon at the beginning of a subsequent accrual period
is the "adjusted issue price" at the beginning of the immediately preceding
accrual period plus the amount of OID allocable to that accrual period and
reduced by the amount of any payment (other than qualified stated interest) made
at the end of or during that accrual period. The OID accruing during such
accrual period will then be divided by the number of days in the period to
determine the daily portion of OID for each day in the period. A subsequent
grantor trust certificateholder will be required to adjust its OID accrual to
reflect its purchase price, the remaining period to maturity and, possibly, a
new prepayment assumption. The servicer will report to all grantor trust
certificateholders holding stripped bonds or stripped coupons as if they were
original holders.
With respect to the receivables, the method of calculating OID as described
above will cause the accrual of OID to either increase or decrease (but never
below zero) in any given accrual period to reflect the fact that prepayments are
occurring at a faster or slower rate than the prepayment assumption used in
respect of the receivables. Subsequent purchasers that purchase grantor trust
certificates at more than a de minimis discount should consult their tax
advisors with respect to the proper method to accrue such OID.
Market Discount.
A grantor trust certificateholder that acquires an undivided interest in
receivables may be subject to the market discount rules of Sections 1276 through
1278 to the extent an undivided interest in a receivable or stripped bond is
considered to have been purchased at a "market discount." Generally, the amount
of market discount is equal to the excess of the portion of the principal amount
of such receivable allocable to such holder's undivided interest over such
holder's tax basis in such interest. Market discount with respect to a grantor
trust certificate will be considered to be zero if the amount allocable to the
grantor trust certificate is less than 0.25% of the grantor trust certificate's
stated redemption price at maturity multiplied by the weighted average maturity
remaining after the date of purchase. Treasury regulations implementing the
market discount rules have not yet been issued; therefore, investors should
consult their own tax advisors regarding the application of these rules and the
advisability of making any of the elections allowed under Code Section 1276 and
1278. The IRS may require you to compute market discount on a receivable by
receivable basis, based on the allocation of your purchase price among the
receivables based on their fair market values. However, we will not furnish
information to you on a receivable by receivable basis. Accordingly, if you
compute premium amortization on an aggregate basis, you may be required by the
IRS to recompute such premium on a receivable by receivable basis.
51
<PAGE>
The Code provides that any principal payment (whether a scheduled payment
or a prepayment) or any gain or disposition of a market discount bond shall be
treated as ordinary income to the extent that it does not exceed the accrued
market discount at the time of such payment. The amount of accrued market
discount for purposes of determining the tax treatment of subsequent principal
payments or dispositions of the market discount bond is to be reduced by the
amount so treated as ordinary income.
The Code also grants the Treasury Department authority to issue regulations
providing for the computation of accrued market discount on debt instruments,
the principal of which is payable in more than one installment. While the
Treasury Department has not yet issued regulations, rules described in the
relevant legislative history will apply. Under those rules, the holder of a
market discount bond may elect to accrue market discount either on the basis of
a constant interest rate or according to one of the following methods. If a
grantor trust certificate is issued with OID, the amount of market discount that
accrues during any accrual period would be equal to the product of (1) the total
remaining market discount and (2) a fraction, the numerator of which is the OID
accruing during the period and the denominator of which is the total remaining
OID at the beginning of the accrual period. For grantor trust certificates
issued without OID, the amount of market discount that accrues during a period
is equal to the product of (1) the total remaining market discount and (2) a
fraction, the numerator of which is the amount of stated interest paid during
the accrual period and the denominator of which is the total amount of stated
interest remaining to be paid at the beginning of the accrual period. For
purposes of calculating market discount under any of the above methods in the
case of instruments (such as the grantor trust certificates) that provide for
payments that may be accelerated by reason of prepayments of other obligations
securing such instruments, the same prepayment assumption applicable to
calculating the accrual of OID will apply. Because the regulations described
above have not been issued, it is impossible to predict what effect those
regulations might have on the tax treatment of a grantor trust certificate
purchased at a discount or premium in the secondary market.
A holder who acquired a grantor trust certificate at a market discount also
may be required to defer a portion of its interest deductions for the taxable
year attributable to any indebtedness incurred or continued to purchase or carry
such grantor trust certificate purchased with market discount. For these
purposes, the de minimis rule referred to above applies. Any such deferred
interest expense would not exceed the market discount that accrues during such
taxable year and is, in general, allowed as a deduction not later than the year
in which such market discount is includible in income. If such holder elects to
include market discount in income currently as it accrues on all market discount
instruments acquired by such holder in that taxable year or thereafter, the
interest deferral rule described above will not apply.
Premium.
The price paid for a grantor trust certificate by a holder will be
allocated to such holder's undivided interest in each receivable based on each
receivable's relative fair market value, so that such holder's undivided
interest in each receivable will have its own tax basis. A grantor trust
certificateholder that acquires an interest in receivables at a premium may
elect to amortize such premium under a constant interest method. Amortizable
bond premium will be treated as an offset to interest income on such grantor
trust certificate. The basis for such grantor trust certificate will be reduced
to the extent that amortizable premium is applied to offset interest payments.
We cannot tell you whether a reasonable prepayment assumption should be used in
computing amortization of premium allowable under Section 171 of the Code. A
grantor trust certificateholder that makes this election for a grantor
certificate that is acquired at a premium will be deemed to have made an
election to amortize bond premium with respect to all debt instruments having
amortizable bond premium that such grantor trust certificateholder acquires
during the year of the election or thereafter. We will not furnish information
to you on a receivable by receivable basis. Accordingly, if you compute premium
amortization on an aggregate basis, the IRS may require you to recompute such
premium.
52
<PAGE>
If a premium is not subject to amortization using a reasonable prepayment
assumption, the holder of a grantor trust certificate acquired at a premium
should recognize a loss if a receivable prepays in full, equal to the difference
between the portion of the prepaid principal amount of such receivable that is
allocable to the grantor trust certificate and the portion of the adjusted basis
of the grantor trust certificate that is allocable to such receivable. If a
reasonable prepayment assumption is used to amortize such premium, it appears
that such a loss would be available, if at all, only if prepayments have
occurred at a rate faster than the reasonable assumed prepayment rate. It is not
clear whether any other adjustments would be required to reflect differences
between an assumed prepayment rate and the actual rate of prepayments.
Election to Treat All Interest as OID.
The OID regulations permit a grantor trust certificateholder to elect to
accrue all interest, discount (including de minimis market discount or OID) and
premium in income as interest, based on a constant yield method. If such an
election were to be made with respect to a grantor trust certificate with market
discount, the certificateholder would be deemed to have made an election to
include in income currently market discount with respect to all other debt
instruments having market discount that such grantor trust certificateholder
acquires during the year of the election or thereafter. Similarly, a grantor
trust certificateholder that makes this election for a grantor trust certificate
that is acquired at a premium will be deemed to have made an election to
amortize bond premium with respect to all debt instruments having amortizable
bond premium that such grantor trust certificateholder owns or acquires. We
refer you to "--Premium" above. The election to accrue interest, discount and
premium on a constant yield method with respect to a grantor trust certificate
is irrevocable.
Sale or Exchange of a Grantor Trust Certificate.
Sale or exchange of a grantor trust certificate prior to its maturity will
result in gain or loss equal to the difference, if any, between the amount
received and the owner's adjusted basis in the grantor trust certificate. Such
adjusted basis generally will equal the seller's purchase price for the grantor
trust certificate, increased by the OID and any market discount included in the
seller's gross income with respect to the grantor trust certificate, and reduced
by any market premium amortized by the seller and by principal payments on the
grantor trust certificate previously received by the seller. Such gain or loss
will be capital gain or loss to an owner for which a grantor trust certificate
is a "capital asset" within the meaning of Section 1221 of the Code (except in
the case of gain attributable to accrued market discount, as noted above under
"--Market Discount") and, with respect to noncorporate owners, will be
short-term or long-term, depending on weather the grantor trust certificate has
been held for 12 months or less, or more than 12 months respectively. (Long-term
capital gain tax rates of noncorporate owners provide a reduction as compared
with short-term capital gains, which are taxed at ordinary income tax rates.)
Grantor trust certificates will be "evidences of indebtedness" within the
meaning of Section 582(c)(1) of the Code, so that gain or loss recognized from
the sale of a grantor trust certificate by a bank or a thrift institution to
which such section applies will be treated as ordinary income or loss. Non-U.S.
Persons.
Non-U.S. Persons.
Interest or OID paid to non-U.S. persons who own grantor trust certificates
will be treated as "portfolio interest" for purposes of United States
withholding tax. Such interest (including OID, if any) attributable to the
underlying receivables will not be subject to the normal 30% (or such lower rate
provided for by an applicable tax treaty) withholding tax imposed on such
amounts provided that (1) the non-U.S. person is not a "10% shareholder" (within
the definition of Section 871(h)(3)) of any obligor
53
<PAGE>
on the receivables; and is not a controlled foreign corporation (within the
definition of Section 957) related to any obligor on the receivables and
(2) such certificateholder fulfills certain certification requirements. Under
these requirements, the certificateholder must certify, under penalty of
perjury, that it is not a U.S. person and must provide its name and address. If,
however, such interest or gain is effectively connected to the conduct of a
trade or business within the U.S. by such certificateholder, such owner will be
subject to U.S. federal income tax thereon at graduated rates. Potential
investors who are not U.S. persons should consult their own tax advisors
regarding the specific tax consequences of owning a certificate. See "Tax
Consequences to the Holders of the Notes--Non-U.S. Holders" above for a further
discussion of these rules.
Information Reporting and Backup Withholding.
The servicer will furnish or make available, within a reasonable time after
the end of each calendar year, to each person who was a grantor trust
certificateholder at any time during such year, such information as the servicer
deems necessary or desirable to assist grantor trust certificateholders in
preparing their federal income tax returns, or to enable holders to make such
information available to beneficial owners or financial intermediaries that hold
grantor trust certificates as nominees on behalf of beneficial owners or
financial intermediaries that hold grantor trust certificates as nominees on
behalf of beneficial owners. If a holder, beneficial owner, financial
intermediary or other recipient of a payment on behalf of a beneficial owner
fails to supply a certified taxpayer identification number or if the Secretary
of the Treasury determines that such person has not reported all interest and
dividend income required to be shown on its federal income tax return, 31%
backup withholding may be required with respect to any payments. Any amounts
deducted and withheld from a distribution to a recipient would be allowed as a
credit against such recipient's federal income tax liability.
The federal tax discussion set forth above is included for general
information only and may not be applicable to your particular tax situation. You
should consult your tax advisor with respect to the tax consequences of the
purchase, ownership and disposition of securities, including the tax
consequences under state, local and foreign and other tax laws and the possible
effects of changes in federal or other tax laws.
54
<PAGE>
ERISA CONSIDERATIONS
The prospectus supplement for each series of securities will summarize,
subject to the limitations discussed in each prospectus supplement,
considerations under ERISA relevant to the purchase of the securities by
employee benefit plans and individual retirement accounts.
PLAN OF DISTRIBUTION
The securities offered hereby and by means of the related prospectus
supplements will be offered through one or more of the methods described below.
The prospectus supplement with respect to each series of securities will
describe the method of offering of the series of securities, including the
initial public offering or purchase price of each class of securities or the
method by which the price will be determined and the net proceeds to the seller
of the sale.
The offered securities will be offered through the following methods from
time to time and offerings may be made concurrently through more than one of
these methods or an offering of a particular series of securities may be made
through a combination of two or more of these methods:
o By negotiated firm commitment underwriting and public reoffering by
underwriters specified in the applicable prospectus supplement;
o By placements by the seller with investors through dealers; and
o By direct placements by the seller with investors.
As more fully described in the prospectus supplement, if underwriters are
used in a sale of any offered securities, the securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices to be determined at the time of sale or at the time
of commitment of the sale. Firm commitment underwriting and public reoffering by
underwriters may be done through underwriting syndicates or through one or more
firms acting alone. The specific managing underwriter or underwriters, if any,
with respect to the offer and sale of the offered securities of a particular
series will be described on the cover of the related prospectus supplement and
the members of the underwriting syndicate, if any, will be named in the
prospectus supplement. If so specified in the related prospectus supplement, the
offered securities will be distributed in a firm commitment underwriting,
subject to the terms and conditions of the underwriting agreement, by the
underwriters named in the underwriting agreement. The prospectus supplement will
describe any discounts and commissions to be allowed or paid by the seller to
the underwriters, any other items constituting underwriting compensation and any
discounts and commissions to be allowed or paid to the dealers. The obligations
of the underwriters will be subject to certain conditions precedent. The
underwriters with respect to a sale of any class of securities will be obligated
to purchase all the securities if any are purchased.
The seller and its affiliates will agree to indemnify the underwriters
against certain civil liabilities, including liabilities under the Securities
Act or will contribute to payments required to be made in respect of the civil
liabilities.
The place and time of delivery for any series of securities in respect of
which this prospectus is delivered will be described in the accompanying
prospectus supplement. To the extent specified in the prospectus supplement for
the related series, the seller or its affiliates may retain some of the classes
of securities.
FINANCIAL INFORMATION
Certain specified trust assets will secure each series of securities, no
trust will engage in any business activities or have any assets or obligations
prior to the issuance of the related series of securities. Accordingly, no
financial statements with respect to any trust assets will be included in this
prospectus or in the related prospectus supplement.
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<PAGE>
A prospectus supplement may contain the financial information or financial
statements of any provider of credit enhancement.
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE
All documents filed by us pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this prospectus and prior to
the termination of the offering of the offered securities of a series will be
deemed to be incorporated by reference into this prospectus and to be a part of
this prospectus from the date of filing of the documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
in this prospectus shall be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained in this prospectus or
in any other subsequently filed document which is or is deemed to be
incorporated by reference in this prospectus modifies or supersedes the
statement. Any statement so modified or superseded will not be deemed, except as
so modified or superseded, to constitute a part of this prospectus.
We will provide without charge to each person to whom a copy of this
prospectus is delivered, upon the written or oral request of the person, a copy
of any and all of the documents incorporated by reference in this prospectus
(not including the exhibits to the documents, unless the exhibits are
specifically incorporated by reference in the documents). Requests for the
copies should be directed to the office of the General Counsel, 120 N.W. 12th
Avenue Deerfield Beach, Florida 33442 (954) 429-2200.
This prospectus and the prospectus supplement for each series are parts of
our registration statement. This prospectus does not contain, and the related
prospectus supplement will not contain, all of the information in our
registration statement. For further information, please see our registration
statement and the accompanying exhibits which we have filed with the Commission.
This prospectus and any prospectus supplement may summarize contracts and/or
other documents. For further information, please see the copy of the contract or
other document filed as an exhibit to the registration statement. You can obtain
copies of the registration statement from the Commission upon payment of the
prescribed charges, or you can examine the registration statement free of charge
at the Commission's offices. Reports and other information filed with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Regional Offices of the Commission at Seven World Trade Center, 13th
Floor, New York, New York 10048; and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of the material can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. You can obtain information on the
operation of the Public Reference Section by calling 1-800-732-0330. The
Commission also maintains a site on the World Wide Web at "http://www.sec.gov"
at which users can view and download copies of reports, proxy and information
statements and other information filed electronically through the EDGAR system.
Copies of the trust documents relating to a series of securities will be
provided to each person to whom a prospectus and the related prospectus
supplement are delivered, upon written or oral request directed to our offices
at 120 N.W. 12th Avenue Deerfield Beach, Florida 33442 (954) 429-2200.
LEGAL MATTERS
The validity of the securities offered hereby and certain federal income
tax matters will be passed upon for the seller by Cadwalader, Wickersham & Taft
or by other counsel identified in the related prospectus supplement.
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INDEX OF TERMS
<TABLE>
<S> <C>
Clearstream...................................................................................................... 20
Code............................................................................................................. 40
Commission....................................................................................................... 4
Deerfield office................................................................................................. 15
Depositories..................................................................................................... 21
Euroclear Participants........................................................................................... 26
Events of Default................................................................................................ 32
Federal Tax Counsel.............................................................................................. 47
five state area.................................................................................................. 14
FTC Rule......................................................................................................... 38
indirect participants............................................................................................ 21
IRS.............................................................................................................. 14
JMFE............................................................................................................. 14
Mobile center.................................................................................................... 15
new withholding regulations...................................................................................... 44
OID.............................................................................................................. 41
OID Regulations.................................................................................................. 41
Payment Date..................................................................................................... 23
Payment Extension Program........................................................................................ 17
Pool Factor...................................................................................................... 21
Pre-Funded Amount................................................................................................ 12
Rating Agencies.................................................................................................. 19
Receivables Pool................................................................................................. 13
Rules............................................................................................................ 21
Securities Act................................................................................................... 4
Servicer Termination Event....................................................................................... 34
Short-Term Note.................................................................................................. 42
Simple Interest Receivables...................................................................................... 12
St. Louis center................................................................................................. 15
Terms and Conditions............................................................................................. 22
Trust Accounts................................................................................................... 25
</TABLE>
57
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 24, 2000.
PROSPECTUS SUPPLEMENT(1) TO PROSPECTUS DATED .
$[ ]
(APPROXIMATE)
WORLD OMNI AUTO RECEIVABLES TRUST 2000-[ ]
[$[ ] CLASS A-1, [ ]% ASSET BACKED NOTES, DUE [ ]
$[ ] CLASS A-2, [ ]% ASSET BACKED NOTES, DUE [ ]
$[ ] CLASS A-3, [ ]% ASSET BACKED NOTES, DUE [ ]
$[ ] CLASS A-4, [ ]% ASSET BACKED NOTES, DUE [ ] ]
WORLD OMNI AUTO RECEIVABLES LLC
SELLER
WORLD OMNI FINANCIAL CORP.
SERVICER
The World Omni Auto Receivables LLC Auto Receivables Backed Notes
Series 2000- will include [ ] classes of notes, that we are offering
pursuant to this prospectus supplement. The Series 2000- notes are
collateralized by the assets of a trust. The trust's main assets will be a pool
of retail installment sale contracts secured by new and used automobiles and
light trucks and other assets as described in the prospectus and this prospectus
supplement.
o Only the securities described on the following table are being offered by
this prospectus supplement and the prospectus.
o The securities will accrue interest from , .
o The price to the public and the proceeds to the seller listed below
exclude interest accrued from , the date the notes will
be issued.
o The proceeds from the sale of the securities exclude expenses, estimated
at $ .
o The controlling securities are [class A-1, class A-2, class A-3 and
class A-4] notes.
<TABLE>
<CAPTION>
UNDERWRITING DISCOUNTS
PRICE TO PUBLIC AND COMMISSIONS PROCEEDS TO SELLER
<S> <C> <C> <C>
[Per class A-1 note] $ $ $
[Per class A-2 note]
[Per class A-3 note]
[Per class A-4 note]
</TABLE>
We will not list the notes on any national securities exchange or on any
automated quotation system of any registered securities association such as
NASDAQ.
- ------------------
(1) This form of prospectus supplement is representative of the form of
prospectus supplement that may typically be used in a particular
transaction. The provisions in this form may change from transaction to
transaction, whether or not the provisions are bracketed in the form to
reflect the specific parties, the structure of the securities, servicing
provisions, receivables pool, provisions of the sale and servicing
agreement, indenture and other matters. In all cases, the provisions in the
prospectus supplement will be consistent in material respects with the
provisions in the prospectus.
------------------------
The Series 2000- notes are not obligations of World Omni Auto Receivables
LLC, World Omni Financial Corp., the trustees, or any of their respective
affiliates. [The offered notes and the underlying receivables are not insured or
guaranteed by any governmental agency or any of the persons specified above.
Principal will be paid on the notes in sequence. All principal will be paid on
the class A-1 notes until they are fully paid, then on the class A-2 until fully
paid, etc.]
Investing in the offered notes involves risk. We refer you to "Risk
Factors" beginning on page [ ] in this prospectus supplement and page [ ] in the
prospectus.
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of the notes, or passed upon the accuracy or
adequacy of this prospectus supplement or prospectus. Any representation to the
contrary is a criminal offense.
We expect that the delivery of the offered notes will be made in book-entry
form only through the facilities of the Depository Trust Company and Clearstream
Bank, societe anonyme and the Euroclear System on or about [ ].
[UNDERWRITERS]
[ ], 2000
The information in this prospectus supplement is not complete and may be
changed. We may not sell these securities until we deliver a final prospectus
supplement and prospectus. This prospectus supplement and prospectus are not an
offer to sell these securities and are 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 SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
Information about the offered notes is contained in two separate documents
that progressively provide more detail: (a) the accompanying prospectus, which
provides general information, some of which may not apply to the offered notes;
and (b) this prospectus supplement, which describes the specific terms of the
offered notes. If the terms of the offered notes vary between this prospectus
supplement and the accompanying prospectus, you should rely on the information
in this prospectus supplement.
You should rely only on the information contained in this prospectus
supplement and the accompanying prospectus. We have not authorized anyone to
provide you with information that is different from that contained in this
prospectus supplement and the prospectus. The information in this prospectus
supplement is accurate only as of the date of this prospectus supplement.
This prospectus supplement begins with several introductory sections
describing the Series 2000- notes and the trust in abbreviated form:
Summary Of Prospectus Supplement, which gives a brief introduction of the
key features of the Series 2000- notes and a description of the receivables;
and
Risk Factors, appearing on page of this prospectus supplement, which
describes risks that apply to the Series 2000- notes which are in addition to
those described in the prospectus with respect to the securities issued by the
trust generally.
This prospectus supplement and the accompanying prospectus include cross
references to sections in these materials where you can find further related
discussions. The Tables of Contents in this prospectus supplement and the
prospectus identify the pages where these sections are located.
Certain capitalized terms are defined and used in this prospectus
supplement and the prospectus to assist you in understanding the terms of the
offered notes and this offering. The capitalized terms used in this prospectus
supplement are defined on the pages indicated under the caption "Index of
Significant Definitions" beginning on page S- in this prospectus supplement.
In this prospectus supplement, the terms "seller," "we," "us" and "our"
refer to World Omni Auto Receivables LLC.
S-2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- -------------------------------------------------- ----
<S> <C>
SUMMARY OF TERMS.................................. S-4
RISK FACTORS...................................... S-8
FORMATION OF THE TRUST............................ S-11
General......................................... S-11
Capitalization of the Trust..................... S-11
The Owner Trustee............................... S-11
The Indenture Trustee........................... S-11
THE RECEIVABLES POOL.............................. S-14
COMPOSITION OF THE RECEIVABLES POOL............... S-14
Delinquencies, Repossessions and Net Losses..... S-15
YIELD CONSIDERATIONS.............................. S-17
POOL FACTORS AND OTHER INFORMATION................ S-17
USE OF PROCEEDS................................... S-17
DESCRIPTION OF THE SECURITIES..................... S-17
General......................................... S-17
Payments of Interest............................ S-17
Payments of Principal........................... S-18
<CAPTION>
SECTION PAGE
- -------------------------------------------------- ----
<S> <C>
Optional Redemption............................. S-19
REGISTRATION OF NOTES............................. S-19
Book Entry Registration......................... S-19
DESCRIPTION OF THE CERTIFICATES................... S-20
DESCRIPTION OF THE TRUST DOCUMENTS................ S-23
Sale and Assignment of Receivables.............. S-23
Trust Accounts.................................. S-23
Advances........................................ S-24
Servicing Compensation and Payment
of Expenses..................................... S-24
Distributions................................... S-24
[Reserve Account]............................... S-27
Statements to Noteholders....................... S-27
FEDERAL INCOME TAX CONSEQUENCES................... S-28
[STATE AND LOCAL TAX CONSEQUENCES]................ S-31
ERISA CONSIDERATIONS.............................. S-32
UNDERWRITING...................................... S-34
LEGAL OPINIONS.................................... S-36
</TABLE>
S-3
<PAGE>
SUMMARY OF TERMS
The following summary is a short, concise description of the main terms of
the notes. For this reason, the summary does not contain all the information
that may be important to you. You will find a detailed description of the terms
of the notes following this summary and in the prospectus.
<TABLE>
<S> <C>
PARTIES AND DATES:
ISSUER: The issuer of the notes is World Omni Auto Receivables Trust 2000-[ ]. The
trust was formed on [ , 2000] under a trust agreement between
World Omni Auto Receivables LLC, a Delaware limited liability company and
[owner trustee], as the owner trustee.
THE SELLER: The seller is World Omni Auto Receivables LLC, a wholly-owned, special-purpose
subsidiary of World Omni Financial Corp.
The address and telephone number of the seller is:
120 N.W. 12th Avenue
Deerfield Beach, Florida 33442
(954) 429-2200
CLOSING DATE: On or about [ ]
CUTOFF DATE: [ ]
INDENTURE TRUSTEE: [ ]
OWNER TRUSTEE: [ ]
TRUST ASSETS: The trust's primary source of funds to make payments of principal of and
interest on the notes will be the trust assets, which will include:
o a pool of retail installment sale contracts between dealers in new and used
automobiles and light trucks and retail obligors;
o the right to receive payments under the receivables after specified cutoff
dates;
o security interests in the financed vehicles;
o the rights of the seller to receive any proceeds with respect to the
receivables from claims on physical damage and other insurance policies
covering the financed vehicles or the obligors;
o [the reserve account]; and
o any and all proceeds of the foregoing.
THE RECEIVABLES: The receivables that the seller will transfer to the trust will be secured by
new and used automobiles and light trucks including the rights to all payments
received with respect to the contracts after the applicable cutoff date.
On the closing date, the trust will acquire receivables. For further
information about the characteristics of the receivables as of the cutoff
date, see "The Receivables Pool--The Receivables" in the prospectus and "The
Receivables Pool" in this prospectus supplement.
</TABLE>
S-4
<PAGE>
<TABLE>
<S> <C>
General characteristics of the receivables as of the cutoff date:
Initial Pool Balance................................................ $
Weighted Average APR................................................ %
Weighted Average Remaining
Term to Maturity (months)...........................................
Weighted Average Original Term
to Maturity (months)................................................
Latest Scheduled Maturity Date......................................
We refer you to "The Receivables Pool" in this prospectus supplement.
TITLE, REGISTRATION AND DENOMINATION OF
OFFERED SECURITIES: World Omni Auto Receivables Trust 2000-[ ] will issue the following
securities:
o [ %] asset-backed notes, class A-1 in the aggregate original principal
amount of [$ ];
o [ %] asset-backed notes, class A-2 in the aggregate original principal
amount of [$ ];
o [ %] asset-backed notes, class A-3 in the aggregate original
o principal amount of [$ ]; and
o [ %] asset-backed notes, class A-4 in the aggregate original principal
amount of [$ ].
The aggregate original principal amount of the notes will be [$ ]. We
will issue the notes in minimum denominations of $1,000 and integral multiples
of $1,000, in book entry form only, through The Depository Trust Company. For
more information, read "Description of the Securities--Book-Entry
Registration" in the prospectus.
The trust will also issue certificates that represent interests in the
property of the trust that remains after full payment to you of interest on
and principal of the notes. This prospectus supplement and the accompanying
prospectus offer only the notes.
TERMS OF NOTES: The principal terms of the notes follow:
PAYMENT DATES: The indenture trustee will make payments on the notes on the [ ] day of
each [month] or, if the [ ] day is not a business day, on the next business
day. The first payment date will be [ , 2000].
INTEREST: On each payment date, the indenture trustee will pay to the holders of record
of each class of notes (the noteholders as of the related record date),
[thirty (30) days] of interest at the interest rate with respect to that class
of notes on the outstanding principal amount of that class of notes at the
close of the preceding payment date. Interest on the notes will be calculated
on the basis of a [360 day year of twelve 30 day] months. On the initial
payment date, the
</TABLE>
S-5
<PAGE>
<TABLE>
<S> <C>
interest payable on each class of notes will be based on the initial principal
amount of each class of notes and number of days from and including the
closing date to and including [ ], 2000. We refer you to
"Description of the Securities--Payments of Interest" in this prospectus
supplement.
The indenture trustee will make all payments of interest to the noteholders on
a pro rata basis to the extent of available funds.
PRINCIPAL: The indenture trustee will pay principal of the notes on each payment date on
the classes of notes in the following order:
o [first, on the class A-1 notes until their outstanding principal amount
equals zero;
o second, on the class A-2 notes until their outstanding principal amount
equals zero;
o third, on the class A-3 notes until their outstanding principal amount
equals zero; and
o fourth, on the class A-4 notes until their outstanding principal amount
equals zero].
All outstanding principal and interest with respect to a class of notes will
be payable in full on its final scheduled payment date. We refer you to
"Description of the Trust Documents--Distributions--Payments to Noteholders"
in this prospectus supplement.
RECORD DATES: The indenture trustee will make payments to holders of record of the notes as
of the close of business on the record date applicable to the payment date.
The record date for a payment date will be the [ ] calendar day of the
month in which the payment date occurs.
SERVICING: After the sale of the receivables to the trust, World Omni Financial Corp.
will continue to service the receivables. World Omni Financial Corp.'s
responsibilities as servicer will include, among other things, collection of
payments, realization on the receivables and the financed vehicles and
monitoring the performance of the receivables. In return for World Omni
Financial Corp.'s services, the trust will pay a fee to World Omni Financial
Corp. out of the interest payments received by the trust. We refer you to
"Description of the Trust Documents-Servicing Compensation" in this prospectus
supplement.
PRIORITY OF PAYMENTS: On each payment date, funds available for distribution from the receivables,
net of specified trust expenses, will be distributed in the following amounts
and order of priority:
(1) to the servicer, the servicing fee and all unpaid servicing fees;
(2) [to the noteholders of each class, pro rata, in accordance with their
interest entitlements; and
(3) to the noteholders of each class, sequentially, their principal
entitlements.]
</TABLE>
S-6
<PAGE>
<TABLE>
<S> <C>
We refer you to "Description of the Trust Documents--Distributions--Payments
to Noteholders" in this prospectus supplement.
OPTIONAL REDEMPTION: The seller or the servicer may, at their option, redeem the outstanding notes
by purchasing all the receivables. The seller or the servicer may only redeem
the notes when the aggregate principal balance of the receivables is equal to
10% or less of the initial pool balance. The redemption price will at least
equal the unpaid principal amount of the notes, plus accrued and unpaid
interest.
CREDIT ENHANCEMENT:
[USE OF EXCESS SPREAD TO INCREASE
OVERCOLLATERALIZATION: The aggregate cutoff date principal balance of the receivables which aggregate
$ will exceed the $ initial aggregate
principal amount of the notes by $ , which is approximately
% of the initial principal amount of the notes. Unless offset by losses
of the receivables, the use of excess spread to pay principal of the notes
will cause the outstanding principal amount of the notes to decrease faster
than the principal balance of the receivables decreases, thereby increasing
overcollateralization and the overcollateralization percentage.
EXCESS SPREAD: Excess spread is the excess of interest collections on the receivables
(exclusive of some amounts) over servicing fees and interest on the notes.
This amount will be used first to offset net losses on the receivables, then,
if necessary, to increase the reserve account to the required amount and
finally, in some circumstances, to release cash to the seller].
[RESERVE ACCOUNT The initial amount in the reserve account will be $ , which is
% of the original principal amount of the securities. The indenture
trustee will apply funds in the reserve account to make payments due on the
notes that are not covered by collections on the receivables. The reserve
account will be replenished to its required amount with excess spread, if
available.]
[PRIORITY OF PAYMENTS; SUBORDINATION
OF CERTIFICATES: On each payment date, the indenture trustee will apply the trust's available
funds first, to pay interest on the notes and second, to pay the outstanding
principal amount of the notes in the order described herein. The subordination
of payments on the certificates is intended to decrease the likelihood that
the trust will default in making payment due on the notes.]
[TAX STATUS: In the opinion of Cadwalader, Wickersham & Taft, for federal income tax
purposes the notes will be characterized as debt and the trust will not be
characterized as an association (or publicly traded partnership) taxable as a
corporation. In accepting a note, each holder of that note will agree to treat
the notes as indebtedness for federal income tax purposes. We refer you to
"Federal Income Tax
</TABLE>
S-7
<PAGE>
<TABLE>
<S> <C>
Consequences" in the prospectus and "Federal Income Tax Consequences" in this
prospectus supplement for additional information concerning the application of
federal tax laws to the trust and the notes.]
[ERISA CONSIDERATIONS: Subject to the considerations discussed under "ERISA Considerations", the
notes are eligible for purchase by pension, profit-sharing or other employee
benefit plans, as well as individual retirement accounts and some types of
Keogh Plans. By its acquisition of a note, each of these entities is deemed to
represent that its purchase and holding of a note will not give rise to a non-
exempt prohibited transaction]. We refer you to "ERISA Considerations" in this
prospectus supplement.
RATINGS OF THE NOTES: It is a condition of issuance that the notes be rated " " (or its
equivalent) by at least two nationally recognized rating agencies. A security
rating is not a recommendation to buy, sell or hold securities and may be
revised or withdrawn at any time by the assigning rating agency. We refer you
to "Risk Factors--A Rating of the securities is not a recommendation to buy,
hold or sell securities" in the prospectus supplement.
</TABLE>
RISK FACTORS
Prospective investors in the notes should consider the following factors
and the additional factors discussed under "Risk Factors" in the prospectus:
<TABLE>
<S> <C>
THE OCCURRENCE OF DEFAULT UNDER THE
INDENTURE MAY RESULT IN INSUFFICIENT
FUNDS TO MAKE PAYMENTS ON YOUR
SECURITIES The trust will not have any significant assets or sources of funds to make
payments on the notes other than the receivables and the reserve account. You
must rely for repayment of your notes upon payments on the receivables and
amounts, if any, in the reserve account. Although funds in the reserve account
may be available on each payment date to cover shortfalls in distributions of
interest and principal on the notes, the amounts available in the reserve
account are limited. If the reserve account becomes depleted, the trust will
depend solely on current collections on the receivables to make payments on
the notes.
PROCEEDS OF THE SALE OF RECEIVABLES MAY
NOT BE SUFFICIENT TO PAY YOUR
SECURITIES IN FULL; FAILURE TO PAY
PRINCIPAL ON YOUR NOTES WILL NOT
CONSTITUTE AN EVENT OF DEFAULT UNTIL
MATURITY If so directed by the holders of the requisite percentage of outstanding notes
of a series, following an acceleration of the notes upon an event of default,
the indenture trustee will sell the receivables owned by the trust only in
limited circumstances. However, there is no assurance that the market value of
those receivables will at any time be equal to or greater than the
</TABLE>
S-8
<PAGE>
<TABLE>
<S> <C>
aggregate principal amount of the notes. Therefore, upon an event of default,
there can be no assurance that sufficient funds will be available to repay you
in full. In addition, the amount of principal required to be paid to the
noteholders will generally be limited to amounts available in the collection
account (and the reserve fund, if any). Therefore, the failure to pay
principal of your notes generally will not result in the occurrence of an
event of default until the final scheduled payment date for your notes.
PREPAYMENT ON RECEIVABLES MAY CAUSE
PREPAYMENTS ON SECURITIES Principal on each class of notes must be fully paid by the final scheduled
payment date for that class of notes. We have determined the final scheduled
payment date for each class of notes so that distributions on the underlying
receivables will be sufficient to retire each such class on or before its
final scheduled payment date. However, because some prepayments of the
receivables are likely and some receivables have terms to maturity that are
shorter than the term to maturity assumed in calculating each class's final
scheduled payment date, the actual payment of any class of notes likely will
occur earlier, and could occur significantly earlier, than such class's final
scheduled payment date. Nevertheless, there can be no assurance that the final
distribution of principal of any or all classes of notes will be earlier than
such class's final scheduled payment date.
[THE GEOGRAPHIC CONCENTRATION AND
PERFORMANCE OF THE RECEIVABLES MAY
INCREASE THE RISK OF LOSS ON YOUR
INVESTMENT Economic conditions in the states where obligors reside may affect
delinquencies, losses and prepayments on the receivables. The following
economic conditions may affect payments on the receivables:
o unemployment,
o interest rates,
o inflation rates, and
o consumer perceptions of the economy.
If a large number of obligors are located in a particular state, these
conditions could increase the delinquency, credit loss or repossession
experience of the receivables. If there is a concentration of obligors and
receivables in particular states, any adverse economic conditions in those
states may affect the performance of the securities more than if this
concentration did not exist.
</TABLE>
S-9
<PAGE>
<TABLE>
<S> <C>
As of [ ], World Omni Financial Corp.'s records indicate that the
billing addresses of the obligors of the receivables were in the following
states:
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL
STATE PRINCIPAL BALANCE:
---------------------------------------------------------- -------------------
<S> <C> <C>
[ ]%
[ ]%
[ ]%
[ ]%
[ ]%
</TABLE>
<TABLE>
<S> <C>
We refer you to "The Receivables Pool" in this prospectus supplement.]
YOU MAY HAVE DIFFICULTY SELLING YOUR
SECURITIES AND/OR OBTAINING YOUR
DESIRED PRICE DUE TO THE ABSENCE OF A
SECONDARY MARKET There will have been no secondary market for any series of your securities
prior to the related offering. The underwriters intend to make a secondary
market for the securities, but are not obligated to do so. We cannot assure
you that a market will develop or, if it does develop, that it will provide
you with liquidity of investment or continue for the life of your securities.
There have been times in the past when very few buyers of asset backed
securities existed and there may be similar times in the future. As a result,
you may be unable to obtain the price that you wish to receive for your
securities or you may suffer a loss on your investment.
</TABLE>
S-10
<PAGE>
FORMATION OF THE TRUST
GENERAL
The trust is a business trust formed under the laws of the State of
Delaware under a trust agreement. Before the sale and assignment of the trust
assets to the trust, the trust will have no assets or obligations or any
operating history. The trust will not engage in any business other than:
(1) acquiring, holding and managing the receivables, the other trust assets
and any proceeds from the receivables and other trust assets;
(2) issuing and making payments on the securities; and
(3) engaging in other activities to accomplish the above.
The trust will initially be capitalized with equity (exclusive of the
amounts allocated in the reserve account) equal to $ , which
is the aggregate principal amount of the receivables as of the cutoff date less
the initial aggregate principal amount of the notes. The certificates evidence
the equity in the trust. The seller will hold the certificates or sell or
otherwise transfer them.
If the protection provided to the investment of the noteholders by the
reserve account is insufficient, the trust will look only to the obligors on the
receivables and the proceeds from the repossession and sale of financed vehicles
which secure defaulted receivables. In this event, some factors, such as the
trust's not having first priority perfected security interests in some of the
Financed Vehicles, may affect the trust's ability to realize on the collateral
securing the receivables. These factors may reduce the proceeds available to
noteholders with respect to the notes. We refer you to "Description of the Trust
Documents--Distributions--Allocations and Distributions" in this prospectus
supplement and "Certain Legal Aspects of the Receivables" in the prospectus.
CAPITALIZATION OF THE TRUST
The following table illustrates the capitalization of the trust as of the
closing date, as if the issuance and sale of the notes had taken place on such
date:
<TABLE>
<S> <C>
[class A-1 notes]........................................................................................ $
[class A-2 notes]........................................................................................
[class A-3 notes]........................................................................................
[class A-4 notes]........................................................................................
certificates.............................................................................................
Total....................................................................................................
==========
</TABLE>
THE OWNER TRUSTEE
[ ] is the owner trustee under the trust agreement.
[ ] is a Delaware banking corporation and its principal offices
are located at [ ]. The owner trustee will perform limited
administrative functions under the trust agreement.
THE INDENTURE TRUSTEE
[ ] is the indenture trustee under the
indenture. It is a national banking association and its principal offices are
located at [ ].
S-11
<PAGE>
THE RECEIVABLES POOL
The pool of receivables (the receivables pool) purchased on the closing
date will have an aggregate outstanding principal balance of approximately
$[ ] as of the cutoff date. Each receivable is a simple interest
receivable. World Omni Financial Corp. purchased most of the receivables from
dealers in the ordinary course of business. Approximately [ %] of the
receivables were originated by World Omni Financial Corp. under a program where
World Omni Financial Corp. offers to obligors which lease vehicles from its
affiliates the option of financing the purchase of the leased vehicle when the
related lease expires. As of the cutoff date, the receivables meet the criteria
described in the prospectus under "The Receivables Pool." In addition, as of the
applicable cutoff date, each receivable:
o [is secured by a new or used automobile or light duty truck;
o was originated in the United States;
o provides for level monthly payments that fully amortize the amount
financed over its original term, subject to some exceptions;
o was originated on or prior to [ ];
o has an original term of [ ] to [ ] months and has a remaining
term to maturity of not less than [ ] months nor more than [ ]
months;
o provides for the payment of a finance charge at a stated annual
percentage rate ("APR") ranging from [ ]% to [ ]%;
o shall not have a scheduled payment that is more than 30 days past due;
o was not due, to the best knowledge of World Omni Financial Corp., from
any obligor who is presently the subject of a bankruptcy proceeding or is
bankrupt or insolvent;
o was not secured by a financed vehicle that had been repossessed without
reinstatement; and
o has a scheduled maturity not later than [ ].]
COMPOSITION OF THE RECEIVABLES POOL
<TABLE>
<S> <C>
Initial Pool Balance......................................................................................... $ [ ]
Number of Receivables........................................................................................ [ ]
Average Cutoff Date Principal Balance........................................................................ $ [ ]
Average Original Amount Financed............................................................................. [ ]
Range of Original Amount Financed............................................................................ [ ]
Weighted Average APR of Receivables(1)....................................................................... [ ]%
Range of APRs................................................................................................ [ ]
Weighted Average Remaining Maturity(1)....................................................................... [ ]
Range of Remaining Maturities as of the Cutoff Date.......................................................... [ ]
</TABLE>
- ------------------
(1) By original principal balance as of the cutoff date.
Approximately [ ]% of the aggregate cutoff date principal balance of
the receivables purchased on the closing date, constituting [ ]% of the
number of the total receivables, represent new vehicles, and approximately
[ ]% of the aggregate cutoff date principal balance of the receivables
purchased on the closing date, constituting [ ]% of the number of the total
receivables, represent used vehicles.
The geographic distribution and distribution by annual percentage rate of
the receivables conveyed to the trust on the closing date as of the cutoff date
are described in the following tables.
S-12
<PAGE>
GEOGRAPHIC DISTRIBUTION OF THE RECEIVABLES AS OF THE CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF INITIAL PERCENT OF
NUMBER OF NUMBER OF POOL INITIAL POOL
STATE(1) RECEIVABLES RECEIVABLES BALANCE BALANCE(1)
- ---------------------------------------------------------------- ----------- -------------- ------- ------------
<S> <C> <C> <C> <C>
Alabama......................................................... % $ %
Florida.........................................................
Georgia.........................................................
North Carolina..................................................
South Carolina..................................................
All Others(2)...................................................
Total......................................................... 100% 100%
</TABLE>
- ------------------
(1) Based on address of origination.
(2) No other state represents a percentage of the aggregate Principal Balance as
of the initial cutoff date in excess of percent.
(3) Percentages may not add up to 100% because of rounding.
DISTRIBUTION OF THE RECEIVABLES BY ANNUAL PERCENTAGE RATE AS OF THE CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF INITIAL PERCENT OF
NUMBER OF NUMBER OF POOL INITIAL POOL
ANNUAL PERCENTAGE RATE RANGE RECEIVABLES RECEIVABLES(1) BALANCE BALANCE(1)
- ---------------------------------------------------------------- ----------- -------------- ------- ------------
<S> <C> <C> <C> <C>
[ ]% - [ ]%............................................. % $ %
[ ]% - [ ]%.............................................
[ ]% - [ ]%.............................................
[ ]% - [ ]%.............................................
[ ]% - [ ]%.............................................
[ ]% - [ ]%.............................................
------- ------ ------- ------
Total 100.00% 100.00%
======= ====== ======= ======
</TABLE>
- ------------------
(1) Percentages may not add up to 100% because of rounding.
DELINQUENCIES, REPOSSESSIONS AND NET LOSSES
Set forth below is some information concerning World Omni Financial Corp.'s
experience with respect to its portfolio of new and used automobile and light
duty truck retail installment sale contracts similar to the receivables.
The data presented in the following tables are for illustrative purposes
only. There is no assurance that World Omni Financial Corp.'s delinquency,
credit loss and repossession experience with respect to automobile and light
duty truck installment sale contracts in the future, or the experience of the
trust with respect to the receivables, will be similar to that described below.
Losses and delinquencies are affected by, among other things, general and
regional economic conditions and the supply of and demand for automobiles and
light duty trucks.
S-13
<PAGE>
DELINQUENCY EXPERIENCE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1999 1998 1997 1996
------- ------ ------ ------
<S> <C> <C> <C> <C>
Ending Number of Contracts................................................... 106,337 76,883 56,442 46,897
Percentage of Delinquent Contracts(1)(2)(3)
31-60 Days................................................................... 1.39% 1.82% 1.99% 2.69%
61-90 Days................................................................... 0.13% 0.16% 0.25% 0.23%
91 Days and Over............................................................. 0.02% 0.02% 0.06% 0.04%
------- ------ ------ ------
Total...................................................................... 1.54% 2.00% 2.30% 2.96%
</TABLE>
- ------------------
(1) Delinquency figures reported exclude delinquent bankrupt contracts. As of
December 31, 1999, bankrupt contracts greater than 60 days past due totaled
749.
(2) The period of delinquency is based on the number of days payments are
contractually past due.
(3) As a percentage of the total number of contracts at period end.
NET LOSS AND REPOSSESSION EXPERIENCE(1)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1999 1998 1997 1996
---------- -------- -------- --------
<S> <C> <C> <C> <C>
Ending Net Receivables........................................... $1,235,065 $818,488 $607,890 $475,410
Ending Number of Contracts....................................... 106,337 76,883 56,442 46,897
Average Portfolio Outstanding During the Period.................. $ 985,303 $758,566 $495,091 $427,851
Average Number of Contracts Outstanding During the Period........ 88,807 72,772 50,210 42,949
Number of Repossessions.......................................... 1,335 1,300 1,178 1,181
Repossessions as a Percentage of Average Number of Contracts
Outstanding.................................................... 1.50% 1.79% 2.35% 2.75%
Net Repossession Losses (1) (2).................................. $ 5,223 $ 6,248 $ 6,293 $ 6,643
Net Losses as a Percentage of Average Portfolio Outstanding...... 0.53% 0.82% 1.27% 1.55%
</TABLE>
- ------------------
(1) Net losses equal the aggregate net principal balances of all contracts
determined to be uncollectable in the period plus accrued but unpaid
interest earned through the point of charge-off, less any recoveries.
(2) Includes charged-off amounts as well as repossession losses but does not
include expenses incurred to dispose of vehicles.
S-14
<PAGE>
YIELD CONSIDERATIONS
All of the receivables can be prepaid at any time without charge. For this
purpose "prepayments" include prepayments in full, liquidations due to default,
as well as receipts of proceeds from physical damage, credit life and credit
accident and health insurance policies and some other receivables repurchased
for administrative reasons. A variety of economic, social, and other factors may
influence the rate of prepayments on the receivables. For example, an obligor
generally may not sell or transfer the Financed Vehicle securing a receivable
without the consent of World Omni Financial Corp. Noteholders will bear all
reinvestment risk resulting from a faster or slower incidence of prepayment of
receivables. The exercise by the seller or servicer of its option to purchase
the receivables and redeem the notes under the conditions described in
"Description of the Securities--Optional Redemption" in this prospectus
supplement will also accelerate the payment of the notes.
POOL FACTORS AND OTHER INFORMATION
The pool factor with respect to any class of notes is a seven digit decimal
which the servicer will compute each month indicating the principal balance of
that class of notes as a fraction of the initial principal balance of that class
of notes. The pool factor will be 1.0000000 as of the closing date; thereafter,
the pool factor will decline to reflect reductions in the principal balance of
the applicable class of notes. Therefore, if you are a class A-1 noteholder,
your share of the principal balance of the class A-1 notes is the product of
(1) the original denomination of your note and (2) the pool factor.
Under the indenture, the noteholders will receive monthly reports
concerning the payments received on the receivables, the pool factors and
various other items of information. The indenture trustee will furnish to the
noteholders of record during any calendar year information for tax reporting
purposes not later than the latest date permitted by law. We refer you to
"Description of the Trust Documents--Statements to Noteholders" in this
prospectus supplement.
USE OF PROCEEDS
The seller will use the net proceeds of the sale of the notes to purchase
the receivables from World Omni Financial Corp.
DESCRIPTION OF THE SECURITIES
GENERAL
The notes will be issued under the terms of an indenture between the Issuer
and the indenture trustee, and the certificates will be issued under the terms
of the trust agreement between the seller and the owner trustee. We have filed
forms of the indenture and the trust agreement as exhibits to the Registration
Statement.
PAYMENTS OF INTEREST
Interest on the principal balances of the classes of the notes will accrue
at their respective per annum interest rates and will be payable to the
noteholders monthly on each payment date, commencing [ ].
Payments will be made to the noteholders of record as of the day immediately
preceding such payment date or, if Definitive Securities are issued, as of the
15th day of the preceding month. Interest on the outstanding principal amount of
the notes will accrue at the applicable interest rate during the interest
accrual period (from the closing date (in the case of the first payment date) or
from the [fifteenth] day of the month preceding the month of a payment date to
and including the [fourteenth] day of the month of the payment date). Interest
on each class of the notes will be calculated
S-15
<PAGE>
on the basis of a 360-day year consisting of twelve 30-day months. The indenture
trustee will generally apply the Total Distribution Amount remaining after the
payment of the servicing fee and any withdrawals from the reserve account to
make interest payments on the notes. We refer you to "Description of the Trust
Documents--Distributions--Payments to Noteholders" in this prospectus
supplement.
Interest payments to all classes of noteholders will have the same
priority. Under some circumstances, the amount available for interest payments
could be less than the amount of interest payable on the notes on any payment
date. In this instance each class of noteholders will receive its ratable share
(based upon the aggregate amount of interest due to such class of noteholders)
of the aggregate amount available to be distributed in respect of interest on
the notes.
PAYMENTS OF PRINCIPAL
The indenture trustee will make principal payments to the noteholders on
each payment date in an amount generally equal to the sum of (1) the Regular
Principal Distribution Amount plus (2) the Accelerated Principal Distribution
Amount. [The "REGULAR PRINCIPAL DISTRIBUTION AMOUNT" with respect to any payment
date will generally equal the sum of principal payments received with respect to
the receivables during the calendar month (the "COLLECTION PERIOD") preceding
such payment date, plus the principal balances of defaulted receivables written
off in the related Collection Period. The "ACCELERATED PRINCIPAL DISTRIBUTION
AMOUNT" with respect to any payment date will equal the portion, if any, of the
Total Distribution Amount for the related Collection Period that remains after
payment of (a) the servicing fee, (b) the noteholders' Interest Distributable
Amount, (c) the Regular Principal Distribution Amount, and (d) any required
deposits to the reserve account on such payment date. The indenture trustee will
make principal payments on the notes from the Total Distribution Amount, if any
remaining after the payment of the servicing fee and the noteholders' Interest
Distributable Amount. Amounts in the reserve account are also available to make
payments of the Regular Principal Distribution Amount. The indenture trustee
will make payments of any Accelerated Principal Distribution Amount from the
Total Distribution Amount, if any, remaining after required deposits to the
reserve account]. We refer you to "Description of the Trust
Documents--Distributions--Payments to Noteholders" in this prospectus
supplement.
On the Business Day immediately preceding each payment date (a
"DETERMINATION DATE"), the indenture trustee shall determine the amount in the
Collection Account for the related Collection Period allocable to interest and
the amount allocable to principal on an actual basis. Payments to noteholders on
the following payment date will be based on this allocation. A "BUSINESS DAY" is
a day other than a Saturday, a Sunday or a day on which banking institutions or
trust companies in the City of New York, Deerfield Beach, Florida or Mobile,
Alabama are authorized by law, regulation or executive order to be closed.
On each payment date, principal payments on the notes will be applied in
the following order of priority:
(1) to the principal balance of the class A-1 notes until the principal
balance of the class A-1 notes is reduced to zero;
(2) to the principal balance of the class A-2 notes until the principal
balance of the class A-2 notes is reduced to zero;
(3) to the principal balance of the class A-3 notes until the principal
balance of the class A-3 notes is reduced to zero; and
(4) to the principal balance of the class A-4 notes until the principal
balance of the class A-4 notes is reduced to zero].
S-16
<PAGE>
The principal balance of each class of notes, to the extent not previously
paid, will be due as described below:
o the principal balance of the class A-1 notes, to the extent not
previously paid, will be due on the [ ] payment date;
o the principal balance of the class A-2 notes, to the extent not
previously paid, will be due on the [ ] payment date;
o the principal balance of the class A-3 notes, to the extent not
previously paid, will be due on the [ ] payment date; and
o the principal balance of the class A-4 notes, to the extent not
previously paid, will be due on the [ ] payment date.
The actual date on which the aggregate outstanding principal amount of any
class of notes is paid in full may be earlier than the respective final
scheduled payment dates.
OPTIONAL REDEMPTION
To avoid excessive administrative expense, the seller or the servicer may
at its option purchase all remaining receivables from the trust. The seller or
the servicer (or its successor) may exercise this repurchase option on or after
the last day of any month on or after which the aggregate principal balance of
the receivables is equal to 10% or less of the aggregate cutoff date principal
balance of receivables. The redemption price will at least equal the aggregate
of the unpaid principal amount of the notes plus accrued and unpaid interest as
of such last day. Exercise of this right will result in the early retirement of
the notes. Upon declaration of an optional redemption, the indenture trustee
will give written notice of termination to each noteholder of record. The final
distribution to any noteholder will be made only upon surrender and cancellation
of each noteholder's note at the office or agency of the indenture trustee
specified in the notice of termination.
REGISTRATION OF NOTES
BOOK ENTRY REGISTRATION
The notes will initially be represented by notes registered in the name of
Cede & Co. as nominee of The Depository Trust Company ("DTC"), and will only be
available in the form of book-entries on the records of DTC and participating
members of DTC in denominations of $1,000. DTC is a limited-purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "CLEARING CORPORATION" within the meaning of the New
York Uniform Commercial Code, and a "CLEARING AGENCY" registered under the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
DTC accepts securities for deposit from its participating organizations
("PARTICIPANTS") and facilitates the clearance and settlement of securities
transactions between Participants through electronic book-entry changes in
accounts of Participants, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks and
trust companies and clearing corporations and may include some other
organizations. Indirect access to the DTC system is also available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly.
A person acquiring an interest in the notes (each, a "NOTE OWNER") will
hold his or her interest through DTC, in the United States, or Clearstream
Banking, societe anonyme ("CLEARSTREAM") or the Euroclear System ("EUROCLEAR"),
in Europe. Transfers within DTC, Clearstream or Euroclear, as the case may be,
will be in accordance with the usual rules and operating procedures of the
relevant system.
S-17
<PAGE>
Cross-market transfers between persons holding directly or indirectly through
DTC, on the one hand, and counterparties holding directly or indirectly through
Clearstream or Euroclear, on the other, will be effected in DTC through
Citibank, N.A. or Morgan Guaranty Trust Company of New York, the relevant
depositaries of Clearstream or Euroclear, respectively, and each a participating
member of DTC. We refer you to "Description of the Securities--Book Entry
Registration" in the prospectus.
If you are acquiring beneficial ownership interests in the notes, you may
hold the notes directly though DTC if you are a Participant, or you may hold
your interest indirectly through organizations which are Participants. Your
ownership of a book-entry note will be recorded on the records of the brokerage
firm, bank, thrift institution or other financial intermediary that maintains
your account for that purpose. In turn the entity's ownership of the book-entry
note will be recorded on the records of DTC (or of a participating firm that
acts as its agent, whose interest will in turn be recorded on the records of
DTC). We refer you to "Description of the Securities--Book-Entry Registration"
in the prospectus.
DESCRIPTION OF THE CERTIFICATES
[The trust will also issue the certificates with an aggregate initial
balance of $[ ]. The certificates will represent fractional undivided
interests in the trust and will be issued pursuant to the trust agreement. The
certificates are not being offered hereby and will initially be held by the
seller, which may thereafter sell the certificates. The certificates will not
bear interest. No principal will be paid on the certificates until the
outstanding principal balances of the notes have been paid in full.]
S-18
<PAGE>
DESCRIPTION OF THE TRUST DOCUMENTS
The following summary describes some terms of the trust documents which are
comprised of the purchase agreement, the sale and servicing agreement, the
indenture and the trust agreement. We have filed forms of the trust documents as
exhibits to the Registration Statement. We will file a copy of the final trust
documents with the Commission following the issuance of the securities. Because
this is a summary of the trust documents, it does not contain all the
information that may be important to you. You should read the trust documents in
their entirety if you require complete information regarding their contents.
SALE AND ASSIGNMENT OF RECEIVABLES
On or before the closing date, various structured commercial paper lending
vehicles and an affiliated entity of World Omni Financial Corp. will transfer
their interests in the receivables to World Omni Financial Corp. The seller will
then purchase from World Omni Financial Corp. under the purchase agreement,
without recourse (except as provided in the purchase agreement), World Omni
Financial Corp.'s entire interest in the receivables, together with World Omni
Financial Corp.'s security interests in the related financed vehicles. At the
time of issuance of the notes, the seller will sell and assign to the trust,
without recourse, except as provided in the sale and servicing agreement, its
entire interest in the receivables, together with its security interests in the
financed vehicles. The indenture trustee will, concurrently with such sale and
assignment, execute, authenticate, and deliver the notes to the seller in
exchange for the receivables. The seller will sell the notes to the
underwriters. We refer you to "Underwriting" in this prospectus supplement.
To assure uniform quality in servicing, as well as to reduce administrative
costs, the indenture trustee will appoint the servicer as custodian of the
receivables and all documents related thereto. The receivables will not be
physically segregated from other automobile and light duty truck retail
installment sale contracts of the servicer, or those which the servicer services
for others, to reflect the transfer to the trust.
In the purchase agreement, World Omni Financial Corp. will make
representations and warranties to the seller concerning the receivables, as
described under "Receivables Pool" in the prospectus supplement. As of the last
day of the second (or, if World Omni Financial Corp. elects, the first) month
following the discovery by or notice to the seller and World Omni Financial
Corp. of a breach of any representation or warranty that materially and
adversely affects the interest of the trust or the indenture trustee, unless the
breach is cured, World Omni Financial Corp. will purchase such receivable from
the trust for the Purchase Amount. The repurchase obligation will constitute the
sole remedy available to the noteholders, the owner trustee or the indenture
trustee for any such uncured breach.
TRUST ACCOUNTS
The indenture trustee will establish and maintain one or more accounts
(collectively, the "COLLECTION ACCOUNT") in the name of the indenture trustee on
behalf of the noteholders. Within two Business Days of receipt of funds, the
servicer will deposit collections into the Collection Account. The indenture
trustee will also establish and maintain one or more accounts, in the name of
the indenture trustee on behalf of the noteholders, from which it will make all
distributions with respect to the notes (collectively, the "DISTRIBUTION
ACCOUNT").
S-19
<PAGE>
ADVANCES
[The servicer will make advances of interest] in respect of the
receivables.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The servicing fee for the servicer will be [ ]% per annum of the Pool
Balance as of the first day of the related Collection Period (or, in the case of
the first distribution date, as of the initial Cutoff Date). The "POOL BALANCE"
will represent the aggregate principal balance of the receivables at the end of
a Collection Period, after giving effect to all payments received from obligors,
Purchase Amounts for that Collection Period, and all losses realized on
receivables liquidated during such Collection Period.
The servicing fee in respect of a Collection Period (together with any
portion of the servicing fee that remains unpaid from prior payment dates) will
be paid on the payment date following such Collection Period out of collections
for such Collection Period. The servicer may elect to waive the servicing fee
with respect to a related collection period as discussed in "Description of the
Trust Documents--Servicing Compensation" in the prospectus.
DISTRIBUTIONS
Deposits to Distribution Account
On or before each payment date, the indenture trustee will deposit into the
Distribution Account all collections and other amounts on deposit in the
Collection Account constituting the Total Distribution Amount (net of the
servicing fee for such payment date and any previously unpaid servicing fees).
Allocations and Distributions
On each payment date, the servicer will instruct the indenture trustee to
make the following distributions, to the extent of the amount then on deposit in
the Distribution Account, in the following order of priority:
(1) allocate to the noteholders for distribution as described below, from
the Total Distribution Amount remaining after the deduction of the
unpaid servicing fees, the Noteholders' Interest Distributable Amount;
(2) allocate to the noteholders for distribution as described below, from
the Total Distribution Amount remaining after the application of clause
(1) and the deduction of the unpaid servicing fees, the Noteholders'
Principal Distributable Amount;
(3) allocate to the reserve account, from the Total Distribution Amount
remaining after the application of clause (2) and the deduction of the
unpaid servicing fees, the excess, if any, of the specified reserve
amount over the amount then allocated to the reserve account;
(4) distribute to the certificateholders, from the Total Distribution
Amount remaining after the application of clause (3) and the deduction
of unpaid servicing fees and only after the notes have been paid in
full, until the certificate balance has been reduced to zero; and
(5) distribute to the seller the remaining balance, if any.
For purposes of this prospectus supplement, the following terms shall have the
following meanings:
"ACCELERATED PRINCIPAL DISTRIBUTION AMOUNT" means with respect to any
payment date, the portion, if any, of the Total Distribution Amount for the
related Collection Period that remains after payment of (a) the servicing
fee, (b) the Noteholders' Interest Distributable Amount, (c) the Regular
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Principal Distribution Amount, and (d) the amount, if any, required to be
allocated to the reserve account on such payment date.
"INTEREST DISTRIBUTION AMOUNT" means, generally, with respect to any
payment date, the sum of the following amounts with respect to the
preceding Collection Period:
o that portion of all collections on the receivables allocable to
interest;
o all proceeds of the liquidated receivables, net of expenses incurred
by the servicer in connection with such liquidation and any amounts
required by law to be remitted to the obligor on the liquidated
receivables ("LIQUIDATION PROCEEDS"), in accordance with the
servicer's customary servicing procedures, and all recoveries in
respect of liquidated receivables which were written off in prior
Collection Periods;
o the Purchase Amount of each receivable that was repurchased by the
seller or purchased by the servicer under an obligation which arose
during the related Collection Period, to the extent attributable to
accrued interest thereon; and
o investment earnings on funds on deposit in the Collection Account.
"NOTEHOLDERS' DISTRIBUTABLE AMOUNT" means, with respect to any payment
date, the sum of the Noteholders' Interest Distributable Amount and the
Noteholders' Principal Distributable Amount.
"NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with respect to any
payment date, the excess of the Noteholders' Interest Distributable Amount
for the preceding payment date, over the amount in respect of interest that
was actually paid on the notes on such preceding payment date, plus
interest on the amount of interest due but not paid to Noteholders on the
preceding payment date, to the extent permitted by law, at the respective
interest rates borne by each class of the notes for the related interest
accrual period.
"NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means, with respect to
any payment date, the sum of the Noteholders' Monthly Interest
Distributable Amount for such payment date and the Noteholders' Interest
Carryover Shortfall for such payment date.
"NOTEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT" means, with
respect to any payment date, interest accrued for the related interest
accrual period on each class of notes at the respective interest rate for
such class on the outstanding principal balance of the notes of such class
on the immediately preceding payment date (or, in the case of the first
payment date, on the Closing Date), after giving effect to all payments of
principal to the Noteholders of such class on or prior to such payment
date.
"NOTEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT" means, with
respect to each payment date, the sum of (i) the Regular Principal
Distribution Amount and (ii) the Accelerated Principal Distribution Amount.
"NOTEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL" means, as of the close of
any payment date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall from the preceding payment date over the amount in respect of
principal that is actually distributed to the noteholders on such payment
date.
"NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to
any payment date, the sum of the Noteholders' Monthly Principal
Distributable Amount for such payment date and the Noteholders' Principal
Carryover Shortfall as of the close of the preceding payment date;
provided, however, that the Noteholders' Principal Distributable Amount
shall not exceed the outstanding principal balance of the notes; and
provided, further, that the Noteholders' Principal Distributable
S-21
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Amount on the final scheduled payment date for each class of notes will
equal at least the amount that is necessary (after giving effect to other
amounts to be deposited in the Distribution Account on such payment date
and allocable to principal) to reduce the outstanding principal balance of
the related class of notes to zero.
"REALIZED LOSSES" means the excess of the principal balance of any
liquidated receivable over Liquidation Proceeds to the extent allocable to
principal.
"REGULAR PRINCIPAL DISTRIBUTION AMOUNT" means, generally, with respect
to any payment date, the sum of the following amounts with respect to the
related Collection Period:
o that portion of all collections on the receivables allocable to
principal;
o all Liquidation Proceeds attributable to the principal amount of
receivables which became liquidated receivables during such
Collection Period in accordance with the servicer's customary
servicing procedures, plus the amount of Realized Losses with
respect to such liquidated receivables;
o to the extent attributable to principal, the Purchase Amount
received with respect to each receivable repurchased by the seller
or purchased by the servicer under an obligation which arose during
the related Collection Period; and
o partial prepayments relating to refunds of extended warranty
protection plan costs or of physical damage, credit life or
disability insurance policy premiums, but only if such costs or
premiums were financed by the respective obligor as of the date of
the original contract.
The Regular Principal Distribution Amount is the reduction in the
aggregate principal balance of the receivables in a Collection Period and
will be determined on the related Determination Date on an actual basis.
"TOTAL DISTRIBUTION AMOUNT" for a payment date is the sum of the
Interest Distribution Amount and the Regular Principal Distribution Amount
(other than the portion attributable to Realized Losses).
PAYMENTS TO NOTEHOLDERS
On each payment date, all amounts allocated to the noteholders will be
generally paid in the following order of priority:
(i) to the applicable noteholders, accrued and unpaid interest on the
outstanding principal balance of the applicable class of notes at the applicable
interest rate;
(ii) the noteholders' Principal Distributable Amount in the following order
of priority:
(a) [to the class A-1 noteholders in reduction of principal until the
principal balance of the class A-1 notes has been reduced to zero;
(b) to the class A-2 noteholders in reduction of principal until the
principal balance of the class A-2 notes has been reduced to zero;
(c) to the class A-3 noteholders in reduction of principal until the
principal balance of the class A-3 notes has been reduced to zero; and
(d) to the class A-4 noteholders in reduction of principal until the
principal balance of the class A-4 notes has been reduced to zero.]
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<PAGE>
[RESERVE ACCOUNT
The reserve account will provide protection to the noteholders. The seller
will initially deposit into the reserve account a specified reserve amount equal
to an initial deposit on the closing date in cash or eligible investments in the
amount of $[ ], which is [ ]% of the initial principal balance of the
securities. The trustee will deposit investment earnings on funds in the reserve
account, net of losses and investment expenses, into the reserve account until
the reserve account reaches the specified balance required.
The indenture trustee will hold amounts allocated from time to time to the
reserve account for the benefit of noteholders. On each payment date the
indenture trustee will pay to the noteholders from the reserve account the
amount by which the Total Distribution Amount (after the payment of the
servicing fee) with respect to any Collection Period is less than the
Noteholders' Distributable Amount. On each payment date, the indenture trustee
will deposit into the reserve account up to the specified reserve amount to the
extent of the portion, if any, of the Total Distribution Amount remaining after
payment of the servicing fee and the payment of the Noteholders' Distributable
Amount.
If the amount allocated to the reserve account on any payment date (after
giving effect to all deposits therein or other withdrawals therefrom on such
payment date) is greater than the specified reserve amount for the related
payment date, the indenture trustee will generally distribute the excess amount
to the seller. [To the extent the seller elects, the seller may instruct the
indenture trustee to deposit such excess amounts in the Collection Account for
application as described in [ ]. The seller has no obligation to make this
election.] Upon this distribution, the noteholders will not have any rights in,
or claims to, such amounts. Subsequent to any reduction or withdrawal by any
rating agency of its rating of any class of notes, unless such rating has been
restored, the indenture trustee will pay any such excess to noteholders on each
payment date as an accelerated payment of principal.
After the payment in full, or the provision for such payment, of (i) all
accrued and unpaid interest on the notes and (ii) the outstanding principal
balance of the securities, the indenture trustee will distribute any remaining
funds in the reserve account, subject to some limitations, to the seller.
The subordination of the certificates and the reserve account are intended
to enhance the likelihood of receipt by noteholders of the full amount of
principal and interest due them and to decrease the likelihood that the
noteholders will experience losses. However, in some circumstances, the reserve
account could be depleted. If the amount required to be withdrawn from the
reserve account to cover shortfalls in collections on the receivables exceeds
the amount then allocated to the reserve account, noteholders could incur losses
or a temporary shortfall in the amounts distributed to the noteholders could
result, which could, in turn, increase the average lives of the notes.]
STATEMENTS TO NOTEHOLDERS
On each payment date, the indenture trustee will include with each
distribution to each noteholder of record as of the close of business on the
applicable record date a statement (prepared by the servicer) as described in
"Description of the Securities--Statements to Noteholders" in the prospectus.
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<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
GENERAL
Set forth below is a summary of certain United States federal income tax
considerations relevant to the beneficial owner of a note that holds the note as
a capital asset and, unless otherwise indicated below, is a U.S. Person (as
defined in the accompanying prospectus). This summary does not address special
tax rules which may apply to certain types of investors, and investors that hold
notes as part of an integrated investment. This summary supplements the
discussion contained in the accompanying prospectus under the heading "Federal
Income Tax Consequences," and supersedes that discussion to the extent that the
two discussions are not consistent. The authorities on which we based this
discussion are subject to change or differing interpretations, and any such
change or interpretation could apply retroactively. This discussion reflects the
applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), as well as regulations promulgated by the U.S. Department of Treasury.
You should consult your own tax advisors in determining the federal, state,
local and any other tax consequences of the purchase, ownership and disposition
of the notes.
Characterization of the Notes. There are no regulations, published rulings
or judicial decisions addressing the characterization for federal income tax
purposes of securities with terms that are substantially the same as those of
the notes. A basic premise of United States federal income tax law is that the
economic substance of a transaction generally will determine the federal income
tax consequences of such transaction. The determination of whether the economic
substance of a loan secured by an interest in property is instead a sale of a
beneficial ownership interest in such property has been made by the Internal
Revenue Service (the "IRS") and the courts on the basis of numerous factors
designed to determine whether the trust has relinquished (and the investor has
obtained) substantial incidents of ownership in such property. Among those
factors, the primary factors examined are whether the investor has the
opportunity to gain if the property increases in value, and has the risk of loss
if the property decreases in value. Based on an assessment of these factors, in
the opinion of Cadwalader, Wickersham & Taft, special tax counsel to the seller,
(i) the class [ ] notes will be treated as indebtedness for federal income
tax purposes and not as an ownership interest in the receivables or an equity
interest in the trust and (ii) the class [ ] notes may either be treated as
indebtedness or as an equity interest in the trust for federal income tax
purposes. We refer you to "Federal Income Tax Consequences" in the accompanying
prospectus. Except as set forth below under "--Alternative Treatment of the
Class [ ] Notes," the remainder of this discussion assumes that the class [ ]
notes are debt for federal income tax purposes. Prospective investors should
consult their own tax advisors as to the characterization of the class [ ]
notes.
Classification of the Trust. In the opinion of Cadwalader, Wickersham &
Taft, special tax counsel to the seller, the trust will not be treated as an
association taxable as a corporation or a publicly traded partnership taxable as
a corporation for federal income tax purposes, but rather will be disregarded as
a separate entity and treated as a mere security device when there is a single
beneficial owner of the trust, or will be treated as a domestic partnership when
there are two or more beneficial owners of the trust, including the case if the
class [ ] notes are treated as equity interests in the trust.
DISCOUNT AND PREMIUM
For federal income tax reporting purposes, it is anticipated that the notes
will not be treated as having been issued with original issue discount. The
prepayment assumption that will be used in determining the rate of accrual of
original issue discount and of market discount and premium, if any, for federal
income tax purposes will be based on the assumption that subsequent to the date
of any determination the receivables will prepay at [ ], and there will be
no extensions of maturity for any
S-24
<PAGE>
receivable. However, no representation is made as to the rate, if any, at which
the receivables will prepay.
The IRS has issued regulations under Sections 1271 and 1275 of the Code
generally addressing the treatment of debt instruments issued with original
issue discount. The original issue discount regulations and Section 1272(a)(6)
of the Code do not adequately address certain issues relevant to, or are not
applicable to, securities such as the notes. Prospective purchasers of the notes
are advised to consult with their tax advisors concerning the tax treatment of
such notes.
Certain classes of the notes may be treated for federal income tax purposes
as having been issued at a premium. Whether any holder of such a class of notes
will be treated as holding notes with amortizable bond premium will depend on
such noteholder's purchase price and the payments remaining to be made on such
note at the time of its acquisition by such noteholder. You should consult your
own tax advisors regarding the possibility of making an election to amortize
such premium on such classes of notes.
GAIN OR LOSS ON DISPOSITION
If you sell a note, you must recognize gain or loss equal to the difference
between the amount realized from the sale and your adjusted basis in such note.
The adjusted basis generally will equal your cost of such note, increased by any
original issue discount included in your ordinary gross income with respect to
the note and reduced (but not below zero) by any payments on the note previously
received or accrued by you (other than qualified stated interest payments) and
any amortizable premium. Similarly, when you receive a principal payment with
respect to a note, you will recognize gain or loss equal to the difference
between the amount of the payment and the allocable portion of your adjusted
basis in the note. Such gain or loss will generally be a long-term capital gain
or loss if you held the note for more than one year.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Payments of interest and principal, as well as payments of proceeds from
the sale of notes, may be subject to the "backup withholding tax" under Section
3406 of the Code at a rate of 31% if you fail to furnish to the trust certain
information, including your taxpayer identification number, or otherwise fail to
establish an exemption from such tax. Any amounts deducted and withheld from a
payment should be allowed as a credit against your federal income tax.
Furthermore, certain penalties may be imposed by the IRS on a recipient of
payments that is required to supply information but that does not do so in the
proper manner.
We will report to noteholders and to the IRS for each calendar year the
amount of any "reportable payments" during such year and the amount of tax
withheld, if any, with respect to payments on the notes.
WITHHOLDING REGULATIONS EFFECTIVE DECEMBER 31, 2000
On October 6, 1997, the Treasury Department issued regulations which make
certain modifications to the withholding rules for investors who are non-U.S.
Persons (as defined in the accompanying prospectus) and the backup withholding
and information reporting rules described above. The regulations attempt to
unify certification requirements and modify reliance standards. Such regulations
will generally be effective for payments made after December 31, 2000, subject
to certain transition rules. Non-U.S. Persons are urged to consult their tax
advisors regarding the effect of these regulations. We refer you to "--
Alternative Treatment of the Class [ ] Notes" below, concerning the possible
application of withholding tax with respect to class [ ] notes held by non-U.S.
Persons.
S-25
<PAGE>
ALTERNATIVE TREATMENT OF THE CLASS [ ] NOTES
If the class [ ] notes are treated as equity (partnership) interests
rather than indebtedness, while the aggregate amount of income reportable by an
investor should not differ over the life of the obligation, the timing and
character of such income could differ significantly. It is possible that
payments on the class [ ] notes would be treated as "guaranteed payments" under
the Code to the extent of the amount of interest and any discount accrued, and a
return of capital as to any excess. To the extent payments are so characterized,
a class [ ] noteholder who is a U.S. Person would be subject to federal income
tax in substantially the same manner, except for timing and income
characterization differences, as if the class [ ] notes were treated as debt.
If a class [ ] noteholder's ownership of a class [ ] note is
characterized as an equity interest but payments thereon are not treated as
"guaranteed payments," it is unclear how its distributable share of partnership
income would be calculated. A class [ ] noteholder may be allocated a share of
net income of the partnership equal to the amount of interest and discount
income that accrued on the class [ ] notes for the applicable period. A class
[ ] noteholder would be subject to federal income taxes on such income even
though it may not have received an equivalent amount of cash from the
partnership, for example, because of defaults or delinquencies on the trust
assets. The characterization of an item of income or loss (e.g., as dividends,
as interest, as rental income or as capital gain or loss as opposed to ordinary
income or loss) will usually be the same for the class [ ] noteholder as it is
for the partnership.
It is not known whether any of the receivables were issued with original
issue discount greater than a de minimis amount. If any of such trust assets
were in fact issued at greater than de minimis discount or are otherwise treated
as issued with original issue discount under the Treasury regulations, an amount
of income will be imputed to the trust with respect to such trust assets. In
general, aggregate amount of original issue discount imputed to the trust with
respect to each such trust asset will be the excess of the "stated redemption
price at maturity" of such asset over its original issue price. The trust would
have to include original issue discount in income as interest over the term of
the respective trust asset possessing original issue discount under a constant
yield method. In general, original issue discount must be included in income in
advance of the receipt of cash representing that income. As indicated above,
class [ ] noteholders may be allocated items of income of the trust in the
event that such class [ ] noteholder's income is not treated as "guaranteed
payments". Such allocated income would include any original issue discount
determined to exist with respect to any of the trust assets. Each class [ ]
noteholder should consult its own tax adviser regarding the impact to it of the
original issue discount rules as applied to the trust and the impact of such
with respect to such class [ ] noteholders. Some receivables may not have been
issued with original issue discount, but, rather, may have been issued with
"unstated interest" as determined under Section 483 of the Code. In this event,
such unstated interest will be treated in a manner similar to original issue
discount.
Moreover, the purchase price paid by the trust for receivables may be
greater or less than the remaining principal balance of the receivables at the
time of purchase. If so, such trust assets will have been acquired at a premium
or discount, as the case may be. Accordingly, in a manner similar to original
issue discount, a class [ ] noteholder may be allocated a portion of such
market discount income or premium amortization in the event that such class [ ]
noteholder's income is not treated as "guaranteed payments". Each class [ ]
noteholder should consult its own tax adviser regarding the impact to it of the
market discount and premium rules as applied to the trust and the impact of such
with respect to such class [ ] noteholder.
A class [ ] noteholder will not be able to deduct its share of losses on
the trust assets (to the extent otherwise deductible under the Code) to the
extent that such losses exceed its adjusted basis in its partnership interest
(i.e., the class [ ] note). In addition, class [ ] noteholders who are
individuals or certain closely held corporations (and certain other taxpayers)
may be subject to other limitations on
S-26
<PAGE>
losses or deductions including the at risk limitations, the passive loss rules,
the limitation on the deduction of investment interest, the limitation on
deduction of non-business bad debts, and the limitation on the deduction of
certain miscellaneous itemized non-trade or business expenses to the extent they
do not, in the aggregate, exceed two percent of the taxpayer's adjusted gross
income. Such taxpayers should consult their tax advisor concerning the various
limitations on losses that may be applicable to an investment in a class [ ]
note.
All or a portion of any taxable income allocated to a class [ ] noteholder
that is a pension, profit-sharing or employee benefit plan or other tax-exempt
entity (including an individual retirement account) may constitute "unrelated
business taxable income" which generally would be taxable to the holder under
the Code.
If the class [ ] notes are treated as equity (partnership) interests for
income tax purposes, a class [ ] noteholder who is a non-U.S. Person may be
subject to withholding tax on its share of the income of the trust.
In view of the foregoing treatment of individuals, certain closely held
corporations, tax-exempt entities and non-U.S. Persons, if the Class [ ] Notes
are treated as equity, the class [ ] notes may not be a suitable investment for
such persons, and such persons should consult their own tax advisors in this
regard.
[STATE AND LOCAL TAX CONSEQUENCES
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
notes, then a financial organization investing in the 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. The seller believes the Loan Rule does not apply
to an investment in the notes or the receipt of interest on the 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 the notes and your ability to offset any such Florida tax against any other
state tax liabilities.
The State of Florida imposes a value-based intangibles tax on January 1 of
each year at the rate of $1.50 per $1,000 of value on certain intangibles owned,
managed or controlled by Florida domiciliaries or intangibles having a business
situs in Florida. On the last business day of each year, in an effort to
minimize the impact of this intangibles tax, the seller intends to transfer 99%
of its right, title and interest in, to and under the certificates owned by the
seller as of such day, together with all of its duties, rights and obligations
under the sale and servicing agreement to World Omni Acceptance III Corp.,
("WOAC III"), a wholly-owned subsidiary of World Omni Financial Corp., located
and managed outside the State of Florida (such transfer, the "Annual Servicing
Transfer"). In connection with such Annual Transfer, World Omni Financial Corp.
shall transfer all of its rights, obligations and duties under the sale and
servicing agreement to WOAC III. The trust will continue to maintain its first
priority perfected security interest in the receivables. Only the seller's
interest in the receivables, together with World Omni Financial Corp.'s
management and control authority and obligations, will be transferred to WOAC
III, to be held in escrow and returned to the seller and World Omni Financial
Corp., respectively, on the first business day of the following year. This
annual transfer is consistent with the
S-27
<PAGE>
Technical Assistance Advisement 95(C)2-021 issued by the Florida Department of
Revenue, which holds that a transfer of receivables to a wholly-owned subsidiary
located outside the State of Florida and having no contacts with the State of
Florida was sufficient to avoid the imposition of the intangibles tax on the
receivables subject to such tax. As additional protection, the trust will be
indemnified by World Omni Financial Corp. with respect to any liability for this
intangibles tax. World Omni Financial Corp. has agreed in the sale and servicing
agreement not to conduct any servicing activities during the period of the
Annual Servicing Transfer.
The discussion above does not address the tax treatment of the trust, the
securities or the security owners under any state or local tax law other than
Florida law to the extent set forth above. Prospective investors are urged to
consult their own tax advisors regarding the local tax treatment of the trust
and the securities, and the consequences of purchase, ownership or disposition
of the securities under any state or local tax law, if applicable.
ERISA CONSIDERATIONS
[Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Section 4975 of the Code prohibit a pension,
profit-sharing or other employee benefit plan within the meaning of
Section 3(3) of ERISA, as well as an individual retirement account, a Keogh plan
and any other plan within the meaning of Section 4975 of the Code (each a
"BENEFIT PLAN"), from engaging in particular 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 such persons or the fiduciaries of the Benefit Plan. In
addition, Title I of 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 be deemed to constitute
prohibited transactions under ERISA and the Code with respect to a Benefit Plan
that purchased 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 "REGULATION"), 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 contained
in the Regulation was applicable. An equity interest is defined under the
Regulation as 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 seller believes
that, at the time of their issuance, the notes should be treated as indebtedness
of the trust without substantial equity features for purposes of the Regulation.
This determination is based in part upon the traditional debt features of the
notes, including the reasonable expectation of purchasers of notes that the
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 notes for
ERISA purposes could change if the trust incurred losses].
[However, without regard to whether the notes are treated as an equity
interest for purposes of the Regulation, the acquisition or holding of notes by
or on behalf of a Benefit Plan could be considered to give rise to a prohibited
transaction if the trust, the seller, the servicer, the owner trustee or the
indenture trustee 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 the purchase and holding of notes by a
Benefit Plan depending on the type and circumstances of the plan fiduciary
making the decision to acquire such notes. Included among these exemptions are:
Prohibited Transaction Class Exemption ("PTCE") 96-23, regarding transactions
effected by "in-house asset managers"; PTCE 95-60, regarding investments by
insurance company general accounts; PTCE 90-1, regarding investments by
insurance company pooled separate accounts; PTCE 91-38, regarding investments by
bank collective
S-28
<PAGE>
investment funds; and PTCE 84-14, regarding transactions effected by "qualified
professional asset managers." By acquiring a note, each initial purchaser,
transferee and owner of a beneficial interest will be deemed to represent that
either (1) it is not acquiring the notes with the assets of a Benefit Plan; or
(2) the acquisition and holding of the notes will not give rise to a nonexempt
prohibited transaction under Section 406(a) of ERISA or Section 4975 of the
Code.]
Employee benefit plans that are governmental plans (as defined in
Section 3(32) of ERISA) and some church plans (as defined in Section 3(33) of
ERISA) are not subject to ERISA requirements; however, governmental plans may be
subject to comparable state law restrictions.
A plan fiduciary considering the purchase of notes should consult its legal
advisors regarding whether the assets of the trust would be considered plan
assets, the possibility of exemptive relief from the prohibited transaction
rules and other issues and their potential consequences.
S-29
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting
agreement dated [ , 2000] among World Omni Financial
Corp., the seller and the underwriters, the seller has agreed to sell to the
underwriters named below and each of the underwriters has severally agreed to
purchase, the principal amount of the offered notes described opposite its name
below:
CLASS A-1 NOTES
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
--------------
<S> <C>
[ ]...................................... $[ ]
[ ]...................................... [
[ ]...................................... [
[ ]...................................... [
--------------
Total................................................... $[ ]
==============
</TABLE>
CLASS A-2 NOTES
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
--------------
<S> <C>
[ ]...................................... $[ ]
[ ]...................................... [
[ ]...................................... [
[ ]...................................... [
--------------
Total................................................... $[ ]
==============
</TABLE>
CLASS A-3 NOTES
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
--------------
<S> <C>
[ ]...................................... $[ ]
[ ]...................................... [
[ ]...................................... [
[ ]...................................... [
--------------
Total................................................... $[ ]
==============
</TABLE>
CLASS A-4 NOTES
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
--------------
<S> <C>
[ ]...................................... $[ ]
[ ]...................................... [
[ ]...................................... [
[ ]...................................... [
--------------
Total................................................... $[ ]
==============
</TABLE>
The underwriters have advised the seller that they propose initially to
offer the offered notes to the public at the prices described herein, and to
some dealers at such prices less the initial concession not in
S-30
<PAGE>
excess of [ % per class A-1 note, % per class A-2 note, % per
class A-3 note and % per class A-4 note.] The underwriters may allow and
the related dealers may reallow a concession not in excess of [ % per
class A-1 note, % per class A-2 note, % per class A-3 note and %
per class A-4 note] to some other dealers. After the initial public offering of
the offered notes, the public offering price and such concessions may be
changed.
The underwriting agreement provides that the obligations of the
underwriters are subject to some conditions precedent and that the underwriters
will purchase all the notes offered hereby if any of such notes are purchased.
[Each underwriter has represented and agreed that (a) it has not offered or
sold, and will not offer to sell, any offered notes to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal agent) for the
purposes of their businesses or otherwise in circumstances that do not
constitute an offer to the public in the United Kingdom for the purposes of the
Public Offers of Securities Regulations 1995, (b) it has complied and will
comply with all applicable provisions of the Financial Services Act of 1986 of
Great Britain with respect to anything done by it in relation to the offered
notes in, from or otherwise involving the United Kingdom and (c) it has only
issued or passed on and will only issue or pass on in the United Kingdom any
document in connection with the issue of the offered notes to a person who is of
a kind described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1995 or is a person to whom the document may
otherwise lawfully be issued or passed on.]
The notes are a new issue of securities with no established trading market.
World Omni Financial Corp. and the seller do not intend to apply for listing of
the notes on a national securities exchange. The underwriters have advised World
Omni Financial Corp. and the seller that they intend to act as market makers for
the notes. However, the underwriters are not obligated to do so and may
discontinue any market making at any time without notice. Accordingly, no
assurance can be given as to the liquidity of any trading market for the notes.
[In connection with the offering of the notes, the underwriters may engage
in transactions that stabilize, maintain or otherwise affect the market price of
the notes. Such transactions may include stabilization transactions effected in
accordance with Rule 104 of Regulation M, pursuant to which such person may bid
for or purchase the notes for the purpose of stabilizing its market price. In
addition, the underwriters may impose "penalty bids" whereby they may reclaim
from a dealer participating in the offering the selling concession with respect
to the notes that the dealer distributed in the offering but subsequently
purchased for the account of the underwriters in the open market. Any of the
transactions described in this paragraph may result in the maintenance of the
price of the notes at a level above that which might otherwise prevail in the
open market. None of the transactions described in this paragraph is required,
and, if they are taken, may be discontinued at any time without notice].
World Omni Financial Corp. and the seller have agreed to indemnify the
underwriters against some liabilities, including civil liabilities under the
Securities Act, or contribute to payments which the underwriters may be required
to make in respect of some liabilities, including civil liabilities under the
Securities Act.
[In the ordinary course of their respective businesses, the underwriters
and their affiliates have engaged and may engage in investment banking and/or
commercial banking transactions with World Omni Financial Corp. and the seller
and their affiliates]. We refer you to "Use of Proceeds" herein and "Plan of
Distribution" in the accompanying prospectus.
This prospectus supplement and the accompanying prospectus may be used by
the underwriters, affiliates of which have an ownership interest in, or
participate in banking transactions with, World Omni Financial Corp. and the
seller, in connection with offers and sales related to market making
S-31
<PAGE>
transactions in the notes. The underwriters may act as principals or agents in
such transactions. Such sales will be made at prices related to prevailing
market prices at the time of the sale or otherwise.
LEGAL OPINIONS
Some legal matters relating to the securities will be passed upon for the
seller and the servicer by Cadwalader, Wickersham & Taft, New York, New York.
Some legal matters relating to Florida state tax laws will be passed upon for
the seller and the servicer by . Certain
legal matters relating to the notes will be passed upon for the underwriters by
[ ].
S-32
<PAGE>
INDEX OF TERMS
<TABLE>
<S> <C>
Accelerated Principal Distribution
Amount.................................. S-16, S-20
APR....................................... S-15
Benefit Plan.............................. S-28
Business Day.............................. S-16
Clearstream............................... S-17
Collection Account........................ S-19
Collection Period......................... S-16
Determination Date........................ S-16
disqualified persons...................... S-28
Distribution Account...................... S-19
DTC....................................... S-17
equity interest........................... S-28
ERISA..................................... S-28
ERISA Considerations...................... S-8
Euroclear................................. S-17
Interest Distribution Amount.............. S-21
Liquidation Proceeds...................... S-24
Note Owner................................ S-17
Noteholders' Distributable Amount......... S-21
Noteholders' Interest Carryover
Shortfall............................... S-21
Noteholders' Interest Distributable
Amount.................................. S-21
Noteholders' Monthly Interest
Distributable Amount.................... S-21
Noteholders' Monthly Principal
Distributable Amount.................... S-21
Noteholders' Principal Carryover
Shortfall............................... S-21
Noteholders' Principal Distributable
Amount.................................. S-21
Participants.............................. S-17
parties in interest....................... S-28
Pool Balance.............................. S-20
PTCE...................................... S-28
Realized Losses........................... S-22
Regular Principal Distribution Amount..... S-16, S-22
Regulation................................ S-28
Total Distribution Amount................. S-22
</TABLE>
S-33
<PAGE>
- ---------------------------------------------------------
---------------------------------------------------------
- ---------------------------------------------------------
---------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS AND
PROSPECTUS SUPPLEMENT. YOU MUST NOT RELY ON ANY UNAUTHORIZED INFORMATION OR
REPRESENTATIONS. THIS PROSPECTUS AND PROSPECTUS SUPPLEMENT IS AN OFFER TO SELL
ONLY THE SECURITIES OFFERED HEREBY, BUT ONLY UNDER CIRCUMSTANCES AND IN
JURISDICTIONS WHERE IT IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN THIS
PROSPECTUS AND PROSPECTUS SUPPLEMENT IS CURRENT ONLY AS OF ITS DATES. UNTIL
[ ], ALL DEALERS EFFECTING TRANSACTIONS IN THE OFFERED SECURITIES,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS SUPPLEMENT AND PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS'
OBLIGATION TO DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO AN UNSOLD ALLOTMENT OR SUBSCRIPTION.
------------------------
$[ ]
(APPROXIMATE)
WORLD OMNI AUTO RECEIVABLES LLC
SELLER
AUTO RECEIVABLES BACKED
NOTES SERIES 2000-
------------------------
PROSPECTUS SUPPLEMENT
------------------------
[UNDERWRITER]
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
<PAGE>
Subject to completion, dated May 24, 2000.
Prospectus Supplement(1) to Prospectus dated ______________.
$[ ]
(Approximate)
World Omni Auto Receivables Trust 2000-[ ]
[$[_______] class A, [___]% asset backed certificates
$[_______] class B, [___]% asset backed certificates]
World Omni Auto Receivables LLC
Seller
Word Omni Financial Corp.
Servicer
The World Omni Auto Receivables LLC Auto Receivables Backed
Certificates Series 2000-__ will include [_______] classes of certificates, that
we are offering pursuant to this prospectus supplement. The Series 2000-__
certificates are collateralized by the assets of a trust. The trust's main
assets will be a pool of retail installment sale contracts secured by new and
used automobiles and light trucks and other assets as described in the
prospectus and this prospectus supplement.
o Only the securities described on the following table are being offered
by this prospectus supplement and the prospectus.
o Credit enhancement will be provided by a reserve fund, and, in the
case of the class A certificates, the subordination of the class B
certificates.
o The price to the public and the proceeds to the seller listed below
include interest accrued from ______, ___ to, but not including, the
date the certificates will be issued.
o The proceeds from the sale of the securities exclude expenses,
estimated at $ .
<TABLE>
<CAPTION>
Price to Public Underwriting Discounts and Proceeds to Seller
Commissions
<S> <C> <C> <C>
[Per class A certificate]
[Per class B certificate]
</TABLE>
- --------------------
We will not list the certificates on any national securities exchange
or on any automated quotation system of any registered securities association
such as NASDAQ.
------------------------------------
The Series 2000-__ certificates are not obligations of World Omni Auto
Receivables LLC, World Omni Financial Corp., the trustee, or any of their
respective affiliates. [The offered certificates and the underlying receivables
are not insured or guaranteed by any governmental agency or any of the persons
- --------
1 This form of prospectus supplement is representative of the form of prospectus
supplement that may typically be used in an equity transaction. The provisions
in this form may change from transaction to transaction, whether or not the
provisions are bracketed in the form to reflect the specific parties, the
structure of the securities, servicing provisions, receivables pool, provisions
of the purchase agreement, pooling and servicing agreement and other matters. In
all cases, the provisions in the prospectus supplement will be consistent in
material respects with the provisions in the prospectus.
<PAGE>
specified above. Principal and interest will be paid on the certificates on the
__ of each month, unless the __ is not a Business Day, in which case, the
payment will be made on the following Business Day. The first distribution date
will be ___________, ____.]
Investing in the offered certificates involves risk. We refer you to
"Risk Factors" beginning on page [ ] in this prospectus supplement and page [ ]
in the prospectus.
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of the certificates, or passed upon the
accuracy or adequacy of this prospectus supplement or prospectus. Any
representation to the contrary is a criminal offense.
We expect that the delivery of the offered certificates will be made in
book-entry form only through the facilities of the Depository Trust Company and
Clearstream Bank, societe anonyme and the Euroclear System on or about
[--------].
[UNDERWRITERS]
[ ], 2000
<PAGE>
The information in this prospectus supplement is not complete and may be
changed. We may not sell these securities until we deliver a final prospectus
supplement and prospectus. This prospectus supplement and prospectus are not an
offer to sell these securities and are 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 SUPPLEMENT and the ACCOMPANYING PROSPECTUS
Information about the offered certificates is contained in two separate
documents that progressively provide more detail: (a) the accompanying
prospectus, which provides general information, some of which may not apply to
the offered certificates; and (b) this prospectus supplement, which describes
the specific terms of the offered certificates. If the terms of the offered
certificates vary between this prospectus supplement and the accompanying
prospectus, you should rely on the information in this prospectus supplement.
You should rely only on the information contained in this prospectus
supplement and the accompanying prospectus. We have not authorized anyone to
provide you with information that is different from that contained in this
prospectus supplement and the prospectus. The information in this prospectus
supplement is accurate only as of the date of this prospectus supplement.
This prospectus supplement begins with several introductory sections
describing the Series 2000-__ certificates and the trust in abbreviated form:
Summary Of Prospectus Supplement, which gives a brief introduction of the
key features of the Series 2000-__ certificates and a description of the
receivables; and
Risk Factors, appearing on page ____ of this prospectus supplement, which
describes risks that apply to the Series 2000-__ certificates which are in
addition to those described in the prospectus with respect to the securities
issued by the trust generally.
This prospectus supplement and the accompanying prospectus include cross
references to sections in these materials where you can find further related
discussions. The tables of contents in this prospectus supplement and the
prospectus identify the pages where these sections are located.
Certain capitalized terms are defined and used in this prospectus
supplement and the prospectus to assist you in understanding the terms of the
offered certificates and this offering. The capitalized terms used in this
prospectus supplement are defined on the pages indicated under the caption
"Index of Significant Definitions" beginning on page S-___ in this prospectus
supplement.
In this prospectus supplement, the terms "seller," "we," "us" and "our"
refer to World Omni Auto Receivables LLC.
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TABLE OF CONTENTS
SUMMARY OF TERMS....................................4
RISK FACTORS.......................................10
THE TRUST..........................................12
General........................................12
The Trustee....................................12
THE RECEIVABLES POOL...............................12
COMPOSITION OF THE RECEIVABLES POOL................13
Delinquencies, Repossessions and Net Losses....16
YIELD CONSIDERATIONS...............................16
OTHER INFORMATION..................................17
USE OF PROCEEDS....................................17
DESCRIPTION OF THE SECURITIES......................17
General........................................17
Payments of Interest...........................17
Payments of Principal..........................18
Optional Redemption............................18
REGISTRATION OF CERTIFICATES.......................18
General........................................18
Book Entry Registration........................18
DESCRIPTION OF THE TRUST DOCUMENTS.................19
Sale and Assignment of Receivables.............19
Trust Accounts.................................20
Advances.......................................20
Servicing Compensation and Payment of Expenses.20
Distributions..................................21
Subordination of the class B
certificates; [Reserve Acount]...............25
Statements to Certificateholders...............26
FEDERAL INCOME TAX CONSEQUENCES....................26
STATE AND LOCAL TAX CONSEQUENCES...................26
ERISA CONSIDERATIONS...............................27
UNDERWRITING.......................................28
LEGAL OPINIONS.....................................30
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SUMMARY OF TERMS
The following summary is a short, concise description of the main terms
of the certificates. For this reason, the summary does not contain all the
information that may be important to you. You will find a detailed description
of the terms of the certificates following this summary and in the prospectus.
<TABLE>
<CAPTION>
PARTIES AND DATES:
<S> <C>
Issuer: The issuer of the certificates is
World Omni Auto Receivables Trust
2000-[ ]. The trust was formed on
[_________, 2000] under a pooling
and servicing agreement among World
Omni Auto Receivables LLC, World
Omni Financial Corp. and [trustee].
Seller: The seller is World Omni Auto
Receivables LLC, a wholly-owned,
special-purpose subsidiary of World
Omni Financial Corp.
The address and telephone number of
the seller is:
120 N.W. 12th Avenue
Deerfield Beach, Florida 33442
(954) 429-2200
Closing Date: On or about [______________________]
Cutoff Date: [__________________________]
Servicer: World Omni Financial Corp., the
parent of the seller.
Trustee: [__________________________]
TRUST ASSETS: The trust's primary source of funds
to make payments of principal of and
interest on the certificates will be
the trust assets, which will
include:
o a pool of retail
installment sale contracts
between dealers in new and
used automobiles and light
trucks and retail obligors;
o the right to receive
payments under the
receivables after specified
cutoff dates;
o security interests in the
financed vehicles;
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o the rights of the seller to
receive any proceeds with
respect to the receivables
from claims on physical
damage and other insurance
policies covering the
financed vehicles or the
obligors;
o [the reserve account]; and
o any and all proceeds of the
foregoing.
The Receivables: The receivables that the seller will
transfer to the trust will be
secured by new and used automobiles
and light trucks including the
rights to all payments received with
respect to the contracts after the
applicable cutoff date.
On the closing date, the trust will
acquire the receivables. For further
information about the
characteristics of the receivables
as of the cutoff date, see "The
Receivables Pool - The Receivables"
in the prospectus and "The
Receivables Pool" in this prospectus
supplement.
General characteristics of the
receivables as of the cutoff date:
Initial Pool Balance:..............................$
Weighted Average APR...............................%
Weighted Average Remaining
Term to Maturity (months):.........................
Weighted Average Original Term
to Maturity (months):..............................
Latest Scheduled Maturity Date.....................
We refer you to "The Receivables
Pool" in this prospectus supplement................
TITLE, REGISTRATION AND DENOMINATION OF World Omni Auto Receivables Trust 2000-[ ] will
OFFERED SECURITIES: issue the following securities:
o [ %] asset-backed certificates,
class A in the aggregate
original principal amount of
[$________]; and
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o [ %] asset-backed certificates,
class B in the aggregate
original principal amount of
[$______];
The aggregate original principal
amount of the offered certificates
will be [$__________]. We will issue
the certificates in minimum
denominations of $1,000 and integral
multiples of $1,000, in book-entry
form only, through The Depository
Trust Company, Clearstream Bank,
societe anonyme and the Euroclear
System. For more information, read
"Description of the Securities -
Book-Entry Registration" in the
prospectus.
TERMS OF CERTIFICATES: The principal terms of the
certificates follow:
Distribution Dates: The trustee will make payments on
the certificates on the [__] day of
each month or, if the [__] day is
not a Business Day, on the next
Business Day. The first distribution
date will be [ , 2000]
Class A Interest: On each distribution date, the
trustee will pay to the holders of
record of the class A certificates
(the class A certificateholders as
of the related record date), [thirty
(30) days] of interest at the class
A pass-through rate on the
outstanding principal amount of that
class of certificates at the close
of the preceding distribution date.
Interest on the class A certificates
will be calculated on the basis of a
[360 day year of twelve 30 day
months]. On the initial distribution
date, the interest payable on the
class A certificates will be based
on the initial principal amount of
that class of certificates and
number of days from and including
the closing date to and including
[____________]. The class A
pass-through rate is [_____%]. We
refer you to "Description of the
Securities--Payments of Interest"
and "Description of the Trust
Documents--Distributions" in this
prospectus supplement.
The trustee will make all payments
of interest to the class A
certificateholders on a pro rata
basis to the extent of available
funds.
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Class A Principal: The trustee will pay principal on
the class A certificates on each
distribution date to the class A
certificateholders on a pro rata
basis in an amount equal to the
Class A Percentage of the Principal
Distribution Amount for the
Collection Period preceding such
distribution date. The Class A
Percentage is [____%]. We refer you
to "Description of the
Securities--Payments of Principal"
and "Description of the Trust
Documents--Distributions" in this
prospectus supplement.
Class B Interest: On each distribution date, the
trustee will pay to the holders of
record of the class B certificates,
[thirty (30) days] of interest at
the class B pass-through rate on the
outstanding principal amount of that
class of certificates at the close
of the preceding distribution date.
Interest on the class B certificates
will be calculated on the basis of a
[360 day year of twelve 30 day
months]. On the initial distribution
date, the interest payable on the
class B certificates will be based
on the initial principal amount of
the class B certificates and number
of days from and including the
closing date to and including
[_________]. The class B
pass-through rate is [________%]. We
refer you to "Description of the
Securities--Payments of Interest"
and "Description of the Trust
Documents--Distributions" in this
prospectus supplement.
The trustee will make all payments
of interest to the class B
certificateholders on a pro rata
basis to the extent of available
funds.
Class B Principal: The trustee will pay principal on
the class B certificates on each
distribution date to the class B
certificateholders on a pro rata
basis in an amount equal to the
Class B Percentage of the Principal
Distribution Amount for the
Collection Period preceding such
distribution date. The Class B
Percentage is [______%]. We refer
you to "Description of the
Securities--Payments of Principal"
and "Description of the Trust
Documents--Distributions" in this
prospectus supplement.
Record Dates: The trustee will make
payments to holders of record of the
certificates as of the close of
business on the record date
applicable to the distribution date.
The record date for a distribution
date will be the [__] calendar day
of the month in which the
distribution date occurs.
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<PAGE>
SERVICING: After the sale of the receivables to
the trust, World Omni Financial
Corp. will continue to service the
receivables. World Omni Financial
Corp.'s responsibilities as servicer
will include, among other things,
collection of payments, realization
on the receivables and the financed
vehicles and monitoring the
performance of the receivables. In
return for World Omni Financial
Corp.'s services, the trust will pay
a fee to World Omni Financial Corp.
out of the interest payments
received by the trust. We refer you
to "Description of the Trust
Documents--Servicing Compensation"
in this prospectus supplement.
PRIORITY OF PAYMENTS: On each distribution
date, funds available for
distribution from the receivables,
net of specified trust expenses,
will be distributed in the following
amounts and order of priority:
(1) to the servicer, the
servicing fee and all
unpaid servicing fees;
(2) [to the class A
certificateholders, pro
rata, in accordance with
their interest
entitlements;
(3) to the class A
certificateholders, pro
rata, their principal
entitlements;
(4) to the class B
certificateholders, pro
rata, in accordance with
their interest
entitlements; and
(5) to the class B
certificateholders, pro
rata, their principal
entitlements.]
We refer you to "Description of the
Trust Documents--Distributions--
Payments to Certificateholders" in
this prospectus supplement.
Optional Redemption: The seller or the servicer may, at
their option, redeem the outstanding
certificates by purchasing all the
receivables. The seller or the
servicer may only redeem the
certificates when the aggregate
principal balance of the receivables
is equal to 10% or less of the
initial Pool Balance. The redemption
price will at least equal the unpaid
principal amount of the
certificates, plus accrued and
unpaid interest.
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CREDIT ENHANCEMENT:
[Reserve Account The initial amount in the reserve
account will be $___________, which
is ___ % of the original principal
amount of the securities. The
trustee will apply funds in the
reserve account to make payments due
on the certificates that are not
covered by collections on the
receivables. The reserve account
will be replenished to its required
amount with excess collections, if
available.] Amounts in the reserve
account in excess of the required
amount will be released to the
seller and will no longer be
available to make payments on
certificates.
Subordination: On each distribution date, the class
A certificateholders are entitled to
the full payment of the amount due
to them before the class B
certificateholders receive any
payment. The subordination of
payments to the class B
certificateholders is intended to
decrease the likelihood that the
trust will be unable to make the
payments due on the class A
certificates.
[Tax Status: In the opinion of Cadwalader,
Wickersham & Taft, the trust will be
treated as a grantor trust for
federal income tax purposes, will
not be subject to federal income tax
and will not be characterized as an
association (or publicly traded
partnership) taxable as a
corporation. We refer you to
"Federal Income Tax Consequences" in
the prospectus and in this
prospectus supplement for additional
information concerning the
application of federal tax laws to
the trust and the certificates.]
[ERISA Considerations: Subject to the
considerations discussed under
"ERISA Considerations," the class A
certificates are eligible for
purchase by employee benefit plans.
Ratings of the Certificates: It is a condition of issuance that
the class A certificates be rated
"______" (or its equivalent) by at
least two nationally recognized
rating agencies and that the class B
certificates be rated "_____" (or
its equivalent) by at least two
nationally recognized rating
agencies. A security rating is not a
recommendation to buy, sell or hold
securities and may be revised or
withdrawn at any time by the
assigning rating agency. We refer
you to "Risk Factors--A Rating of
the securities is not a
recommendation to purchase, hold or
sell securities" in the prospectus.
</TABLE>
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<PAGE>
RISK FACTORS
Prospective investors in the certificates should consider the following
factors and the additional factors discussed under "Risk Factors" in the
prospectus:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
You can only rely on payments on the The trust will not have any significant assets or sources of funds to
receivables and any amounts in the make payments on the certificates other than the receivables and the
reserve account for payments on your reserve account. You must rely for distributions of your certificates
certificates: upon payments on the receivables and amounts, if any, in the reserve
account. Although funds in the reserve account may be available on each
distribution date to cover shortfalls in distributions of interest and
principal on the certificates, the amounts available in the reserve
account are limited. If the reserve account becomes depleted, the trust
will depend solely on current collections on the receivables to make
payments on the certificates.
Subordination of class B certificates Distributions of interest and principal on the class B certificates
increases risk of loss to class B will be subordinated in priority of payment interest and principal due
certificateholders: on the class A certificates. Consequently, the class B
certificateholders will not receive any distributions with respect to a
Collection Period until the full amount of interest and principal due on
the class A certificates on such distribution date has been distributed
to the class A certificateholders. Such subordination has the effect of
increasing the likelihood of payment on the class A certificates and
therefore decreasing the likelihood of payment on the class B
certificates.
Prepayment on receivables may affect your We have determined the final scheduled distribution date for each class
yield to maturity: of certificates so that distributions on the underlying receivables will
be sufficient to retire each such class on or before its final scheduled
distribution date. However, because some prepayments of the receivables
are likely and some receivables have terms to maturity that are shorter
than the term to maturity assumed in calculating each class's final
scheduled distribution date, the actual payment of any class of
certificates likely will occur earlier, and could occur significantly
earlier, than such class's final scheduled distribution date.
Nevertheless, there can be no assurance that the final distribution of
principal of any or all classes of certificates will be earlier than
such class's final scheduled distribution date.
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<PAGE>
[The geographic concentration and Economic conditions in the states where obligors reside may affect
performance of the receivables may delinquencies, losses and prepayments on the receivables. The following
increase the risk of loss on your economic conditions may affect payments on the receivables:
investment: o unemployment,
o interest rates,
o inflation rates, and
o consumer perceptions of the economy.
If a large number of obligors are located in a particular state, these
conditions could increase the delinquency, credit loss or repossession
experience of the receivables. If there is a concentration of obligors
and receivables in particular states, any adverse economic conditions in
those states may affect the performance of the securities more than if
this concentration did not exist.
As of [ ,] World Omni Financial Corp.'s records indicate that the
billing addresses of the obligors of the receivables were in the
following states:
PERCENTAGE OF
STATE TOTAL PRINCIPAL BALANCE:
__________________________ __________________________
____________________ [ ]%
____________________ [ ]%
____________________ [ ]%
____________________ [ ]%
____________________ [ ]%
We refer you to "The Receivables Pool" in this prospectus supplement.]
You may have difficulty selling your There will have been no secondary market for any series of your
securities and/or obtaining your desired securities prior to the related offering. The underwriters intend to
price due to the absence of a secondary make a secondary market for the securities, but are not obligated to do
market. so. We cannot assure you that a market will develop or, if it does
develop, that it will provide you with liquidity of investment or
continue for the life of your securities.
There have been times in the past when very few buyers of asset backed
securities existed and there may be similar times in the future. As a
result, you may be unable to obtain the price that you wish to receive
for your securities or you may suffer a loss on your investment.
</TABLE>
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<PAGE>
THE TRUST
General
The seller will establish the trust by selling and assigning the trust
property, as described below, to the trustee in exchange for the certificates.
The trust will be governed by a pooling and servicing agreement dated as of
____________. The servicer will service the receivables pursuant to the pooling
and servicing agreement and will be compensated for acting as the servicer. See
"Description of the Trust Documents--Servicing Compensation and Payment of
Expenses." The trust will not engage in any business other than:
(1) acquiring, holding and managing the receivables, the other trust
assets and any proceeds from the receivables and other trust
assets;
(2) issuing and making payments on the securities; and
(3) engaging in other activities to accomplish the above.
If the protection provided to the investment of the certificateholders
by the reserve account is insufficient, and, in the case of the class A
certificateholders, the subordination of the class B certificates is
insufficient, the trust will look only to the obligors on the receivables and
the proceeds from the repossession and sale of financed vehicles which secure
defaulted receivables. In this event, some factors, such as the trust's not
having first priority perfected security interests in some of the financed
vehicles, may affect the trust's ability to realize on the collateral securing
the receivables. These factors may reduce the proceeds available to
certificateholders with respect to the certificates. We refer you to
"Description of the Trust Documents--Distributions--Allocations and
Distributions" in this prospectus supplement and "Some Legal Aspects of the
Receivables" in the prospectus.
The Trustee
[________________] is the trustee under the pooling and servicing
agreement. [___________] is a [national banking association] and its principal
offices are located at [________________].
THE RECEIVABLES POOL
The pool of receivables (the receivables pool) purchased on the closing
date will have an aggregate outstanding principal balance of approximately
$[___________] as of the cutoff date. Each receivable is a simple interest
receivable. World Omni Financial Corp. purchased most of the receivables from
dealers in the ordinary course of business. Approximately [__%] of the
receivables were originated by World Omni Financial Corp. under a program where
World Omni Financial Corp. offers to obligors which lease vehicles from its
affiliates the option of financing the purchase of the leased vehicle when the
related lease expires. As of the cutoff date, the receivables meet the criteria
described in the prospectus under "The Receivables Pool." In addition, as of the
applicable cutoff date, each receivable:
o [is secured by a new or used automobile or light duty truck;
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o was originated in the United States;
o provides for level monthly payments that fully amortize the
amount financed over its original term, subject to some
exceptions;
o was originated on or prior to [_______];
o has an original term of [____] to [_____] months and has a
remaining term to maturity of not less than [___] months nor more
than [___] months;
o provides for the payment of a finance charge at a stated annual
percentage rate ("APR") ranging from [___]% to [___]%;
o shall not have a scheduled payment that is more than 30 days
past due;
o was not due, to the best knowledge of World Omni Financial
Corp., from any obligor who is presently the subject of a
bankruptcy proceeding or is bankrupt or insolvent;
o was not secured by a financed vehicle that had been repossessed
without reinstatement; and
o has a scheduled maturity not later than [____________].]
COMPOSITION OF THE RECEIVABLES POOL
<TABLE>
<CAPTION>
<S> <C>
Initial Pool Balance ...................................................................$[ ]
Number of Receivables...................................................................[ ]
Average Cutoff Date Principal Balance...................................................$[ ]
Average Original Amount Financed........................................................[ ]
Range of Original Amount Financed.....................................................[ ]
Weighted Average APR of Receivables(1)..................................................[ ]%
Range of APRs.........................................................................[ ]
Weighted Average Remaining Maturity(1)..................................................[ ]
Range of Remaining Maturities as of the Cutoff Date...................................[ ]
</TABLE>
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(1) By original principal balance as of the cutoff date.
Approximately [____]% of the aggregate cutoff date principal balance of
the receivables purchased on the closing date, constituting [____]% of the
number of the total receivables, represent new vehicles, and approximately
[_____]% of the aggregate cutoff date principal balance of the receivables
purchased on the closing date, constituting [____]% of the number of the total
receivables, represent used vehicles.
The geographic distribution and distribution by annual percentage rate
of the receivables conveyed to the trust on the closing date as of the cutoff
date are described in the following tables.
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<TABLE>
<CAPTION>
Geographic Distribution of the Receivables as of the Cutoff Date
PERCENT OF
PERCENT OF INITIAL INITIAL
NUMBER OF NUMBER OF POOL POOL
STATE(1) RECEIVABLES RECEIVABLES(3) BALANCE BALANCE(3)
-------- ----------- -------------- ------- ----------
<S> <C> <C> <C> <C>
Alabama............................... % $ %
Florida...............................
Georgia...............................
North Carolina........................
South Carolina........................
All Others(2).........................
Total........................ 100% 100%
</TABLE>
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(1) Based on address of origination.
(2) No other state represents a percentage of the aggregate Principal Balance
as of the initial cutoff date in excess of ____ percent.
(3) Percentages may not add up to 100% because of rounding.
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Distribution of the Receivables by Annual Percentage Rate as of the Cutoff Date
<TABLE>
<CAPTION>
PERCENT OF
INITIAL INITIAL
NUMBER OF PERCENT OF NUMBER POOL POOL
ANNUAL PERCENTAGE RATE RANGE RECEIVABLES OF RECEIVABLES(1) BALANCE BALANCE(1)
---------------------------- ----------- ----------------- ------- ----------
<S> <C> <C> <C> <C>
[----]% - [----]%..................... % $ %
[----]% - [----]%.....................
[----]% - [----]%.....................
[----]% - [----]%.....................
[----]% - [----]%.....................
[----]% - [----]%.....................
----------- ------------- -------------- ------------
------------- -------------- ------------
Total 100.00% 100.00%
============= ============== ============
</TABLE>
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(1) Percentages may not add up to 100% because of rounding.
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Delinquencies, Repossessions and Net Losses.
Set forth below is some information concerning World Omni Financial
Corp.'s experience with respect to its portfolio of new and used automobile and
light duty truck retail installment sale contracts similar to the receivables.
The data presented in the following tables are for illustrative
purposes only. There is no assurance that World Omni Financial Corp.'s
delinquency, credit loss and repossession experience with respect to automobile
and light duty truck installment sale contracts in the future, or the experience
of the trust with respect to the receivables, will be similar to that described
below. Losses and delinquencies are affected by, among other things, general and
regional economic conditions and the supply of and demand for automobiles and
light duty trucks.
Delinquency Experience
(Dollars in Thousands)
<TABLE>
<CAPTION>
1999 1998 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Ending Number of Contracts................. 106,337 76,883 56,442 46,897
Percentage of Delinquent Contracts(1)(2)(3)
31-60 Days................................. 1.39% 1.82% 1.99% 2.69%
61-90 Days................................. 0.13% 0.16% 0.25% 0.23%
91 Days and Over........................... 0.02% 0.02% 0.06% 0.04%
----- ----- ----- -----
Total.......................... 1.54% 2.00% 2.30% 2.96%
</TABLE>
- ----------
(1) Delinquency figures reported exclude delinquent bankrupt contracts. As of
December 31, 1999, bankrupt contracts greater than 60 days past due totaled
749.
(2) The period of delinquency is based on the number of days payments are
contractually past due. (3) As a percentage of the total number of
contracts at period end. Net Loss and Repossession Experience(1) (Dollars
in Thousands)
<TABLE>
<CAPTION>
1999 1998 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Ending Net Receivables......................... $1,235,065 $818,488 $607,890 $475,410
Ending Number of Contracts..................... 106,337 76,883 56,442 46,897
Average Portfolio Outstanding During the Period $ 985,303 $758,566 $495,091 $427,851
Average Number of Contracts Outstanding During 88,807 72,772 50,210 42,949
the Period....................................
Number of Repossessions........................ 1,335 1,300 1,178 1,181
Repossessions as a Percentage of Average
Number of Contracts Outstanding................ 1.50% 1.79% 2.35% 2.75%
Net Repossession Losses (1) (2)................ $ 5,223 $ 6,248 $ 6,293 $ 6,643
Net Losses as a Percentage of Average
Portfolio Outstanding.......................... 0.53% 0.82% 1.27% 1.55%
</TABLE>
- ----------
(1) Net losses equal the aggregate net principal balances of all contracts
determined to be uncollectable in the period plus accrued but unpaid
interest earned through the point of charge-off, less any recoveries.
(2) Includes charged-off amounts as well as repossession losses but does not
include expenses incurred to dispose of vehicles.
YIELD CONSIDERATIONS
All of the receivables can be prepaid at any time without charge. For
this purpose "prepayments" include prepayments in full, liquidations due to
default, as well as receipts of proceeds from physical damage, credit life and
credit accident and health insurance policies and some other receivables
repurchased for administrative reasons. A variety of economic, social, and other
factors may influence the rate of prepayments on the receivables. For example,
an obligor generally may not sell or transfer the financed vehicle securing a
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receivable without the consent of World Omni Financial Corp. As the rate of
payment of principal of each class of certificates depends on the rate of
payment (including prepayments and liquidations due to default) of the principal
balance of the receivables, the final distribution in respect of the
certificates could occur significantly earlier than the final scheduled
distribution date. Certificateholders will bear all reinvestment risk resulting
from a faster or slower incidence of prepayment of receivables. The exercise by
the seller or servicer of its option to purchase the receivables and redeem the
certificates under the conditions described in "Description of the
Securities--Optional Redemption" in this prospectus supplement will also
accelerate the payment of the certificates.
OTHER INFORMATION
Under the pooling and servicing agreement, the certificateholders will
receive monthly reports concerning the payments received on the receivables and
various other items of information. The trustee will furnish to the
certificateholders of record during any calendar year information for tax
reporting purposes not later than the latest date permitted by law. We refer you
to "Description of the Trust Documents--Statements to Certificateholders" in
this prospectus supplement.
USE OF PROCEEDS
The seller will use the net proceeds of the sale of the certificates to
purchase the receivables from World Omni Financial Corp.
DESCRIPTION OF THE SECURITIES
General
The certificates will be issued under the terms of a pooling and
servicing agreement among the seller, the servicer and the trustee. We have
filed a form of the pooling and servicing agreement as an exhibit to the
registration statement.
Payments of Interest
Interest on the principal balances of the classes of the certificates
will accrue at their respective per annum pass-through rates and will be payable
to the certificateholders monthly on each distribution date, commencing
[__________]. Payments will be made to the certificateholders of record as of
the day immediately preceding such distribution date or, if definitive
securities are issued, as of the 15th day of the preceding month. Interest on
the outstanding principal amount of the certificates will accrue at the
applicable pass-through rates during the interest accrual period (from the
closing date (in the case of the first distribution date) or from the [first]
day of the month preceding the month of a distribution date to and including the
[last] day of the month of the distribution date). Interest on each class of the
certificates will be calculated on the basis of a 360-day year consisting of
twelve 30-day months. We refer you to "Description of the Trust
Documents--Distributions--Payments to Certificateholders" in this prospectus
supplement.
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Payments of Principal
On the Business Day immediately preceding each distribution date, the
trustee shall determine the amount in the Collection Account for the related
Collection Period allocable to interest and the amount allocable to principal on
an actual basis. Payments to certificateholders on the following distribution
date will be based on this allocation. A "Collection Period" means with respect
to any distribution date, the calendar month preceding such distribution date. A
"Business Day" is a day other than a Saturday, a Sunday or a day on which
banking institutions or trust companies in the City of New York, Deerfield
Beach, Florida or Mobile, Alabama are authorized by law, regulation or executive
order to be closed. We refer you to "Description of the Trust
Documents--Distributions--Payments to Certificateholders" in this prospectus
supplement
Optional Redemption
To avoid excessive administrative expense, the seller or the servicer
may at its option purchase all remaining receivables from the trust. The seller
or the servicer (or its successor) may exercise this repurchase option on or
after the last day of any month on or after which the aggregate principal
balance of the receivables is equal to 10% or less of the aggregate cutoff date
principal balance of receivables. The redemption price will at least equal the
aggregate of the unpaid principal amount of the certificates plus accrued and
unpaid interest as of such last day. Exercise of this right will result in the
early retirement of the certificates. Upon declaration of an optional
redemption, the trustee will give written notice of termination to each
certificateholder of record. The final distribution to any certificateholder
will be made only upon surrender and cancellation of each certificateholder's
certificate at the office or agency of the trustee specified in the notice of
termination.
REGISTRATION OF CERTIFICATES
General
The Certificates will evidence interests in the trust created pursuant
to the pooling and servicing agreement. The class A certificates will evidence
in the aggregate an undivided ownership interest (the "Class A Percentage") of
approximately ____% of the trust and the class B certificates will evidence in
the aggregate an undivided ownership interest (the "Class B Percentage") of
approximately ____% of the trust.
Book Entry Registration
The certificates will initially be represented by certificates
registered in the name of Cede & Co. as nominee of The Depository Trust Company
("DTC"), and will only be available in the form of book-entries on the records
of DTC and participating members of DTC in denominations of $1,000. DTC is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered under the provisions of Section 17A of the Securities Exchange Act of
1934, as
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amended. DTC accepts securities for deposit from its participating
organizations ("Participants") and facilitates the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes in accounts of Participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers,
banks and trust companies and clearing corporations and may include some other
organizations. Indirect access to the DTC system is also available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly.
A person acquiring an interest in the certificates will hold his or her
interest through DTC, in the United States, or Clearstream Banking, societe
anonyme ("Clearstream") or the Euroclear System ("Euroclear"), in Europe.
Transfers within DTC, Clearstream or Euroclear, as the case may be, will be in
accordance with the usual rules and operating procedures of the relevant system.
Cross-market transfers between persons holding directly or indirectly through
DTC, on the one hand, and counterparties holding directly or indirectly through
Clearstream or Euroclear, on the other, will be effected in DTC through
Citibank, N.A. or Morgan Guaranty Trust Company of New York, the relevant
depositaries of Clearstream or Euroclear, respectively, and each a participating
member of DTC. We refer you to "Description of the Securities--Book Entry
Registration" in the prospectus.
If you are acquiring beneficial ownership interests in the
certificates, you may hold the certificates directly though DTC if you are a
Participant, or you may hold your interest indirectly through organizations
which are Participants. Your ownership of a book-entry certificate will be
recorded on the records of the brokerage firm, bank, thrift institution or other
financial intermediary that maintains your account for that purpose. In turn the
entity's ownership of the book-entry certificate will be recorded on the records
of DTC (or of a participating firm that acts as its agent, whose interest will
in turn be recorded on the records of DTC). We refer you to "Description of the
Securities--Book-Entry Registration" in the prospectus.
DESCRIPTION OF THE TRUST DOCUMENTS
The following summary describes some terms of the trust documents which
are comprised of the purchase agreement and the pooling and servicing agreement.
We have filed forms of the trust documents as exhibits to the registration
statement. We will file a copy of the final trust documents with the Securities
and Exchange Commission following the issuance of the securities. Because this
is a summary of the trust documents, it does not contain all the information
that may be important to you. You should read the trust documents in their
entirety if you require complete information regarding their contents.
Sale and Assignment of Receivables
On or before the closing date, various structured commercial paper
lending vehicles and an affiliated entity of World Omni Financial Corp. will
transfer their interests in the receivables to World Omni Financial Corp. The
seller will then purchase from World Omni Financial Corp. under the purchase
agreement, without recourse (except as provided in the purchase agreement),
World Omni Financial Corp.'s entire interest in the receivables, together with
World Omni Financial Corp.'s security interests in the related financed
vehicles. At the time of issuance of the certificates, the seller will sell and
assign to the trust, without recourse,
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except as provided in the pooling and servicing agreement, its entire interest
in the receivables, together with its security interests in the financed
vehicles. The trustee will, concurrently with such sale and assignment, execute,
authenticate, and deliver the certificates to the seller in exchange for the
receivables. The seller will sell the certificates to the underwriters. We refer
you to "Underwriting" in this prospectus supplement.
To assure uniform quality in servicing, as well as to reduce
administrative costs, the trustee will appoint the servicer as custodian of the
receivables and all documents related thereto. The receivables will not be
physically segregated from other automobile and light duty truck retail
installment sale contracts of the servicer, or those which the servicer services
for others, to reflect the transfer to the trust.
In the purchase agreement, World Omni Financial Corp. will make
representations and warranties to the seller concerning the receivables, as
described under "Receivables Pool" in this prospectus supplement. As of the last
day of the second (or, if World Omni Financial Corp. elects, the first) month
following the discovery by or notice to the seller and World Omni Financial
Corp. of a breach of any representation or warranty that materially and
adversely affects the interest of the trust or the trustee, unless the breach is
cured, World Omni Financial Corp. will purchase such receivable from the trust
for the Purchase Amount. The repurchase obligation will constitute the sole
remedy available to the certificateholders or the trustee for any such uncured
breach.
Trust Accounts
The trustee will establish and maintain one or more accounts
(collectively, the "Collection Account") in the name of the trustee on behalf of
the certificateholders. Within two Business Days of receipt of funds, the
servicer will deposit collections into the Collection Account. The trustee will
also establish and maintain one or more accounts, in the name of the trustee on
behalf of the certificateholders, from which it will make all distributions with
respect to the certificates (collectively, the "Distribution Account").
Advances
[The servicer will make advances of interest] in respect of the
receivables.
Servicing Compensation and Payment of Expenses
The servicing fee for the servicer will be [__]% per annum of the Pool
Balance as of the first day of the related Collection Period (or, in the case of
the first distribution date, as of the initial cutoff date). The "Pool Balance"
will represent the aggregate principal balance of the receivables at the end of
a Collection Period, after giving effect to all payments received from obligors,
Purchase Amounts for that Collection Period, and all losses realized on
receivables liquidated during such Collection Period.
The servicing fee in respect of a Collection Period (together with any
portion of the servicing fee that remains unpaid from prior distribution dates)
will be paid on the distribution date following such Collection Period out of
collections for such Collection Period. The servicer may elect to waive the
servicing fee with respect to a related Collection Period as
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discussed in "Description of the Trust Documents--Servicing Compensation" in the
prospectus.
Distributions
Deposits to Distribution Account
On or before each distribution date, the servicer will cause the Total
Distribution Amount (net of the servicing fee for such distribution date and any
previously unpaid servicing fees) to be deposited into the Distribution Account.
The "Total Distribution Amount"for a distribution date shall be the sum of the
Interest Distribution Amount and the Principal Distribution Amount (other than
the portion thereof attributable to Realized Losses). "Realized Losses" means
the excess of the principal balance of any Liquidated Receivable over
Liquidation Proceeds to the extent allocable to principal received in the
Collection Period in which the receivable became a Liquidated Receivable.
Allocations and Distributions
On each distribution date, the servicer will instruct the trustee to
make the following distributions, to the extent of the amount then on deposit in
the Distribution Account, in the following order of priority:
(1) allocate to the class A certificateholders for distribution as
described below, from the Total Distribution Amount remaining after
the deduction of the unpaid servicing fees, the Class A Interest
Distributable Amount;
(2) allocate to the class A certificateholders for distribution as
described below, from the Total Distribution Amount remaining after
the application of clause (1) and the deduction of the unpaid
servicing fees, the Class A Principal Distributable Amount;
(3) allocate to the class B certificateholders for distribution as
described below, from the Total Distribution Amount remaining after
the application of clauses (1) and (2) and the deduction of the unpaid
servicing fees, the Class B Interest Distributable Amount; and
(4) allocate to the class B certificateholders for distribution as
described below, from the Total Distribution Amount remaining after
the application of clauses (1), (2) and (3) and the deduction of the
unpaid servicing fees, the Class B Principal Distributable Amount;
(5) allocate to the reserve account, from the Total Distribution Amount
remaining after the application of clause (2) and the deduction of the
unpaid servicing fees, the excess, if any, of the specified reserve
amount over the amount then allocated to the reserve account; and
(6) [distribute to the seller the remaining balance, if any.]
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For purposes of this prospectus supplement, the following terms shall have the
following meanings:
The "Interest Distribution Amount" for a distribution date generally
will be the sum of the following amounts with respect to the preceding
Collection Period: (i) that portion of all collections on the receivables
allocable to interest; (ii) all proceeds of the liquidated receivables, net of
expenses incurred by the servicer in connection with such liquidation and any
amounts required by law to be remitted to the obligor on the liquidated
receivables ("Liquidation Proceeds"), to the extent attributable to interest due
thereon in accordance with the servicer's customary servicing procedures, and
all recoveries in respect of liquidated receivables which were written off in
prior Collection Periods; (iii) the Purchase Amount of each receivable that was
repurchased by the seller or purchased by the servicer under an obligation which
arose during the related Collection Period, to the extent attributable to
accrued interest thereon; and (iv) investment earnings on funds on deposit in
the Collection Account.
The "Principal Distribution Amount" for a distribution date generally
will be the sum of the following amounts with respect to the related Collection
Period: (i) that portion of all collections on the receivables allocable to
principal; (ii) all Liquidation Proceeds attributable to the principal amount of
receivables which became liquidated receivables during such Collection Period in
accordance with the servicer's customary servicing procedures, plus the amount
of Realized Losses with respect to such liquidated receivables; (iii) to the
extent attributable to principal, the Purchase Amount received with respect to
each receivable repurchased by the seller or purchased by the servicer under an
obligation which arose during the related Collection Period; and (iv) partial
prepayments relating to refunds of extended warranty protection plan costs or of
physical damage, credit life or disability insurance policy premiums, but only
if such costs or premiums were financed by the respective obligor as of the date
of the original contract.
The Interest Distribution Amount and the Principal Distribution Amount
on any distribution date shall exclude all payments and proceeds (including
Liquidation Proceeds) of any receivables the Purchase Amount of which has been
included in the Total Distribution Amount in a prior Collection Period.
The Interest Distribution Amount and Principal Distribution Amount with
respect to any distribution date will not be determined on the basis of the
reconciliation methodology described under "Description of the Transfer and
Servicing Agreements--Distributions--Allocation of Collections on Receivables;
Reconciliation."
Calculation of Distributable Amounts
The "Class A Distributable Amount" with respect to a distribution date
shall be an amount equal to the sum of (i) the "Class A Principal Distributable
Amount," consisting of the Class A Percentage of the Principal Distribution
Amount, plus (ii) the "Class A Interest Distributable Amount" consisting of
thirty (30) days' interest at the class A pass-through rate on the Class A
Certificate Balance as of the close of business on the last day of the preceding
Collection Period. In addition, on the final scheduled distribution date, the
Class A Principal
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Distributable Amount will include the lesser of (A) the Class
A Percentage of any payments of principal due and remaining unpaid on each
receivable in the trust as of the last day of the preceding Collection Period
and (B) the portion of such amount necessary (after giving effect to the other
amounts described above to be distributed to the class A certificateholders on
such distribution date and allocable to principal) to reduce the Class A
Certificate Balance to zero.
The "Class A Certificate Balance" shall equal, initially,
$_____________ and, thereafter, shall equal the initial Class A Certificate
Balance reduced by all amounts previously distributed to class A
certificateholders and allocable to principal.
The "Class B Distributable Amount" with respect to a distribution date
shall be an amount equal to the sum of (i) the "Class B Principal Distributable
Amount," consisting of the Class B Percentage of the Principal Distribution
Amount plus (ii) the "Class B Interest Distributable Amount," consisting of
thirty (30) days' interest at the class B pass-through rate on the Class B
Certificate Balance as of the close of business on the last day of the preceding
Collection Period. In addition, on the final scheduled distribution date, the
principal required to be distributed to the class B certificateholders will
include the lesser of (i) the Class B Percentage of any payments of principal
due and remaining unpaid with respect to the receivables in the trust as of the
last day of the preceding Collection Period and (ii) the portion of the amount
in clause (i) above that is necessary (after giving effect to all other amounts
distributed to class A and class B certificateholders on such distribution date
and allocable to principal) to reduce the Class B Certificate Balance to zero.
The "Class B Certificate Balance" shall equal, initially,
$_______________ and, thereafter, shall equal the initial Class B Certificate
Balance, reduced by all amounts previously distributed to class B
certificateholders (or deposited in the reserve account, but not including the
reserve account initial deposit) and allocable to principal and by Realized
Losses.
The "Certificateholders' Distributable Amount" means, with respect to
any distribution date, the sum of the Class A Distributable Amount and the Class
B Distributable Amount.
Calculation of Amounts to Be Distributed
Prior to each distribution date, the servicer will calculate the Total
Distribution Amount, the Class A Distributable Amount and the Class B
Distributable Amount.
The holders of the class A certificates will receive on any
distribution date, to the extent of available funds, the Class A Distributable
Amount and any outstanding Class A Interest Carryover Shortfall and Class A
Principal Carryover Shortfall (each as defined below) as of the close of the
preceding distribution date. On each distribution date on which the sum of the
Class A Interest Distributable Amount and any outstanding Class A Interest
Carryover Shortfall from the preceding distribution date (plus interest on such
Class A Interest Carryover Shortfall at the class A pass-through rate from such
preceding distribution date to the current distribution date, to the extent
permitted by law) exceeds the Class A Percentage of the Interest Distribution
Amount (after payment of the servicing fee) on such distribution date, the class
A certificateholders shall be entitled generally to receive such amounts, first,
from the Class A Percentage of the Interest Distribution Amount; second, if such
amounts are
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insufficient, from the amounts available in the reserve account; and
third, if such amounts are insufficient, from the Class B Percentage of the
Principal Distribution Amount (other than the portion thereof attributable to
Realized Losses).
The "Class A Interest Carryover Shortfall" as of the close of any
distribution date means the excess of the Class A Interest Distributable Amount
for such distribution date, plus any outstanding Class A Interest Carryover
Shortfall from the preceding distribution date, plus interest on such
outstanding Class A Interest Carryover Shortfall, to the extent permitted by
law, at the class A pass-through rate from such preceding distribution date
through the current distribution date, over the amount of interest that the
holders of the class A certificates actually received on such current
distribution date.
On each distribution date on which the sum of the Class A Principal
Distributable Amount and any outstanding Class A Principal Carryover Shortfall
from the preceding distribution date exceeds the Class A Percentage of the
Principal Distribution Amount on such distribution date, the class A
certificateholders shall be entitled to receive such amounts first, from the
Class B Percentage of the Principal Distribution Amount (other than the portion
thereof attributable to Realized Losses); second, if such amounts are
insufficient, from amounts available in the reserve account; and third, if such
amounts are insufficient, from the Class B Percentage of the Interest
Distribution Amount. The "Class A Principal Carryover Shortfall" as of the close
of any distribution date means the excess of the Class A Principal Distributable
Amount plus any outstanding Class A Principal Carryover Shortfall from the
preceding distribution date over the amount of principal that the holders of the
class A certificates actually received on such current distribution date.
The holders of the class B certificates will receive on any
distribution date, to the extent of available funds, the Class B Distributable
Amount and any outstanding Class B Interest Carryover Shortfall and Class B
Principal Carryover Shortfall (each as defined below) as of the close of the
preceding distribution date. On each distribution date on which the sum of the
Class B Interest Distributable Amount and any outstanding Class B Interest
Carryover Shortfall from the preceding distribution date (plus interest on such
Class B Interest Carryover Shortfall at the class B pass-through rate from such
preceding distribution date to the current distribution date, to the extent
permitted by law) exceeds the Class B Percentage of the Interest Distribution
Amount (after distribution of the servicing fee) on such distribution date less
any portion thereof required to be distributed to the class A certificateholders
pursuant to their prior rights as described above, the class B
certificateholders shall be entitled generally to receive such amounts, first,
from the Class A Percentage of the Interest Distribution Amount that is not
otherwise required to be distributed to the class A certificateholders as
described above and, second, from the amount, if any, available in the reserve
account (after giving effect to any withdrawals therefrom for distribution to
the class A certificateholders on such distribution date). The "Class B Interest
Carryover Shortfall" as of the close of any distribution date means the excess
of the Class B Interest Distributable Amount for such distribution date, plus
any outstanding Class B Interest Carryover Shortfall from the preceding
distribution date, plus interest on such outstanding Class B Interest Carryover
Shortfall, to the extent permitted by law, at the class B pass-through rate from
such preceding distribution date through the current distribution date, over the
amount of interest that the holders of the class B certificates actually
received on such current distribution date.
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On each distribution date on which the sum of the Class B Principal
Distributable Amount and any outstanding Class B Principal Carryover Shortfall
from the preceding distribution date exceeds the Class B Percentage of the
Principal Distribution Amount on such distribution date less any portion thereof
required to be distributed to the class A certificateholders pursuant to their
prior rights as described above, the class B certificateholders shall be
entitled to receive such amounts, first, from the Interest Distribution Amount
that is not otherwise required to be distributed to the Class A or class B
certificateholders as described above and, second, from amounts available in the
reserve account (after giving effect to any withdrawals therefrom on such
Distribution Date for distribution to the class A certificateholders and for
distribution of interest to the class B certificateholders). The "Class B
Principal Carryover Shortfall" as of the close of any distribution date means
the excess of the Class B Principal Distributable Amount plus any outstanding
Class B Principal Carryover Shortfall from the preceding distribution date over
the amount of principal that the holders of class B certificates actually
received on such current distribution date.
Subordination of the class B certificates; [Reserve Acount]
The rights of the class B certificateholders to receive distributions
with respect to the receivables generally will be subordinated to the rights of
the class A certificateholders in the event of defaults and delinquencies on the
receivables as described herein and provided in the pooling and servicing
agreement. The protection afforded to the class A certificateholders through
subordination will be effected both by the preferential right of the class A
certificateholders to receive current distributions with respect to the
receivables and by the establishment of the reserve account. The seller will
initially deposit into the reserve account a specified reserve amount equal to
an initial deposit on the closing date in cash or eligible investments in the
amount of $[_________], which is [__]% of the initial principal balance of the
securities. The trustee will deposit investment earnings on funds in the reserve
account, net of losses and investment expenses, into the reserve account until
the reserve account reaches the specified balance required.
The trustee will hold amounts allocated from time to time to the
reserve account for the benefit of certificateholders. On each distribution date
the trustee will pay to the certificateholders from the reserve account the
amount by which the Total Distribution Amount (after the payment of the
servicing fee) with respect to any Collection Period is less than the
Certificateholders' Distributable Amount. On each distribution date, the trustee
will deposit into the reserve account up to the specified reserve amount to the
extent of the portion, if any, of the Total Distribution Amount remaining after
payment of the servicing fee and the payment of the Certificateholders'
Distributable Amount.
If the amount allocated to the reserve account on any distribution date
(after giving effect to all deposits therein or other withdrawals therefrom on
such distribution date) is greater than the specified reserve amount for the
related distribution date, the trustee will generally distribute the excess
amount to the seller. [To the extent the seller elects, the seller may instruct
the trustee to deposit such excess amounts in the Collection Account for
application as described in [__________]. The seller has no obligation to make
this election.] Upon this distribution, the certificateholders will not have any
rights in, or claims to, such
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amounts. Subsequent to any reduction or withdrawal by any rating agency of its
rating of any class of certificates, unless such rating has been restored, the
trustee will pay any such excess to certificateholders on each distribution date
as an accelerated payment of principal.
After the payment in full, or the provision for such payment, of (i)
all accrued and unpaid interest on the certificates and (ii) the outstanding
principal balance of the securities, the trustee will distribute any remaining
funds in the reserve account, subject to some limitations, to the seller.
The subordination of the class B certificates and the reserve account
are intended to enhance the likelihood of receipt by class A certificateholders
of the full amount of principal and interest due them and to decrease the
likelihood that the class A certificateholders will experience losses. However,
in some circumstances, the reserve account could be depleted. If the amount
required to be withdrawn from the reserve account to cover shortfalls in
collections on the receivables exceeds the amount then allocated to the reserve
account, certificateholders could incur losses or a temporary shortfall in the
amounts distributed to the certificateholders could result, which could, in
turn, increase the average lives of the certificates.]
If on any distribution date the holders of the class A certificates do
not receive the sum of the Class A Distributable Amount, the Class A Interest
Carryover Shortfall and the Class A Principal Carryover Shortfall for such
distribution date (after giving effect to any amounts withdrawn from the reserve
account and the Class B Percentage of the Total Distribution Amount and applied
to such deficiency, as described above), the holders of the class B certificates
generally will not receive any portion of the Total Distribution Amount. While
the class B certificateholders are entitled to receive amounts from the reserve
account as described above, such entitlement is subordinated to the rights of
the class A certificateholders to receive amounts from the reserve account as
described above. If the reserve account becomes depleted, the class B
certificateholders may experience shortfalls in the distributions due them and
incur a loss on their investment.
Statements to Certificateholders
On each distribution date, the trustee will include with each
distribution to each certificateholder of record as of the close of business on
the applicable record date a statement (prepared by the servicer) as described
in "Description of the Securities--Statements to Certificateholders" in the
prospectus.
FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Cadwalader, Wickersham & Taft, the trust will be
treated as a grantor trust for federal income tax purposes, will not be subject
to federal income tax and will not be characterized as an association (or a
publicly traded partnership) taxable as a corporation. See "Federal Income Tax
Consequences--Trusts Treated as Grantor Trusts" in the Prospectus.
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STATE AND LOCAL TAX CONSEQUENCES
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
certificates, then a financial organization investing in the certificates 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. The seller believes the Loan
Rule does not apply to an investment in the certificates or the receipt of
interest on the certificates 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 the certificates and your ability to offset
any such Florida tax against any other state tax liabilities.
The State of Florida imposes a value-based intangibles tax on January 1
of each year at the rate of $1.50 per $1,000 of value on certain intangibles
owned, managed or controlled by Florida domiciliaries or intangibles having a
business situs in Florida. On the last Business Day of each year, in an effort
to minimize the impact of this intangibles tax, the servicer intends to transfer
the custody of the receivables, together with all of its duties, rights and
obligations under the pooling and servicing agreement to World Omni Acceptance
III Corp., ("WOAC III"), a wholly-owned subsidiary of World Omni Financial
Corp., located and managed outside the State of Florida (such transfer, the
"Annual Servicing Transfer"). The trust will continue to own the receivables.
Only the servicer's servicing rights under the pooling and servicing agreement,
together with its custody of the receivables, will be transferred to WOAC III,
to be held in escrow and returned to the servicer on the first Business Day of
the following year. This annual transfer is consistent with the Technical
Assistance Advisement 95(C)2-021 issued by the Florida Department of Revenue,
which holds that a transfer of receivables to a wholly-owned subsidiary located
outside the State of Florida and having no contacts with the State of Florida
was sufficient to avoid the imposition of the intangibles tax on the receivables
subject to such tax. As additional protection, the trust will be indemnified by
World Omni Financial Corp. with respect to any liability for this intangibles
tax. World Omni Financial Corp. has agreed in the pooling and servicing
agreement not to conduct any servicing activities during the period of the
Annual Servicing Transfer.
The discussion above does not address the tax treatment of the trust,
the securities or the security owners under any state or local tax law other
than Florida law to the extent set forth above. Prospective investors are urged
to consult their own tax advisors regarding the local tax treatment of the trust
and the securities, and the consequences of purchase, ownership or disposition
of the securities under any state or local tax law, if applicable.
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ERISA CONSIDERATIONS
The class A certificates
Subject to the considerations set forth under "ERISA Considerations" in
the Prospectus, the class A certificates may be purchased by or with assets of
an employee benefit plan or an individual retirement account (a "Plan") subject
to ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code"). A fiduciary of a Plan must determine that the purchase of a class A
certificate is consistent with its fiduciary duties under ERISA and does not
result in a nonexempt prohibited transaction as defined in Section 406 of ERISA
or Section 4975 of the Code. For additional information regarding treatment of
the class A certificates under ERISA, see "ERISA Considerations" in the
Prospectus.
The class B certificates
The class B certificates may not be acquired by (a) an employee benefit
plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of
Title I of ERISA, (b) a plan described in Section 4975(e)(1) of the Code or (c)
any entity whose underlying assets include plan assets by reason of a plan's
investment in the entity. By its acceptance of a class B certificate, each class
B certificateholder will be deemed to have represented and warranted that it is
not subject to the foregoing limitation. For additional information regarding
treatment of the class B certificates under ERISA, see "ERISA Considerations" in
the Prospectus.
UNDERWRITING
Under the terms and subject to the conditions contained in an
underwriting agreement dated [ , 2000] among World Omni Financial Corp., the
seller and the underwriters, the seller has agreed to sell to the underwriters
named below and each of the underwriters has severally agreed to purchase, the
principal amount of the offered certificates described opposite its name below:
S-28
CLASS A CERTIFICATES
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C>
[ ].................................................................... $[ ]
[ ].................................................................... [ ]
[ ].................................................................... [ ]
[ ].................................................................... [ ]
----------------
Total........................................................ $[ ]
================
CLASS B CERTIFICATES
PRINCIPAL
AMOUNT
[ ].................................................................... $[ ]
[ ].................................................................... [ ]
[ ].................................................................... [ ]
[ ].................................................................... [ ]
----------------
Total........................................................ $[ ]
================
</TABLE>
The underwriters have advised the seller that they propose initially to
offer the offered certificates to the public at the prices described herein, and
to some dealers at such prices less the initial concession not in excess of
[____% per class A certificate and ____% per class B certificate.] The
underwriters may allow and the related dealers may reallow a concession not in
excess of [____% per class A certificate and ____% per class B certificate] to
some other dealers. After the initial public offering of the offered
certificates, the public offering price and such concessions may be changed.
The underwriting agreement provides that the obligations of the
underwriters are subject to some conditions precedent and that the underwriters
will purchase all the certificates offered hereby if any of such certificates
are purchased.
[Each underwriter has represented and agreed that (a) it has not
offered or sold, and will not offer to sell, any offered certificates to persons
in the United Kingdom except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as principal agent)
for the purposes of their businesses or otherwise in circumstances that do not
constitute an offer to the public in the United Kingdom for the purposes of the
Public Offers of Securities Regulations 1995, (b) it has complied and will
comply with all applicable provisions of the Financial Services Act of 1986 of
Great Britain with respect to anything done by it in relation to the offered
certificates in, from or otherwise involving the United Kingdom and (c) it has
only issued or passed on and will only issue or pass on in the United Kingdom
any document in connection with the issue of the offered certificates to a
person who is of a kind described in Article 11(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1995 or is a person to whom
the document may otherwise lawfully be issued or passed on.]
S-29
<PAGE>
The certificates are a new issue of securities with no established trading
market. World Omni Financial Corp. and the seller do not intend to apply for
listing of the certificates on a national securities exchange. The underwriters
have advised World Omni Financial Corp. and the seller that they intend to act
as market makers for the certificates. However, the underwriters are not
obligated to do so and may discontinue any market making at any time without
notice. Accordingly, no assurance can be given as to the liquidity of any
trading market for the certificates.
[In connection with the offering of the certificates, the underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
market price of the certificates. Such transactions may include stabilization
transactions effected in accordance with Rule 104 of Regulation M, pursuant to
which such person may bid for or purchase the certificates for the purpose of
stabilizing its market price. In addition, the underwriters may impose "penalty
bids" whereby they may reclaim from a dealer participating in the offering the
selling concession with respect to the certificates that the dealer distributed
in the offering but subsequently purchased for the account of the underwriters
in the open market. Any of the transactions described in this paragraph may
result in the maintenance of the price of the certificates at a level above that
which might otherwise prevail in the open market. None of the transactions
described in this paragraph is required, and, if they are taken, may be
discontinued at any time without notice].
World Omni Financial Corp. and the seller have agreed to indemnify the
underwriters against some liabilities, including civil liabilities under the
Securities Act, or contribute to payments which the underwriters may be required
to make in respect of some liabilities, including civil liabilities under the
Securities Act.
[In the ordinary course of their respective businesses, the
underwriters and their affiliates have engaged and may engage in investment
banking and/or commercial banking transactions with World Omni Financial Corp.
and the seller and their affiliates]. We refer you to "Use of Proceeds" herein
and "Plan of Distribution" in the accompanying prospectus.
This prospectus supplement and the accompanying prospectus may be used
by the underwriters, affiliates of which have an ownership interest in, or
participate in banking transactions with, World Omni Financial Corp. and the
seller, in connection with offers and sales related to market making
transactions in the certificates. The underwriters may act as principals or
agents in such transactions. Such sales will be made at prices related to
prevailing market prices at the time of the sale or otherwise.
LEGAL OPINIONS
Some legal matters relating to the securities will be passed upon for
the seller and the servicer by Cadwalader, Wickersham & Taft, New York, New
York. Some legal matters relating to Florida state tax laws will be passed upon
for the seller and the servicer by____________________________. Certain legal
matters relating to the certificates will be passed upon for the underwriters by
[ ].
S-30
<PAGE>
INDEX OF TERMS
Annual Servicing Transfer..........................27
APR................................................13
Business Day.......................................18
Certificateholders' Distributable Amount...........23
Class A Certificate Balance........................23
Class A Distributable Amount.......................22
Class A Interest Carryover Shortfall...............24
Class A Interest Distributable Amount..............22
Class A Percentage.................................18
Class A Principal Carryover Shortfall..............24
Class A Principal Distributable Amount.............22
Class B Certificate Balance........................23
Class B Distributable Amount.......................23
Class B Interest Carryover Shortfall...............24
Class B Interest Distributable Amount..............23
Class B Percentage.................................18
Class B Principal Carryover Shortfall..............25
Class B Principal Distributable Amount.............23
Clearstream........................................19
Code...............................................28
Collection Account.................................20
Collection Period..................................18
Distribution Account...............................20
DTC................................................18
Euroclear..........................................19
Interest Distribution Amount.......................22
Liquidation Proceeds...............................22
Loan Rule..........................................27
Participants.......................................19
Plan...............................................28
Pool Balance.......................................20
Principal Distribution Amount......................22
Realized Losses....................................21
Total Distribution Amount..........................21
WOAC III...........................................27
S-31
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
No dealer, salesperson or other person is authorized to give any information or
to represent anything not contained in this prospectus and prospectus $[ ]
supplement. You must not rely on any unauthorized information or (Approximate)
representations. This prospectus and prospectus supplement is an offer to sell
only the securities offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this World Omni Auto Receivables LLC
prospectus and prospectus supplement is current only as of its dates. Until [ ], Seller
all dealers effecting transactions in the offered securities, whether or not
participating in this distribution, may be required to deliver a prospectus
supplement and prospectus. This is in addition to the dealers' obligation to
deliver a prospectus supplement and prospectus when acting as underwriters and Auto Receivables Backed
with respect to an unsold allotment or subscription.
Notes Series 2000-
-----------------
PROSPECTUS SUPPLEMENT
-----------------
[Underwriter]
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Registration Fee........................................................ $ 435,600
Printing and Engraving.................................................. 125,000
Legal Fees and Expenses................................................. 400,000
Accountants' Fees and Expenses.......................................... 100,000
Rating Agency Fees...................................................... 550,000
Trustee's Fees and Expenses............................................. 30,000
Miscellaneous Fees...................................................... 20,000
Total................................................................. $1,660,600
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 18-108 of the Delaware Limited Liability Company Act (the "Act")
provides that, subject to the standards and restrictions, if any, as are
described in its limited liability company agreement, a limited liability
company may, and shall have the power to, indemnify and hold harmless any member
or manager or other person from and against any and all claims and demands
whatsoever.
The Registrant was formed under the laws of Delaware. The limited liability
company agreement of the Registrant provides, in effect, that, subject to
certain limited exceptions, it will indemnify its members, directors or officers
and may indemnify any employee or agent of the Registrant who was or is a party
or is threatened to be made a party to a threatened, pending, or completed
action, suit, or proceeding (whether civil, criminal, administrative, or
investigative and whether formal or informal) other than an action by or in the
right of the Registrant, where such person is a party because such person is or
was a member, director, officer, employee, or agent of the Registrant. The
Registrant's limited liability company agreement also provides that it will
generally indemnify its members and directors against expenses, including,
attorney fees, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by a director in connection with an action,
suit or proceeding relating to acts or omissions of that director regarding
specified items relating to bankruptcy and insolvency.
In general, the Registrant will indemnify its members, directors or
officers and may indemnify its employees or agents against expenses, including
attorneys fees, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with an action,
suit or proceeding. To the fullest extent permitted by law, the Registrant will
also indemnify such member, director or officer and may indemnify such employee
or agent if the person acted in good faith and did not engage in willful
misconduct or gross negligence. With respect to a criminal action or proceeding,
the person must have had no reasonable cause to believe his misconduct was
unlawful. Unless ordered by a court, certain indemnifications shall be made by
the Registrant only as it authorizes in the specific case after (1) determining
that the indemnification is proper under the circumstances because the person to
be indemnified has met the applicable standard of conduct and (2) evaluating the
reasonableness of the expenses and of the amounts paid in settlement. This
determination and evaluation shall be made by a majority vote of the
disinterested members or, if there is only one member, by that member. However,
no indemnification shall be provided to any member, director, officer, employee,
or agent of the Registrant for or in connection with (1) the receipt of a
financial benefit to which the person is not entitled; (2) voting for or
assenting to a distribution to members in violation of the limited liability
company agreement or the Delaware Limited Liability Company Act; (3) a knowing
violation of law; or (4) acts or omissions of such person constituting willful
misconduct or gross negligence. To the extent that a member, director, officer,
employee, or agent of the Registrant has been successful on the merits or
otherwise in defense of an action, suit, or proceeding or in defense of any
claim, issue, or other
<PAGE>
matter in such action, suit or proceeding, such person shall be indemnified
against actual and reasonable expenses, including reasonable attorney fees,
incurred by such person in connection with the action, suit, proceeding and any
action, suit or proceeding brought to enforce such mandatory indemnification.
In addition, no Member, director or officer of the Registrant shall be
liable to the Registrant or any other person who has an interest in the
Registrant for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such member, director or officer in good faith
on behalf of the Registrant and in a manner reasonably believed to be within the
scope of the authority conferred on such member, director or officer by the
limited liability company agreement of the Registrant, except that a member,
director or officer shall be liable for any such loss, damage or claim incurred
by reason of such member's, director's or officer's willful misconduct or gross
negligence.
Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
The Registrant also maintains insurance providing for payment, subject to
certain exceptions, on behalf of officers, directors and managers of the
Registrant and its subsidiaries of money damages incurred as a result of legal
actions instituted against them in their capacities as such officers, directors
or managers (whether or not such person could be indemnified against such
expense, liability or loss under the Delaware Limited Liability Company Act).
Each underwriting agreement will provide that the underwriter will
indemnify the Registrant against specified liabilities, including liabilities
under the Securities Act of 1933.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS.
(a) Exhibits
<TABLE>
<S> <C> <C>
1.1 -- Form of Underwriting Agreement
3.1 -- Limited Liability Company Agreement of Registrant*
4.1 -- Form of Trust Agreement and exhibits thereto
4.2 -- Form of Indenture and exhibits thereto
4.3 -- Form of Pooling and Servicing Agreement
5.1 -- Opinion of Cadwalader, Wickersham & Taft with respect to legality
8.1 -- Opinion of Cadwalader, Wickersham & Taft with respect to tax matters (incorporated in
Exhibit 5.1)
10.1 -- Form of Sale and Servicing Agreement
10.2 -- Form of Purchase Agreement
23.1 -- Consent of Cadwalader, Wickersham & Taft (incorporated in Exhibit 5.1)
24.1 -- Power of Attorney (included on page II-5)
</TABLE>
- ------------------
* Previously filed.
(b) Financial Statements
All financial statements, schedules and historical financial information
have been omitted as they are not applicable.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes:
(a) To file during any period in which offers or sales are being made, a
post-effective amendment to this registration statement 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 Securities
Act of 1933, as amended (the "Securities 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) That for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual reports pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement 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.
(e) To provide to the Underwriters at the closing specified in the
Underwriting Agreements certificates in such denominations and registered in
such names as required by the Underwriters to provide prompt delivery to each
purchaser.
(f) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, that the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission (the "Commission") such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the 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, the 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
securities Act and will be governed by the final adjudication of such issue.
(g) That for purposes of determining any liability under the Securities
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 the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(h) That for the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus 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.
(i) To file an application for the purpose of determining the eligibility
of the trustee to act under subsection (a) of Section 310 of the trust Indenture
Act in accordance with the rules and regulations prescribed by the Commission
under Section 305(b)(2) of the trust Indenture Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3, and reasonably believes that the security
rating requirement contained in Transaction Requirement B.5. of Form S-3 will be
met by the time of the sale of the securities registered hereunder and has duly
caused this Pre-Effective Amendment No. 1 to Form S-3 registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized in the
City of Deerfield Beach, State of Florida, on May 19, 2000.
WORLD OMNI AUTO RECEIVABLES LLC
By: /S/ JAMES R. FOSTER
---------------------------------
Name: James R. Foster
Title: Treasurer
II-4
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints James R. Foster his true and lawful
attorney-in-fact and agent, with full power of substitution and re-
substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Pre-Effective Amendment No. 1 to Form S-3 registration statement, and to
file the same, with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
said attorney-in-fact and agent or his substitutes or substitute may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to Form S-3 registration statement has been signed
by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ------------------------------------------ --------------------------------------------------------- ------------
<S> <C> <C>
/S/ JAMES R. FOSTER Director and Treasurer May 19, 2000
James R. Foster (Chief Financial and Accounting Officer)
/S/ LOUIS R. FEAGLES Director and President May 19, 2000
Louis R. Feagles (Chief Executive Officer)
/S/ COLIN W. BROWN Director May 19, 2000
Colin W. Brown
/S/ JEFFREY B. SHAPIRO Director May 19, 2000
Jeffrey B. Shapiro
/S/ CHRISTOPHER C. WHEELER Director May 19, 2000
Christopher C. Wheeler
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -------------------------------------------------------------------------------------------------------
<S> <C> <C>
1.1 -- Form of Underwriting Agreement
3.1 -- Limited Liability Company Agreement of Registrant*
4.1 -- Form of Trust Agreement and exhibits thereto
4.2 -- Form of Indenture and exhibits thereto
4.3 -- Form of Pooling and Servicing Agreement
5.1 -- Opinion of Cadwalader, Wickersham & Taft with respect to legality
8.1 -- Opinion of Cadwalader, Wickersham & Taft with respect to tax matters (incorporated in Exhibit 5.1)
10.1 -- Form of Sale and Servicing Agreement
10.2 -- Form of Purchase Agreement
23.1 -- Consent of Cadwalader, Wickersham & Taft (incorporated in Exhibit 5.1)
24.1 -- Power of Attorney (included on page II-5)
</TABLE>
- ------------------
* Previously filed.
Exhibit 1.1
WORLD OMNI AUTO RECEIVABLES LLC,
WORLD OMNI FINANCIAL CORP.
AND
[UNDERWRITER]
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
FOR
WORLD OMNI AUTO RECEIVABLES TRUSTS
AUTOMOBILE RECEIVABLE BACKED SECURITIES
[______], 200_
<PAGE>
WORLD OMNI AUTO RECEIVABLES LLC,
WORLD OMNI FINANCIAL CORP.
120 N.W. 12th Avenue
Deerfield Beach, Florida 33442
[Underwriter], as
representative of the several
Underwriters named in the
respective Underwriting
Agreements hereinafter described
[________], 200_
Dear Sirs:
From time to time, World Omni Auto Receivables LLC ("WOAR")
and World Omni Financial Corp. ("World Omni") may enter into one or more
underwriting agreements that provide for the sale of Securities (as defined
herein) to you and to such other underwriters as may be named therein. The
standard provisions set forth herein may be incorporated by reference in any
such underwriting agreement (each, an "Underwriting Agreement"). Any such
Underwriting Agreement shall be in the form of Annex I hereto, with such
additions and deletions as the parties thereto may determine. Unless otherwise
defined herein, capitalized terms used herein shall have the meanings set forth
in the Indenture referred to below.
I.
WOAR proposes to sell to the several underwriters named in the
Underwriting Agreement $[_______] principal amount of its Class [__] [__]% Auto
Receivables Backed Securities (the "Securities") representing debt in a trust
secured by the trust assets, consisting primarily of retail installment sales
contracts (the "Receivables") secured by new and used automobiles, light trucks
and retail purchasers (the "Financed Vehicles"). The Securities will be issued
by World Omni Auto Receivables Trust Series 200_-[ ] (the "Trust") pursuant to
an indenture dated as of [_____], 200_ (the "Indenture") between the Trust, as
issuer and the bank or trust company or other financial institution identified,
as trustee (the "Trustee"). The Receivables will be sold to WOAR by World Omni
pursuant to a Receivables Purchase Agreement (the "Purchase Agreement") between
World Omni, as Seller and WOAR as Purchaser. The Trust will acquire the
Receivables from WOAR pursuant to a Sale and Servicing Agreement, dated as of
[________], 200_ (the "Sale and Servicing Agreement") between WOAR, as seller,
World Omni, as servicer and the Trust, as issuer. The terms and rights of any
particular issuance of Securities shall be as specified in the Underwriting
Agreement relating thereto and in or pursuant to the Indenture identified in
such Underwriting Agreement. The Securities which are the subject of any
particular Underwriting Agreement into which these Standard Provisions are
incorporated are herein referred to as the "Offered Securities." This Agreement,
the Underwriting Agreement, the Indenture and the Sale and Servicing Agreement
-2-
<PAGE>
are hereinafter referred to as the "Transaction Documents." The Securities will
represent undivided interests in a trust fund consisting of a pool of the
Receivables, all monies due thereunder after a specified date, security
interests in the Financed Vehicles, and other instruments, funds, and accounts
as may be specified in the Indenture (collectively, the "Trust Fund"). The
Securities with respect to each Underwriting Agreement and the related Indenture
shall be issued with the title and in the amount set forth in such Underwriting
Agreement.
Particular sales of Securities may be made from time to time
to you, or to the Underwriters named in the Underwriting Agreement, for whom
you, or you together with such other firm or firms specified in the Underwriting
Agreement, will act as representatives (the "Representatives"). The terms
"Representatives" and "Underwriters" shall mean you in such instances where you
act as sole Underwriter. The standard provisions set forth herein shall not be
construed as an obligation of WOAR to sell any of the Securities or as an
obligation of any of the Underwriters to purchase the Securities. The obligation
of WOAR to sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the
Underwriting Agreement with respect to the Securities specified therein. Each
Underwriting Agreement shall specify the aggregate original principal amount of
such Securities or, if applicable, an indication that the offering will be an
at-the-market offering, the purchase by the Underwriters of such Securities, the
names of the Representatives of such Underwriters (if applicable), and the
aggregate original principal amount of such Securities to be purchased by each
Underwriter and shall set forth the date, time, and delivery of such Securities
and the manner of payment therefor. The Underwriting Agreement shall also
specify (to the extent not set forth in the Indenture and the registration
statement and prospectus with respect thereto) the terms of such Securities. An
Underwriting Agreement shall be in the form of an executed writing (which may be
in counterparts), and may be evidenced by an exchange of facsimile
communications. The obligation of the Underwriters under an Underwriting
Agreement shall be several and not joint.
II.
Representations and Warranties. (1) WOAR represents and
warrants to, and agrees with, each Underwriter of any Offered Securities as of
the date hereof and as of the date of any Underwriting Agreement that:
(a) A registration statement on Form S-3, including a
prospectus, relating to the Securities has been filed with the
Securities and Exchange Commission (the "Commission"), pursuant to the
Securities Act of 1933, as amended (the "Act"), which registration
statement has become effective and copies of which have been heretofore
delivered to you. WOAR is eligible to use Form S-3 in connection with
the offer and sale of the Securities. WOAR, as registrant, will file
with the Commission either, prior to effectiveness of such registration
statement, an amendment thereto (including the form of final prospectus
and prospectus supplement) or, after effectiveness of such registration
statement, a final prospectus and/or prospectus supplement in
accordance with Rules 430A and 424(b)(1) or (4). As filed, such
amendment and form of final prospectus and prospectus supplement, or
such final prospectus and/or prospectus supplement, shall include all
Rule 430A Information (as defined below) and, except to
-3-
<PAGE>
the extent that the Underwriters shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to the Underwriters prior to the Execution Time (as defined
below) or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes
(beyond that contained in the latest Preliminary Prospectus (as defined
below)) as WOAR has advised the Underwriters, prior to the Execution
Time, will be included or made therein.
As used herein, the term the "Effective Date" shall
mean each date that the Registration Statement and any post-effective
amendment or amendments thereto became or become effective. "Execution
Time" shall mean the date and time that the Underwriting Agreement is
executed and delivered by the parties thereto. "Preliminary Prospectus"
shall mean any preliminary prospectus and prospectus supplement which
has been filed pursuant to Rule 402(a), Rule 472(a) or Rule 424.
"Prospectus" shall mean the prospectus and prospectus supplement
relating to the Offered Securities that is filed pursuant to Rule
424(b) in respect of the Offered Securities including any documents
incorporated by reference therein, or if no filing pursuant to Rule
424(b) is required, shall mean the prospectus and the prospectus
supplement included in the Registration Statement at the Effective
Date. "Registration Statement" shall mean the registration statement
referred to in the preceding paragraph, as it may be amended, including
incorporated documents, exhibits and financial statements, in the form
in which it was at the latest Effective Time prior to the Closing Date
(as hereinafter defined), inclusive of such incorporated documents,
exhibits, financial statements and any Rule 430A Information deemed to
be included therein at the Effective Date as provided by Rule 430A.
"Rule 430A Information" means information with respect to the Offered
Securities and the offering thereof permitted to be omitted from the
Registration Statement, at the Effective Date, pursuant to Rule 430A.
(b) On the Effective Date, at the Execution Time,
and, when the Prospectus is first filed in accordance with Rule 424(b)
and on the Closing Date, the Registration Statement did or will and the
Prospectus will, comply as to form in all material respects with the
applicable requirements of the Act and the rules and regulations of the
Commission; on each such date the Prospectus did not and will not,
include any untrue statement of a material fact and did not and will
not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and at each
such time the Registration Statement did not and will not include any
untrue statement of a material fact and did not and will not omit to
state a material fact necessary in order to make the statements therein
not misleading; provided, however, that the foregoing representations
and warranties in this Article II(1)(b) do not apply to any statements
or omissions made in reliance on and in conformity with information
relating to any Underwriter furnished to WOAR by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement
or the Prospectus. For purposes of this Agreement, each party
acknowledges that the amounts of the selling concession and reallowance
set forth in the Prospectus Supplement constitute the only information
relating to any Underwriter furnished to WOAR by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement
or the Prospectus.
-4-
<PAGE>
(c) The computer tape of the Receivables underlying
the Offered Securities made available to the Representatives by WOAR
was complete and accurate as of the date that it was delivered to the
Representatives and accurately reflects both the information appearing
on the "Schedule of Receivables" that will be an exhibit to the
Indenture and the description of the Receivables in the related
Prospectus Supplement.
(d) WOAR has been duly organized and is validly
existing as a limited liability company under the laws of the State of
Delaware and has all power and authority to own its properties and
conduct its business, as now conducted by it, and to enter into and
perform its obligations under each Transaction Document to which it is
a party.
(e) WOAR is not aware of (i) any request by the
Commission for any further amendment of the Registration Statement or
the Prospectus or for any additional information, (ii) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any
proceeding for that purpose or (iii) any notification with respect to
the suspension of the qualification of the Offered Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding
for such purpose.
(f) This Agreement has been duly authorized,
executed, and delivered by WOAR and the other Transaction Documents to
which it is a party, when delivered by WOAR, will each have been duly
authorized, executed, and delivered by WOAR, and each such Transaction
Document will constitute a legal, valid, and binding agreement of WOAR,
enforceable against WOAR in accordance with its terms, subject, as to
the enforcement of remedies, to applicable bankruptcy, insolvency,
reorganization, moratorium, receivership, and other similar laws
affecting creditors' rights generally and to general principles of
equity (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(g) The Offered Securities and Transaction Documents
will conform in all material respects to the description thereof
contained in the Prospectus and, assuming that the Offered Securities
have been duly and validly authorized, executed, and issued by the
Trustee in accordance with the Indenture, will, when duly and validly
authenticated by the Trustee and delivered to and paid for by the
Underwriters in accordance with this Agreement and the Underwriting
Agreement, be entitled to the benefits of the Indenture.
(h) As of the Closing Date, each of the Receivables
will meet the criteria for selection described in the Prospectus, and
on such Closing Date the representations and warranties of WOAR with
respect to the Receivables contained in the Sale and Servicing
Agreement will be true and correct.
(i) Neither the sale of the Offered Securities, nor
the consummation of any other of the transactions contemplated by, nor
the fulfillment of the terms of, any Transaction Document to which it
is a party, (A) will constitute a breach of any term or provision of
the limited liability company agreement of WOAR, or (B) conflict with
or constitute a breach, violation, or acceleration of or a default
under the terms of any
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<PAGE>
indenture or other agreement or instrument to which WOAR is a party or
by which it is bound, or any statute, regulation, or order applicable
to WOAR of any governmental body, administrative agency, regulatory
body, or court having jurisdiction over WOAR or WOAR's material
properties, that materially and adversely affects or would in the
future materially and adversely affect (i) the ability of WOAR to
perform its obligations under any Transaction Document to which it is a
party or (ii) the business, operations, or financial condition, or the
material properties or assets of WOAR. WOAR is not a party to, bound by
or in breach or violation of any indenture or other material agreement
or instrument, or subject to or in violation of any statute,
regulation, or order of any governmental body, administrative agency,
regulatory body, or court having jurisdiction over it, that materially
and adversely affects or would in the future materially and adversely
affect (i) the ability of WOAR to perform its obligations under any
Transaction Document to which it is a party or (ii) the business,
operations, or financial condition, or the material properties or
assets of WOAR.
(j) There are no actions or proceedings against, or
investigations of, WOAR pending or, to the knowledge of WOAR,
threatened before any court, administrative agency, or other tribunal
(i) asserting the invalidity of any Transaction Document or the Offered
Securities, (ii) seeking to prevent the issuance of the Offered
Securities or the consummation of any of the transactions contemplated
by any Transaction Document, (iii) that might materially and adversely
affect the performance by WOAR of its obligations under, or the
validity or enforceability of, any Transaction Document or the Offered
Securities, (iv) seeking to affect adversely the federal income tax
attributes of the Offered Securities described in the Prospectus, or
(v) that if determined adversely as to WOAR would have a material
adverse effect on the business, operations, or financial condition or
the material properties or assets of WOAR.
(k) There has not been any material adverse change,
or development involving a material adverse prospective change, in the
business, operations, or financial condition or the material properties
or assets of WOAR, taken as a whole, since the more recent of (1) the
end of the most recent fiscal quarter for which quarterly financial
statements or audited annual financial statements, as applicable, were
delivered to Representatives prior to the date of the related
Underwriting Agreement or (2) the formation of WOAR.
(l) Any taxes, fees, and other governmental charges
in connection with the execution and delivery of any Transaction
Document and the execution, delivery, and sale of the Offered
Securities have been or will be paid at or before the Closing Date.
(m) WOAR is not an "investment company" or under the
"control" of an "investment company," as such terms are defined in the
Investment Company Act of 1940.
(2) World Omni represents and warrants to, and agrees with,
each Underwriter of any Offered Securities as of the date hereof and as
of the date of any Underwriting Agreement that:
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<PAGE>
(a) The computer tape of the Receivables underlying
the Offered Securities made available to the Representatives by World
Omni was complete and accurate as of the date that it was delivered to
the Representatives and accurately reflects both the information
appearing on the "Schedule of Receivables" that will be an exhibit to
the Indenture and the description of the Receivables in the related
Prospectus Supplement.
(b) World Omni has been duly incorporated as a
corporation and is validly existing under the laws of the State of
Florida, and has corporate and other power and authority to own its
properties and conduct its business, as now conducted by it, and to
enter into and perform its obligations under the Transaction Documents.
(c) This Agreement has been duly authorized,
executed, and delivered by World Omni and the other Transaction
Documents to which it is a party, when delivered by World Omni, will
each have been duly authorized, executed, and delivered by World Omni,
and each such Transaction Document will constitute a legal, valid, and
binding agreement of World Omni, enforceable against World Omni in
accordance with its terms, subject, as to the enforcement of remedies,
to applicable bankruptcy, insolvency, reorganization, moratorium,
receivership, and other similar laws affecting creditors' rights
generally and to general principles of equity (regardless of whether
the enforcement of such remedies is considered in a proceeding in
equity or at law).
(d) The Offered Securities and Transaction Documents
will conform in all material respects to the description thereof
contained in the Prospectus and, assuming that the Offered Securities
have been duly and validly authorized, executed, and issued by the
Trustee in accordance with the Indenture, will, when duly and validly
authenticated by the Trustee and delivered to and paid for by the
Underwriters in accordance with this Agreement and the Underwriting
Agreement, be entitled to the benefits of the Indenture.
(e) As of the Closing Date, each of the Receivables
will meet the criteria for selection described in the Prospectus, and
on such Closing Date the representations and warranties of World Omni
with respect to the Receivables contained in the Purchase Agreement
will be true and correct.
(f) Neither the sale of the Offered Securities, nor
the consummation of any other of the transactions contemplated by, nor
the fulfillment of the terms of, any Transaction Document to which it
is a party, (A) will constitute a breach of any term or provision of
the certificate of incorporation or by-laws of World Omni, or (B)
conflict with or constitute a breach, violation, or acceleration of or
a default under the terms of any indenture or other agreement or
instrument to which World Omni is a party or by which it is bound, or
any statute, regulation, or order applicable to World Omni of any
governmental body, administrative agency, regulatory body, or court
having jurisdiction over World Omni or World Omni's material
properties, that materially and adversely affects or would in the
future materially and adversely affect (i) the ability of World Omni to
perform its obligations under any Transaction Document to which it is a
party or (ii) the business, operations, or financial condition, or the
material properties or assets of
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<PAGE>
World Omni. World Omni is not a party to, bound by or in breach or
violation of any indenture or other material agreement or instrument,
or subject to or in violation of any statute, regulation, or order of
any governmental body, administrative agency, regulatory body, or court
having jurisdiction over it, that materially and adversely affects or
would in the future materially and adversely affect (i) the ability of
World Omni to perform its obligations under any Transaction Document to
which it is a party or (ii) the business, operations, or financial
condition, or the material properties or assets of World Omni.
(g) There are no actions or proceedings against, or
investigations of, World Omni pending or, to the knowledge of World
Omni, threatened before any court, administrative agency, or other
tribunal (i) asserting the invalidity of any Transaction Document or
the Offered Securities, (ii) seeking to prevent the issuance of the
Offered Securities or the consummation of any of the transactions
contemplated by any Transaction Document, (iii) that might materially
and adversely affect the performance by World Omni of its obligations
under, or the validity or enforceability of, any Transaction Document
or the Offered Securities, (iv) seeking to affect adversely the federal
income tax attributes of the Offered Securities described in the
Prospectus, or (v) that if determined adversely as to World Omni would
have a material adverse effect on the business, operations, or
financial condition or the material properties or assets of World Omni.
(h) There has not been any material adverse change,
or development involving a material adverse prospective change, in the
business, operations, or financial condition or the material properties
or assets of World Omni, taken as a whole, since the end of the most
recent fiscal quarter for which either audited annual financial
statements or unaudited quarterly financial statements, as applicable,
were delivered to the Representatives prior to the date of the related
Underwriting Agreement.
(i) Any taxes, fees, and other governmental charges
in connection with the execution and delivery of any Transaction
Document and the execution, delivery, and sale of the Offered
Securities have been or will be paid at or before the Closing Date.
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<PAGE>
III.
Purchase By the Underwriters. The Offered Securities to be
purchased by the Underwriters pursuant to the Underwriting Agreement relating
thereto in such authorized denominations and registered in such names as the
Underwriters may request upon three full Business Days' prior notice to WOAR,
shall be delivered by or on behalf of WOAR to the Representatives for the
account of such Underwriters, against payment by such Underwriters (or on such
Underwriters' behalf) of the purchase price therefor (i) by wire transfer or by
certified or official bank check or checks, payable to the order of WOAR in
immediately available funds, or (ii) by such other means and in such form as is
specified in the Underwriting Agreement, all at the place, time, and date
specified in the Underwriting Agreement or at such other place, time, and date
as the Underwriters and WOAR may agree upon in writing, such time and date being
herein called the "Closing Date" for such Offered Securities.
WOAR agrees to have the Offered Securities available for
inspection, checking, and packaging by the Representatives in New York, New York
(or such other location as may be specified by the Representatives) not later
than 10:00 A.M. on the Business Day prior to the Closing Date.
IV.
Offering by the Underwriters. WOAR is advised by the
Representatives that upon the execution of the Underwriting Agreement and
authorization by the Representatives of the release of such Offered Securities,
the Underwriters propose to offer such Offered Securities for sale upon the
terms and conditions set forth in the Prospectus as amended or supplemented.
WOAR agrees that the Underwriters are not obligated to make a market in the
Offered Securities and any such market-making may be discontinued at any time in
the Underwriters' sole discretion.
V.
Agreements. WOAR agrees with each of the Underwriters of any
Offered Securities that:
(a) WOAR will promptly advise each such Underwriter
(i) when any amendment to the Registration Statement shall have become
effective, (ii) of any request by the Commission for any amendment to
the Registration Statement or the Prospectus or for any additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (iv)
of the receipt by WOAR of any notification with respect to the
suspension of the qualification of the Offered Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose. WOAR will not file any amendment to the Registration
Statement or supplement to the Prospectus after the date of the
Underwriting Agreement and prior to the Closing Date for such Offered
Securities unless WOAR has furnished each such Underwriter a copy for
its review prior to filing and will not file any such proposed
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<PAGE>
amendment or supplement to which any such Underwriter reasonably
objects. Subject to the foregoing sentence, if required under the Act,
WOAR will cause the Prospectus, as supplemented or amended, to be
transmitted to the Commission for filing pursuant to Rule 424(b) under
the Act by means reasonably calculated to result in timely filing with
the Commission pursuant to said rule. WOAR will use its best efforts to
prevent the issuance of any stop order suspending the effectiveness of
the Registration Statement and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when in the opinion of counsel
for the Underwriters the Prospectus is required by law to be delivered,
any event occurs as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if it shall be necessary to amend or supplement the
Prospectus to comply with the Act or the rules under the Act, WOAR will
promptly prepare and file with the Commission, subject to paragraph (a)
of this Article V, an amendment or supplement that will correct such
statement or omission or an amendment that will effect such compliance
and, if such amendment or supplement is required to be contained in a
post-effective amendment to the Registration Statement, will use its
best efforts to cause such amendment of the Registration Statement to
be made effective as soon as possible.
(c) WOAR will furnish to the Underwriters, without
charge, executed copies of the Registration Statement (including
exhibits thereto) and, so long as delivery of a prospectus by the
Underwriters or a dealer may be required by the Act, as many copies of
the Preliminary Prospectus and Prospectus, as amended or supplemented,
and any amendments and supplements thereto as the Underwriters may
reasonably request. WOAR will pay the expenses of printing all offering
documents relating to the offering of the Offered Securities.
(d) WOAR agrees that, so long as the Offered
Securities shall be outstanding, promptly after the availability
thereof, it will deliver or cause to be delivered to the
Representatives the annual statement as to compliance delivered to the
Trustee pursuant to the Sale and Servicing Agreement, the annual
statement of a firm of independent public accountants furnished to the
Trustee pursuant to the Sale and Servicing Agreement, and the
Servicer's Certificate and all monthly reports generated by the
Servicer under the Sale and Servicing Agreement.
(e) As soon as practicable, but not later than
sixteen months after the effective date of the Registration Statement,
WOAR will cause the Trust to make generally available to
securityholders of the Trust an earnings statement of the Trust
covering a period of at least 12 months beginning after the effective
date of the Registration Statement which will satisfy the provisions of
Section 11(a) of the Act and, at the option of WOAR, will satisfy the
requirements of Rule 158 under the Act.
(f) WOAR will furnish such information, execute such
instruments and take such action, if any, as may be required to qualify
the Offered Securities for sale
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<PAGE>
(including, but not limited to, such action as may be required for the
qualification or exemption of the sale of the Offered Securities under
state securities or Blue Sky laws) and to determine their eligibility
for investment under the laws of such jurisdictions as the Underwriters
may designate and will maintain such qualification in effect so long as
required for the distribution of the Offered Securities. WOAR will
furnish such information, execute such instruments and take such
action, if any, as the Underwriters may reasonably request in
connection with any filing with the National Association of Securities
Dealers, Inc. relating to the Offered Securities should the
Underwriters determine that such filing is required or appropriate.
(g) Unless otherwise provided in the related
Underwriting Agreement, WOAR will pay all costs and expenses in
connection with the transactions herein contemplated, including, but
not limited to, the fees and disbursements of its counsel; the costs
and expenses of preparation and printing (or otherwise reproducing) and
delivering each Transaction Document, and printing or engraving and
distributing the Offered Securities; any transfer taxes relating to the
transfer of the Offered Securities to the Underwriters; accounting fees
and disbursements; the costs and expenses in connection with the
qualification or exemption of the sale of the Offered Securities under
state securities or Blue Sky laws and the determination of their
eligibility for investment under state and federal laws, including
filing fees and reasonable fees and disbursements of counsel in
connection therewith; the costs and expenses of the Trustee, including
reasonable fees and disbursements of its counsel; the costs and
expenses of any credit enhancer, including reasonable fees and
disbursements of its counsel; fees and disbursements of the
Underwriters' counsel; the costs and expenses of preparing and
distributing any memoranda concerning the Offered Securities'
eligibility for investment; the costs and expenses in connection with
the preparation, printing, and filing of the Registration Statement
(including exhibits thereto), the Preliminary Prospectus, and the
Prospectus and all amendments and supplements thereto, and the
furnishing to the Underwriters of such copies of each such document as
the Underwriters may reasonably request; the fees of the rating agency
that initially rates the Offered Securities; and any filing fees of the
National Association of Securities Dealers, Inc. relating to the
Offered Securities should the Underwriters determine that such filing
is required or appropriate.
(h) Each Underwriting Agreement will specify a period
of days beginning from each Effective Date during which neither WOAR
nor any affiliate of WOAR will, without the Underwriters' prior written
consent, enter into any agreement to offer or sell receivables or
securities as identified in such Underwriting Agreement.
(i) So long as any of the Offered Securities are
outstanding, WOAR will furnish to the Underwriters as soon as
practicable after the end of the fiscal year, (i) all documents
required to be distributed to securityholders of the Trust or filed
with the Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any order of the Commission thereunder
and (ii) from time to time, any other information concerning WOAR filed
with any government or regulatory authority that is otherwise publicly
available.
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<PAGE>
(j) On or before the Closing Date, WOAR and World
Omni shall cause their computer records relating to the Receivables and
the Receivables Files to be marked in such a manner as shall clearly
indicate the Trust's absolute ownership of the Receivables, and from
and after the Closing Date WOAR and World Omni shall not take any
action inconsistent with the Trust's ownership of such Receivables,
other than as permitted by the Sale and Servicing Agreement.
(k) To the extent, if any, that the rating provided
with respect to the Offered Securities by the rating agency that
initially rates the Offered Securities is conditional upon the
furnishing of documents or the taking of any other actions by WOAR,
WOAR shall, as soon as practicable, furnish such documents and take any
such other actions.
(l) WOAR will file with the Commission any periodic
reports concerning the Trust and the Offered Securities that are
required by the Exchange Act.
(m) WOAR will timely file with the Commission on Form
8-K any documents concerning the Trust and the Offered Securities that
are required by the Act.
VI.
Conditions to the Obligations of the Underwriters. The
obligation of the Underwriters of any Offered Securities under the Underwriting
Agreement to purchase the Offered Securities shall be subject to the accuracy of
the representations and warranties on the part of WOAR and World Omni contained
herein as of the date hereof and the Closing Date, to the accuracy of the
statements of WOAR made in any certificates pursuant to the provisions hereof,
to the performance by WOAR of its obligations hereunder and to the following
additional conditions with respect to the Offered Securities:
(a) The Registration Statement shall have become
effective not later than 4:00 p.m., New York City time, on the day
following the Effective 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
threatened; and, if required, the Prospectus shall have been timely
filed with the Commission pursuant to Rule 424(b) under the Act.
(b) The Underwriters shall have received from
Cadwalader, Wickersham & Taft, counsel for WOAR and World Omni and such
other counsels admitted in the appropriate jurisdictions acceptable to
the Representative, favorable opinions, dated the Closing Date and
satisfactory in form and substance to counsel for the Underwriters.
Such opinions (a) may express reliance as to factual matters on the
representations and warranties made by, and on certificates or other
documents furnished by, officers of the parties to the Transaction
Documents, (b) may assume the due authorization, execution, and
delivery of the instruments and documents referred to therein by the
parties thereto other than WOAR, World Omni and their respective
affiliates, and (c) to the extent such opinion relates to law other
than the laws of the State
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<PAGE>
of New York and the federal laws of the United States, may rely on a
favorable opinion of local counsel satisfactory to the Representatives,
dated the Closing Date, and satisfactory in form and substance to
counsel for the Underwriters.
(c) Cadwalader, Wickersham & Taft and/or such other
counsels will also deliver opinions to the Underwriters, dated the
Closing Date and satisfactory in form and substance to counsel for the
Underwriters with respect to certain insolvency and Uniform Commercial
Code matters.
(d) For each State for which the Receivables
constitute [__%] or more of the initial principal balance of a
Receivables included in the Trust Fund, the Underwriters shall have
received from legal counsel to WOAR admitted in the appropriate
jurisdictions acceptable to the Representative, favorable opinions,
dated the Closing Date and satisfactory in form and substance to the
counsel for the Underwriters.
(e) The Underwriters shall have received from counsel
for the Underwriters, a favorable opinion, dated the Closing Date and
satisfactory in form and substance to the Underwriters, with respect to
the issuance and sale of the Securities, certain matters with respect
to the Registration Statement and the Prospectus and such other matters
as the Underwriters may require.
(f) The Underwriters shall have received on the
Closing Date, addressed to the Underwriters and dated the Closing Date,
any opinion delivered to the rating agency or credit enhancer in
connection with its rating of the Offered Securities.
(g) The Underwriters shall have received from counsel
for the Trustee, a favorable opinion, dated the Closing Date and
satisfactory in form and substance to counsel for the Underwriters, to
the effect set forth in Exhibit A.
(h) The Underwriters shall have received a favorable
opinion addressed to the Underwriters from counsel for the third party
credit enhancer, if any, dated the Closing Date and satisfactory in
form and substance to counsel for the Underwriters.
(i) The Offered Securities shall be rated in [the
highest category] by a nationally recognized rating agencies or such
other category as shall be designated in the Underwriting Agreement.
Further, subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any
downgrading, nor shall any notice have been given of (i) any intended
or potential downgrading or (ii) any review or possible change that
does not indicate the direction of a possible change, in the rating
accorded (i) the Offered Securities by any nationally recognized rating
agency which rates the Offered Securities or (ii) any rated debt
instrument issued by the third party credit enhancer, if any.
(j) WOAR and World Omni will enter into each
Transaction Document to which it is a party at or before the Closing
Date and, when delivered by
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WOAR and World Omni as the case may be, each such Transaction Document
will have been duly authorized, executed, and delivered by such entity
and will constitute the legal, valid, and binding agreement of such
entity.
(k) Each of World Omni and WOAR shall have delivered
to the Underwriters a certificate, dated the Closing Date, of the
President or a Vice President to the effect that the signer of such
certificate has carefully examined each Transaction Document and to the
effect that: (i) the representations and warranties of such entity
contained in such agreements are true and current in all material
respects at and as of the Closing Date with the same effect as if made
at the Closing Date, (ii) such entity has complied in all material
respects with all the agreements and satisfied all the conditions on
its part to be performed or satisfied on or prior to the Closing Date,
(iii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to such entity's knowledge threatened, (iv) there shall
have been no material adverse change in the condition of such entity,
from that set forth in the Registration Statement, (v) nothing has come
to its attention that would lead it to believe that the Prospectus or
Registration Statement contains any untrue statement of a material fact
or omits 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, (vi) such entity has been duly incorporated
or duly organized (as applicable) and is validly existing as a
corporation or a limited liability company (as applicable) in good
standing under the laws of the jurisdiction of its organization with
corporate or requisite (as applicable) and other power and authority to
own its properties and conduct its business, as now conducted by it,
and to enter into and perform its obligations under each Transaction
Document, (vii) each Transaction Document has been duly authorized,
executed, and delivered by such entity, (viii) the fulfillment of the
terms of each Transaction Document will not constitute a material
breach of any term or provision of the charter or by-laws of such
entity, or conflict with or constitute a material breach, violation, or
acceleration of or a default under, the terms of any indenture or other
material agreement or instrument to which such entity is a party, and
(ix) such entity is not a party to, bound by, or in breach or violation
of any indenture or other material agreement or instrument, or subject
to or in violation of any statute, regulation, or order of any
governmental body, administrative agency, regulatory body, or court
having jurisdiction over such entity, that materially and adversely
affects or would in the future materially and adversely affect the
business, operations, or financial condition or the material properties
or assets of such entity.
(l) The Underwriters shall have received from
independent accountants of WOAR, one or two letters, one such letter
dated the date of the Prospectus relating to such Offered Securities
and satisfactory in form and substance to the Underwriters and counsel
for the Underwriters, and a second letter, if necessary, dated the
Closing Date, as to such matters as the Underwriters may reasonably
request in form and substance satisfactory to the Underwriter and
counsel to the Underwriters, provided by WOAR.
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<PAGE>
(m) All proceedings in connection with the
transactions contemplated by the Offered Securities, each Transaction
Document and all documents incident hereto or thereto shall be
satisfactory in form and substance to the Underwriters and counsel for
the Underwriters, and the Underwriters and counsel for the Underwriters
shall have received such information, certificates, opinions, and
documents as the Underwriters may reasonably request.
VII.
Reimbursement of Underwriters' Expenses. If the sale of any
Offered Securities provided for in the Underwriting Agreement relating thereto
is not consummated because any condition to the obligations of the Underwriters
set forth in Article VI hereof is not satisfied or because of any refusal,
inability, or failure on the part of WOAR or World Omni to perform any agreement
herein or therein or comply with any provision hereof, other than by reason of a
default by the Underwriters, WOAR and World Omni, jointly and severally, will
reimburse the Underwriters upon demand for all reasonable out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by the Underwriters in connection with the proposed purchase and sale
of such Offered Securities.
VIII.
Indemnification and Contribution. (a) WOAR and World Omni,
jointly and severally, agree to indemnify and hold harmless the Underwriters and
each person who controls any Underwriter within the meaning of the Act or the
Exchange Act from and against any and all losses, claims, damages, or
liabilities, joint or several, to which the Underwriters may become subject
under the Act, the Exchange Act, or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof) (i) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement as originally filed or in any amendment
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading or (ii) arise out of or are based upon any
untrue statement of a material fact or omission or alleged omission to state a
material fact contained in the Prospectus (together with any supplement thereto)
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, on the Effective Date,
if not filed pursuant to Rule 424(b), and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date; and agree to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action, as such expenses are incurred; provided, however, that
neither WOAR nor World Omni will be liable in any such case to the extent that
any such loss, claim, damage, or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance on and in conformity with information
furnished in writing to WOAR and/or World Omni as herein stated by or on behalf
of the Underwriters specifically for use in connection with the preparation
thereof. This indemnity agreement will be in addition to any liability that WOAR
and World Omni may otherwise have.
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(b) The Underwriters agree, severally and not jointly, to
indemnify and hold harmless WOAR and World Omni, its directors, each of WOAR's
and World Omni's officers who sign the Registration Statement, and each person,
if any, who controls WOAR and World Omni within the meaning of the Act, to the
same extent as the foregoing indemnity from WOAR and World Omni to the
Underwriters, but only insofar as such losses, claims, damages, or liabilities
arise out of or are based upon any untrue statement or omission or alleged
untrue statement or omission that was made in the Registration Statement, any
Preliminary Prospectus or the Prospectus, as amended or supplemented, or any
amendment or supplement thereto, in reliance on and in conformity with
information furnished in writing to WOAR and/or World Omni as herein stated by
or on behalf of the Underwriters specifically for use in the preparation of the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability that the Underwriters may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to paragraphs (a) or (b), such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
in addition to any local counsel for all such indemnified parties and that all
such fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in writing by [Underwriter] in the case of parties indemnified
pursuant to paragraph (a) of this Article VIII and by World Omni in the case of
parties indemnified pursuant to paragraph (b) of this Article VIII. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the third sentence of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 calendar
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any
-16-
<PAGE>
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Article VIII
is unavailable to an indemnified party under paragraphs (a) or (b) of this
Article VIII or is insufficient in respect of any losses, claims, damages, or
liabilities referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by WOAR and/or World Omni on the one hand, and the
Underwriters on the other, from the offering of the Offered Securities 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) but also the relative fault of WOAR and World
Omni on the one hand, and the Underwriters on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages, or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by WOAR and World Omni on the one hand, and the
Underwriters on the other, in connection with the offering of the Offered
Securities shall be deemed to be in the same proportion as the total net
proceeds from the offering of such Offered Securities (before deducting
expenses) received by WOAR and World Omni bear to the total underwriting
discounts and commissions received by the Underwriters in respect thereof. The
relative fault of WOAR and/or World Omni on the one hand, and the Underwriters
on the other, 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
WOAR and/or World Omni or the Underwriters and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) WOAR and World Omni and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Article VIII
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article VIII, no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts
received by it. 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. The
Underwriters' obligations to contribute pursuant to this Article VIII are
several, in proportion to the respective principal amounts of Offered Securities
purchased by each of such Underwriters (as defined in the Agreement Among
Underwriters), and not joint.
IX.
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<PAGE>
Termination. This Agreement and each Underwriting Agreement
shall be subject to termination in your absolute discretion, by notice given to
WOAR, if (a) after the execution and delivery of this Agreement and prior to the
Closing Date (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange, the National Association of Securities Dealers, Inc.,
the Chicago Board Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities, or (iii) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) the events specified in
clause (a) singly or together with any other such event makes it, in your
judgment, impracticable to market the Offered Securities on the terms and in the
manner contemplated in the Prospectus.
X.
Substitution Of and Default By An Underwriter. If, on the
Closing Date, any one or more of the Underwriters shall fail or refuse to
purchase the Offered Securities which it or they have agreed to purchase under
the Underwriting Agreement relating thereto, and the aggregate principal amount
of the Offered Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of the Offered Securities to which such Underwriting
Agreement relates, the other Underwriters shall be obligated severally in the
proportions which the amounts of such Offered Securities set forth opposite
their names in such Underwriting Agreement bear to the aggregate principal
amount of such Offered Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Offered Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase; provided
that in no event shall the principal amount of the Offered Securities which any
Underwriter has agreed to purchase hereunder be increased pursuant to this
Article X by an amount in excess of one-ninth of such principal amount of such
Offered Securities without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
the Offered Securities which it or they agreed to purchase hereunder and the
aggregate principal amount of the Offered Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is more
than one-tenth of the aggregate principal amount of the Offered Securities to
which such Underwriting Agreement relates and arrangements satisfactory to the
Representatives and WOAR for the purchase of such Offered Securities are not
made within 36 hours after such default, such Underwriting Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or of
World Omni or WOAR. In any such case either the Representatives or WOAR shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this Article X or any such termination shall
not relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement or such Underwriting Agreement.
XI.
-18-
<PAGE>
Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities, and other statements of
WOAR or World Omni or on their behalf by its officers and the Underwriters set
forth in or made pursuant to this Agreement and each Underwriting Agreement will
remain in full force and effect, regardless of any investigation made by the
Underwriters or on the Underwriters' behalf, WOAR or World Omni or any of the
officers, directors, or controlling persons referred to in Article VIII hereof,
and will survive delivery of and payment for the Offered Securities. The
provisions of Sections V(g), VII, and VIII hereof shall survive the termination
or cancellation of this Agreement or any Underwriting Agreement.
XII.
Notices. All communications hereunder or under any
Underwriting Agreement will be in writing and effective only on receipt, mailed,
delivered or sent by facsimile and reconfirmed by telephone to the following
parties at the following addresses and telephone numbers:
World Omni Financial Corp.
120 N.W. 12th Avenue
Deerfield Beach, Florida 33442
Attention: A. Tucker Allen
Telephone: (954-) 429-2200
Facsimile: (954) [________]
World Omni Auto Receivables LLC
120 N.W. 12th Avenue
Deerfield Beach, Florida 33442
Attention: A. Tucker Allen
Telephone: (954-) 429-2200
Facsimile: (954) [________]
[Underwriter]
[--------]
Attention: [________]
Telephone: [________]
Facsimile: [________]
XIII.
Successors. None of the obligations of WOAR or World Omni
under this Agreement or any Underwriting Agreement may be assigned without the
prior consent of the Representatives. Subject to the foregoing, this Agreement
and each Underwriting 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 Article VIII hereof, and their
successors and assigns, and no other person will have any right or obligation
hereunder.
XIV.
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<PAGE>
Applicable Law. This Agreement and each Underwriting Agreement
will be governed by and construed in accordance with the laws of the State of
New York applicable to agreements made and to be performed therein. This
Agreement and any Underwriting Agreement may be executed in any number of
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall together constitute but one and the same instrument.
XV.
Headings. The headings used in this Agreement are for
convenience of reference only and are not to affect the construction of or to be
taken into consideration in interpreting this Agreement.
-20-
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart hereof, whereupon this
letter and your acceptance shall represent a binding agreement between WOAR and
World Omni and you.
Very truly yours,
WORLD OMNI AUTO RECEIVABLES LLC
By: World Omni Financial Corp.,
as its sole member
By: __________________________________
Name:
Title:
WORLD OMNI FINANCIAL CORP.
By: _____________________________
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
[UNDERWRITER]
By: _______________________________
Name:
Title:
-21-
<PAGE>
EXHIBIT A
OPINION OF COUNSEL FOR THE TRUSTEE
(i) the Trustee has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation with full power and authority (corporate or other) and to
enter into, and to take all action required of it under, the Indenture;
(ii) the Indenture has been duly authorized, executed, and
delivered by the Trustee and constitutes a legal, valid and binding obligation
of the Trustee enforceable against the Trustee in accordance with its terms,
except as the enforceability thereof may be limited by (a) bankruptcy,
insolvency, reorganization, and other similar laws affecting the enforcement of
creditors' rights generally, as such laws would apply in the event of a
bankruptcy, insolvency or reorganization or similar occurrence affecting the
Trustee, and (b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(iii) the Trustee has duly executed the Offered Securities
on behalf of the Trust;
(iv) the Trustee has duly authenticated and delivered the
Offered Securities;
(v) the execution and delivery of the Indenture by the
Trustee and the performance by the Trustee of its terms do not conflict with or
result in a violation of (A) any law or regulation of the United States of
America or the State of New York governing the banking or trust powers of the
Trustee, or (B) the Charter or By-laws of the Trustee; and
(vi) no approval, authorization or other action by, or filing
with, any governmental authority of the United States of America or the State of
New York having jurisdiction over the banking or trust powers of the Trustee is
required in connection with the execution and delivery by the Trustee of the
Indenture or the performance by the Trustee of the terms of the Indenture.
<PAGE>
WORLD OMNI AUTO RECEIVABLES LLC
WORLD OMNI FINANCIAL CORP.
AND
[UNDERWRITER]
UNDERWRITING AGREEMENT
FOR
WORLD OMNI AUTO RECEIVABLES TRUST 200_-[ ]
AUTOMOBILE RECEIVABLES BACKED CERTIFICATES
<PAGE>
BACKED NOTES
[_________], 200_
<PAGE>
ANNEX I
[_____], 200_
World Omni Financial Corp.
120 N.W. 12th Avenue
Deerfield Beach, Florida 33442
World Omni Auto Receivables LLC
120 N.W. 12th Avenue
Deerfield Beach, Florida 33442
Dear Sirs:
We understand that World Omni Auto Receivables LLC, a Delaware
corporation ("WOAR"), proposes to sell $[______] aggregate amount of Securities
designated "World Omni Auto Receivables Trust 200_-[ ], Auto Receivables Backed
Securities," (the "Offered Securities"), issued by World Omni Auto Receivables
Trust 200_-[ ]. The Offered Securities will consist of $[________] aggregate
principal amount [Class A-1], [Class A-2], [Class A-3] and [Class A-4]
Securities. Subject to the terms and conditions set forth in or incorporated by
reference in this Underwriting Agreement (this "Agreement"), [we] [the
Underwriters named on page __ of the copy of the Prospectus attached hereto as
Annex A (such Underwriters being herein called the "Underwriters")] hereby agree
severally and not jointly to purchase all of the Offered Securities. The price
at which the Offered Securities are offered to the public, the underwriting
discount on the Offered Securities and the purchase price at which we will
purchase the Offered Securities are set forth on the following grid. [Accrued
interest from _________ to the date of payment and delivery of the Offered
Securities pursuant to the following paragraph will added to the purchase
price].
<TABLE>
<CAPTION>
=============================== ============================ ============================ ============================
Price to Public Underwriting Discount Sale and Servicing Price
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C>
Per Class A-1 Note [________]% [_____]% [______]%
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Per Class A-2 Note [________]% [_____]% [______]%
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Per Class A-3 Note [________]% [_____]% [______]%
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Per Class A-4 Note [________]% [_____]% [______]%
=============================== ============================ ============================ ============================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
=============================== ============================ ============================ ============================
<S> <C> <C> <C>
Total $[________] $[_____] $[______]
=============================== ============================ ============================ ============================
</TABLE>
I-2
<PAGE>
We will pay for the Offered Securities in immediately
available funds upon delivery of the Offered Securities to or at the offices of
[____________], or at such other location as shall be designated by [us] [the
Underwriters], at 1:00 P.M. (New York time) on [_____], 200_, or at such other
time, not later than [________], 200_, as shall be designated by [us] [the
Underwriters] (such time, the "Closing Date").
Pursuant to Article V(h) of the Standard Provisions (as
defined below), during a period of 60 calendar days from the date hereof,
neither WOAR nor any affiliate of WOAR will, without [our] [the Underwriters]
prior written consent, enter into any agreement to offer or sell the Offered
Securities.
Notwithstanding Article V(g) of the Standard Provisions (as
defined below), WOAR shall pay the fees of the Underwriter's counsel only in an
amount up to $[_____] and the blue sky fees of the Underwriter's counsel only in
an amount up to $[______].
The Offered Securities shall have the terms set forth in the
copy of the Prospectus attached hereto as Annex A and shall conform in all
material respects to the description thereof contained in such Prospectus.
All the provisions contained in that certain Underwriting
Agreement Standard Provisions for World Omni Auto Receivables Trust 200_-[ ],
Auto Receivables Backed Securities, dated [_____], 200_ (the "Standard
Provisions"), by and among World Omni Financial Corp., WOAR and [Underwriter], a
copy of which you have previously received, are herein incorporated by reference
in their entirety and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein. All references
to the "Underwriters," the "several Underwriters" or the "Representative" in the
Standard Provisions shall be deemed to refer to [Underwriter], the sole
Underwriter hereunder.
I-3
<PAGE>
Please confirm your agreement by having authorized officers
sign a copy of this Agreement in the spaces set forth below and returning the
signed copy to us.
Very truly yours,
[UNDERWRITER],
as Underwriter
By: ___________________________________
Name:
Title:
Accepted: [_______], 200_
WORLD OMNI FINANCIAL CORP.
By: ___________________________________
Name:
Title:
I-4
<PAGE>
ANNEX A
[Copy of Prospectus]
EXHIBIT 4.1
- ------------------------------------------------------------------------------
TRUST AGREEMENT
between
WORLD OMNI AUTO RECEIVABLES LLC,
as Depositor,
and
[______________________],
as Owner Trustee
Dated as of [_______], [_______]
- ------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
<S> <C> <C>
SECTION 1.01. Capitalized Terms.................................................................................1
SECTION 1.02. Other Definitional Provisions.....................................................................4
ARTICLE II
Organization
SECTION 2.01. Name..............................................................................................4
SECTION 2.02. Office............................................................................................5
SECTION 2.03. Purposes and Powers...............................................................................5
SECTION 2.04. Appointment of Owner Trustee......................................................................5
SECTION 2.05. Initial Capital Contribution of Owner Trust Estate................................................5
SECTION 2.06. Declaration of Trust..............................................................................6
SECTION 2.07. Liability of the Owners...........................................................................6
SECTION 2.08. Title to Trust Property...........................................................................6
SECTION 2.09. Situs of Trust....................................................................................7
SECTION 2.10. Representations and Warranties of the Depositor...................................................7
SECTION 2.11. Maintenance of the Demand Note....................................................................8
SECTION 2.12. Federal Income Tax Provisions.....................................................................8
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.01. Initial Ownership.................................................................................8
SECTION 3.02. The Trust Certificates............................................................................8
SECTION 3.03. Authentication of Trust Certificates..............................................................8
SECTION 3.04. Registration of Transfer and Exchange of Trust Certificates.......................................9
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificates..........................................11
SECTION 3.06. Persons Deemed Owners............................................................................11
SECTION 3.07. Access to List of Certificateholders' Names and Addresses........................................11
SECTION 3.08. Maintenance of Office or Agency..................................................................12
SECTION 3.09. Appointment of Paying Agent......................................................................12
SECTION 3.10. Ownership by Depositor of Trust Certificates.....................................................12
SECTION 3.11. Book-Entry Trust Certificates....................................................................12
SECTION 3.12. Notices to Clearing Agency.......................................................................13
SECTION 3.13. Definitive Trust Certificates....................................................................13
ARTICLE IV
Actions by Owner Trustee
SECTION 4.01. Prior Notice to Owners with Respect to Certain Matters...........................................14
SECTION 4.02. Action by Owners with Respect to Certain Matters.................................................15
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 4.03. Action by Owners with Respect to Bankruptcy......................................................15
SECTION 4.04. Restrictions on Owners' Power....................................................................15
SECTION 4.05. Majority Control.................................................................................15
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.01. Establishment of Trust Account...................................................................15
SECTION 5.02. Application of Trust Funds.......................................................................16
SECTION 5.03. Method of Payment................................................................................16
SECTION 5.04. No Segregation of Moneys; No Interest............................................................16
SECTION 5.05. Accounting and Reports to the Noteholders, Owners, the Internal Revenue Service
and Others..............................................................................16
SECTION 5.06. Signature on Returns.............................................................................17
ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.01. General Authority................................................................................17
SECTION 6.02. General Duties...................................................................................17
SECTION 6.03. Action upon Instruction..........................................................................17
SECTION 6.04. No Duties Except as Specified in this Agreement or in Instructions...............................18
SECTION 6.05. No Action Except Under Specified Documents or Instructions.......................................18
SECTION 6.06. Restrictions.....................................................................................19
ARTICLE VII
Concerning the Owner Trustee
SECTION 7.01. Acceptance of Trusts and Duties..................................................................19
SECTION 7.02. Furnishing of Documents..........................................................................20
SECTION 7.03. Representations and Warranties...................................................................20
SECTION 7.04. Reliance; Advice of Counsel......................................................................21
SECTION 7.05. Not Acting in Individual Capacity................................................................21
SECTION 7.06. Owner Trustee Not Liable for Trust Certificates or Receivables...................................21
SECTION 7.07. Owner Trustee May Own Trust Certificates and Notes...............................................22
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.01. Owner Trustee's Fees and Expenses................................................................22
SECTION 8.02. Indemnification..................................................................................22
SECTION 8.03. Payments to the Owner Trustee....................................................................23
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement...................................................................23
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 9.02. Dissolution upon Bankruptcy of the Depositor....................................................24
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.01. Eligibility Requirements for Owner Trustee......................................................24
SECTION 10.02. Resignation or Removal of Owner Trustee.........................................................25
SECTION 10.03. Successor Owner Trustee.........................................................................25
SECTION 10.04. Merger or Consolidation of Owner Trustee........................................................26
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee...................................................26
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments......................................................................27
SECTION 11.02. No Legal Title to Owner Trust Estate in Owners..................................................28
SECTION 11.03. Limitations on Rights of Others.................................................................28
SECTION 11.04. Notices.........................................................................................29
SECTION 11.05. Severability....................................................................................29
SECTION 11.06. Separate Counterparts...........................................................................29
SECTION 11.07. Successors and Assigns..........................................................................29
SECTION 11.08. Covenants of the Depositor......................................................................29
SECTION 11.09. No Petition.....................................................................................30
SECTION 11.10. No Recourse.....................................................................................30
SECTION 11.11. Headings........................................................................................30
SECTION 11.12. Governing Law...................................................................................30
SECTION 11.13. [Reserved.].....................................................................................30
SECTION 11.14. Depositor Payment Obligation....................................................................30
EXHIBIT A Form of Trust Certificate
EXHIBIT B Form of Certificate of Trust
EXHIBIT C Form of Transferor Certificate
EXHIBIT D Form of Investment Letter
EXHIBIT E Form of Depository Agreement
ANNEX A Tax Partnership Provisions
</TABLE>
iii
<PAGE>
TRUST AGREEMENT dated as of [______], [_______], between WORLD OMNI
AUTO RECEIVABLES LLC, a Delaware limited liability company, as
depositor (the "Depositor") and [____________________], a Delaware
banking corporation, as owner trustee (the "Owner Trustee").
ARTICLE I
Definitions
SECTION 1.01. Capitalized Terms. For all purposes of this
Agreement, the following terms shall have the meanings set
forth below:
["Administration Agreement" shall mean the Administration
Agreement dated as of [__________], [________] among the Administrator, the
Trust and the Indenture Trustee.]
"Administrator" shall mean World Omni Financial Corp., a
Florida corporation, or any successor Administrator under the Administration
Agreement.
"Agreement" shall mean this Trust Agreement, as the same may
be amended and supplemented from time to time.
"Basic Documents" shall mean the Sale and Servicing Agreement,
the Indenture, the Administration Agreement, the Receivables Purchase Agreement,
and the other documents, instruments and certificates delivered in connection
therewith.
"Benefit Plan" shall have the meaning assigned to such term in
Section 3.04.
"Book-Entry Trust Certificate" shall mean a beneficial
interest in the Trust Certificates, ownership and transfers of which shall be
made through book entries by a Clearing Agency as described in Section 3.11.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of
the Delaware Code, 12 Del. Code ss. 3801 et seq., as the same may be amended
from time to time.
"Certificate Depository Agreement" shall mean the agreement
dated [_____], [______], among the Trust, the Owner Trustee, the Administrator
and The Depository Trust Company, as the initial Clearing Agency, substantially
in the form attached hereto as Exhibit E, relating to the Trust Certificates, as
the same may be amended and supplemented from time to time.
"Certificate Distribution Account" shall have the meaning
assigned to such term in Section 5.01.
"Certificate of Trust" shall mean the Certificate of Trust in
the form of Exhibit B filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
<PAGE>
"Certificate Register" and "Certificate Registrar" shall mean
the register mentioned in and the registrar appointed pursuant to Section 3.04.
"Certificate Owner" shall mean, with respect to a Book-Entry
Trust Certificate, a Person who is the beneficial owner of such Book-Entry Trust
Certificate, as reflected on the books of the Clearing Agency or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Certificateholder" or "Holder" shall mean a Person in whose
name a Trust Certificate is registered.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" shall mean a broker, dealer,
bank, other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
[_____________], Attn: [_____________], or at such other address as the Owner
Trustee may designate by notice to the Owners and the Depositor, or the
principal corporate trust office of any successor Owner Trustee at the address
designated by such successor Owner Trustee by notice to the Owners and the
Depositor.
"Definitive Trust Certificates" shall have the meaning set
forth in Section 3.11.
["Demand Note" shall mean, in the case of the Depositor, the
Demand Note dated [______], [______], from World Omni to the Depositor.]
"Depositor" shall mean World Omni Auto Receivables LLC in its
capacity as depositor hereunder.
"Depositor's Interest" shall mean the Trust Certificate owned
by the Depositor evidencing (i) a not less than 1% undivided interest in the
Certificate Balance and interest at the Pass-Through Rate and (ii) all other
amounts in respect of the Trust property to which the Depositor is entitled
hereunder.
"ERISA" shall have the meaning assigned thereto in Section
3.04.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Expenses" shall have the meaning assigned to such term in
Section 8.02.
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"Indemnified Parties" shall have the meaning assigned to such
term in Section 8.02.
"Indenture" shall mean the Indenture dated as of [_____],
[_____] between the Trust and [_____________], as Indenture Trustee.
"Initial Certificate Balance" shall mean $[___________].
"Owner" shall mean each Holder of a Trust Certificate.
"Owner Trust Estate" shall mean all right, title and interest
of the Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Trust Accounts and the Certificate Distribution Account and all
other property of the Trust from time to time, including any rights of the Owner
Trustee and the Trust pursuant to the Sale and Servicing Agreement and the
Administration Agreement.
"Owner Trustee" shall mean [____________________], a Delaware
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
"Paying Agent" shall mean any paying agent or co-paying agent
appointed pursuant to Section 3.09 and shall initially be
[____________________].
"Person" shall mean any individual, corporation, estate,
partnership, joint venture, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization, or government or any
agency or political subdivision thereof.
"Receivables Purchase Agreement" shall mean the Receivables
Purchase Agreement, dated as of [_______], [________], among World Omni
Financial Corp., as seller and Depositor, as purchaser.
"Record Date" shall mean, with respect to any Distribution
Date, the close of business on the last day of the month immediately preceding
such Distribution Date.
"Sale and Servicing Agreement" shall mean the Sale and
Servicing Agreement dated as of [_____], [______], among the Trust, as issuer,
the Depositor, as seller, World Omni Financial Corp., as servicer as the same
may be amended or supplemented from time to time.
"Secretary of State" shall mean the Secretary of State of the
State of Delaware.
"Treasury Regulations" shall mean regulations, including
proposed or temporary Regulations, promulgated under the Code. References herein
to specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
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"Trust Certificate" shall mean a certificate evidencing the
beneficial interest of an Owner in the Trust, substantially in the form attached
hereto as Exhibit A.
"World Omni" shall mean World Omni Financial Corp., a Florida
corporation, and any successor in interest.
SECTION 1.02. Other Definitional Provisions. (a) Capitalized
terms used and not otherwise defined herein have the meanings assigned to them
in the Sale and Servicing Agreement or, if not defined therein, in the
Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent that
the definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II
Organization
SECTION 2.01. Name. The Trust created hereby shall be known as
"World Omni Auto Receivables Trust [_____]-[_]" in which name the Owner Trustee
may conduct the
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business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
SECTION 2.02. Office. The office of the Trust shall be in care
of the Owner Trustee at the Corporate Trust Office or at such other address in
Delaware as the Owner Trustee may designate by written notice to the Owners and
the Depositor.
SECTION 2.03. Purposes and Powers. (a) The purpose of the
Trust is to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Trust
Certificates pursuant to this Agreement and to sell the Notes and the
Trust Certificates;
(ii) with the proceeds of the sale of the Notes and the Trust
Certificates, to purchase the Receivables, to fund the Reserve Account
and to pay the organizational, start-up and transactional expenses of
the Trust;
(iii) to assign, grant, transfer, pledge, mortgage and convey
the Trust Estate pursuant to the Indenture and to hold, manage and
distribute to the Owners pursuant to the terms of the Sale and
Servicing Agreement any portion of the Trust Estate released from the
Lien of, and remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to engage
in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions
to the Owners and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.04. Appointment of Owner Trustee. The Depositor
hereby appoints the Owner Trustee as trustee of the Trust effective as of the
date hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.05. Initial Capital Contribution of Owner Trust
Estate. The Depositor hereby sells, assigns, transfers, conveys and sets over to
the Owner Trustee, as of the date hereof, the sum of $1. The Owner Trustee
hereby acknowledges receipt in trust from the Depositor, as of the date hereof,
of the foregoing contribution, which shall constitute the initial Owner Trust
Estate and shall be deposited in the Certificate Distribution Account. The
Depositor shall pay organizational expenses of the Trust as they may arise or
shall, upon the
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request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee.
SECTION 2.06. Declaration of Trust. The Owner Trustee hereby
declares that it will hold the Owner Trust Estate in trust upon and subject to
the conditions set forth herein for the use and benefit of the Owners, subject
to the obligations of the Trust under the Basic Documents. It is the intention
of the parties hereto that the Trust constitute a business trust under the
Business Trust Statute and that this Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, solely for income and franchise tax purposes, the Trust shall be treated
as a partnership, with the assets of the partnership being the Receivables and
other assets held by the Trust, the partners of the partnership being the
Certificateholders (including the Depositor, in its capacity as recipient of
distributions from the Reserve Account), and the Notes being debt of the
partnership. The parties agree that, unless otherwise required by appropriate
tax authorities, the Trust will file or cause to be filed annual or other
necessary returns, reports and other forms consistent with the characterization
of the Trust as a partnership for such tax purposes. Effective as of the date
hereof, the Owner Trustee shall have all rights, powers and duties set forth
herein and in the Business Trust Statute with respect to accomplishing the
purposes of the Trust.
SECTION 2.07. Liability of the Owners. (a) The Depositor shall
be liable directly to and will indemnify any injured party for all losses,
claims, damages, liabilities and expenses of the Trust (including Expenses, to
the extent not paid out of the Owner Trust Estate) to the extent that the
Depositor would be liable if the Trust were a partnership under the Delaware
Revised Uniform Limited Partnership Act in which the Depositor were a general
partner; provided, however, that the Depositor shall not be liable for any
losses incurred by a Certificateholder in the capacity of an investor in the
Trust Certificates, or by a Noteholder in the capacity of an investor in the
Notes. In addition, any third party creditors of the Trust (other than in
connection with the obligations described in the preceding sentence for which
the Depositor shall not be liable) shall be deemed third party beneficiaries of
this paragraph and paragraph (c) below. The obligations of the Depositor under
this paragraph and paragraph (c) below shall be evidenced by the Trust
Certificates described in Section 3.10, which for purposes of the Business Trust
Statute shall be deemed to be a separate class of Trust Certificates from all
other Trust Certificates issued by the Trust; provided that the rights and
obligations evidenced by all Trust Certificates, regardless of class, shall,
except as provided in this Section, be identical.
(b) No Owner, other than to the extent set forth in paragraphs
(a) and (c), shall have any personal liability for any liability or obligation
of the Trust.
(c) The Depositor agrees to be liable directly to and will
indemnify any injured party for all losses, claims, damages, liabilities and
expenses (other than those incurred by a Certificateholder in the capacity of an
investor in the Trust Certificates and a Noteholder in the capacity of an
investor in the Notes) as though such arrangements were a partnership under the
Delaware Revised Uniform Limited Partnership Act in which the Depositor were a
general partner.
SECTION 2.08. Title to Trust Property. Legal title to all the
Owner Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable
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law in any jurisdiction requires title to any part of the Owner Trust Estate to
be vested in a trustee or trustees, in which case title shall be deemed to be
vested in the Owner Trustee, a co-trustee and/or a separate trustee, as the case
may be.
SECTION 2.09. Situs of Trust. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the State of Delaware or the
State of New York. The Trust shall not have any employees in any state other
than Delaware; provided, however, that nothing herein shall restrict or prohibit
the Owner Trustee from having employees within or without the State of Delaware.
Payments will be received by the Trust only in Delaware or New York, and
payments will be made by the Trust only from Delaware or New York. The only
office of the Trust will be at the Corporate Trust Office in Delaware.
SECTION 2.10. Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Owner Trustee that:
(a) The Depositor is duly organized and validly
existing as a limited liability company in good standing under the laws
of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted.
(b) The Depositor is duly qualified to do business as
a foreign limited liability company in good standing and has obtained
all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of its property or the conduct of its business shall
require such qualifications.
(c) The Depositor has the power and authority to
execute and deliver this Agreement and to carry out its terms; the
Depositor has full power and authority to sell and assign the property
to be sold and assigned to and deposited with the Trust and the
Depositor has duly authorized such sale and assignment and deposit to
the Trust by all necessary action; and the execution, delivery and
performance of this Agreement have been duly authorized by the
Depositor by all necessary action.
(d) The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default
under, the limited liability agreement or bylaws of the Depositor, or
any indenture, agreement or other instrument to which the Depositor is
a party or by which it is bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms
of any such indenture, agreement or other instrument (other than
pursuant to the Basic Documents); nor violate any law or, to the best
of the Depositor's knowledge, any order, rule or regulation applicable
to the Depositor of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality
having jurisdiction over the Depositor or its properties.
(e) There are no proceedings or investigations
pending or, to the Depositor's best knowledge, threatened before any
court, regulatory body, administrative
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agency or other governmental instrumentality having jurisdiction over
the Depositor or its properties: (A) asserting the invalidity of this
Agreement, (B) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity
or enforceability of, this Agreement.
SECTION 2.11. Maintenance of the Demand Note. To the fullest
extent permitted by applicable law, the Depositor agrees that it shall not sell,
convey, pledge, transfer or otherwise dispose of the Demand Note.
SECTION 2.12. Federal Income Tax Provisions. Annex A to this
Agreement sets forth the tax accounting and administration of the Trust in a
manner consistent with its treatment as a partnership for federal, state and
local tax purposes.
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.01. Initial Ownership. Upon the formation of the
Trust by the contribution by the Depositor pursuant to Section 2.05 and until
the issuance of the Trust Certificates, the Depositor shall be the sole
beneficiary of the Trust.
SECTION 3.02. The Trust Certificates. The Trust Certificates
shall be issued in minimum denominations of $[________] and in integral
multiples of $[____] in excess thereof; provided, however, that the Trust
Certificates issued to the Depositor pursuant to Section 3.10 may be issued in
such denomination as required to include any residual amount. The Trust
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of an authorized officer of the Owner Trustee. Trust Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Trust, shall be validly issued and entitled to the benefit of this
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Trust Certificates or did not hold such offices at the date of authentication
and delivery of such Trust Certificates.
A transferee of a Trust Certificate shall become a
Certificateholder and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder upon such transferee's acceptance
of a Trust Certificate duly registered in such transferee's name pursuant to
Section 3.04.
SECTION 3.03. Authentication of Trust Certificates. On the
Closing Date, the Owner Trustee shall cause the Trust Certificates in an
aggregate principal amount equal to the Initial Certificate Balance to be
executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Depositor, signed by its chairman of the board, its
president, any vice president, secretary or any assistant treasurer, without
further corporate action by the Depositor, in authorized denominations. No Trust
Certificate shall entitle its Holder to any benefit under this Agreement or be
valid for any purpose unless there shall appear on such Trust Certificate a
certificate of authentication substantially in the form set forth in Exhibit A,
executed
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by the Owner Trustee, by manual signature; such authentication shall constitute
conclusive evidence that such Trust Certificate shall have been duly
authenticated and delivered hereunder. All Trust Certificates shall be dated the
date of their authentication.
SECTION 3.04. Registration of Transfer and Exchange of Trust
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.08, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Owner
Trustee shall provide for the registration of Trust Certificates and of
transfers and exchanges of Trust Certificates as herein provided.
[____________________] shall be the initial Certificate Registrar.
The Certificates have not been and will not be registered
under the Securities Act and will not be listed on any exchange. No transfer of
a Certificate shall be made unless such transfer is made pursuant to an
effective registration statement under the Securities Act and any applicable
state securities laws or is exempt from the registration requirements under said
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 state securities laws,
in order to assure compliance with the Securities Act and such laws, the Holder
desiring to effect such transfer and such Holder's prospective transferee shall
each certify to the Owner Trustee and the Depositor in writing the facts
surrounding the transfer in substantially the forms set forth in Exhibit C (the
"Transferor Certificate") and Exhibit D (the "Investment Letter"). Except in the
case of a transfer as to which the proposed transferee has provided an
Investment Letter with respect to a Rule 144A transaction, there shall also be
delivered to the Owner Trustee an opinion of counsel that such transfer may be
made pursuant to an exemption from the Securities Act and state securities laws,
which opinion of counsel shall not be an expense of the Trust, the Owner Trustee
or the Indenture Trustee (unless it is the transferee from whom such opinion is
to be obtained) or of the Depositor or World Omni; provided that such opinion of
counsel in respect of the applicable state securities laws may be a memorandum
of law rather than an opinion if such counsel is not licensed in the applicable
jurisdiction. The Depositor shall provide to any Holder of a Certificate and any
prospective transferee designated by any such Holder information regarding the
Certificates and the Receivables and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for transfer of any such Certificate without registration thereof under the
Securities Act pursuant to the registration exemption provided by Rule 144A.
Each Holder of a Certificate desiring to effect such a transfer shall, and does
hereby agree to, indemnify the Issuer, the Owner Trustee, the Indenture Trustee
and the Depositor against any liability that may result if the transfer is not
so exempt or is not made in accordance with federal and state securities laws.
[No transfer of a Trust Certificate shall be made to any
Person unless the Owner Trustee has received (A) a certificate in the form of
paragraph 3 to the Investment Letter attached hereto as Exhibit D from such
Person to the effect that such Person is not (i) an employee benefit plan (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) that is subject to the provisions of Title I of ERISA,
(ii) a plan described in Section 4975(e)(1) of the Code or (iii) any entity
whose underlying assets include plan assets by reason of a plan's investment in
the entity (each, a "Benefit Plan"), (B) an opinion of counsel satisfactory to
the Owner Trustee and the Depositor to the effect that the purchase and holding
of such Trust Certificate will not constitute or result in the assets of the
Issuer being deemed to be
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"plan assets" subject to the prohibited transactions provisions of ERISA or
Section 4975 of the Code and will not subject the Owner Trustee, the Indenture
Trustee or the Depositor to any obligation in addition to those undertaken in
the Basic Documents or (C) if such Person is an insurance company, a
representation that such Person is an insurance company that is purchasing such
Certificates with funds contained in an "insurance company general account" (as
such term is defined in section v(e) of Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60")) and that the purchase and holding of such Certificates and
any deemed extension of credit from a Certificateholder which is a party in
interest to a Plan, the assets of which are held by such "Insurance Company" are
covered under PTCE 95-60; provided, however, that the Owner Trustee will not
require such certificate or opinion in the event that, as a result of a change
of law or otherwise, counsel satisfactory to the Owner Trustee has rendered an
opinion to the effect that the purchase and holding of a Trust Certificate by a
Benefit Plan or a Person that is purchasing or holding such a Trust Certificate
with the assets of a Benefit Plan will not constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code. The preparation and
delivery of the certificate and opinions referred to above shall not be an
expense of the Issuer, the Owner Trustee, the Indenture Trustee, the Servicer or
the Depositor. The transferee of a beneficial interest in a Book-Entry Trust
Certificate shall be deemed to represent either (1) that it is not acting on
behalf of a Benefit Plan and is not using the assets of the Benefit Plan to
acquire such interest or (2) that it is an insurance company and is acquiring
such interest with funds contained in an insurance company general account and
that the purchase and holding of such interest is covered under Sections I and
III of PTCE 95-60. Any attempted or purported transfer in violation of these
transfer restrictions will be null and void and will vest no rights in any
purported transferee.
The Owner Trustee shall cause each Certificate to contain a
legend stating that transfer of the Certificates is subject to certain
restrictions and referring prospective purchasers of the Certificates to the
terms of this Agreement with respect to such restrictions.]
Upon surrender for registration of transfer of any Trust
Certificate at the office or agency maintained pursuant to Section 3.08, the
Owner Trustee shall execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Trust Certificates in
authorized denominations of a like aggregate amount dated the date of
authentication by the Owner Trustee or any authenticating agent. At the option
of a Holder, Trust Certificates may be exchanged for other Trust Certificates of
authorized denominations of a like aggregate amount upon surrender of the Trust
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.08.
Every Trust Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each Trust Certificate surrendered for registration of
transfer or exchange shall be cancelled and subsequently disposed of by the
Owner Trustee in accordance with its customary practice.
No service charge shall be made for any registration of
transfer or exchange of Trust Certificates, but the Owner Trustee or the
Certificate Registrar may require payment of a
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sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Trust Certificates.
The preceding provisions of this Section notwithstanding, the
Owner Trustee shall not make, and the Certificate Registrar shall not register
transfers or exchanges of, Trust Certificates for a period of 15 days preceding
the due date for any payment with respect to the Trust Certificates.
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust
Certificates. If (a) any mutilated Trust Certificate shall be surrendered to the
Certificate Registrar, or if the Certificate Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any Trust Certificate and
(b) there shall be delivered to the Certificate Registrar and the Owner Trustee
such security or indemnity as may be required by them to save each of them
harmless, then in the absence of notice that such Trust 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 Trust
Certificate, a new Trust Certificate of like tenor and denomination. In
connection with the issuance of any new Trust Certificate under this Section,
the Owner Trustee or the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Certificate issued pursuant to this
Section shall constitute conclusive evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust
Certificate shall be found at any time.
SECTION 3.06. Persons Deemed Owners. Prior to due presentation
of a Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar or any Paying Agent may treat the Person in whose name any
Trust Certificate is registered in the Certificate Register as the owner of such
Trust Certificate for the purpose of receiving distributions pursuant to Section
5.02 and for all other purposes whatsoever, and none of the Owner Trustee, the
Certificate Registrar or any Paying Agent shall be bound by any notice to the
contrary.
SECTION 3.07. Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer and the Depositor, within 15 days after receipt by the Owner Trustee of
a written request therefor from the Servicer or the Depositor, a list, in such
form as the Servicer or the Depositor may reasonably require, of the names and
addresses of the Certificateholders as of the most recent Record Date. If three
or more Certificateholders or one or more Holders of Trust Certificates
evidencing not less than 25% of the Certificate Balance apply in writing to the
Owner Trustee, and such application states that the applicants desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Trust Certificates and such application is
accompanied by a copy of the communication that such applicants propose to
transmit, then the Owner Trustee shall, within five Business Days after the
receipt of such application, afford such applicants access during normal
business hours to the current list of Certificateholders. Each Holder, by
receiving and holding a Trust Certificate, shall be deemed to have agreed not to
hold any of the Depositor, the Certificate Registrar or the Owner Trustee
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
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SECTION 3.08. Maintenance of Office or Agency. The Owner
Trustee shall maintain in the Borough of Manhattan, The City of New York, an
office or offices or agency or agencies where Trust Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Owner Trustee in respect of the Trust Certificates and
the Basic Documents may be served. The Owner Trustee initially designates
[_________________], Attention: [________], as its office for such purposes. The
Owner Trustee shall give prompt written notice to the Depositor and to the
Certificateholders of any change in the location of the Certificate Register or
any such office or agency.
SECTION 3.09. Appointment of Paying Agent. The Paying Agent
shall make distributions to Certificateholders from the Certificate Distribution
Account pursuant to Section 5.02 and shall report the amounts of such
distributions to the Owner Trustee. Any Paying Agent shall have the revocable
power to withdraw funds from the Certificate Distribution Account for the
purpose of making the distributions referred to above. The Owner Trustee may
revoke such power and remove the Paying Agent if the Owner Trustee determines in
its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. The Owner Trustee will
be the initial Paying Agent. In the event that the Owner Trustee shall no longer
be the Paying Agent, the Owner Trustee shall appoint a successor to act as
Paying Agent (which shall be a bank or trust company). The Owner Trustee shall
cause such successor Paying Agent or any additional Paying Agent appointed by
the Owner Trustee to execute and deliver to the Owner Trustee an instrument in
which such successor Paying Agent or additional Paying Agent shall agree with
the Owner Trustee that, as Paying Agent, such successor Paying Agent or
additional Paying Agent will hold all sums, if any, held by it for payment to
the Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders. The
Paying Agent shall return all unclaimed funds to the Owner Trustee and upon
removal of a Paying Agent such Paying Agent shall also return all funds in its
possession to the Owner Trustee. The provisions of Sections 7.01, 7.03, 7.04 and
8.01 shall apply to the Owner Trustee also in its role as Paying Agent, for so
long as the Owner Trustee shall act as Paying Agent and, to the extent
applicable, to any other paying agent appointed hereunder. Any reference in this
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
SECTION 3.10. Ownership by Depositor of Trust Certificates.
The Depositor shall on the Closing Date retain Trust Certificates representing
at least 1% of the Initial Certificate Balance and shall thereafter retain
beneficial and record ownership of Trust Certificates representing at least 1%
of the Certificate Balance. Any attempted transfer of the Depositor's Trust
Certificate that would reduce such interest of the Depositor below 1% of the
Certificate Balance shall be void. The Owner Trustee shall cause the Depositor's
Trust Certificate to contain a legend stating "THIS CERTIFICATE IS
NON-TRANSFERABLE".
SECTION 3.11. Book-Entry Trust Certificates. The Trust
Certificates, upon original issuance, will be issued in the form of a
typewritten Trust Certificate or Trust Certificates representing Book-Entry
Trust Certificates, to be delivered to The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Trust; provided, however, that one
Definitive Trust Certificate may be issued to the Depositor pursuant to Section
3.10. Such Trust Certificate or Trust Certificates shall initially be registered
on the Certificate Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Certificate Owner will
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receive a definitive Trust Certificate representing such Certificate Owner's
interest in such Trust Certificate, except as provided in Section 3.13. Unless
and until definitive, fully registered Trust Certificates (the "Definitive Trust
Certificates") have been issued to Certificate Owners pursuant to Section 3.13:
(a) The provisions of this Section shall be in full force and
effect;
(b) The Certificate Registrar and the Owner Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Agreement (including the payment of principal of and interest on the
Trust Certificates and the giving of instructions or directions
hereunder) as the sole Holder of the Trust Certificates and shall have
no obligation to the Certificate Owners;
(c) To the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this
Section shall control;
(d) The rights of Certificate Owners shall be exercised only
through the Clearing Agency and shall be limited to those established
by law and agreements between such Certificate Owners and the Clearing
Agency and/or the Clearing Agency Participants. Pursuant to the
Certificate Depository Agreement, unless and until Definitive Trust
Certificates are issued pursuant to Section 3.13, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit payments of principal of and
interest on the Trust Certificates to such Clearing Agency
Participants; and
(e) Whenever this Agreement requires or permits actions to be
taken based upon instructions or directions of Holders of Trust
Certificates evidencing a specified percentage of the Certificate
Balance, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to such
effect from Certificate Owners and/or Clearing Agency Participants
owning or representing, respectively, such required percentage of the
beneficial interest in the Trust Certificates and has delivered such
instructions to the Owner Trustee.
SECTION 3.12. Notices to Clearing Agency. Whenever a notice or
other communication to the Certificateholders is required under this Agreement,
unless and until Definitive Trust Certificates shall have been issued to
Certificate Owners pursuant to Section 3.14, the Owner Trustee shall give all
such notices and communications specified herein to be given to
Certificateholders to the Clearing Agency, and shall have no obligations to the
Certificate Owners.
SECTION 3.13. Definitive Trust Certificates. If (i) the
Administrator advises the Owner Trustee in writing that the Clearing Agency is
no longer willing or able to properly discharge its responsibilities with
respect to the Trust Certificates and the Administrator is unable to locate a
qualified successor, (ii) the Administrator at its option advises the Owner
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 or a
Servicer Default, Certificate Owners representing beneficial interests
aggregating at least a majority of the Certificate Balance advise
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the Clearing Agency in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interest of the Certificate
Owners, then the Clearing Agency shall notify all Certificate Owners and the
Owner Trustee of the occurrence of any such event and of the availability of the
Definitive Trust Certificates to Certificate Owners requesting the same. Upon
surrender to the Owner Trustee of the typewritten Trust Certificate or Trust
Certificates representing the Book-Entry Trust Certificates by the Clearing
Agency, accompanied by registration instructions, the Owner Trustee shall
execute and authenticate the Definitive Trust Certificates in accordance with
the instructions of the Clearing Agency. Neither the Certificate Registrar nor
the Owner 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 Definitive Trust Certificates, the Owner
Trustee shall recognize the Holders of the Definitive Trust Certificates as
Certificateholders. The Definitive Trust Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Owner Trustee, as evidenced by its execution thereof.
ARTICLE IV
Actions by Owner Trustee
SECTION 4.01. Prior Notice to Owners with Respect to Certain
Matters. With respect to the following matters, the Owner Trustee shall not take
action unless at least 30 days before the taking of such action, the Owner
Trustee shall have notified the Certificateholders in writing of the proposed
action and the Owners shall not have notified the Owner Trustee in writing prior
to the 30th day after such notice is given that such Owners have withheld
consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust
(except claims or lawsuits brought in connection with the collection of
the Receivables) and the compromise of any action, claim or lawsuit
brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of the Receivables);
(b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Business Trust Statute);
(c) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is not required
and such amendment would materially adversely affect the interests of
the Owners;
(e) the amendment, change or modification of the
Administration Agreement, except to cure any ambiguity or to amend or
supplement any provision in a manner or add any provision that would
not materially adversely affect the interests of the Owners; or
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(f) the appointment pursuant to the Indenture of a successor
Note Registrar, Paying Agent or Indenture Trustee or pursuant to this
Agreement of a successor Certificate Registrar, or the consent to the
assignment by the Note Registrar, Paying Agent or Indenture Trustee or
Certificate Registrar of its obligations under the Indenture or this
Agreement, as applicable.
SECTION 4.02. Action by Owners with Respect to Certain
Matters. The Owner Trustee shall not have the power, except upon the written
direction of the Owners, to (a) remove the Administrator under the
Administration Agreement pursuant to Section 8 thereof, (b) appoint a successor
Administrator under the Administration Agreement pursuant to Section 8 thereof,
(c) remove the Servicer under the Sale and Servicing Agreement pursuant to
Section 8.01 thereof or (d) except as expressly provided in the Basic Documents,
sell the Receivables after the termination of the Indenture. The Owner Trustee
shall take the actions referred to in the preceding sentence only upon written
instructions signed by the Owners.
SECTION 4.03. Action by Owners with Respect to Bankruptcy. The
Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Owners and the delivery to the Owner Trustee by each such Owner of a certificate
certifying that such Owner reasonably believes that the Trust is insolvent.
SECTION 4.04. Restrictions on Owners' Power. The Owners shall
not direct the Owner Trustee to take or to refrain from taking any action if
such action or inaction would be contrary to any obligation of the Trust or the
Owner Trustee under this Agreement or any of the Basic Documents or would be
contrary to Section 2.03 or contrary to applicable law, nor shall the Owner
Trustee be obligated to follow any such direction, if given.
SECTION 4.05. Majority Control. Except as expressly provided
herein, any action that may be taken by the Owners under this Agreement may be
taken by the Holders of Trust Certificates evidencing not less than a majority
of the Certificate Balance. Except as expressly provided herein, any written
notice of the Owners delivered pursuant to this Agreement shall be effective if
signed by Holders of Trust Certificates evidencing not less than a majority of
the Certificate Balance at the time of the delivery of such notice.
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.01. Establishment of Trust Account. The Owner
Trustee, for the benefit of the Certificateholders, shall establish and maintain
in the name of the Trust an Eligible Deposit Account (the "Certificate
Distribution Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders.
The Owner Trustee shall possess all right, title and interest
in all funds on deposit from time to time in the Certificate Distribution
Account and in all proceeds thereof. Except as otherwise expressly provided
herein, the Certificate Distribution Account shall be under the sole dominion
and control of the Owner Trustee for the benefit of the Certificateholders. If,
at any
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time, the Certificate Distribution Account ceases to be an Eligible Deposit
Account, the Owner Trustee (or the Depositor on behalf of the Owner Trustee, if
the Certificate Distribution Account is not then held by the Owner Trustee or
an affiliate thereof) shall within 10 Business Days (or such longer period, not
to exceed 30 calendar days, as to which each Rating Agency may consent)
establish a new Certificate Distribution Account as an Eligible Deposit Account
and shall transfer any cash and/or any investments to such new Certificate
Distribution Account.
SECTION 5.02. Application of Trust Funds. (a) On each
Distribution Date, the Owner Trustee will distribute to Certificateholders, on a
pro rata basis, amounts deposited in the Certificate Distribution Account
pursuant to Section 5.06 of the Sale and Servicing Agreement with respect to
such Distribution Date.
(b) On each Distribution Date, the Owner Trustee shall send to
each Certificateholder the statement or statements provided to the Owner Trustee
by the Servicer pursuant to Section 5.09 of the Sale and Servicing Agreement
with respect to such Distribution Date.
SECTION 5.03. Method of Payment. Subject to Section 9.01(c),
distributions required to be made to Certificateholders on any Distribution Date
shall be made to each Certificateholder of record on the preceding Record Date
either (x) by wire transfer, in immediately available funds, to the account of
such Holder at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided to the Certificate Registrar
appropriate written instructions no later than the Record Date prior to such
Distribution Date, or (y) if such Holder does not qualify under clause (x), by
check mailed to such Certificateholder at the address of such holder appearing
in the Certificate Register.
SECTION 5.04. No Segregation of Moneys; No Interest. Subject
to Sections 5.01 and 5.02, moneys received by the Owner Trustee hereunder need
not be segregated in any manner except to the extent required by law or the Sale
and Servicing Agreement and may be deposited under such general conditions as
may be prescribed by law, and the Owner Trustee shall not be liable for any
interest thereon.
SECTION 5.05. Accounting and Reports to the Noteholders,
Owners, the Internal Revenue Service and Others. In accordance with Annex A
hereto, the Owner Trustee shall (a) maintain (or cause to be maintained) the
books of the Trust on a calendar year basis and the accrual method of
accounting, in a manner consistent with its treatment as a partnership for
federal and applicable state and local tax purposes, (b) deliver to each Owner,
as may be required by the Code and applicable Treasury Regulations, such
information as may be required (including Schedule K-1) to enable each Owner to
prepare its federal and state income tax returns, (c) file such tax returns
relating to the Trust (including a partnership information return, IRS Form
1065) and make such elections as from time to time may be required or
appropriate under any applicable state or federal statute or any rule or
regulation thereunder so as to maintain the Trust's characterization as a
partnership for federal income tax purposes, (d) cause such tax returns to be
signed in the manner required by law and (e) collect or cause to be collected
any withholding tax as described in and in accordance with Section 6(e) of Annex
A hereto with respect to income or distributions to Owners. The Owner Trustee
shall elect under Section 1278 of the Code to include in income currently any
market discount that accrues with respect to the
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Receivables. The Owner Trustee shall not make the election provided under
Section 754 of the Code.
SECTION 5.06. Signature on Returns. The Owner Trustee shall
sign on behalf of the Trust the tax returns of the Trust, unless applicable law
requires an Owner to sign such documents, in which case such documents shall be
signed by the Depositor.
ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.01. General Authority. The Owner Trustee is
authorized and directed to execute and deliver the Basic Documents to which the
Trust is to be a party and each certificate or other document attached as an
exhibit to or contemplated by the Basic Documents to which the Trust is to be a
party and, in each case, in such form as the Depositor shall approve, as
evidenced conclusively by the Owner Trustee's execution thereof. In addition to
the foregoing, the Owner Trustee is authorized, but shall not be obligated, to
take all actions required of the Trust pursuant to the Basic Documents. The
Owner Trustee is further authorized from time to time to take such action as the
Administrator recommends with respect to the Basic Documents.
SECTION 6.02. General Duties. It shall be the duty of the
Owner Trustee to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement and the Basic Documents
to which the Trust is a party and to administer the Trust in the interest of the
Owners, subject to the Basic Documents and in accordance with the provisions of
this Agreement. Notwithstanding the foregoing, the Owner Trustee shall be deemed
to have discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee shall not be held
liable for the default or failure of the Administrator to carry out its
obligations under the Administration Agreement.
SECTION 6.03. Action upon Instruction. (a) Subject to Article
IV and in accordance with the terms of the Basic Documents, the Owners may by
written instruction direct the Owner Trustee in the management of the Trust.
Such direction may be exercised at any time by written instruction of the Owners
pursuant to Article IV.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or under any Basic Document, the Owner Trustee shall promptly give
notice (in such form as shall be appropriate under the circumstances) to the
Owners requesting instruction as to the course of action to be
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adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Owners received, the Owner Trustee shall not
be liable on account of such action to any Person. If the Owner Trustee shall
not have received appropriate instruction within 10 days of such notice (or
within such shorter period of time as reasonably may be specified in such notice
or may be necessary under the circumstances) it may, but shall be under no duty
to, take or refrain from taking such action not inconsistent with this Agreement
or the Basic Documents, as it shall deem to be in the best interests of the
Owners, and shall have no liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Owners
requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action not inconsistent with this Agreement or the Basic
Documents, as it shall deem to be in the best interests of the Owners, and shall
have no liability to any Person for such action or inaction.
SECTION 6.04. No Duties Except as Specified in this Agreement
or in Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.03; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Securities and Exchange Commission filing
for the Trust or to record this Agreement or any Basic Document. The Owner
Trustee nevertheless agrees that it will, at its own cost and expense, promptly
take all action as may be necessary to discharge any liens on any part of the
Owner Trust Estate that result from actions by, or claims against, the Owner
Trustee that are not related to the ownership or the administration of the Owner
Trust Estate.
SECTION 6.05. No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in
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accordance with the Basic Documents and (iii) in accordance with any document or
instruction delivered to the Owner Trustee pursuant to Section 6.03.
SECTION 6.06. Restrictions. The Owner Trustee shall not take
any action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.03 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation for federal income tax
purposes. The Owners shall not direct the Owner Trustee to take action that
would violate the provisions of this Section.
ARTICLE VII
Concerning the Owner Trustee
SECTION 7.01. Acceptance of Trusts and Duties. The Owner
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts, but only upon the terms of this
Agreement. The Owner Trustee also agrees to disburse all moneys actually
received by it constituting part of the Owner Trust Estate upon the terms of the
Basic Documents and this Agreement. The Owner Trustee shall not be answerable or
accountable hereunder or under any Basic Document under any circumstances,
except (i) for its own willful misconduct or gross negligence (or negligence in
the case of handling funds), (ii) for liabilities arising from the failure by
the Owner Trustee to perform obligations expressly undertaken by it in the last
sentence of Section 6.04 hereof, (iii) for any investments made by the Owner
Trustee with [____________________] (in its individual capacity) in its
commercial capacity, (iv) in the case of the inaccuracy of any representation or
warranty contained in Section 7.03 expressly made by the Owner Trustee or (v)
for federal or Delaware taxes, fees or other charges, based on or measured by
any fees, commissions or compensation received by the Owner Trustee in
connection with any of the transactions contemplated by this Agreement or any of
the Basic Documents. In particular, but not by way of limitation (and subject to
the exceptions set forth in the preceding sentence):
(a) The Owner Trustee shall not be liable for any error of
judgment made by a Trust Officer of the Owner Trustee;
(b) The Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the
instructions of the Administrator or any Owner;
(c) No provision of this Agreement or any Basic Document
shall require the Owner Trustee to expend or risk funds or otherwise
incur any financial liability in the performance of any of its rights
or powers hereunder or under any Basic Document if the Owner Trustee
shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured or provided to it;
(d) Under no circumstances shall the Owner Trustee be liable
for indebtedness evidenced by or arising under any of the Basic
Documents, including the principal of and interest on the Notes;
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(e) The Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Depositor or for the form, character,
genuineness, sufficiency, value or validity of any of the Owner Trust
Estate, or for or in respect of the validity or sufficiency of the
Basic Documents, other than the certificate of authentication on the
Trust Certificates, and the Owner Trustee shall in no event assume or
incur any liability, duty or obligation to any Noteholder or to any
Owner, other than as expressly provided for herein or expressly agreed
to in the Basic Documents;
(f) The Owner Trustee shall not be liable for the default or
misconduct of the Administrator, the Depositor, the Indenture Trustee
or the Servicer under any of the Basic Documents or otherwise, and the
Owner Trustee shall have no obligation or liability to perform the
obligations of the Trust under this Agreement or the Basic Documents
that are required to be performed by the Administrator under the
Administration Agreement, the Indenture Trustee under the Indenture or
the Servicer or World Omni Auto Receivables LLC, as Depositor under the
Sale and Servicing Agreement; and
(g) The Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement, or
to institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any Basic Document, at
the request, order or direction of any of the Owners, unless such
Owners have offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may
be incurred by the Owner Trustee therein or thereby. The right of the
Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any Basic Document shall not be construed as a duty,
and the Owner Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of any such act.
SECTION 7.02. Furnishing of Documents. The Owner Trustee shall
furnish to the Owners promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 7.03. Representations and Warranties. The Owner
Trustee hereby represents and warrants to the Depositor, for the benefit of the
Owners, that:
(a) It is a banking corporation duly organized and validly
existing in good standing under the laws of the State of Delaware. It
has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement, and this Agreement
will be executed and delivered by one of its officers who is duly
authorized to execute and deliver this Agreement on its behalf.
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(c) Neither the execution or the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby, nor compliance by it with any of the terms or provisions hereof
will contravene any federal or Delaware law, governmental rule or
regulation governing the banking or trust powers of the Owner Trustee
or any judgment or order binding on it, or constitute any default under
its charter documents or bylaws or any indenture, mortgage, contract,
agreement or instrument to which it is a party or by which any of its
properties may be bound.
SECTION 7.04. Reliance; Advice of Counsel. (a) The Owner
Trustee shall incur no liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond, or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. The Owner Trustee
may accept a certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the method of determination of which is not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president or by the
treasurer or other authorized officers of the relevant party, as to such fact or
matter, and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder
and in the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled Persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such Persons and not contrary to this Agreement or
any Basic Document.
SECTION 7.05. Not Acting in Individual Capacity. Except as
provided in this Article VII, in accepting the trusts hereby created
[____________________] acts solely as Owner Trustee hereunder and not in its
individual capacity, and all Persons having any claim against the Owner Trustee
by reason of the transactions contemplated by this Agreement or any Basic
Document shall look only to the Owner Trust Estate for payment or satisfaction
thereof.
SECTION 7.06. Owner Trustee Not Liable for Trust Certificates
or Receivables. The Owner Trustee makes no representations as to the validity or
sufficiency of this Agreement, of any Basic Document or of the Trust
Certificates (other than the signature and countersignature of the Owner Trustee
on the Trust Certificates) or the Notes, or of any Receivable or related
documents. The Owner Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Receivable, or the perfection and priority of any security interest created
by any Receivable in any Financed Vehicle or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Owner
Trust Estate or its ability to generate the payments to be distributed to
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Certificateholders under this Agreement or the Noteholders under the Indenture,
including, without limitation: the existence, condition and ownership of any
Financed Vehicle; the existence and enforceability of any insurance thereon; the
existence and contents of any Receivable on any computer or other record
thereof; the validity of the assignment of any Receivable to the Trust or of any
intervening assignment; the completeness of any Receivable; the performance or
enforcement of any Receivable; the compliance by the Depositor or the Servicer
with any warranty or representation made under any Basic Document or in any
related document or the accuracy of any such warranty or representation, or any
action of the Administrator, the Indenture Trustee or the Servicer or any
subservicer taken in the name of the Owner Trustee.
SECTION 7.07. Owner Trustee May Own Trust Certificates and
Notes. The Owner Trustee in its individual or any other capacity may become the
owner or pledgee of Trust Certificates or Notes and may deal with the Depositor,
the Administrator, the Indenture Trustee and the Servicer in banking
transactions with the same rights as it would have if it were not Owner Trustee.
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.01. Owner Trustee's Fees and Expenses. The Owner
Trustee shall receive as compensation for its services hereunder such fees as
have been separately agreed upon before the date hereof between the Depositor
and the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed
by the Administrator pursuant to the Administration Agreement for its other
reasonable expenses hereunder, including the reasonable compensation, expenses
and disbursements of such agents, representatives, experts and counsel as the
Owner Trustee may employ in connection with the exercise and performance of its
rights and its duties hereunder.
SECTION 8.02. Indemnification. Pursuant to the Administration
Agreement, the Administrator shall be liable as primary obligor for, and shall
indemnify the Owner Trustee and its successors, assigns, agents and servants
(collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may at any time be imposed on, incurred by, or asserted
against the Owner Trustee or any Indemnified Party in any way relating to or
arising out of this Agreement, the Basic Documents, the Owner Trust Estate, the
administration of the Owner Trust Estate or the action or inaction of the Owner
Trustee hereunder, except only that the Administrator shall not be liable for or
required to indemnify an Indemnified Party from and against Expenses arising or
resulting from any of the matters described in the third sentence of Section
7.01. The indemnities contained in this Section shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement. In any
event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section, the Owner Trustee's choice of legal counsel shall be
subject to the approval of the Administrator, which approval shall not be
unreasonably withheld.
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SECTION 8.03. Payments to the Owner Trustee. Any amounts paid
to the Owner Trustee pursuant to this Article VIII shall be deemed not to be a
part of the Owner Trust Estate immediately after such payment.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement. (a) This
Agreement (other than Article VIII) and the Trust shall terminate and be of no
further force or effect (i) upon the final distribution by the Owner Trustee of
all moneys or other property or proceeds of the Owner Trust Estate in accordance
with the terms of the Indenture, the Sale and Servicing Agreement and Article V
or (ii) at the time provided in Section 9.02. The bankruptcy, liquidation,
dissolution, death or incapacity of any Owner, other than the Depositor as
described in Section 9.02, shall not (x) operate to terminate this Agreement or
the Trust or (y) entitle such Owner's legal representatives or heirs to claim an
accounting or to take any action or proceeding in any court for a partition or
winding up of all or any part of the Trust or Owner Trust Estate or (z)
otherwise affect the rights, obligations and liabilities of the parties hereto.
(b) Except as provided in Section 9.01(a), neither the
Depositor nor any Owner shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which Certificateholders shall surrender their Trust
Certificates to the Paying Agent for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five Business Days of receipt of notice of such
termination from the Servicer given pursuant to Section 9.01(b) of the Sale and
Servicing Agreement, stating (i) the Distribution Date upon or with respect to
which final payment of the Trust Certificates shall be made upon presentation
and surrender of the Trust Certificates at the office of the Paying Agent
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Trust
Certificates at the office of the Paying Agent therein specified. The Owner
Trustee shall give such notice to the Certificate Registrar (if other than the
Owner Trustee) and the Paying Agent at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Trust Certificates,
the Paying Agent shall cause to be distributed to Certificateholders amounts
distributable on such Distribution Date pursuant to Section 5.02.
In the event that all of the Certificateholders shall not
surrender their Trust Certificates for cancellation within six months after the
date specified in the above mentioned written notice, the Owner Trustee shall
give a second written notice to the remaining Certificateholders to surrender
their Trust Certificates for cancellation and receive the final distribution
with respect thereto. If within one year after the second notice all the Trust
Certificates shall not have been surrendered for cancellation, the Owner Trustee
may take appropriate steps, or may appoint an agent to take appropriate steps,
to contact the remaining Certificateholders concerning surrender of their Trust
Certificates, and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Agreement. Any funds
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remaining in the Trust after exhaustion of such remedies shall be distributed by
the Owner Trustee to the Depositor.
(d) Upon the winding up of the Trust and its termination, the
Owner Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
SECTION 9.02. Dissolution upon Bankruptcy of the Depositor. In
the event that an Insolvency Event shall occur with respect to the Depositor,
this Agreement shall be terminated in accordance with Section 9.01 90 days after
the date of such Insolvency Event, unless, before the end of such 90-day period,
the Owner Trustee shall have received written instructions from (a) Holders of
Certificates (other than the Depositor) representing more than 50% of the
Certificate Balance (not including the Certificate Balance of the Trust
Certificates held by the Depositor) and (b) Holders (as defined in the
Indenture) of Notes representing more than 50% of the Outstanding Amount of the
Notes, to the effect that each such party disapproves of the liquidation of the
Receivables and termination of the Trust. Promptly after the occurrence of any
Insolvency Event with respect to the Depositor, (A) the Depositor shall give the
Indenture Trustee and the Owner Trustee written notice of such Insolvency Event,
(B) the Owner Trustee shall, upon the receipt of such written notice from the
Depositor, give prompt written notice to the Certificateholders and the
Indenture Trustee, of the occurrence of such event and (C) the Indenture Trustee
shall, upon receipt of written notice of such Insolvency Event from the Owner
Trustee or the Depositor, give prompt written notice to the Noteholders of the
occurrence of such event; provided, however, that any failure to give a notice
required by this sentence shall not prevent or delay, in any manner, a
termination of the Trust pursuant to the first sentence of this Section 9.02.
Upon a termination pursuant to this Section, the Owner Trustee shall direct the
Indenture Trustee promptly to sell the assets of the Trust (other than the Trust
Accounts and the Certificate Distribution Account), in a commercially reasonable
manner and on commercially reasonable terms. The proceeds of such a sale of the
assets of the Trust shall be treated as collections under the Sale and Servicing
Agreement.
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.01. Eligibility Requirements for Owner Trustee.
The Owner Trustee shall at all times be a corporation satisfying the provisions
of Section 3807(a) of the Business Trust Statute; authorized 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. If such corporation shall publish reports of condition at least
annually pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, 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 10.02.
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SECTION 10.02. Resignation or Removal of Owner Trustee. The
Owner Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Administrator. Upon receiving
such notice of resignation, the Administrator shall promptly appoint a successor
Owner Trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Owner Trustee and one copy to the successor
Owner Trustee. If no successor Owner Trustee shall have been so appointed and
have accepted appointment within 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.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to resign after
written request therefor by the Administrator, or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged 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 Administrator may remove the Owner
Trustee. If the Administrator shall remove the Owner Trustee under the authority
of the immediately preceding sentence, the Administrator shall promptly appoint
a successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the outgoing Owner Trustee so removed and one
copy to the successor Owner Trustee, and shall pay all fees owed to the outgoing
Owner Trustee.
Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions of
this Section shall not become effective until acceptance of appointment by the
successor Owner Trustee pursuant to Section 10.03 and payment of all fees and
expenses owed to the outgoing Owner Trustee. The Administrator shall provide
notice of such resignation or removal of the Owner Trustee to each Rating
Agency.
SECTION 10.03. Successor Owner Trustee. Any successor Owner
Trustee appointed pursuant to Section 10.02 shall execute, acknowledge and
deliver to the Administrator 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 upon payment of its fees and
expenses deliver to the successor Owner Trustee all documents and statements and
monies held by it under this Agreement; and the Administrator and the
predecessor Owner Trustee shall execute and deliver such instruments and do such
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 pursuant to Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section, the Administrator shall mail notice thereof to all
Certificateholders, the Indenture
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Trustee, the Noteholders and the Rating Agencies. If the Administrator shall
fail to mail such notice within 10 days after acceptance of such appointment by
the successor Owner Trustee, the successor Owner Trustee shall cause such notice
to be mailed at the expense of the Administrator.
SECTION 10.04. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, 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; provided, that such corporation shall be eligible pursuant to
Section 10.01 and, provided, further, that the Owner Trustee shall mail notice
of such merger or consolidation to each Rating Agency.
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Administrator and the Owner Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Administrator and Owner Trustee to act as co-trustee, jointly
with the Owner Trustee, or as separate trustee or separate trustees, of all or
any part of the Owner Trust Estate, and to vest in such Person, in such
capacity, 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 Administrator and the Owner Trustee may consider necessary or desirable.
If the Administrator 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 10.01 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.03.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(a) 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 Owner Trust Estate 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;
(b) No trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under this
Agreement; and
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(c) The Administrator 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 Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the
Owner Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor co-trustee or separate trustee.
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments. This Agreement may
be amended by the Depositor and the Owner Trustee, with prior written notice to
each Rating Agency, without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel, adversely affect in any material respect the interests
of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the
Depositor and the Owner Trustee, with prior written notice to each Rating
Agency, with the consent of the Holders (as defined in the Indenture) of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes and
the consent of the Holders of Certificates evidencing not less than a majority
of the Certificate Balance, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (a) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that shall be required
to be made for the benefit of the Noteholders or the Certificateholders or (b)
reduce the aforesaid percentage of the Outstanding Amount of the Notes and the
Certificate Balance required to
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consent to any such amendment, without the consent of the holders of all the
outstanding Notes and Certificates.
No amendment to this Agreement shall be recognized or be
effective without the written consent of the Trustee and receipt by the Trustee
of an Opinion of Counsel to the effect that such amendment will not (i) cause
the Trust to be treated as an association taxable as a corporation or as a
publicly-traded partnership for federal income tax purposes or (ii) cause the
Trust to be subject to an entity-level tax for [State of Florida or State of
Delaware] tax purposes.
Promptly after the execution of any such amendment or consent,
the Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
Rating Agency.
It shall not be necessary for the consent of
Certificateholders, Noteholders or the Indenture Trustee pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents (and any other consents of Certificateholders
provided for in this Agreement or in any other Basic Document) and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Owner Trustee may prescribe.
Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing of such amendment
with the Secretary of State.
Prior to the execution of any amendment to this Agreement or
the Certificate of Trust, the Owner Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Owner Trustee may, but shall not
be obligated to, enter into any such amendment that affects the Owner Trustee's
own rights, duties or immunities under this Agreement or otherwise.
In connection with the execution of any amendment to this
Trust Agreement or any amendment of any other agreement to which the Issuer is a
party, the Owner Trustee shall be entitled to receive and conclusively rely upon
an Opinion of Counsel to the effect that such amendment is authorized or
permitted by the Basic Documents and that all conditions precedent in the Basic
Documents for the execution and delivery thereof by the Issuer or the Owner
Trustee, as the case may be, have been satisfied.
SECTION 11.02. No Legal Title to Owner Trust Estate in Owners.
The Owners shall not have legal title to any part of the Owner Trust Estate. The
Owners shall be entitled to receive distributions with respect to their
undivided ownership interest therein only in accordance with Articles V and IX.
No transfer, by operation of law or otherwise, of any right, title or interest
of the Owners to and in their ownership interest in the Owner Trust Estate shall
operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Owner Trust Estate.
SECTION 11.03. Limitations on Rights of Others. Except for
Section 2.07, the provisions of this Agreement are solely for the benefit of the
Owner Trustee, the Depositor, the Owners, the Administrator and, to the extent
expressly provided herein, the Indenture Trustee
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and the Noteholders, and nothing in this Agreement (other than Section 2.07
hereof), whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Owner Trust Estate
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 11.04. Notices. (a) Unless otherwise expressly
specified or permitted by the terms hereof, all notices shall be in writing and
shall be deemed given upon receipt by the intended recipient or three Business
Days after mailing if personally delivered or mailed by certified mail, return
receipt requested and postage prepaid or by recognized overnight courier or by
facsimile confirmed by delivery or mail as described above (except that notice
to the Owner Trustee shall be deemed given only upon actual receipt by the Owner
Trustee), if to the Owner Trustee, addressed to the Corporate Trust Office; if
to the Depositor, addressed to World Omni Auto Receivables LLC, 120 N.W. 12th
Avenue, Deerfield Beach, Florida 33442, telephone: (954) 429-2200, facsimile:
(954) 429-[_____], Attention: A. Tucker Allen; or, as to each party, at such
other address as shall be designated by such party in a written notice to each
other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
SECTION 11.05. Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 11.06. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.07. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
each of the Depositor and its permitted assignees, the Owner Trustee and its
successors and each Owner and its successors and permitted assigns, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by an Owner shall bind the successors and assigns of such
Owner.
SECTION 11.08. Covenants of the Depositor. In the event that
(a) Certificateholders' Principal Carryover Shortfalls shall occur or (b) any
litigation with claims in excess of $1,000,000 to which the Depositor is a party
which shall be reasonably likely to result in a material judgment against the
Depositor that the Depositor will not be able to satisfy shall be commenced by
an Owner, during the period beginning nine months following the commencement of
such litigation and continuing until such litigation is dismissed or otherwise
terminated (and, if such litigation has resulted in a final judgment against the
Depositor, such
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judgment has been satisfied), the Depositor shall not pay any dividend to World
Omni, or make any distribution on or in respect of its capital stock to World
Omni, or repay the principal amount of any indebtedness of the Depositor held by
World Omni, unless (i) after giving effect to such payment, distribution or
repayment, the Depositor's liquid assets shall not be less than the amount of
actual damages claimed in such litigation or (ii) the Rating Agency Condition
shall have been satisfied with respect to any such payment, distribution or
repayment. The Depositor will not at any time institute against the Trust any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Trust
Certificates, the Notes, the Trust Agreement or any of the Basic Documents.
SECTION 11.09. No Petition. The Owner Trustee, by entering
into this Agreement, each Certificateholder, by accepting a Trust Certificate,
and the Indenture Trustee and each Noteholder, by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Depositor or the Trust, or join in any institution against the
Depositor or the Trust of, any bankruptcy proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Trust Certificates, the Notes, this Agreement or any of the
Basic Documents.
SECTION 11.10. No Recourse. Each Certificateholder by
accepting a Trust Certificate acknowledges that such Certificateholder's Trust
Certificates represent beneficial interests in the Trust only and do not
represent interests in or obligations of the Depositor, the Servicer, the
Administrator, the Owner Trustee, the Indenture Trustee or any Affiliate thereof
and no recourse may be had against such parties or their assets, except as may
be expressly set forth or contemplated in this Agreement, the Trust Certificates
or the Basic Documents.
SECTION 11.11. Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 11.13. [Reserved.]
SECTION 11.14. Depositor Payment Obligation. The Depositor
shall be responsible for payment of the Administrator's fees under the
Administration Agreement and shall reimburse the Administrator for all expenses
and liabilities of the Administrator incurred thereunder. In addition, the
Depositor shall be responsible for the payment of all fees and expenses of the
Trust, the Owner Trustee and the Indenture Trustee paid by any of them in
connection with any of their obligations under the Basic Documents to obtain or
maintain any required license under the Motor Vehicle Sales Finance Act.
* * * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
WORLD OMNI AUTO RECEIVABLES LLC,
as Depositor
By: World Omni Financial Corp.,
as its sole member
By: __________________________________
Name:
Title:
[ ]
not in its individual capacity
but solely as Owner Trustee,
By: ___________________________________
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF TRUST CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED TO THE NOTES, AS AND TO THE EXTENT SET FORTH IN
THE SALE AND SERVICING AGREEMENT.
UNLESS THIS TRUST CERTIFICATE 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 TRUST
CERTIFICATE 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.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR UNDER THE SECURITIES OR BLUE SKY
LAWS OF ANY STATE IN THE UNITED STATES OR ANY FOREIGN SECURITIES LAWS. BY ITS
ACCEPTANCE OF THIS CERTIFICATE THE HOLDER HEREOF IS DEEMED TO REPRESENT TO THE
DEPOSITOR AND THE OWNER TRUSTEE (i) THAT IT IS AN "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D PROMULGATED UNDER THE
1933 ACT (AN "ACCREDITED INVESTOR") AND THAT IT IS ACQUIRING THIS CERTIFICATE
FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR
AGENT FOR OTHERS (WHICH OTHERS ALSO ARE ACCREDITED INVESTORS UNLESS THE HOLDER
IS A BANK ACTING IN ITS FIDUCIARY CAPACITY) FOR INVESTMENT AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, THE PUBLIC DISTRIBUTION HEREOF,
(ii) THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER
THE 1933 ACT AND IS ACQUIRING SUCH CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR
THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO
ARE QUALIFIED INSTITUTIONAL BUYERS) OR (iii) THAT IT IS AN INVESTOR THAT IS
OTHERWISE PERMITTED TO ACQUIRE THIS CERTIFICATE UNDER THE TRUST AGREEMENT.
NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE BY ANY PERSON
UNLESS EITHER (i) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO THE DEPOSITOR,
(ii) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO AN ACCREDITED INVESTOR THAT
EXECUTES A CERTIFICATE, SUBSTANTIALLY IN THE FORM SPECIFIED IN THE TRUST
AGREEMENT, TO THE EFFECT THAT IT IS AN ACCREDITED INVESTOR ACTING FOR ITS OWN
ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR
OTHERS (WHICH OTHERS ALSO ARE ACCREDITED INVESTORS UNLESS THE
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HOLDER IS A BANK ACTING IN ITS FIDUCIARY CAPACITY), (iii) SO LONG AS THIS
CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE 1933 ACT,
SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO A PERSON WHO THE PROSPECTIVE
TRANSFEROR REASONABLY BELIEVES AFTER DUE INQUIRY IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A), ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE
ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE
QUALIFIED INSTITUTIONAL BUYERS) TO WHOM NOTICE IS GIVEN THAT THE SALE, PLEDGE OR
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (iv) SUCH SALE, PLEDGE OR
OTHER TRANSFER IS OTHERWISE MADE IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT, IN WHICH CASE THE OWNER TRUSTEE SHALL REQUIRE THAT
BOTH THE PROSPECTIVE TRANSFEROR AND THE PROSPECTIVE TRANSFEREE CERTIFY TO THE
OWNER TRUSTEE AND THE DEPOSITOR IN WRITING THE FACTS SURROUNDING SUCH TRANSFER,
WHICH CERTIFICATION SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE OWNER
TRUSTEE AND THE DEPOSITOR. EXCEPT IN THE CASE OF A TRANSFER DESCRIBED IN CLAUSES
(i) OR (iii) ABOVE, THE OWNER TRUSTEE SHALL REQUIRE A WRITTEN OPINION OF COUNSEL
(WHICH SHALL NOT BE AT THE EXPENSE OF THE DEPOSITOR, ANY AFFILIATE OF THE
DEPOSITOR OR THE OWNER TRUSTEE) SATISFACTORY TO THE DEPOSITOR AND THE OWNER
TRUSTEE TO THE EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE 1933 ACT. NO SALE,
PLEDGE OR OTHER TRANSFER MAY BE MADE TO ANY ONE PERSON FOR SECURITIES WITH A
FACE AMOUNT OF LESS THAN $[_________] AND, IN THE CASE OF ANY PERSON ACTING ON
BEHALF OF ONE OR MORE THIRD PARTIES (OTHER THAN A BANK (AS DEFINED IN SECTION
3(a)(2) OF THE 1933 ACT) ACTING IN ITS FIDUCIARY CAPACITY), FOR SECURITIES WITH
A FACE AMOUNT OF LESS THAN $[_________] FOR EACH SUCH THIRD PARTY.
EACH SECURITYHOLDER, BY ITS ACCEPTANCE OF THIS SECURITY, COVENANTS AND AGREES
THAT SUCH SECURITYHOLDER, SHALL NOT, PRIOR TO THE DATE THAT IS ONE YEAR AND ONE
DAY AFTER THE TERMINATION OF THE TRUST AGREEMENT, ACQUIESCE, PETITION OR
OTHERWISE INVOKE OR CAUSE THE TRUST, THE DEPOSITOR OR THE SELLER TO INVOKE THE
PROCESS OF ANY COURT OR GOVERNMENTAL AUTHORITY FOR THE PURPOSE OF COMMENCING OR
SUSTAINING A CASE AGAINST THE TRUST, THE DEPOSITOR OR THE SELLER UNDER ANY
FEDERAL OR STATE BANKRUPTCY, INSOLVENCY, REORGANIZATION OR SIMILAR LAW, OR
APPOINTING A RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE, CUSTODIAN, SEQUESTRATOR OR
OTHER SIMILAR OFFICIAL OF THE TRUST, THE DEPOSITOR OR THE SELLER OR ANY
SUBSTANTIAL PART OF ITS PROPERTY, OR ORDERING THE WINDING UP OR LIQUIDATION OF
THE AFFAIRS OF THE TRUST, THE DEPOSITOR OR THE SELLER.
[HIS CERTIFICATE WILL NOT BE REGISTERED FOR TRANSFER UNLESS THE OWNER TRUSTEE
RECEIVES EITHER (1) A REPRESENTATION FROM THE TRANSFEREE OF SUCH CERTIFICATE TO
THE EFFECT THAT SUCH TRANSFEREE NEITHER IS NOR IS ACTING ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE
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RETIREMENT SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR A GOVERNMENTAL PLAN
(AS DEFINED IN SECTION 3(32) OF ERISA) SUBJECT TO ANY FEDERAL, STATE OR LOCAL
LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN") AND IS NOT USING THE
ASSETS OF A PLAN SUBJECT TO ERISA OR THE CODE TO INVEST IN THE CERTIFICATES, (2)
IF THE TRANSFEREE IS A PLAN, OR IS ACTING ON BEHALF OF A PLAN TO INVEST IN THIS
CERTIFICATE, OR IS USING THE ASSETS OF A PLAN, AN OPINION OF COUNSEL
SATISFACTORY TO THE OWNER TRUSTEE TO THE EFFECT THAT SUCH TRANSFER WILL NOT
RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" OR SUBJECT
THE DEPOSITOR, THE SELLER, THE SERVICER, THE OWNER TRUSTEE, OR THE INDENTURE
TRUSTEE TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE TRUST
AGREEMENT, THE SALE AND SERVICING AGREEMENT AND THE ADMINISTRATION AGREEMENT,
INCLUDING ANY LIABILITIES ASSESSED FOR "PROHIBITED TRANSACTIONS" UNDER ERISA,
THE CODE OR SIMILAR LAW (3) IF THE TRANSFEREE IS AN INSURANCE COMPANY, A
REPRESENTATION THAT THE TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING
SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL ACCOUNT"
(AS SUCH TERM IS DEFINED IN SECTION V(e) OF PROHIBITED TRANSACTION CLASS
EXEMPTION 95-60 ("PTCE 95-60")) AND THAT THE PURCHASE AND HOLDING OF SUCH
CERTIFICATES AND ANY DEEMED EXTENSION OF CREDIT FROM A CERTIFICATEHOLDER WHICH
IS A PARTY IN INTEREST TO A PLAN, THE ASSETS OF WHICH ARE HELD BY SUCH
"INSURANCE COMPANY" ARE COVERED UNDER PTCE 95-60. ANY PURPORTED TRANSFER OF A
CERTIFICATE TO OR ON BEHALF OF A PLAN WITHOUT THE DELIVERY OF AN OPINION OF
COUNSEL REFERRED TO IN CLAUSE (2) ABOVE OR THE REPRESENTATION REFERRED TO IN
CLAUSE (3) ABOVE SHALL BE VOID AND OF NO EFFECT.
THE TRANSFEREE OF A BENEFICIAL INTEREST IN A BOOK-ENTRY TRUST CERTIFICATE SHALL
BE DEEMED TO REPRESENT EITHER (1) THAT IT IS NOT ACTING ON BEHALF OF A PLAN AND
IS NOT USING THE ASSETS OF A PLAN TO ACQUIRE SUCH INTEREST OR (2) THAT IT IS AN
INSURANCE COMPANY AND IS ACQUIRING SUCH INTEREST WITH FUNDS CONTAINED IN AN
INSURANCE COMPANY GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF SUCH
INTEREST IS COVERED UNDER SECTION I AND III OF PTCE 95-60.]
[THIS CERTIFICATE IS NONTRANSFERABLE.]1/
- --------------------------
1/To be included only on the Certificates representing the 1% minimum required
to be retained by the Depositor and any Certificates issued in exchange
therefor.
A-3
<PAGE>
NUMBER $_________
R- CUSIP NO. ______ __ _
WORLD OMNI AUTO RECEIVABLES TRUST [_____]-[_]
[___]% ASSET BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which consists of retail installment sale contracts for new and used
automobiles, vans and light duty trucks (collectively, the "Receivables"), all
monies received on or after the related Cutoff Date, security interests in the
vehicles financed thereby, certain bank accounts and the proceeds thereof,
proceeds from claims on certain insurance policies and certain other rights
under the Trust Agreement and the Sale and Servicing Agreement and all proceeds
of the foregoing.
THIS TRUST CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF WORLD
OMNI AUTO RECEIVABLES LLC, WORLD OMNI FINANCIAL CORP. OR ANY OF THEIR RESPECTIVE
AFFILIATES.
THIS CERTIFIES THAT ________________ is the registered owner
of ____________________________________________ DOLLARS nonassessable,
fully-paid, fractional undivided interest in World Omni Auto Receivables Trust
[___]-[_] (the "Trust"), formed by World Omni Auto Receivables LLC, a Delaware
limited liability company (the "Depositor").
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned Trust
Agreement. [____________________], not in its individual capacity, but solely as
Owner
[_____________________],
not in its individual capacity,
but solely as Owner Trustee
By: ___________________________
Authorized Signatory
A-4
<PAGE>
The Trust was created pursuant to a Trust Agreement dated as
of [_____], [____], (as amended or supplemented from time to time, the "Trust
Agreement"), between the Depositor and [____________________], as owner trustee
(the "Owner Trustee"), a summary of certain of the pertinent provisions of which
is set forth below. To the extent not otherwise defined herein, the capitalized
terms used herein have the meanings assigned to them in the Trust Agreement or
the Sale and Servicing Agreement dated as of [_____],[_____] (as amended and
supplemented from time to time, the "Sale and Servicing Agreement"), among the
Trust, the Depositor and World Omni Financial Corp., as servicer (the
"Servicer"), as applicable.
This Certificate is one of the duly authorized Certificates
designated as "[___]% Asset Backed Certificates" (herein called the "Trust
Certificates"). Also issued under an Indenture dated as of [_____], [______]
(the "Indenture"), between the Trust and [_____________], as indenture trustee,
are the Notes designated as "[___]% Asset Backed Notes" (the "Notes"). This
Trust Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Trust Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound. The property of the Trust consists of retail installment sale
contracts for new and used automobiles, light duty trucks and vans
(collectively, the "Receivables"), all monies received on or after the Cutoff
Date plus all Payaheads as of the Cutoff Date; any proceeds with respect to the
Receivables from claims on any physical damage, credit life or disability,
theft, mechanical breakdown or "guaranteed auto protection" insurance policies
relating to Financed Vehicles or Obligors; proceeds of any recourse (but none of
the obligations) to Dealers on Receivables; any Financed Vehicle that shall have
secured a Receivable and shall have been acquired by or on behalf of the
Depositor, the Servicer, or the Trust; the Receivables Files; the Receivables
Purchase Agreement, including the right of the Depositor to cause World Omni to
purchase Receivables under certain circumstances; the Trust Accounts; and
certain other rights under the Trust Agreement and the Sale and Servicing
Agreement and all proceeds of the foregoing. The rights of the Holders of the
Trust Certificates are subordinated to the rights of the Holders of the Notes,
as and to the extent set forth in the Sale and Servicing Agreement. [The
Depositor's Interest shall also entitle the Depositor to the distributions
specified in Sections 5.06 and 5.07 of the Sale and Servicing Agreement.]
Under the Trust Agreement, there will be distributed [March
15, June 15, September 15 and December 15] of each year or, if such day is not a
Business Day, the immediately following Business Day (each, a "Distribution
Date"), commencing on [_______], [____], to the Person in whose name this Trust
Certificate is registered at the close of business on the last day of the month
immediately preceding such Distribution Date (the "Record Date"), such
Certificateholder's fractional undivided interest in the amount to be
distributed to Certificateholders on such Distribution Date. No distributions of
principal will be made on any Certificate on any Distribution Date until the
full amount of principal payable on the Notes on such Distribution Date has been
paid in full; provided, however, that if a Loss Trigger Event has occurred, no
distributions of principal (other than any Certificateholders' Principal
Carryover Shortfall outstanding as of the date of occurrence of such Loss
Trigger Event) will be made on any Certificate.
A-5
<PAGE>
The Holder of this Trust Certificate acknowledges and agrees
that its rights to receive distributions in respect of this Trust Certificate
are subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement and the Indenture.
It is the intent of the Depositor, the Servicer and the
Certificateholders that, for purposes of federal income, state and local income
and single business tax and any other income taxes, the Trust will be treated as
a partnership and the Certificateholders (including the Depositor) will be
treated as partners in that partnership. The Depositor and the other
Certificateholders, by acceptance of a Trust Certificate, agree to treat, and to
take no action inconsistent with the treatment of, the Trust Certificates for
such tax purposes as partnership interests in the Trust.
Each Certificateholder, or Certificate Owner, by its
acceptance of a Trust Certificate or, in the case of a Certificate Owner, a
beneficial interest in a Trust Certificate, covenants and agrees that such
Certificateholder or Certificate Owner, as the case may be, will not at any time
institute against the Depositor, or join in any institution against the
Depositor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
the Trust Certificates, the Notes, the Trust Agreement or any of the Basic
Documents.
Distributions on this Trust Certificate will be made as
provided in the Trust Agreement by the Owner Trustee by wire transfer or check
mailed to the Certificateholder of record in the Certificate Register without
the presentation or surrender of this Trust Certificate or the making of any
notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Trust Certificate will
be made after due notice by the Owner Trustee of the pendency of such
distribution and only upon presentation and surrender of this Trust Certificate
at the office or agency maintained for that purpose by the Owner Trustee in the
Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this
Trust Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual
signature, this Trust Certificate shall not entitle the Holder hereof to any
benefit under the Trust Agreement or the Sale and Servicing Agreement or be
valid for any purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust
and not in its individual capacity, has caused this Trust Certificate to be duly
executed.
A-6
<PAGE>
WORLD OMNI AUTO RECEIVABLES TRUST [____]-[_]
[_____________________],
not in its individual capacity but solely as
Owner Trustee,
Dated: _________________ By: ______________________________
Authorized Signatory
A-7
<PAGE>
[REVERSE OF TRUST CERTIFICATE]
The Trust Certificates do not represent an obligation of, or
an interest in, the Depositor, the Servicer, the Seller, the Owner Trustee or
any affiliates of any of them and no recourse may be had against such parties or
their assets, except as expressly set forth or contemplated herein or in the
Trust Agreement or the Basic Documents. In addition, this Trust Certificate is
not guaranteed by any governmental agency or instrumentality and is limited in
right of payment to certain collections and recoveries with respect to the
Receivables (and certain other amounts), all as more specifically set forth
herein and in the Sale and Servicing Agreement. A copy of each of the Sale and
Servicing Agreement and the Trust Agreement may be examined by any
Certificateholder upon written request during normal business hours at the
principal office of the Depositor and at such other places, if any, designated
by the Depositor.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor and the Owner Trustee with the
consent of the Holders of the Trust Certificates and the Notes, each voting as a
class, evidencing not less than a majority of the Certificate Balance and the
outstanding principal balance of the Notes. Any such consent by the Holder of
this Trust Certificate shall be conclusive and binding on such Holder and on all
future Holders of this Trust Certificate and of any Trust Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof, whether or
not notation of such consent is made upon this Trust Certificate. The Trust
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the Holders of any of the Trust Certificates.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Trust Certificate is
registerable in the Certificate Register upon surrender of this Trust
Certificate for registration of transfer at the offices or agencies of the
Certificate Registrar maintained by the Owner Trustee in the Borough of
Manhattan, The City of New York, accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Trust Certificates of authorized
denominations evidencing the same aggregate interest in the Trust will be issued
to the designated transferee. The initial Certificate Registrar appointed under
the Trust Agreement is the Owner Trustee.
Except as provided in the Trust Agreement, the Trust
Certificates are issuable only as registered Trust Certificates without coupons
in denominations of $[_______] and in integral multiples of $[_____] in excess
thereof. As provided in the Trust Agreement and subject to certain limitations
therein set forth, Trust Certificates are exchangeable for new Trust
Certificates of authorized denominations evidencing the same aggregate
denomination, as requested by the Holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
A-8
<PAGE>
The Owner Trustee, the Certificate Registrar and any agent of
the Owner Trustee or the Certificate Registrar may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Owner Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust
Agreement and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of all
property held as part of the Owner Trust Estate. The Servicer of the Receivables
may at its option purchase the Owner Trust Estate at a price specified in the
Sale and Servicing Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Trust Certificates;
however, such right of purchase is exercisable only as of the last day of any
Collection Period as of which the Pool Balance is less than or equal to 5% of
the Original Pool Balance.
A-9
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
the within Trust Certificate, and all rights thereunder, and hereby irrevocably
constitutes and appoints ------, attorney, to transfer said Trust Certificate on
the books of the Certificate Registrar, with full power of substitution in the
premises.
Dated:
________________________________________*/
Signature Guaranteed:
____________________________*/
- ---------
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Trust Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
A-10
<PAGE>
EXHIBIT B
CERTIFICATE OF TRUST OF
WORLD OMNI AUTO RECEIVABLES TRUST [ ]-[_]
THIS Certificate of Trust of WORLD OMNI AUTO RECEIVABLES
TRUST [____]-[_] (the "Trust"), dated [______], [____] (, is being duly executed
and filed by [____________________], a Delaware banking corporation, as trustee,
to form a business trust under the Delaware Business Trust Act (12 Del. C. ss.
3801 et seq.).
1. Name. The name of the business trust formed hereby is
World Omni Auto Receivables Trust [____]-[_].
2. Delaware Trustee. The name and business address of the
trustee of the Trust in the State of Delaware is [_________________],
[______________], Attn: [__________]
3. Effective Date. This Certificate of Trust shall be
effective upon filing with the Secretary of State.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of
the Trust, has executed this Certificate of Trust as of the date first-above
written.
[____________________],
as Trustee,
By: _______________________________
Name:
Title:
B-1
<PAGE>
EXHIBIT C
FORM OF TRANSFEROR CERTIFICATE
[DATE]
World Omni Auto Receivables LLC
120 N.W. 12th Avenue
Deerfield Beach, FL 33442
[____________________], as Owner Trustee
[ ]
Re: World Omni Auto Receivables Trust [____]-[_]
[___]% Asset Backed Certificates
Ladies and Gentlemen:
In connection with our disposition of the above-referenced
[___]% Asset Backed Certificates (the "Certificates") we certify that (a) we
understand that the Certificates have not been registered under the Securities
Act of 1933, as amended (the "Act"), and are being transferred by us in a
transaction that is exempt from the registration requirements of the Act and (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act.
Very truly yours,
[NAME OF TRANSFEROR]
By: _________________________________
Authorized Officer
C-1
<PAGE>
EXHIBIT D
FORM OF INVESTMENT LETTER
World Omni Auto Receivables LLC
120 N.W. 12th Avenue
Deerfield Beach, FL 33442
[____________________], as Owner Trustee
[ ]
Ladies and Gentlemen:
In connection with our proposed purchase of [$_______]
aggregate principal amount of [___]% Asset Backed Certificates (the
"Certificates") of World Omni Auto Receivables Trust [____]-[_] (the "Issuer"),
we confirm that:
1. We understand that the Certificates have not been
registered under the Securities Act of 1933, as amended (the "1933
Act"), and may not be sold except as permitted in the following
sentence. We understand and agree, on our own behalf and on behalf of
any accounts for which we are acting as hereinafter stated, (x) that
such Certificates are being offered only in a transaction not involving
any public offering within the meaning of the 1933 Act and (y) that
such Certificates may be resold, pledged or transferred only (i) to the
Depositor, (ii) to an "accredited investor" as defined in Rule
501(a)(1),(2),(3) or (7) (an "Accredited Investor") under the 1933 Act
acting for its own account (and not for the account of others) or as a
fiduciary or agent for others (which others also are Accredited
Investors unless the holder is a bank acting in its fiduciary capacity)
that executes a certificate substantially in the form hereof, (iii) so
long as such Certificate is eligible for resale pursuant to Rule 144A
under the 1933 Act ("Rule 144A"), to a person whom we reasonably
believe after due inquiry is a "qualified institutional buyer" as
defined in Rule 144A, acting for its own account (and not for the
account of others) or as a fiduciary or agent for others (which others
also are "qualified institutional buyers") to whom notice is given that
the resale, pledge or transfer is being made in reliance on Rule 144A
or (iv) in a sale, pledge or other transfer made in a transaction
otherwise exempt from the registration requirements of the 1933 Act, in
which case the Owner Trustee shall require that both the prospective
transferor and the prospective transferee certify to the Owner Trustee
and the Depositor in writing the facts surrounding such transfer, which
certification shall be in form and substance satisfactory to the Owner
Trustee and the Depositor. Except in the case of a transfer described
in clauses (i) or (iii) above, the Owner Trustee shall require a
written opinion of counsel (which will not be at the expense of the
Depositor, any affiliate of the Depositor or the Owner Trustee)
satisfactory to the Depositor and the Owner Trustee be delivered to the
Depositor and the Owner Trustee to the effect that such transfer will
not violate the 1933 Act, in each case in accordance with any
applicable securities laws of any state of the United States. We will
notify any purchaser of the Certificates from us of the above resale
restrictions, if then applicable. We further understand that in
connection with any transfer of the Certificates by us that the
Depositor and the Owner Trustee may request,
D-1
<PAGE>
and if so requested we will furnish such certificates and other
information as they may reasonably require to confirm that any such
transfer complies with the foregoing restrictions. We understand that
no sale, pledge or other transfer may be made to any one person of
Certificates with a face amount of less than $[______] and, in the case
of any person acting on behalf of one or more third parties (other than
a bank (as defined in Section 3(a)((2) of the 1933 Act) acting in its
fiduciary capacity), of Certificates with a face amount of less than
$[_________] for each such third party.
2. [CHECK ONE]
(a) We are an "accredited investor" (as defined in
Rule 501(a)(1),(2),(3) or (7) of Regulation D under
the Certificates Act) acting for our own account (and
not for the account of others) or as a fiduciary or
agent for others (which others also are Accredited
Investors unless we are a bank acting in its
fiduciary capacity). We have such knowledge and
experience in financial and business matters as to be
capable of evaluating the merits and risks of our
investment in the Certificates, and we and any
accounts for which we are acting are each able to
bear the economic risk of our or their investment for
an indefinite period of time. We are acquiring the
Certificates for investment and not with a view to,
or for offer and sale in connection with, a public
distribution.
(b) We are a "qualified institutional buyer" as
defined under Rule 144A under the 1933 Act and are
acquiring the Certificates for our own account (and
not for the account of others) or as a fiduciary or
agent for others (which others also are "qualified
institutional buyers"). We are familiar with Rule
144A under the 1933 Act and are aware that the seller
of the Certificates and other parties intend to rely
on the statements made herein and the exemption from
the registration requirements of the 1933 Act
provided by Rule 144A.
3. [We are not (i) an employee benefit plan (as
defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) that is subject to the provisions of
Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of the
Code or (iii) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (each, a "Benefit Plan").
We hereby acknowledge that no transfer of any Certificate shall be
permitted to be made to any person unless the Trustee has received (i)
a certificate from such transferee to the effect of the preceding
sentence, (ii) an opinion of counsel satisfactory to the Trustee to the
effect that the purchase and holding of any such Certificate will not
constitute or result in the assets of the Issuer being deemed to be
"plan assets" and subject to the prohibited transaction provisions of
ERISA or Section 4975 of the Code and will not subject the Owner
Trustee, the Indenture Trustee or the Depositor to any obligation in
addition to those undertaken in the Basic Documents with respect to the
Certificates (provided, however, that the Owner Trustee will not
require such certificate or opinion in the event that, as a result of
change of law or otherwise, counsel satisfactory to the Owner Trustee
has rendered an opinion to the effect that the purchase and holding of
any such Certificate by a Benefit Plan or a Person that is purchasing
or holding
D-2
<PAGE>
any such Certificate with the assets of a Benefit Plan will not
constitute or result in a prohibited transaction under ERISA or Section
4975 of the Code) or (iii) if the transferee is an insurance company, a
representation that the transferee is an insurance company that is
acquiring such Certificates with funds contained in an "Insurance
Company General Account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60)) and that
the purchase and holding of such Certificates and any deemed extension
of credit from a Certificateholder which is a party in interest to a
Plan, the assets of which are held by such "Insurance Company" are
covered under PTCE 95-60.]
4. We understand that the Depositor, the Trust and
others will rely upon the truth and accuracy of the foregoing
acknowledgments, representations and agreements, and we agree that if
any of the acknowledgments, representations and warranties deemed to
have been made by us by our purchase of the Certificates, for our own
account or for one or more accounts as to each of which we exercise
sole investment discretion, are no longer accurate, we shall promptly
notify the Depositor.
5. You are entitled to rely upon this letter and you
are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[NAME OF PURCHASER]
By: _________________________________
Name:
Title:
Date: _______________________________
D-3
<PAGE>
ANNEX A
TAX PARTNERSHIP PROVISIONS
1. Characterization for Tax Purposes. For United States
federal and applicable state and local income tax purposes, the Depositor's
contribution of the Receivables to the Trust in exchange for interests in the
Trust, and the sale by the Depositor of the Certificates (other than the
retention by the Depositor of the Depositor's Trust Certificate) is intended to
constitute the formation of a partnership (the "Tax Partnership") whose partners
are the Certificateholders (which are hereinafter collectively referred to as
the "Tax Partners"). The Servicer, on behalf of the Tax Partners, shall elect
pursuant to Treasury Regulation Section 301.7701-3(b)(1) to treat the Trust as a
partnership for federal income tax purposes (and shall not elect to treat the
Trust or to change the classification of the Trust to that of an association
pursuant to Treasury Regulation Section 301.7701-3(c)), and each Tax Partner
irrevocably agrees to be bound by such election.
2. Election with Respect to Subchapter K. Notwithstanding
anything to the contrary, each Tax Partner agrees: (a) not to elect to be
excluded from the application of Subchapter K of Chapter 1 of Subtitle A of the
Code, or any comparable provisions of applicable state laws; and (b) to join in
the execution of such additional documents and elections as may be required in
order to effectuate the foregoing.
3. Capital Contributions and Capital Accounts.
(a) The value of the interests contributed by the
Certificateholders (other than the Depositor) shall equal the amount
paid by such Certificateholders, respectively, for their Certificates
and such amounts shall constitute the opening balance in their Capital
Accounts (as hereinafter defined). The value of the interests
contributed by the Depositor shall equal the fair market value of the
Depositor's Interest, which the Tax Partners agree shall be based on
the sum, without duplication, of (i) the Reserve Account Initial
Deposit and (ii) the value of the Depositor's Interest based on (A) as
to the Certificate Balance and interest at the Pass-Through Rate of the
Depositor's Trust Certificate, the average price of the Certificates to
investors and (B) as to all other amounts due the Depositor, the
present value of the cash flow to the Depositor of the amounts to which
the Depositor is entitled to receive pursuant to Sections 5.05(b)(viii)
and 5.06(b) and (e) of the Sale and Servicing Agreement at each
Distribution Date or upon termination of the Trust using a discount
rate that reflects an appropriate arm's-length equity rate of return
and a prepayment assumption of 1.75 ABS, and such total shall be
submitted to the Owner Trustee in writing within ten (10) Business Days
after the Closing Date. Such amount shall constitute the opening
balance in the Depositor's Capital Account.
(b)An individual capital account (a "Capital
Account") shall be maintained for each Tax Partner in compliance with
Treasury Regulation Sections 1.704-1(b)(2)(iv) and 1.704-2 and
accordingly, except as otherwise provided herein:
(i) The Capital Account of each Tax Partner shall be
credited by (A) the amount of cash and the fair market value
of property other than cash
<PAGE>
contributed (or deemed contributed pursuant to Code Section
708) by such Tax Partner to the Tax Partnership (net of any
liabilities assumed by the Tax Partnership upon such
contribution or to which such property is subject at the time
of such contribution); and (B) the amount of any item of
taxable income or gain and the amount of any item of income or
gain exempt from tax allocated to such Tax Partner.
(ii) The Capital Account of each Tax Partner shall
be debited by (A) the amount of any item of tax deduction or
loss allocated to such Tax Partner; (B) such Tax Partner's
allocable share of expenditures not deductible in computing
taxable income and not properly chargeable as capital
expenditures; and (C) the amount of cash and the fair market
value of any property other than cash (net of any liabilities
assumed by such Tax Partner or to which such property is
subject at the time of distribution) distributed to such Tax
Partner.
(iii) Immediately prior to any distribution of
property in kind, the Tax Partners' Capital Accounts shall be
adjusted by assuming that the distributed properties were sold
for cash at their respective fair market values as of the date
of distribution and crediting or debiting each Tax Partner's
Capital Account with its respective share of the hypothetical
gains or losses resulting from such assumed sales in the same
manner as gains or losses on actual sales of such properties
would be allocated under Paragraph 6 below.
5. Federal and State Income Tax Returns and Elections.
(a) The Tax Partners agree that the Depositor shall
serve as the "tax matters partner" (as such term is defined in Code
Section 6231(a)(7) (the "Tax Matters Partner") of the Tax Partnership.
The Tax Matters Partner shall (i) apply to the Internal Revenue Service
for a taxpayer identification number for the Tax Partnership, (ii)
elect to adopt the accrual method of accounting and the calendar year
as the Tax Partnership's fiscal year (the "Fiscal Year"), (iv) make
such other elections as it deems proper, (v) prepare, execute and file
the necessary federal and state partnership income tax returns for the
Tax Partnership and (vi) keep the other Tax Partners informed of all
material matters that may come to its attention in its capacity as Tax
Matters Partner. Each Tax Partner agrees to furnish the Tax Matters
Partner with all pertinent information relating to activities under
this Agreement which is necessary for the Tax Matters Partner to
prepare and file federal and state partnership returns. In acting as
Tax Matters Partner, the Tax Matters Partner shall use its best
efforts, but shall incur no liability to the other Tax Partners.
(b) Within 60 days after the end of each of the Tax
Partnership's taxable years, the Tax Matters Partner shall send to each
Tax Partner who has been a Tax Partner at any time during the taxable
year then ended such tax information as shall be necessary for the
preparation by such Tax Partner of its Federal income tax return and
state income and other tax returns, if any, in states where the Tax
Partnership is organized or is qualified to do business.
2
<PAGE>
6. Allocations.
(a)(i) "Net Income" and "Net Loss" respectively, for
any period, means the income or losses of the Tax Partnership as
determined in accordance with the method of accounting followed by the
Tax Partnership for Federal income tax purposes, including, for all
purposes, any income exempt from tax and any expenditures of the Tax
Partnership described in Code Section 705(a)(2)(B); provided, however,
(i) that any item allocated under Paragraph 6(c) shall be excluded from
the computation of Net Loss and (ii) that if, as a result of the
contribution of an asset whose fair market value differs from its
adjusted basis for Federal income tax purposes or as a result of the
revaluation of the Tax Partnership's assets, the book value of any Tax
Partnership asset differs from its adjusted basis for Federal income
tax purposes, gain, loss, depreciation and amortization with respect to
such assets shall be computed using the asset's book value consistently
with the requirements of Treasury Regulation Section
1.704-1(b)(2)(iv)(g).
(ii) "Period" shall mean the period ending on each
Distribution Date; provided that as to the month in which the
Closing Date occurs, Period shall mean the period commencing
on the Closing Date and ending on the first Distribution Date
and as to the period in which the Tax Partnership terminates,
Period shall mean the period beginning on the first day of
such period and ending on the date of the Tax Partnership's
termination.
(b) The Tax Partners agree that the Tax Partnership's
Net Income and Net Loss and each item of income, gain, loss, or
deduction entering into the computation thereof for any Fiscal Year
shall be allocated by first allocating the Tax Partnership's Net Income
and Net Loss (and each item of income, gain, loss, or deduction
entering into the computation thereof) for each Period or portion
thereof within such Fiscal Year (as if such Period (or portion) were a
complete fiscal year), dividing the amount of such allocations for the
Period ending March 15 on a daily basis between calendar years and then
aggregating the allocations for the portion of such Period within each
Fiscal Year; provided, that the Tax Partnership's Net Income or Net
Loss for the period commencing December 18 and ending December 31 may
be determined on an estimated basis to permit timely preparation of the
Partnership's tax returns and reporting to the Tax Partners. In the
case of the transfer of any interest in the Tax Partnership, the items
of Net Income and Net Loss allocated for any Period with respect to the
transferred interest shall be allocated between the transferor and
transferee of such interest on a daily basis within such Period. The
Tax Partnership's Net Income and Net Loss for each Period within a
Fiscal Year shall be allocated as follows:
(i) Net Income for such Period shall be allocated as
follows:
(A) An amount of Net Income equal to the excess
of (x) the sum for such Period and each preceding
Period up to the Period beginning with the Closing
Date, of (1) the product of the Pass-Through Rate and
(2) the Certificate Balance amount for such Period
(and each such preceding Period) over (y) all amounts
allocated to the Certificateholders pursuant to this
Paragraph 6(b)(i)(A) shall be allocated 100% to the
Certificateholders (including the Depositor), in
proportion to their holdings
3
<PAGE>
of Trust Certificates; provided that the product
of (1) and (2) in clause (x) shall be computed on the
basis of a 360 day year consisting of twelve 30 day
months.
(B) An amount of Net Income equal to the excess
of (x) the sum for such Period and each preceding
Period up to the Period beginning with the Closing
Date, of that portion of any excess of the principal
amount of the Trust Certificates over their initial
issue price (disregarding accrued interest) that
would have accrued with respect to such Periods if
the Trust Certificates were indebtedness and such
excess were original issue discount over (y) all
amounts previously allocated to the
Certificateholders pursuant to this Paragraph
6(b)(i)(B) shall be allocated 100% to the
Certificateholders (including the Depositor), in
proportion to their holdings of Trust Certificates.
(C) Any remaining Net Income shall be allocated
100% to the Depositor.
(ii) Net Losses for such Period shall be
allocated as follows:
(A) 100% to the Depositor until the excess of the
Adjusted Capital Account (as hereinafter defined)
balance of the Depositor over the amount specified in
Paragraph 3(a)(i)(A) (as adjusted for all prior
distributions of principal and accruals of market
discount income allocable to the Depositor) equals
zero.
(B) 100% to the Certificateholders (including the
Depositor) in proportion to their holdings of Trust
Certificates, until the Adjusted Capital Account
balances of the Certificateholders equal zero; and
(C) Any remaining Net Losses shall be allocated
100% to the Depositor.
(c)(i) Any deductions attributable to (w) the
amortization of premium on the Receivables, (x) payments to the Owner
Trustee, (y) payments to the Servicer and (z) payments of any other
expenses, claims and losses of the Trust shall be specially allocated
to the Depositor.
(ii) If there is a net decrease in "partnership
minimum gain" (within the meaning of Treasury Regulation
Section 1.704-2(d)) for a Fiscal year, then there shall be
allocated to each Tax Partner items of income and gain for
that year equal to that Tax Partner's share of the net
decrease in partnership minimum gain (within the meaning of
Treasury Regulation Section 1.704-2(g)(2)), subject to the
exceptions set forth in Treasury Regulation Sections
1.704-2(f)(2), (3) and (5), provided, that if the Tax
Partnership has any discretion as to an exception set forth
pursuant to Treasury Regulation Section 1.704-2(f)(5), the
Tax Matters Partner may exercise such discretion on behalf of
the Tax Partnership. In the event the application of the
minimum gain chargeback requirement would cause a distortion
in
4
<PAGE>
the economic arrangement among the Tax Partners, the Tax
Matters Partner shall request the Commissioner to waive the
minimum gain chargeback requirement pursuant to Treasury
Regulation Section 1.704-2(f)(4). The foregoing is intended
to be a "minimum gain chargeback" provision as described in
Treasury Regulation Section 1.704-2(f) and shall be
interpreted and applied in all respects in accordance with
that Treasury Regulation.
If during a Fiscal Year there is a net decrease in
partner nonrecourse debt minimum gain (as determined in
accordance with Treasury Regulation Section 1.704-2(i)(3)),
then, in addition to the amounts, if any, allocated pursuant
to the preceding paragraph, any Tax Partner with a share of
that partner nonrecourse debt minimum gain (determined in
accordance with Treasury Regulation Section 1.704-2(i)(5)) as
of the beginning of the Fiscal Year shall, subject to the
exceptions set forth in Treasury Regulation Section
1.704-2(i)(4), including exceptions analogous to those
provided pursuant to Treasury Regulation Sections
1.704-2(f)(2), (3) and (5) (provided, that if the Tax
Partnership has any discretion as to an exception set forth
pursuant to Treasury Regulation Section 1.704-2(f)(5) as made
applicable by Treasury Regulation Section 1.704-2(i)(4), the
Tax Matters Partner may exercise such discretion on behalf of
the Tax Partnership) be allocated items of income and gain
for the year (and, if necessary, for succeeding years) equal
to that Tax Partner's share of the net decrease in the
partner nonrecourse minimum gain. In the event the
application of the minimum gain chargeback requirement would
cause a distortion in the economic arrangement among the Tax
Partners, the Tax Matters Partner shall request the
Commissioner to waive the minimum gain chargeback requirement
pursuant to Treasury Regulation Sections 1.704-2(i)(4) and
1.704-2(f)(4). The foregoing is intended to be the
"chargeback of partner nonrecourse debt minimum gain"
required by Treasury Regulation Section 1.704-2(i)(4) and
shall be interpreted and applied in all respects in
accordance with that Treasury Regulation.
(iii) If during any Fiscal year of the Tax
Partnership a Tax Partner unexpectedly receives an
adjustment, allocation or distribution described in Treasury
Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6),
which causes or increases a deficit balance in the Tax
Partner's Adjusted Capital Account (as defined below), there
shall be allocated to the Tax Partner items of income and
gain (consisting of a pro rata portion of each item of Tax
Partnership income, including gross income, and gain for such
year) in an amount and manner sufficient to eliminate such
deficit as quickly as possible. The foregoing is intended to
be a "qualified income offset" provision as described in
Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted and applied in all respects in accordance with
the Treasury Regulation.
A Tax Partner's "Adjusted Capital Account", at any
time, shall equal the Tax Partner's Capital Account at such
time (x) increased by the sum of (A) the amount of the Tax
Partner's share of partnership minimum gain (as defined in
Treasury Regulation Section 1.704-2(g)(1) and (3)), (B) the
amount of the Tax Partner's share of partner nonrecourse debt
minimum gain (as defined in Treasury Regulation Section
1.704-2(i)(5)), and (C) any amount of the deficit balance in
its
5
<PAGE>
Capital Account and Tax Partner is obligated to restore
on liquidation of the Tax Partnership and (y) decreased by
reasonably expected adjustments, allocations and
distributions described in Treasury Regulation Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6).
(iv) Notwithstanding anything to the contrary in
this Paragraph 6, Tax Partnership losses, deductions, or Code
Section 705(a)(2)(B) expenditures that are attributable to a
particular partner nonrecourse liability shall be allocated
to the Tax Partner that bears the economic risk of loss for
the liability in accordance with the rules of Treasury
Regulation Section 1.704-2(i).
(v) Notwithstanding any provision of Paragraphs
6(b) and 6(c)(i), no allocation of items of loss or deduction
shall be made to a Tax Partner if it would cause the Tax
Partner to have a negative balance in its Adjusted Capital
Account. Allocations of items of loss or deduction that would
be made to a Tax Partner but for this Paragraph 6(c)(v) shall
instead be made first to the Depositor to the extent not
inconsistent with this Paragraph 6(c)(v), and second, to the
Certificateholders in proportion to the amounts distributable
for the related Period pursuant to Sections 5.06(a)(ii)(C)
and (D) or (v) of the Sale and Servicing Agreement, to the
extent distributions under either such Section were reduced.
To the extent allocations of items of loss or deduction
cannot be made to any Tax Partner because of this Paragraph
6(c)(v), such allocations shall be made to the Tax Partners
in accordance with Paragraphs 6(b) and 6(c)(i)
notwithstanding this Paragraph 6(c)(v).
(vi) To the extent that any item of income, gain,
loss or deduction has been specially allocated pursuant to
Paragraphs 6(c)(iii) and (v) and such allocation is
inconsistent with the way in which the same amount otherwise
would have been allocated under Paragraphs 6(b) and 6(c)(i),
subsequent allocations under Paragraph 6(b) and 6(c)(i) shall
be made, to the extent possible and without duplication, in a
manner consistent with Paragraphs 6(c)(ii), (iii), (iv) and
(v) which negate as rapidly as possible the effect of all
such inconsistent allocations.
(vii) Any allocations made pursuant to this
Paragraph 6 shall be made in the following order:
(i) Paragraph 6(c)(ii)
(ii) Paragraph 6(c)(iii)
(iii) Paragraph 6(c)(iv)
(iv) Paragraph 6(c)(vi)
(v) Paragraph 6(c)(i)
(vi) Paragraph 6(b)(i) and (ii)
6
<PAGE>
These provisions shall be applied as if all
distributions and allocations were made at the end of
the Fiscal Year. Where any provision depends on the
Capital Account of any Tax Partner, that Capital
Account shall be determined after the operation of
all preceding provisions for the year. These
allocations shall be made consistently with the
requirements of Treasury Regulation Section
1.704-2(j).
(d) The income, gains, losses, deductions and credits
of the Tax Partnership for Federal, state and local income tax purposes
shall be allocated in the same manner as the corresponding items
entering into the computation of Net Income and Net Losses were
allocated pursuant to Paragraphs 6(b) and (c) provided that solely for
Federal, local and state income and franchise tax purposes and not for
book or Capital Account purposes, income, gain, loss and deduction with
respect to property properly carried on the Tax Partnership's books at
a value other than its tax basis shall be allocated (i) in the case of
property contributed in kind, in accordance with the requirements of
Code Section 704(c) and such Treasury Regulations as may be promulgated
thereunder from time to time, and (ii) in the case of other property,
in accordance with the principles of Code Section 704(c) and the
Treasury Regulations thereunder as incorporated among the requirements
of the relevant provisions of the Treasury Regulations under Code
Section 704(b).
(e) The Tax Partnership shall comply with all
withholding requirements under Federal, state and local law and shall
remit amounts withheld to and file required forms with the applicable
jurisdictions. To the extent the Tax Partnership is required to
withhold and pay over any amounts with respect to distributions or
allocations to any Tax Partner, the amount withheld shall be treated as
a distribution to that Tax Partner. In the event of any claimed
overwithholding, Tax Partners shall have no claim for recovery against
the Tax Partnership or other Tax Partners. If the amount withheld was
not withheld from actual distributions, the Tax Partnership, may at its
option, (i) require the Tax Partner to reimburse the Tax Partnership
for such withholding (and each Tax Partner agrees to reimburse the Tax
Partnership promptly following such request) or (ii) reduce any
subsequent distributions by the amount of such withholding. If there is
a possibility that withholding tax is payable with respect to a
distribution (such as a distribution to a non-U.S. Tax Partner), the
Tax Partnership may in its sole discretion withhold such amounts in
accordance with this Partnership may in its sole discretion withhold
such amounts in accordance with this Paragraph 6(e). Each Tax Partner
agrees to furnish the Tax Partnership with any representations and
forms as shall reasonably be requested by the Tax Partnership to assist
it in determining the extent of, and in fulfilling, its withholding
obligations. If a Tax Partner wishes to apply for a refund of any such
withholding tax, the Owner Trustee shall reasonably cooperate with such
Tax Partner in making such claim as long as the Tax Partner agrees to
reimburse the Tax Partnership for any out-of-pocket expenses incurred.
7. Sale of Interests. The Tax Partners agree that any sale by
a Tax Partner of any ownership interest in a Trust Certificate shall be deemed
to be a sale of all or a portion of such Tax Partner's interest in the Tax
Partnership.
8. Termination of a Tax Partner's Interest. Any distribution
by the Tax Partnership in termination of any Tax Partner's interest in the Tax
Partnership other than
7
<PAGE>
pursuant to Paragraph 9 below shall be in an amount of cash or property other
than cash having a net fair market value equal to the positive Capital Account
balance of such Tax Partner at the time such interest is terminated, after such
Capital Account balance has been adjusted in accordance with Paragraphs 4 and 6
above for all operations preceding such distribution and the applicable Treasury
Regulations under Code Section 704(b), and shall be made by the later of: (a)
the end of the Tax Partnership's taxable year in which such termination occurs;
or (b) within 90 days after the date of such termination.
9. Distributions upon Termination. Upon termination of the
Agreement pursuant to its terms, the activities of the Tax Partners under this
Annex A shall be concluded and the assets subject to the Agreement and this
Annex A shall be distributed to the Tax Partners in the manner and in the order
set forth below:
(a) Debts of the Tax Partnership created pursuant to the
Indenture on the Trust Agreement, other than to Tax Partners, shall be
paid.
(b) All cash on hand representing unexpended contributions
by any Tax Partner shall be returned to the contributor.
(c) The Tax Partners' Capital Accounts shall be adjusted by:
(i) assuming the sale of all remaining assets at their fair market
values as of the date of termination of the Trust Agreement; and (ii)
debiting or crediting each Tax Partner's Capital Account with the Tax
Partner's respective share of the hypothetical gains or losses
resulting from such assumed sales in the same manner as such Tax
Partner's Capital Account would be debited or credited under Paragraph
6 above for gains or losses on actual sales of such properties.
(d) All Tax Partnership assets shall be distributed to the
Tax Partners in accordance with their respective Capital Account
balances as so adjusted by the later of: (i) the end of the Tax
Partnership's taxable year in which the termination occurs; or (ii)
within 90 days after the date of such termination.
If property subject to the Agreement is distributed pursuant to this paragraph,
the amount of the distribution shall be equal+ to the net fair market value of
the distributed property.
8
EXHIBIT 4.2
INDENTURE
between
WORLD OMNI AUTO RECEIVABLES TRUST [____]-[_]
as Issuer
and
-------------------------------,
as Indenture Trustee
(Series [____])
Dated as of [____]
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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ARTICLE I
<S> <C> <C>
Definitions and Incorporation by Reference
Section 1.01 Definitions...................................................................................2
Section 1.02 Incorporation by Reference of Trust Indenture Act.............................................8
Section 1.03 Rules of Construction.........................................................................9
ARTICLE II
The Notes
Section 2.01 Form..........................................................................................9
Section 2.02 Execution, Authentication and Delivery.......................................................10
Section 2.03 Temporary Notes..............................................................................10
Section 2.04 (Reserved)...................................................................................11
Section 2.05 Registration; Registration of Transfer and Exchange..........................................11
Section 2.06 Mutilated, Destroyed, Lost or Stolen Notes...................................................12
Section 2.07 Persons Deemed Owner.........................................................................12
Section 2.08 Payment of Principal and Interest; Defaulted Interest........................................13
Section 2.09 Cancellation.................................................................................14
Section 2.10 Release of Collateral........................................................................14
Section 2.11 Book-Entry Notes.............................................................................14
Section 2.12 Notices to Clearing Agency...................................................................15
Section 2.13 Definitive Notes.............................................................................15
Section 2.14 Tax Treatment................................................................................15
ARTICLE III
Covenants
Section 3.01 Payment of Principal and Interest............................................................16
Section 3.02 Maintenance of Office or Agency..............................................................16
Section 3.03 Money for Payments To Be Held in Trust.......................................................16
Section 3.04 Existence....................................................................................18
Section 3.05 Protection of Trust Estate...................................................................18
Section 3.06 Opinions as to Trust Estate..................................................................18
Section 3.07 Performance of Obligations; Servicing of Receivables.........................................19
Section 3.08 Negative Covenants...........................................................................21
Section 3.09 Annual Statement as to Compliance............................................................21
Section 3.10 Issuer May Consolidate, etc., Only on Certain Terms..........................................21
</TABLE>
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<TABLE>
<S> <C> <C>
Section 3.11 Successor or Transferee......................................................................23
Section 3.12 No Other Business............................................................................23
Section 3.13 No Borrowing.................................................................................23
Section 3.14 Servicer's Obligations.......................................................................24
Section 3.15 Guarantees, Loans, Advances and Other Liabilities............................................24
Section 3.16 Capital Expenditures.........................................................................24
Section 3.17 Removal of Administrator.....................................................................24
Section 3.18 Restricted Payments..........................................................................24
Section 3.19 Notice of Events of Default..................................................................24
Section 3.20 Further Instruments and Acts.................................................................24
Section 3.21 Issuance of Additional Series of Notes.......................................................24
ARTICLE IV
Satisfaction and Discharge
Section 4.01 Satisfaction and Discharge of Indenture......................................................25
Section 4.02 Application of Trust Money...................................................................26
Section 4.03 Repayment of Moneys Held by Paying Agent.....................................................26
ARTICLE V
Remedies
Section 5.01 Events of Default............................................................................27
Section 5.02 Acceleration of Maturity; Rescission and Annulment...........................................28
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee....................28
Section 5.04 Remedies; Priorities.........................................................................30
Section 5.05 Optional Preservation of the Receivables.....................................................32
Section 5.06 Limitation of Suits..........................................................................32
Section 5.07 Unconditional Rights of Noteholders To Receive Principal and Interest........................33
Section 5.08 Restoration of Rights and Remedies...........................................................33
Section 5.09 Rights and Remedies Cumulative...............................................................33
Section 5.10 Delay or Omission Not a Waiver...............................................................33
Section 5.11 Control by Noteholders.......................................................................34
Section 5.12 Waiver of Past Defaults......................................................................34
Section 5.13 Undertaking for Costs........................................................................34
Section 5.14 Waiver of Stay or Extension Laws.............................................................35
Section 5.15 Action on Notes..............................................................................35
Section 5.16 Performance and Enforcement of Certain Obligations...........................................35
</TABLE>
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<TABLE>
<CAPTION>
ARTICLE VI
The Indenture Trustee
<S> <C> <C>
Section 6.01 Duties of Indenture Trustee..................................................................36
Section 6.02 Rights of Indenture Trustee..................................................................37
Section 6.03 Individual Rights of Indenture Trustee.......................................................37
Section 6.04 Indenture Trustee's Disclaimer...............................................................38
Section 6.05 Notice of Defaults...........................................................................38
Section 6.06 Reports by Indenture Trustee to Holders......................................................38
Section 6.07 Compensation and Indemnity...................................................................38
Section 6.08 Replacement of Indenture Trustee.............................................................38
Section 6.09 Successor Indenture Trustee by Merger........................................................39
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee............................40
Section 6.11 Eligibility; Disqualification................................................................41
Section 6.12 Preferential Collection of Claims Against Issuer.............................................41
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01 Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders.......................41
Section 7.02 Preservation of Information; Communications to Noteholders...................................41
Section 7.03 Reports by Issuer............................................................................42
Section 7.04 Reports by Indenture Trustee.................................................................42
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01 Collection of Money..........................................................................43
Section 8.02 Trust Accounts...............................................................................43
Section 8.03 General Provisions Regarding Accounts........................................................44
Section 8.04 Release of Trust Estate......................................................................45
Section 8.05 Opinion of Counsel...........................................................................45
ARTICLE IX
Supplemental Indentures
Section 9.01 Supplemental Indentures Without Consent of Noteholders.......................................46
Section 9.02 Supplemental Indentures with Consent of Noteholders..........................................47
Section 9.03 Execution of Supplemental Indentures.........................................................48
Section 9.04 Effect of Supplemental Indenture.............................................................48
Section 9.05 Conformity with Trust Indenture Act..........................................................48
</TABLE>
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<TABLE>
<S> <C> <C>
Section 9.06 Reference in Notes to Supplemental Indentures................................................49
ARTICLE X
Redemption of Notes
Section 10.01 Redemption...................................................................................49
Section 10.02 Form of Redemption Notice....................................................................49
Section 10.03 Notes Payable on Redemption Date.............................................................50
ARTICLE XI
Miscellaneous
Section 11.01 Compliance Certificates and Opinions, etc....................................................50
Section 11.02 Form of Documents Delivered to Indenture Trustee.............................................52
Section 11.03 Acts of Noteholders..........................................................................53
Section 11.04 Notices, etc., to Indenture Trustee, Issuer and Rating Agencies..............................53
Section 11.05 Notices to Noteholders; Waiver...............................................................54
Section 11.06 Alternate Payment and Notice Provisions......................................................54
Section 11.07 Conflict with Trust Indenture Act............................................................54
Section 11.08 Effect of Headings and Table of Contents.....................................................55
Section 11.09 Successors and Assigns.......................................................................55
Section 11.10 Separability.................................................................................55
Section 11.11 Benefits of Indenture........................................................................55
Section 11.12 Legal Holidays...............................................................................55
Section 11.13 GOVERNING LAW................................................................................55
Section 11.14 Recording of Indenture.......................................................................55
Section 11.15 Trust Obligation.............................................................................56
Section 11.16 No Petition..................................................................................56
Section 11.17 Inspection...................................................................................56
SCHEDULE A - Schedule of Receivables
EXHIBIT [A-1] - Form of Class [A-1] Note
EXHIBIT [A-2] - Form of Class [A-2] Note
EXHIBIT [A-3] - Form of Class [A-3] Note
EXHIBIT [A-4] - Form of Class [A-4] Note
EXHIBIT B - Form of Note Depository Agreement
</TABLE>
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<PAGE>
INDENTURE dated as of ______________, [____], between WORLD
OMNI AUTO RECEIVABLES TRUST [____]-[__], a Delaware business trust (the
"Issuer"), and _________________________________, a _____________________, as
trustee and not in its individual capacity (the "Indenture Trustee"). Each party
agrees as follows for the benefit of the other party and for the equal and
ratable benefit of the Holders of the Issuer's Class [A-1] _________% Asset
Backed Notes (Series [____]-[__]) (the "Class [A-1] Notes"), Class [A-2]
________% Asset Backed Notes (Series [____]-[__]) (the "Class [A-2] Notes"),
Class [A-3] ________% Asset Backed Notes (Series [____]-[__]) (the "Class [A-3]
Notes") and Class [A-4]] ______% Asset Backed Notes (Series [____]-[__]) (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"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the
Closing Date, as Indenture Trustee for the benefit of the Holders of the Notes,
all of the Issuer's right, title and interest in and to (a) the Receivables and
all moneys received thereon on and after ____________, [____]; (b) the security
interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and any other interest of the Issuer in such Financed Vehicles; (c)
any proceeds with respect to the Receivables from claims on any physical damage,
credit life or disability insurance policies covering Financed Vehicles or
Obligors; (d) any proceeds with respect to the Receivables from recourse to
Dealers thereon with respect to which the Servicer has determined in accordance
with its customary servicing procedures that eventual payment in full is
unlikely; (e) any Financed Vehicle that shall have secured a Receivable and that
shall have been acquired by or on behalf of the Seller, the Servicer or the
Issuer; (f) all funds on deposit from time to time in the Trust Accounts,
including the Reserve Account Initial Deposit, and in all investments and
proceeds thereof (including all income thereon); (g) the Sale and Servicing
Agreement (including the Issuer's right to cause the Seller to repurchase
Receivables from the Issuer under certain circumstances described therein); and
(h) all present and future claims, demands, causes of action and choses in
action in respect of any or all of the foregoing and all payments on or under
and all proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Holders of the Notes, acknowledges such Grant, accepts the trusts under this
Indenture in accordance with the provisions of this Indenture and agrees to
perform its duties required in this Indenture to the best
<PAGE>
of its ability to the end that the interests of the Holders of the Notes may be
adequately and effectively protected.
ARTICLE I
Definitions and Incorporation by Reference
Section 1.01 Definitions. (a) Except as otherwise specified
herein or as the context may otherwise require, the following terms have the
respective meanings set forth below for all purposes of this Indenture.
"Act" has the meaning specified in Section 11.03(a).
"Administration Agreement" means the Administration Agreement
dated as of [______________], [____], among the Administrator, the Issuer and
the Indenture Trustee.
"Administrator" means World Omni Financial Corp., a Florida
corporation, or any successor Administrator under the Administration Agreement.
"Affiliate" means, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used with
respect to any Person 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. "Authorized Officer"
means, with respect to the Issuer, any officer of the Owner Trustee who is
authorized to act for the Owner Trustee in matters relating to the Issuer and
who is identified on the list of Authorized Officers delivered by the Owner
Trustee to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter) and, so long as the
Administration Agreement is in effect, any Vice President or more senior officer
of the Administrator who is authorized to act for the Administrator in matters
relating to the Issuer and to be acted upon by the Administrator pursuant to the
Administration Agreement and who is identified on the list of Authorized
Officers delivered by the Administrator to the Indenture Trustee on the Closing
Date (as such list may be modified or supplemented from time to time
thereafter).
"Basic Documents" means the Certificate of Trust, the Trust
Agreement, the Sale and Servicing Agreement, the Receivables Purchase Agreement,
the Administration Agreement, the Note Depository Agreement and other documents
and certificates delivered in connection therewith.
"Book-Entry Notes" means a beneficial interest in the Class
[A-1] Notes, Class [A-2] Notes, Class [A-3] Notes and Class [A-4] Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.11.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which banking institutions or trust companies in The City of New
York are authorized or obligated by law, regulation or executive order to remain
closed.
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"Certificate of Trust" means the certificate of trust of the
Issuer substantially in the form of Exhibit B to the Trust Agreement.
"Class [A-1] Interest Rate" means ________% per annum
(computed on the basis of the actual number of days in the Interest Accrual
Period divided by 360).
"Class [A-1] Notes" means the Class [A-1] _________% Asset
Backed Notes, (Series 1999-_,) substantially in the form of Exhibit [A-1].
"Class [A-2] Interest Rate" means _____% per annum (computed
on the basis of a 360-day year consisting of twelve 30-day months).
"Class [A-2] Notes" means the Class [A-2] ______% Asset Backed
Notes, (Series 1999-_,) substantially in the form of Exhibit [A-2].
"Class [A-3] Interest Rate" means _____% per annum (computed
on the basis of a 360 day year consisting of twelve 30-day months).
"Class [A-3] Notes" means the Class [A-3] ______% Asset Backed
Notes, substantially in the form of Exhibit [A-3].
"Class [A-4] Interest Rate" means _____% per annum (computed
on the basis of a 360-day year consisting of twelve 30-day months).
"Class [A-4] Notes" means the Class [A-4] ______% Asset Backed
Notes, (Series 1999-_,) substantially in the form of Exhibit [A-4].
"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 [_________________], [____].
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause
of this Indenture.
"Corporate Trust Office" means the principal office of the
Indenture Trustee at which at any particular time its corporate trust business
shall be administered, which office at the date of execution of this Agreement
is located at _____________________________________, Attention:
__________________________, or at such other address as the Indenture Trustee
may designate from time to time by notice to the Noteholders and the Issuer, or
the principal corporate trust office of any successor Indenture Trustee at the
address designated by such successor Indenture Trustee by notice to the
Noteholders and the Issuer.
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"Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.11.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Executive Officer" means, with respect to any corporation,
the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation; and with respect to any partnership, any general
partner thereof.
"Grant" means mortgage, pledge, bargain, warrant, alienate,
remise, release, convey, assign, transfer, create, and grant a lien upon and a
security interest in and a right of set-off against, deposit, set over and
confirm pursuant to this Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral 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.
"Holder" or "Noteholder" means the Person in whose name a Note
is registered on the Note Register.
"Indenture Trustee" means _________________________________, a
________ __________________, as Indenture Trustee under this Indenture, or any
successor Indenture Trustee under this Indenture.
"Independent" means, when used with respect to any specified
Person, that the Person (a) is in fact independent of the Issuer, any other
obligor on the Notes, the Seller and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller or
any Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01, made by
an Independent appraiser or other expert appointed by an Issuer Order and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
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"Interest Accrual Period" means, with respect to any
Distribution Date and the Notes, the period from and including the sixth day of
the month preceding the month of such Distribution Date (or, in the case of the
first Distribution Date, the Closing Date) to and including the fifth day of the
month of such Distribution Date.
"Interest Rate" means the Class [A-1] Interest Rate, the Class
[A-2] Interest Rate, the Class [A-3] Interest Rate or the Class [A-4] Interest
Rate.
"Issuer" means World Omni Auto Receivables Trust 1999-_ until
a successor replaces it and, thereafter, means the successor and, for purposes
of any provision contained herein and required by the TIA, each other obligor on
the Notes. "Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Note" means a Class [A-1] Note, a Class [A-2] Note, a Class
[A-3] Note or a Class [A-4] Note.
"Note Depository Agreement" means the agreement dated
[____________], [____], among the Issuer, the Administrator, the Indenture
Trustee and The Depository Trust Company, as the initial Clearing Agency,
relating to the Class [A-1] Notes, the Class [A-2] Notes, the Class [A-3] Notes
and the Class [A-4] Notes, substantially in the form of Exhibit B. "Note Owner"
means, with respect to a Book-Entry Note, the Person who is the beneficial owner
of such Book-Entry Note, as reflected on the books of the Clearing Agency or on
the books of a Person maintaining an account with such Clearing Agency (directly
as a Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Note Register" and "Note Registrar" have the respective
meanings specified in Section 2.05.
"Officer's Certificate" means a certificate signed by any
Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01, and
delivered to the Indenture Trustee. Unless otherwise specified, any reference in
this Indenture to an Officer's Certificate shall be to an Officer's Certificate
of any Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of
counsel who may, except as otherwise expressly provided in this Indenture, be an
employee of or counsel to the Issuer and who shall be satisfactory to the
Indenture Trustee, and which opinion or opinions shall be addressed to the
Indenture Trustee as Indenture Trustee, shall comply with any applicable
requirements of Section 11.01 and shall be in form and substance satisfactory to
the Indenture Trustee.
"Outstanding" means, as of the date of determination, all
Notes theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Note Registrar for cancellation;
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(ii) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes
(provided, however, that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or
provision for such notice has been made, satisfactory to the Indenture
Trustee); and
(iii) Notes in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser;
provided, that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned by
the Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any
of the foregoing Persons shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Notes that the Indenture Trustee knows to be so owned shall be
so disregarded. Notes so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Indenture Trustee the pledgee's right so to act with respect to such Notes and
that the pledgee is not the Issuer, any other obligor upon the Notes, the Seller
or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of
all Notes, or Class of Notes, as applicable, Outstanding at the date of
determination.
"Owner Trustee" means __________________________, not in its
individual capacity but solely as Owner Trustee under the Trust Agreement, or
any successor Owner Trustee under the Trust Agreement.
"Paying Agent" means the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 and is authorized by the Issuer to make payments to and
distributions from the Collection Account and the Note Distribution Account,
including payments of principal of or interest on the Notes on behalf of the
Issuer.
"Payment Date" means a Distribution Date.
"Person" means any individual, corporation, estate,
partnership, joint venture, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"Predecessor Note" 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 2.06 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.
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"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Rating Agency Condition" means, with respect to any action,
that each Rating Agency shall have been given 10 days (or such shorter period as
is acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer and the Issuer in
writing that such action will not result in a reduction or withdrawal of the
then current rating of the Notes.
"Rating Agency" means Moody's Investor's Service ("Moody's")
and Standard & Poor's Ratings Services ("Standard & Poor's"). If no such
organization or successor is any longer in existence, "Rating Agency" shall be a
nationally recognized statistical rating organization or other comparable Person
designated by the Issuer, notice of which designation shall be given to the
Indenture Trustee, the Owner Trustee and the Servicer. Any notice required to be
given to a Rating Agency pursuant to this Agreement shall also be given to Fitch
IBCA, Inc. and Duff & Phelps Credit Rating Co., although, except as set forth
above, neither shall be deemed to be a Rating Agency for any purposes of this
Agreement.
"Record Date" means, with respect to a Distribution Date or
Redemption Date, the close of business on the day immediately preceding such
Distribution Date or Redemption Date or, if Definitive Notes have been issued
pursuant to Section 2.13, the 15th day of the preceding month.
"Redemption Date" means, in the case of a redemption of the
Notes pursuant to Section 10.01, the Distribution Date specified by the Servicer
or the Issuer pursuant to Section 10.01.
"Redemption Price" means in connection with a redemption of
the Notes pursuant to Section 10.01, an amount equal to the unpaid principal
amount of the Notes redeemed plus accrued and unpaid interest thereon at the
weighted average of the Interest Rates for each Class of Notes being so redeemed
to but excluding the Redemption Date.
"Registered Holder" means the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
"Responsible Officer" means, with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture Trustee,
including any Vice President, Assistant Vice President, Assistant Treasurer,
Assistant Secretary or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement dated as of [______________], [__], between the Issuer World Omni Auto
Receivables LLC, as Seller and World Omni Financial Corp., as Servicer.
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"Schedule of Receivables" means the list of the Receivables
set forth in Schedule A (which Schedule may be in the form of microfiche).
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means World Omni Auto Receivables LLC, in its
capacity as seller under the Sale and Servicing Agreement, and its successor in
interest.
"Servicer" means World Omni Financial Corp, in its capacity as
servicer under the Sale and Servicing Agreement, and any Successor Servicer
thereunder.
"State" means any one of the 50 States of the United States of
America or the District of Columbia.
"Successor Servicer" has the meaning specified in Section
3.07(e).
"Telerate Page 3750" means the page so designated on the Dow
Jones Telerate Service or such other page as may replace that page on that
service, or such other service as may be nominated as the information vendor,
for the purpose of displaying London interbank offered rates of major banks.
"Trust Estate" means all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of this Indenture for the benefit of the Noteholders (including,
without limitation, all property and interests Granted to the Indenture
Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939 as in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the
Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended
from time to time.
(b) Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein have
the respective meanings set forth in the Sale and Servicing Agreement for all
purposes of this Indenture.
Section 1.02 Incorporation by Reference of Trust Indenture
Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
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"indenture trustee" or "institutional trustee" means the
Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule have the meaning assigned to them by such definitions.
Section 1.03 Rules of Construction. Unless the context
otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented and includes (in the case of
agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to
its permitted successors and assigns.
ARTICLE II
The Notes
Section 2.01 Form. The Class [A-1] Notes, the Class [A-2]
Notes, the Class [A-3] Notes and the Class [A-4] Notes, in each case together
with the Indenture Trustee's certificate of authentication, shall be in
substantially the form set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3 and
Exhibit A-4, respectively, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted 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 of the Notes. Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the
Note.
The definitive Notes shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods (with
or without steel engraved borders), all as determined by the officers executing
such Notes, as evidenced by their execution of such Notes.
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Each Note shall be dated the date of its authentication. The
terms of the Notes set forth in Exhibit [A-1], Exhibit [A-2], Exhibit [A-3] and
Exhibit [A-4] are part of the terms of this Indenture.
Section 2.02 Execution, Authentication and Delivery. The Notes
shall be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals
who were at any time Authorized Officers of the Issuer 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 such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and
deliver Class [A-1] Notes for original issue in an aggregate principal amount of
$_____________, Class [A-2] Notes for original issue in an aggregate principal
amount of $_______________, Class [A-3] Notes for original issue in an aggregate
principal amount of $_____________, and Class [A-4] Notes for original issue in
an aggregate principal amount of $_____________. The aggregate principal amount
of Class [A-1] Notes, Class [A-2] Notes, Class [A-3] Notes and Class [A-4] Notes
outstanding at any time may not exceed such respective amounts except as
provided in Section 2.06. Each Note shall be dated the date of its
authentication. The Notes shall be issuable as registered Notes in the minimum
denomination of $1,000 and in integral multiples thereof.
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 by the manual signature of one of its
authorized signatories, 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 2.03 Temporary Notes. Pending the preparation of
definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order
the Indenture Trustee shall authenticate and deliver, temporary Notes that are
printed, lithographed, typewritten, mimeographed or otherwise produced, of the
tenor of the definitive Notes in lieu of which they are issued and with such
variations not inconsistent with the terms of this Indenture as the officers
executing such Notes may determine, as evidenced by their execution of such
Notes.
If temporary Notes are issued, the Issuer shall cause
definitive Notes to be prepared without unreasonable delay. After the
preparation of definitive Notes, the temporary Notes shall be exchangeable for
definitive Notes upon surrender of the temporary Notes at the office or agency
of the Issuer to be maintained as provided in Section 3.02, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary Notes,
the Issuer shall execute, and the Indenture Trustee shall authenticate and
deliver in exchange therefor, a like principal amount of definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as definitive
Notes.
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Section 2.04 (Reserved).
Section 2.05 Registration; Registration of Transfer and
Exchange. The Issuer shall cause to be kept a register (the "Note Register") in
which the Issuer shall provide for the registration of Notes and the
registration of transfers of Notes. The Indenture Trustee initially shall be the
"Note Registrar" for the purpose of registering Notes and transfers of Notes as
herein provided. Upon any resignation of any Note Registrar, the Issuer shall
promptly appoint a successor or, if it elects not to make such an appointment,
assume the duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by
the Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Holders of the Notes and
the principal amounts and number of such Notes.
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, if
the requirements of Section 8-401(1) of the UCC are met the Issuer shall
execute, and the Indenture Trustee shall authenticate and the Noteholder shall
obtain from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes of the same Class in any authorized
denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other
Notes of the same Class in any authorized denominations, 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, if the requirements
of Section 8-401(1) of the UCC are met the Issuer shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, the Notes which the Noteholder making the exchange is
entitled to receive.
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 be duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in the Securities Transfer Agent's Medallion Program
("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 Exchange Act.
No service charge shall be made to a Holder 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 that
may be imposed in connection with any registration of transfer or
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exchange of Notes, other than exchanges pursuant to Section 2.03 or 9.06 not
involving any transfer. The preceding provisions of this Section
notwithstanding, the Issuer shall not be required to make and the Note Registrar
need not register transfers or exchanges of Notes selected for redemption or of
any Note for a period of 15 days preceding the due date for any payment with
respect to the Note.
Section 2.06 Mutilated, Destroyed, Lost or Stolen Notes. If
(i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, and (ii) there is delivered to the Indenture Trustee such security
or indemnity as may be required by it to hold the Issuer and the Indenture
Trustee harmless, then, in the absence of notice to the Issuer, the Note
Registrar or the Indenture Trustee that such Note has been acquired by a bona
fide purchaser, and provided that the requirements of Section 8-405 of the UCC
are met, the Issuer shall execute, and upon its request the Indenture Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note of the same Class;
provided, however, that if any such destroyed, lost or stolen Note, but not a
mutilated Note, shall have become or within seven days shall be due and payable,
or shall have been called for redemption, instead of issuing a replacement Note,
the Issuer may pay such destroyed, lost or stolen Note when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section,
the Issuer may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in
replacement 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.
Section 2.07 Persons Deemed Owner. Prior to due presentment
for registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in whose
name any Note is registered (as of the day of determination) as the owner of
such Note for the purpose of receiving payments of principal of and interest, if
any, on such Note and for all other purposes whatsoever, whether or not such
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Note be overdue, and none of the Issuer, the Indenture Trustee or any agent of
the Issuer or the Indenture Trustee shall be affected by notice to the contrary.
Section 2.08 Payment of Principal and Interest; Defaulted
Interest.
(a) The Class [A-1] Notes, the Class [A-2] Notes, the Class
[A-3] Notes and the Class [A-4] Notes shall accrue interest at the Class [A-1]
Interest Rate, the Class [A-2] Interest Rate, the Class [A-3] Interest Rate and
the Class [A-4] Interest Rate, respectively, as set forth in Exhibits A-1, A-2,
A-3 and A-4, respectively, and such interest shall be payable on each
Distribution Date as specified therein, subject to Section 3.01. Any installment
of interest or principal payable on a Note that is punctually paid or duly
provided for by the Issuer on the applicable Distribution Date shall be paid to
the Person in whose name such Note (or one or more Predecessor Notes) is
registered on the Record Date by check mailed first-class postage prepaid to
such Person's address as it appears on the Note Register on such Record Date,
except that, unless Definitive Notes have been issued pursuant to Section 2.13,
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payment will
be made by wire transfer in immediately available funds to the account
designated by such nominee and except for the final installment of principal
payable with respect to such Note on a Distribution Date or on the applicable
class final scheduled Distribution Date (and except for the Redemption Price for
any Note called for redemption pursuant to Section 10.01) which shall be payable
as provided below. The funds represented by any such checks returned undelivered
shall be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in
installments on each Distribution Date as provided in the forms of the Notes set
forth in Exhibits [A-1], [A-2], [A-3] and [A-4]. Notwithstanding the foregoing,
the entire unpaid principal amount of the Notes shall be due and payable, if not
previously paid, on the date on which an Event of Default shall have occurred
and be continuing, if the Indenture Trustee or Holders of the Notes representing
not less than a majority of the Outstanding Amount of the Notes have declared
the Notes to be immediately due and payable in the manner provided in Section
5.02. All principal payments on each Class of Notes shall be made pro rata to
the Noteholders of such Class entitled thereto. The Indenture Trustee shall
notify the Person in whose name a Note is registered at the close of business on
the Record Date preceding the Distribution Date on which the Issuer expects that
the final installment of principal of and interest on such Note will be paid.
Such notice shall be mailed or transmitted by facsimile prior to such final
Distribution Date and shall specify that such final installment 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 payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.02.
(c) If the Issuer defaults in a payment of interest on the
Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted
interest to the extent lawful) at the applicable Interest Rate in any lawful
manner. The Issuer may pay such defaulted interest to the persons who are
Noteholders on a subsequent special record date, which date shall be at least
five Business Days prior to the payment date. The Issuer shall fix or cause to
be fixed any such special record date and payment date, and, at least 15 days
before any such special record date,
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the Issuer shall mail to each Noteholder a notice that states the special
record date, the payment date and the amount of defaulted interest to be paid.
Section 2.09 Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Notes may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time unless the Issuer shall direct by an Issuer Order that
they be destroyed or returned to it; provided, that such Issuer Order is timely
and the Notes have not been previously disposed of by the Indenture Trustee.
Section 2.10 Release of Collateral. Subject to Section 11.01
and the terms of the Basic Documents, the Indenture Trustee shall release
property from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and Independent
Certificates in accordance with TIA Section 314(c) and 314(d)(1) or an Opinion
of Counsel in lieu of such Independent Certificates to the effect that the TIA
does not require any such Independent Certificates.
Section 2.11 Book-Entry Notes. The Notes, upon original
issuance, will be issued in the form of typewritten Notes representing the
Book-Entry Notes, to be delivered to The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Issuer. The Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co., the nominee
of the initial Clearing Agency, and no Owner thereof will receive a definitive
Note representing such Note Owner's interest in such Note, except as provided in
Section 2.13. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to such Note Owners pursuant to Section
2.13:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
Notes and the giving of instructions or directions hereunder) as the
sole holder of the Notes, and shall have no obligation to the 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 shall be exercised only through
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 pursuant to the Note Depository
Agreement. Unless and until Definitive Notes are issued pursuant
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to Section 2.13, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Clearing Agency shall be deemed to represent such percentage
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 percentage of the beneficial
interest in the Notes and has delivered such instructions to the
Indenture Trustee.
Section 2.12 Notices to Clearing Agency. Whenever a notice or
other communication to the Noteholders is required under this Indenture, unless
and until Definitive Notes shall have been issued to such Note Owners pursuant
to Section 2.13, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Clearing Agency, and shall have no obligation to such Note Owners.
Section 2.13 Definitive Notes. If (i) the Administrator
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
Book- Entry Notes and the Administrator is unable to locate a qualified
successor, (ii) the Administrator 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 or a Servicer
Default, Owners of the Book-Entry Notes representing beneficial interests
aggregating at least a majority of the Outstanding Amount of such Notes advise
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 Clearing Agency shall notify all Note Owners and the Indenture
Trustee of the occurrence of any such event and of the availability of
Definitive Notes to Note Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Notes representing the Book-Entry Notes by
the Clearing Agency, accompanied by registration instructions, the Issuer shall
execute and the Indenture Trustee shall authenticate the Definitive Notes in
accordance with the instructions of the Clearing Agency. None of the Issuer, the
Note Registrar or 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 Definitive
Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes
as Noteholders.
Section 2.14 Tax Treatment. The Issuer has entered into this
Indenture, and the Notes will be issued, with the intention that, for all
purposes including federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. The 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 all purposes including federal, state and local income, single
business and franchise tax purposes as indebtedness of the Issuer.
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ARTICLE III
Covenants
Section 3.01 Payment of Principal and Interest. The Issuer
will duly and punctually pay the principal of and interest, if any, on the Notes
in accordance with the terms of the Notes and this Indenture. Without limiting
the foregoing, subject to Section 8.02(c), the Issuer will cause to be
distributed all amounts on deposit in the Note Distribution Account on a
Distribution Date deposited therein pursuant to the Sale and Servicing Agreement
(i) for the benefit of the Class [A-1] Notes, to the Class [A-1] Noteholders,
(ii) for the benefit of the Class [A-2] Notes, to the Class [A-2] Noteholders,
(iii) for the benefit of the Class [A-3] Notes, to the Class [A-3] Noteholders
and (iv) for the benefit of the Class [A-4] Notes, to the Class [A-4]
Noteholders. Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
Section 3.02 Maintenance of Office or Agency. The Issuer will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange, and
where 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 to serve as its agent for the foregoing purposes. 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 surrenders, notices and demands
may be made or served at the Corporate Trust Office, and the Issuer hereby
appoints the Indenture Trustee as its agent to receive all such surrenders,
notices and demands.
Section 3.03 Money for Payments To Be Held in Trust. As
provided in Section 8.02(a) and (b), all payments of amounts due and payable
with respect to any Notes that are to be made from amounts withdrawn from the
Collection Account and the Note Distribution Account pursuant to Section 8.02(c)
shall be made on behalf of the Issuer by the Indenture Trustee or by another
Paying Agent, and no amounts so withdrawn from the Collection Account and the
Note Distribution Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section.
On or before the Business Day preceding each Distribution Date
and Redemption Date, the Issuer shall deposit or cause to be deposited in the
Note Distribution Account an aggregate sum sufficient to pay the amounts then
becoming due under the Notes, such sum to be held in trust for the benefit of
the Persons entitled thereto, and (unless the Paying Agent is the Indenture
Trustee) shall promptly notify the Indenture Trustee of its action or failure so
to act.
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 (and if the
Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section, that such Paying Agent will:
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(i) 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;
(ii) give the Indenture Trustee notice of any default by the
Issuer (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with respect
to the Notes;
(iii) 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;
(iv) immediately resign as a Paying Agent and forthwith pay to
the 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
(v) 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 the 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.
Subject to applicable laws with respect to escheat of funds,
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
two years after such amount has become due and payable shall be discharged from
such trust and be paid to the Issuer on Issuer Request; and the Holder of such
Note shall thereafter, as an unsecured general creditor, look only to the Issuer
for payment thereof (but only to the extent of the amounts so paid to the
Issuer), and all liability of the Indenture Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that the
Indenture Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense and direction of the Issuer cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Indenture Trustee shall also adopt and employ, at the expense and direction
of the Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Holders
whose Notes have been called but have not been surrendered for redemption or
whose right to or interest in moneys due and
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payable but not claimed is determinable from the records of the Indenture
Trustee or of 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 [__________] (unless it becomes, or any successor Issuer hereunder is
or becomes, organized under the laws of any other State or of the United States
of America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will obtain
and preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
Section 3.05 Protection of Trust Estate. The Issuer will from
time to time execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively
the purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) 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.
The Issuer hereby designates the Indenture Trustee its agent and attorney-in-
fact to execute any financing statement, continuation statement or other
instrument required to be executed pursuant to this
Section 3.06 Opinions as to Trust Estate. (a) On the Closing
Date, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording and 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
are necessary to perfect and make effective the lien and security interest of
this Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before March 31, in each calendar year, beginning in
[______], the Issuer shall furnish to the Indenture Trustee an Opinion 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 refiling 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 lien and
security interest created by this
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Indenture and reciting the details of such action, or stating that in the
opinion of such counsel no such action is necessary to maintain such lien and
security interest. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling 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 lien and security interest of this
Indenture until March 31 in the following calendar year.
Section 3.07 Performance of Obligations; Servicing of
Receivables.
(a) The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement 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 or agreement, except as
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Servicer and the Administrator to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Trust Estate, including but
not limited to filing or causing to be filed all UCC financing statements and
continuation statements required to be filed by the terms of this Indenture and
the Sale and Servicing Agreement in accordance with and within the time periods
provided for herein and therein. Except as otherwise expressly provided therein,
the Issuer shall not waive, amend, modify, supplement or terminate any Basic
Document or any provision thereof without the consent of the Indenture Trustee
or the Holders of at least a majority of the Outstanding Amount of the Notes.
(d) If the Issuer shall have knowledge of the occurrence of a
Servicer Default under the Sale and Servicing Agreement, the Issuer shall
promptly notify the Indenture Trustee and the Rating Agencies thereof, and shall
specify in such notice the action, if any, the Issuer is taking with respect to
such default. If a Servicer Default shall arise from the failure of the Servicer
to perform any of its duties or obligations under the Sale and Servicing
Agreement with respect to the Receivables, the Issuer shall take all reasonable
steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of
termination to the Servicer of the Servicer's rights and powers pursuant to
Section 8.01 of the Sale and Servicing Agreement, the Issuer shall appoint a
successor servicer (the "Successor Servicer"), and such Successor Servicer shall
accept its appointment by a written assumption in a form acceptable to the
Indenture Trustee. In the event that a Successor Servicer has not been appointed
and
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accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee without further action shall automatically be
appointed the Successor Servicer. The Indenture Trustee may resign as the
Servicer by giving written notice of such resignation to the Issuer and in such
event will be released from such duties and obligations, such release not to be
effective until the date a new servicer enters into a servicing agreement with
the Issuer as provided below. Upon delivery of any such notice to the Issuer,
the Issuer shall obtain a new servicer as the Successor Servicer under the Sale
and Servicing Agreement. Any Successor Servicer other than the Indenture Trustee
shall (i) be an established financial institution having a net worth of not less
than $100,000,000 and whose regular business includes the servicing of Contracts
and (ii) enter into a servicing agreement with the Issuer having substantially
the same provisions as the provisions of the Sale and Servicing Agreement
applicable to the Servicer. If within 30 days after the delivery of the notice
referred to above, the Issuer shall not have obtained such a new servicer, the
Indenture Trustee may appoint, or may petition a court of competent jurisdiction
to appoint, a Successor Servicer. In connection with any such appointment, the
Indenture Trustee may make such arrangements for the compensation of such
successor as it and such successor shall agree, subject to the limitations set
forth below and in the Sale and Servicing Agreement, and in accordance with
Section 8.02 of the Sale and Servicing Agreement, the Issuer shall enter into an
agreement with such successor for the servicing of the Receivables (such
agreement to be in form and substance satisfactory to the Indenture Trustee). If
the Indenture Trustee shall succeed to the Servicer's duties as servicer of the
Receivables as provided herein, it shall do so in its individual capacity and
not in its capacity as Indenture Trustee and, accordingly, the provisions of
Article VI hereof shall be inapplicable to the Indenture Trustee in its duties
as the successor to the Servicer and the servicing of the Receivables. In case
the Indenture Trustee shall become successor to the Servicer under the Sale and
Servicing Agreement, the Indenture Trustee shall be entitled to appoint as
Servicer any one of its affiliates, provided that it shall be fully liable for
the actions and omissions of such affiliate in such capacity as Successor
Servicer.
(f) Upon any termination of the Servicer's rights and powers
pursuant to the Sale and Servicing Agreement, the Issuer shall promptly notify
the Indenture Trustee. As soon as a Successor Servicer is appointed, the Issuer
shall notify the Indenture Trustee of such appointment, specifying in such
notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the
assignment granted to the Indenture Trustee under this Indenture or the rights
of the Indenture Trustee hereunder, the Issuer agrees (i) that it will not,
without the prior written consent of the Indenture Trustee or the Holders of at
least a majority in Outstanding Amount of the Notes, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Collateral
(except to the extent otherwise provided in the Sale and Servicing Agreement) or
the Basic Documents, or waive timely performance or observance by the Servicer
or the Seller under the Sale and Servicing Agreement; and (ii) that any such
amendment shall not (A) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, distributions that are required to be made
for the benefit of the Noteholders or (B) reduce the aforesaid percentage of the
Notes that is required to consent to any such amendment, without the consent of
the Holders of all the Outstanding Notes. If any such amendment, modification,
supplement or waiver shall be so consented to by the Indenture Trustee or such
Holders, the Issuer agrees, promptly following a request by the
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Indenture Trustee to do so, to execute and deliver, in its own name and at its
own expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the circumstances.
Section 3.08 Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or the
Sale and Servicing Agreement, sell, transfer, exchange or otherwise
dispose of any of the properties or assets of the Issuer, including
those included in the Trust Estate, unless directed to do so by the
Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate; or
(iii) (A) 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 with
respect to the Notes under this Indenture except as may be expressly
permitted hereby, (B) permit any lien, charge, excise, claim, 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 (other than tax liens, mechanics' liens and other
liens that arise by operation of law, in each case on any of the
Financed Vehicles and arising solely as a result of an action or
omission of the related Obligor) or (C) permit the lien of this
Indenture not to constitute a valid first priority (other than with
respect to any such tax, mechanics' or other lien) security interest in
the Trust Estate.
Section 3.09 Annual Statement as to Compliance. The Issuer
will deliver to the Indenture Trustee, within 120 days after the end of each
fiscal year of the Issuer (commencing with the fiscal year [____]), an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that:
(i) a review of the activities of the Issuer during such year
and of its performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based
on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year or, if there has
been a default in its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
Section 3.10 Issuer May Consolidate, etc., Only on Certain
Terms.
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(a) The Issuer shall not consolidate or merge with or into any
other Person, unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any State
and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory
to the Indenture Trustee, the due and punctual payment of the principal
of and interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation or merger and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any
filing required by the Exchange Act).
(b) Except as otherwise contemplated by Section 3.21, the
Issuer shall not convey or transfer any of its properties or assets, including
those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted (A) shall be a United States citizen or a Person
organized and existing under the laws of the United States of America
or any State, (B) expressly assumes, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee, the due and punctual payment of
the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided herein,
(C) expressly agrees by means of such supplemental indenture that all
right, title and interest so conveyed or transferred shall be subject
and subordinate to the rights of Holders of the Notes, (D) unless
otherwise provided in such supplemental indenture, expressly agrees to
indemnify, defend and hold harmless the Issuer against and from any
loss, liability or expense arising under or related to this Indenture
and the Notes and (E)
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expressly agrees by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified Person) shall make
all filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse federal
income or [Delaware] income or single business tax consequence to the
Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such conveyance or transfer and such supplemental indenture comply with
this Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
Section 3.11 Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in
accordance with Section 3.10(a), the Person formed by or surviving such
consolidation or merger (if other than the Issuer) shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein.
(b) Upon a conveyance or transfer of all the assets and
properties of the Issuer pursuant to Section 3.10(b), World Omni Auto
Receivables Trust [____]-[__] will be released from every covenant and agreement
of this Indenture to be observed or performed on the part of the Issuer with
respect to the Notes immediately upon the delivery of written notice to the
Indenture Trustee stating that World Omni Auto Receivables Trust [____]-[__] is
to be so released.
Section 3.12 No Other Business. Except as otherwise
contemplated by Section 3.21, the Issuer shall not engage in any business other
than financing, purchasing, owning, selling and managing the Receivables in the
manner contemplated by this Indenture and the Basic Documents and activities
incidental thereto. The Issuer shall not fund the purchase of any new Contracts.
Section 3.13 No Borrowing. Except as otherwise contemplated by
Section 3.21, the Issuer shall not issue, incur, assume, guarantee or otherwise
become liable, directly or indirectly, for any indebtedness except for the
Notes.
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Section 3.14 Servicer's Obligations. The Issuer shall cause
the Servicer to comply with Sections 4.09, 4.10, 4.11 and 5.09(b) and Article IX
of the Sale and Servicing Agreement.
Section 3.15 Guarantees, Loans, Advances and Other
Liabilities. Except as contemplated by the Sale and Servicing Agreement or this
Indenture (including Section 3.21), the Issuer shall not make any loan or
advance or credit to, or guarantee (directly or indirectly or by an instrument
having the effect of assuring another's payment or performance on any obligation
or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.
Section 3.16 Capital Expenditures. The Issuer shall not make
any expenditure (by long-term or operating lease or otherwise) for capital
assets (either realty or personalty).
Section 3.17 Removal of Administrator. So long as any Notes
are Outstanding, the Issuer shall not remove the Administrator without cause
unless the Rating Agency Condition shall have been satisfied in connection with
such removal.
Section 3.18 Restricted Payments. The Issuer shall not,
directly or indirectly, (i) pay any dividend or make any distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, to the Owner Trustee or any owner of a beneficial interest
in the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire
or otherwise acquire for value any such ownership or equity interest or security
or (iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, (x)
distributions as contemplated by, and to the extent funds are available for such
purpose under, the Sale and Servicing Agreement or the Trust Agreement and (y)
payments to the Indenture Trustee pursuant to Section 1(a)(ii) of the
Administration Agreement. The Issuer will not, directly or indirectly, make
payments to or distributions from the Collection Account except in accordance
with this Indenture and the Basic Documents.
Section 3.19 Notice of Events of Default. The Issuer shall
give the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder, each default on the part of the Servicer or the
Seller of its obligations under the Sale and Servicing Agreement and each
default on the part of the Company of its obligations under the Purchase
Agreement.
Section 3.20 Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
Section 3.21 Issuance of Additional Series of Notes. The
Issuer may, at its election from time to time, issue one or more additional
series of notes that are secured motor vehicle retail installment sale contracts
(or securities based thereon) other than the Contracts and
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the Receivables. The Noteholders hereby acknowledge and agree that they have no
interest in or claim on (directly or indirectly) the collateral or the trust
estate (or any asset thereof) that secures such additional series of notes.
The Issuer shall not issue any additional series of notes
unless:
(a) immediately after giving effect to such issuance, no
Default or Event of Default shall have occurred and be continuing;
(b) the Rating Agency Condition shall have been satisfied with
respect to such issuance;
(c) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse federal income or [Delaware]
income or single business tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(d) the Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that the
issuance of such additional series of notes satisfies the conditions of this
Section 3.21.)
ARTICLE IV
Satisfaction and Discharge
Section 4.01 Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to the Notes except
as to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections 3.03,
3.04, 3.05, 3.08, 3.10, 3.12 and 3.13, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.07 and the obligations of the Indenture
Trustee under Section 4.02) and (vi) the rights of Noteholders as beneficiaries
hereof with respect to the property so deposited with the Indenture Trustee
payable to all or any of them, and the Indenture Trustee, on demand of and at
the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the Notes, when
(a) either
(i) all Notes theretofore authenticated and delivered (other
than (a) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.06 and (b) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to the
Issuer or discharged from such trust, as provided in Section 3.03) have
been delivered to the Indenture Trustee for cancellation; or
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(ii) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
(A) have become due and payable, or
(B) are to be called for redemption 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 (A) or (B) above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Indenture Trustee for cancellation
when due to the applicable final scheduled Distribution Date or Redemption Date
(if Notes shall have been called for redemption pursuant to Section 10.01), as
the case may be;
(b) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(c) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and (if required by the TIA or the
Indenture Trustee) an Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of Section 11.01(a) and,
subject to Section 11.02, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Section 4.02 Application of Trust Money. All moneys deposited
with the Indenture Trustee pursuant to Section 4.01 hereof shall be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Holders of the particular Notes for the
payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such moneys need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
Section 4.03 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes shall,
upon demand of the Issuer, be paid to the Indenture Trustee to be held and
applied according to Section 3.03 and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
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ARTICLE V
Remedies
Section 5.01 Events of Default. "Event of Default", wherever
used herein, means 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):
(i) default in the payment of any interest on any Note when
the same becomes due and payable, and such default shall continue for a
period of [ ]; or
(ii) default in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and
payable; or
(iii) default in the observance or performance of any covenant
or agreement of the Issuer made in this Indenture (other than a
covenant or agreement, a default in the observance or performance of
which is elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture or in
any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a
period of 60 days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the Issuer
and the Indenture Trustee by the Holders of at least 25% of the
Outstanding Amount of the Notes, a written notice specifying such
default or incorrect representation or warranty and requiring it to be
remedied and stating that such notice is a notice of Default hereunder;
or
(iv) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Trust Estate in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Trust Estate, or ordering the
winding-up or liquidation of the Issuer's affairs, and such decree or
order shall remain unstayed and in effect for a period of 60
consecutive days; or
(v) the commencement by the Issuer of a voluntary case under
any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by the Issuer to the
entry of an order for relief in an involuntary case under any such law,
or the consent by the Issuer to the appointment or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Trust
Estate, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to
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pay its debts as such debts become due, or the taking of any action by
the Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five days after the
occurrence thereof, written notice in the form of an Officer's Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (iii), its status and what action the Issuer is
taking or proposes to take with respect thereto.
Section 5.02 Acceleration of Maturity; Rescission and
Annulment. If an Event of Default should occur and be continuing, then and in
every such case the Indenture Trustee or the Holders of Notes representing not
less than a majority of the Outstanding Amount of the Notes 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 unpaid principal amount of such Notes, together with accrued and
unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.
At any time after such 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 V
provided, the Holders of Notes representing a majority of the Outstanding Amount
of the Notes, by written notice to the Issuer and the Indenture Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on all Notes
and all other amounts that would then be due hereunder or upon
such Notes if the Event of Default giving rise to such
acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its
agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
Section 5.03 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee.
(a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note when
the same becomes due and payable, the Issuer will, upon demand of the Indenture
Trustee, pay to it, for the benefit of the Holders of the Notes, the whole
amount then due and payable on such Notes for principal and interest, with
interest on the overdue
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principal and, to the extent payment at such rate of interest shall be legally
enforceable, on overdue installments of interest at the rate borne by the Notes
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents
and counsel.
(b) In case the Issuer shall fail forthwith to pay such
amounts upon such demand, the Indenture Trustee, in its own name and as 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 other obligor upon such
Notes and collect in the manner provided by law out of the property of the
Issuer or other obligor upon such Notes, wherever situated, the moneys adjudged
or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the
Indenture Trustee may, as more particularly provided in Section 5.04, 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 to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or by
law.
(d) In case there shall be pending, relative to the Issuer or
any other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, Proceedings under Title 11 of the United States
Code or any other applicable federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, or liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any 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 pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest 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 (including any
claim for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence or bad
faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
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(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee or the Holders of Notes allowed in any
Proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting 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 except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such action or Proceedings
instituted by the Indenture Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and
also any Proceedings involving the interpretation of any provision of this
Indenture to which the Indenture Trustee shall be a party), the Indenture
Trustee shall be held to represent all the Holders of the Notes, and it shall
not be necessary to make any Noteholder a party to any such Proceedings.
Section 5.04 Remedies; Priorities.
(a) If an Event of Default shall have occurred and be
continuing, the Indenture Trustee may do one or more of the following (subject
to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained and collect
from the Issuer and any other obligor upon such Notes moneys adjudged
due;
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(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights
and remedies of the Indenture Trustee and the Holders of the Notes; and
(iv) 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;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than an Event of
Default described in Section 5.01(i) or (ii), unless (A) the Holders of 100% of
the Outstanding Amount of the Notes consent thereto, (B) the proceeds of such
sale or liquidation distributable to the Noteholders are sufficient to discharge
in full all amounts then due and unpaid upon such Notes for principal and
interest or (C) the Indenture Trustee determines that the Trust Estate will not
continue to provide sufficient funds for the payment of principal of and
interest on the Notes as they would have become due if the Notes had not been
declared due and payable, and the Indenture Trustee obtains the consent of
Holders of 66 2/3% of the Outstanding Amount of the Notes. In determining such
sufficiency or insufficiency with respect to clause (B) and (C), the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
(b) [If the Indenture Trustee collects any money or property
pursuant to this Article V, it shall pay out the money or property in the
following order:
FIRST: to the Indenture Trustee for amounts due under Section
6.07;
SECOND: to Holders of the Notes for amounts due and unpaid on
the Notes for interest (including any premium), ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for interest (including any premium);
THIRD: to the Noteholders in the following order of priority:
(i) to Holders of the Class [A-1] Notes for amounts due and
unpaid on the Class [A-1] Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class [A-1] Notes for principal, until the Outstanding
Amount of the Class [A-1] Notes is reduced to zero;
(ii) to Holders of the Class [A-2] Notes for amounts due and
unpaid on the Class [A-2] Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class [A-2] Notes for principal, until the Outstanding
Amount of the Class [A-2] Notes is reduced to zero;
(iii) to Holders of the Class [A-3] Notes for amounts due and
unpaid on the Class [A-3] Notes for principal, ratably, without
preference or priority of any kind,
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according to the amounts due and payable on the Class [A-3] Notes for
principal, until the Outstanding Amount of the Class [A-3] Notes is
reduced to zero;
(iv) to Holders of the Class [A-4] Notes for amounts due and
unpaid on the Class [A-4] Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class [A-4] Notes for principal, until the Outstanding
Amount of the Class [A-4] Notes is reduced to zero; and
FOURTH: to the Issuer for distribution pursuant to the Trust
Agreement.
The Indenture Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section. At least 15 days before such record date,
the Issuer shall mail to each Noteholder and the Indenture Trustee a notice that
states the record date, the payment date and the amount to be paid.]
(c) Notwithstanding anything in this Indenture to the
contrary, the Indenture Trustee and the Noteholders (in their respective
capacities as such) shall not (i) have any rights in or claims on the collateral
or trust estate (or any asset thereof) (collectively, "Unavailable Collateral")
that the Issuer has Granted in order to secure any additional series of notes
issued or to be issued by the Issuer or (ii) exercise or attempt to exercise any
remedies to realize upon such Unavailable Collateral.)
Section 5.05 Optional Preservation of the Receivables. If the
Notes have been declared to be due and payable under Section 5.02 following an
Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Trust Estate. It is the desire of the parties hereto
and the Noteholders that there be at all times sufficient funds for the payment
of principal of and interest on the Notes, and the Indenture Trustee shall take
such desire into account when determining whether or not to maintain possession
of the Trust Estate. In determining whether to maintain possession of the Trust
Estate, the Indenture Trustee may, but need not, obtain and rely upon an opinion
of an Independent investment banking or accounting firm of national reputation
as to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
Section 5.06 Limitation of Suits. No Holder of any Note 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) the Holders of not less than 25% of the Outstanding
Amount of the Notes have made written request to the Indenture Trustee
to institute such Proceeding 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 complying with such request;
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(iv) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute
such Proceedings; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Holders of a majority of the Outstanding Amount of the Notes.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting
or inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Outstanding Amount of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this Indenture.
Section 5.07 Unconditional Rights of Noteholders To Receive
Principal and Interest. Notwithstanding any other provisions 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, if any, on
such Note on or after the respective due dates thereof expressed in such Note or
in this Indenture (or, in the case of redemption, on or after the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder.
Section 5.08 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 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 5.09 Rights and Remedies Cumulative. 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 5.10 Delay or Omission Not a Waiver. No delay or
omission of the Indenture Trustee or any Holder of any Note to exercise any
right or remedy accruing upon any Default or Event of Default shall impair any
such right or remedy or constitute a waiver of any
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such Default or Event of Default or an acquiescence therein. Every right and
remedy given by this Article V 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 5.11 Control by Noteholders. The Holders of a majority
of the Outstanding Amount of the Notes 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 exercising any trust or power
conferred on the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) subject to the express terms of Section 5.04, any
direction to the Indenture Trustee to sell or liquidate the Trust
Estate shall be by Holders of Notes representing not less than 100% of
the Outstanding Amount of the Notes;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee
by Holders of Notes representing less than 100% of the Outstanding
Amount of the Notes to sell or liquidate the Trust Estate shall be of
no force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction. Notwithstanding the rights of Noteholders set forth in this
Section, subject to Section 6.01, the Indenture Trustee need not take
any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not
consenting to such action.
Section 5.12 Waiver of Past Defaults. Prior to the declaration
of the acceleration of the maturity of the Notes as provided in Section 5.02,
the Holders of Notes of not less than a majority of the Outstanding Amount of
the Notes may waive any past Default or Event of Default and its consequences
except a Default (a) in payment of principal of or interest on any of the Notes
or (b) in respect of a covenant or provision hereof which cannot be modified or
amended without the consent of the Holder of each Note. In the case of any such
waiver, the Issuer, the Indenture Trustee and the Holders of the Notes shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereto.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
Section 5.13 Undertaking for Costs. All parties to this
Indenture agree, and each Holder of a Note by such Holder's 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
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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, 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 (a) any suit
instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder,
or group of Noteholders, in each case holding in the aggregate more than 10% of
the Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
Section 5.14 Waiver of Stay or Extension Laws. 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 or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, 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 5.15 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 the 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 or upon any of the assets of the Issuer. Any money or property collected
by the Indenture Trustee shall be applied in accordance with Section 5.04(b).
Section 5.16 Performance and Enforcement of Certain
Obligations.
(a) Promptly following a request from the Indenture Trustee to
do so and at the Administrator's expense, the Issuer shall take all such lawful
action as the Indenture Trustee may request to compel or secure the performance
and observance by the Seller or the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Sale and Servicing
Agreement and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Sale and
Servicing Agreement to the extent and in the manner directed by the Indenture
Trustee, including the transmission of notices of default on the part of the
Seller or the Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Seller or the
Servicer of each of their obligations under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in writing
or by telephone (confirmed in writing promptly thereafter)) of the Holders of
66 2/3% of the Outstanding Amount of the Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the
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Seller or the Servicer under or in connection with the Sale and Servicing
Agreement, including the right or power to take any action to compel or secure
performance or observance by the Seller or the Servicer, of each of their
obligations to the Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Sale and Servicing Agreement
and any right of the Issuer to take such action shall be suspended.
ARTICLE VI
The Indenture Trustee
Section 6.01 Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise 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 in the conduct of
such person's own affairs.
(b) 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 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, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
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 is
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 it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates
to the Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section.
(e) The Indenture Trustee shall not be liable for interest on
any money received by it except as the Indenture Trustee may agree in writing
with the Issuer.
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(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
Section 6.02 Rights of Indenture Trustee.
(a) The Indenture Trustee may rely on any document believed by
it to be genuine and to have been signed or presented by the proper person. The
Indenture Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Indenture Trustee acts or refrains from acting,
it may require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
(c) 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 or a custodian or nominee, and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of, or for
the supervision of, any such agent, attorney, custodian or nominee appointed
with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
Section 6.03 Individual Rights of Indenture Trustee. The
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not Indenture Trustee. Any Paying
Agent, Note Registrar, co-registrar or co-paying agent may do the same with like
rights. However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
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Section 6.04 Indenture Trustee's Disclaimer. The Indenture
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Notes, it shall not be accountable
for the Issuer's use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Issuer in the Indenture or in any document
issued in connection with the sale of the Notes or in the Notes other than the
Indenture Trustee's certificate of authentication.
Section 6.05 Notice of Defaults. If a Default occurs and is
continuing and if it is known to a Responsible Officer of the Indenture Trustee,
the Indenture Trustee shall mail to each Noteholder notice of the Default within
90 days after it occurs. Except in the case of a Default in payment of principal
of or interest on any Note (including payments pursuant to the mandatory
redemption provisions of such Note), the Indenture Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
Section 6.06 Reports by Indenture Trustee to Holders. The
Indenture Trustee shall deliver to each Noteholder such information as may be
required to enable such holder to prepare its federal and state income tax
returns.
Section 6.07 Compensation and Indemnity. The Issuer shall, or
shall cause the Administrator to, pay to the Indenture Trustee from time to time
reasonable compensation for its services. The Indenture Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuer shall, or shall cause the Administrator to, reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by
it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall, or shall cause the Administrator to,
indemnify the Indenture Trustee against any and all loss, liability or expense
(including attorneys' fees) incurred by it in connection with the administration
of this trust and the performance of its duties hereunder. The Indenture Trustee
shall notify the Issuer and the Administrator promptly of any claim for which it
may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and
the Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder. The Issuer shall, or shall cause the Administrator to,
defend any such claim, and the Indenture Trustee may have separate counsel and
the Issuer shall, or shall cause the Administrator to, pay the fees and expenses
of such counsel. Neither the Issuer nor the Administrator need reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of a Default specified in
Section 5.01(iv) or (v) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
Section 6.08 Replacement of Indenture Trustee. No resignation
or removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become
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effective until the acceptance of appointment by the successor Indenture Trustee
pursuant to this Section 6.08. The Indenture Trustee may resign at any time by
so notifying the Issuer. The Holders of a majority in Outstanding Amount of the
Notes may remove the Indenture Trustee by so notifying the Indenture Trustee and
may appoint a successor Indenture Trustee. The Issuer shall remove the Indenture
Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or
insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such event
being referred to herein as the retiring Indenture Trustee), the Issuer shall
promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee and to the
Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to
Noteholders. The retiring Indenture Trustee shall promptly transfer all property
held by it as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within
60 days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority in Outstanding Amount
of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11,
any Noteholder may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section, the Issuer's and the Administrator's obligations under
Section 6.07 shall continue for the benefit of the retiring Indenture Trustee.
Section 6.09 Successor Indenture Trustee by Merger. If the
Indenture Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall provide
the Rating Agencies prior written notice of any such transaction.
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In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
Section 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at
any time, for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Trust Estate, or any part hereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Indenture Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co- trustee or separate trustee shall be required under
Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture 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
Indenture 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 Indenture 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 Estate 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 Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as
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if given to each of them. Every instrument appointing any separate trustee or
co-trustee shall refer to this Agreement and the conditions of this Article VI.
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 Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture, specifically including every provision of this Indenture relating to
the conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture 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 Indenture Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
Section 6.11 Eligibility; Disqualification. The Indenture
Trustee shall at all times satisfy the requirements of TIA Section 310(a). The
Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition, and the time deposits of the Indenture Trustee shall be rated at
least A-1 by Standard & Poor's and P-1 by Moody's. The Indenture Trustee shall
comply with TIA Section 310(b), including the optional provision permitted by
the second sentence of TIA Section 310(b)(9); provided, however, that there
shall be excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
Section 6.12 Preferential Collection of Claims Against Issuer.
The Indenture Trustee shall comply with 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.
ARTICLE VII
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) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and addresses
of the Holders of Notes as of such Record Date, and (b) at such other times as
the Indenture Trustee may request in writing, within 30 days after receipt by
the Issuer of any such request, a list of similar form and content as of a date
not more than 10 days prior to the time such list is furnished; provided,
however, that so long as the Indenture Trustee is the Note Registrar, no such
list shall be required to be furnished.
Section 7.02 Preservation of Information; Communications to
Noteholders.
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(a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.01 upon receipt
of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b)
with other Noteholders with respect to their rights under this Indenture or
under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar
shall have the protection of TIA Section 312(c).
Section 7.03 Reports by Issuer.
(a) The Issuer shall:
(i) 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;
(ii) 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
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
Section 313(c)) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i) and
(ii) of this Section 7.03(a) and by rules and regulations prescribed
from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of
the Issuer shall end on December 31 of each year.
Section 7.04 Reports by Indenture Trustee. If required by TIA
Section 313(a), within 60 days after each [________] beginning with
[___________] the Indenture Trustee shall mail to each Noteholder as required by
TIA Section 313(c) a brief report dated as of such date that complies with TIA
Section 313(a). The Indenture Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Noteholders shall be filed by the Indenture Trustee with the Commission and each
stock exchange, if any, on which the Notes
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are listed. The Issuer shall notify the Indenture Trustee if and when the Notes
are listed on any stock exchange.
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01 Collection of Money. Except as otherwise
expressly provided herein, the Indenture Trustee may 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. The Indenture Trustee shall apply all such money received by it 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 agreement or instrument that is part of the Trust Estate, the
Indenture Trustee may take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim a
Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
Section 8.02 Trust Accounts.
(a) On or prior to the Closing Date, the Issuer shall cause
the Servicer to establish and maintain, in the name of the Indenture Trustee,
for the benefit of the Noteholders and the Certificateholders, the Trust
Accounts as provided in Section 5.01 of the Sale and Servicing Agreement.
(b) On or before each Distribution Date, the Total
Distribution Amount with respect to the preceding Collection Period will be
deposited in the Collection Account as provided in Section 5.02 of the Sale and
Servicing Agreement. On or before each Distribution Date, all amounts required
to be deposited in the Note Distribution Account with respect to the preceding
Collection Period pursuant to Sections 5.06 and 5.07 of the Sale and Servicing
Agreement will be transferred from the Collection Account and/or the Reserve
Account to the Note Distribution Account.
(c) On each Distribution Date and Redemption Date, the
Indenture Trustee shall distribute all amounts on deposit in the Note
Distribution Account to Noteholders in respect of the Notes to the extent of
amounts due and unpaid on the Notes for principal and interest (including any
premium) in the following amounts and in the following order of priority (except
as otherwise provided in Section 5.04(b):
(i) accrued and unpaid interest on the Notes; provided, that
if there are not sufficient funds in the Note Distribution Account to
pay the entire amount of accrued and unpaid interest then due on the
Notes, the amount in the Note Distribution Account shall be applied to
the payment of such interest on the Notes pro rata on the basis of the
total such interest due on the Notes;
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(ii) the Noteholders' Principal Distributable Amount in the
following order of priority:
(A) to the Holders of the Class [A-1] Notes on account of
principal until the Outstanding Amount of the Class [A-1]
Notes is reduced to zero;
(B) to the Holders of the Class [A-2] Notes on account of
principal until the Outstanding Amount of the Class [A-2]
Notes is reduced to zero;
(C) to the Holders of the Class [A-3] Notes on account of
principal until the Outstanding Amount of the Class [A-3]
Notes is reduced to zero; and
(D) to the Holders of the Class [A-4] Notes on account of
principal until the Outstanding Amount of the Class [A-4]
Notes is reduced to zero.
Section 8.03 General Provisions Regarding Accounts.
(a) So long as no Default or Event of Default shall have
occurred and be continuing, all or a portion of the funds in the Trust Accounts
shall be invested in Eligible Investments and reinvested by the Indenture
Trustee (or the investment manager referred to in clause (2) of Section 5.01(b)
of the Sale and Servicing Agreement) upon Issuer Order, subject to the
provisions of Section 5.01(b) of the Sale and Servicing Agreement. All income or
other gain from investments of moneys deposited in the Trust Accounts shall be
deposited by the Indenture Trustee in the Collection Account, and any loss
resulting from such investments shall be charged to such account. The Issuer
will not direct the Indenture Trustee to make any investment of any funds or to
sell any investment held in any of the Trust Accounts unless the security
interest Granted and perfected in such account will continue to be perfected in
such investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Indenture
Trustee to make any such investment or sale, if requested by the Indenture
Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of
Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.01(c), the Indenture Trustee shall
not in any way be held liable by reason of any insufficiency in any of the Trust
Accounts resulting from any loss on any Eligible Investment included therein
except for losses attributable to the Indenture Trustee's failure to make
payments on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as trustee, in accordance with
their terms.
(c) If (i) the Issuer (or the Servicer or any investment
manager pursuant to Section 5.01(b) of the Sale and Servicing Agreement) shall
have failed to give investment directions for any funds on deposit in the Trust
Accounts to the Indenture Trustee by 11:00 a.m. Eastern Time (or such other time
as may be agreed by the Issuer and Indenture Trustee) on any Business Day or
(ii) a Default or Event of Default shall have occurred and be continuing with
respect to the Notes but the Notes shall not have been declared due and payable
pursuant to Section 5.02 or (iii) if such Notes shall have been declared due and
payable following an Event of Default but amounts collected or receivable from
the Trust Estate are being applied in accordance with Section 5.05 as if there
had not been such a declaration, then the Indenture
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Trustee shall, to the fullest extent practicable, invest and reinvest funds in
the Trust Accounts in one or more Eligible Investments.
Section 8.04 Release of Trust Estate.
(a) Subject to the payment of its fees and expenses pursuant
to Section 6.07, the Indenture Trustee may, and when required by the provisions
of this Indenture shall, execute instruments to release property from the lien
of this Indenture, 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 VIII 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 and all sums due the Indenture Trustee pursuant to Section
6.07 have been paid, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture and release to the Issuer or
any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel and (if
required by the TIA) Independent Certificates in accordance with TIA Section
314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01.
(c) Upon the written notification from the Servicer pursuant
to Section 5.06(a)(ii)(D) or 5.06(c) of the Sale and Servicing Agreement, on the
related Distribution Date the Issuer shall deliver to the Indenture Trustee an
Issuer Request accompanied by an Officer's Certificate, an Opinion of Counsel
and (if required by the TIA) Independent Certificates in accordance with TIA
Section 314(c) and 314(d)(1) meeting the applicable requirements of Section
11.01, and upon its receipt of such items on such Distribution Date the
Indenture Trustee shall deposit the Cash Release Amount (to the extent of funds
available pursuant to Section 5.06(a)(ii)(D) of the Sale and Servicing
Agreement) in the Certificate Distribution Account and release from the lien of
this Indenture the Receivables to be so released pursuant to Section 5.06(c) of
the Sale and Servicing Agreement.
Section 8.05 Opinion of Counsel. The Indenture Trustee shall
receive at least seven days notice when requested by the Issuer to take any
action pursuant to Section 8.04(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall 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 security for the Notes or the
rights of the Noteholders in contravention of the provisions of this Indenture;
provided, however, that such Opinion of Counsel shall not 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 the Indenture
Trustee in connection with any such action.
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ARTICLE IX
Supplemental Indentures
Section 9.01 Supplemental Indentures Without Consent of
Noteholders.
(a) Without the consent of the Holders of any Notes but with
prior notice to the Rating Agencies, the Issuer and the Indenture Trustee, when
authorized by an Issuer Order, at any time and from time to time, may enter into
one or more indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as in force at the date of the execution
thereof), in form satisfactory to the Indenture Trustee, for any of the
following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided, that such action shall not adversely affect the
interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA. The Indenture
Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by
an Issuer Order, may, also without the consent of any of the Holders of the
Notes but with prior notice to the
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Rating Agencies, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Noteholder.
Section 9.02 Supplemental Indentures with Consent of
Noteholders. The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may, with prior notice to the Rating Agencies and with the consent
of the Holders of not less than a majority of the Outstanding Amount of the
Notes, by Act of such Holders delivered to the Issuer and the Indenture Trustee,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof, the
interest rate thereon or the Redemption Price with respect thereto,
change the provisions of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Trust Estate to
payment of principal of or interest on the Notes, or change any place
of payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for
the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or
after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Indenture Trustee to direct the Issuer to
sell or liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section except to increase
any percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified
or waived without the consent of the Holder of each Outstanding Note
affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on
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any Distribution Date (including the calculation of any of the
individual components of such calculation) or to affect the rights of
the Holders of Notes to the benefit of any provisions for the mandatory
redemption of the Notes contained herein; or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security
provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any Notes
would be affected by any supplemental indenture and any such determination shall
be conclusive upon the Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee shall not be liable
for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section, the Indenture
Trustee shall mail to the Holders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
Section 9.03 Execution of Supplemental Indentures. In
executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modification thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to receive,
and subject to Sections 6.01 and 6.02, shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Indenture Trustee may, but
shall not be obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee's own rights, duties, liabilities or immunities
under this Indenture or otherwise.
Section 9.04 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and shall be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 9.05 Conformity with Trust Indenture Act. Every
amendment of this Indenture and every supplemental indenture executed pursuant
to this Article IX shall conform to
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the requirements of the Trust Indenture Act as then in effect so long as this
Indenture shall then be qualified under the Trust Indenture Act.
Section 9.06 Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article IX 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 or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, 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.
ARTICLE X
Redemption of Notes
Section 10.01 Redemption. The Class [A-4] Notes are subject to
redemption in whole, but not in part, at the direction of the Servicer pursuant
to Section 9.01(a) of the Sale and Servicing Agreement, on any Distribution Date
on which the Servicer exercises its option to purchase the Trust Estate pursuant
to said Section 9.01(a), for a purchase price equal to the Redemption Price;
provided that the Issuer has available funds sufficient to pay the Redemption
Price. The Servicer or the Issuer shall furnish the Rating Agencies notice of
such redemption. If the Class [A-4] Notes are to be redeemed pursuant to this
Section, the Servicer or the Issuer shall furnish notice of such election to the
Indenture Trustee not later than 20 days prior to the Redemption Date and the
Issuer shall deposit by 10:00 A.M. New York City time on the Redemption Date
with the Indenture Trustee in the Note Distribution Account the Redemption Price
of the Class [A-4] Notes to be redeemed, whereupon all such Class [A-4] 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 the Notes.
Section 10.02 Form of Redemption Notice. Notice of redemption
under Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile mailed or transmitted not later than 10 days
prior to the applicable Redemption Date to each Holder of Notes, as of the close
of business on the Record Date preceding the applicable Redemption Date, at such
Holder's address or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) 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).
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Notice of redemption of the Notes shall be given by the Indenture Trustee in the
name and at the expense of the Issuer. Failure to give notice of redemption, or
any defect therein, to any Holder of any Note shall not impair or affect the
validity of the redemption of any other Note.
Section 10.03 Notes Payable on Redemption Date. The Notes or
portions thereof to be redeemed shall, following notice of redemption as
required by Section 10.02, on the 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 Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
ARTICLE XI
Miscellaneous
Section 11.01 Compliance Certificates and Opinions, etc.
(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:
(i) 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;
(ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with;
and
(iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable
requirements of this Section, 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, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(A) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or
condition and the definitions herein relating thereto;
(B) 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;
(C) a statement that, in the opinion of each such
signatory, such signatory has made such examination or
investigation as is necessary to enable
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such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(D) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other
property or securities with the Indenture Trustee that is to be made the
basis for the release of any property or securities subject to the lien of
this Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.01(a) or elsewhere in this Indenture, furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days of
such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value to the
Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth in
the certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the Outstanding Amount of the Notes, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the
related Officer's Certificate is less than $25,000 or less than one percent
of the Outstanding Amount of the Notes.
(iii) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed to
be released and stating that in the opinion of such person the proposed
release will not impair the security under this Indenture in contravention
of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (iii)
above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property, other than property as
contemplated by clause (v) below or securities released from the lien of
this Indenture since the commencement of the then-current calendar year, as
set forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the Outstanding Amount of the Notes, but
such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less than one percent
of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.10 or any other provision of
this Section, the Issuer may, without compliance with the requirements of
the other provisions of this
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Section, (A) collect, liquidate, sell or otherwise dispose of Receivables
and Financed Vehicles as and to the extent permitted or required by the
Basic Documents and (B) make cash payments out of the Trust Accounts as and
to the extent permitted or required by the Basic Documents, so long as the
Issuer shall deliver to the Indenture Trustee every six months, commencing
[_____________], [____], an Officer's Certificate of the Issuer stating
that all the dispositions of Collateral described in clauses (A) or (B)
above that occurred during the preceding six calendar months were in the
ordinary course of the Issuer's business and that the proceeds thereof were
applied in accordance with the Basic Documents.
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 Authorized 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 of an
Authorized Officer 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 Servicer, the Seller, the Issuer or the
Administrator, stating that the information with respect to such factual matters
is in the possession of the Servicer, the Seller, the Issuer or the
Administrator, 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.
Whenever 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
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee's right to rely upon the
truth and accuracy of any statement or opinion contained in any such document as
provided in Article VI.
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Section 11.03 Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture 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 agents
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 expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of 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 and (subject to Section 6.01) conclusive in
favor of the Indenture Trustee and the Issuer, 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 in any manner that the Indenture
Trustee deems sufficient.
(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 or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
Section 11.04 Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or act of Noteholders is to be made upon,
given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Indenture Trustee at its
Corporate Trust Office, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and
mailed first-class, postage prepaid to the Issuer addressed to: World
Omni Auto Receivables Trust [____]-[__], in care of
_________________________, Attention of ____________________, or at any
other address previously furnished in writing to the Indenture Trustee
by the Issuer or the Administrator. The Issuer shall promptly transmit
any notice received by it from the Noteholders to the Indenture
Trustee.
Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered or mailed by certified mail, return receipt requested, to
[(i) in the case of Moody's, at the following address: Moody's Investors
Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York
10007, (ii) in the case of Standard & Poor's, at the following address: Standard
& Poor's
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Ratings Services, a division of The McGraw-Hill Companies, Inc., 25 Broadway
(15th Floor), New York, New York 10004, Attention of Asset Backed Surveillance
Department, (iii) in the case of Fitch IBCA, Inc., at the following address:
One State Street Plaza, New York, N.Y. 10004, and (iv) in the case of Duff &
Phelps Credit Rating Co., at the following address: 17 State Street, 12th
Floor, New York, N.Y. 10004; or as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.]
Section 11.05 Notices to Noteholders; Waiver. Where this
Indenture provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Holder's address 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. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
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 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 a 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 satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute a
Default or Event of Default.
Section 11.06 Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such Holder, that is different from the methods provided for in
this Indenture for such payments or notices. The Issuer will furnish to the
Indenture Trustee a copy of each such agreement and the Indenture Trustee will
cause payments to be made and notices to be given in accordance with such
agreements.
Section 11.07 Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this Indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.
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<PAGE>
The provisions of TIA Section 310 through 317 that impose
duties on any person (including the provisions automatically deemed included
herein unless expressly excluded by this Indenture) are a part of and govern
this Indenture, whether or not physically contained herein.
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 and the Notes by the Issuer shall bind its
successors and assigns, whether so expressed or not. All agreements of the
Indenture Trustee in this Indenture shall bind its successors, co-trustees and
agents.
Section 11.10 Separability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 11.11 Benefits of Indenture. Nothing in this Indenture
or in the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Trust Estate, 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 on
which any payment is due shall not be a Business Day, then (notwithstanding any
other provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 11.13 GOVERNING LAW. THIS 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 SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. SECTION
11.14. Counterparts. This Indenture 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.
Section 11.14 Recording of Indenture. If this Indenture is
subject to recording in any appropriate public recording offices, such recording
is to be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (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 any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
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<PAGE>
Section 11.15 Trust Obligation. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) 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
Indenture Trustee or the Owner Trustee in its individual capacity, any holder of
a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of 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) 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. 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 VI, VII and VIII of the Trust Agreement.
Section 11.16 No Petition. The Indenture Trustee, by entering
into this Indenture, and each Noteholder, by accepting a Note, hereby covenant
and agree that they will not at any time institute against the Issuer, or join
in any institution against the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the Basic
Documents.
Section 11.17 Inspection. The Issuer agrees that, on
reasonable prior notice, it will permit any representative of the Indenture
Trustee, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall, and shall cause its representatives to,
hold in confidence all such information except to the extent disclosure may be
required by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers,
thereunto duly authorized and duly attested, all as of the day and year first
above written.
-56-
<PAGE>
WORLD OMNI AUTO RECEIVABLES TRUST [____]-[__],
by: _______________________________, not in its
individual capacity but solely as Owner Trustee,
by: _________________________________
Name:
Title:
____________________________________, not in its
individual capacity but solely as Indenture Trustee,
by: ________________________________
Name:
Title:
-57-
<PAGE>
SCHEDULE A
Provided to the Owner Trustee at Closing
EXHIBIT A-1
(FORM OF CLASS [A-1] NOTE)
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.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS 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.
<PAGE>
REGISTERED $____________
No. R-__ CUSIP NO. ___________
WORLD OMNI AUTO RECEIVABLES TRUST [____]-[__]
(SERIES [____]-[__])
CLASS [___] ________% ASSET BACKED NOTES
World Omni Auto Receivables Trust [____]-[__], a business
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or registered assigns, the principal sum of TWO HUNDRED MILLION DOLLARS
payable on each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is [$________________] and the
denominator of which is [$____________] by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the Class
[A-1] Notes pursuant to Section 3.01 of the Indenture dated as of
[______________],[____] (the "Indenture"), between the Issuer and
_________________________________, a national banking association, as Indenture
Trustee (the "Indenture Trustee"); provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on the [_______________]
[____] Distribution Date (the "Class [A-1] Final Scheduled Distribution Date").
Capitalized terms used but not defined herein are defined in Article I of the
Indenture, which also contains rules as to construction that shall be applicable
herein.
The Issuer will pay interest on this Note at the rate per
annum shown above on each Distribution Date until the principal of this Note is
paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in the last sentence of Section 3.01 of the
Indenture. Interest on this Note will accrue for each Distribution Date from the
sixth day of the month preceding the month of such Distribution Date (in the
case of the first Distribution Date, from the Closing Date) to and including the
fifth day of the month of such Distribution Date. Interest will be computed on
the basis of the actual number of days in the Interest Accrual Period divided by
360. Such principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.
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. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
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.
-2-
<PAGE>
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: WORLD OMNI AUTO RECEIVABLES TRUST [____]-[__]
by: ___________________________________,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement,
by: ____________________________________
Authorized Signatory
-3-
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-
mentioned Indenture.
Date: _______________________, not in its individual
capacity but solely as Indenture Trustee,
by: ___________________________________
Authorized Signatory
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class [A-1] _______% Asset (, Series [____]-[__])
Backed Notes (herein called the "Class [A-1] Notes"), all issued 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 Class [A-1] Notes are subject to all terms of the Indenture.
The Class [A-1] Notes, the Class [A-2] Notes, the Class [A-3]
Notes and the Class [A-4] Notes (collectively, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class [A-1] Notes will be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the sixth day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing [____________], [____].
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the Class [A-1] Final Scheduled Distribution
Date. Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Holders of
Notes representing not less than a majority of the Outstanding Amount of the
Notes have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the Class
[A-1] Notes shall be made pro rata to the Class [A-1] Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by check mailed to the
Person whose name appears as the Registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date, except that with respect to Notes registered on the Record Date in
the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such
-4-
<PAGE>
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment. Any reduction in the principal amount of this 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 this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Distribution Date, then the Indenture Trustee, in the name of and
on behalf of the Issuer, will notify the Person who was the Registered Holder
hereof as of the Record Date preceding such Distribution Date by notice mailed
or transmitted by facsimile prior to such Distribution Date, and the amount then
due and payable shall be payable only upon presentation and surrender of this
Note at the Indenture Trustee's principal Corporate Trust Office or at the
office of the Indenture Trustee's agent appointed for such purposes located in
(The City of New York).
The Issuer shall pay interest on overdue installments of
interest at the Class [A-1] Interest Rate to the extent lawful.
As provided in the Indenture and subject to the limitations
set forth therein and on the face hereof, the transfer of this Note may be
registered on the Note Register upon surrender of this Note for registration of
transfer at the office or agency designated by the Issuer pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Indenture Trustee duly executed by, the Holder
hereof or such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("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, and thereupon one or more new Notes
of authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) 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 or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed 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.
-5-
<PAGE>
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Basic Documents.
(Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that such Noteholder or Note Owner
(in their capacities as such) shall not (i) have any rights in or claims on the
collateral or trust estate (or any asset thereof) (collectively, "Unavailable
Collateral") that the Issuer has granted in order to secure any additional
series of notes issued or to be issued by the Issuer or (ii) exercise or attempt
to exercise any remedies to realize upon such Unavailable Collateral.)
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer secured by the Trust Estate. Each Noteholder, by acceptance of a Note
(and each Note Owner by acceptance of a beneficial interest in a Note), agrees
to treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the Outstanding Amount of the Notes,
on behalf of the Holders of all the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
-6-
<PAGE>
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
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.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of ________________________ in
its individual capacity, _________________________________ in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on this Note or
performance of, or failure to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
-7-
<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:
____________________________________________*/
- ------------------------
*/ NOTICE: 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 whatever. Such
signature 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.
-8-
<PAGE>
EXHIBIT A-2
(FORM OF CLASS [A-2] NOTE)
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.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS 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.
REGISTERED $____________
No. R-__ CUSIP NO. ____________
WORLD OMNI AUTO RECEIVABLES TRUST [____]-[__]
CLASS A-2 ______% ASSET BACKED NOTES
(SERIES[____]-[__])
World Omni Auto Receivables Trust[____]-[__], a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to Cede & Co.,
or registered assigns, the principal sum of ________________ DOLLARS payable on
each Distribution Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is $____________ and the denominator of
which is [$___________________] by (ii) the aggregate amount, if any, payable
from the Note Distribution Account in respect of principal on the Class [A-2]
Notes pursuant to Section 3.01 of the Indenture dated as of
[______________],[____] (the "Indenture"), between the Issuer and
_________________________________, a national banking association, as Indenture
Trustee (the "Indenture Trustee"); provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on the __________
Distribution Date (the "Class [A-2] Final Scheduled Distribution Date"). No
payments of principal of the Class [A-2] Notes shall be made until the Class
[A-1] Notes have been paid in full. Capitalized terms used but not defined
herein are defined in Article I of the Indenture, which also contains rules as
to construction that shall be applicable herein.
The Issuer will pay interest on this Note at the rate per
annum shown above on each Distribution Date until the principal of this Note is
paid or made available for payment, on
<PAGE>
the principal amount of this Note outstanding on the preceding Distribution Date
(after giving effect to all payments of principal made on the preceding
Distribution Date), subject to certain limitations contained in the last
sentence of Section 3.01 of the Indenture. Interest on this Note will accrue for
each Distribution Date from the sixth day of the month preceding the month of
such Distribution Date (in the case of the first Distribution Date, from the
Closing Date) to and including the fifth day of the month of such Distribution
Date. Interest will be computed on the basis of a 360-day year of twelve 30-day
months. Such principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.
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. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
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 whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: WORLD OMNI AUTO RECEIVABLES TRUST [____]-[__]
by: ___________________________________,
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement,
by: ___________________________________
Authorized Signatory
-2-
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-
mentioned Indenture.
Date: ____________________________, not in its
individual capacity but solely as Indenture
Trustee,
by: ___________________________________
Authorized Signatory
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class [A-2] ______% Asset Backed Notes(, Series
[____]-[__]) (herein called the "Class [A-2] Notes"), all issued 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 Class [A-2] Notes are subject to all terms of the Indenture.
The Class [A-1] Notes, the Class [A-2] Notes, the Class [A-3]
Notes and the Class [A-4] Notes (collectively, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class [A-2] Notes will be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the sixth day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing [____________], [____].
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the Class [A-2] Final Scheduled Distribution
Date. Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Holders of
Notes representing not less than a majority of the Outstanding Amount of the
Notes have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the Class
[A-2] Notes shall be made pro rata to the Class [A-2] Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by check mailed to the
Person whose name appears as the Registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date, except that with respect to Notes registered on the Record Date in
the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such
-3-
<PAGE>
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment. Any reduction in the principal amount of this 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 this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Distribution Date, then the Indenture Trustee, in the name of and
on behalf of the Issuer, will notify the Person who was the Registered Holder
hereof as of the Record Date preceding such Distribution Date by notice mailed
or transmitted by facsimile prior to such Distribution Date, and the amount then
due and payable shall be payable only upon presentation and surrender of this
Note at the Indenture Trustee's principal Corporate Trust Office or at the
office of the Indenture Trustee's agent appointed for such purposes located in
(The City of New York).
The Issuer shall pay interest on overdue installments of
interest at the Class [A-2] Interest Rate to the extent lawful.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("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, and thereupon one or more new Notes
of authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) 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 or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed 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.
-4-
<PAGE>
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Basic Documents.
(Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that such Noteholder or Note Owner
(in their capacities as such) shall not (i) have any rights in or claims on the
collateral or trust estate (or any asset thereof) (collectively, "Unavailable
Collateral") that the Issuer has granted in order to secure any additional
series of notes issued or to be issued by the Issuer or (ii) exercise or attempt
to exercise any remedies to realize upon such Unavailable Collateral.)
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer secured by the Trust Estate. Each Noteholder, by acceptance of a Note
(and each Note Owner by acceptance of a beneficial interest in a Note), agrees
to treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the Outstanding Amount of the Notes,
on behalf of the Holders of all the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
-5-
<PAGE>
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
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.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of
_________________________________ in its individual capacity,
_________________________________ in its individual capacity, any owner of a
beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The Holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Holder shall have no claim against
any of the foregoing for any deficiency, loss or claim therefrom; provided,
however, that nothing contained herein shall be taken to prevent recourse to,
and enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
-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:
_____________________________________________*/
- ------------------------
*/ NOTICE: 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
whatever. Such signature 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.
-7-
<PAGE>
EXHIBIT A-3
(FORM OF CLASS [A-3] NOTE)
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.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS 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.
<PAGE>
REGISTERED $____________
No. R-__ CUSIP NO. _____________
WORLD OMNI AUTO RECEIVABLES TRUST [____]-[__]
CLASS [A-3] ______% ASSET BACKED NOTES
(SERIES [____]-[__])
World Omni Auto Receivables Trust 1999-_, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to Cede & Co.,
or registered assigns, the principal sum of DOLLARS payable on each Distribution
Date in an amount equal to the result obtained by multiplying (i) a fraction the
numerator of which is $____________ and the denominator of which is
$________________ by (ii) the aggregate amount, if any, payable from the Note
Distribution Account in respect of principal on the Class [A-3] Notes pursuant
to Section 3.01 of the Indenture dated as of ______________, 1999 (the
"Indenture"), between the Issuer and _________________________________, a
national banking association, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the __________________ Distribution Date (the "Class [A-3]
Final Scheduled Distribution Date"). No payments of principal of the Class [A-3]
Notes shall be made until the Class [A-1] Notes and the Class [A-2] Notes have
been paid in full. Capitalized terms used but not defined herein are defined in
Article I of the Indenture, which also contains rules as to construction that
shall be applicable herein.
The Issuer will pay interest on this Note at the rate per
annum shown above on each Distribution Date until the principal of this Note is
paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in the last sentence of Section 3.01 of the
Indenture. Interest on this Note will accrue for each Distribution Date from the
sixth day of the month preceding the month of such Distribution Date (in the
case of the first Distribution Date, from the Closing Date) to and including the
fifth day of the month of such Distribution Date. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
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. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
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.
-2-
<PAGE>
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: WORLD OMNI AUTO RECEIVABLES TRUST [____]-[__]
by: _________________________________________,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement,
by: ___________________________________
Authorized Signatory
-3-
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-
mentioned Indenture.
Date: ___________________________, not in its
individual capacity but solely as
Indenture Trustee,
by: ___________________________________
Authorized Signatory
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class [A-3] _______% Asset Backed Notes(, Series
[____]-[__]) (herein called the "Class [A-3] Notes"), all issued 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 Class [A-3] Notes are subject to all terms of the Indenture.
The Class [A-1] Notes, the Class [A-2] Notes, the Class [A-3]
Notes and the Class [A-4] Notes (collectively, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class [A-3] Notes will be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the sixth day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing [______________],[____].
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the Class [A-3] Final Scheduled Distribution
Date. Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Holders of
Notes representing not less than a majority of the Outstanding Amount of the
Notes have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the Class
[A-3] Notes shall be made pro rata to the Class [A-3] Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by check mailed to the
Person whose name appears as the Registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date, except that with respect to Notes registered on the Record Date in
the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such
-4-
<PAGE>
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment. Any reduction in the principal amount of this 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 this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Distribution Date, then the Indenture Trustee, in the name of and
on behalf of the Issuer, will notify the Person who was the Registered Holder
hereof as of the Record Date preceding such Distribution Date by notice mailed
or transmitted by facsimile prior to such Distribution Date, and the amount then
due and payable shall be payable only upon presentation and surrender of this
Note at the Indenture Trustee's principal Corporate Trust Office or at the
office of the Indenture Trustee's agent appointed for such purposes located in
(The City of New York).
The Issuer shall pay interest on overdue installments of
interest at the Class [A-3] Interest Rate to the extent lawful.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("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, and thereupon one or more new Notes
of authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) 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 or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed 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.
-5-
<PAGE>
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Basic Documents.
(Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that such Noteholder or Note Owner
(in their capacities as such) shall not (i) have any rights in or claims on the
collateral or trust estate (or any asset thereof) (collectively, "Unavailable
Collateral") that the Issuer has granted in order to secure any additional
series of notes issued or to be issued by the Issuer or (ii) exercise or attempt
to exercise any remedies to realize upon such Unavailable Collateral.)
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer secured by the Trust Estate. Each Noteholder, by acceptance of a Note
(and each Note Owner by acceptance of a beneficial interest in a Note), agrees
to treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the Outstanding Amount of the Notes,
on behalf of the Holders of all the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
-6-
<PAGE>
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
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.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of
_________________________________ in its individual capacity,
_________________________________ in its individual capacity, any owner of a
beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The Holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Holder shall have no claim against
any of the foregoing for any deficiency, loss or claim therefrom; provided,
however, that nothing contained herein shall be taken to prevent recourse to,
and enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
-7-
<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:
___________________________________________*/
- ------------------------
*/ NOTICE: 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
whatever. Such signature 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.
-8-
<PAGE>
EXHIBIT A-4
(FORM OF CLASS [A-4] NOTE)
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.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS 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.
<PAGE>
REGISTERED $____________
No. R-__ CUSIP NO. ___________
WORLD OMNI AUTO RECEIVABLES TRUST [____]-[__]
CLASS [A-4] ______% ASSET BACKED NOTES
(SERIES [____]-[__])
World Omni Auto Receivables Trust[____]-[__], a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to Cede & Co.,
or registered assigns, the principal sum of DOLLARS payable on each Distribution
Date in an amount equal to the result obtained by multiplying (i) a fraction the
numerator of which is $____________ and the denominator of which is
$_________________ by (ii) the aggregate amount, if any, payable from the Note
Distribution Account in respect of principal on the Class [A-4] Notes pursuant
to Section 3.01 of the Indenture dated as of [______________], [____] (the
"Indenture"), between the Issuer and _________________________________, a
national banking association, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earlier of the ______________ Distribution Date (the
"Class [A-4] Final Scheduled Distribution Date") or the Redemption Date, if any,
pursuant to Section 10.01 of the Indenture. No payments of principal of the
Class [A-4] Notes shall be made until the Class [A-1] Notes, the Class [A-2]
Notes and the Class [A-3] Notes have been paid in full. Capitalized terms used
but not defined herein are defined in Article I of the Indenture, which also
contains rules as to construction that shall be applicable herein.
The Issuer will pay interest on this Note at the rate per
annum shown above on each Distribution Date until the principal of this Note is
paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in the last sentence of Section 3.01 of the
Indenture. Interest on this Note will accrue for each Distribution Date from the
sixth day of the month preceding the month of such Distribution Date (in the
case of the first Distribution Date, from the Closing Date) to and including the
fifth day of the month of such Distribution Date. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
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. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
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.
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<PAGE>
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: WORLD OMNI AUTO RECEIVABLES TRUST [____]-[__],
by: _________________________________,
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement,
by: ___________________________________
Authorized Signatory
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<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-
mentioned Indenture.
Date: ________________________________, not in
its individual capacity but solely as
Indenture Trustee,
by: ___________________________________
Authorized Signatory
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class [A-4] _______% Asset Backed Notes(, Series
[____]-[__]) (herein called the "Class [A-4] Notes"), all issued 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 Class [A-4] Notes are subject to all terms of the Indenture.
The Class [A-1] Notes, the Class [A-2] Notes, the Class [A-3]
Notes and the Class [A-4] Notes (collectively, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class [A-4] Notes will be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the sixth day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing [______________],[____].
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the Class [A-4] Final Scheduled
Distribution Date or the Redemption Date, if any, pursuant to Section 10.01 of
the Indenture. Notwithstanding the foregoing, the entire unpaid principal amount
of the Notes shall be due and payable on the date on which an Event of Default
shall have occurred and be continuing and the Indenture Trustee or the Holders
of Notes representing not less than a majority of the Outstanding Amount of the
Notes have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the Class
[A-4] Notes shall be made pro rata to the Class [A-4] Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by check mailed to the
Person whose name appears as the Registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date, except that with respect to Notes registered on the Record Date in
the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will
<PAGE>
be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this 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 this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Registered Holder hereof as of the Record Date preceding such
Distribution Date by notice mailed or transmitted by facsimile prior to such
Distribution Date, and the amount then due and payable shall be payable only
upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in (The City of New York).
The Issuer shall pay interest on overdue installments of
interest at the Class [A-4] Interest Rate to the extent lawful.
As provided in the Indenture, the Class [A-4] Notes may be
redeemed in whole but not in part at the option of the Servicer on any
Distribution Date on and after the date on which the Pool Balance is less than
or equal to 10% of the Original Pool Balance.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("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, and thereupon one or more new Notes
of authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) 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 or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
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<PAGE>
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed 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.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Basic Documents.
(Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that such Noteholder or Note Owner
(in their capacities as such) shall not (i) have any rights in or claims on the
collateral or trust estate (or any asset thereof) (collectively, "Unavailable
Collateral") that the Issuer has granted in order to secure any additional
series of notes issued or to be issued by the Issuer or (ii) exercise or attempt
to exercise any remedies to realize upon such Unavailable Collateral.)
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer secured by the Trust Estate. Each Noteholder, by acceptance of a Note
(and each Note Owner by acceptance of a beneficial interest in a Note), agrees
to treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the Outstanding Amount of the Notes,
on behalf of the Holders of all the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
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<PAGE>
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
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.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of
_________________________________ in its individual capacity,
_________________________________ in its individual capacity, any owner of a
beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The Holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Holder shall have no claim against
any of the foregoing for any deficiency, loss or claim therefrom; provided,
however, that nothing contained herein shall be taken to prevent recourse to,
and enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
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.
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<PAGE>
Dated: __________________________________
_________________________________ */ Signature Guaranteed:
_________________________________________*/
------------------------
*/ NOTICE: 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
whatever. Such signature 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.
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<PAGE>
EXHIBIT B
(Form of Note Depository Agreement)
Letter of Representations
(To be Completed by Issuer and Trustee)
---------------------------------
(Name of Issuer)
---------------------------------
(Name of Trustee)
(Date)
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: _________________________________________
_________________________________________
_________________________________________
(Issue Description)
Ladies and Gentlemen:
This letter sets forth our understanding with respect to
certain matters relating to the above-referenced issue (the "Securities").
Trustee will act as trustee with respect to the Securities pursuant to a trust
indenture dated [____________________], [____] (the "Document").
__________________ _____________________________________________________ (the
"Underwriter") is distributing the Securities through The Depository Trust
Company ("DTC"). To induce DTC to accept the Securities as eligible for deposit
at DTC, and to act in accordance with its Rules with respect to the Securities,
Issuer and Trustee make the following representations to DTC:
. Prior to closing on the Securities on
[_____________________], [____], there shall be deposited with DTC one Security
certificate registered in the name of DTC's nominee, Cede & Co., for each stated
maturity of the Securities in the face amounts set forth on Schedule A hereto,
the total of which represents 100% of the principal amount of such Securities.
If, however, the aggregate principal amount of any maturity exceeds $200
million, one certificate will be issued with respect to each $200 million of
principal amount and an additional certificate will be issued with respect to
any remaining principal amount. Each Security certificate shall bear the
following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to Issuer or its agent for registration of transfer, exchange,
or payment, and any certificate issued is registered in
<PAGE>
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.
2. In the event of any solicitation of consents from or
voting by holders of the Securities, Issuer or Trustee shall establish a record
date for such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall, to the extent possible, send notice of such
record date to DTC not less than 15 calendar days in advance of such record
date. Notices to DTC pursuant to this Paragraph by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-6896 or (212) 709-6897, and receipt
of such notices shall be confirmed by telephoning (212) 709-6870. Notices to DTC
pursuant to this Paragraph by mail or by any other means shall be sent to DTC's
Reorganization Department as indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer
or Trustee shall send a notice to DTC specifying: (a) the amount of the
redemption or refunding; (b) in the case of a refunding, the maturity date(s)
established under the refunding; and (c) the date such notice is to be mailed to
Security holders or published (the "Publication Date"). Such notice shall be
sent to DTC by a secure means (e.g., legible telecopy, registered or certified
mail, overnight delivery) in a timely manner designed to assure that such notice
is in DTC's possession no later than the close of business on the business day
before or, if possible, two business days before the Publication Date. Issuer or
Trustee shall forward such notice either in a separate secure transmission for
each CUSIP number or in a secure transmission for multiple CUSIP numbers (if
applicable) which includes a manifest or list of each CUSIP number submitted in
that transmission. (The party sending such notice shall have a method to verify
subsequently the use of such means and the timeliness of such notice.) The
Publication Date shall be not less than 30 days nor more than 60 days prior to
the redemption date or, in the case of an advance refunding, the date that the
proceeds are deposited in escrow. Notices to DTC pursuant to this Paragraph by
telecopy shall be sent to DTC's Call Notification Department at (516) 227-4039
or (516) 227-4190. If the party sending the notice does not receive a telecopy
receipt from DTC confirming that the notice has been received, such party shall
telephone (516) 227-4070. Notices to DTC pursuant to this Paragraph by mail or
by any other means shall be sent to:
Manager; Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
4. In the event of an invitation to tender the
Securities (including mandatory tenders, exchanges, and capital changes), notice
by Issuer or Trustee to Security holders specifying the terms of the tender and
the Publication Date of such notice shall be sent to DTC by a secure means in
the manner set forth in the preceding Paragraph. Notices to DTC pursuant to this
Paragraph and notices of other corporate actions by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094, and receipt
of such notices
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<PAGE>
shall be confirmed by telephoning (212) 709-6884. Notices to DTC pursuant to the
above by mail or by any other means shall be sent to:
Manager; Reorganization Departmen
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
5. All notices and payment advices sent to DTC shall
contain the CUSIP number of the Securities.
6. Trustee shall send DTC written notice with respect to
the dollar amount per $1,000 original face value (or other minimum authorized
denomination if less than $1,000 face value) payable on each payment date
allocated as to the interest and principal portions thereof preferably 5, but
not less than 2, business days prior to such payment date. Such notices, which
shall also contain the current pool factor, and special adjustments to
principal/interest rates (e.g., adjustments due to deferred interest or
shortfall), and Trustee contact's name and telephone number, shall be sent by
telecopy to DTC's Dividend Department at (212) 709-1723, or if by mail or by any
other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
7. (NOTE: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND
CROSS OUT THE OTHER:) (The interest accrual period is record date to record
date.) (The interest accrual period is payment date to payment date.)
8. Trustee must provide DTC, no later than noon (Eastern
Time) on the payment date, CUSIP numbers for each issue for which payment is
being sent, as well as the dollar amount of the payment for each issue.
Notification of payment details should be sent using automated communications.
9. Interest payments and principal payments that are part of periodic
principal-and-interest payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns in same-day funds, no later than 2:30 p.m.
(Eastern Time) on each payment date (in accordance with existing arrangements
between Issuer or Trustee and DTC). Absent any other arrangements between Issuer
or Trustee and DTC, such funds shall be wired as follows:
[_________________]
Issuer or Trustee shall provide interest payment information to a standard
announcement service subscribed to by DTC. In the unlikely event that no such
service exists, Issuer or Trustee shall provide interest payment information
directly to DTC in advance of the interest payment date as soon as the
information is available. This information should be conveyed directly to DTC
electronically. If electronic transmission is not available, absent any other
arrangements between
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<PAGE>
Trustee and DTC, such information should be sent by telecopy to DTC's Dividend
Department at (212) 709-1723 or (212) 709-1686, and receipt of such notices
shall be confirmed by telephoning (212) 709-1270. Notices to DTC pursuant to the
above by mail or by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
10. DTC shall receive maturity and redemption payments
allocated with respect to each CUSIP number on the payable date in same-day
funds by 2:30 p.m. (Eastern Time). Absent any other arrangements between Trustee
and DTC, such payments shall be wired as follows:
[_________________]
in accordance with existing SDFS payment procedures in the manner set forth in
DTC's SDFS Paying Agent Operating Procedures, a copy of which has previously
been furnished to Trustee.
11. DTC shall receive all reorganization payments and
CUSIP-level detail resulting from corporate actions (such as tender offers,
remarketings, or mergers) on the first payable date in same-day funds by 2:30
p.m. (Eastern Time). Absent any other arrangements between Trustee and DTC, such
payments shall be wired as follows:
[_________________]
12. DTC may direct Issuer or Trustee to use any other
number or address as the number or address to which notices or payments of
interest or principal may be sent.
13. In the event of a redemption, acceleration, or any
other similar transaction (e.g., tender made and accepted in response to
Issuer's or Trustee's invitation) necessitating a reduction in the aggregate
principal amount of Securities outstanding or an advance refunding of part of
the Securities outstanding, DTC, in its discretion: (a) may request Issuer or
Trustee to issue and authenticate a new Security certificate; or (b) may make an
appropriate notation on the Security certificate indicating the date and amount
of such reduction in principal except in the case of final maturity, in which
case the certificate will be presented to Issuer or Trustee prior to payment, if
required.
14. In the event that Issuer determines that beneficial
owners of Securities shall be able to obtain certificated Securities, Issuer or
Trustee shall notify DTC of the availability of certificates. In such event,
Issuer or Trustee shall issue, transfer, and exchange certificates in
appropriate amounts, as required by DTC and others.
15. DTC may discontinue providing its services as
securities depository with respect to the Securities at any time by giving
reasonable notice to Issuer or Trustee (at which time DTC will confirm with
Issuer or Trustee the aggregate principal amount of Securities
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<PAGE>
outstanding). Under such circumstances, at DTC's request Issuer and Trustee
shall cooperate fully with DTC by taking appropriate action to make available
one or more separate certificates evidencing Securities to any DTC Participant
having Securities credited to its DTC accounts.
16. Issuer: (a) understands that DTC has no obligation
to, and will not, communicate to its Participants or to any person having an
interest in the Securities any information contained in the Security
certificate(s); and (b) acknowledges that neither DTC's Participants nor any
person having an interest in the Securities shall be deemed to have notice of
the provisions of the Security certificates by virtue of submission of such
certificate(s) to DTC.
17. Nothing herein shall be deemed to require Trustee to
advance funds on behalf of Issuer.
Notes:
A. If there is a Trustee (as defined in this Letter of Representations), Trustee
as well as Issuer must sign this Letter. If there is no Trustee, in signing this
Letter Issuer itself undertakes to perform all of the obligations set forth
herein.
B. Schedule B contains statements that DTC believes accurately describe DTC, the
method of effecting book-entry transfers of securities distributed through DTC,
and certain related matters.
Very truly yours,
__________________________________
(Issuer)
By: ______________________________
(Authorized Officer's Signature)
__________________________________
(Trustee)
By: ______________________________
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
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<PAGE>
By: _____________________________
cc: Underwriter
Underwriter's Counsel
-6-
<PAGE>
SCHEDULE A
______________________________________
______________________________________
(Describe Issue)
CUSIP Principal Amount Maturity Date Interest Rate
- ---------------- ---------------------- --------------- ---------------
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<PAGE>
SCHEDULE B
SAMPLE OFFICIAL STATEMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(PREPARED BY DTC--BRACKETED MATERIAL MAY BE APPLICABLE ONLY TO
CERTAIN ISSUES)
1. The Depository Trust Company ("DTC"), New York, NY,
will act as securities depository for the securities (the "Securities"). The
Securities will be issued as fully-registered securities registered in the name
of Cede & Co. (DTC's partnership nominee). One fully-registered Security
certificate will be issued for (each issue of the Securities, (each) in the
aggregate principal amount of such issue, and will be deposited with DTC. (If,
however, the aggregate principal amount of (any) issue exceeds $200 million, one
certificate will be issued with respect to each $200 million of principal amount
and an additional certificate will be issued with respect to any remaining
principal amount of such issue.)
2. 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 the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants"). The
Rules applicable to DTC and its Participants are on file with the Securities and
Exchange Commission.
3. Purchases of Securities under the DTC system must be
made by or through Direct Participants, which will receive a credit for the
Securities on DTC's records. The ownership interest of each actual purchaser of
each Security ("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Securities are to be accomplished by entries made on
the books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in
Securities, except in the event that use of the book-entry system for the
Securities is discontinued.
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<PAGE>
4. To facilitate subsequent transfers, all Securities
deposited by Participants with DTC are registered in the name of DTC's
partnership nominee, Cede & Co. The deposit of Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's
records reflect only the identity of the Direct Participants to whose accounts
such Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers. 5. Conveyance of notices and other communications by
DTC to Direct Participants, by Direct Participants to Indirect Participants, and
by Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
(6. Redemption notices shall be sent to Cede & Co. If
less than all of the Securities within an issue are being redeemed, DTC's
practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.)
7. Neither DTC nor Cede & Co. will consent or vote with
respect to Securities. Under its usual procedures, DTC mails an Omnibus Proxy to
the Issuer as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
8. Principal and interest payments on the Securities
will be made to DTC. DTC's practice is to credit Direct Participants' accounts
on payable date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive payment on
payable date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC,
Trustee, or Issuer, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of principal and interest to DTC is the
responsibility of the Issuer or Trustee, disbursement of such payments to Direct
Participants shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
(9. A Beneficial Owner shall give notice to elect to have
its Securities purchased or tendered, through its Participant, to Trustee (or
Tender/Remarketing Agent), and shall effect delivery of such Securities by
causing the Direct Participant to transfer the Participant's interest in the
Securities, on DTC's records, to Trustee (or Tender/Remarketing Agent). The
requirement for physical delivery of Securities in connection with an optional
tender or a mandatory purchase will be deemed satisfied when the ownership
rights in the Securities are transferred by Direct Participants on DTC's records
and followed by a book-entry credit of tendered Securities to Trustee (or
Tender/Remarketing Agent's) DTC account.)
10. DTC may discontinue providing its services as
securities depository with respect to the Securities at any time by giving
reasonable notice to Issuer or Agent. Under such circumstances, in the event
that a successor securities depository is not obtained, Security certificates
are required to be printed and delivered.
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<PAGE>
11. The Issuer may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor securities
depository). In that event, Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Issuer believes to be reliable, but Issuer
takes no responsibility for the accuracy thereof.
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================================================================================
EXHIBIT 4.3
[FORM OF POOLING AND SERVICING AGREEMENT]
among
WORLD OMNI AUTO RECEIVABLES LLC,
as Seller
WORLD OMNI FINANCIAL CORP.
as Servicer,
and
[____________________]
as Trustee
on behalf of the Certificateholders
Dated as of [__________]
WORLD OMNI AUTO RECEIVABLES TRUST ____-_
[___]% Asset Backed Certificates, Class [A]
[___]% Asset Backed Certificates, Class [B]
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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ARTICLE I
SPECIAL DEFINITIONS AND TERMS
<S> <C>
Section 1.01 Special Definitions and Terms.................................................................1
ARTICLE II
ESTABLISHMENT OF TRUST
Section 2.01 Creation of Trust.............................................................................5
Section 2.02 Acceptance by Trustee.........................................................................5
ARTICLE III
CONVEYANCE OF RECEIVABLES
Section 3.01 Conveyance of Initial Standard Receivables....................................................5
Section 3.02 [Conveyance of Subsequent Standard Receivables................................................6
ARTICLE IV
INCORPORATION OF STANDARD TERMS AND CONDITIONS
Section 4.01 Incorporation of Standard Terms and Conditions of Agreement...................................9
ARTICLE V
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE SELLER
Section 5.01 Additional Representations and Warranties of the Seller......................................10
ARTICLE VI
ADDITIONAL PROVISIONS RELATING TO SERVICER
Section 6.01 World Omni Financial Corp....................................................................10
Section 6.02 Additional Covenant of the Servicer..........................................................10
</TABLE>
-i-
<PAGE>
SCHEDULE A - Schedule of Receivables
SCHEDULE B - Location of Receivable Files
SCHEDULE C - Schedule of Eligible Investment Receivables
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<PAGE>
POOLING AND SERVICING AGREEMENT dated as of [__________],
among WORLD OMNI FINANCIAL CORP., a Florida corporation, as seller (the
"Seller") and servicer (the "Servicer"), and [____________________], a
[____________________] banking corporation, as trustee (the "Trustee").
WHEREAS, the Seller owns or will acquire certain receivables
arising in connection with motor vehicle retail installment sale contracts (the
"Contracts") generated by World Omni Financial Corp. in the ordinary course of
its business; and
WHEREAS, the Seller, the Servicer and the Trustee wish to set
forth the terms and conditions pursuant to which the Trust (as hereinafter
defined) will acquire the Contracts from the Seller, and the Servicer will
service the Contracts on behalf of the Trust;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the Seller, the Servicer and the
Trustee agree as follows:
ARTICLE I
SPECIAL DEFINITIONS AND TERMS
Section 1.01 Special Definitions and Terms. Capitalized terms
used and not defined herein have the meanings assigned thereto in the Standard
Terms and Conditions of Agreement. Whenever used in this Agreement and the
Standard Terms and Conditions of Agreement, the following words and phrases
shall have the following meanings:
"Agency Agreement" means the agreement dated as of the date
hereof among the Seller, the Servicer, the Trustee and the Agent.
"Agent" means [ ], or a successor thereto.
"Agreement" means this Pooling and Servicing Agreement,
including the Standard Terms and Conditions of Agreement of World Omni Auto
Receivables Trusts, dated as of [ ], in the form attached hereto.
"Certificates" means the Class [A] Certificates and the Class
[B] Certificates.
"Class [A] Certificate" means a [ ]% Asset Backed Certificate,
Class [A], evidencing a beneficial interest in the Trust, substantially in the
form of Exhibit A to the Standard Terms and Conditions of Agreement.
"Class [A] Pass-Through Rate" means [_____]%.
"Class [A] Percentage" means [_____]%.
"Class [A] Prepayment Premium" means an amount equal to the
excess, if any, discounted as described below, of (i) the amount of interest
that would accrue on the Pre-Funded
<PAGE>
Percentage with respect to the Class [A] Certificates of any remaining
Pre-Funded Amount (the "Class [A] Prepayment Amount") at the Class [A]
Pass-Through Rate during the period commencing on and including the Distribution
Date on which such Class [A] Prepayment Amount is required to be deposited in
the Distribution Account pursuant to Section 14.08(b) to but excluding
[__________], over (ii) the amount of interest that would have accrued on such
Class [A] Prepayment Amount over the same period at a per annum rate of interest
equal to the bond equivalent yield to maturity on the Determination Date
preceding such Distribution Date on the [ ]. Such excess shall be discounted on
a monthly basis to present value to such Distribution Date at the yield
described in clause (ii) above.
"Class [B] Certificate" means a [ ]% Asset Backed Certificate,
Class [B], evidencing a beneficial interest in the Trust, substantially in the
form of Exhibit B to the Standard Terms and Conditions of Agreement.
"Class [B] Pass-Through Rate" means [_____]%.
"Class [B] Percentage" means [_____]%.
"Class [B] Prepayment Premium" means an amount equal to the
excess, if any, discounted as described below, of (i) the amount of interest
that would accrue on the Pre-Funded Percentage with respect to the Class [B]
Certificates of any remaining Pre-Funded Amount (the "Class [B] Prepayment
Amount") at the Class [B] Pass-Through Rate during the period commencing on and
including the Distribution Date on which such Class [B] Prepayment Amount is
required to be deposited in the Distribution Account pursuant to Section
14.08(b) to but excluding [__________], over (ii) the amount of interest that
would have accrued on such Class [B] Prepayment Amount over the same period at a
per annum rate of interest equal to the bond equivalent yield to maturity on the
Determination Date preceding such Distribution Date on the [____________]. Such
excess shall be discounted on a monthly basis to present value to such
Distribution Date at the yield described in clause (ii) above.
"Closing Date" means [______________________________________].
"Corporate Trust Office" means the principal corporate trust
office of the Trustee, which at the time of execution of this agreement is
[______________________________], Attention: [____________________].
"Depository Agreement" means the agreement dated
[____________________], among the Trustee, the Administrator, and The Depository
Trust Company, as the initial Clearing Agency, substantially in the form
attached as Exhibit C to the Standard Terms and Conditions of Agreement.
"Distribution Date" means, with respect to each Collection
Period, the [__________] day of the following calendar month or, if such day is
not a Business Day, the immediately following Business Day, commencing on
[__________].
"Final Scheduled Distribution Date" means
[____________________________].
"Final Scheduled Maturity Date" means
[_____________________________].
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<PAGE>
"Funding Period" means the period beginning on and including
the Closing Date and ending on the first to occur of (a) the Determination Date
on which the amount on deposit in the Pre-Funding Account (after giving effect
to any transfers therefrom in connection with the transfer of Subsequent
Receivables to the Trustee on such Determination Date) is less than or equal to
$[__________], (b) the date on which an Event of Default occurs, (c) the date on
which an Insolvency Event occurs with respect to the Seller or the Servicer, and
(d) the Determination Date with respect to the Distribution Date.
"Initial Certificate Balance" means $[__________].
"Initial Class [A] Balance" means $[__________].
"Initial Class [B] Balance" means $[__________].
"Initial Collection Period" means the period beginning on,
and including, [_________] to and including [_________].
"Initial Cutoff Date" means [____________] with respect to
Initial Receivables.
"Initial Receivable" means any Standard Receivable conveyed to
the Trustee hereunder on the Closing Date.
"Investment Earnings" means with respect to any Distribution
Date, the investment earnings (net of losses and investment expenses) on amounts
on deposit in the Trust Accounts to be deposited to the Distribution Account on
such Distribution Date pursuant to Section 14.01(b).
"Lien" means a security interest, lien, charge, pledge,
equity, or encumbrance of any kind, other than tax liens, mechanics' liens and
any liens that attach to the respective Receivable by operation of law as a
result of any act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable or Eligible
Investment Receivable, as applicable, liquidated by the Servicer through sale of
a Financed Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to a Liquidated
Receivable, the monies collected in respect thereof, from whatever source,
during the Collection Period in which such Receivable or Eligible Investment
Receivable, as applicable, became a Liquidated Receivable, net of the sum of any
amounts expended by the Servicer in connection with such liquidation, plus any
amounts required by law to be remitted to the Obligor.
"Moody's" means Moody's Investors Service, Inc., or its
successor.
"Obligor" on a Receivable means the purchaser or co-purchasers
of the Financed Vehicle and any other Person who owes payments under the
Receivable.
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<PAGE>
"Officers' Certificate" means a certificate signed by the (a)
chairman of the board, the president, any executive vice president or any vice
president and (b) any treasurer, assistant treasurer, secretary or assistant
secretary of the Seller or the Servicer, as appropriate.
"Opinion of Counsel" means one or more written opinions of
counsel, who may be an employee of or counsel to the Seller or the Servicer,
which counsel shall be acceptable to the Trustee or Rating Agencies, as
applicable.
"Original Pool Balance" means the sum, as of any date, of the
Pool Balance as of the Initial Cutoff Date, plus the aggregate Principal Balance
of the Subsequent Receivables, if any, sold to the Trust, as of their respective
Cutoff Dates.
"Outstanding Simple Interest Advances" on the Simple Interest
Receivables means the sum, as of the close of business on the last day of a
Collection Period, of all Simple Interest Advances, reduced as provided in
Section 14.04(b).
"Person" means any individual, corporation, estate,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof
"Physical Property" has the meaning assigned to such term in
the definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last
day of a Collection Period, the aggregate Principal Balance of the Receivables
as of such date (excluding Purchased Receivables and Liquidated Receivables).
"Pool Factor" means, as of the close of business on the last
day of a Collection Period, a seven-digit decimal figure equal to the Pool
Balance divided by the Original Pool Balance. The Pool Factor will be 1.0000000
as of the Initial Cutoff Date; thereafter, the Pool Factor will decline to
reflect reductions in the Pool Balance.
"Pre-Funded Amount" means, with respect to any Distribution
Date, the amount on deposit in the Pre-Funding Account, which initially shall be
$[__________].
"Reserve Account Initial Deposit" means, with respect to the
Closing Date and taking into account any transfer of Subsequent Receivables on
such date, an amount equal to the Specified Reserve Account Balance on the
Closing Date (which is equal to $[__________]) and, with respect to each
Subsequent Transfer Date after the Closing Date, an amount equal to [_____]% of
the Principal Balance of the Subsequent Receivables transferred to the Trust on
such Subsequent Transfer Date.
"Servicing Rate" means [_____]% per annum.
"Specified Reserve Account Balance" means [STATE FORMULA].
-4-
<PAGE>
"Standard Terms and Conditions of Agreement" means the
Standard Terms and Conditions of Agreement of World Omni Auto Receivables
Trusts, dated as of [__________], in the form attached hereto.
"Subsequent Receivable" means any Subsequent Standard
Receivable conveyed to the Trustee hereunder on a Subsequent Transfer Date
conveyed to the Agent on a Subsequent Transfer Date pursuant to the Agency
Agreement.
"Trustee" means [____________________], a [__________] banking
corporation, its successors in interest and any successor Trustee hereunder.
ARTICLE II
ESTABLISHMENT OF TRUST
Section 2.01 Creation of Trust. Upon the execution of this
Agreement by the parties hereto, there is hereby created a separate trust, which
shall be known as Premier Auto Trust (the "Trust"). The Trust shall be
administered pursuant to the provisions of this Agreement for the benefit of the
Certificateholders.
Section 2.02 Acceptance by Trustee. The Trustee hereby accepts
all consideration conveyed by the Seller pursuant to Section 3.01 and declares
that it will hold such consideration upon the trusts set forth herein for the
benefit of the Certificateholders, subject to the terms and provisions of this
Agreement.
ARTICLE III
CONVEYANCE OF RECEIVABLES
Section 3.01 Conveyance of Initial Standard Receivables. In
consideration of the Trustee's delivery on the Closing Date to or upon the order
of the Seller of Class [A] Certificates in an initial aggregate principal amount
equal to the Initial Class [A] Balance and Class [B] Certificates in an initial
aggregate principal amount equal to the Initial Class [B] Balance, the Seller
does hereby sell, transfer, assign, set over and otherwise convey to the Trustee
for the benefit of the Certificateholders, without recourse (subject to the
obligations set forth herein), all right, title and interest of the Seller in
and to:
(1) the Initial Standard Receivables, and all moneys due
thereon on or after [__________];
(2) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Initial Standard Receivables and any other interest of
the Seller in such Financed Vehicles;
(3) any proceeds with respect to the Initial Standard
Receivables from claims on any physical damage, credit life or disability
insurance policies covering Financed Vehicles or Obligors;
-5-
<PAGE>
(4) any proceeds from recourse to Dealers on Initial Standard
Receivables with respect to which the Servicer has determined in accordance with
its customary servicing procedures that eventual payment in full is unlikely;
(5) any Financed Vehicle that shall have secured any such
Initial Standard Receivable and shall have been acquired by or on behalf of the
Seller, the Servicer or the Trust; and
(6) the proceeds of any and all of the foregoing.
Section 3.02 [Conveyance of Subsequent Standard Receivables.
(a) Subject to the conditions set forth in paragraph (b) below, in consideration
of the Trustee's delivery on the related Subsequent Transfer Date to or upon the
order of the Seller of the amount described in Section 14.08(a), the Seller does
hereby sell, transfer, assign, set over and otherwise convey to the Trustee, for
the benefit of the Certificateholders, without recourse (subject to the
obligations set forth herein), all right, title and interest of the Seller in
and to:
(1) the Subsequent Standard Receivables listed on Schedule A
to the related Subsequent Transfer Assignment, and all moneys due thereon on or
after the related Subsequent Cutoff Date;
(2) the security interests in the Financed Vehicles granted by
Obligors pursuant to such Subsequent Standard Receivables and any other interest
of the Seller in such Financed Vehicles;
(3) any proceeds with respect to such Subsequent Standard
Receivables from claims on any physical damage, credit life or disability
insurance policies covering the related Financed Vehicles or Obligors;
(4) any proceeds from recourse to Dealers determined in
accordance with its customary servicing procedures that eventual payment in full
is unlikely;
(5) any Financed Vehicle that shall have secured any such
Subsequent Standard Receivable and shall have been acquired by or on behalf of
the Seller, the Servicer or the Trust; and
(6) the proceeds of any and all of the foregoing.
(b) (1) The Seller shall transfer to the Trustee, for the
benefit of the Certificateholders, the Subsequent Standard
Receivables and the other property and rights related
thereto described in paragraph (a) above only upon the
satisfaction of each of the following conditions precedent
on or prior to the related Subsequent Transfer Date:
(i) the Seller shall have delivered to the Trustee a duly
executed Subsequent Transfer Assignment, which shall
include supplements to Schedule A listing the
Subsequent Receivables;
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<PAGE>
(ii) the Seller shall have deposited in the Collection
Account, to the extent required by Section 14.02, all
collections in respect of the Subsequent Receivables;
(iii) as of each Subsequent Transfer Date, (1) the Seller
shall not be insolvent and shall not become insolvent
as a result of the transfer of Subsequent Receivables
on such Subsequent Transfer Date, (2) the Seller
shall not intend to incur or believe that it shall
incur debts that would be beyond its ability to pay
as such debts mature, (3) such transfer shall not
have been made with actual intent to hinder, delay or
defraud any Person and (4) the assets of the Seller
shall not constitute unreasonably small capital to
carry out its business as conducted;
(iv) the applicable Reserve Account Initial Deposit for
such Subsequent Transfer Date shall have been made
pursuant to Section 14.08(a);
(v) the Funding Period shall not have terminated;
(vi) the Subsequent Receivables transferred to the Trustee
pursuant hereto and to the Agent pursuant to the
Agency Agreement, including the Subsequent
Receivables to be so conveyed to the Trustee and the
Agent on such Subsequent Transfer Date, shall meet
the following criteria (based on the characteristics
of the Initial Receivables on the Initial Cutoff Date
and the Subsequent Receivables on the related
Subsequent Cutoff Dates): (1) not more than [_____]%
of the Principal Balances of the Receivables
transferred to the Trustee and the Agent, as
applicable, shall represent vehicles financed at the
Seller's used vehicle rates; and (2) the weighted
average APR of the Receivables transferred to the
Trustee and the Agent, as applicable, shall not be
less than [_____]%, unless, with the prior consent of
the Rating Agencies, the Seller increases the Reserve
Account Initial Deposit by the Additional Amount
solely relating thereto; and the weighted average
remaining term of the Receivables transferred to the
Trustee and the Agent, as applicable, including the
Subsequent Receivables to be conveyed to the Trustee
and the Agent on such Subsequent Transfer Date, shall
not be greater than [__________] months;
(vii) each of the representations and warranties made by
the Seller pursuant to Section 12.01 with respect to
the Subsequent Receivables shall be true and correct
as of the
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<PAGE>
related Subsequent Transfer Date, and the Seller
shall have performed all obligations to be performed
by it hereunder on or prior to such Subsequent
Transfer Date;
(viii) the Seller shall, at its own expense, on or prior to
the Subsequent Transfer Date indicate in its computer
files that the Subsequent Standard Receivables
identified in the Subsequent Transfer Assignment have
been sold to the Trustee pursuant to this Agreement;
(ix) the Seller shall have taken any action required to
maintain the first priority perfected ownership
interest of the Trustee in the Trust property;
(x) no selection procedures believed by the Seller to be
adverse to the interests of the Certificateholders
shall have been utilized in selecting the Subsequent
Receivables;
(xi) the addition of any such Subsequent Receivables shall
not result in a material adverse tax consequence to
the Trust or the Certificateholders; and
(xii) the Seller shall have delivered to the Trustee an
Officers' Certificate confirming the satisfaction of
each condition precedent specified in this paragraph
(b)(1).
(2) In addition, any such conveyance of Subsequent Standard
Receivables made on one or more Subsequent Transfer Dates occurring during any
Collection Period also will be subject to the satisfaction, on or before the
[_____] day of the month following the end of such Collection Period (or if such
[_____] day is not a Business Day, then on the next succeeding Business Day), of
the following conditions subsequent:
(i) the Seller shall have delivered to the Trustee and
the Rating Agencies a statement listing the aggregate
Principal Balance of the Subsequent Standard
Receivables so transferred to the Trustee transferred
to the Agent during the related Collection Period,
and any other information reasonably requested by any
of the foregoing with respect to such Subsequent
Standard Receivables;
(ii) each of the Rating Agencies shall have notified the
Seller in writing that, following the transfer of all
such Subsequent Standard Receivables to the Trustee
during the related Collection Period, the (Class [A])
Certificates continue to be rated in the highest
investment rating category by each such Rating
Agency;
-8-
<PAGE>
(iii) the Seller shall have delivered (1) to the Rating
Agencies an Opinion of Counsel with respect to the
transfer of such Subsequent Standard Receivables
substantially in the form of the Opinion of Counsel
delivered to the Rating Agencies on the Closing Date
and (2) to the Trustee the Opinion of Counsel
required by Section 21.02(i)(1);
(iv) [the Seller shall have delivered to the Trustee a
letter of a firm of independent certified public
accountants confirming that the conditions set forth
in Section were satisfied with respect to those
Subsequent Standard Receivables conveyed to the
Trustee on each Subsequent Transfer Date during the
related Collection Period, covering substantially the
same matters with respect to such Subsequent
Receivables as are set forth on Exhibit E to the
Standard Terms and Conditions of Agreement]; and
(v) the Seller shall have delivered to the Trustee an
Officers' Certificate confirming the satisfaction of
each condition specified in this paragraph (b)(2).
The Seller covenants that in the event any of the foregoing conditions
subsequent are not satisfied with respect to any Subsequent Standard Receivable
on the date required as specified above, the Seller will immediately repurchase
such Subsequent Standard Receivable from the Trustee, at a price equal to the
Purchase Amount thereof, in the manner specified in Section 14.05.
(c) The Seller covenants to transfer Subsequent Standard
Receivables to the Trustee pursuant to paragraph (a) above with an aggregate
Principal Balance equal to $[__________]. In the event that the Seller shall
fail to deliver and sell to the Trustee and/or the Agent any or all of such
Subsequent Receivables by the date on which the Funding Period ends and the
Pre-Funded Amount is greater than $[__________] on such date, the Seller shall
be obligated to deposit an amount equal to the Prepayment Premium into the
Certificate Distribution Account on the Distribution Date on which the Funding
Period ends (or, if the Funding Period does not end on a Distribution Date, on
the first Distribution Date following the end of the Funding Period); provided,
however, that the foregoing shall be the sole remedy of the Trustee, the Agent
or the Certificateholders with respect to a failure of the Seller to comply with
such covenant.]
ARTICLE IV
INCORPORATION OF STANDARD TERMS AND CONDITIONS
Section 4.01 Incorporation of Standard Terms and Conditions of
Agreement. This Pooling and Servicing Agreement does hereby incorporate by
reference the Standards Terms and Conditions of Agreement for World Omni Auto
Receivables Trusts dated as of (the "Standard Terms and Conditions of
Agreement"), in the form attached hereto.
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<PAGE>
ARTICLE V
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE SELLER
Section 5.01 Additional Representations and Warranties of the
Seller. The Seller makes the following representations and warranties on which
the Trustee relies in accepting the Standard Receivables in trust and executing
and authenticating the Certificates. Such representations and warranties speak
as of the execution and delivery of this Agreement and as of the Closing Date,
in the case of the Initial Receivables, and as of the applicable Subsequent
Transfer Date, in the case of the Subsequent Receivables, but shall survive the
sale, transfer and assignment of the Initial Standard Receivables and the
Subsequent Standard Receivables to the Trustee.
(a) Maturity of Receivables. Each Standard Receivable has a
final maturity date not later than [__________]; the weighted average remaining
term of the Initial Receivables is [__________] months as of the Initial Cutoff
Date.
(b) Financing. Approximately [_____]% of the aggregate
principal balance of the Initial Receivables, constituting [_____]% of the
number of Initial Receivables as of the Initial Cutoff Date, represent vehicles
financed at new vehicle rates; the remainder of the Initial Receivables
represent financing of used vehicles; approximately [_____]% of the aggregate
principal balance of the Initial Receivables represent financing of vehicles
manufactured or distributed by [__________]; 100% of the aggregate principal
balance of the Initial Receivables as of the Initial Cutoff Date represent
Simple Interest Receivables. The aggregate Principal Balance of the Initial
Receivables, as of the Initial Cutoff Date, is $[__________].
ARTICLE VI
ADDITIONAL PROVISIONS RELATING TO SERVICER
Section 6.01 World Omni Financial Corp. Not to Resign as
Servicer. Subject to the provisions of Section 17.03 of the Standard Terms and
Conditions of Agreement, World Omni Financial Corp. shall not resign from the
obligations and duties hereby imposed on it as Servicer under this Agreement
except upon determination that the performance of its duties under this
Agreement shall no longer be permissible under applicable law. Notice of any
such determination permitting the resignation of World Omni Financial Corp.
shall be communicated to the Trustee at the earliest practicable time (and, if
such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee concurrently with or
promptly after such notice. No such resignation shall become effective until the
Trustee or a successor Servicer shall have assumed the responsibilities and
obligations of World Omni Financial Corp. in accordance with Section 18.02 of
the Standard Terms and Conditions of Agreement.
Section 6.02 Additional Covenant of the Servicer. If the
Servicer takes any action pursuant to Section 13.02 of the Standard Terms and
Conditions of Agreement that
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<PAGE>
impairs the rights of the Certificateholders in any Receivable, the Servicer
shall purchase such Receivable pursuant to Section 13.07 of the Standard Terms
and Conditions of Agreement.
-11-
<PAGE>
IN WITNESS WHEREOF, the Seller, the Servicer and the Trustee
have caused this Pooling and Servicing Agreement to be duly executed by their
respective officers as of the day and year first above written.
WORLD OMNI FINANCIAL CORP.,
as Seller
By: _____________________________________________
Name:
Title:
WORLD OMNI FINANCIAL CORP.,
as Servicer
By: _____________________________________________
Name:
Title:
[______________________________],
as Trustee
By: _____________________________________________
Name:
Title:
<PAGE>
Schedule A
Schedule of Receivables
(To be delivered to the Trustee at Closing and supplemented on each Subsequent
Transfer Date on which Subsequent Standard Receivables are transferred to the
Trust)
A-1
<PAGE>
Schedule B
Location of Receivable Files
World Omni Financial Corp.
120 N.W. 12th Avenue
Deerfield Beach, Florida 33442
B-1
<PAGE>
Schedule C
Schedule of Eligible Investment Receivables
(To be delivered on each Subsequent Transfer Date on which Eligible Investment
Receivables are delivered to Trust)
<PAGE>
================================================================================
WORLD OMNI AUTO RECEIVABLES TRUSTS
STANDARD TERMS AND CONDITIONS OF AGREEMENT
Dated as of [__________]
================================================================================
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TABLE OF CONTENTS
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ARTICLES I-X
RESERVED
ARTICLE XI
DEFINITIONS
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Section 11.01 Definitions...................................................................................1
Section 11.02 Other Definitional Provisions................................................................16
ARTICLE XII
THE RECEIVABLES
Section 12.01 Representations and Warranties of World Omni.................................................17
Section 12.02 [Reserved]...................................................................................20
Section 12.03 [Reserved]...................................................................................20
Section 12.04 Repurchase Upon Breach.......................................................................20
Section 12.05 Custody of Receivable Files..................................................................20
Section 12.06 Duties of Servicer as Custodian..............................................................20
Section 12.07 Instructions; Authority to Act...............................................................21
Section 12.08 Custodian's Indemnification..................................................................21
Section 12.09 Effective Period and Termination.............................................................21
ARTICLE XIII
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 13.01 Duties of Servicer...........................................................................22
Section 13.02 Collection and Allocation of Receivable Payments.............................................22
Section 13.03 Realization Upon Receivables.................................................................23
Section 13.04 Physical Damage Insurance....................................................................23
Section 13.05 Maintenance of Security Interests in Financed Vehicles.......................................23
Section 13.06 Covenants of Servicer........................................................................23
Section 13.07 Purchase of Receivables Upon Breach..........................................................23
Section 13.08 Servicing Fee................................................................................24
Section 13.09 Servicer's Certificate.......................................................................24
Section 13.10 Annual Statement as to Compliance; Notice of Default.........................................24
Section 13.11 Annual Independent Certified Public Accountant's Report......................................25
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Section 13.12 Access to Certain Documentation and Information Regarding Receivables........................25
Section 13.13 Servicer Expenses............................................................................25
Section 13.14 Appointment of Subservicer...................................................................25
ARTICLE XIV
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS
Section 14.01 Establishment of Trust Accounts..............................................................26
Section 14.02 Collections..................................................................................28
Section 14.03 Application of Collections...................................................................28
Section 14.04 Advances.....................................................................................28
Section 14.05 Additional Deposits..........................................................................29
Section 14.06 Distributions................................................................................29
Section 14.07 Reserve Account..............................................................................31
Section 14.08 Pre-Funding Account..........................................................................32
Section 14.09 Statements to Certificateholders.............................................................33
Section 14.10 Accounting and Tax Returns...................................................................34
Section 14.11 Net Deposits.................................................................................34
Section 14.12 Transfer of the Class [B] Certificates.......................................................34
ARTICLE XV
THE CERTIFICATES
Section 15.01 The Certificates.............................................................................34
Section 15.02 Authentication of Certificates...............................................................35
Section 15.03 Registration of Transfer and Exchange of Certificates........................................35
Section 15.04 Limitations on Transfer of the Class [B] Certificates........................................36
Section 15.05 Mutilated, Destroyed, Lost, or Stolen Certificates...........................................37
Section 15.06 Persons Deemed Owners........................................................................37
Section 15.07 Access to List of Certificateholders' Names and Addresses....................................37
Section 15.08 Maintenance of Office or Agency..............................................................38
Section 15.09 Book-Entry Certificates......................................................................38
Section 15.10 Notices to Clearing Agency...................................................................39
Section 15.11 Definitive Certificates......................................................................39
ARTICLE XVI
THE SELLER
Section 16.01 Representations of Seller....................................................................39
Section 16.02 Existence....................................................................................41
Section 16.03 Liabilities of Seller; Indemnities...........................................................41
Section 16.04 Merger or Consolidation of, or Assumption of the Obligations of, Seller......................42
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Section 16.05 Limitation on Liability of Seller and Others.................................................42
Section 16.06 Seller May Own Certificates..................................................................42
ARTICLE XVII
THE SERVICER
Section 17.01 Representations of Servicer..................................................................42
Section 17.02 Indemnities of Servicer......................................................................44
Section 17.03 Merger or Consolidation of, or Assumption of the Obligations of, Servicer....................44
Section 17.04 Limitation on Liability of Servicer and Others...............................................45
ARTICLE XVIII
DEFAULT
Section 18.01 Events of Default............................................................................45
Section 18.02 Appointment of Successor.....................................................................46
Section 18.03 Repayment of Advances........................................................................47
Section 18.04 Notification to Certificateholders...........................................................47
Section 18.05 Waiver of Past Defaults......................................................................47
ARTICLE XIX
THE TRUSTEE
Section 19.01 Duties of Trustee............................................................................47
Section 19.02 Certain Matters Affecting Trustee............................................................48
Section 19.03 Trustee Not Liable for Certificates or Receivables...........................................49
Section 19.04 Trustee May Own Certificates.................................................................49
Section 19.05 Trustee's Fees and Expenses..................................................................49
Section 19.06 Eligibility Requirements for Trustee.........................................................50
Section 19.07 Resignation or Removal of Trustee............................................................50
Section 19.08 Successor Trustee............................................................................50
Section 19.09 Merger or Consolidation of Trustee...........................................................51
Section 19.10 Appointment of Co-Trustee or Separate Trustee................................................51
Section 19.11 Representations and Warranties of Trustee....................................................52
Section 19.12 No Bankruptcy Petition.......................................................................53
ARTICLE XX
TERMINATION
Section 20.01 Termination of the Trust.....................................................................53
Section 20.02 Optional Purchase of All Receivables.........................................................54
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ARTICLE XXI
MISCELLANEOUS PROVISIONS
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Section 21.01 Amendment....................................................................................54
Section 21.02 Protection of Title to Trust.................................................................55
Section 21.03 Separate Counterparts........................................................................57
Section 21.04 Limitation on Rights of Certificateholders...................................................57
Section 21.05 Governing Law................................................................................58
Section 21.06 Notices......................................................................................58
Section 21.07 Severability of Provisions...................................................................58
Section 21.08 Assignment...................................................................................58
Section 21.09 Certificates Nonassessable and Fully Paid....................................................58
Section 21.10 Limitations on Rights of Others..............................................................59
Section 21.11 Headings.....................................................................................59
Section 21.12 Nonpetition Covenants........................................................................59
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EXHIBITS
EXHIBIT A - Form of Class A Certificate
EXHIBIT B - Form of Class B Certificate
EXHIBIT C - [Form of Depository Agreement]
EXHIBIT D - Form of Servicer's Certificate
EXHIBIT E - [Form of Accountants' Letter]
EXHIBIT F - Form of Transferor Certificate
EXHIBIT G - Form of Investment Letter
EXHIBIT H - Form of Rule 144A Letter
EXHIBIT I - Subsequent Transfer Assignment No.
EXHIBIT J - Eligible Investment Transfer Assignment No.
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INTRODUCTION
These Standard Terms and Conditions of Agreement shall be
applicable to World Omni Auto Receivables Trust grantor trusts formed on or
after the date hereof with respect to which a Pooling and Servicing Agreement
incorporating by reference these Standard Terms and Conditions of Agreement
shall have been executed.
ARTICLES I-X
RESERVED
ARTICLE XI
DEFINITIONS
Section 11.01 Definitions. Whenever used in this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
"Additional Amount" means the aggregate of all amounts
required to be deposited to the Reserve Account in connection with any
conveyance of Subsequent Receivables pursuant to an Agreement.
"Advance" means a Simple Interest Advance.
"Affiliate" means, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used with
respect to any Person 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.
"Agreement" means a pooling and servicing agreement among
World Omni, as seller and servicer, and the Trustee named in such agreement in
respect of any World Omni Auto Receivables Trust that is a grantor trust.
"Amount Financed" means (a) with respect to a Standard
Receivable or Eligible Investment Standard Receivable, as applicable, the amount
advanced under such Standard Receivable or Eligible Investment Standard
Receivable toward the purchase price of the Financed Vehicle and any related
costs, exclusive of any amount allocable to the premium of force-placed physical
damage insurance covering the Financed Vehicle.
"Annual Percentage Rate" or "APR" of a Receivable means the
annual rate of finance charges stated in the related Contract.
"Benefit Plan" has the meaning set forth in Section 15.04(b).
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"Book-Entry Certificates" means, unless otherwise specified in
the Agreement, a beneficial interest in the Class [A] Certificates, ownership
and transfers of which shall be registered through book entries by a Clearing
Agency as described in Section 15.09.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which banking institutions or trust companies in The City of New
York are authorized or obligated by law, regulation or executive order to be
closed.
"Certificate Balance" means, as of any date, the aggregate
outstanding principal amount of the Certificates at such date.
"Certificate Owner" means, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as reflected on the books of the Clearing Agency or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Certificateholder" or "Holder" means a Person in whose name a
Certificate is registered in the Certificate Register.
"Certificate Register" and "Certificate Registrar" mean the
register maintained and the registrar appointed pursuant to Section 15.03.
"Certificates" shall have the meaning set forth in the
Agreement.
"Class [A] Certificate Balance" means, as of any date of
determination, the Initial Class [A] Certificate Balance, as specified in the
Agreement, reduced by all amounts previously distributed to Holders of Class [A]
Certificates and allocable to principal.
"Class [A] Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class [A] Principal Distributable Amount and
the Class [A] Interest Distributable Amount for such date.
"Class [A] Interest Carryover Shortfall" means, with respect
to any Distribution Date, the excess of the sum of the Class [A] Monthly
Interest Distributable Amount for the preceding Distribution Date and any
outstanding Class [A] Interest Carryover Shortfall on such preceding
Distribution Date, over the amount in respect of interest that Holders of the
Class [A] Certificates actually received on such preceding Distribution Date,
plus 30 days' interest on such excess, to the extent permitted by law, at the
Class [A] Pass-Through Rate.
"Class [A] Interest Distributable Amount" means, with respect
to any Distribution Date, the sum of the Class [A] Monthly Interest
Distributable Amount for such Distribution Date and the Class [A] Interest
Carryover Shortfall for such Distribution Date. Unless otherwise specified in
the Agreement, interest with respect to the Class [A] Certificates shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
"Class [A] Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, 30 days of interest (or, in the case of the
first Distribution Date, interest
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accrued from and including the Closing Date to but excluding such Distribution
Date) at the Class [A] Pass-Through Rate on the Class [A] Certificate Balance on
the last day of the preceding Collection Period (or, in the case of the first
Distribution Date, on the Closing Date).
"Class [A] Monthly Principal Distributable Amount" means, with
respect to any Distribution Date, the Class [A] Percentage of the Principal
Distribution Amount.
"Class [A] Pass-Through Rate" shall have the meaning specified
in the Agreement.
"Class [A] Percentage" means the aggregate undivided ownership
interest in the Trust represented by the Class [A] Certificates, as specified in
the Agreement.
"Class [A] Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Class [A] Monthly Principal
Distributable Amount and any outstanding Class [A] Principal Carryover Shortfall
from the preceding Distribution Date, over the amount in respect of principal
that is actually distributed to Holders of the Class [A] Certificates on such
current Distribution Date.
"Class [A] Principal Distributable Amount" means, with respect
to any Distribution Date, the sum of the Class [A] Monthly Principal
Distributable Amount for such Distribution Date and the Class [A] Principal
Carryover Shortfall as of the closing of the preceding Distribution Date;
provided, however, that the Class [A] Principal Distributable Amount shall not
exceed the Class [A] Certificate Balance. In addition, on the Final Scheduled
Distribution Date, the principal required to be included in the Class [A]
Principal Distributable Amount will include the lesser of (a) the Class [A]
Percentage of any principal due and remaining unpaid on each Simple Interest
Receivable in the Trust as of the Final Scheduled Maturity Date or (b) the
amount that is necessary (after giving effect to the other amounts to be
deposited in the Distribution Account on such Distribution Date and allocable to
principal) to reduce the Class [A] Certificate Balance to zero.
"Class [B] Certificate Balance" means, as of any date of
determination, the Initial Class [B] Certificate Balance, as specified in the
Agreement, reduced by all amounts previously distributed to Holders of Class [B]
Certificates and allocable to principal.
"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] Interest Carryover Shortfall" means, with respect
to any Distribution Date, the excess of the sum of the Class [B] Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Class [B] Interest Carryover Shortfall on such preceding Distribution Date, over
the amount in respect of interest that Holders of the Class [B] Certificates
actually received on such preceding Distribution Date, plus 30 days' interest on
such excess, to the extent permitted by law, at the Class [B] Pass-Through Rate.
"Class [B] Interest Distributable Amount" means, with respect
to any Distribution Date, the sum of the Class [B] Monthly Interest
Distributable Amount for such Distribution Date
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and the Class [B] Interest Carryover Shortfall for such Distribution Date.
Unless otherwise specified in the Agreement, interest with respect to the Class
[B] Certificates shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
"Class [B] Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, 30 days of interest (or, in the case of the
first Distribution Date, interest accrued from and including the Closing Date to
but excluding such Distribution Date) at the Class [B] Pass-Through Rate on the
Class [B] Certificate Balance on the last day of the preceding Collection Period
(or, in the case of the first Distribution Date, on the Closing Date).
"Class [B] Monthly Principal Distributable Amount" means, with
respect to any Distribution Date, the Class [B] Percentage of the Principal
Distribution Amount.
"Class [B] Pass-Through Rate" shall have the meaning specified
in the Agreement.
"Class [B] Percentage" means the aggregate undivided ownership
interest in the Trust represented by the Class [B] Certificates, as specified in
the Agreement.
"Class [B] Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Class [B] Monthly Principal
Distributable Amount and any outstanding Class [B] Principal Carryover Shortfall
from the preceding Distribution Date, over the amount in respect of principal
that is actually distributed to Holders of the Class [B] Certificates on such
current
"Class [B] Principal Distributable Amount" means, with respect
to any Distribution Date, the sum of the Class [B] Monthly Principal
Distributable Amount for such Distribution Date and the Class [B] Principal
Carryover Shortfall as of the close of the preceding Distribution Date;
provided, however, that the Class [B] Principal Distributable Amount shall not
exceed the Class [B] Certificate Balance. In addition, on the Final Scheduled
Distribution Date, the principal required to be included in the Class [B]
Principal Distributable Amount will include the lesser of (a) the Class [B]
Percentage of any principal due and remaining unpaid on each Simple Interest
Receivable in the Trust as of the Final Scheduled Maturity Date or (b) the
amount that is necessary (after giving effect to the other amounts to be
deposited in the Distribution Account on such Distribution Date and allocable to
principal) to reduce the Class [B] Certificate Balance to zero.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended.
"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" with respect to each Trust shall have the
meaning set forth in the applicable Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Collection Account" means the account designated as such,
established and maintained pursuant to Section 14.01.
"Collection Period" means a calendar month (or in the case of
the first Distribution Date, the period from and including the Initial Cutoff
Date to and including the last day of the calendar month in which the Closing
Date occurs). Any amount stated as of the last day of a Collection Period or as
of the first day of a Collection Period shall give effect to the following
calculations as determined as of the close of business on such last day: (1) all
applications of collections, (2) all Advances and reductions of Advances and (3)
all distributions to be made on the following Distribution Date.
"Corporate Trust Office" means the principal office of the
Trustee at the address set forth in the related Agreement or at such other
address as the Trustee may designate from time to time by notice to
Certificateholders, the Seller and the Servicer, or the principal corporate
trust office of any successor Trustee (of which address such successor Trustee
shall notify the Certificateholders, the Seller and Servicer).
"Cutoff Date" means, with respect to any Receivable or
Eligible Investment Receivable, as applicable, the date as of which collections
on such Receivable or Eligible Investment Receivable will be included in a Trust
pursuant to the related Agreement.
"Dealer" means the dealer who sold a Financed Vehicle and who
originated and assigned the related Receivable to under an existing agreement
between such dealer and World Omni.
"Definitive Certificates" shall have the meaning specified in
Section 15.11.
"Delivery" when used with respect to Trust Account Property
means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC and are
susceptible of physical delivery, transfer thereof to the Trustee or its nominee
or custodian by physical delivery to the Trustee or its nominee or custodian
endorsed to, or registered in the name of, the Trustee or its nominee or
custodian or endorsed in blank, and, with respect to a certificated security (as
defined in Section 8-102 of the UCC) transfer thereof (i) by delivery of such
certificated security endorsed to, or registered in the name of, the Trustee or
its nominee or custodian or endorsed in blank to a financial intermediary (as
defined in Section 8-313 of the UCC) and the making by such financial
intermediary of entries on its books and records identifying such certificated
securities as belonging to the Trustee or its nominee or custodian and the
sending by such financial intermediary of a confirmation of the purchase of such
certificated security by the Trustee or its nominee or custodian, or (ii) by
delivery thereof to a "clearing corporation" (as defined in Section 8-102(3) of
the UCC) and the making by such clearing corporation of appropriate entries on
its books reducing the appropriate securities account of the transferor and
increasing the appropriate securities account of a financial intermediary by the
amount of such certificated security, the identification by the clearing
corporation of the certificated securities for the sole and exclusive account of
the financial intermediary, the maintenance of such certificated securities by
such
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clearing corporation or a "custodian bank" (as defined in Section 8-102(4)
of the UCC) or the nominee of either, subject to the clearing corporation's
exclusive control, the sending of a confirmation by the financial intermediary
of the purchase by the Trustee or its nominee or custodian of such securities
and the making by such financial intermediary of entries on its books and
records identifying such certificated securities as belonging to the Trustee or
its nominee or custodian (all of the foregoing, "Physical Property"), and, in
any event, any such Physical Property in registered form shall be in the name of
the Trustee or its nominee or custodian; and such additional or alternative
procedures as may hereafter become appropriate to effect the complete transfer
of ownership of any such Trust Account Property to the Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or the
interpretation thereof;
(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the Federal National
Mortgage Association that is a book-entry security held through the Federal
Reserve System pursuant to federal book-entry regulations, the following
procedures, all in accordance with applicable law, including applicable federal
regulations and Articles 8 and 9 of the UCC: book-entry registration of such
Trust Account Property to an appropriate book-entry account maintained with a
Federal Reserve Bank by a financial intermediary that is also a "depository"
pursuant to applicable federal regulations and issuance by such financial
intermediary of a deposit advice or other written confirmation of such
book-entry registration to the Trustee or its nominee or custodian of the
purchase by the Trustee or its nominee or custodian of such book-entry
securities; the making by such financial intermediary of entries in its books
and records identifying such book-entry security held through the Federal
Reserve System pursuant to federal book-entry regulations as belonging to the
Trustee or its nominee or custodian and indicating that such custodian holds
such Trust Account Property solely as agent for the Trustee or its nominee or
custodian; and such additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Trust Account
Property to the Trustee or its nominee or custodian, consistent with changes in
applicable law or regulations or the interpretation thereof; and
(c) with respect to any item of Trust Account Property that is
an uncertificated security under Article 8 of the UCC and that is not governed
by clause (b) above, registration on the books and records of the issuer thereof
in the name of the financial intermediary, the sending of a confirmation by the
financial intermediary of the purchase by the Trustee or its nominee or
custodian of such uncertificated security, the making by such financial
intermediary of entries on its books and records identifying such uncertificated
certificates as belonging to the Trustee or its nominee or custodian.
"Determination Date" means the Business Day of each calendar
month, unless a different date is identified in an Agreement as the
Determination Date for the purposes of such Agreement.
"Distribution Account" means the account designated as such,
established and maintained pursuant to Section 14.01.
"Distribution Date" with respect to each Trust shall have the
meaning set forth in the applicable Agreement.
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"Duff & Phelps" means Duff & Phelps Credit Rating Company, or
its successor.
"Eligible Deposit Account" means either (a) a segregated
account with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Colombia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories that signifies
investment grade.
"Eligible Institution" means (a) the corporate trust
department of the Trustee or any other entity specified in the Agreement or (b)
a depository institution organized under the laws of the United States of
America or any one of the states thereof or the District of Columbia (or any
domestic branch of a foreign bank), which (i) has either (A) a long-term
unsecured debt rating of AAA or better by Standard & Poor's and A1 or better by
Moody's or (B) a certificate of deposit rating of A-1+ by Standard & Poor's and
P-1 or better by Moody's or any other long-term, short-term or certificate of
deposit rating acceptable to the Rating Agencies and (ii) whose deposits are
insured by the FDIC. If so qualified, the Trustee or any such other entity
specified in the Agreement may be considered an Eligible Institution for the
purposes of clause (b) of this definition.
"Eligible Investment Receivable" means (i) any Eligible
Investment Standard Receivable.
"Eligible Investment Standard Receivable" means any contract
that is listed on Schedule C to an Agreement (which Schedule may be in the form
of microfiche), as such Schedule shall be supplemented to reflect the transfer
of Eligible Investment Receivables to the related Trust on Subsequent Transfer
Dates.
"Eligible Investment Transfer Assignment" means a written
assignment substantially in the form of Exhibit K.
"Eligible Investments" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
[(a) direct obligations of, and obligations fully
guaranteed as to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of
deposit of any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof (of any domestic
branch of a foreign bank) and subject to supervision and examination by Federal
or State banking or depository institution authorities; provided, however, that
at the time of the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person other than
such depository institution or trust company) thereof shall have a credit rating
from each of the Rating Agencies in the highest investment category granted
thereby;
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(c) commercial paper having, at the time of the
investment or contractual commitment to invest therein, a rating from each of
the Rating Agencies in the highest investment category granted thereby;
(d) investments in money market funds having a rating
from each of the Rating Agencies in the highest investment category granted
thereby (including funds for which the Trustee or any of its Affiliates is
investment manager or advisor);
(e) bankers' acceptances issued by any depository
institution or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security
that is a direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of which are
backed by the full faith and credit of the United States of America, in either
case entered into with a depository institution or trust company (acting as
principal) described in clause (b);
(g) repurchase obligations with respect to any security
or whole loan, entered into with (i) a depository institution or trust company
(acting as principal) described in clause (b) above (except that the rating
referred to in the provision in such clause (b) shall be A-1 or higher in the
case of Standard & Poor's)(such depository institution or trust company being
referred to in this definition as a "financial institution"), (ii) a
broker/dealer (acting as principal) registered as a broker or dealer under
Section 15 of the Exchange Act (a "broker/dealer") the unsecured short-term debt
obligations of which are rated P-1 by Moody's and at least A-1 by Standard &
Poor's at the time of entering into such repurchase obligation (a "rated
broker/dealer"), (iii) an unrated broker/dealer (an "unrated broker/dealer"),
acting as principal, that is a wholly-owned subsidiary of a non-bank holding
company the unsecured short-term debt obligations of which are rated P-1 by
Moody's and at least A-1 by Standard & Poor's at the time of entering into such
repurchase obligation (a "Rated Holding Company") or (iv) an unrated subsidiary
(a "Guaranteed Counterparty"), acting as principal, that is a wholly-owned
subsidiary of a direct or indirect parent Rated Holding Company, that guarantees
such subsidiary's obligations under such repurchase agreement; provided that the
following conditions are satisfied:
(1) the aggregate amount of funds invested in repurchase
obligations of a financial institution, [____________________] a rated
broker/dealer, [____________________] an unrated broker/dealer or Guaranteed
Counterparty in respect of which Standard & Poor's unsecured short-term ratings
are A-1 (in the case of an unrated broker/dealer or Guaranteed Counterparty,
such rating being that of the Rated Holding Company) shall not exceed 20% of the
Certificate Balance (there being no limit on the amount of funds that may be
invested in repurchase obligations in respect of which such Standard & Poor's
rating is A-1+ (in the case of an unrated broker/dealer or Guaranteed
Counterparty, such rating being that of the related Rated Holding Company));
(2) in the case of the Reserve Account and the
Pre-Funding Account, the rating from Standard & Poor's in respect of the
unsecured short-term debt obligations of the financial institution, rated
broker/dealer, unrated broker/dealer or Guaranteed Counterparty (in
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the case of an unrated broker/dealer or Guaranteed Counterparty, such rating
being that of the related Rated Holding Company) shall be A-1+;
(3) the repurchase obligation must mature within 30 days
of the date on which the Trustee on behalf of the Trust, enters into such
repurchase obligation;
(4) the repurchase obligation shall not be subordinated
to any other obligation of the related financial institution, rated
broker/dealer, unrated broker/dealer or Guaranteed Counterparty;
(5) the collateral subject to the repurchase obligation
is held, in the appropriate form, by a custodial bank on behalf of the Trustee;
(6) the repurchase obligation shall require that the
collateral subject thereto shall be marked to market daily;
(7) in the case of a repurchase obligation of a
Guaranteed Counterparty, the following conditions shall also be satisfied:
(A) the Trustee shall have received an opinion
of counsel (which may be in-house counsel) to the effect that the guarantee of
the related Rated Holding Company is a legal, valid and binding agreement of the
Rated Holding Company, enforceable in accordance with its terms, subject as to
enforceability to bankruptcy, insolvency, reorganization and moratorium or other
similar laws affecting creditor's rights generally and to general equitable
principles;
(B) the Trustee shall have received (x) an
incumbency certificate for the signer of such guarantee, certified by an officer
of such Rated Holding Company, (y) a resolution, certified by an officer of the
Rated Holding Company and (z) a resolution, certified by an officer of the Rated
Holding Company, of the board of directors (or applicable committee thereof) of
the Rated Holding Company authorizing the execution, delivery and performance of
such guarantee by the Rated Holding Company;
(C) the only conditions to the obligation of
such Rated Holding Company to pay on behalf of the Guaranteed Counterparty shall
be that the Guaranteed Counterparty shall not have paid under such repurchase
obligation when required (it being understood that not notice to, demand on or
other action in respect of the Guaranteed Counterparty is necessary) and that
Trustee or the Trust shall make a demand on the Rated Holding Company to make
the payment due under such guarantee;
(D) the guarantee of the Rated Holding Company
shall be irrevocable with respect to such repurchase obligation and shall not be
subordinated to any other obligation of the Rated Holding Company; and
(E) each of Standard & Poor's and Moody's has
confirmed in writing to the Trustee that it has reviewed the form of the
guarantee of the Rated Holding Company and has determined that the issuance of
such guarantee will not result in the downgrade or withdrawal of the ratings
assigned to the Certificates.
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(8) the repurchase obligation shall require that the
repurchase obligation be overcollateralized and shall provide that, upon any
failure to maintain such overcollateralization, the repurchase obligation shall
become due and payable, and unless the repurchase obligation is satisfied
immediately, the collateral subject to the repurchase agreement shall be
liquidated and the proceeds applied to satisfy the unsatisfied portion of the
repurchase obligation.
(h) Eligible Investment Receivables; provided that
Eligible Investment Receivables shall be Eligible Investments only for funds in
the Reserve Account and only to the extent of the portion of the Specified
Reserve Account Balance specified in the Agreement in clause (ii) of the
definition of "Specified Reserve Account Balance"; and
(i) any other investment with respect to which the
Trustee or the Servicer has received written notification from the Rating
Agencies that the acquisition of such investment as an Eligible Investment will
not result in a withdrawal or downgrading of the ratings of the Certificates.]
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Event of Default" means an event specified in Section 18.01.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Distribution Date" means the date specified
in an Agreement as the final scheduled distribution date with respect to the
related Certificates.
"Final Scheduled Maturity Date" means the final scheduled
maturity date specified in an Agreement in respect of the Receivables
transferred to the Trust under such Agreement.
"Financed Vehicle" means an automobile or light-duty truck,
together with all accessions thereto, securing an Obligor's indebtedness under
the respective Standard Receivable.
"Fitch" means Fitch IBCA, Inc., or its successor.
"Funding Period" with respect to each Trust shall have the
meaning set forth in the applicable Agreement.
"Initial Cutoff Date" means the date or dates as of which
Initial Receivables, if any, are conveyed to a Trust pursuant to the related
Agreement.
"Initial Receivables" means the Standard Receivables conveyed
to a Trust on the Closing Date and listed on Schedule A to the related
Agreement.
"Insolvency Event" means, with respect to a specified Person,
(a) the filing of a decree or order for relief by a court having jurisdiction in
the premises in respect of such Person or any substantial part of its property
in an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver,
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liquidator, assignee, custodian, trustee, sequestrator, or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation or such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable federal
or state bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by, a receiver, liquidator, assignee,
custodian, trustee, sequestrator, or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"Interest Distribution Amount" means, with respect to any
Distribution Date, the sum of the following amounts in respect of the preceding
Collection Period: (i) that portion of all collections on Receivables allocable
to interest, (ii) Liquidation Proceeds with respect to the Receivables to the
extent allocable to interest due thereon in accordance with the Servicer's
customary servicing procedures; (iii) all Advances made by the Servicer of
interest due on Receivables, (iv) the Purchase Amount of each Receivable that
became a Purchased Receivable during the related Collection Period to the extent
attributable to accrued interest on such Receivable (v) Recoveries for such
Collection Period, and (vi) Investment Earnings for such Collection Period;
provided, however, that in calculating the Interest Distribution Amount the
following will be excluded: (i) all payments and proceeds (including Liquidation
Proceeds) of any Purchased Receivables the Purchase Amount of which has been
included in the Interest Distribution Amount in a prior Collection Period; (ii)
the sum for all Simple Interest Receivables of collections on each such Simple
Interest Receivable received during the preceding Collection Period in excess of
the amount of interest that would be due on the aggregate Principal Balance of
the Simple Interest Receivables during such Collection Period at their
respective APRs if a payment were received on each Simple Interest Receivable
during such Collection Period on the date payment is due under the terms of the
related Contract; (iii) Liquidation Proceeds with respect to a Simple Interest
Receivable attributable to accrued and unpaid interest thereon (but not
including interest for the then current Collection Period) but only to the
extent of any unreimbursed Simple Interest Advances; and (iv) amounts released
from the Pre-Funding Account.
"Investment Earnings" means, with respect to any Distribution
Date, the investment earnings (net of losses and investment expenses) on amounts
on deposit in the Trust Accounts to be deposited to the Distribution Account on
such Distribution Date pursuant to Section 14.01(b).
"Lien" means a security interest, lien, charge, pledge,
equity, or encumbrance of any kind, other than tax liens, mechanics' liens and
any liens that attach to the respective Receivable by operation of law as a
result of any act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable or Eligible
Investment Receivable, as applicable, liquidated by the Servicer through sale of
a Financed Vehicle or otherwise.
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"Liquidation Proceeds" means, with respect to a Liquidated
Receivable, the monies collected in respect thereof, from whatever source,
during the Collection Period in which such Receivable or Eligible Investment
Receivable, as applicable, became a Liquidated Receivable, net of the sum of any
amounts expended by the Servicer in connection with such liquidation, plus any
amounts required by law to be remitted to the Obligor.
"Moody's" means Moody's Investors Service, Inc., or its
successor.
"Obligor" on a Receivable means the purchaser or co-purchasers
of the Financed Vehicle and any other Person who owes payments under the
Receivable.
"Officers' Certificate" means a certificate signed by the (a)
chairman of the board, the president, any executive vice president or any vice
president and (b) any treasurer, assistant treasurer, secretary or assistant
secretary of the Seller or the Servicer, as appropriate.
"Opinion of Counsel" means one or more written opinions of
counsel, who may be an employee of or counsel to the Seller or the Servicer,
which counsel shall be acceptable to the Trustee or Rating Agencies, as
applicable.
"Original Pool Balance" means the sum, as of any date, of the
Pool Balance as of the Initial Cutoff Date, plus the aggregate Principal Balance
of the Subsequent Receivables, if any, sold to the Trust, as of their respective
Cutoff Dates.
"Outstanding Simple Interest Advances" on the Simple Interest
Receivables means the sum, as of the close of business on the last day of a
Collection Period, of all Simple Interest Advances, reduced as provided in
Section 14.04(b).
"Person" means any individual, corporation, estate,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"Physical Property" has the meaning assigned to such term in
the definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last
day of a Collection Period, the aggregate Principal Balance of the Receivables
as of such date (excluding Purchased Receivables and Liquidated Receivables).
"Pool Factor" means, as of the close of business on the last
day of a Collection Period, a seven-digit decimal figure equal to the Pool
Balance divided by the Original Pool Balance. The Pool Factor will be 1.0000000
as of the Initial Cutoff Date; thereafter, the Pool Factor will decline to
reflect reductions in the Pool Balance.
"Pre-Funded Amount" means, with respect to any Distribution
Date, the amount on deposit in the Pre-Funding Account. The amount, if any, to
be deposited initially to the Pre-Funding Account will be specified in the
Agreement.
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"Pre-Funded Percentage" means, with respect to the Class [A]
Certificates and the Class [B] Certificates, the quotient (expressed as a
percentage) of (i) the initial Class [A] Certificate Balance or Class [B]
Certificate Balance, as the case may be, and (ii) the Initial Certificate
Balance.
"Pre-Funding Account" means the Trust Account established
pursuant to (a)(ii).
"Prepayment Premium" means the Class [A] Prepayment Premium or
the Class [B] Prepayment Premium, or both, as specified in the Agreement.
"Principal Balance" means the Amount Financed minus the sum,
as of the close of business on the last day of a Collection Period, of (a) the
portion of all payments made by or on behalf of the related Obligor on or prior
to such day and allocable to principal using the Simple Interest Method and (b)
any payment of the Purchase Amount allocable to principal.
"Principal Distribution Amount" means, for any Distribution
Date, the sum of the following amounts with respect to the preceding Collection
Period: (i) that portion of all collections on Receivables allocable to
principal; (ii) all Liquidation Proceeds attributable to the principal amount of
Receivables that became Liquidated Receivables during the Collection Period in
accordance with the Servicer's customary servicing procedures, plus the amount
of Realized Losses with respect to such Liquidated Receivables; (iii) to the
extent attributable to principal, the Purchase Amount received with respect to
each Receivable that became a Purchased Receivable during the related Collection
Period; (iv) partial prepayments relating to refunds of extended warranty
protection plan costs or of physical damage, credit life or disability insurance
policy premiums, but only if such costs or premiums were financed by the
respective Obligor as of the date of the original contract; and (v) on the Final
Scheduled Distribution Date, any amounts advanced by the Servicer on such Final
Scheduled Distribution Date with respect to principal on the Receivables.
"Purchase Amount" means the amount, as of the close of
business on the last day of a Collection Period, required to prepay in full a
Receivable or Eligible Investment Receivable, as applicable, under the terms
thereof including interest to the end of the month of purchase.
"Purchased Receivable" means a Receivable or Eligible
Investment Receivable, as applicable, purchased as of the close of business on
the last day of a Collection Period by the Servicer pursuant to Section 13.07 or
by the Seller pursuant to Section 12.04.
"Rating Agency" means Moody's and Standard & Poor's and, for
purposes of (b) of the Agreement only, Fitch and Duff & Phelps. If no such
organization or successor is any longer in existence, "Rating Agency" shall mean
any nationally recognized statistical rating organization or other comparable
Person designated by the Seller, notice of which designation shall be given to
the Trustee and the Servicer. Any notice required to be given to a Rating Agency
pursuant to this Agreement shall also be given to Fitch and Duff & Phelps,
although, except as set forth above, neither shall be deemed a Rating Agency for
any purposes of this Agreement.
"Rating Agency Condition" means, with respect to any action,
that each Rating Agency shall have been given 10 days' (or such shorter period
as shall be acceptable to each
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Rating Agency) prior notice thereof and that each of the Rating Agencies shall
have notified the Seller, the Servicer and the Trustee in writing that such
action will not result in a reduction or withdrawal of the then current rating
of the Certificates.
"Realized Losses" means, with respect to any Receivable or
Eligible Investment Receivable, as applicable, that becomes a Liquidated
Receivable, the excess of the Principal Balance of such Liquidated Receivable
over Liquidation Proceeds to the extent allocable to principal.
"Receivable" means any Standard Receivable.
"Receivable Files" means the documents specified in Section
12.05.
"Record Date" with respect to each Distribution Date means the
first day of the calendar month in which such Distribution Date occurs, unless
otherwise specified in the Agreement.
"Recoveries" means, with respect to any Receivable or Eligible
Investment Receivable, as applicable, that becomes a Liquidated Receivable,
monies collected in respect thereof, from whatever source, during any Collection
Period following the Collection Period in which such Receivable or Eligible
Investment Receivable became a Liquidated Receivable, net of the sum of any
amounts expended by the Servicer for the account of the Obligor and any amounts
required by law to be remitted to the Obligor.
"Reserve Account" means the account designated as such,
established and maintained pursuant to Section 14.01(a)(iv).
"Reserve Account Initial Deposit" with respect to a Trust
shall have the meaning set forth in the Agreement.
"Seller" means World Omni Auto Receivables LLC., a Delaware
limited liability company, and its successors in interest to the extent
permitted hereunder.
"Servicer" means World Omni Financial Corp., a Florida
corporation, as the servicer of the Receivables, and each successor Servicer
pursuant to Section 17.03 or 18.02.
"Servicer's Certificate" means an Officers' Certificate of the
Servicer delivered pursuant to Section 13.09, substantially in the form of
Exhibit D.
"Servicing Fee" means the fee payable to the Servicer for
services rendered during each Collection Period, determined pursuant to Section
13.08.
"Servicing Rate" means, unless otherwise specified in the
Agreement, 1.00%
"Simple Interest Advance" means the amount of interest, as of
the close of business on the last day of a Collection Period, which the Servicer
is required to advance on the Simple Interest Receivables pursuant to Section
14.04(b).
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"Simple Interest Method" means the method of allocating a
fixed level payment to principal and interest, pursuant to which the portion of
such payment that is allocated to interest is equal to the product of the fixed
rate of interest multiplied by the unpaid principal balance multiplied by the
period of time elapsed since the preceding payment of interest was made and the
remainder of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable or Eligible
Investment Receivable, as applicable, under which the portion of a payment
allocable to interest and the portion allocable to principal is determined in
accordance with the Simple Interest Method.
"Specified Reserve Account Balance" means the amount of funds
generally required to be maintained in the Reserve Account, determined as
specified in the Agreement.
"Standard & Poor's" means Standard & Poor's Ratings Group, or
its successor.
"Standard Receivable" means any contract that is listed on
Schedule A (which schedule may be in the form of microfiche), as such Schedule
shall be supplemented to reflect the transfer of Subsequent Receivables, if any,
to the Trust pursuant to the Agreement.
"Subsequent Cutoff Date" means any date as of which particular
Subsequent Receivables are conveyed to a Trust pursuant to the Agreement.
"Subsequent Receivables" means the Standard Receivables
transferred to a Trust pursuant to the Agreement, which shall be listed on
Schedule A to the related Subsequent Transfer Assignment.
"Subsequent Transfer Assignment" means a written assignment
substantially in the form of Exhibit J.
"Subsequent Transfer Date" means, with respect to Subsequent
Receivables, any date during the Funding Period on which Subsequent Receivables
are to be transferred to a Trust and a Subsequent Transfer Assignment is
executed and delivered to the related Trustee pursuant to the Agreement and,
with respect to Eligible Investment Receivables, any date on which Eligible
Investment Receivables are to be transferred to a Trust and an Eligible
Investment Transfer Assignment is executed and delivered to the related Trustee
pursuant to the Agreement.
"Total Distribution Amount" means, for each Distribution Date,
the sum of the Interest Distribution Amount and the Principal Distribution
Amount (other than the portion thereof attributable to Realized Losses).
"Trust" shall have the meaning set forth in the Agreement.
"Trust Account Property" with respect to each Trust means the
Trust Accounts, all amounts and investments held from time to time in any Trust
Account (whether in the form of deposit accounts, Physical Property, book-entry
securities, uncertificated securities or otherwise), including the Reserve
Account Initial Deposit, and all proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto in Section
14.01.
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"Trustee" with respect to each Trust shall have the meaning
assigned thereto in the Agreement.
"Trustee Officer" means any officer within the Corporate Trust
Office of the Trustee, including the chairman or vice-chairman of the board of
directors, the chairman or vice-chairman of the executive committee of the board
of directors, the president, any vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"UCC" means the Uniform Commercial Code as in effect in the
State of New York on the date hereof.
"World Omni" means World Omni Financial Corp., a Florida
corporation.
Section 11.02 Other Definitional Provisions. (a) All terms
defined in this Standard Terms and Conditions of Agreement or any Agreement
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto or thereto unless otherwise defined therein.
(b) As used herein, in any Agreement and in any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined herein or in such Agreement or in any such certificate or other
document, and accounting terms partly defined herein or in such Agreement or in
any such certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms herein, in
any related Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained herein, in such Agreement or in any such
certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and word of
similar import when used herein shall refer to these Standard Terms and
Conditions of Agreement and the Agreement as a whole and not to any particular
provision of the Standard Terms and Conditions of Agreement or the Agreement;
Article, Section, Schedule and Exhibit references contained in the Standard
Terms and Conditions of Agreement or any Agreement are references to Articles,
Sections, Schedules and Exhibits in or to the Standard Terms and Conditions of
Agreement and the Agreement, respectively; and the term "including" shall mean
"including without limitation".
(d) The definitions contained in these Standard Terms and
Conditions of Agreement and the Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of
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agreements or instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE XII
THE RECEIVABLES
Section 12.01 Representations and Warranties of World Omni.
World Omni which sold the related Receivable hereby represents and warrants to
the other parties hereto and to the Noteholders, with respect to such Receivable
as of the Closing Date:
(i) [Characteristics of Receivables. Each Standard Receivable
(a) shall have been originated in the United States of America by a Dealer for
the retail sale of a Financed Vehicle in the ordinary course of such Dealer's
business, shall have been fully and properly executed by the parties thereto,
shall have been purchased by the Seller from World Omni, which, in turn, shall
have purchased such Standard Receivable from such Dealer under an existing
dealer agreement with World Omni, shall have created or shall create a valid,
subsisting and enforceable first priority security interest in favor of World
Omni in the Financed Vehicle, which security interest has been assigned by World
Omni to the Seller, and shall be assignable by the Seller, (c) shall contain
customary and enforceable provisions such that the rights and remedies of the
holder thereof shall be adequate for realization against the collateral of the
benefits of the security, and (d) shall provide for level monthly payments that
fully amortize the Amount Financed by maturity and yield interest at the Annual
Percentage Rate.
(ii) Schedule of Receivables. The information set forth in
Schedule A to each Agreement and Schedule A to any Subsequent Transfer
Assignment shall be true and correct in all material respects as of the opening
of business on the related Cutoff Date, and no selection procedures believed to
be adverse to the Certificateholders shall have been utilized in selecting the
Standard Receivables. Each computer tape or other listing regarding the Standard
Receivables made available to the Trustee shall be true and correct in all
respects.
(iii) Compliance with Law. Each Standard Receivable and the
sale of the Financed Vehicle shall comply at the time of the execution of the
Agreement in all material respects with all requirements of applicable federal,
state and local laws and regulations thereunder, including, without limitation,
usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act,
the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the
Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal
Reserve Board's Regulations B and Z, the Texas Consumer Credit Code, and State
adaptations of the National Consumer Act and of the Uniform Consumer Credit
Code, and other consumer credit laws and equal credit opportunity and disclosure
laws.
(iv) Binding Obligation. Each Standard Receivable shall
represent the genuine, legal, valid and binding payment obligation in writing of
the Obligor, enforceable by the holder thereof in accordance with its terms.
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(v) No Government Obligor. None of the Standard Receivables
shall be due from the United States of America or any State or from any agency,
department or instrumentality of the United States of America or any State.
(vi) Security Interest in Financed Vehicle. Immediately prior
to the sale, assignment and transfer thereof, each Standard Receivable shall be
secured by a validly perfected first security interest in the Financed Vehicle
in favor of the Seller as secured party or all necessary and appropriate actions
shall have been commenced that would result in the valid perfection of a first
security interest in the Financed Vehicle in favor of the Seller as secured
party.
(vii) Receivables in Force. No Standard Receivable shall have
been satisfied, subordinated or rescinded, nor shall any Financed Vehicle have
been released from the lien granted by the related Standard Receivable in whole
or in part.
(viii) No Waiver. No provision of a Standard Receivable shall
have been waived.
(ix) No Amendments. No Standard Receivable shall have been
amended such that the amount of the Obligor's Scheduled Payments shall have been
increased except for increases resulting from the inclusion of any premiums for
forced placed physical damage insurance covering the Financed Vehicle.
(x) No Defenses. No right of rescission, setoff, counterclaim
or defense shall have been asserted or threatened with respect to any Standard
Receivable.
(xi) No Liens. To the best of the Seller's knowledge, no liens
or claims shall have been filed for work, labor or materials relating to a
Financed Vehicle that shall be liens prior to, or equal or coordinate with, the
security interest in the Financed Vehicle granted by the Standard Receivable.
(xii) No Default. No Standard Receivable has a payment that is
more than 90 days overdue as of the related Cutoff Date, and, except as
permitted in this paragraph, no default, breach, violation or event permitting
acceleration under the terms of any Standard Receivable has occurred; and no
continuing condition that with notice or the lapse of time would constitute a
default, breach, violation or event permitting acceleration under the terms of
any Standard Receivable has arisen; and the Seller has not waived and shall not
waive any of the foregoing.
(xiii) Insurance. The Seller, in accordance with its customary
procedures, shall have determined that the Obligor has obtained physical damage
insurance covering the Financed Vehicle and under the terms of the Standard
Receivable the Obligor is required to maintain such insurance.
(xiv) Title. It is the intention of the Seller that the
transfer and assignment herein contemplated constitute a sale of the Standard
Receivables from the Seller to the Trust and that the beneficial interest in and
title to the Standard Receivables not be part of the debtor's estate in the
event of the filing of a bankruptcy petition by or against the Seller under any
bankruptcy law. No Standard Receivable has been sold, transferred, assigned or
pledged by the
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Seller to any Person other than the Trustee. Immediately prior to the transfer
and assignment herein contemplated, the Seller had good and marketable title to
each Standard Receivable free and clear of all Liens, encumbrances, security
interests and rights of others and, immediately upon the transfer thereof, the
Trustee, for the benefit of the Certificateholders, shall have good and
marketable title to each such Standard Receivable, free and clear of all Liens,
encumbrances, security interests and rights of others; and the transfer has been
perfected under the UCC.
(xv) Lawful Assignment. No Standard Receivable shall have been
originated in, or shall be subject to the laws of, any jurisdiction under which
the sale, transfer and assignment of such Standard Receivable under the
Agreement or any Subsequent Transfer Assignment or pursuant to transfers of the
Certificates shall be unlawful, void or voidable.
(xvi) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Trustee a first perfected ownership
interest in the Standard Receivables shall have been made.
(xvii) One Original. There shall be only one original executed
copy of each Standard Receivable.
(xviii) Scheduled Payments. (a) Each Standard Receivable has a
scheduled due date on or prior to the end of the month following the related
Cutoff Date and (b) no Standard Receivable has a payment that is more than 90
days overdue as of the related Cutoff Date, and has a final scheduled payment
date no later than the Final Scheduled Maturity Date.
(xix) Location of Receivable Files. The Receivable Files are
kept at one or more of the locations listed in Schedule B to the Agreement.
(xx) Remaining Maturity. The latest scheduled maturity of any
Standard Receivable shall be no later than the Final Scheduled Maturity Date.
(xxi) Outstanding Principal Balance. Each Standard Receivable
has an outstanding gross balance of at least $1,000.
(xxii) No Bankruptcies. No Obligor on any Standard Receivable
as of the related Subsequent Cutoff Date was noted in the related Receivable
File as having filed for bankruptcy.
(xxiii) No Repossessions. No Financed Vehicle securing any
Standard Receivable is in repossession status.
(xxiv) Chattel Paper. Each Standard Receivable constitutes
"chattel paper" under the UCC.
(xxv) Agreement. The representations and warranties contained
herein and in the Agreement shall be true and correct.
(xxvi) Remaining Maturity. The latest scheduled maturity of
any Standard Receivable shall be no later than the Final Scheduled Maturity
Date.]
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Section 12.02 [Reserved]
Section 12.03 [Reserved]
Section 12.04 Repurchase Upon Breach. The Seller, the Servicer
or the Trustee, as the case may be, shall inform the other parties to the
Agreement promptly, in writing, upon the discovery of any breach of the Seller's
representations and warranties made pursuant to Section 12.01 or 16.01. Unless
any such breach shall have been cured by the last day of the second Collection
Period following the discovery thereof by the Trustee or receipt by the Trustee
of notice from the Seller or the Servicer of such breach, the Seller shall be
obligated to repurchase any Standard Receivable materially and adversely
affected by any such breach as of such last day (or, at the Seller's option, the
last day of the first Collection Period following such discovery or notice). In
consideration of the repurchase of any Standard Receivable, the Seller shall
remit the Purchase Amount, in the manner specified in Section 14.05. Subject to
the provisions of Section 16.03, the sole remedy of the Trustee, the Trust or
the Certificateholders with respect to a breach of representations and
warranties pursuant to Section 12.01 or 16.01 and the agreement contained in
this Section shall be to require the Seller to repurchase Standard Receivables
pursuant to this Section 12.04, subject to the conditions contained herein.
Section 12.05 Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Trustee, upon the execution and delivery of the Agreement, hereby revocably
appoints the Servicer, and the Servicer hereby accepts such appointment, to act
as the agent of the Trustee as custodian of the following documents or
instruments which are hereby constructively delivered to the Trustee as of the
earlier of the Initial Cutoff Date and the Closing Date (in the case of Initial
Receivables) and as of each Subsequent Transfer Date (in the case of Subsequent
Receivables) with respect to each Receivable:
(i) the original of the Standard Receivable;
(ii) the original credit application fully executed by the
Obligor;
(iii) the original certificate of title or such documents that
the Servicer or the Seller shall keep on file, in accordance with its customary
procedures, evidencing the security interest of the Seller in the Financed
Vehicle; and
(iv) any and all other documents that the Servicer or the
Seller shall keep on file, in accordance with its customary procedures, relating
to a Standard Receivable, an Obligor or a Financed Vehicle.
Section 12.06 Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer shall hold the Receivable Files
as custodian on behalf of the Trustee for the benefit of all present and future
Certificateholders, and shall maintain such accurate and complete accounts,
records and computer systems pertaining to each Receivable File as shall enable
the Trustee to comply with these Standard Terms and Conditions of Agreement and
the Agreement. In performing its duties as custodian the Servicer shall act with
reasonable care, using that degree of skill and attention that the Servicer
exercises with
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respect to the receivable files relating to all comparable automotive
receivables that the Servicer services for itself or others. The Servicer shall
conduct, or cause to be conducted, periodic audits of the Receivable Files held
by it under the Agreement, and of the related accounts, records and computer
systems, in such a manner as shall enable the Trustee to verify the accuracy of
the Servicer's record keeping. The Servicer shall promptly report to the Trustee
any failure on its part to hold the Receivable Files and maintain its accounts,
records and computer systems as herein provided and shall promptly take
appropriate action to remedy any such failure. Nothing herein shall be deemed to
require an initial review or any periodic review by the Trustee of the
Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of its offices specified in Schedule B to
the Agreement or at such other office as shall be specified to the Trustee by
written notice not later than 90 days after any change in location. The Servicer
shall make available to the Trustee or its duly authorized representatives,
attorneys or auditors a list of locations of the Receivable Files and the
related accounts, records and computer systems maintained by the Servicer at
such times during normal business hours as the Trustee shall instruct.
(c) Release of Documents. Upon instruction from the Trustee,
the Servicer shall release any Receivable File to the Trustee, the Trustee's
agent or the Trustee's designee, as the case may be, at such place or places as
the Trustee may designate, as soon as practicable.
Section 12.07 Instructions; Authority to Act. The Servicer
shall be deemed to have received proper instructions with respect to the
Receivable Files upon its receipt of written instructions signed by a Trustee
Officer.
Section 12.08 Custodian's Indemnification. The Servicer as
custodian shall indemnify the Trustee and each of its officers, directors,
employees and agents for any and all liabilities, obligations, losses,
compensatory damages, payments, costs, or expenses of any kind whatsoever that
may be imposed on, incurred by or asserted against the Trustee or any of its
officers, directors, employees or agents as the result of any improper act or
omission in any way relating to the maintenance and custody by the Servicer as
custodian of the Receivable Files; provided, however, that the Servicer shall
not be liable to the Trustee or any such officers, director, employee or agent
of the Trustee for any portion of any such amount resulting from the willful
misfeasance, bad faith or negligence of the Trustee or any such officer,
director, employee or agent of the Trustee. Section 12.09 Effective Period and
Termination. The Servicer's appointment as custodian shall become effective as
of the Initial Cutoff Date or, if no Initial Receivables are conveyed to the
Trustee, the Closing Date and shall continue in full force and effect until
terminated pursuant to this
Section 12.09. If World Omni shall resign as Servicer in
accordance with the provisions hereof or if all of the rights and obligations of
any Servicer shall have been terminated under Section 18.01, the appointment of
such Servicer as custodian shall be terminated by the Trustee, or by Holders of
the [Class [A]] Certificates evidencing not less than 25% of the [Class [A]]
Certificate Balance, in the same manner as the Trustee or such Holders may
terminate the rights and obligations of the Servicer under Section 18.01. The
Trustee may terminate the Servicer's appointment as custodian, with cause, at
any time upon written
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notification to the Servicer, and without cause upon 30 days' prior written
notification. As soon as practicable after any termination of such appointment,
the Servicer shall deliver the Receivable Files to the Trustee or the Trustee's
agent at such place or places as the Trustee may reasonably designate.
ARTICLE XIII
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 13.01 Duties of Servicer. The Servicer, as agent for
the Trustee (to the extent provided herein), shall manage, service, administer
and make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it services
for itself or others. The Servicer's duties shall include collection and posting
of all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending payment coupons to Obligors, reporting tax
information to Obligors, accounting for collections, furnishing monthly and
annual statements to the Trustee with respect to distributions, and making
Advances pursuant to Section 14.04. Subject to the provisions of Section 13.02,
the Servicer shall follow its customary standards, policies and procedures in
performing its duties as Servicer. Without limiting the generality of the
foregoing, the Servicer is authorized and empowered by the Trustee to execute
and deliver, on behalf of itself, the Trust, the Certificateholders, the
Trustee, or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Receivables or to the Financed Vehicles
securing such Receivables. If the Servicer shall commence a legal proceeding to
enforce a Receivable, the Trustee (in the case of any Receivable other than a
Purchased Receivable) shall thereupon be deemed to have automatically assigned,
solely for the purpose of collection, such Receivable to the Servicer. If in any
enforcement suit or legal proceeding it shall be held that the Servicer may not
enforce a Receivable on the ground that it shall not be a real party in interest
or a holder entitled to enforce such Receivable, the Trustee shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Certificateholders. The
Trustee shall, upon written request of the Servicer, furnish the Servicer with
any powers of attorney and other documents reasonably necessary or appropriate
to enable the Servicer to carry out its servicing and administrative duties
hereunder.
Section 13.02 Collection and Allocation of Receivable
Payments. The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Receivables as and when the
same shall become due and shall follow such collection procedures as it follows
with respect to all comparable automotive receivables that it services for
itself or others. The Servicer shall allocate collections between principal and
interest in accordance with the customary servicing procedures it follows with
respect to all comparable automotive receivables that it services for itself or
others. The Servicer may grant extensions, rebates or adjustments on a Standard
Receivable, which shall not, for the purposes of the Agreement, modify the
original due dates or amounts of the originally scheduled payments of interest
on Simple Interest Receivables; provided, however, that if the Servicer extends
the date for final payment by the Obligor of any Receivable beyond the Final
Scheduled Maturity Date, it
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shall promptly repurchase the Receivable from the Trust in accordance with the
terms of Section 13.07. The Servicer may in its discretion waive any late
payment charge or any other fees that may be collected in the ordinary course of
servicing a Receivable. The Servicer shall not agree to any alteration of the
interest rate on any Receivable or of the amount of the originally scheduled
payments on Simple Interest Receivables.
Section 13.03 Realization Upon Receivables. On behalf of the
Trust, the Servicer shall use its best efforts, consistent with its customary
servicing procedures, to repossess or otherwise convert the ownership of the
Financed Vehicle securing any Receivable as to which the Servicer shall have
determined eventual payment in full is unlikely. The Servicer shall follow such
customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of automotive receivables, which may include
reasonable efforts to realize upon any recourse to Dealers and selling the
Financed Vehicle at public or private sale. The foregoing shall be subject to
the provision that, in any case in which the Financed Vehicle shall have
suffered damage, the Servicer shall not expend funds in connection with the
repair or the repossession of such Financed Vehicle unless it shall determine in
its discretion that such repair and/or repossession will increase the
Liquidation Proceeds by an amount greater than the amount of such expenses.
Section 13.04 Physical Damage Insurance. The Servicer, in
accordance with its customary servicing procedures, shall require that each
Obligor shall have obtained physical damage insurance covering the Financed
Vehicle as of the execution of the Standard Receivable.
Section 13.05 Maintenance of Security Interests in Financed
Vehicles. The Servicer shall, in accordance with its customary servicing
procedures, take such steps as are necessary to maintain perfection of the
security interest created by each Standard Receivable in the related Financed
Vehicle. The Trustee hereby authorizes the Servicer to take such steps as are
necessary to re-perfect such security interest on behalf of the Trust in the
event of the relocation of a Financed Vehicle or for any other reason.
Section 13.06 Covenants of Servicer. The Servicer shall not
release the Financed Vehicle securing any Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment in
full by the Obligor thereunder or repossession, nor shall the Servicer impair
the rights of the Trust or the Certificateholders in such Receivables, nor shall
the Servicer increase the number of scheduled payments due under a Standard
Receivable.
Section 13.07 Purchase of Receivables Upon Breach. The
Servicer or the Trustee shall inform the other party and the Seller promptly, in
writing, upon the discovery of any breach pursuant to Section 13.02, 13.05 or
13.06. Unless the breach shall have been cured by the last day of the second
Collection Period following such discovery (or, at the Servicer's election, the
last day of the first following Collection Period), the Servicer shall purchase
any Receivable materially and adversely affected by such breach as of such last
day. If the Servicer takes any action in any Collection Period pursuant to
Section 13.02 that impairs the right of the Trustee, the Trust or the
Certificateholders in any Receivable or as otherwise provided in Section 13.02,
the Servicer shall purchase such Receivable as of the last day of such
Collection Period. In consideration of the purchase of any such Receivable
pursuant to either of the two
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preceding sentences, the Servicer shall remit the Purchase Amount in the manner
specified in Section 14.05. For purposes of this Section 13.07, the Purchase
Amount shall consist in part of a release by the Servicer of all rights of
reimbursement with respect to Outstanding Simple Interest Advances on the
Receivable. Subject to Section 17.02, the sole remedy of the Trustee, the Trust
or the Certificateholders with respect to a breach pursuant to Section 13.02,
13.05 or 13.06 shall be to require the Servicer to repurchase Receivables
pursuant to this Section 13.07. The Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section.
Section 13.08 Servicing Fee. The Servicing Fee for a
Distribution Date shall equal the product of (a) one twelfth, (b) the Servicing
Rate and (c) the Pool Balance as of the first day of the preceding Collection
Period. The Servicer shall also be entitled to all late fees, prepayment charges
(including, in the case of a Receivable that provides for payments according to
the "Rule of 78s" and that is prepaid in full, the difference between the
Principal Balance of such Receivable (plus accrued interest to the date of
prepayment) and the principal balance of such Receivable computed according to
the "Rule of 78s") and other administrative fees or similar charges allowed by
applicable law with respect to the Receivables, collected (from whatever source)
on the Receivables, plus any reimbursement pursuant to Section 17.02.
Section 13.09 Servicer's Certificate. Not later than 11:00 am
(New York time) on each Determination Date, the Servicer shall deliver to the
Trustee, the Rating Agencies and the Seller, a Servicer's Certificate containing
all information necessary to make the distributions on the related Distribution
Date pursuant to Section 14.06 for the related Collection Period. Receivables to
be purchased by the Servicer or to be repurchased by the Seller shall be
identified by the Servicer by account number with respect to such Receivable (as
specified in Schedule A).
Section 13.10 Annual Statement as to Compliance; Notice of
Default. (a) The Servicer shall deliver to the Trustee, on or before April 30 of
each year, an Officers' Certificate, dated as of December 31 of the preceding
year, stating that (i) a review of the activities of the Servicer during the
preceding 12-month period (or such shorter period as shall have elapsed since
the Closing Date) and of its performance hereunder and under the Agreement has
been made under such officers' supervision and (ii) to the best of such
officers' knowledge, based on such review, the Servicer has fulfilled all its
obligations hereunder and under the Agreement throughout such year or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officers and the nature and status thereof. The
Trustee shall send a copy of such certificate and the report referred to in
Section 13.11 to the Rating Agencies. A copy of such certificate and the report
referred to in Section 13.11 may be obtained by any Certificateholder by a
request in writing to the Trustee addressed to the Corporate Trust Office.
(b) The Servicer shall deliver to the Trustee and to the
Rating Agencies, promptly after having obtained knowledge thereof, but in no
event later than 5 Business Days thereafter, written notice in an Officers'
Certificate of any event which with the giving of notice or lapse of time, or
both, would become an Event of Default under clause (iii) or (iv) of Section
18.01(a) or (b).
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Section 13.11 Annual Independent Certified Public Accountant's
Report. The Servicer shall cause a firm of independent certified public
accountants, who may also render other services to the Servicer, the Seller or
their Affiliates, to deliver to the Trustee on or before April 30 of each year
beginning April 30, ______, a report addressed to the Board of Directors of the
Servicer to the effect that such firm has examined the financial statements of
World Omni and issued its report thereon and that such examination (1) was made
in accordance with generally accepted auditing standards and accordingly
included such tests of the accounting records and such other auditing procedures
as such firm considered necessary in the circumstances; (2) included tests
relating to automotive loans serviced for others in accordance with the
requirements of the Uniform Single Audit Program for Mortgage Bankers (the
"Program"), to the extent the procedures in such Program are applicable to the
servicing obligations set forth herein; and (3) except as described in the
report, disclosed no exceptions or errors in the records relating to automobile
and light truck loans serviced for others that, in the firm's opinion, paragraph
four of such Program requires such firm to report.
The Report will also indicate that the firm is independent of
the Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
Section 13.12 Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to the Certificateholders
access to the Receivable Files in such cases where the Certificateholder shall
be required by applicable statutes or regulations to review such documentation.
Access shall be afforded without charge, but only upon reasonable request and
during the normal business hours at the offices of the Servicer. Nothing in this
Section shall affect the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors, and the
failure of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section.
Section 13.13 Servicer Expenses. The Servicer shall be
required to pay all expenses incurred by it in connection with its activities
hereunder, including fees and disbursements of independent accountants, taxes
imposed on the Servicer and expenses incurred in connection with distributions
and reports to Certificateholders.
Section 13.14 Appointment of Subservicer. The Servicer may at
any time appoint a subservicer to perform all or any portion of its obligations
as Servicer hereunder; provided that the Rating Agency Condition shall have been
satisfied in connection therewith; and, provided further that the Servicer shall
remain obligated and shall be liable to the Trustee and the Certificateholders
for the servicing and administering of the Receivables in accordance with the
provisions hereof without diminution of such obligation and liability by virtue
of the appointment of such subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Receivables. The fees and expenses of the subservicer shall be as agreed
between the Servicer and its subservicer from time to time, and none of the
Trust, the Trustee or the Certificateholders shall have any responsibility
therefor.
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ARTICLE XIV
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS
Section 14.01 Establishment of Trust Accounts. (a) (i) The
Servicer, for the benefit of the Certificateholders, shall establish and
maintain in the name of the Trustee an Eligible Deposit Account (the "Collection
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders.
(ii) The Servicer, for the benefit of the Certificateholders,
shall establish and maintain in the name of the Trustee an Eligible Deposit
Account (the "Pre-Funding Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Certificateholders.
(iii) The Servicer, for the benefit of the Certificateholders,
shall establish and maintain in the name of the Trustee an Eligible Account (the
"Distribution Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders.
(iv) The Servicer, for the benefit of the Certificateholders,
shall establish and maintain in the name of the Trustee an Eligible Deposit
Account (the "Reserve Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Certificateholders.
(b) Funds on deposit in the Collection Account, the
Pre-Funding Account, the Distribution Account and the Reserve Account
(collectively the "Trust Accounts") shall be invested by the Trustee in Eligible
Investments selected in writing by the Servicer or an investment manager
selected by the Servicer, which investment manager shall have agreed to comply
with the terms of these Standard Terms and Conditions of Agreement and the
Agreement as they relate to investing such funds; provided, however, that it is
understood and agreed that the Trustee shall not be liable for any loss arising
from such investment in Eligible investments. All such Eligible Investments
shall be held by the Trustee for the benefit of the Certificateholders;
PROVIDED, that on each Determination Date all interest and other investment
income (net of losses and investment expenses) on funds on deposit therein shall
be deposited into the Collection Account and shall be deemed to constitute a
portion of the Interest Distribution Amount; and, provided further that any
interest and other investment income on Eligible Investment Receivables in the
Reserve Account earned in respect of a Collection Period shall be deposited in
the Collection Account on the second Determination Date following such
Collection Period and shall be deemed to constitute a portion of the Interest
Distribution Amount for the related Distribution Date. Other than as permitted
by the Rating Agencies, funds on deposit in the Collection Account, the
Pre-Funding Account, the Reserve Account and the Distribution Account shall be
invested in Eligible Investments that will mature (A) not later than the
Business Day immediately preceding the next Distribution Date or (B) on such
next Distribution Date if either (x) such investment is held in the trust
department of the institution with which the Collection Account, the Pre-Funding
Account, the Reserve Account or the Distribution Account, as applicable, is then
maintained and is invested in a time deposit of [the Trustee] rated at least A-1
by Standard & Poor's and P-1 by Moody's (such account being maintained within
the trust department of [the
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Trustee]) or (y) the Trustee (so long as the short-term unsecured debt
obligations of the Trustee are either (i) rated at least P-1 by Moody's and A-1
by Standard & Poor's on the date such investment is made or (ii) guaranteed by
an entity whose short-term unsecured debt obligations are rated at least P-1 by
Moody's and A-1 by Standard & Poor's on the date such investment is made) has
agreed to advance funds on such Distribution Date to the Distribution Account in
the amount payable on such investment on such Distribution Date pending receipt
thereof to the extent necessary to make distributions on such Distribution Date;
provided that Eligible Investment Receivables need not satisfy such maturity
requirements. The guarantee referred to in clause (y) of the preceding sentence
shall be subject to the Rating Agency Condition. For the purpose of the
foregoing, unless the Trustee affirmatively agrees in writing to make such
advance with respect to such investment prior to the time an investment is made,
it shall not be deemed to have agreed to make such advance. Funds deposited in a
Trust Account upon the maturity of any Eligible Investments on the day
immediately preceding a Distribution Date are not required to be invested
overnight.
(c) (i) The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts
and in all proceeds thereof (including all income thereon) and all such
funds, investments, proceeds and income shall be part of the Trust Estate.
The Trust Accounts shall be under the sole dominion and control of the
Trustee for the benefit of the Certificateholders. If, at any time, any of
the Trust Accounts ceases to be an Eligible Deposit Account, the Trustee
(or the Servicer on its behalf) shall within 10 Business Days (or such
longer period, not to exceed 30 calendar days, as to which each Rating
Agency may consent) establish a new Trust Account as an Eligible Deposit
Account and shall transfer any cash and/or any investments to such new
Trust Account.
(ii) With respect to the Trust Account Property, the Trustee
agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit
accounts shall be held solely in the Eligible Deposit
Accounts, subject to the last sentence of Section
14.01(c)(i); and each such Eligible Deposit Account
shall be subject to the exclusive custody and control
of the Trustee, and the Trustee shall have sole
signature authority with respect thereto;
(B) any Trust Account Property that constitutes Physical
Property shall be delivered to the Trustee in
accordance with paragraph (a) of the definition of
"Delivery" and shall be held, pending maturity or
disposition, solely by the Trustee or a financial
intermediary (as such term is defined in Section
8-313(4) of the UCC) acting solely for the Trustee;
(C) any Trust Account Property that is a book-entry
security held through the Federal Reserve System
pursuant to federal book-entry regulations shall be
delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by
the Trustee, pending maturity or
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disposition, through continued book-entry
registration of such Trust Account Property as
described in such paragraph; and
(D) (i) any Trust Account Property that is an
"uncertificated security" under Article VIII of the
UCC and that is not governed by clause (C) above
shall be delivered to the Trustee in accordance with
paragraph (c) of the definition of "Delivery" and
shall be maintained by the Trustee, pending maturity
or disposition, through continued registration of the
Trustee's (or its nominee's) ownership of such
security.
(ii) The Servicer shall have the power, revocable by
the Trustee, to instruct the Trustee to make
withdrawals and payments from the Trust Accounts for
the purpose of permitting the Servicer to carry out
its respective duties hereunder.
Section 14.02 Collections. The Servicer shall remit within two
Business Days of receipt thereof to the Collection Account all payments by or on
behalf of the Obligors with respect to the Receivables (other than Purchased
Receivables) and all Liquidation Proceeds, both as collected during the
Collection Period. Notwithstanding the foregoing, for so long as (i) World Omni
remains the Servicer, (ii) no Event of Default shall have occurred and be
continuing and (iii) (x) World Omni is a wholly-owned subsidiary of World Omni
and World Omni maintains a short-term rating of at least A-1 by Standard &
Poor's and P-1 by Moody's (and for five Business Days following a reduction in
either such rating) or (y) prior to ceasing daily remittances, the Rating Agency
Condition shall have been satisfied (and any conditions or limitations imposed
by the Rating Agencies in connection therewith are complied with), the Servicer
shall remit such collections with respect to the preceding calendar month to the
Collection Account on the Determination Date immediately preceding the related
Distribution Date. For purposes of this Article XIV the phrase "payments by or
on behalf of Obligors" shall mean payments made with respect to the Receivables
by Persons other than
Section 14.03 Application of Collections. All collections for
the Collection Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a
Purchased Receivable), payments by or on behalf of the Obligor
shall be applied first, to reduce Outstanding Simple Interest
Advances to the extent described in Section 14.04(b). Next,
any excess shall be applied to interest and principal in
accordance with the Simple Interest Method.
Section 14.04 Advances. (a) As of the close of business on the
last day of each Collection Period, if the payments by or on behalf of the
Obligor on a Precomputed Receivable (other than a Purchased Receivable) shall be
less than the Scheduled Payment, the Payahead Balance shall be applied by the
Servicer to the extent of the shortfall and such Payahead Balance shall be
reduced accordingly. Next, the Servicer shall advance any remaining shortfall
(such amount a "Precomputed Advance"), to the extent that the Servicer, at its
sole discretion, shall determine that the Precomputed Advance shall be
recoverable from the Obligor, the Purchase
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Amount, Liquidation Proceeds or proceeds of any other Precomputed Receivables.
With respect to each Precomputed Receivable, the Precomputed Advance shall
increase Outstanding Precomputed Advances. Outstanding Precomputed Advances
shall be reduced by subsequent payments by or on behalf of the Obligor,
collections of Liquidation Proceeds in respect of Precomputed Receivables, or
payments of the Purchase Amount in respect of Precomputed Receivables.
(b) At the close of business on the last day of each
Collection Period, the Servicer shall advance an amount equal to the amount of
interest due on the Simple Interest Receivables at their respective APR's for
the related Collection Period (assuming the Simple Interest Receivables pay on
their respective due dates) minus the amount of interest actually received on
the Simple Interest Receivables during the related Collection Period (such
amount, a "Simple Interest Advance"). With respect to each Simple Interest
Receivable, the Simple Interest Advance shall increase Outstanding Simple
Interest Advances. If such calculation results in a negative number, an amount
equal to such negative number shall be paid to the Servicer and the amount of
Outstanding Simple Interest Advances shall be reduced by such amount. In
addition, in the event that a Simple Interest Receivable becomes a Liquidated
Receivable, Liquidation Proceeds with respect to such Simple Interest Receivable
attributable to accrued and unpaid interest thereon (but not including interest
for the then current Collection Period) shall be paid to the Servicer to reduce
Outstanding Simple Interest Advances, but only to the extent of any Outstanding
Simple Interest Advances. The Servicer shall not make any advance with respect
to principal of Simple Interest Receivables or in respect of Eligible Investment
Receivables.
Section 14.05 Additional Deposits. The Servicer shall deposit
in the Collection Account the aggregate Advances pursuant to Section 14.04. To
the extent that the Servicer fails to make a Simple Interest Advance pursuant to
Section 14.04(b) on the date required, the Trustee shall withdraw such amount
(or, if determinable, such portion of such amount as does not represent advances
for delinquent interest) from the Reserve Account and deposit such amount in the
Collection Account. The Servicer and the Seller shall deposit or cause to be
deposited in the Collection Account the aggregate Purchase Amount with respect
to Purchased Receivables, and the Servicer shall deposit therein all amounts to
be paid under Section 20.02. The Servicer shall deposit the aggregate Purchase
Amount with respect to Purchased Receivables when such obligations are due,
unless the Servicer shall not be required to make daily deposits pursuant to
Section 14.02.
Section 14.06 Distributions. (a) On each Distribution Date,
the Trustee shall cause to be transferred from the Collection Account to the
Distribution Account, in immediately available funds, the entire amount then on
deposit in the Collection Account; provided, however, that in the event that the
Servicer is required to make deposits to the Collection Account on a daily basis
pursuant to Section 14.02, the amount of the funds transferred from the
Collection Account to the Distribution Account will include only those funds
that were deposited in the Collection Account for the Collection Period related
to such Distribution Date.
(b) On each Distribution Date, the Trustee (based on the
information contained in the Servicer's Certificate delivered on the related
Determination Date pursuant to
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Section 14.09) shall distribute amounts on deposit in the Distribution Account
and, if applicable, the Reserve Account in the manner and priority set forth
below:
(i) to the Servicer, from the Interest Distribution Amount,
the Servicing Fee and all unpaid Servicing Fees from prior Collection
Periods;
(ii) to the Class [A] Certificateholders:
(B) from the Class [A] Percentage of the Interest
Distribution Amount (except as provided in the
proviso to subsection (c)(i) below) (as such Interest
Distribution Amount has been reduced by Servicing Fee
payments), the Class [A] Interest Distributable
Amount;
(C) from the Class [A] Percentage of the Principal
Distribution Amount, the Class [A] Principal
Distributable Amount;
(iii) to the Class [B] Certificateholders:
(A) from the Class [B] Percentage of the Interest
Distribution Amount (as such Interest Distribution
Amount has been reduced by Servicing Fee payments),
the Class [B] Interest Distributable Amount; and
(B) from the Class [B] Percentage of the Principal
Distribution Amount, the sum of the Class [B]
Principal Distributable Amount.
(c) The rights of the Class [B] Certificateholders to receive
distributions in respect of the Class [B] Certificates shall be and hereby are
subordinated to the rights of the Class [A] Certificateholders to receive
distributions in respect of the Class [A] Certificates and the rights of the
Servicer to receive the Servicing Fee (and any accrued and unpaid Servicing Fees
from prior Collection Periods) in the event of delinquency or defaults on the
Receivables. Such subordination shall be effected as follows, and all payments
shall be effected pursuant to clause (i) below prior to any payments pursuant to
clause (ii):
(i) If the Class [A] Percentage of the Interest
Distribution Amount (as such Interest Distribution
Amount has been reduced by Servicing Fee payments) is
less than the Class [A] Interest Distributable Amount
on any Distribution Date, the Class [A]
Certificateholders shall be entitled to receive
distributions in respect of such deficiency first,
from the Class [B] Percentage of the Interest
Distribution Amount; second, if such amounts are
insufficient, from amounts on deposit in the Reserve
Account; and third, if such amounts are insufficient,
from the Class [B] Percentage of the Principal
Distribution Amount; provided, however, that if the
amount of Simple Interest Advances required to be
made for the Collection Period have not been paid by
the Servicer or withdrawn from the Reserve Account,
the shortfall in either such amount shall be
allocated pro rata between the Class [A] Certificates
and the Class [B] Certificates and any such shortfall
with respect to the Class [A] Certificates (and any
Class [A] Carryover Shortfalls attributable thereto)
shall be paid only from amounts
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that are or become available in the Reserve Account
after giving effect to any deposit thereto on such
day.
(ii) If the Class [A] Percentage of the Principal
Distribution Amount is less than the sum of the Class
[A] Principal Distributable Amount on any
Distribution Date, the Class [A] Certificateholders
shall be entitled to receive distributions in respect
of such deficiency first, from the Class [B]
Percentage of the Principal Distribution Amount;
second, if such amounts are insufficient, from
amounts on deposit in the Reserve Account; and third,
if such amounts are insufficient, from the Class [B]
Percentage of the Interest Distribution Amount.
(d) Subject to Section 20.01 respecting the final payment upon
retirement of each Certificate, the Servicer shall on each Distribution Date
instruct the Trustee to distribute to each Certificateholder of record on the
preceding Record Date either by wire transfer in immediately available funds to
the account of such Holder at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided to the
Servicer appropriate instructions prior to such Distribution Date and such
Holder's Certificates of either Class in the aggregate evidence a denomination
of not less than $1,000,000, or, if not, by check mailed to such
Certificateholder at the address of such Holder appearing in the Certificate
Register, the amounts to be distributed to such Certificateholder pursuant to
such Holder's Certificates.
Section 14.07 Reserve Account. (a) On the Closing Date, the
Trustee will deposit, on behalf of the Seller, the Reserve Account Initial
Deposit into the Reserve Account from the net proceeds of the sale of the
Certificates.
(b) If the amount on deposit in the Reserve Account on any
Distribution Date (after giving effect to all deposits thereto or withdrawals
therefrom on such Distribution Date) is greater than the Specified Reserve
Account Balance for such Distribution Date, the Servicer shall instruct the
Trustee to distribute the amount of such excess to the Seller, which
distribution may include Eligible Investment Receivables; provided that no such
excess shall be distributed unless the letter from a firm of independent
certified public accountants required to be delivered under the Agreement in
respect of the Collection Period immediately following the Closing Date has been
delivered to the Trustee.
(c) If the Servicer determines pursuant to Section 14.04 that
it is required to make an Advance on any Distribution Date and does not do so
from its own funds, the Servicer shall instruct the Trustee to withdraw funds
from the Reserve Account and deposit them in the Collection Account to cover any
shortfall. Such payment shall be deemed to have been made by the Servicer
pursuant to Section 14.04 for purposes of making distributions pursuant to the
Agreement, but shall not otherwise satisfy the Servicer's obligation to deliver
the amount of the Advances, and the Servicer shall within two Business Days
replace any funds in the Reserve Account so used.
(d) (i) In the event that the Class [A] Distributable Amount
for a Distribution Date exceeds the sum of the amounts distributed to
Holders of the Class [A] Certificates
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pursuant to Section 14.06(b)(ii) on such Distribution Date, the
Servicer shall instruct the Trustee to withdraw from the Reserve
Account on such Distribution Date an amount equal to such excess, to
the extent of funds available therein, and distribute such amount to
the Holders of the Class [A] Certificates.
(ii) In the event that the Class [A] Principal
Distributable Amount on the Final Scheduled Distribution Date exceeds
the amount distributed to Holders of Class [A] Certificates pursuant to
Section 14.06(b)(ii)(B) on such Distribution Date, the Servicer shall
instruct the Trustee to withdraw from the Reserve Account on such
Distribution Date an amount equal to such excess, to the extent of
funds available therein, and distribute such amount to the Holders of
the Class [A] Certificates.
(e) (i) In the event that the Class [B] Distributable Amount
for a Distribution Date exceeds the sum of the amounts distributed to
Holders of the Class [B] Certificates pursuant to Section 14.06(b)(iii)
on such Distribution Date, the Servicer shall instruct the Trustee to
withdraw from the Reserve Account on such Distribution Date an amount
equal to such excess, to the extent of funds available therein after
giving effect to paragraphs (c) and (d) above, and distribute such
amount to the Holders of the Class [B] Certificates.
(ii) In the event that the Certificateholders'
Principal Distributable Amount on the Final Scheduled Distribution Date
exceeds the amount distributed to Holders of the Class [B] Certificates
pursuant to Section (b)(iii)(B), the Servicer shall instruct the
Trustee to withdraw from the Reserve Account on such Distribution Date
an amount equal to such excess, to the extent of funds available
therein after giving effect to paragraphs (d) and (e)(i) above, and
distribute such amount to the Holders of the Class [B] Certificates.
Following the payment in full of the Certificate Balance and of all
other amounts owing or to be distributed under the Agreement to
Certificateholders and the termination of the Trust, any amount
remaining on deposit in the Reserve Account shall be distributed to the
Seller and any Eligible Investment Receivables in the Reserve Account
shall be transferred to the Seller.
Section 14.08 Pre-Funding Account. (a) On the Closing Date,
the Trustee will deposit the amount, if any, specified in the Agreement in the
Pre-Funding Account on behalf of the Seller from the net proceeds of the sale of
the Certificates. On each Subsequent Transfer Date, the Servicer shall instruct
the Trustee to withdraw from the Pre-Funding Account an amount equal to (i) the
Principal Balance of the Subsequent Receivables transferred to the Trust on such
Subsequent Transfer Date less the Reserve Account Initial Deposit for such
Subsequent Transfer Date, and to distribute such amount to or upon the order of
the Seller upon satisfaction of the conditions set forth in the Agreement with
respect to such transfer, and (ii) the Reserve Account Initial Deposit for such
Subsequent Transfer Date and, on behalf of the Seller, to deposit such amount in
the Reserve Account. If Subsequent Receivables are transferred to the Trust on
the Closing Date, the Closing Date shall also be a Subsequent Transfer Date for
the purposes of this Section.
(b) If (x) the Pre-Funded Amount has not been reduced to zero
on the Distribution Date on which the Funding Period ends (or, if the Funding
Period does not end on a
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Distribution Date, on the first Distribution Date following the end of the
Funding Period) or (y) the Pre-Funded Amount has been reduced to $[__________]
or less on any Determination Date, in either case after giving effect to any
reductions in the Pre-Funded Amount on such Distribution Date or Determination
Date pursuant to paragraph (a) above, the Servicer shall instruct the Trustee to
withdraw from the Pre-Funding Account, in the case of (x), on such Distribution
Date or, in the case of (y), on the Distribution Date immediately succeeding
such Determination Date, (i) if the Pre-Funded Amount is equal to or less than
$[__________], the Pre-Funded Amount and deposit such amount in the Distribution
Account for payment as principal of the Class [A]-1 Certificates up to the Class
[A] Certificate Balance and then for payment of principal of the Class [A]-2
Certificates, and (ii) if the Pre-Funded Amount is greater than $[__________],
amounts equal to the Pre-Funded Percentage for each Class of Certificates of the
Pre-Funded Amount and deposit such amounts in the Distribution Account. In
addition, if the Pre-Funded Amount is greater than $[__________], the Seller
will deposit into the Distribution Account an amount equal to the sum of the
Class [A] Prepayment Premium and the Class [B] Prepayment Premium.
Section 14.09 Statements to Certificateholders. On each
Distribution Date, the Servicer shall provide to the Trustee for the Trustee to
forward to each Certificateholder of record as of the most recent Record Date, a
statement substantially in the form of Exhibit D setting forth at least the
following information as to each Class of Certificates to the extent applicable:
(i) the amount of such distribution allocable to
principal allocable to each class of Certificates;
(ii) the amount of such distribution allocable to interest
allocable to each class of Certificates;
(iii) for the final Distribution Date with respect to the
Funding Period, the amount of any remaining
Pre-Funded Amount that has not been used to fund the
purchase of Subsequent Receivables;
(iv) the Pool Balance as of the close of business on the
last day of the related Collection Period, after
giving effect to payments allocated to principal
reported under (i) above;
(v) the Class [A] Certificate Balance and the Class [B]
Certificate Balance as of the close of business on
the last day of the related Collection Period, after
giving effect to payments allocated to principal
reported under (i) above;
(vi) the amount of the Servicing Fee paid to the Servicer
with respect to the related Collection Period;
(vii) the amount of the Class [A] Principal Carryover
Shortfall and Class [A] Interest Carryover Shortfall
and Class [B] Principal Carryover Shortfall and Class
[B] Interest Carryover Shortfall, as applicable, if
any, on such Distribution Date and the change in the
Class [A] Principal Carryover
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Shortfall and Class [A] Interest Carryover Shortfall
and Class [B] Principal Carryover Shortfall and Class
[B] Interest Carryover Shortfall, as applicable, from
the preceding Distribution Date;
(viii) the amount of Realized Losses, if any, with respect
to the related Collection Period;
(ix) the amount otherwise distributable to the Class [B]
Certificateholders that is distributed to Class [A]
Certificateholders on such Distribution Date;
(x) the balance of the Reserve Account on such
Distribution Date, after giving effect to deposits
and withdrawals made on such Distribution Date;
(xi) for Distribution Dates during the Funding Period, the
remaining Pre-Funded Amount.
Each amount set forth pursuant to subclauses (i), (ii), (vi)
or (vii) above shall be expressed as a dollar amount per $1,000 of original
principal balance of a Class [A] or Class [B] Certificate, as applicable.
Section 14.10 Accounting and Tax Returns. The Trustee shall
(a) maintain (or cause to be maintained) the books of the Trust on a calendar
year basis and the accrual method of accounting and (b) deliver to each Holder
of a Certificate, as may be required by the Code and applicable Treasury
Regulations, such information as may be required (including Schedule K-1) to
enable each Holder to prepare its federal and state income tax returns.
Section 14.11 Net Deposits. As an administrative convenience,
unless the Servicer is required to remit collections daily, the Servicer will be
permitted to make the deposit of collections on the Receivables, aggregate
Advances and Purchase Amounts for or with respect to each Collection Period net
of distributions to be made to the Servicer with respect to such Collection
Period. The Servicer, however, will account to the Trustee and to the
Certificateholders as if all deposits, distributions and transfers were made
individually.
Section 14.12 Transfer of the Class [B] Certificates. In the
event any Holder of a Class [B] Certificate shall wish to transfer such
Certificate, the Seller shall provide to such Holder and any prospective
transferee designated by such Holder information regarding the Class [B]
Certificates and the Receivables and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for transfer of any such Class [B] Certificate without registration thereof
under the Securities Act of 1933, as amended, pursuant to the exemption from
registration provided by Rule 144A.]
ARTICLE XV
The Certificates
Section 15.01 The Certificates. Unless otherwise specified in
the Agreement, the Certificates shall be issued in fully registered form in
minimum denominations of $1,000.
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The Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of an authorized officer of the Trustee. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefit of the Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of authentication and delivery of such
Certificates.
A transferee of a Certificate shall become a Certificateholder
and shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Certificate
duly registered in such transferee's name pursuant to Section 15.03.
Section 15.02 Authentication of Certificates. The Trustee
shall cause the Certificates to be executed on behalf of the Trust,
authenticated and delivered to or upon the written order of the Seller, signed
by its chairman of the board, its president, any vice president, secretary, or
assistant treasurer, without further corporate action by the Seller, in
authorized denominations, pursuant to the Agreement. No Certificate shall
entitle its Holder to any benefit under the Agreement or shall be valid for any
purpose unless there shall appear on such Certificate a certificate of
authentication substantially in the form set forth in Exhibit A or Exhibit B to
the Agreement, as appropriate, executed by the Trustee by manual signature. Such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. All Certificates shall be
dated the date of their authentication.
Section 15.03 Registration of Transfer and Exchange of
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 15.08, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Unless otherwise specified in the
Agreement, the Trustee shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Certificate
at the Corporate Trust Office, the Trustee shall execute, authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates in authorized denominations of a like aggregate amount dated
the date of authentication by the Trustee. At the option of a Holder,
Certificates may be exchanged for other Certificates of authorized denominations
of a like aggregate amount upon surrender at the Corporate Trust Office of the
Certificates to be exchanged.
Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder or such Holder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer and exchange shall be
cancelled and subsequently disposed of by the Trustee.
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No service charge shall be made for any registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
[Section 15.04 Limitations on Transfer of the Class [B]
Certificates. (a) Unless otherwise set forth in the Agreement, the Class [B]
Certificates shall not have been and will not be registered under the Securities
Act and will not be listed on any exchange. No transfer of a Class [B]
Certificate shall be made unless such transfer is made pursuant to an effective
registration statement under the Securities Act and any applicable state
securities laws or is exempt from the registration requirements under said 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 state securities laws, in
order to assure compliance with the Securities Act and such laws, the Holder
desiring to effect such transfer and such Holder's prospective transferee shall
each certify to the Trustee in writing the facts surrounding the transfer in
substantially the forms set forth in Exhibit F (the "Transferor Certificate")
and either Exhibit G (the "Investment Letter") or Exhibit H (the "Rule 144A
Letter"). Except in the case of a transfer as to which the proposed transferee
has provided a Rule 144A Letter, there shall also be delivered to the Trustee an
opinion of counsel that such transfer may be made pursuant to an exemption from
the Securities Act and state securities laws, which opinion of counsel shall not
be an expense of the Trust or Trustee; provided that such opinion of counsel in
respect of the applicable state securities laws may be a memorandum of law
rather than an opinion if such counsel is not licensed in the applicable
jurisdiction. The Seller shall provide to any Holder of a Class [B] Certificate
and any prospective transferee designated by any such Holder, information
regarding the Class [B] Certificates and the Receivables and such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Class [B] Certificates without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. Each Holder of a Class [B] Certificate desiring
to effect such a transfer shall, and does hereby agree to, indemnify the Trust,
the Trustee and the Seller against any liability that may result if the transfer
is not so exempt or is not made in accordance with federal and state securities
laws.
(b) No transfer of a Class [B] Certificate shall be made
unless the Trustee shall have received a representation from the transferee of
such Class [B] Certificate, acceptable to and in form and substance satisfactory
to the Trustee, to the effect that such transferee is not an employee benefit
plan, trust or account (each a "Benefit Plan") subject to the fiduciary
responsibility provisions of ERISA or Section 4975 of the Code or a Person
acting on behalf of any such Benefit Plan or using assets of a Benefit Plan to
acquire Class [B] Certificates. For purposes of the preceding sentence, such
representation shall be deemed to have been made to the Trustee by the
transferee's (including an initial acquiror's) acceptance of a Class [B]
Certificate. Notwithstanding anything else to the contrary herein, any proposed
transfer of a Class [B] Certificate to or on behalf of a Benefit Plan subject to
ERISA or to the Code without the delivery to the Trustee of an opinion of
counsel satisfactory to the Trustee as described above shall be void and of no
effect. The Trustee shall be under no liability to any Person for any
registration of transfer of any Class [B] Certificate that is in fact not
permitted by this Section 15.04 or for making any payments due on such Class [B]
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of the
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Agreement so long as the transfer was registered by the Trustee in accordance
with the foregoing requirements. The Trustee shall be entitled, but not
obligated, to recover from any Holder of any Class [B] Certificate that was in
fact a Benefit Plan subject to Section 406 of ERISA or to Section 4975 of the
Code or a Person acting on behalf of any such Benefit Plan at the time it became
a Holder or subsequently became such a Benefit Plan or Person acting on behalf
of such a Benefit Plan, all payments made on such Class [B] Certificate at and
after either such time. Any such payments so recovered by the Trustee shall be
paid and delivered by the Trustee to the last preceding Holder of such
Certificate that is not, and was not at the time it held such Certificate, such
a Benefit Plan or Person acting on behalf of a Benefit Plan.
(c) The Trustee shall cause each Class [B] Certificate to
contain a legend stating that transfer of the Class [B] Certificates is subject
to certain restrictions and referring prospective purchasers of the Class [B]
Certificates to this Section 15.04 with respect to such restrictions.
(d) Unless otherwise set forth in the Agreement, no transfer
of a Class [B] Certificate or any interest therein shall be made unless prior to
such transfer the Holder of such Class [B] Certificate delivers to the Seller
and the Trustee either a ruling of the Internal Revenue Service or an Opinion of
Counsel, to the effect that the proposed transfer will not result in the
arrangement contemplated by the Agreement being treated as an association
taxable as a corporation under either the Code or [the tax laws of the State of
New York].]
Section 15.05 Mutilated, Destroyed, Lost, or Stolen
Certificates. If (a) any mutilated Certificate shall be surrendered to the
Certificate Registrar, or if the Certificate Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any Certificate and (b)
there shall be delivered to the Certificate Registrar and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
then in the absence of notice that such Certificate has been acquired by a bona
fide purchaser, the Trustee on behalf of the Trust shall execute, and the
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and denomination. In connection with the issuance of any new Certificate
under this Section, the Trustee and the Certificate Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of ownership in
the Trust, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 15.06 Persons Deemed Owners. Prior to due presentation
of a Certificate for registration of transfer, the Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate shall be registered
as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 14.06 and for all other purposes whatsoever, and neither the
Trustee nor the Certificate Registrar shall be bound by any notice to the
contrary.
Section 15.07 Access to List of Certificateholders' Names and
Addresses. The Trustee shall furnish or cause to be furnished to the Servicer,
within 15 days after receipt by the Trustee of a request therefor from the
Servicer in writing, a list, in such form as the Servicer may
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reasonably require, of the names and addresses of the Certificateholders as of
the most recent Record Date. If three or more Certificateholders, or one or more
Holders of [Class [A]] Certificates evidencing not less than 25% of the
Certificate Balance apply in writing to the Trustee, and such application states
that the applicants desire to communicate with other Certificateholders with
respect to their rights under the Agreement or under the Certificates and such
application shall be accompanied by a copy of the communication that such
applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt for such application, afford such applicants access
during normal business hours to the current list of Certificateholders. Each
Holder, by receiving and holding a Certificate, shall be deemed to have agreed
to hold neither the Servicer nor the Trustee accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
Section 15.08 Maintenance of Office or Agency. The Trustee
shall maintain in the Borough of Manhattan, The City of New York, an office or
offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustee in respect of the Certificates and the Agreement may be served. The
Trustee initially designates the Corporate Trust Office as specified in the
Agreement as its office for such purposes. The Trustee shall give prompt written
notice to the Servicer and to Certificateholders of any change in the location
of the Certificate Register or any such office or agency.
Section 15.09 Book-Entry Certificates. The Class [A]
Certificates and, if so specified in the Agreement, the Class [B] Certificates
may be issued in the form of one or more typewritten Certificates representing
Book-Entry Certificates, to be delivered by, or on behalf of, the Seller to the
initial Clearing Agency, which, unless otherwise specified in the Agreement,
shall be The Depository Trust Company. In such case, the Certificates delivered
to the Depository Trust Company shall initially be registered on the Certificate
Register in the name of Cede & Co., the nominee of the initial Clearing Agency,
and no Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in the Certificates, except as provided in Section
15.11. Unless and until definitive, fully registered Certificates (the
"Definitive Certificates") have been issued to such Certificate Owners pursuant
to Section 15.11:
(i) the provisions of this Section shall be in full force
and effect;
(ii) the Seller, the Servicer, the Certificate Registrar
and the Trustee may deal with the Clearing Agency for
all purposes (including the making of distributions
on such Certificates) as the sole Holder of such
Certificates and shall have no obligation to the
related Certificate Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Agreement,
the provisions of this Section shall control;
(iv) the rights of such Certificate Owners shall be
exercised only through the Clearing Agency and shall
be limited to those established by law and agreements
between such Certificate Owners and the Clearing
Agency and/or the Clearing Agency Participants.
Pursuant to the Depository Agreement, unless and
until Definitive Certificates are issued pursuant to
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Section 15.11, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions
of principal and interest on such Certificates to
such Clearing Agency Participants; and
(v) whenever the Agreement requires or permits actions to
be taken based upon instructions or directions of
Holders of Certificates evidencing a specified
percentage of the Certificate Balance, the Clearing
Agency shall be deemed to represent such percentage
only to the extent that it has received instructions
to such effect from Certificate Owners and/or
Clearing Agency Participants owning or representing,
respectively, such required percentage of the
beneficial interest in such Certificates and has
delivered such instructions to the Trustee.
Section 15.10 Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 15.11, the Trustee and the Servicer shall give all such
notices and communications specified herein to be given to Certificate Owners to
the Clearing Agency.
Section 15.11 Definitive Certificates. If (i) the Servicer advises the
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities under the Depository Agreement and the
Trustee or the Seller is unable to locate a qualified successor, (ii) the Seller
at its option advises the 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, Certificate Owners representing beneficial interests
aggregating not less than a majority of the aggregate outstanding principal
amount of the Book-Entry Certificates advise the Trustee and 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 the Certificate Owners, then the
Clearing Agency shall notify all Certificate Owners and the Trustee of the
occurrence of such event and of the availability of Definitive Certificates to
Certificate Owners requesting the same. Upon surrender to the Trustee of the
typewritten Certificates representing the Book-Entry Certificates by the
Clearing Agency, accompanied by registration instructions, the Trustee shall
execute and authenticate the Definitive Certificates in accordance with the
instructions of the Clearing Agency. None of the Seller, the Certificate
Registrar or the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, the Trustee
shall recognize the Holders of the Definitive Certificates as Certificateholders
hereunder. The Definitive Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Trustee, as evidenced by its execution thereof.
ARTICLE XVI
The Seller
Section 16.01 Representations of Seller. The Seller makes the
following representations on which the Trustee shall be deemed to have relied in
accepting the Receivables
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in trust and executing and authenticating the Certificates. The representations
speak as of the execution and delivery of the Agreement and as of the Closing
Date, in the case of Initial Receivables, if any, and as of the applicable
Subsequent Transfer Date, in the case of Subsequent Receivables, if any, and
shall survive the sale of the Receivables to the Trustee.
(i) Organization and Good Standing. The Seller is duly
organized and validly existing as a limited liability company in good standing
under the laws of the State of Florida, with power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to acquire and own the Standard
Receivables.
(ii) Due Qualification. The Seller is duly qualified to do
business as a foreign limited liability company in good standing, and has
obtained all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business shall require such
qualifications.
(iii) Power and Authority. The Seller has the power and
authority to execute and deliver the Agreement and to carry out its terms; the
Seller has full power and authority to sell and assign the property to be sold
and assigned to and deposited with the Trustee as part of the Trust, and the
Seller shall have duly authorized such sale and assignment to the Trustee by all
necessary action; and the execution, delivery and performance of the Agreement
and of each Subsequent Transfer Assignment or Eligible Investment Transfer
Assignment, as applicable, shall have been duly authorized by the Seller by all
necessary action.
(iv) Binding Obligation. The Agreement, each Subsequent
Transfer Assignment and Eligible Investment Transfer Assignment, when executed
and delivered by the Seller, shall constitute a legal, valid and binding
obligation of the Seller enforceable in accordance with its terms.
(v) No Violation. The consummation of the transactions
contemplated by the Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
articles of organization or operating agreement of the Seller, or any indenture,
agreement or other instrument to which the Seller is a party or by which it is
bound; or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Agreement); or violate any law or, to the
best of the Seller's knowledge, any order, rule or regulation applicable to the
Seller of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the Seller
or its properties.
(vi) No Proceedings. To the Seller's best knowledge, there are
no proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Seller or its properties: (i) asserting the
invalidity of the Agreement or the Certificates; (ii) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by the Agreement; (iii) seeking any determination or ruling that
might materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, the
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Agreement or the Certificates, or (iv) that might adversely affect the federal
income tax attributes of the Certificates.
Section 16.02 Existence. During the term of the Agreement, the
Seller will keep in full force and effect its existence, rights and franchises
as a limited liability company under the laws of the jurisdiction of its
organization and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of the Agreement and each other
instrument or agreement necessary or appropriate to the proper administration of
the Agreement and the transactions contemplated hereby.
Section 16.03 Liabilities of Seller; Indemnities. The Seller
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under the Agreement.
(i) The Seller shall indemnify, defend and hold harmless the
Trustee and the Trust from and against any taxes that may at any time be
asserted against the Trustee or the Trust with respect to the transactions
contemplated in the Agreement, including any sales, gross receipts, general
corporation, tangible personal property, privilege, or license taxes (but, in
the case of the Trust, not including any taxes asserted with respect to, and as
the date of, the sale of the Receivables to the Trust or the issuance and
original sale of the Certificates, or asserted with respect to ownership of the
Receivables or Eligible Investment Receivables, or federal or other income taxes
arising out of the distributions on the Certificates) and costs and expenses in
defending against the same.
(ii) The Seller shall indemnify, defend and hold harmless the
Trustee and the Certificateholders from and against any loss, liability or
expense incurred by reason of (a) the Seller's willful misfeasance, bad faith or
negligence in the performance of its duties under the Agreement, or by reason of
reckless disregard of its obligations and duties under the Agreement, and (b)
the Seller's or Trust's violation of federal or state securities laws in
connection with the offering and sale of the Certificates.
(iii) The Seller shall indemnify, defend and hold harmless the
Trustee and its officers, directors, employees and agents from and against all
costs, expenses, losses, claims, damages and liabilities arising out of or
incurred in connection with the acceptance or performance of the trusts and
duties herein and in the Agreement contained, except to the extent that such
cost, expense, loss, claim, damage or liabilities shall be due to the willful
misfeasance, bad faith or negligence (except for errors in judgment) of the
Trustee.
Indemnification under this Section 16.03 shall survive the
resignation or removal of the Trustee and the termination of the Agreement and
shall include reasonable fees and expenses of counsel and expenses of
litigation. If the Seller shall have made any indemnity payments to the Trustee
pursuant to this Section and the Trustee thereafter shall collect any of such
amounts from others, the Trustee shall promptly repay such amounts to the
Seller, without interest.
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Section 16.04 Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party or (c) which may succeed to the properties and assets of
the Seller substantially as a whole, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Seller
under the Agreement, shall be the successor to the Seller hereunder without the
execution or filing of any document or any further act by any of the parties to
the Agreement; provided, however, that (i) immediately after giving effect to
such transaction, no representation or warranty made pursuant to Section 12.01
shall have been breached and no Event of Default, and no event which, after
notice or lapse of time, or both, would become an Event of Default shall have
happened and be continuing, (ii) the Seller shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section and that all conditions precedent, if any, provided for in the
Agreement relating to such transaction have been complied with, (iii) the Rating
Agency Requirement shall have been satisfied with respect to such transaction
and (iv) the Seller shall have delivered to the Trustee an Opinion of Counsel
stating that, in the opinion of such Counsel, either (A) all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary fully to preserve and protect the interest of the
Trustee in the Receivables and reciting the details of such filings or (B) no
such action shall be necessary to preserve and protect such interest.
Notwithstanding anything herein to the contrary, the execution of the foregoing
agreement of assumption and compliance with clauses (i), (ii), (iii) and (iv)
above shall be conditions to the consummation of the transactions referred to in
clauses (a), (b) or (c) above.
Section 16.05 Limitation on Liability of Seller and Others.
The Seller and any director, officer, employee or agent of the Seller 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 hereunder. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under the Agreement and that in its opinion may involve it in any
expense or liability.
Section 16.06 Seller May Own Certificates. The Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates with the same rights as it would have if it were not
the Seller or an Affiliate thereof, except as otherwise provided herein.
ARTICLE XVII
The Servicer
Section 17.01 Representations of Servicer. The Servicer makes
the following representations on which the Trustee shall be deemed to have
relied in accepting the Receivables in trust and executing and authenticating
the Certificates. The representations speak as of the execution and delivery of
the Agreement and as of the Closing Date, in the case of the Initial
Receivables, if any, and as of the applicable Subsequent Transfer Date, in the
case of the Subsequent Receivables or Eligible Investment Receivables, if any,
and shall survive the sale of the Receivables to the Trustee.
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(a) Organization and Good Standing. The Servicer is duly
organized and validly existing as a limited liability company in good standing
under the laws of the state of its organization, with power and authority to own
its properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant times,
and has, the power, authority and legal right to acquire, own, sell and service
the Standard Receivables and to hold the Receivable Files as custodian.
(b) Due Qualification. The Servicer is duly qualified to do
business as a foreign limited liability company in good standing, and has
obtained all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including the
servicing of the Standard Receivables as required by the Agreement) shall
require such qualifications.
(c) Power and Authority. The Servicer has the power and
authority to execute and deliver the Agreement and to carry out its terms; and
the execution, delivery and performance of the Agreement have been duly
authorized by the Servicer by all necessary action.
(d) Binding Obligation. The Agreement constitutes a legal,
valid and binding obligation of the Servicer enforceable in accordance with its
terms.
(e) No Violation. The consummation of the transactions
contemplated by the Agreement and the fulfillment of the terms hereof shall not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
articles of organization or operating agreement of the Servicer, or any
indenture, agreement or other instrument to which the Servicer is a party or by
which it is bound; or 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 the Agreement); or violate any law or, to the best
of the Servicer's knowledge, any order, rule or regulation applicable to the
Servicer of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Servicer or its properties.
(f) No Proceedings. To the Servicer's best knowledge, there
are no proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Servicer or its properties: (i) asserting the
invalidity of the Agreement or the Certificates, (ii) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by the Agreement, (iii) seeking any determination or ruling that
might materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, the Agreement or the
Certificates, or (iv) relating to the Servicer and which might adversely affect
the federal income tax attributes of the Certificates.
(g) No Insolvent Obligors. As of the related Cutoff Date, no
Obligor on a Standard Receivable shall be shown on the Receivable Files as the
subject of a bankruptcy proceeding.
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Section 17.02 Indemnities of Servicer. The Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under the Agreement.
(a) The Servicer shall defend, indemnify and hold harmless the
Trustee, the Trust, the Certificateholders and the Seller from and against any
and all costs, expenses, losses, damages, claims, and liabilities, arising out
of or resulting from the use, ownership or operation by the Servicer or any
Affiliate thereof of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the
Trustee, the Seller, the Trust and the Certificateholders from and against any
and all costs, expenses, losses, claims, damages, and liabilities to the extent
that such cost, expense, loss, claim, damage, or liability arose out of, or was
imposed upon any such Person through, the negligence, willful misfeasance or bad
faith of the Servicer in the performance of its duties under the Agreement or by
reason of reckless disregard of its obligations and duties under the Agreement.
For purposes of this Section, in the event of the termination
of the rights and obligations of World Omni (or any successor thereto pursuant
to Section 17.03) as Servicer pursuant to Section 18.01, or a resignation by
such Servicer pursuant to the Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the Trustee)
pursuant to Section 18.02.
Indemnification under this Section shall survive the
resignation or removal of the Trustee or the termination of the Agreement and
shall include reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer shall have made any indemnity payments pursuant to
this Section and the recipient thereafter collects any of such amounts from
others, such Person shall promptly repay such amounts to the Servicer, without
interest.
Section 17.03 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) into which the Servicer may be merged
or consolidated, (b) which may result from any merger or consolidation to which
the Servicer shall be a party, (c) which may succeed to the properties and
assets of the Servicer substantially as a whole or (d) with respect to the
Servicer's obligations hereunder, which is a corporation 50% or more of the
voting stock of which is owned, directly or indirectly, by World Omni Financial
Corp., which Person executed an agreement of assumption to perform every
obligation of the Servicer hereunder shall be the successor to the Servicer
under the Agreement without further act on the part of any of the parties to the
Agreement; provided, however, that (i) immediately after giving effect to such
transaction, no Event of Default and no event which, after notice or lapse of
time, or both, would become an Event of Default shall have happened and be
continuing, (ii) the Servicer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent provided for in the Agreement relating to such
transaction have been complied with, (iii) the Rating Agency Condition shall
have been satisfied with respect to such transaction and (iv) the Servicer shall
have delivered to the Trustee an Opinion of Counsel stating that, in the opinion
of such counsel, either (A) all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Trustee in the Receivables and reciting
the details of such
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filings or (B) no such action shall be necessary to preserve and protect such
interest. Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii), (iii)
and (iv) above shall be conditions to the consummation of the transactions
referred to in clauses (a), (b) or (c) above.
Section 17.04 Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or agents of
the Servicer shall be under any liability to the Trust or the
Certificateholders, except as provided under the Agreement, for any action taken
or for refraining from the taking of any action pursuant to the Agreement or for
errors in judgment; provided, however, that this provision shall not protect the
Servicer or any such Person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under the Agreement. The Servicer and any director, officer, employee or
agent of the Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising under the Agreement.
Except as provided in the Agreement, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to service the Receivables in accordance
with the Agreement and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of the Agreement and
the rights and duties of the parties to the Agreement and the interests of the
Certificateholders under the Agreement.
ARTICLE XVIII
Default
Section 18.01 Events of Default. If any one of the following
events ("Events of Default") shall occur and be continuing:
(a) Any failure by the Servicer to deliver to the Trustee for
deposit to any Trust Account any proceeds or payment required to be so delivered
under the terms of the Certificates and the Agreement that shall continue
unremedied for a period of three Business Days after written notice of such
failure is received by the Servicer from the Trustee or after discovery of such
failure by an officer of the Servicer; or
(b) Failure by the Servicer or the Seller, as the case may be,
duly to observe or to perform in any material respect any other covenants or
agreements of the Servicer or the Seller (as the case may be) set forth in the
Certificates or in the Agreement, which failure shall (a) materially and
adversely affect the rights of Certificateholders and (b) continue unremedied
for a period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given (1) to the Servicer or
the Seller (as the case may be) by the Trustee or (2) to the Servicer or the
Seller (as the case may be) and to the Trustee by the Holders of [Class [A]]
Certificates evidencing not less than 25% of the [Class [A]] Certificate
Balance; or
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(c) The occurrence of an Insolvency Event with respect to the
Servicer or the Seller; then, and in each and every case, so long as the Event
of Default shall not have been remedied, either the Trustee or the Holders of
[Class [A]] Certificates evidencing not less than 25% of the [Class [A]]
Certificate Balance, by notice then given in writing to the Servicer (and to the
Trustee if given by Certificateholders) may terminate all of the rights and
obligations (other than the obligations set forth in Section 17.02) of the
Servicer under the Agreement. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under the Agreement,
whether with respect to the Certificates or the Receivables or otherwise, shall,
without further action, pass to and be vested in the Trustee or such successor
Servicer as may be appointed under Section 18.02; and, without limitation, the
Trustee is hereby authorized and empowered to execute and deliver, on behalf of
the predecessor Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and related documents, or otherwise. The predecessor Servicer shall cooperate
with the successor Servicer and the Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under the Agreement,
including the transfer to the successor Servicer for administration by it of all
cash amounts that shall at the time be held by the predecessor Servicer for
deposit, or shall thereafter be received with respect to any Receivable. All
reasonable costs and expenses (including attorneys' fees) incurred in connection
with transferring the Receivable Files to the successor Servicer and amending
the Agreement to reflect such succession as Servicer pursuant to this Section
shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses. Upon receipt of notice of the
occurrence of an Event of Default, the Trustee shall give notice thereof to the
Rating Agencies.
Section 18.02 Appointment of Successor. (a) Upon the
Servicer's receipt of notice of termination pursuant to Section 18.01 or the
Servicer's resignation in accordance with the terms of the Agreement, the
predecessor Servicer shall continue to perform its functions as Servicer under
the Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the later of
(x) the date 45 days from the delivery to the Trustee of written notice of such
resignation (or written confirmation of such notice) in accordance with the
terms of the Agreement and (y) the date upon which the predecessor Servicer
shall become unable to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. In the event of the Servicer's
termination hereunder, the Trustee shall appoint a successor Servicer, and the
successor Servicer shall accept its appointment by a written assumption in form
acceptable to the Trustee. In the event that a successor Servicer has not been
appointed at the time when the predecessor Servicer has ceased to act as
Servicer in accordance with this Section, the Trustee without further action
shall automatically be appointed the successor Servicer and shall be entitled to
the Servicing Fee. Notwithstanding the above, the Trustee shall, if it shall be
legally unable so to act, appoint, or petition a court of competent jurisdiction
to appoint, any established institution having a net worth of not less than
$100,000,000 and whose regular business shall include the servicing of
automotive receivables as the successor to the Servicer under the Agreement.
(b) Upon appointment, the successor Servicer (including the
Trustee acting as successor Servicer) shall be the successor in all respects to
the predecessor Servicer and shall be
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subject to all the responsibilities, duties and liabilities arising thereafter
relating thereto placed on the predecessor Servicer and shall be entitled to the
Servicing Fee and all of the rights granted to the predecessor Servicer by the
terms and provisions of the Agreement.
(c) The Servicer may not resign unless it is prohibited from
serving as such by law.
Section 18.03 Repayment of Advances. If the Servicer shall
change, the predecessor Servicer shall be entitled to receive reimbursement for
Outstanding Advances pursuant to Sections 14.03 and 14.04 with respect to all
Advances made by the predecessor Servicer.
Section 18.04 Notification to Certificateholders. Upon any
termination of, or appointment of a successor to, the Servicer pursuant to this
Article XVIII, the Trustee shall give prompt written notice thereof to
Certificateholders and to the Rating Agencies.
Section 18.05 Waiver of Past Defaults. The Holders of [Class
[A]] Certificates evidencing not less than a majority of the [Class [A]]
Certificate Balance may, on behalf of all Holders of Certificates, waive any
default by the Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to or payments
from the Trust Accounts in accordance with the Agreement. Upon any such waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of the
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
ARTICLE XIX
The Trustee
Section 19.01 Duties of Trustee. (a) If an Event of Default
has occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by the Agreement and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs; provided, however, that if the Trustee
shall assume the duties of the Servicer pursuant to Section 18.02, the Trustee
in performing such duties shall use the degree of skill and attention
customarily exercised by a servicer with respect to automobile receivables that
it services for itself or others.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in the
Agreement and no implied covenants or obligations
shall be read into the Agreement against the Trustee;
and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of the Agreement; provided, however,
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that the Trustee shall examine the certificates and
opinions to determine whether or not they conform to
the [__________].
(c) The Trustee shall take and maintain custody of the
Schedule of Receivables included as an exhibit to the Agreement and shall retain
all Servicer's Certificates identifying Receivables that become Purchased
Receivables and Liquidated Receivables.
(d) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken in good faith in accordance with the
Agreement or at the direction of the Holders of [Class [A]] Certificates
evidencing not less than 25% of the [Class [A]] Certificate Balance relating to
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee
under the Agreement;
(e) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of clause
(d) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Trustee Officer
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in
accordance with a direction received by it pursuant
to the Agreement.
(f) No provision of the Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
Section 19.02 Certain Matters Affecting Trustee. Except as
otherwise provided in Section 19.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in any such document.
(b) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters or relating to the Agreement or
the Certificates shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it under the
Agreement in good faith and in accordance with such advice or opinion of such
counsel.
(c) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by the Agreement, or to institute, conduct
or defend any litigation under the
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Agreement at the request, order or direction of any of the Certificateholders
pursuant to the provisions of the Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities that may be incurred therein or thereby.
(d) The Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith which it believes to be authorized or
within its rights or powers conferred upon it by the Agreement; provided that
such conduct does not constitute willful misconduct, bad faith or negligence on
the part of the Trustee.
(e) The Trustee may execute any of the trusts or powers or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian, and the Trustee shall not be responsible for any
misconduct or negligence of any such agent, attorney or custodian appointed with
due care by it hereunder.
Section 19.03 Trustee Not Liable for Certificates or
Receivables. The recitals contained herein and in the Certificates (other than
the certificate of authentication on the Certificates) shall be taken as the
statements of the Seller or the Servicer, as the case may be, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee shall make no
representations as to the validity or sufficiency of the Agreement or of the
Certificates (other than the certificate of authentication on the Certificates),
or of any Receivable or Eligible Investment Receivable or related document. The
Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Receivable or
Eligible Investment Receivable, or the perfection and priority of any security
interest created by any Receivable or Eligible Investment Receivable in any
Financed Vehicle or the maintenance of any such perfection and priority, or for
or with respect to the efficacy of the Trust or its ability to generate the
payments to be distributed to Certificateholders under the Agreement, including,
without limitation: the existence, condition and ownership of any Financed
Vehicle; the existence and enforceability of any insurance thereon; the
existence and contents of any Receivable or Eligible Investment Receivable or
any computer or other record thereof; the validity of the assignment of any
Receivable or Eligible Investment Receivable to the Trust or of any intervening
assignment; the completeness of any Receivable or Eligible Investment
Receivable; the performance or enforcement of any Receivable or Eligible
Investment Receivable; the compliance by the Seller or the Servicer with any
warranty or representation made under the Agreement or in any related document
and the accuracy of any such warranty or representation or any action of the
Servicer taken in the name of the Trustee.
Section 19.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
and may deal with the Seller and the Servicer in banking transactions with the
same rights as it would have if it were not Trustee.
Section 19.05 Trustee's Fees and Expenses. The Servicer shall
pay to the Trustee, and the Trustee shall be entitled to receive, reasonable
compensation as shall have been separately agreed upon before the date of the
Agreement between the Seller and the Trustee (which shall not be limited by any
provision of law regarding the compensation of a trustee of an express trust)
for all services rendered by it in the execution of the trusts created by the
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Agreement and in the exercise and performance of any of the Trustee's powers and
duties under the Agreement. The Trustee shall be entitled to be reimbursed by
the Seller for its reasonable expenses under the Agreement, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Trustee may employ in connection
with the exercise and performance of its rights and duties under the Agreement.
Section 19.06 Eligibility Requirements for Trustee. The
Trustee shall at all times be a corporation having an office in the same state
as the location of the Corporate Trust Office; organized and doing business
under the laws of such state or the United States of America; 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 (or having a parent that has) a rating
of at least Baa3 by Moody's. If such corporation shall publish reports of
condition at least annually pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 19.07.
Section 19.07 Resignation or Removal of Trustee. The Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer shall promptly appoint a successor Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor Trustee. If no successor Trustee
shall have been so appointed and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 19.06 and shall fail to resign after
written request therefor by the Servicer, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Servicer
may remove the Trustee. If the Servicer shall remove the Trustee under the
authority of the immediately preceding sentence, the Servicer shall promptly
appoint a successor Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the outgoing Trustee so removed and one
copy to the successor Trustee, and shall pay all fees owed to the outgoing
Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee
pursuant to Section 19.08 and payment of all fees and expenses owed to the
outgoing Trustee. The Servicer shall provide notice of such resignation or
removal of the Trustee to each of the Rating Agencies.
Section 19.08 Successor Trustee. Any successor Trustee
appointed pursuant to Section 19.07 shall execute, acknowledge and deliver to
the Servicer and to its predecessor
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Trustee an instrument accepting such appointment under the Agreement, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor under the Agreement, with like effect as if
originally named as Trustee. The predecessor Trustee shall upon payment of its
fees and expenses deliver to the successor Trustee all documents and statements
and monies held by it under the Agreement; and the Servicer and the predecessor
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Trustee all such rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Trustee shall
be eligible pursuant to Section 19.06.
Upon acceptance of appointment by a successor Trustee pursuant
to this Section, the Servicer shall mail notice thereof to all
Certificateholders and to the Rating Agencies. If the Servicer shall fail to
mail such notice within 10 days after acceptance of appointment by the successor
Trustee, the successor Trustee shall cause such notice to be mailed at the
expense of the Servicer.
Section 19.09 Merger or Consolidation of Trustee. Any
corporation into which the 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 Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible pursuant to Section 19.06, 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. The Trustee shall mail
notice of any such merger or consolidation to the Rating Agencies.
Section 19.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of the Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Financed Vehicle may at the time be located, the Servicer
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
to act as co-trustee, jointly with the 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 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 Servicer and the Trustee
may consider necessary or desirable. If the Servicer shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee under the Agreement shall be required to meet the terms of
eligibility as a successor Trustee pursuant to Section 19.06 and no notice of
the appointment of any co-trustee or separate
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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 any such separate trustee or
co-trustee shall be conferred upon and exercised or
performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such
act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are
to be performed, the Trustee shall be incompetent or
unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations
(including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of
the Trustee;
(ii) No trustee under the Agreement shall be personally
liable by reason of any act or omission of any other
trustee under the Agreement; and
(iii) The Servicer and the 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 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 the Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of the
Agreement, specifically including every provision of the Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Each such instrument shall be filed with the Trustee and a copy thereof
given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the
Trustee its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of the
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor co-trustee or separate trustee.
Section 19.11 Representations and Warranties of Trustee. The
Trustee shall make the following representations and warranties on which the
Seller and Certificateholders shall be deemed to rely:
(i) The Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws
of its place of incorporation.
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(ii) The Trustee has full corporate power, authority and
legal right to execute and deliver, and to perform
its obligations under, the Agreement, and shall have
taken all necessary action to authorize the execution
and delivery of, and the performance of its
obligations under, the Agreement.
(iii) The Agreement shall have been duly executed and
delivered by the Trustee.
Section 19.12 No Bankruptcy Petition. The Trustee, by entering
into the Agreement, and each Certificateholder, by accepting a Certificate,
hereby covenant and agree that they will not at any time institute against, or
join any other Person in instituting against, the Seller or the Trust any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other similar proceedings under any federal or state bankruptcy or similar
law in connection with the Certificates or the Agreement.
ARTICLE XX
Termination
Section 20.01 Termination of the Trust. (a) The respective
obligations and responsibilities of the Seller, the Servicer and the Trustee
created hereby and the Trust created by the Agreement shall terminate (i) upon
the payment to Certificateholders 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 and (ii) at the time provided in Section 20.02; provided, however,
that in no event shall the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Joseph P. Kennedy, the late ambassador of the United States to the Court of St.
James, living on the date of the Agreement. The Servicer shall promptly notify
the Trustee of any prospective termination pursuant to this Section.
(b) Except as provided in Section 20.01(a), neither the Seller
nor any Owner shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which Certificateholders shall surrender their
Certificates to the Trustee for payment of the final distribution and
cancellation of the Certificates, shall be given by the Trustee by letter to
Certificateholders mailed not earlier than the 15th day and not later than the
25th day of the month next preceding the specified Distribution Date stating (A)
the Distribution Date upon which final payment of the Certificates shall be made
upon presentation and surrender of the Certificates at the office of the Trustee
therein designated, (B) the amount of such final payment and (C) that the Record
Date otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Certificates at the
office of the Trustee therein specified. The Trustee shall give such notice to
the Certificate Registrar (if other than the Trustee) at the time such notice is
given to Certificateholders. Upon presentation and surrender of the
Certificates, the Trustee shall cause to be distributed to Certificateholders
amounts distributable on such Distribution Date pursuant to Section 14.06.
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In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after such second notice all of the Certificates
shall not have been surrendered for cancellation, the Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to the Agreement. Any funds remaining in the Trust after
exhaustion of such remedies shall be distributed by the Trustee to the Seller.
Section 20.02 Optional Purchase of All Receivables. On the
last day of any Collection Period as of which the Pool Balance shall be less
than or equal to 10% of the Original Pool Balance, the Servicer shall have the
option to purchase the corpus of the Trust; provided, however, that the Servicer
may not effect any such purchase if at such time the rating of World Omni's
long-term debt obligations is less than Baa3 by Moody's, unless the Trustee
shall have received an Opinion of Counsel to the effect that such purchase would
not constitute a fraudulent conveyance. To exercise such option, the Servicer
shall deposit an amount into the Collection Account pursuant to Section 14.05
equal to the aggregate Purchase Amount for the Receivables (including defaulted
Receivables), plus the appraised value of any other property held by the Trust,
such value to be determined by an appraiser mutually agreed upon by the Servicer
and the Trustee. The Servicer thereafter shall succeed to all interests in and
to the Trust.
ARTICLE XXI
Miscellaneous Provisions
Section 21.01 Amendment. The Agreement may be amended by the
Seller, the Servicer and the Trustee, without the consent of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in the Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any provision in the Agreement or of
modifying in any manner the rights of the Certificateholders; provided, however,
that such action shall not, as evidenced by an Opinion of Counsel delivered to
the Trustee, adversely affect in any material respect the interests of any
Certificateholder.
The Agreement may also be amended from time to time by the
Seller, the Servicer and the Trustee with the consent of the Holders of Class
[A] Certificates and Class [B] Certificates (which consent shall be conclusive
and binding on such Holders and on all future Holders of such Certificates and
of any Certificates issued upon the transfer therefor or in exchange thereof or
in lieu thereof, whether or not notation of such consent is made upon the
Certificates), each voting as a class, evidencing not less than a majority of
the Class [A] Certificate Balance and Class [B] Certificate Balance,
respectively, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Agreement, or of modifying in
any manner the rights of the Certificateholders; provided, however, that no such
amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Receivables or
distributions that shall be required to be made on any Certificate or (b) reduce
the aforesaid percentage of the Class [A] Certificate
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Balance and Class [B] Certificate Balance required to consent to any such
amendment without the consent of the Holders of all Certificates then
outstanding.
Promptly after the execution of any such amendment or consent,
the Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder and the Rating Agencies.
It shall not be necessary for the consent of
Certificateholders pursuant to this Section to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents (and
any other consents of Certificateholders provided for in this Agreement) and of
evidencing the authorization of any action by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
Prior to the execution of any amendment to the Agreement, the
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 the Agreement
and the Opinion of Counsel referred to in Section 21.02(i)(1). The Trustee may,
but shall not be obligated to, enter into any such amendment that affects the
Trustee's own rights, duties or immunities under the Agreement or otherwise.
Section 21.02 Protection of Title to Trust. (a) The Seller
shall execute and file such financing statements and cause to be executed and
filed such continuation 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
Certificateholders and the Trustee in the Receivables and in the proceeds
thereof. The Seller shall deliver (or cause to be delivered) to the Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of ss. 9-402(7) of
the UCC, unless it shall have given the Trustee at least five days' prior
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.
(c) Each of the Seller and the Servicer shall have an
obligation to give the Trustee at least 60 days' 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 file any such amendment or new financing
statement. The Servicer shall at all times maintain its principal executive
office and each office from which it shall service Receivables within the United
States of America.
(d) The Servicer shall maintain accounts and records as to
each Standard Receivable accurately and in sufficient detail to permit (i) the
reader thereof to know at any time the status of such Receivable, including
payments and recoveries made and payments owing (and
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the nature of each) and (ii) reconciliation between payments or recoveries on
(or with respect to) each Receivable and the amounts from time to time deposited
in the Distribution Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under the Agreement of the Standard Receivables,
the Servicer's master computer records (including any back-up archives) that
refer to a Standard Receivable shall indicate clearly the interest of the Trust
in such Standard Receivable and that such Standard Receivable is owned by the
Trustee. Indication of the Trustee's ownership of a Standard Receivable shall be
deleted from or modified on the Servicer's computer systems when, and only when,
such Receivable shall have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
automotive receivables to, any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective purchaser, lender or
other transferee computer tapes, records or print-outs (including any restored
from back-up archives) that, if they shall refer in any manner whatsoever to any
Standard Receivable, shall indicate clearly that such Standard Receivable has
been sold and is owned by the Trustee.
(g) The Servicer shall permit the Trustee and its agents at
any time during normal business hours to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Trustee,
within five Business Days, a list of all Receivables (by contract number and
name of Obligor) then held as part of the Trust, together with a reconciliation
of such list to the Schedule of Receivables and to each of the Servicer's
Certificates furnished before such request indicating removal of Receivables
from the Trust.
(i) The Servicer shall deliver to the Trustee:
(A) promptly after the execution and delivery of the
Agreement and, if required pursuant to Section 21.01,
of each amendment hereto and on certain Distribution
Dates as required by Sections 3.02(b)(2)(iii)(B) and
12.03(b)(x)(B) of the Agreement, an Opinion of
Counsel stating that, in the opinion of such Counsel,
either (1) all financing statements and continuation
statements have been executed and filed that are
necessary fully to preserve and protect the interest
of the Trustee in the Receivables, and reciting the
details of such filings or referring to prior
Opinions of Counsel in which such details are given,
or (2) no such action shall be necessary to preserve
and protect such interest; and
(B) within 90 days after the beginning of each calendar
year beginning with the first calendar year beginning
more than three months after the initial Cutoff Date,
an Opinion of Counsel, dated as of a date during such
90-day period, stating that, in the opinion of such
counsel, either (1) all financing
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statements and continuation statements have been
executed and filed that are necessary fully to
preserve and protect the interest of the Trustee in
the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in
which such details are given, or (2) no such action
shall be necessary to preserve and protect such
interest.
Each Opinion of Counsel referred to in clause (l) or (2) above shall specify any
action necessary (as of the date of such opinion) to be taken in the following
year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable
law, cause the Certificates to be registered with the Securities and Exchange
Commission pursuant to Section 12(b) or Section 12(g) of the Securities Exchange
Act of 1934 within the time periods specified in such sections.
Section 21.03 Separate Counterparts. The Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section 21.04 Limitation on Rights of Certificateholders. (a)
The death or incapacity of any Certificateholder shall not operate to terminate
the Agreement or the Trust, nor entitle such Certificateholder'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 the rights, obligations and liabilities of the parties to
the Agreement or any of them.
(b) No Certificateholder shall have any right to vote (except
as provided in Section 21.01 or 18.05) or in any manner otherwise control the
operation and management of the Trust or the obligations of the parties to the
Agreement; nor shall any provision in the Agreement or contained in the
Certificates be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken pursuant to any provision of the Agreement.
(c) No Certificateholder shall have any right to institute any
suit, action or proceeding in equity or at law upon or under or with respect to
the Agreement, unless: (i) such Holder previously shall have given to the
Trustee written notice of a continuing Event of Default; (ii) the Holders of
Certificates evidencing not less than 25% of the Certificate Balance shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee under the Agreement and shall have offered
to the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby; (iii) the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity
shall have neglected or refused to institute any such action, suit or
proceeding; and (iv) during such 60-day period no request or waiver inconsistent
with such written request shall have been given to the Trustee by Holders
representing a majority of the Certificate Balance. It is understood and
intended that no one or more Holders of Certificates shall have any right in any
manner whatever by virtue of, or by availing of, any provisions of the Agreement
to affect,
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disturb or prejudice the rights of any other Holders of Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under the Agreement, except in the manner provided in
the Agreement.
Section 21.05 Governing Law. THE AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 21.06 Notices. All demands, notices and communications
upon or to the Seller, the Servicer, the Trustee or the Rating Agencies under
the 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 (a) in the case of the Seller, to World Omni Financial Corp., 120 N.W.
12th Avenue, Deerfield Beach, Florida 33442, Attention: A. Tucker Allen ((954)
429-2200); (b) in the case of the Servicer, to World Omni Financial Corp., 120
N.W. 12th Avenue, Deerfield Beach, Florida 33442, Attention: A. Tucker Allen
((954) 429-2200); (c) in the case of the Trustee, at the Corporate Trust Office;
(d) in the case of Moody's, to Moody's Investors Service, Inc., ABS Monitoring
Department, 99 Church Street, New York, New York 10007; (e) in the case of
Standard & Poor's, to Standard & Poor's Ratings Group, 25 Broadway - 15th Floor,
New York, New York 10004, Attention: Asset Backed Surveillance Department; (f)
in the case of Duff and Phelps, to Duff & Phelps Credit Rating Company, 55 East
Monroe Street, 35th Floor, Chicago, Illinois 60603, Attention: Structured
Finance; and (g) in the case of Fitch, to Fitch Investors Service, Inc., One
State Street Plaza, New York, New York 10004, Attention: Structured Surveillance
Department. Any notice required or permitted to be mailed to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in the Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder shall receive such notice.
Section 21.07 Severability of Provisions. Any provision of the
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of the Agreement,
and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Section 21.08 Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Sections 16.04 and 17.03 and as
provided in the provisions of the Agreement concerning the resignation of the
Servicer, the Agreement may not be assigned by the Seller or the Servicer
without the prior written consent of the Trustee and the Holders of Certificates
evidencing not less than 66% of the Certificate Balance.
Section 21.09 Certificates Nonassessable and Fully Paid.
Certificateholders shall not be personally liable for obligations of the Trust.
The interests represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever.
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Section 21.10 Limitations on Rights of Others. The provisions
of this Agreement are solely for the benefit of the Seller, the Servicer, the
Trustee and the Certificateholders, and nothing in this Agreement, whether
express or implied, shall be construed to give any other Person any legal or
equitable right, remedy or claim in respect of the Trust or under or in respect
of the Agreement or any covenants, conditions or provisions contained herein.
Section 21.11 Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
Section 21.12 Nonpetition Covenants. (a) Notwithstanding any
prior termination of this Agreement, the Servicer and the Seller shall not,
prior to the date that is one year and one day after the termination of the
Agreement with respect to the Trust, acquiesce to, petition or otherwise invoke
or cause the Trust to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Trust under any
federal or state bankruptcy, insolvency or similar law, or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator, or other
similar official of the Trust or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Trust.
(b) Notwithstanding any prior termination of the Agreement,
the Servicer shall not, prior to the date that is one year and one day after the
termination of the Agreement with respect to the Seller, acquiesce to, petition
or otherwise invoke or cause the Seller to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Seller under any federal or state bankruptcy, insolvency or similar law,
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator,
or other similar official of the Seller or any substantial part of its property,
or ordering the winding up or liquidation of the affairs of the Seller.
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EXHIBIT A
FORM OF CLASS [A] CERTIFICATE
UNLESS THIS CERTIFICATE 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 CERTIFICATE
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.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CLASS [A]
CERTIFICATE WILL BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS [B] CERTIFICATE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
NUMBER $ R-
CUSIP NO.
WORLD OMNI AUTO RECEIVABLES TRUST [_______]-[_________]
[_____]% ASSET BACKED CERTIFICATE, CLASS [A]
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts (as
defined herein) secured by new and used automobiles and light duty trucks.
(This Class [A] Certificate does not represent an interest in or obligation of
World Omni Financial Corp. or any of its affiliates, except to the extent
described below.)
THIS CERTIFIES THAT [____________________] is the registered owner of
[____________________] DOLLARS nonassessable, fully-paid, fractional undivided
interest in World Omni Auto Receivables Trust [_______]-[_________] (the
"Trust") formed pursuant to the Pooling and Servicing Agreement (the
"Agreement") dated as of [__________], among World Omni Financial Corp., a
Florida corporation, as seller (the "Seller"), World Omni Financial Corp., a
Florida corporation, as servicer (the "Servicer") and
[______________________________], a banking association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Agreement.
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This Certificate is one of a duly authorized series of
Certificates, designated as the [_____]% Asset Backed Certificates, Class [A]
(herein called the "Class [A] Certificates"), all issued under the Agreement, to
which Agreement reference is hereby made for a statement of the respective
rights and obligations thereunder of the Seller, the Servicer, the Trustee and
Holders of the Certificates. The Class [A] Certificates are subject to all terms
of the Agreement.
The property of the Trust includes a pool of retail
installment sale contracts for new and used automobiles and light duty trucks
(the "Receivables"), all monies received on or after the related Cutoff Date,
security interests in the vehicles financed thereby, certain bank accounts and
the proceeds thereof, proceeds from claims on certain insurance policies and all
proceeds of the foregoing. Under the Agreement, there will be distributed on the
[_____] day of each month or, if such day is not a Business Day, the next
Business Day (each, a "Distribution Date"), commencing on [__________], to the
Person in whose name this Class [A] Certificate is registered at the close of
business on the first day of the month in which such Distribution Date occurs
(the "Record Date"), such Certificateholder's fractional undivided interest in
the amount to be distributed to Class [A] Certificateholders on such
Distribution Date.
It is the intent of the Seller, the Trustee and the
Certificateholders that, for purposes of federal income, state and local income
and single business tax and any other income taxes, the Trust will be treated as
a grantor trust and the Certificates will be treated as interests in a grantor
trust. The Seller, the Servicer, the Trustee and the Certificateholders, by
acceptance of a Certificate, agree to treat, and to take no action inconsistent
with the treatment of, the Certificates for such tax purposes as interests in a
grantor trust.
Distributions on this Class [A] Certificate will be made as
provided in the Agreement by the Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Class [A] Certificate or the making of any notation hereon,
except that with respect to Class [A] Certificates registered on the Record Date
in the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Except as otherwise provided in
the Agreement and notwithstanding the above, the final distribution on this
Class [A] Certificate will be made after due notice by the Trustee of the
pendency of such distribution and only upon presentation and surrender of this
Class [A] Certificate at the office or agency maintained for that purpose by the
Trustee in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this
Class [A] Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Trustee, by manual signature, this
Class [A] Certificate shall not entitle the Holder hereof to any benefit under
the Agreement or be valid for any purpose.
THIS TRUST CERTIFICATE 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
A-2
<PAGE>
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and
not in its individual capacity, has caused this Class [A] Certificate to be duly
executed.
Date: [__________]
WORLD OMNI AUTO RECEIVABLES TRUST
[----------]-[----------]
By: [____________________], not in its
individual capacity but solely as Trustee
By: _____________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [A] Certificates referred to in the within-mentioned
Agreement.
Date:
[------------------------------]
as Trustee
By: __________________________________________
Authorized Signatory
[REVERSE OF CLASS [A] CERTIFICATE]
The Class [A] Certificates do not represent an obligation of,
or an interest in, the Seller, the Servicer, the Trustee or any affiliates of
any of them, and no recourse may be had against such parties or their assets
except as expressly set forth or contemplated herein or in the Agreement. In
addition, this Class [A] Certificate is not guaranteed by any governmental
agency or instrumentality and is limited in right of payment to certain
collections and recoveries with respect to the Receivables (and certain other
amounts), all as more specifically set forth herein and in the Agreement. A copy
of the Agreement may be examined by any Certificateholder upon written request
during normal business hours at the principal office of the Seller and at such
other places, if any, designated by the Seller.
A-3
<PAGE>
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Seller, the Servicer and the Trustee and the rights of the
Certificateholders at any time by the Seller, the Servicer and the Trustee with
the consent of the Holders of Certificates evidencing not less than a majority
of the Certificate Balance. Any such consent by the Holder of this Class [A]
Certificate shall be conclusive and binding on such Holder and on all future
Holders of this Certificate and of any Class [A] Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent is made upon this Class [A] Certificate. The Agreement
also permits the amendment thereof, in certain limited circumstances, without
the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Class [A] Certificate is
registerable in the Certificate Register upon surrender of this Class [A]
Certificate for registration of transfer at the offices or agencies of the
Certificate Registrar maintained by the Trustee in the Borough of Manhattan, The
City of New York, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Class [A] Certificates of authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee. The initial Certificate Registrar appointed under the
Agreement is [____________________].
Except as provided in the Agreement, the Class [A]
Certificates are issuable only as registered certificates without coupons in a
minimum denomination of $[__________]. As provided in the Agreement and subject
to certain limitations therein set forth, Class [A] Certificates are
exchangeable for new Class [A] Certificates of authorized denominations
evidencing the same aggregate denomination, as requested by the Holder
surrendering the same. No service charge will be made for any such registration
of transfer or exchange, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Trustee, the Certificate Registrar and any agent of the
Trustee or the Certificate Registrar may treat the Person in whose name this
Class [A] Certificate is registered as the owner hereof for all purposes, and
none of the Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Agreement and the disposition of all property held by the Trust. The Servicer of
the Receivables may at its option purchase the Trust property at a price
specified in the Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Certificates; however,
such right of purchase is exercisable only as of the last day of any Collection
Period as of which the Pool Balance is less than or equal to 10% of the Original
Pool Balance.
A-4
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------------------- (Please print or type
name and address, including postal zip code, of assignee)
- ------------------------------------------------------- the within Class [A]
Certificate, and all rights thereunder, hereby irrevocably constituting and
appointing to
- ------------------------------ transfer said Class [A] Certificate on the books
of the Certificate Registrar, with full power of substitution in the premises.
Dated:
*/
--------------------------------------
Signature Guaranteed:
*/
--------------------------------------
- ------------------
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Class [A] Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
A-5
<PAGE>
EXHIBIT B
FORM OF CLASS [B] CERTIFICATE
THIS CLASS [B] CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS, AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM. THE TRANSFER OF THIS CLASS [B]
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS AND CONDITIONS SET FORTH IN THE
AGREEMENT UNDER WHICH THIS CLASS [B] CERTIFICATE IS ISSUED (A COPY OF WHICH IS
AVAILABLE FROM THE TRUSTEE UPON REQUEST), INCLUDING RECEIPT BY THE TRUSTEE OF AN
INVESTMENT LETTER IN WHICH THE TRANSFEREE SHALL MAKE CERTAIN REPRESENTATIONS.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT IS AN
EMPLOYEE BENEFIT PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR
ANY GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW THAT IS, TO A MATERIAL EXTENT, SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN") OR ANY PERSON
INVESTING THE ASSETS OF A PLAN EXCEPT AS PROVIDED IN THE AGREEMENT REFERRED TO
HEREIN.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CLASS [B]
CERTIFICATE WILL BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS [B] CERTIFICATE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
NUMBER $ R-
CUSIP NO.
WORLD OMNI AUTO RECEIVABLES TRUST [_________]-[________]
[_____]% ASSET BACKED CERTIFICATE, CLASS [B]
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts (as
defined herein) secured by new and used automobiles and light duty trucks.
(This Class [B] Certificate does not represent an interest in or obligation of
World Omni Financial Corp. or any of its affiliates, except to the extent
described below.)
B-1
<PAGE>
THIS CERTIFIES THAT [______________________________] is the
registered owner of [______________________________] DOLLARS nonassessable,
fully-paid, fractional undivided interest in World Omni Auto Receivables Trust
[______]-[______] (the "Trust") formed pursuant to a Pooling and Servicing
Agreement (the "Agreement") dated as of [__________], among World Omni Financial
Corp., a Florida corporation, as seller (the "Seller"), World Omni Financial
Corp., a Florida corporation, as servicer (the "Servicer") and
[___________________], a banking association, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth below. To
the extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in the Agreement.
This Certificate is one of a duly authorized series of
Certificates, designated as the [_____]% Asset Backed Certificates, Class [B]
(herein called the "Class [B] Certificates") all, issued under the Agreement, to
which Agreement reference is hereby made for a statement of the respective
rights and obligations thereunder of the Seller, the Servicer, the Trustee and
Holders of the Certificates. The Class [B] Certificates are subject to all terms
of the Agreement.
The property of the Trust includes a pool of retail
installment sale contracts for new and used automobiles and light duty trucks
(the "Receivables"), all monies or received on or after the related Cutoff Date
security interests in the vehicles financed thereby, certain bank accounts and
the proceeds thereof, proceeds from claims on certain insurance policies and all
proceeds of the foregoing. Under the Agreement, there will be distributed on the
[_____] day of each month or, if such day is not a Business Day, the next
Business Day (each, a "Distribution Date"), commencing on [__________], to the
Person in whose name this Class [B] Certificate is registered at the close of
business on the first day of the month in which such Distribution Date occurs
(the "Record Date"), such Certificateholder's fractional undivided interest in
the amount to be distributed to Class [B] Certificateholders on such
Distribution Date.
It is the intent of the Seller, the Servicer, the Trustee and
the Certificateholders that, for purposes of federal income, state and local
income and single business tax and any other income taxes, the Trust will be
treated as a grantor trust and the Certificates will be treated as interests in
a grantor trust. The Seller, the Servicer, the Trustee and the
Certificateholders, by acceptance of a Certificate, agree to treat, and to take
no action inconsistent with the treatment of, the Certificates for such tax
purposes as interests in a grantor trust.
Distributions on this Class [B] Certificate will be made as
provided in the Agreement by the Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Class [B] Certificate or the making of any notation hereon,
except that with respect to Class [B] Certificates registered on the Record Date
in the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Except as otherwise provided in
the Agreement and notwithstanding the above, the final distribution on this
Class [B] Certificate will be made after due notice by the Trustee of the
pendency of such distribution and only upon presentation and surrender of this
Class [B] Certificate at the office or agency maintained for that purpose by the
Trustee in the Borough of Manhattan, The City of New York.
B-2
<PAGE>
Reference is hereby made to the further provisions of this
Class [B] Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Trustee, by manual signature, this
Class [B] Certificate shall not entitle the Holder hereof to any benefit under
the Agreement or be valid for any purpose.
THIS CLASS [B] CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and
not in its individual capacity, has caused this Class [B] Certificate to be duly
executed.
Date: [__________]
WORLD OMNI AUTO RECEIVABLES TRUST [_________]-[_____]
By: [____________________], not in its individual
capacity but solely as Trustee
By: __________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [B] Certificates referred to in the within-mentioned
Agreement.
Date:
[------------------------------]
as Trustee
By: _______________________________________
Authorized Signatory
B-3
<PAGE>
[REVERSE OF CLASS [B] CERTIFICATE]
The Class [B] Certificates do not represent an obligation of,
or an interest in, the Seller, the Servicer, the Trustee or any affiliates of
any of them, and no recourse may be had against such parties or their assets
except as expressly set forth or contemplated herein or in the Agreement. In
addition, this Class [B] Certificate is not guaranteed by any governmental
agency or instrumentality and is limited in right of payment to certain
collections and recoveries with respect to the Receivables (and certain other
amounts), all as more specifically set forth herein and in the Agreement. A copy
of the Agreement may be examined by any Certificateholder upon written request
during normal business hours at the principal office of the Seller and at such
other places, if any, designated by the Seller.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Seller, the Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Seller, the Servicer
and the Trustee with the consent of the Holders of Certificates evidencing not
less than a majority of the Certificate Balance. Any such consent by the Holder
of this Class [B] Certificate shall be conclusive and binding on such Holder and
on all future Holders of this Class [B] Certificate and of any Class [B]
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent is made upon this Class [B]
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
No transfer of this Class [B] Certificate will be made unless
such transfer is exempt from the registration requirements of the Securities Act
and any applicable state securities laws or is made in accordance with said Act
and laws. In the event that the Holder hereof desires to make such a transfer,
the Holder and such Holder's transferee will be required to comply with certain
procedures set forth in the Agreement, including the delivery of certain
certificates and investment letters. The Holder hereof, by acceptance of this
Certificate, does hereby agree to indemnify the Trustee, the Seller, the
Servicer and the Certificate Registrar against any liability that may result if
any such transfer is not so exempt or is not made in accordance with federal and
state laws. In connection with any such transfer, the Trustee will also require
(i) a representation letter, in the form described in the Agreement, stating
that the transferee is not a Plan and is not acting on behalf of a Plan or using
the assets of a Plan to effect such purchase or (ii) if such transferee is a
Plan, an opinion of counsel acceptable to and in form and substance satisfactory
to the Trustee and the Depository with respect to certain matters described in
the Agreement.
Except as provided in the Agreement, the Class [B]
Certificates are issuable only as registered certificates without coupons in a
minimum denominations of $[__________]. As provided in the Agreement and subject
to certain limitations therein set forth, Class [B] Certificates are
exchangeable for new Class [B] Certificates of authorized denominations
evidencing the same aggregate denomination, as requested by the Holder
surrendering the same. No service charge will be made for any such registration
of transfer or exchange, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
B-4
<PAGE>
The Trustee, the Certificate Registrar and any agent of the
Trustee or the Certificate Registrar may treat the Person in whose name this
Class [B] Certificate is registered as the owner hereof for all purposes, and
none of the Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Agreement and the disposition of all property by the Trust. The Servicer of the
Receivables may at its option purchase the Trust property at a price specified
in the Agreement, and such purchase of the Receivables and other property of the
Trust will effect early retirement of the Class [B] Certificates; however, such
right of purchase is exercisable only as of the last day of any Collection
Period as of which the Pool Balance is less than or equal to 10% of the Original
Pool Balance.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------------------------ (Please print or
type name and address, including postal zip code, of assignee)
- ------------------------------------------------------------ the within Class
[B] Certificate, and all rights thereunder, hereby irrevocably constituting and
appointing
- ------------------------------------- to transfer said Class [B] Certificate on
the books of the Certificate Registrar, with full power of substitution in the
premises.
Dated:
*/
------------------------------------------
Signature Guaranteed:
*/
------------------------------------------
- ------------------
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Class [B] Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
B-5
<PAGE>
EXHIBIT C
[FORM OF DEPOSITORY AGREEMENT]
C-1
<PAGE>
EXHIBIT D
FORM OF SERVICER'S CERTIFICATE
WORLD OMNI AUTO RECEIVABLES TRUST [________]-[____________]
% Asset Backed Certificates, Class [A]
% Asset Backed Certificates, Class [B]
Distribution Date:
Collection Period:
Under the Pooling and Servicing Agreement dated as
[__________] of by and among World Omni Financial Corp., a Florida corporation,
as Seller, World Omni Financial Corp., a Florida corporation, as Servicer, and
[______________________________], as Trustee, the Servicer is required to
prepare certain information each month regarding current distributions to
Certificateholders and the performance of the Trust during the previous month.
The information that is required to be prepared with respect to the Distribution
Date and Collection Period listed above is set forth below. Certain of the
information is presented on the basis of an original principal amount of $1,000
per Class [A] Certificate or Class [B] Certificate, as appropriate, and certain
other information is presented based upon the aggregate amounts for the Trust as
a whole.
<TABLE>
<CAPTION>
A. Information Regarding the Current Monthly Distribution.
------------------------------------------------------
1. Class [A] Certificates.
----------------------
<S> <C>
(a) The aggregate amount of the distribution
to Class [A] Certificateholders..............................$
(b) The amount of the distribution set forth in
paragraph A.1.(a) above in respect of interest...............$
(c) The amount of the distribution set forth in
paragraph A.1.(a) above in respect of principal..............$
(d) The amount of the distribution set forth in
paragraph A.1.(a) above per $1,000 interest..................$
(e) The amount of the distribution set forth in
paragraph A.1.(b) above per $1,000 interest..................$
(f) The amount of the distribution set forth in
paragraph A.1.(c) above per $1,000 interest..................$
</TABLE>
D-1
<PAGE>
<TABLE>
<CAPTION>
2. Class [B] Certificates.
----------------------
<S> <C>
(a) The aggregate amount of the distribution
to Class [B] Certificateholders..............................$
(b) The amount of the distribution set forth in
paragraph A.2(a) above in respect of interest................$
(c) The amount of the distribution set forth in
paragraph A.2(a) above in respect of principal...............$
(d) The amount of the distribution set forth in
paragraph A.2(a) above per $1,000 interest...................$
(e) The amount of the distribution set forth in
paragraph A.2(b) above per $1,000 interest...................$
(f) The amount of the distribution set forth in
paragraph A.2(c) above per $1,000 interest...................$
B. Information Regarding the Performance of the Trust.
--------------------------------------------------
1. Pool Balance and Certificate Balances.
-------------------------------------
(a) The Pool Balance close of business on the last
day of the preceding Collection Period.......................$
(b) The Class [A] Certificate Balance as of the close of
business on the last day of the preceding Collection
Period, after giving effect to payments allocated to
principal set forth in Paragraph A.1(c) above................$
(c) The Class [B] Certificate Balance as of the close of
business of the last day of the preceding Collection
Period, after giving effect to payments allocated to
principal set forth in paragraph A.2(c) above................$
(d) The Pool Factor as of the close of business on
the last day of the preceding Collection Period..............$
2. Servicing Fee and Advances.
--------------------------
(a) The aggregate amount of the Servicing
Fee paid to the Servicer with respect
to the preceding Collection Period...........................$
(b) The amount of such Servicing Fee per
$1,000 interest..............................................$
</TABLE>
D-2
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
(d) The amount of any unpaid Servicing Fee.......................$
(e) The change in the amount of any unpaid Servicing
Fee from the previous Distribution Date......................$
(f) Aggregate Advances on such
Distribution Date............................................$
3. Payment Shortfalls.
------------------
(a) The amount of the Class [A] Interest Carryover Shortfall
after giving effect to the payments
set forth in paragraph A.1(b) above..........................$
(b) The amount of the Class [A] Principal Carryover Shortfall
after giving effect to the payment
set forth in paragraph A.1(c) above..........................$
(c) The amount of the Class [B] Interest Carryover Shortfall
after giving effect to the payments
set forth in paragraph A.2(b) above..........................$
(d) The amount of the Class [B] Principal Carryover Shortfall
after giving effect to the payments
set forth in paragraph A.2(c) above..........................$
(e) The amount otherwise distributable to Class [B]
Certificateholders that is distributed
to Class [A] Certificateholders..............................$
4. Reserve Account.
---------------
(a) The Reserve Account balance after
giving effect to distributions made on
such Distribution Date.......................................$
(b) The change in the Reserve Account
on such Distribution Date....................................$
</TABLE>
D-3
<PAGE>
EXHIBIT E
[FORM OF ACCOUNTANTS' LETTER]
E-1
<PAGE>
EXHIBIT F
FORM OF TRANSFEROR CERTIFICATE
[DATE]
[Seller]
[Seller Address]
[Trustee]
[Trustee Address]
Re: World Omni Auto Receivables Trust [______]-[________]
Asset Backed Certificates, Class [B]
Ladies and Gentlemen:
In connection with our disposition of the above-referenced
[_____]% Asset Certificates, Class [B] (the "Certificates") we certify that (a)
we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being transferred by us
in a transaction that is exempt from the registration requirements of the Act
and (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act.
Very truly yours,
[NAME OF TRANSFEROR]
By: _______________________________________
Authorized Officer
F-1
<PAGE>
EXHIBIT G
FORM OF INVESTMENT LETTER
[DATE]
[Seller]
[Seller Address]
[Trustee]
[Trustee Address]
Re: World Omni Auto Receivables Trust [ ]-[ ]
-- --
Asset Backed Certificates, Class [B]
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced
Asset Backed Certificates, Class [B] (the "Certificates") we certify that (a) we
understand that the Certificates are not being registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we are an "accredited investor,"
as defined in Regulation D under the Act, and have such knowledge and experience
in financial and business matters that we are capable of evaluating the merits
and risks of investments in the Certificates, (c) we have had the opportunity to
ask questions of and receive answers from the seller concerning the purchase of
the Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Certificates, (d) we are not an
employee benefit plan or trust account that is subject to the Employee
Retirement Income Security Act of 1974, as amended, or section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such Plan or using the assets of any such Plan to acquire Class [B]
Certificates, (e) we are acquiring the Certificates for investment for our own
account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of the
Certificates in accordance with clause (g) below), (f) we have not offered or
sold any Certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action that would result in a violation of Section 5
of the Act or any state securities laws and (g) we will not sell, transfer or
otherwise dispose of any Certificates unless (1) such sale, transfer or other
disposition is made pursuant to an effective registration statement under the
Act and in compliance with any relevant state securities laws or is exempt from
such registration requirements and, if requested, we will at our expense provide
an opinion of counsel satisfactory to the addressees of this certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Note has executed and
delivered to you a certificate to substantially the same effect as this
certificate and (3) the purchaser or transferee has otherwise complied with any
G-1
<PAGE>
conditions for transfer set forth in the Pooling and Servicing Agreement dated
as of , among World Omni Financial Corp. and .
Very truly yours,
[NAME OF TRANSFEREE]
By: ___________________________________________
Authorized Officer
G-2
<PAGE>
EXHIBIT H
FORM OF RULE 144A LETTER
[DATE]
[Seller]
[Seller Address]
[Trustee]
[Trustee Address]
Re: World Omni Auto Receivables Trust [ ]-[ ]
-- --
Asset Backed Certificates, Class [B]
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced
____ % Asset-Backed Certificates, Class [B] (the "Certificates") we certify that
(a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the seller
concerning the purchase of the Certificates and all matters relating thereto or
any additional information deemed necessary to our decision to purchase the
Certificates, (d) we are not an employee benefit plan, trust or account that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or
section 4975 of the Internal Revenue Code of 1986, as amended, nor are we acting
on behalf of any such Plan or using the assets of any such Plan to acquire Class
[B] Certificates, (e) we have not, nor has anyone acting on our behalf, offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from or otherwise approached or negotiated with respect to the Certificates, any
interest in the Certificates or any other similar security 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 that would constitute a
distribution of the Certificates under the Act or that would render the
disposition of the Certificates a violation of Section 5 of the Act or any state
securities laws or require registration pursuant thereto, and we will not act,
or authorize any person to act, in such manner with respect to the Certificates,
and (f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Act. We are aware that the sale to us is being made in reliance
on Rule 144A. We are acquiring the Certificates for our own account or for
resale pursuant to Rule 144A and understand that such Certificates may be
resold, pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to
H-1
<PAGE>
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 Act.
Very truly yours,
[NAME OF TRANSFEREE]
By: ______________________________________
Authorized Officer
H-2
<PAGE>
EXHIBIT J
SUBSEQUENT TRANSFER ASSIGNMENT NO.__
For value received, in accordance with and subject to the
Pooling and Servicing Agreement dated as of , [_______] (the "Agreement"), among
World Omni Financial Corp., a Florida corporation (the "Seller"), World Omni
Financial Corp., a Florida corporation (the "Servicer"), and __________________,
a ________________ (the "Trustee"), the Seller does hereby sell, assign,
transfer and otherwise convey unto the Trustee, for the benefit of the
Certificateholders, without recourse (except as expressly provided in the
Agreement), all right, title and interest of the Seller in and to (i) the
Subsequent Receivables, having an aggregate Principal Balance equal to $ , set
forth on Schedule A hereto (which shall supplement Schedule A to the Agreement)
and all monies received thereon on and after the Subsequent Cutoff Date; (ii)
the security interests in the Financed Vehicles granted by the Obligors pursuant
to such Subsequent Receivable and any other interest of the Seller in such
Financed Vehicles; (iii) any proceeds with respect to such Subsequent
Receivables from claims on any physical damage, credit life or disability
insurance policies covering Financed Vehicles or Obligors; (iv) any proceeds
with respect to such Subsequent Receivables from recourse to Dealers thereon
with respect to which the Servicer has determined in accordance with its
customary servicing procedures that eventual payment in full is unlikely; (v)
any Financed Vehicle that shall have secured any such Subsequent Receivable and
that shall have been acquired by or on behalf of the Seller, the Servicer or the
Trust; and (vi) the proceeds of any and all of the foregoing. The foregoing sale
does not constitute and is not intended to result in any assumption by the Trust
of any obligation of the Seller to the Obligors, insurers or any other person in
connection with the Standard Receivables, Receivable Files, any insurance
policies or any agreement or instrument relating to any of them.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the Seller contained
in the Agreement (including the Officers' Certificate of the Seller accompanying
this Assignment, in the form of Annex A hereto) and is to be governed in all
respects by the Agreement.
Capitalized terms used and not otherwise defined herein shall
have the meanings assigned thereto in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment
to be duly executed as of --------------, [---------].
World Omni Financial Corp.
By: __________________________________
Name:
J-1
<PAGE>
SCHEDULE A TO
Subsequent Transfer Assignment
Schedule of Subsequent Receivables
<PAGE>
ANNEX A TO
Subsequent Transfer Assignment
World Omni Financial Corp.
OFFICERS' CERTIFICATE
The undersigned, _______________ and ________________, the
duly qualified and elected __________________ and ____________________ of World
Omni Financial Corp. (the "Seller"), in connection with the conveyance of
Subsequent Receivables to World Omni Auto Receivables Trust
[_________]-[_________] (the "Trust") pursuant to Section 3.02(b) of the Pooling
and Servicing Agreement dated as of , ________________, (the "Agreement"), among
the Seller, _________________, as trustee, and World Omni Financial Corp., a
Florida corporation, as servicer, and Subsequent Transfer Assignment No. dated
as of the date hereof from the Seller, hereby certify that:
(a)_________% of the Principal Balances of the Receivables in
the Trust on the date hereof (including the Subsequent Receivables conveyed to
the Trust on the date hereof) represent vehicles financed at World Omni's used
vehicle rate.
(b)______The weighted average APR of the Receivables in the
Trust on the date hereof (including the Subsequent Receivables conveyed to the
Trust on the date hereof) is ____%.
(c)______The weighted average remaining term of the Subsequent
Receivables in the Trust on the date hereof (including the Subsequent
Receivables conveyed to the Trust on the date hereof) is _____ months.
(d)______All other conditions precedent set forth in Section
3.02(b)(1) of the Agreement relating to the conveyance of Subsequent Receivables
to the Trust have been satisfied.
All capitalized terms used but not otherwise defined herein
shall have the meanings assigned thereto in the Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand as of this
____ day of ________, _____.
By: _______________________________________
Name:
Title:
<PAGE>
EXHIBIT K
ELIGIBLE INVESTMENT TRANSFER ASSIGNMENT NO.__
For value received, in accordance with and subject to the
Pooling and Servicing Agreement dated as of , __________, ______ (the
"Agreement"), among World Omni Financial Corp., a Florida corporation (the
"Seller"), World Omni Financial Corp., a Florida corporation (the "Servicer"),
and ____________________, as trustee, the Seller does hereby sell, assign,
transfer and otherwise convey unto the Issuer, without recourse (except as
expressly provided in the Agreement), all right, title and interest of the
Seller in and to (i) the Eligible Investment Receivables, having an aggregate
Principal Balance equal to $________, set forth on Schedule A hereto (which
shall supplement Schedule C to the Agreement) and all monies received thereon on
and after the Subsequent Cutoff Date, in the case of Simple Interest
Receivables; (ii) the security interests in the Financed Vehicles granted by the
Obligors pursuant to such Eligible Investment Receivables and any other interest
of the Seller in such Financed Vehicles, (iii) any proceeds with respect to such
Eligible Investment Receivables from claims on any physical damage, credit life
or disability insurance policies covering Financed Vehicles or Obligors; (iv)
any proceeds with respect to such Eligible Investment Receivables from recourse
to Dealers thereon with respect to which the Servicer has determined in
accordance with its customary servicing procedures that eventual payment in full
is unlikely, (v) any Financed Vehicle that shall have secured any such Eligible
Investment Receivable and that shall have been acquired by or on behalf of the
Seller, the Servicer or the Trust, and (vi) the proceeds of any and all of the
foregoing. The foregoing sale does not constitute and is not intended to result
in any assumption by the Trust of any obligation of the Seller to the Obligors,
insurers or any other person in connection with the Eligible Investment Standard
Receivables, Receivable File, any insurance policies or any agreement or
instrument relating to any of them.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the Seller contained
in the Agreement (including the Officers' Certificate of the Seller accompanying
this Assignment, in the form of Annex A hereto) and is to be governed in all
respects by the Agreement.
Capitalized terms used and not otherwise defined herein shall
have the meanings assigned thereto in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment
to be duly executed as of ----------, -------.
World Omni Financial Corp.
By: ________________________________________
K-1
<PAGE>
SCHEDULE A TO
Eligible Investment Transfer Assignment
Schedule of Eligible Investment Receivables
<PAGE>
ANNEX A TO
Eligible Investment Transfer Assignment
World Omni Financial Corp.
OFFICER'S CERTIFICATE
The undersigned _____________________ and
_____________________, the duly qualified and elected and _____________________
and ____________________ of World Omni Financial Corp. (the "Seller"), in
connection with the conveyance of Eligible Investment Receivables to World Omni
Auto Receivables Trust [_______]-[________] (the "Trust") pursuant to Section
12.03 of the Pooling and Servicing Agreement dated as of _____________,
_________ (the "Agreement"), among the Seller, as trustee, and World Omni
Financial Corp., as servicer, and Eligible Investment Transfer Assignment No.
__, dated as of the date hereof from the Seller, hereby certify that:
(a)___________ % of the Principal Balances of the Eligible
Investment Receivables in the Reserve Account on the date hereof (including the
Eligible Investment Receivables conveyed to the Reserve Account on the date
hereof) represent vehicles financed at World Omni's used vehicle rate.
(b)______All other conditions precedent set forth in Section
12.03 of the Agreement relating to the conveyance of Eligible Investment
Receivables to the Reserve Account have been satisfied.
All capitalized terms used but not otherwise defined herein
shall have the meanings assigned thereto in the Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand as of this ___
day of __________, _________.
By: ______________________________________________
Name:
Title:
Exhibit 5.1
May 24, 2000
World Omni Auto Receivables LLC
120 N.W. 12th Avenue
Deerfield Beach, Florida 33442
Re: Auto Receivables-Backed Certificates and Auto Receivables-Backed Notes
Gentlemen:
We have acted as special counsel to World Omni Auto
Receivables LLC (the "Seller") in connection with the Registration Statement on
Form S-3 (the "Registration Statement"), which Registration Statement is being
filed with the Securities and Exchange Commission (the "Commission"), pursuant
to the Securities Act of 1933, as amended (the "Act"). The Prospectus describes
Auto Receivables-Backed Certificates ("Certificates") and Auto
Receivables-Backed Notes ("Notes") to be sold by the Seller in one or more
series (each, a "Series") of Certificates or Notes, as applicable. Each Series
of Certificates will be issued under a separate pooling and servicing agreement
(the "Pooling and Servicing Agreement") among World Omni Financial Corp. (a
"Servicer"), the Seller and a trustee (a "Trustee") and, if applicable, such
other parties to be identified in the Prospectus Supplement for such Series.
Each Series of Notes will be issued under a separate indenture (the "Indenture")
among a trust to be formed by the Seller (a "Trust"), an indenture trustee (the
"Indenture Trustee") and, if applicable, such other parties to be identified in
the Prospectus Supplement for such Series. The form of Pooling and Servicing
Agreement, filed as an exhibit to Seller's Registration Statement on Form S-3,
is incorporated by reference as an exhibit to the Registration Statement. The
form of Indenture, filed as an exhibit to Seller's Registration Statement on
Form S-3, is incorporated by reference as an exhibit to the Registration
Statement. Capitalized terms used and not otherwise defined herein have the
respective meanings given to such terms in the Registration Statement.
In rendering the opinions set forth below, we have examined
and relied upon the following: (1) the Registration Statement, the Prospectus
and the form of Prospectus Supplement constituting a part thereof, each
substantially in the form filed with the Commission; (2) the form of Pooling and
Servicing Agreement; (3) the form of Indenture and (4) such other documents,
materials and authorities as we have deemed necessary in order to enable us to
render our opinion set forth below. We express no opinion with respect to any
Series of Certificates or Notes for which we do not act as counsel to the
Seller.
<PAGE>
-2- May 24, 2000
Based on the foregoing, we are of the opinion that:
1. When the Pooling and Servicing Agreement for a
Series of Certificates has been duly and validly authorized,
executed and delivered by the Seller, a Servicer, a Trustee
and any other party thereto, such Pooling and Servicing
Agreement will constitute a legal, valid and binding agreement
of the Seller, enforceable against the Seller in accordance
with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium,
receivership or other laws relating to or affecting creditors'
rights generally, and to general principles of equity
(regardless of whether enforcement is sought in a proceeding
at law or in equity), and except that the enforcement of
rights with respect to indemnification and contribution
obligations and provisions (a) purporting to waive or limit
rights to trial by jury, oral amendments to written agreements
or rights to set off or (b) relating to submission to
jurisdiction, venue of service or process, may be limited by
applicable law or considerations of public policy.
2. When the Indenture for a Series of Notes has been
duly and validly authorized, executed and delivered by a
Trust, an Indenture Trustee and any other party thereto, such
Indenture will constitute a valid and legally binding
agreement of such Trust, enforceable against such Trust in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium,
receivership or other laws relating to or affecting creditors'
rights generally, and to general principles of equity
(regardless of whether enforcement is sought in a proceeding
at law or in equity), and except that the enforcement of
rights with respect to indemnification and contribution
obligations and provisions (a) purporting to waive or limit
rights to trial by jury, oral amendments to written agreements
or rights to set off or (b) relating to submission to
jurisdiction, venue of service or process, may be limited by
applicable law or considerations of public policy.
3. When the Pooling and Servicing Agreement for a
Series of Certificates has been duly and validly authorized,
executed and delivered by the Seller, a Servicer, a Trustee
and any other party thereto, and the Certificates of such
Series have been duly executed, authenticated, delivered and
sold as contemplated in the Registration Statement, such
Certificates will be legally and validly issued, fully paid
and nonassessable, and entitled to the benefits provided by
such Pooling and Servicing Agreement.
4. When the Indenture for a Series of Notes has been
duly and validly authorized, executed and delivered by a
Trust, an Indenture Trustee and any other party thereto, and
the Notes of such Series have been duly executed,
authenticated, delivered and sold as contemplated in the
Registration Statement, such Notes will be legally and validly
issued, fully paid and nonassessable obligations of such
Trust, enforceable against such Trust in accordance with their
<PAGE>
-3- May 24, 2000
terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium,
receivership or other laws relating to creditors' rights
generally, and to general principles of equity including
principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity), and will be validly issued
and outstanding and entitled to the benefits provided by such
Indenture.
5. The description of federal income tax consequences
appearing under the heading "Federal Income Tax Consequences"
in the Prospectus accurately describes the material federal
income tax consequences to holders of Certificates or Notes,
as applicable, under existing law and subject to the
qualifications and assumptions stated therein.
We hereby consent to the filing of this letter as an Exhibit
to the Registration Statement and to the reference to this firm under the
headings "Legal Matters" and "Federal Income Tax Consequences" in the
Prospectus, which is a part of the Registration Statement. This consent is not
to be construed as an admission that we are a person whose consent is required
to be filed with the Registration Statement under the provisions of the Act.
Very truly yours,
/S/ CADWALADER, WICKERSHAM & TAFT
Exhibit 10.1
================================================================================
SALE AND SERVICING AGREEMENT
between
WORLD OMNI AUTO RECEIVABLES TRUST [____],
Issuer,
WORLD OMNI AUTO RECEIVABLES LLC,
Seller,
and
WORLD OMNI FINANCIAL CORP.,
Servicer
(Series [____]-[_])
Dated as of [__________], [____]
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
Section 1.01 Definitions..............................................1
Section 1.02 Other Definitional Provisions...........................15
ARTICLE II
Conveyance of Receivables
Section 2.01 Conveyance of Receivables...............................16
ARTICLE III
The Receivables
Section 3.01 Representations and Warranties of World Omni with
Respect to the Receivables............................17
Section 3.02 Repurchase upon Breach..................................19
Section 3.03 Custody of Receivable Files.............................20
Section 3.04 Duties of Servicer as Custodian.........................20
Section 3.05 Instructions; Authority To Act..........................21
Section 3.06 Custodian's Indemnification.............................21
Section 3.07 Effective Period and Termination........................21
ARTICLE IV
Administration and Servicing of Receivables
Section 4.01 Duties of Servicer......................................22
Section 4.02 Collection and Allocation of Receivable Payments........22
Section 4.03 Realization upon Receivables............................23
Section 4.04 Physical Damage Insurance...............................23
Section 4.05 Maintenance of Security Interests in Financed
Vehicles..............................................23
Section 4.06 Covenants of Servicer...................................23
Section 4.07 Purchase of Receivables upon Breach.....................23
Section 4.08 Servicing Fee...........................................24
Section 4.09 Servicer's Certificate..................................24
<PAGE>
Section 4.10 Annual Statement as to Compliance; Notice of
Default...............................................24
Section 4.11 Annual Independent Certified Public Accountants'
Report................................................24
Section 4.12 Access to Certain Documentation and Information
Regarding Receivables.................................25
Section 4.13 Servicer Expenses.......................................25
Section 4.14 Appointment of Subservicer..............................25
ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders and Noteholders
Section 5.01 Establishment of Trust Accounts.........................26
Section 5.02 Collections.............................................28
Section 5.03 Application of Collections..............................28
Section 5.04 (Reserved)..............................................28
Section 5.05 Additional Deposits.....................................28
Section 5.06 Distributions...........................................29
Section 5.07 Reserve Account.........................................30
Section 5.08 (Reserved)..............................................31
Section 5.09 Statements to Noteholders and
Certificateholders....................................31
Section 5.10 Net Deposits............................................32
Section 5.11 Transfer of Certificates................................32
ARTICLE VI
The Seller
Section 6.01 Representations of Seller...............................32
Section 6.02 Corporate Existence.....................................33
Section 6.03 Liability of Seller; Indemnities........................34
Section 6.04 Merger or Consolidation of, or Assumption of
Obligations of, Seller................................35
Section 6.05 Limitation on Liability of Seller and Others............35
Section 6.06 Seller May Own Notes....................................35
ARTICLE VII
The Servicer
Section 7.01 Representations of Servicer.............................35
Section 7.02 Indemnities of Servicer.................................37
Section 7.03 Merger or Consolidation of, or Assumption of
Obligations of, Servicer..............................37
Section 7.04 Limitation on Liability of Servicer and Others..........38
Section 7.05 World Omni Not To Resign as Servicer....................38
-ii-
<PAGE>
ARTICLE VIII
Default
Section 8.01 Servicer Default........................................39
Section 8.02 Appointment of Successor................................40
Section 8.03 Notification to Noteholders and
Certificateholders....................................41
Section 8.04 Waiver of Past Defaults.................................41
ARTICLE IX
Termination
Section 9.01 Optional Purchase of All Receivables....................41
ARTICLE X
Miscellaneous
Section 10.01 Amendment...............................................42
Section 10.02 Protection of Title to Trust............................43
Section 10.03 Notices.................................................44
Section 10.04 Assignment by the Seller or the Servicer................45
Section 10.05 Limitations on Rights of Others.........................45
Section 10.06 Severability............................................45
Section 10.07 Separate Counterparts...................................45
Section 10.08 Headings................................................45
Section 10.09 Governing Law...........................................45
Section 10.10 Assignment by Issuer....................................45
Section 10.11 Nonpetition Covenants...................................45
Section 10.12 Limitation of Liability of Owner Trustee
and Indenture Trustee.................................46
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
EXHIBIT A Form of Distribution Statement to Noteholders..........A-1
EXHIBIT B Form of Servicer's Certificate.........................B-1
-iii-
<PAGE>
SALE AND SERVICING AGREEMENT dated as of _______________,
[____], between WORLD OMNI AUTO RECEIVABLES TRUST [____]-[_], a Delaware
business trust (the "Issuer"), WORLD OMNI AUTO RECEIVABLES LLC, a Delaware
limited liability company, as seller (the "Seller") and WORLD OMNI FINANCIAL
CORP., a Florida corporation, as servicer (the "Servicer").
WHEREAS the Issuer desires to purchase a portfolio of
receivables arising in connection with automobile retail installment sale
contracts generated by World Omni Auto Receivables LLC in the ordinary course of
business; and
WHEREAS World Omni Auto Receivables LLC is willing to deposit
such Receivables to the Issuer;
WHEREAS World Omni Financial Corp. is willing to service such
receivables;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree as follows:
PRELIMINARY STATEMENT
This Agreement relates to Receivables that secure only the
Issuer's Asset Backed Notes, Series [___]-[_] that have been issued pursuant to
the Indenture referred to herein and are contained in a Subdivision of the
Issuer formed only for its Series [____]-[_] Trust Certificates, which have been
issued pursuant to the Supplement referred to in the definition of Trust
Agreement herein. The Receivables and their proceeds are not available for any
other purpose.
ARTICLE I
Definitions
Section 1.01. Definitions. Whenever used in this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
"Accelerated Principal Distribution Amount" means, with
respect to any Distribution Date, an amount equal to that portion of the Total
Distribution Amount for such Distribution Date that remains after the payment of
(i) the Servicing Fee, (ii) the Noteholders' Interest Distributable Amount,
(iii) the Regular Principal Distribution Amount and (iv) the amount, if any,
required to be deposited into the Reserve Account on such Distribution Date
pursuant to Section 5.06(a)(ii)(E).
"Amount Financed" means with respect to a Receivable, the
amount advanced under the Receivable toward the purchase price of the Financed
Vehicle and any related costs.
"Annual Percentage Rate" or "APR" of a Receivable means the
annual rate of finance charges stated in the related Contract.
<PAGE>
"Basic Documents" means the Indenture, the Trust Agreement,
the Administration Agreement and the Receivables Purchase Agreement.
"Business Day" means any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in the State of Florida, the
State of New York, the State of Delaware, the state in which the servicing
offices of the Servicer is located or the state in which the Corporate Trust
Office is located are required or authorized by law or executive order to be
closed.
"Cash Release Amount" means, with respect to a Distribution
Date, the amount equal to _____% of the Regular Principal Distribution Amount
for such Distribution Date.
"Certificate Distribution Account" has the meaning assigned in
the Trust Agreement.
"Certificateholders" has the meaning assigned to such term in
the Trust Agreement.
"Certificates" means the (Series [____]-[_]) Trust
Certificates (as defined in the Trust Agreement).
"Class" means any one of the classes of Notes.
"Class [A-1] Final Scheduled Distribution Date" means the
_____________ Distribution Date.
"Class [A-1] Noteholder" means the Person in whose name a
Class [A-1] Note is registered in the Note Register.
"Class [A-2] Final Scheduled Distribution Date" means the
_____________ Distribution Date.
"Class [A-2] Noteholder" means the Person in whose name a
Class [A-2] Note is registered in the Note Register.
"Class [A-3] Final Scheduled Distribution Date" means the
_______________ Distribution Date.
"Class [A-3] Noteholder" means the Person in whose name a
Class [A-3] Note is registered in the Note Register.
"Class [A-4] Final Scheduled Distribution Date" means the
_______________ Distribution Date.
"Class [A-4] Noteholder" means the Person in whose name a
Class [A-4] Note is registered in the Note Register.
-2-
<PAGE>
"Collateral Release Period" means the period from and
including the First Release Distribution Date to and including the Distribution
Date on which the aggregate amount of the cash and Principal Balances of
Receivables released from the lien of the Indenture pursuant to Sections
5.06(a)(ii)(D) and 5.06(c) is equal to the [Initial Overcollateralization
Amount.]
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 5.01(a)(i).
"Collection Period" means a calendar month. Any amount stated
as of the last day of a Collection Period or as of the first day of a Collection
Period shall give effect to the following calculations as determined as of the
close of business on such last day: (1) all applications of collections, and (2)
all distributions to be made on the following Distribution Date.
"Contract" means a motor vehicle retail installment sale
contract.
"Corporate Trust Office" means the principal office of the
Indenture Trustee at which at any particular time its corporate trust business
shall be administered, which office at the date of the execution of this
Agreement is located at __________________________________; or at such other
address as the Indenture Trustee may designate from time to time by notice to
the Noteholders and the Seller, or the principal corporate trust office of any
successor Indenture Trustee (of which address such successor Indenture Trustee
will notify the Noteholders and the Seller).
"Cutoff Date" means [______________], [____].
"Dealer" means the dealer who sold a Financed Vehicle and who
originated and assigned the related Receivable to World Omni under an existing
agreement between such dealer and World Omni.
-3-
<PAGE>
"Delivery" when used with respect to Trust Account Property
means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC and are
susceptible of physical delivery, transfer thereof to the Indenture Trustee or
its nominee or custodian by physical delivery to the Indenture Trustee or its
nominee or custodian endorsed to, or registered in the name of, the Indenture
Trustee or its nominee or custodian or endorsed in blank, and, with respect to a
certificated security (as defined in Section 8-102 of the UCC) transfer thereof
(i) by delivery of such certificated security endorsed to, or registered in the
name of, the Indenture Trustee or its nominee or custodian or endorsed in blank
to a financial intermediary (as defined in Section 8-313 of the UCC) and the
making by such financial intermediary of entries on its books and records
identifying such certificated securities as belonging to the Indenture Trustee
or its nominee or custodian and the sending by such financial intermediary of a
confirmation of the purchase of such certificated security by the Indenture
Trustee or its nominee or custodian, or (ii) by delivery thereof to a "clearing
corporation" (as defined in Section 8-102(3) of the UCC) and the making by such
clearing corporation of appropriate entries on its books reducing the
appropriate securities account of the transferor and increasing the appropriate
securities account of a financial intermediary by the amount of such
certificated security, the identification by the clearing corporation of the
certificated securities for the sole and exclusive account of the financial
intermediary, the maintenance of such certificated securities by such clearing
corporation or a "custodian bank" (as defined in Section 8-102(4) of the UCC) or
the nominee of either subject to the clearing corporation's exclusive control,
the sending of a confirmation by the financial intermediary of the purchase by
the Indenture Trustee or its nominee or custodian of such securities and the
making by such financial intermediary of entries on its books and records
identifying such certificated securities as belonging to the Indenture Trustee
or its nominee or custodian (all of the foregoing, "Physical Property"), and, in
any event, any such Physical Property in registered form shall be in the name of
the Indenture Trustee or its nominee or custodian; and such additional or
alternative procedures as may hereafter become appropriate to effect the
complete transfer of ownership of any such Trust Account Property (as defined
herein) to the Indenture Trustee or its nominee or custodian, consistent with
changes in applicable law or regulations or the interpretation thereof;
(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the Federal National
Mortgage Association that are book-entry securities held through the Federal
Reserve System pursuant to Federal book-entry regulations, the following
procedures, all in accordance with applicable law, including applicable Federal
regulations and Articles 8 and 9 of the UCC: book-entry registration of such
Trust Account Property to an appropriate book-entry account maintained with a
Federal Reserve Bank by a financial intermediary which is also a "depository"
pursuant to applicable Federal regulations and issuance by such financial
intermediary of a deposit advice or other written confirmation of such
book-entry registration to the Indenture Trustee or its nominee or custodian of
the purchase by the Indenture Trustee or its nominee or custodian of such
book-entry securities; the identification by the Federal Reserve Bank of such
book-entry securities on its record being credited to the financial
intermediary's Participant's securities account; the making by such financial
intermediary of entries in its books and records identifying such book-entry
security held through the Federal Reserve System pursuant to Federal book-entry
regulations as
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being credited to the Indenture Trustee's securities account or custodian's
securities account and indicating that such custodian holds such Trust Account
Property solely as agent for the Indenture Trustee or its nominee or custodian;
and such additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Trust Account
Property to the Indenture Trustee or its nominee or custodian, consistent with
changes in applicable law or regulations or the interpretation thereof; and
(c) with respect to any item of Trust Account Property that is
an uncertificated security under Article 8 of the UCC and that is not governed
by clause (b) above, registration on the books and records of the issuer thereof
in the name of the financial intermediary, the sending of a confirmation by the
financial intermediary of the purchase by the Indenture Trustee or its nominee
or custodian of such uncertificated security, the making by such financial
intermediary of entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee or custodian.
"Depositor" means the Seller in its capacity as Depositor
under the Trust Agreement.
"Distribution Date" means, with respect to each Collection
Period, the [sixth day] of the following month or, if such day is not a Business
Day, the immediately following Business Day, commencing on [_________], [____].
"Eligible Deposit Account" means either (a) a segregated
account with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories that signifies
investment grade.
"Eligible Institution" means (a) the corporate trust
department of the Indenture Trustee, the Owner Trustee or ____________________
so long as it shall be Paying Agent under the Trust Agreement or (b) a
depository institution organized under the laws of the United States of America
or any one of the states thereof or the District of Columbia (or any domestic
branch of a foreign bank), which (i) has either (A) a long-term unsecured debt
rating of AAA or better by Standard & Poor's and A1 or better by Moody's or (B)
a certificate of deposit rating of A-1+ by Standard & Poor's and P-1 or better
by Moody's, or any other long-term, short-term or certificate of deposit rating
acceptable to the Rating Agencies and (ii) whose deposits are insured by the
FDIC. If so qualified, the Indenture Trustee, the Owner Trustee or
_____________________ may be considered an Eligible Institution for the purposes
of clause (b) of this definition.
"Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as
to the full and timely payment by, the United States of America;
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(b) demand deposits, time deposits or certificates of deposit
of any depository institution or trust company incorporated under the laws of
the United States of America or any state thereof (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or State
banking or depository institution authorities; provided, however, that at the
time of the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person other than
such depository institution or trust company) thereof shall have a credit rating
from each of the Rating Agencies in the highest applicable rating category
granted thereby;
(c) commercial paper, variable amount notes or other short
term debt obligations having, at the time of the investment or contractual
commitment to invest therein, a rating from each of the Rating Agencies in the
highest applicable rating category granted thereby;
(d) investments in money market or common trust funds having a
rating from each of the Rating Agencies in the highest applicable rating
category granted thereby (including funds for which the Indenture Trustee or the
Owner Trustee or any of their respective Affiliates is investment manager or
advisor);
(e) bankers' acceptances issued by any depository institution
or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United States of America
or any agency or instrumentality thereof the obligations of which are backed by
the full faith and credit of the United States of America, in either case
entered into with a depository institution or trust company (acting as
principal) described in clause (b);
(g) repurchase obligations with respect to any security or
whole loan, entered into with (i) a depository institution or trust company
(acting as principal) described in clause (b) above (except that the rating
referred to in the proviso in such clause (b) shall be A-1 or higher in the case
of Standard & Poor's) (such depository institution or trust company being
referred to in this definition as a "financial institution"), (ii) a
broker/dealer (acting as principal) registered as a broker or dealer under
Section 15 of the Exchange Act (a "broker/dealer") the unsecured short-term debt
obligations of which are rated P-1 by Moody's and at least A-1 by Standard &
Poor's at the time of entering into such repurchase obligation (a "rated
broker/dealer"), (iii) an unrated broker/dealer (an "unrated broker/dealer"),
acting as principal, that is a wholly-owned subsidiary of a non-bank holding
company the unsecured short-term debt obligations of which are rated P-1 by
Moody's and at least A-1 by Standard & Poor's at the time of entering into such
repurchase obligation (a "Rated Holding Company") or (iv) an unrated subsidiary
(a "Guaranteed Counterparty"), acting as principal, that is a wholly-owned
subsidiary of a direct or indirect parent Rated Holding Company, which
guarantees such subsidiary's obligations under such repurchase agreement;
provided that the following conditions are satisfied:
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(i) the aggregate amount of funds invested in
repurchase obligations of a financial institution, a rated
broker/dealer, an unrated broker/dealer or Guaranteed Counterparty in
respect of which the Standard & Poor's unsecured short-term ratings are
A-1 (in the case of an unrated broker/dealer or Guaranteed
Counterparty, such rating being that of the related Rated Holding
Company) shall not exceed 20% of the sum of the then outstanding
principal balance of the Notes (there being no limit on the amount of
funds that may be invested in repurchase obligations in respect of
which such Standard & Poor's rating is A-1+ (in the case of an unrated
broker/dealer or Guaranteed Counterparty, such rating being that of the
related Rated Holding Company));
(ii) in the case of the Reserve Account, the rating
from Standard & Poor's in respect of the unsecured short-term debt
obligations of the financial institution, rated broker/dealer, unrated
broker/dealer or Guaranteed Counterparty (in the case of an unrated
broker/dealer or Guaranteed Counterparty, such rating being that of the
related Rated Holding Company) shall be A-1+;
(iii) the repurchase obligation must mature within 30
days of the date on which the Indenture Trustee or the Issuer, as
applicable, enters into such repurchase obligation;
(iv) the repurchase obligation shall not be
subordinated to any other obligation of the related financial
institution, rated broker/dealer, unrated broker/dealer or Guaranteed
Counterparty;
(v) the collateral subject to the repurchase
obligation is held, in the appropriate form, by a custodial bank on
behalf of the Indenture Trustee or the Issuer, as applicable;
(vi) the repurchase obligation shall require that the
collateral subject thereto shall be marked to market daily;
(vii) in the case of a repurchase obligation of a
Guaranteed Counterparty, the following conditions shall also be
satisfied:
(A) the Indenture Trustee or the Issuer, as
applicable, shall have received an opinion of counsel (which
may be in-house counsel) to the effect that the guarantee of
the related Rated Holding Company is a legal, valid and
binding agreement of the Rated Holding Company, enforceable in
accordance with its terms, subject as to enforceability to
bankruptcy, insolvency, reorganization and moratorium or other
similar laws affecting creditors' rights generally and to
general equitable principles;
(B) the Indenture Trustee or the Issuer, as
applicable, shall have received (x) an incumbency certificate
for the signer of such guarantee, certified by an officer of
such Rated Holding Company and (y) a resolution, certified by
an officer of the Rated Holding Company, of the board of
directors (or applicable committee thereof) of the Rated
Holding Company authorizing the execution, delivery and
performance of such guarantee by the Rated Holding Company;
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(C) the only conditions to the obligation of such
Rated Holding Company to pay on behalf of the Guaranteed
Counterparty shall be that the Guaranteed Counterparty shall
not have paid under such repurchase obligation when required
(it being understood that no notice to, demand on or other
action in respect of the Guaranteed Counterparty is necessary)
and that the Indenture Trustee or the Issuer shall make a
demand on the Rated Holding Company to make the payment due
under such guarantee;
(D) the guarantee of the Rated Holding Company shall
be irrevocable with respect to such repurchase obligation and
shall not be subordinated to any other obligation of the Rated
Holding Company; and
(E) each of [__________] and [__________] has
confirmed in writing to the Indenture Trustee or Issuer, as
applicable, that it has reviewed the form of the guarantee of
the Rated Holding Company and has determined that the issuance
of such guarantee will not result in the downgrade or
withdrawal of the ratings assigned to the Notes.
(viii) the repurchase obligation shall require that
the repurchase obligation be overcollateralized and shall provide that,
upon any failure to maintain such overcollateralization, the repurchase
obligation shall become due and payable, and unless the repurchase
obligation is satisfied immediately, the collateral subject to the
repurchase agreement shall be liquidated and the proceeds applied to
satisfy the unsatisfied portion of the repurchase obligation;
(h) any other investment with respect to which the Issuer or
the Servicer has received written notification from the Rating Agencies that the
acquisition of such investment as an Eligible Investment will not result in a
withdrawal or downgrading of the ratings on the Notes.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Distribution Date" means the Distribution
Date immediately following the Final Scheduled Maturity Date.
"Final Scheduled Maturity Date" means __________________.
"Financed Vehicle" means an automobile or light-duty truck,
together with all accessions thereto, securing an Obligor's indebtedness under
the respective Receivable.
"First Release Distribution Date" means the first Distribution
Date on which the [Overcollateralization Amount] is at least equal to the sum of
(a) the [Initial Overcollateralization Amount] and (b) the product of (i) _% and
(ii) the excess of the Related Pool Balance over the [Initial
Overcollateralization Amount].
"Indenture" means the Indenture dated as of _______________,
[____], between the Issuer and the Indenture Trustee (that provides for the
issuance of the Issuer's Asset Backed Notes, Series [____].
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"Indenture Trustee" means the Person acting as Indenture
Trustee under the Indenture, its successors in interest and any successor
trustee under the Indenture.
["Initial Overcollateralization Amount" means
$________________.]
"Insolvency Event" means, with respect to a specified Person,
(a) the filing of a decree or order for relief by a court having jurisdiction in
the premises in respect of such Person or any substantial part of its property
in an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or (b) the commencement by such Person of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by such Person to the entry of an order for
relief in an involuntary case under any such law, or the consent by such Person
to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"Interest Distribution Amount" means, with respect to any
Distribution Date, the sum of the following amounts, without duplication, with
respect to the Receivables in respect of the Collection Period preceding such
Distribution Date: (a) that portion of all collections on Receivables allocable
to interest, (b) Liquidation Proceeds with respect to the Receivables to the
extent allocable to interest due thereon in accordance with the Servicer's
customary servicing procedures, (c) the Purchase Amount of each Receivable that
became a Purchased Receivable during such Collection Period to the extent
attributable to accrued interest on such Receivable, (d) Recoveries for such
Collection Period, and (e) Investment Earnings for the related Distribution
Date; provided, however, that in calculating the Interest Distribution Amount
all payments and proceeds (including Liquidation Proceeds) of any Purchased
Receivables the Purchase Amount of which has been included in the Interest
Distribution Amount in a prior Collection Period shall be excluded.
"Investment Earnings" means, with respect to any Distribution
Date, the investment earnings (net of losses and investment expenses) on amounts
on deposit in the Trust Accounts to be deposited into the Collection Account on
such Distribution Date pursuant to Section 5.01(b).
"Issuer" means World Omni Auto Receivables Trust [____]-[__]
"Lien" means a security interest, lien, charge, pledge, equity
or encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable liquidated by the
Servicer through the sale of a Financed Vehicle or otherwise.
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"Liquidation Proceeds" means, with respect to any Liquidated
Receivable, the moneys collected in respect thereof, from whatever source on a
Liquidated Receivable during the Collection Period in which such Receivable
became a Liquidated Receivable, net of the sum of any amounts expended by the
Servicer in connection with such liquidation and any amounts required by law to
be remitted to the Obligor on such Liquidated Receivable.
"Moody's" means Moody's Investors Service, Inc., or its
successor.
"Notes" means the Class [A-1] Notes, Class [A-2] Notes, Class
[A-3] Notes and Class [A-4] Notes.
"Note Amount" means, with respect to any Distribution Date,
the aggregate outstanding principal amount of the Notes after giving effect to
payments of principal made on the Notes on all preceding Distribution Dates.
"Note Distribution Account" means the account designated as
such, established and maintained pursuant to Section 5.01.
"Note Pool Factor" means, with respect to each Class of Notes
as of the close of business on the last day of a Collection Period, a
seven-digit decimal figure equal to the outstanding principal balance of such
Class of Notes (after giving effect to any reductions thereof to be made on the
immediately following Distribution Date) divided by the original outstanding
principal balance of such Class of Notes. The Note Pool Factor will be 1.0000000
as of the Closing Date; thereafter, the Note Pool Factor will decline to reflect
reductions in the outstanding principal balance of such Class of Notes.
"Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount for such Distribution Date.
"Noteholders' Interest Carryover Shortfall" means, with
respect to any Distribution Date, the excess of the sum of the Noteholders'
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Noteholders' Interest Carryover Shortfall on such preceding
Distribution Date, over the amount in respect of interest that is actually
deposited in the Note Distribution Account on such preceding Distribution Date,
plus interest on the amount of interest due but not paid to Noteholders on the
preceding Distribution Date, to the extent permitted by law, at the respective
Interest Rates borne by each Class of the Notes for the related Interest Period.
"Noteholders' Interest Distributable Amount" means, with
respect to any Distribution Date, the sum of the Noteholders' Monthly Interest
Distributable Amount for such Distribution Date and the Noteholders' Interest
Carryover Shortfall for such Distribution Date. For all purposes of this
Agreement and the Basic Documents, interest with respect to all Classes of Notes
shall be computed on the basis of a 360-day year consisting of twelve [30]-day
months.
"Noteholders' Monthly Interest Distributable Amount" means,
with respect to any Distribution Date, interest accrued for the related Interest
Accrual Period on each Class of Notes at the respective Interest Rate for such
Class on the outstanding principal balance of the Notes of
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such Class on the immediately preceding Distribution Date (or, in the case of
the first Distribution Date, the Closing Date), after giving effect to all
distributions of principal to the Noteholders of such Class on or prior to such
Distribution Date (or, in the case of the first Distribution Date, on the
Closing Date).
"Noteholders' Monthly Principal Distributable Amount" means,
with respect to any Distribution Date, the sum of (i) the Regular Principal
Distribution Amount (less, on each Distribution Date in the Collateral Release
Period, the Cash Release Amount) plus (ii) the Accelerated Principal
Distribution Amount plus (iii) any accelerated payments of principal required to
be made from amounts on deposit in the Reserve Account pursuant to Section
5.07(b)(ii).
"Noteholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall from the preceding Distribution Date, over the amount in respect of
principal that is actually deposited in the Note Distribution Account on such
current Distribution Date.
"Noteholders' Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of the Noteholders' Monthly Principal
Distributable Amount for such Distribution Date and the Noteholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date;
provided, however, that the Noteholders' Principal Distributable Amount shall
not exceed the outstanding principal balance of the Notes. In addition, (a) on
the Class [A-1] Final Scheduled Distribution Date, the principal required to be
deposited in the Note Distribution Account will include the amount necessary
(after giving effect to the other amounts to be deposited in the Note
Distribution Account on such Distribution Date and allocable to principal) to
reduce the Outstanding Amount of the Class [A-1] Notes to zero; (b) on the Class
[A-2] Final Scheduled Distribution Date, the principal required to be deposited
in the Note Distribution Account will include the amount necessary (after giving
effect to the other amounts to be deposited in the Note Distribution Account on
such Distribution Date and allocable to principal) to reduce the Outstanding
Amount of the Class [A-2] Notes to zero; (c) on the Class [A-3] Final Scheduled
Distribution Date, the principal required to be deposited in the Note
Distribution Account will include the amount necessary (after giving effect to
the other amounts to be deposited in the Note Distribution Account on such
Distribution Date and allocable to principal) to reduce the Outstanding Amount
of the Class [A-3] Notes to zero; and (d) on the Class [A-4] Final Scheduled
Distribution Date, the principal required to be deposited in the Note
Distribution Account will include the amount necessary (after giving effect to
the other amounts to be deposited in the Note Distribution Account on such
Distribution Date and allocable to principal) to reduce the Outstanding Amount
of the Class [A-4] Notes to zero;
"Obligor" on a Receivable means the purchaser or co-purchasers
of the Financed Vehicle and any other Person who owes payments under the
Receivable.
"Officers' Certificate" means certificate signed by the
Chairman of the Board, Vice Chairman of the Board, President or a Vice President
and by the Treasurer, the Secretary or one of the Assistant Treasurers or
Assistant Secretaries, or any other duly authorized officer of the Seller or the
Servicer, as appropriate.
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"Opinion of Counsel" means one or more written opinions of
counsel, who may be an employee of or counsel to the Seller or the Servicer,
which counsel shall be acceptable to the Indenture Trustee, the Owner Trustee or
the Rating Agencies, as applicable.
"Original Pool Balance" means $_________________.
["Overcollateralization Amount" means, with respect to any
Distribution Date, the excess of (i) the Related Pool Balance over (ii) the Note
Amount.]
["Overcollateralization Percentage" means, with respect to any
Distribution Date, the percentage derived from the fraction, the numerator of
which is the Overcollateralization Amount for such Distribution Date and the
denominator of which is the Related Pool Balance.]
"Owner Trust Estate" has the meaning assigned to such term in
the Trust Agreement.
"Owner Trustee" means the Person acting as Owner Trustee under
the Trust Agreement, its successors in interest and any successor owner trustee
under the Trust Agreement.
"Payment Determination Date" means, with respect to any
Distribution Date, the Business Day immediately preceding such Distribution
Date.
"Physical Property" has the meaning assigned to such term in
the definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last
day of a Collection Period, the aggregate Principal Balance of the Receivables
as of such day (excluding Purchased Receivables and Liquidated Receivables).
"Principal Balance" of a Receivable, as of the close of
business on the last day of a Collection Period, means the Amount Financed minus
the sum of (i) the portion of all payments made by or on behalf of the related
Obligor on or prior to such day and allocable to principal using the Simple
Interest Method and (ii) any payment of the Purchase Amount with respect to the
Receivable allocable to principal.
"Purchase Amount" means the amount, as of the close of
business on the last day of a Collection Period, required to prepay in full a
Receivable under the terms thereof including interest to the end of the month of
purchase.
"Purchased Receivable" means a Receivable purchased as of the
close of business on the last day of a Collection Period by the Servicer
pursuant to Section 4.07 or by the Seller pursuant to Section 3.02.
"Rating Agency" means each of [_______________] and
[______________]. If either such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the Seller,
notice of which designation shall be given to the Indenture Trustee, the Owner
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Trustee and the Servicer. Any notice required to be given to a Rating Agency
pursuant to this Agreement shall also be given to [___________], although,
except as set forth above, neither shall be deemed to be a Rating Agency for any
purposes of this Agreement.
"Rating Agency Condition" means, with respect to any action,
that each Rating Agency shall have been given 10 days' (or such shorter period
as shall be acceptable to each Rating Agency) prior notice thereof and that each
of the Rating Agencies shall have notified the Seller, the Servicer, the Owner
Trustee and the Indenture Trustee in writing that such action will not result in
a reduction or withdrawal of the then current rating of the Notes.
"Realized Losses" means, with respect to any Receivable that
becomes a Liquidated Receivable, the excess of the Principal Balance of such
Liquidated Receivable over Liquidation Proceeds to the extent allocable to
principal.
"Receivable" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche).
"Receivables Purchase Agreement" shall mean the Receivables
Purchase Agreement, dated as of [____], [____] among the Servicer, as seller and
the Seller, as purchaser.
"Receivable Files" means the documents specified in Section
3.03.
"Recoveries" means, with respect to any Receivable that
becomes a Liquidated Receivable, monies collected in respect thereof, from
whatever source, during any Collection Period following the Collection Period in
which such Receivable became a Liquidated Receivable, net of the sum of any
amounts expended by the Servicer for the account of the Obligor and any amounts
required by law to be remitted to the Obligor.
"Regular Principal Distribution Amount" means, with respect to
any Distribution Date, the sum of the following amounts, without duplication,
with respect to the Receivables in respect of the Collection Period preceding
such Distribution Date: (a) that portion of all collections on Receivables
allocable to principal, (b) all Liquidation Proceeds attributable to the
principal amount of Receivables that became Liquidated Receivables during such
Collection Period in accordance with the Servicer's customary servicing
procedures, plus the amount of Realized Losses with respect to such Liquidated
Receivables, (c) to the extent attributable to principal, the Purchase Amount of
each Receivable that became a Purchased Receivable during such Collection
Period, (d) partial prepayments relating to refunds of extended warranty
protection plan costs or of physical damage, credit life or disability insurance
policy premiums, but only if such costs or premiums were financed by the
respective Obligors thereon as of the date of the original contract and only to
the extent not included under clause (a) above, and (e) on the Final Scheduled
Distribution Date, any amounts advanced by the Servicer on such Final Scheduled
Distribution Date with respect to principal on the Receivables; provided,
however, that in calculating the Regular Principal Distribution Amount all
payments and proceeds (including Liquidation Proceeds) of any Purchased
Receivables the Purchase Amount of which has been included in the Principal
Distribution Amount in a prior Collection Period will be excluded.
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"Related Pool Balance" means, with respect to any Distribution
Date, the Pool Balance as of the beginning of the preceding Collection Period.
"Reserve Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Reserve Account Initial Deposit" means the initial deposit of
cash and Eligible Investments in the amount of $________________ made by the
Seller into the Reserve Account on the Closing Date.
"Seller" means World Omni Auto Receivables LLC and its
successors in interest to the extent permitted hereunder.
"Servicer" means World Omni, as the servicer of the
Receivables, and each successor to World Omni (in the same capacity) pursuant to
Section 7.03 or 8.02.
"Servicer Default" means an event specified in Section 8.01.
"Servicer's Certificate" means an Officers' Certificate of the
Servicer delivered pursuant to Section 4.09, substantially in the form of
Exhibit B.
"Servicing Fee" means the fee payable to the Servicer for
services rendered during each Collection Period, determined pursuant to Section
4.08.
"Servicing Fee Rate" means ______% per annum.
"Simple Interest Method" means the method of allocating a
fixed level payment to principal and interest, pursuant to which the portion of
such payment that is allocated to interest is equal to the product of the fixed
rate of interest multiplied by the unpaid principal balance multiplied by the
period of time elapsed since the preceding payment of interest was made and the
remainder of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable under which
the portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Specified Reserve Account Balance" means, with respect to any
Distribution Date, an amount equal to the Reserve Account Initial Deposit;
provided, however, that if, after the Collateral Release Period, the
[Overcollateralization Percentage] at any time equals at least ____%, then the
Specified Reserve Account Balance shall be $_______________.
"Standard & Poor's" means Standard & Poor's Ratings Services,
a division of The McGraw-Hill Companies, Inc., or its successor.
["Targeted Overcollateralization Amount" means, with respect
to a Distribution Date, the amount equal to (a) the quotient derived from
dividing the Note Amount for such Distribution Date by _________ minus (b) such
Note Amount.]
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"Total Distribution Amount" means, for each Distribution Date,
the sum of the applicable Interest Distribution Amount and the applicable
Regular Principal Distribution Amount (other than the portion thereof
attributable to Realized Losses).
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts
and investments held from time to time in any Trust Account (whether in the form
of deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit, and all
proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto in Section
5.01.
"Trust Agreement" means the Trust Agreement dated as of
_______________, [____], among the Seller and the Owner Trustee (as supplemented
by the Supplement thereto dated ___________, [____] relating to Series
[____]-[__].
"Trust Officer" means, in the case of the Indenture Trustee,
any Officer within the Corporate Trust Office of the Indenture Trustee,
including any Vice President, Assistant Vice President, Secretary, Assistant
Secretary or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject and, with respect to the Owner Trustee, any officer in the
Corporate Trust Administration Department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the Basic
Documents on behalf of the Owner Trustee.
"World Omni" means World Omni Financial Corp., a Florida
corporation, or its successors.
Section 1.02 Other Definitional Provisions. (a) Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to them in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent that
the definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Agreement or in any such certificate or other document shall control.
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(d) The words "hereof", "herein", "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Article, Section,
Schedule and Exhibit references contained in this Agreement are references to
Articles, Sections, Schedules and Exhibits in or to this Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(e) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II
Conveyance of Receivables
Section 2.01 Conveyance of Receivables. In consideration of
the Issuer's delivery to or upon the order of the Seller of $_________________,
less (i) the amount to be deposited to the Reserve Account on the Closing Date
and (ii) the [Initial Overcollateralization Amount], and the Certificates, the
Seller does hereby sell, transfer, assign, set over and otherwise convey to the
Issuer, without recourse (subject to the obligations of the Seller set forth
herein), all right, title and interest of the Seller in and to:
(a) the Receivables and all moneys received thereon on and
after __________;
(b) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of the Seller in the
Financed Vehicles;
(c) any proceeds with respect to the Receivables from claims
on any physical damage, credit life or disability insurance policies covering
Financed Vehicles or Obligors;
(d) any proceeds from recourse to Dealers with respect to
Receivables with respect to which the Servicer has determined in accordance with
its customary servicing procedures that eventual payment in full is unlikely;
(e) any Financed Vehicle that shall have secured a Receivable
and shall have been acquired by or on behalf of the Seller, the Servicer or the
Trust;
(f) all right, title and interest in all funds on deposit from
time to time in the Trust Accounts, including the Reserve Account Initial
Deposit, and in all investments and proceeds thereof (including all income
thereon); and
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(g) the proceeds of any and all of the foregoing.
[The Seller and the Issuer acknowledge that $________________ of the purchase
price of the Receivables owed by the Issuer to the Seller pursuant to this
Section 2.01 shall be offset by the Issuer against delivery of the Class [A-1]
Notes to the Seller.]
ARTICLE III
The Receivables
Section 3.01 Representations and Warranties of World Omni with
Respect to the Receivables. World Omni, which sold the related Receivable,
hereby represents and warrants to the other parties hereto and to the
Noteholders, with respect to such Receivable as of the Closing Date:
(a) [Characteristics of Receivables. Each Receivable (A) was
originated in the United States of America by a Dealer for the retail sale of a
Financed Vehicle in the ordinary course of such Dealer's business, was fully and
properly executed by the parties thereto, was purchased by the Seller from such
Dealer under an existing dealer agreement, (B) has created or shall create a
valid, subsisting and enforceable first priority security interest in favor of
the Seller and is assignable by the Seller to the Issuer and by the Issuer to
the Indenture Trustee, (C) contains customary and enforceable provisions such
that the rights and remedies of the holder thereof are adequate for realization
against the collateral of the benefits of the security, and (D) provides for
level monthly payments (provided, that the payment in the first or last month in
the life of the Receivable may be minimally different from the level payments)
that fully amortize the Amount Financed by maturity and yield interest at the
Annual Percentage Rate.
(b) Schedule of Receivables. The information set forth in
Schedule A to this Agreement is true and correct in all material respects as of
the opening of business on the applicable Cutoff Date, and no selection
procedures believed to be adverse to the Noteholders were utilized in selecting
the Receivables. The computer tape or other listing regarding the Receivables
made available to the Issuer and its assigns (which computer tape or other
listing is required to be delivered as specified herein) is true and correct in
all respects.
(c) Compliance with Law. Each Receivable and the sale of the
related Financed Vehicle complied at the time it was originated or made and, at
the execution of this Agreement, complies in all material respects with all
requirements of applicable federal, state and local laws and regulations
thereunder, including usury laws, the federal Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act,
the Federal Reserve Board's Regulations B and Z, and State adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code, and other
consumer credit laws and equal credit opportunity and disclosure laws.
(d) Binding Obligation. Each Receivable represents the
genuine, legal, valid and binding payment obligation in writing of the Obligor,
enforceable by the holder thereof in accordance with its terms.
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(e) No Government Obligor. None of the Receivables are due
from the United States of America or any State or from any agency, department or
instrumentality of the United States of America or any State.
(f) Security Interest in Financed Vehicle. Immediately prior
to the sale, assignment and transfer thereof, each Receivable shall be secured
by a validly perfected first priority security interest in the Financed Vehicle
in favor of the Seller as secured party or all necessary and appropriate actions
have been commenced that would result in the valid perfection of a first
priority security interest in the Financed Vehicle in favor of the Seller as
secured party.
(g) Receivables in Force. No Receivable has been satisfied,
subordinated or rescinded, nor has any Financed Vehicle been released from the
lien granted by the related Receivable in whole or in part.
(h) No Amendments. No Receivable has been amended such that
the amount of the Obligor's scheduled payments has been increased except for
increases resulting from the inclusion of any premiums for forced placed
physical damage insurance covering the Financed Vehicle.
(i) No Waiver. No provision of a Receivable has been waived.
(j) No Defenses. No right of rescission, setoff, counterclaim
or defense has been asserted or threatened with respect to any Receivable.
(k) No Liens. To the best of the Seller's knowledge, no liens
or claims have been filed for work, labor or materials relating to a Financed
Vehicle that are liens prior to, or equal to or coordinate with, the security
interest in the Financed Vehicle granted by any Receivable.
(l) No Default. No Receivable has a payment that is more than
30 days overdue as of the related Cutoff Date, and, except as permitted in this
paragraph, no default, breach, violation or event permitting acceleration under
the terms of any Receivable has occurred; and no continuing condition that with
notice or the lapse of time would constitute a default, breach, violation or
event permitting acceleration under the terms of any Receivable has arisen; and
the Seller has not waived and shall not waive any of the foregoing.
(m) Insurance. The Seller, in accordance with its customary
procedures, has determined that, at the origination of the Receivable, the
Obligor had obtained physical damage insurance covering the Financed Vehicle and
under the terms of the Receivable the Obligor is required to maintain such
insurance.
(n) Title. It is the intention of the Seller that the transfer
and assignment herein contemplated constitute a sale of the Receivables from the
Seller to the Issuer and that the beneficial interest in and title to the
Receivables not be part of the debtor's estate in the event of the filing of a
bankruptcy petition by or against the Seller under any bankruptcy law. No
Receivable has been sold, transferred, assigned or pledged by the Seller to any
Person other than the Issuer. Immediately prior to the transfer and assignment
herein contemplated, the Seller had good and marketable title to each Receivable
free and clear of all Liens, encumbrances, security interests and rights of
others and, immediately upon the transfer thereof, the Issuer shall have
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good and marketable title to each Receivable, free and clear of all Liens,
encumbrances, security interests and rights of others; and the transfer has been
perfected under the UCC.
(o) Lawful Assignment. No Receivable has been originated in,
or is subject to the laws of, any jurisdiction under which the sale, transfer
and assignment of such Receivable under this Agreement or the Indenture is
unlawful, void or voidable.
(p) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Issuer a first priority perfected
ownership interest in the Receivables, and to give the Indenture Trustee a first
priority perfected security interest therein, shall have been made.
(q) One Original. There is only one original executed copy of
each Receivable.
(r) Maturity of Receivables. Each Receivable has a final
maturity date not later than ________________.
(s) Scheduled Payments. (A) Each Receivable has a first
scheduled due date on or prior to the end of the month following the related
Cutoff Date and (B) no Receivable has a payment that is more than 30 days
overdue as of the related Cutoff Date, and has a final scheduled payment date no
later than the Final Scheduled Maturity Date.
(t) Location of Receivable Files. The Receivable Files are
kept at one or more of the locations listed in Schedule B.
(u) Remaining Maturity. The latest scheduled maturity of any
Receivable shall be no later than the Final Scheduled Maturity Date.
(v) Outstanding Principal Balance. Each Receivable has an
outstanding principal balance of at least $____.
(w) No Bankruptcies. No Obligor on any Receivable as of the
related Cutoff Date was noted in the related Receivable File as having filed for
bankruptcy.
(x) No Repossessions. No Financed Vehicle securing any
Receivable is in repossession status.
(y) Chattel Paper. Each Receivable constitutes "chattel paper"
as defined in the UCC.
(z) Agreement. The representations of the Seller in Section
6.01 are true and correct.
Section 3.02 Repurchase upon Breach. The Seller, the Servicer
or the Owner Trustee, as the case may be, shall inform the other parties to this
Agreement and the Indenture Trustee promptly, in writing, upon the discovery of
any breach of World Omni's or the Seller's representations and warranties made
pursuant to Section 3.01 or 6.01. Unless any such breach shall have been cured
by the last day of the second Collection Period following the discovery
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thereof by the Owner Trustee or receipt by the Owner Trustee of written notice
from the Seller or the Servicer of such breach, World Omni shall be obligated to
repurchase any Receivable materially and adversely affected by any such breach
as of such last day (or, at the World Omni's option, the last day of the first
Collection Period following the discovery). In consideration of the repurchase
of any such Receivable, World Omni shall remit the Purchase Amount, in the
manner specified in Section 5.05. Subject to the provisions of Section 6.03, the
sole remedy of the Issuer, the Owner Trustee, the Indenture Trustee, the
Noteholders or the Certificateholders with respect to a breach of
representations and warranties pursuant to Section 3.01 and the agreement
contained in this Section shall be to require the Seller to repurchase
Receivables pursuant to this Section, subject to the conditions contained
herein.
Section 3.03 Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Issuer hereby revocably appoints the Servicer, and the Servicer hereby accepts
such appointment, to act for the benefit of the Issuer and the Indenture Trustee
as custodian of the following documents or instruments which are hereby or will
hereby be constructively delivered to the Indenture Trustee, as pledgee of the
Issuer, as of the Closing Date with respect to each Receivable:
(a) the fully executed original of the Receivable;
(b) the original credit application fully executed by the
Obligor;
(c) the original certificate of title or such documents that
the Servicer or the Seller shall keep on file, in accordance with its customary
procedures, evidencing the security interest of the Seller in the Financed
Vehicle; and
(d) any and all other documents that the Servicer or the
Seller shall keep on file, in accordance with its customary procedures, relating
to a Receivable, an Obligor or a Financed Vehicle.
Section 3.04 Duties of Servicer as Custodian. (a) Safekeeping.
The Servicer shall hold the Receivable Files as custodian for the benefit of the
Issuer and maintain such accurate and complete accounts, records and computer
systems pertaining to each Receivable File as shall enable the Issuer to comply
with this Agreement. In performing its duties as custodian the Servicer shall
act with reasonable care, using that degree of skill and attention that the
Servicer exercises with respect to the receivable files relating to all
comparable automotive receivables that the Servicer services for itself or
others. The Servicer shall conduct, or cause to be conducted, periodic audits of
the Receivable Files held by it under this Agreement and of the related
accounts, records and computer systems, in such a manner as shall enable the
Issuer or the Indenture Trustee to verify the accuracy of the Servicer's record
keeping. The Servicer shall promptly report to the Issuer and the Indenture
Trustee any failure on its part to hold the Receivable Files and maintain its
accounts, records and computer systems as herein provided and shall promptly
take appropriate action to remedy any such failure. Nothing herein shall be
deemed to require an initial review or any periodic review by the Issuer or the
Indenture Trustee of the Receivable Files.
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(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of its offices specified in Schedule B or
at such other office as shall be specified to the Issuer and the Indenture
Trustee by written notice not later than 90 days after any change in location.
The Servicer shall make available to the Issuer and the Indenture Trustee or
their respective duly authorized representatives, attorneys or auditors a list
of locations of the Receivable Files and the related accounts, records and
computer systems maintained by the Servicer at such times during normal business
hours as the Issuer or the Indenture Trustee shall instruct.
(c) Release of Documents. Upon instruction from the Indenture
Trustee, the Servicer shall release any Receivable File to the Indenture
Trustee, the Indenture Trustee's agent or the Indenture Trustee's designee, as
the case may be, at such place or places as the Indenture Trustee may designate,
as soon as practicable.
Section 3.05 Instructions; Authority To Act. The Servicer
shall be deemed to have received proper instructions with respect to the
Receivable Files upon its receipt of written instructions signed by a Trust
Officer of the Indenture Trustee.
Section 3.06 Custodian's Indemnification. The Servicer as
custodian shall indemnify the Trust, the Owner Trustee and the Indenture Trustee
and each of their respective officers, directors, employees and agents for any
and all liabilities, obligations, losses, compensatory damages, payments, costs
or expenses of any kind whatsoever that may be imposed on, incurred by or
asserted against the Trust, the Owner Trustee or the Indenture Trustee or any of
their respective officers, directors, employees and agents as the result of any
improper act or omission in any way relating to the maintenance and custody by
the Servicer as custodian of the Receivable Files; provided, however, that the
Servicer shall not be liable to the Owner Trustee for any portion of any such
amount resulting from the willful misfeasance, bad faith or negligence of the
Owner Trustee, and the Servicer shall not be liable to the Indenture Trustee for
any portion of any such amount resulting from the willful misfeasance, bad faith
or negligence of the Indenture Trustee.
Section 3.07 Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section. If
World Omni shall resign as Servicer in accordance with the provisions of this
Agreement or if all of the rights and obligations of any Servicer shall have
been terminated under Section 8.01, the appointment of such Servicer as
custodian shall be terminated by the Indenture Trustee or by the Holders of
Notes evidencing not less than 25% of the Outstanding Amount of the Notes or,
with the consent of Holders of the Notes evidencing not less than 25% of the
Outstanding Amount of the Notes, by the Owner Trustee, in the same manner as the
Indenture Trustee or such Holders may terminate the rights and obligations of
the Servicer under Section 8.01. The Indenture Trustee or, with the consent of
the Indenture Trustee, the Owner Trustee may terminate the Servicer's
appointment as custodian, with cause, at any time upon written notification to
the Servicer and, without cause, upon 30 days' prior written notification to the
Servicer. As soon as practicable after any termination of such appointment, the
Servicer shall deliver the Receivable Files to the Indenture Trustee or the
Indenture Trustee's agent at such place or places as the Indenture Trustee may
reasonably designate.
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ARTICLE IV
Administration and Servicing of Receivables
Section 4.01 Duties of Servicer. The Servicer, for the benefit
of the Issuer (to the extent provided herein), shall manage, service, administer
and make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it services
for itself or others. The Servicer's duties shall include collection and posting
of all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending payment coupons to Obligors, reporting tax
information to Obligors, accounting for collections and furnishing monthly and
annual statements to the Owner Trustee and the Indenture Trustee with respect to
distributions. Subject to the provisions of Section 4.02, the Servicer shall
follow its customary standards, policies and procedures in performing its duties
as Servicer. Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders and the
Noteholders or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Receivables or to the Financed Vehicles
securing such Receivables. If the Servicer shall commence a legal proceeding to
enforce a Receivable, the Issuer (in the case of a Receivable other than a
Purchased Receivable) shall thereupon be deemed to have automatically assigned,
solely for the purpose of collection, such Receivable to the Servicer. If in any
enforcement suit or legal proceeding it shall be held that the Servicer may not
enforce a Receivable on the ground that it shall not be a real party in interest
or a holder entitled to enforce such Receivable, the Owner Trustee shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders. The Owner Trustee
shall upon the written request of the Servicer furnish the Servicer with any
powers of attorney and other documents reasonably necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties
hereunder.
Section 4.02 Collection and Allocation of Receivable Payments.
The Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Receivables as and when the same shall
become due and shall follow such collection procedures as it follows with
respect to all comparable automotive receivables that it services for itself or
others. The Servicer shall allocate collections between principal and interest
in accordance with the customary servicing procedures it follows with respect to
all comparable automotive receivables that it services for itself or others. The
Servicer may grant extensions, rebates or adjustments on a Receivable, which
shall not, for the purposes of this Agreement, modify the original due dates or
amounts of the originally scheduled payments of interest on such Receivable;
provided, however, that if the Servicer extends the date for final payment by
the Obligor of any Receivable beyond the Final Scheduled Maturity Date, it shall
promptly repurchase the Receivable from the Issuer in accordance with the terms
of Section 4.07. The Servicer may in its discretion waive any late payment
charge or any other fees that may be collected in the ordinary course of
servicing a Receivable. The Servicer shall not agree to any alteration of the
interest rate or the originally scheduled payments on any Receivable.
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Section 4.03 Realization upon Receivables. On behalf of the
Issuer, the Servicer shall use its best efforts, consistent with its customary
servicing procedures, to repossess or otherwise convert the ownership of the
Financed Vehicle securing any Receivable as to which the Servicer shall have
determined eventual payment in full is unlikely. The Servicer shall follow such
customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of automotive receivables, which may include
reasonable efforts to realize upon any recourse to Dealers and selling the
Financed Vehicle at public or private sale. The foregoing shall be subject to
the provision that, in any case in which the Financed Vehicle shall have
suffered damage, the Servicer shall not expend funds in connection with the
repair or the repossession of such Financed Vehicle unless it shall determine in
its discretion that such repair and/or repossession will increase the
Liquidation Proceeds by an amount greater than the amount of such expenses.
Section 4.04 Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering the Financed Vehicle as
of the execution of the Receivable.
Section 4.05 Maintenance of Security Interests in Financed
Vehicles. The Servicer shall, in accordance with its customary servicing
procedures, take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle.
The Servicer is hereby authorized to take such steps as are necessary to
re-perfect such security interest on behalf of the Issuer and the Indenture
Trustee in the event of the relocation of a Financed Vehicle or for any other
reason.
Section 4.06 Covenants of Servicer. The Servicer shall not
release the Financed Vehicle securing any Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment in
full by the Obligor thereunder or repossession, nor shall the Servicer impair
the rights of the Issuer, the Indenture Trustee, the Certificateholders or the
Noteholders in such Receivable, nor shall the Servicer increase the number of
scheduled payments due under a Receivable.
Section 4.07 Purchase of Receivables upon Breach. The Servicer
or the Owner Trustee shall inform the other party and the Indenture Trustee and
the Seller promptly, in writing, upon the discovery of any breach pursuant to
Section 4.02, 4.05 or 4.06. Unless the breach shall have been cured by the last
day of the second Collection Period following such discovery (or, at the
Servicer's election, the last day of the first following Collection Period), the
Servicer shall purchase any Receivable materially and adversely affected by such
breach as of such last day. If the Servicer takes any action during any
Collection Period pursuant to Section 4.02 that impairs the rights of the
Issuer, the Indenture Trustee, the Certificateholders or the Noteholders in any
Receivable or as otherwise provided in Section 4.02, the Servicer shall purchase
such Receivable as of the last day of such Collection Period. In consideration
of the purchase of any such Receivable pursuant to either of the two preceding
sentences, the Servicer shall remit the Purchase Amount in the manner specified
in Section 5.05. Subject to Section 7.02, the sole remedy of the Issuer, the
Owner Trustee, the Indenture Trustee, the Certificateholders or the Noteholders
with respect to a breach pursuant to Section 4.02, 4.05 or 4.06 shall be to
require the Servicer to purchase Receivables pursuant to this Section. The
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Owner Trustee shall have no duty to conduct any affirmative investigation as to
the occurrence of any condition requiring the purchase of any Receivable
pursuant to this Section.
Section 4.08 Servicing Fee. The Servicing Fee for a
Distribution Date shall equal the product of (a) one-twelfth, (b) the Servicing
Fee Rate and (c) the Pool Balance as of the first day of the related Collection
Period. The Servicer shall also be entitled to all late fees, prepayment
charges, and other administrative fees or similar charges allowed by applicable
law with respect to the Receivables, collected (from whatever source) on the
Receivables, plus any reimbursement pursuant to the last paragraph of Section
7.02.
Section 4.09 Servicer's Certificate. Not later than 11:00 A.M.
(New York time) on each Payment Determination Date, the Servicer shall deliver
to the Owner Trustee, each Paying Agent, the Indenture Trustee and the Seller,
with a copy to the Rating Agencies, a Servicer's Certificate containing all
information necessary to make the distributions to be made on the related
Distribution Date pursuant to Sections 5.06 and 5.07 for the related Collection
Period. Receivables to be purchased by the Servicer or to be repurchased by the
Seller shall be identified by the Servicer by account number with respect to
such Receivable (as specified in Schedule A).
Section 4.10 Annual Statement as to Compliance; Notice of
Default. (a) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee, on or before [April 30] of each year beginning ______________, [____],
an Officers' Certificate, dated as of December 31 of the preceding year, stating
that (i) a review of the activities of the Servicer during the preceding
12-month period (or such longer period as shall have elapsed since the Closing
Date) and of its performance under this Agreement has been made under such
officers' supervision and (ii) to the best of such officers' knowledge, based on
such review, the Servicer has fulfilled all its obligations under this Agreement
throughout such year or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officers and the
nature and status thereof. The Indenture Trustee shall send a copy of such
certificate and the report referred to in Section 4.11 to the Rating Agencies. A
copy of such certificate and the report referred to in Section 4.11 may be
obtained by any Certificateholder, Noteholder or Note owner by a request in
writing to the Owner Trustee addressed to the Corporate Trust Office. Upon the
telephone request of the Owner Trustee, the Indenture Trustee will promptly
furnish the Owner Trustee a list of Noteholders as of the date specified by the
Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and the Rating Agencies, promptly after having obtained
knowledge thereof, but in no event later than five (5) Business Days thereafter,
written notice in an Officers' Certificate of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Default under Section
8.01(a) or (b).
Section 4.11 Annual Independent Certified Public Accountants'
Report. The Servicer shall cause a firm of independent certified public
accountants, which may also render other services to the Servicer, the Seller or
their Affiliates, to deliver to the Owner Trustee and the Indenture Trustee on
or before [____] of each year beginning [____], [____], a report addressed to
the Board of Directors of the Servicer, to the effect that such firm has
examined the financial statements of World Omni Auto Receivables LLC and issued
its report thereon and that
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such examination (a) was made in accordance with generally accepted auditing
standards and accordingly included such tests of the accounting records and such
other auditing procedures as such firm considered necessary in the
circumstances; (b) included tests relating to automotive loans serviced for
others in accordance with the requirements of the Uniform Single Attestation
Program for Mortgage Bankers (the "Program"), to the extent the procedures in
such Program are applicable to the servicing obligations set forth in this
Agreement; and (c) except as described in the report, disclosed no exceptions or
errors in the records relating to automobile and light-duty truck loans serviced
for others that, in the firm's opinion, paragraph four of such Program requires
such firm to report.
Such report will also indicate that the firm is independent of
the Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
Section 4.12 Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to the Certificateholders and
Noteholders access to the Receivable Files in such cases where the
Certificateholders or Noteholders shall be required by applicable statutes or
regulations to review such documentation. Access shall be afforded without
charge, but only upon reasonable request and during the normal business hours at
the offices of the Servicer. Nothing in this Section shall affect the obligation
of the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors and the failure of the Servicer to provide
access to information as a result of such obligation shall not constitute a
breach of this Section.
Section 4.13 Servicer Expenses. The Servicer shall be required
to pay all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and reports
to Certificateholders and Noteholders.
Section 4.14 Appointment of Subservicer. The Servicer may at
any time appoint a subservicer to perform all or any portion of its obligations
as Servicer hereunder; provided, however, that the Rating Agency Condition shall
have been satisfied in connection therewith; and provided, further, that the
Servicer shall remain obligated and be liable to the Issuer, the Owner Trustee,
the Indenture Trustee, the Certificateholders and the Noteholders for the
servicing and administering of the Receivables in accordance with the provisions
hereof without diminution of such obligation and liability by virtue of the
appointment of such subservicer and to the same extent and under the same terms
and conditions as if the Servicer alone were servicing and administering the
Receivables. The fees and expenses of the subservicer shall be as agreed between
the Servicer and its subservicer from time to time, and none of the Issuer, the
Owner Trustee, the Indenture Trustee, the Certificateholders or the Noteholders
shall have any responsibility therefor.
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ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders and Noteholders
Section 5.01 Establishment of Trust Accounts. (a)(i) The
Servicer, for the benefit of the Noteholders and the Certificateholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Collection Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Noteholders and
the Certificateholders.
(ii) The Servicer, for the benefit of the
Noteholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account (the "Note Distribution Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders.
(iii) The Servicer, for the benefit of the
Noteholders and the Certificateholders, shall establish and maintain in
the name of the Indenture Trustee an Eligible Deposit Account (the
"Reserve Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Noteholders and
the Certificateholders.
(b) Funds on deposit in the Collection Account, the Note
Distribution Account and the Reserve Account (collectively the "Trust Accounts")
shall be invested (1) by the Indenture Trustee in Eligible Investments selected
in writing by the Servicer or an investment manager selected by the Servicer,
which investment manager shall have agreed to comply with the terms of this
Agreement as it relates to investing such funds or (2) by an investment manager
in Eligible Investments selected by such investment manager; provided that (A)
such investment manager shall be selected by the Servicer, (B) such investment
manager shall have agreed to comply with the terms of this Agreement as it
relates to investing such funds, (C) any investment so selected by such
investment manager shall be made in the name of the Indenture Trustee and shall
be settled by a Delivery to the Indenture Trustee that complies with the terms
of this Agreement as it relates to investing such funds, and (D) prior to the
settlement of any investment so selected by such investment manager the
Indenture Trustee shall affirm that such investment is an Eligible Investment.
The Servicer initially appoints the Indenture Trustee investment manager
hereunder, which appointment the Indenture Trustee hereby accepts. It is
understood and agreed that the Indenture Trustee shall not be liable for any
loss arising from an investment in Eligible Investments made in accordance with
this Section 5.01(b). All such Eligible Investments shall be held by the
Indenture Trustee for the benefit of the Noteholders and the Certificateholders
or the Noteholders, as applicable; provided, however, that on each Payment
Determination Date all interest and other investment income (net of losses and
investment expenses) on funds on deposit in the Trust Accounts shall be
deposited into the Collection Account and shall be deemed to constitute a
portion of the Interest Distribution Amount for the related Distribution Date.
Other than as permitted by the Rating Agencies, funds on deposit in the
Collection Account, the Reserve Account and the Note Distribution Account shall
be invested in Eligible Investments that will mature (A) not later than the
Business Day immediately preceding the next Distribution Date or (B) on such
next Distribution Date if either
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(x) such investment is held in the corporate trust department of the institution
with which the Collection Account, the Reserve Account, the Note Distribution
Account or the Certificate Distribution Account, as applicable, is then
maintained and is invested either in a time deposit of the Indenture Trustee
rated at least A-1 by Standard & Poor's and P-1 by Moody's (such account being
maintained within the corporate trust department of the Indenture Trustee) or in
the Indenture Trustee's common trust fund so long as such fund is rated in the
highest applicable rating category by Standard & Poor's and Moody's or (y) the
Indenture Trustee (so long as the short-term unsecured debt obligations of the
Indenture Trustee are either (i) rated at least P-1 by Moody's and A-1 by
Standard & Poor's on the date such investment is made or (ii) guaranteed by an
entity whose short-term unsecured debt obligations are rated at least P-1 by
Moody's and A-1 by Standard & Poor's on the date such investment is made) has
agreed to advance funds on such Distribution Date to the Note Distribution
Account and the Certificate Distribution Account in the amount payable on such
investment on such Distribution Date pending receipt thereof to the extent
necessary to make distributions on such Distribution Date. The guarantee
referred to in clause (y) of the preceding sentence shall be subject to the
Rating Agency Condition. For the purpose of the foregoing, unless the Indenture
Trustee affirmatively agrees in writing to make such advance with respect to
such investment prior to the time an investment is made, it shall not be deemed
to have agreed to make such advance. Funds deposited in a Trust Account on a day
which immediately precedes a Distribution Date upon the maturity of any Eligible
Investments are not required to be invested overnight.
(c) (i) The Indenture Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Trust Accounts and
in all proceeds thereof (including all income thereon) and all such funds,
investments, proceeds and income shall be part of the Trust Estate. The Trust
Accounts shall be under the sole dominion and control of the Indenture Trustee
for the benefit of the Noteholders or the Noteholders and the
Certificateholders, as the case may be. If, at any time, any of the Trust
Accounts ceases to be an Eligible Deposit Account, the Indenture Trustee (or the
Servicer on its behalf) shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, as to which each Rating Agency may consent)
establish a new Trust Account as an Eligible Deposit Account and shall transfer
any cash and/or any investments to such new Trust Account.
(ii) With respect to the Trust Account Property, the
Indenture Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in
deposit accounts shall be held solely in the Eligible Deposit
Accounts, subject to the last sentence of Section 5.01(c)(i);
and each such Eligible Deposit Account shall be subject to the
exclusive custody and control of the Indenture Trustee, and
the Indenture Trustee shall have sole signature authority with
respect thereto;
(B) any Trust Account Property that constitutes
Physical Property shall be delivered to the Indenture Trustee
in accordance with paragraph (a) of the definition of
"Delivery" and shall be held, pending maturity or disposition,
solely by the Indenture Trustee or a financial intermediary
(as such term is defined in Section 8-313(4) of the UCC)
acting solely for the Indenture Trustee;
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(C) any Trust Account Property that is a book-entry
security held through the Federal Reserve System pursuant to
federal book-entry regulations shall be delivered in
accordance with paragraph (b) of the definition of "Delivery"
and shall be maintained by the Indenture Trustee, pending
maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in
such paragraph; and (D) any Trust Account Property that is an
"uncertificated security" under Article VIII of the UCC and
that is not governed by clause (C) above shall be delivered to
the Indenture Trustee in accordance with paragraph (c) of the
definition of "Delivery" and shall be maintained by the
Indenture Trustee, pending maturity or disposition, through
continued registration of the Indenture Trustee's (or its
nominee's) ownership of such security.
(iii) The Servicer shall have the power, revocable by the
Indenture Trustee or by the Owner Trustee with the consent of the
Indenture Trustee, to instruct the Indenture Trustee to make
withdrawals and payments from the Trust Accounts for the purpose of
permitting the Servicer or the Owner Trustee to carry out its
respective duties hereunder or permitting the Indenture Trustee to
carry out its duties under the Indenture.
Section 5.02 Collections. The Servicer shall remit within two
Business Days of receipt thereof to the Collection Account all payments by or on
behalf of the Obligors with respect to the Receivables (other than Purchased
Receivables) and all Liquidation Proceeds, both as collected during the
Collection Period. Notwithstanding the foregoing, for so long as (i) World Omni
remains the Servicer, (ii) no Servicer Default shall have occurred and be
continuing and (iii)(x) World Omni maintains a short-term rating of at least
[ _ ] by [__________] and [ _ ] by [__________] (and for five Business Days
following a reduction in either such rating) or (y) prior to ceasing daily
remittances, the Rating Agency Condition shall have been satisfied (and any
conditions or limitations imposed by the Rating Agencies in connection therewith
are complied with), the Servicer shall remit such collections with respect to
the preceding calendar month to the Collection Account on the Payment
Determination Date immediately preceding the related Distribution Date. For
purposes of this Article V the phrase "payments by or on behalf of Obligors"
shall mean payments made with respect to the Receivables by Persons other than
the Servicer or the Seller.
Section 5.03 Application of Collections. All collections for
the Collection Period shall be applied by the Servicer as follows: with respect
to each Receivable (other than a Purchased Receivable), payments by or on behalf
of the Obligor shall be applied to interest and principal in accordance with the
Simple Interest Method.
Section 5.04 (Reserved)
Section 5.05 Additional Deposits. The Servicer and the Seller
shall deposit or cause to be deposited in the Collection Account the aggregate
Purchase Amount with respect to Purchased Receivables and the Servicer shall
deposit therein all amounts to be paid under Section 9.01. The Servicer will
deposit the aggregate Purchase Amount with respect to Purchased Receivables when
such obligations are due, unless the Servicer shall not be required to make
daily deposits pursuant to Section 5.02. All such other deposits shall be made
on the Payment Determination Date for the related Collection Period.
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Section 5.06 Distributions. (a)(i) On each Payment
Determination Date, the Servicer shall calculate all amounts required to be
deposited in the Note Distribution Account and the Certificate Distribution
Account.
(ii) On each Distribution Date, the Servicer shall
instruct the Indenture Trustee (based on the information contained in
the Servicer's Certificate delivered on the related Payment
Determination Date pursuant to Section 4.09) to make the following
deposits and distributions for receipt by the Servicer or deposit in
the applicable account by 11:00 A.M. (New York time), to the extent of
the Total Distribution Amount, in the following order of priority:
(A) to the Servicer, from the Interest Distribution
Amount, the Servicing Fee (and all unpaid Servicing Fees from
prior Collection Periods);
(B) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clause
(A), the Noteholders' Interest Distributable Amount;
(C) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clauses
(A) and (B), the Noteholders' Principal Distributable Amount;
(D) if all of the conditions set forth in Section
5.06(b) are satisfied, to the Certificate Distribution
Account, from the Total Distribution Amount remaining after
the application of clauses (A) through (C), the Cash Release
Amount for such Distribution Date;
(E) to the Reserve Account, from the Total
Distribution Amount remaining after the application of clauses
(A) through (D) (it being understood that the Accelerated
Principal Distribution Amount is a function of and subject to
the amount required to be deposited in the Reserve Account
pursuant to this clause (E)), the amount, if any, necessary to
reinstate the balance in the Reserve Account up to the
Specified Reserve Account Balance; and
(F) to the Certificate Distribution Account, the
portion, if any, of the Total Distribution Amount remaining
after the application of clauses (A) through (E).
Notwithstanding that the Notes have been paid in full, the Indenture Trustee
shall continue to maintain the Collection Account hereunder until the Pool
Balance is reduced to zero.
(b) The distribution of a Cash Release Amount pursuant to
Section 5.06(a)(ii)(D) and the release of Receivables from the lien of the
Indenture pursuant to Section 5.06(c) on a Distribution Date shall be subject to
the satisfaction of all of the following conditions:
(i) no such distribution or release shall be made
until the First Release Distribution Date;
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(ii) subject to condition (iii) below, the aggregate
Principal Balance of Receivables released in respect of such
Distribution Date shall equal (x) the [Overcollateralization Amount for
such Distribution Date less (y) the Targeted Overcollateralization
Amount];
(iii) the aggregate amount of Cash Release Amounts
distributed pursuant to Section 5.06(a)(ii)(D) and the aggregate
Principal Balance of Receivables released pursuant to Section 5.06(c)
shall not exceed the [Initial Overcollateralization Amount]; and
(iv) the entire amount of the Noteholders' Principal
Distribution Amount for such Distribution Date is distributed pursuant
to Section 5.06(a)(ii)(c).
(c) If on any Distribution Date all of the conditions in
Section 5.06(b) will be satisfied, then on the related Payment Determination
Date the Servicer shall notify the Owner Trustee of such fact and instruct the
Indenture Trustee to release from the lien of the Indenture and transfer to the
Trust, free and clear of the lien of the Indenture, Receivables having the
aggregate Principal Balance specified in Section 5.06(b)(ii). The Servicer shall
randomly select the Receivables to be released.
Section 5.07 Reserve Account.
(a) On the Closing Date, the Owner Trustee will deposit, on
behalf of the Seller, the Reserve Account Initial Deposit into the Reserve
Account from the net proceeds of the sale of the Notes.
(b) (i) After giving effect to clause (ii) below, if the
amount on deposit in the Reserve Account on any Distribution Date (after giving
effect to all deposits thereto or withdrawals therefrom on such Distribution
Date) is greater than the Specified Reserve Account Balance for such
Distribution Date, the Servicer shall instruct the Indenture Trustee to
distribute the amount of such excess to the Seller.
(ii) On each Distribution Date subsequent to any
reduction or withdrawal by any Rating Agency of its rating of any Class
of Notes, unless such rating has been restored, if the amount on
deposit in the Reserve Account (after taking into account any deposits
thereto pursuant to Section 5.06(a) and withdrawals therefrom pursuant
to Section 5.07(c) or (d) on such date) is greater than the Specified
Reserve Account Balance for such Distribution Date, then the Servicer
shall instruct the Indenture Trustee to include the amount of such
excess in the Noteholders' Monthly Principal Distribution Amount and to
deposit the amount of such excess to the Collection Account for deposit
to the Note Distribution Account for distribution to Noteholders as an
accelerated payment of principal on such Distribution Date; provided,
that the amount of such deposit shall not exceed the outstanding
principal balance of the Notes after giving effect to all other
payments of principal to be made on such date.
(c) (i) In the event that the Noteholders' Distributable
Amount for a Distribution Date exceeds the sum of the amounts deposited into the
Note Distribution Account pursuant to Section 5.06(a)(ii)(B) and (C) on such
Distribution Date, the Servicer shall instruct
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the Indenture Trustee to withdraw from the Reserve Account on such Distribution
Date an amount equal to such excess, to the extent of funds available therein,
and deposit such amount into the Note Distribution Account; provided that such
amount shall be applied first to the payment of interest due on the Notes to the
extent, if any, that the amount deposited pursuant to Section 5.06(a)(ii)(B) is
not sufficient to cover such payment of interest and second to the payment of
principal of the Notes but only to the extent of the amount remaining in the
Reserve Account (calculated after giving effect to the amount applied pursuant
to clause second on such Distribution Date).
(ii) In the event that the Noteholders' Principal
Distributable Amount on the Class [A-1] Final Scheduled Distribution
Date, the Class [A-2] Final Scheduled Distribution Date, the Class
[A-3] Final Scheduled Distribution Date or the Class [A-4] Final
Scheduled Distribution Date exceeds the amount deposited into the Note
Distribution Account pursuant to Section 5.06(a)(ii)(C) on such
Distribution Date, the Servicer shall instruct the Indenture Trustee to
withdraw from the Reserve Account on such Distribution Date an amount
equal to such excess, to the extent of funds available therein, and
deposit such amount into the Note Distribution Account.
(d) Subject to Section 9.01, amounts will continue to be
applied pursuant to Section 5.06(a) following payment in full of the Outstanding
Amount of the Notes until the Pool Balance is reduced to zero. Following the
payment in full of the aggregate Outstanding Amount of the Notes and of all
other amounts owing or to be distributed hereunder or under the Indenture or the
Trust Agreement to Noteholders and the termination of the Trust, any amount
remaining on deposit in the Reserve Account shall be distributed to the Seller.
Section 5.08 (Reserved)
Section 5.09 Statements to Noteholders and Certificateholders.
On each Distribution Date, the Servicer shall provide to the Owner Trustee (with
a copy to the Rating Agencies and each Paying Agent) for the Owner Trustee to
forward to each Certificateholder of record as of the most recent Record Date
and to the Indenture Trustee (with a copy to each Paying Agent) for the
Indenture Trustee to forward to each Noteholder of record as of the most recent
Record Date a statement substantially in the form of Exhibit A, setting forth at
least the following information as to the Notes, to the extent applicable:
(a) the amount of such distribution allocable to principal
allocable to each Class of Notes;
(b) the amount of such distribution allocable to interest
allocable to each Class of Notes;
(c) the outstanding principal balance of each Class of Notes
and the Note Pool Factor for each such Class as of the close of business on the
last day of the preceding Collection Period, after giving effect to payments
allocated to principal reported under clause (i) above;
(d) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period;
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(e) the amount of Realized Losses, if any, with respect to the
related Collection Period;
(f) the balance of the Reserve Account on such Payment
Determination Date after giving effect to deposits and withdrawals to be made on
the next following Distribution Date, if any;
(g) the Pool Balance as of the close of business on the
last day of the related Collection Period, after giving effect to payments
allocated to principal reported under clause (i) above; and
(h) the amount, if any, distributed to the Certificate
Distribution Account.
Each amount set forth on the Distribution Date statement under
clauses (a), (b) or (d) above shall be expressed as a dollar amount per $1,000
of original principal balance of a Note.
Section 5.10 Net Deposits. As an administrative convenience,
unless the Servicer is required to remit collections daily, the Servicer will be
permitted to make the deposit of collections on the Receivables and Purchase
Amounts for or with respect to the Collection Period net of distributions to be
made to the Servicer with respect to the Collection Period. The Servicer,
however, will account to the Owner Trustee, the Indenture Trustee, the
Noteholders and the Certificateholders as if all deposits, distributions and
transfers were made individually.
Section 5.11 Transfer of Certificates. In the event any Holder
of a Certificate shall wish to transfer such Certificate, the Seller shall
provide to such Holder and any prospective transferee designated by such Holder
information regarding the Certificates and the Receivables and such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act of 1933, as amended, pursuant to
the exemption from registration provided by Rule 144A.
ARTICLE VI
The Seller
Section 6.01 Representations of Seller. The Seller makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Seller is duly
organized and validly existing as a limited liability company in good standing
under the laws of the State of Delaware, with the requisite power and authority
to own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and had at all
relevant times, and has, the requisite power, authority and legal right to
acquire and own the Receivables.
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(b) Due Qualification. The Seller is duly qualified to do
business as a foreign limited liability company in good standing, and has
obtained all necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business shall require such
qualifications.
(c) Power and Authority. The Seller has the requisite power
and authority to execute and deliver this Agreement and to carry out its terms;
the Seller has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Issuer, and the Seller shall have
duly authorized such sale and assignment to the Issuer by all necessary action;
and the execution, delivery and performance of this Agreement has been duly
authorized by the Seller by all necessary action.
(d) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Seller enforceable in accordance with its
terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
limited liability company agreement of the Seller, or any indenture, agreement
or other instrument to which the Seller is a party or by which it is bound; or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than pursuant to this Agreement and the Basic Documents); or violate any
law or, to the best of the Seller's knowledge, any order, rule or regulation
applicable to the Seller of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties.
(f) No Proceedings. To the Seller's best knowledge, there are
no proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Seller or its properties: (i) asserting the
invalidity of this Agreement, the Indenture or any of the other Basic Documents,
the Notes or the Certificates, (ii) seeking to prevent the issuance of the Notes
or the Certificates or the consummation of any of the transactions contemplated
by this Agreement, the Indenture or any of the other Basic Documents, (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates or (iv) which might adversely affect
the federal or state income tax attributes of the Notes or the Certificates.
Section 6.02 Corporate Existence. During the term of this
Agreement, the Seller will keep in full force and effect its existence, rights
and franchises as a limited liability company under the laws of the jurisdiction
of its incorporation and will obtain and preserve its qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Basic Documents and each other instrument or agreement necessary or appropriate
to the proper administration of this Agreement and the transactions contemplated
hereby. In addition, all transactions and dealings between the Seller and its
Affiliates will be conducted on an arm's-length basis.
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Section 6.03 Liability of Seller; Indemnities. The Seller
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under this Agreement:
(a) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee and the Servicer and any of the
officers, directors, employees and agents of the Issuer, the Owner Trustee and
the Indenture Trustee from and against any taxes that may at any time be
asserted against any such Person with respect to the transactions contemplated
herein and in the Basic Documents, including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes (but, in the
case of the Issuer, not including any taxes asserted with respect to, and as of
the date of, the sale of the Receivables to the Issuer or the issuance and
original sale of the Certificates and the Notes, or asserted with respect to
ownership of the Receivables, or federal or other income taxes arising out of
distributions on the Certificates or the Notes) and costs and expenses in
defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders and the
Noteholders and any of the officers, directors, employees and agents of the
Issuer, the Owner Trustee and the Indenture Trustee from and against any loss,
liability or expense incurred by reason of (i) the Seller's willful misfeasance,
bad faith or negligence in the performance of its duties under this Agreement,
or by reason of reckless disregard of its obligations and duties under this
Agreement and (ii) the Seller's or the Issuer's violation of federal or state
securities laws in connection with the offering and sale of the Notes and the
Certificates.
(c) The Seller shall indemnify, defend and hold harmless the
Owner Trustee and the Indenture Trustee and their respective officers,
directors, employees and agents from and against all costs, expenses, losses,
claims, damages and liabilities arising out of or incurred in connection with
the acceptance or performance of the trusts and duties herein and in the Trust
Agreement contained, in the case of the Owner Trustee, and in the Indenture
contained, in the case of the Indenture Trustee, except to the extent that such
cost, expense, loss, claim, damage or liability: (i) in the case of the Owner
Trustee, shall be due to the willful misfeasance, bad faith or negligence
(except for errors in judgment) of the Owner Trustee or, in the case of the
Indenture Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Indenture Trustee; or (ii) in
the case of the Owner Trustee, shall arise from the breach by the Owner Trustee
of any of its representations or warranties set forth in Section 7.03 of the
Trust Agreement.
(d) The Seller shall pay any and all taxes levied or assessed
upon all or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee and the
termination of this Agreement and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Seller shall have made any indemnity
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter shall collect any of such amounts from others, such
Person shall promptly repay such amounts to the Seller, without interest.
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Section 6.04 Merger or Consolidation of, or Assumption of
Obligations of, Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party or (c) which may succeed to the properties and assets of
the Seller substantially as a whole, which person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Seller
under this Agreement, shall be the successor to the Seller hereunder without the
execution or filing of any document or any further act by any of the parties to
this Agreement; provided, however, that (i) immediately after giving effect to
such transaction, no representation or warranty made pursuant to Section 3.01
shall have been breached and no Servicer Default, and no event that, after
notice or lapse of time, or both, would become a Servicer Default shall have
occurred and be continuing, (ii) the Seller shall have delivered to the Owner
Trustee and the Indenture Trustee an Officers' Certificate and an Opinion of
Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with, (iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction and (iv) the Seller shall have
delivered to the Owner Trustee and the Indenture Trustee an Opinion of Counsel
either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary fully to preserve and protect the interest of the
Owner Trustee and Indenture Trustee, respectively, in the Receivables and
reciting the details of such filings, or (B) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve and protect such
interests. Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii), (iii)
and (iv) above shall be conditions to the consummation of the transactions
referred to in clauses (a), (b) or (c) above.
Section 6.05 Limitation on Liability of Seller and Others. The
Seller and any director, officer, employee or agent of the Seller 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
hereunder. The Seller shall not be under any obligation to appear in, prosecute
or defend any legal action that shall not be incidental to its obligations under
this Agreement, and that in its opinion may involve it in any expense or
liability.
Section 6.06 Seller May Own Notes. The Seller and any
Affiliate thereof 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
Seller or an Affiliate thereof, except as expressly provided herein or in any
Basic Document. The Seller shall not own any Certificates unless the Rating
Agency Condition is satisfied.
ARTICLE VII
The Servicer
Section 7.01 Representations of Servicer. The Servicer makes
the following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing
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Date, and shall survive the sale of the Receivables to the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is duly
organized and validly existing as a corporation in good standing under the laws
of the state of its incorporation, with the corporate power and authority to own
its properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant times,
and has, the corporate power, authority and legal right to acquire, own, sell
and service the Receivables and to hold the Receivable Files as custodian.
(b) Due Qualification. The Servicer is duly qualified to do
business as a foreign corporation 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 (including the servicing of the
Receivables as required by this Agreement) shall require such qualifications.
(c) Power and Authority. The Servicer has the corporate power
and authority to execute and deliver this Agreement and to carry out its terms;
and the execution, delivery and performance of this Agreement have been duly
authorized by the Servicer by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Servicer enforceable in accordance with its
terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof shall not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or bylaws of the Servicer, or any indenture, agreement
or other instrument to which the Servicer is a party or by which it is bound; or
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); or violate any law or, to the best of the
Servicer's knowledge, any order, rule or regulation applicable to the Servicer
of any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Servicer or
its properties.
(f) No Proceedings. To the Servicer's best knowledge, there
are no proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Servicer or its properties: (i) asserting the
invalidity of this Agreement, the Indenture, any of the other Basic Documents,
the Notes or the Certificates, (ii) seeking to prevent the issuance of the Notes
or the Certificates or the consummation of any of the transactions contemplated
by this Agreement, the Indenture or any of the other Basic Documents, (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates or (iv) relating to the Servicer and
which might adversely affect the federal or state income tax attributes of the
Notes or the Certificates.
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(g) No Insolvent Obligors. As of the related Cutoff Date, no
Obligor on a Receivable is shown on the Receivable Files as the subject of a
bankruptcy proceeding.
Section 7.02 Indemnities of Servicer. The Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Seller and any of the officers, directors, employees
and agents of the Issuer, the Owner Trustee and the Indenture Trustee from and
against any and all costs, expenses, losses, damages, claims and liabilities
arising out of or resulting from the use, ownership or operation by the Servicer
or any Affiliate thereof of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the
Certificateholders and the Noteholders and any of the officers, directors,
employees and agents of the Issuer, the Owner Trustee and the Indenture Trustee
from and against any and all costs, expenses, losses, claims, damages and
liabilities to the extent that such cost, expense, loss, claim, damage or
liability arose out of, or was imposed upon any such Person through, the
negligence, willful misfeasance or bad faith of the Servicer in the performance
of its duties under this Agreement or by reason of reckless disregard of its
obligations and duties under this Agreement.
For purposes of this Section, in the event of the termination
of the rights and obligations of World Omni (or any successor thereto pursuant
to Section 7.03) as Servicer pursuant to Section 8.01, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the Indenture
Trustee) pursuant to Section 8.02.
Indemnification under this Section shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee or the
termination of this Agreement and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Servicer shall have made any
indemnity payments pursuant to this Section and the Person to or on behalf of
whom such payments are made thereafter collects any of such amounts from others,
such Person shall promptly repay such amounts to the Servicer, without interest.
Section 7.03 Merger or Consolidation of, or Assumption of
Obligations of, Servicer. Any Person (a) into which the Servicer may be merged
or consolidated, (b) which may result from any merger or consolidation to which
the Servicer shall be a party, (c) which may succeed to the properties and
assets of the Servicer substantially as a whole or (d) with respect to the
Servicer's obligations hereunder, which is a corporation 50% or more of the
voting stock of which is owned, directly or indirectly, by [_____________],
which Person executed an agreement of assumption to perform every obligation of
the Servicer hereunder, shall be the successor to the Servicer under this
Agreement without further act on the part of any of the parties to this
Agreement; provided, however, that (i) immediately after giving effect to such
transaction, no Servicer Default and no event which, after notice or lapse of
time, or both, would become a Servicer Default shall have occurred and be
continuing, (ii) the Servicer shall have
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delivered to the Owner Trustee and the Indenture Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent provided for in this Agreement relating to
such transaction have been complied with, (iii) the Rating Agency Condition
shall have been satisfied with respect to such transaction, (iv) immediately
after giving effect to such transaction, the successor to the Servicer shall
become the Administrator under the Administration Agreement in accordance with
Section 8 of such Agreement and (v) the Servicer shall have delivered to the
Owner Trustee and the Indenture Trustee an Opinion of Counsel stating that, in
the opinion of such counsel, either (A) all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary fully to preserve and protect the interest of the Owner Trustee
and the Indenture Trustee, respectively, in the Receivables and reciting the
details of such filings or (B) no such action shall be necessary to preserve and
protect such interests. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses
(i), (ii), (iii), (iv) and (v) above shall be conditions to the consummation of
the transactions referred to in clause (a), (b) or (c) above.
Section 7.04 Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or agents of
the Servicer shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this Agreement
or for errors in judgment; provided, however, that this provision shall not
protect the Servicer or any such person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties under this Agreement. The Servicer and any director, officer,
employee or agent of the Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any person respecting any
matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not
be under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to service the Receivables in accordance
with this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement and
the Basic Documents and the rights and duties of the parties to this Agreement
and the Basic Documents and the interests of the Certificateholders under this
Agreement and the Noteholders under the Indenture.
Section 7.05 World Omni Not To Resign as Servicer. Subject to
the provisions of Section 7.03, World Omni shall not resign from the obligations
and duties hereby imposed on it as Servicer under this Agreement except upon a
determination that the performance of its duties under this Agreement shall no
longer be permissible under applicable law and cannot be cured. Notice of any
such determination permitting the resignation of World Omni shall be
communicated to the Owner Trustee and the Indenture Trustee at the earliest
practicable time (and, if such communication is not in writing, shall be
confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Owner Trustee and the Indenture Trustee concurrently with or
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promptly after such notice. No such resignation shall become effective until the
Indenture Trustee or a successor Servicer shall (i) have assumed the
responsibilities and obligations of World Omni in accordance with Section 8.02
and (ii) have become the Administrator under the Administration Agreement in
accordance with Section 8 of such Agreement.
ARTICLE VIII
Default
Section 8.01 Servicer Default. If any one of the following
events (a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deliver to the Indenture
Trustee for deposit in any of the Trust Accounts or the Certificate Distribution
Account any required payment or to direct the Indenture Trustee to make any
required distributions therefrom, which failure continues unremedied for a
period of three Business Days after written notice of such failure is received
by the Servicer from the Owner Trustee or the Indenture Trustee or after
discovery of such failure by an officer of the Servicer; or
(b) failure by the Servicer or the Seller, as the case may be,
duly to observe or to perform in any material respect any other covenants or
agreements of the Servicer or the Seller (as the case may be) set forth in this
Agreement or any other Basic Document, which failure shall (i) materially and
adversely affect the rights of Certificateholders or Noteholders and (ii)
continue unremedied for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
(A) to the Servicer or the Seller (as the case may be) by the Owner Trustee or
the Indenture Trustee or (B) to the Servicer or the Seller (as the case may be),
and to the Owner Trustee and the Indenture Trustee by the Holders of Notes or
Certificates, as applicable, evidencing not less than 25% of the Outstanding
Amount of the Notes or 25% of the outstanding Certificate Balance; or
(c) the occurrence of an Insolvency Event with respect to the
Seller or the Servicer;
then, and in each and every case, so long as the Servicer Default shall not have
been remedied, either the Indenture Trustee or the Holders of Notes evidencing
not less than 25% of the Outstanding Amount of the Notes, by notice then given
in writing to the Servicer (and to the Indenture Trustee and the Owner Trustee
if given by the Noteholders) may terminate all the rights and obligations (other
than the obligations set forth in Section 7.02 hereof) of the Servicer under
this Agreement. On or after the receipt by the Servicer of such written notice,
all authority and power of the Servicer under this Agreement, whether with
respect to the Notes, the Certificates or the Receivables or otherwise, shall,
without further action, pass to and be vested in the Indenture Trustee or such
successor Servicer as may be appointed under Section 8.02; and, without
limitation, the Indenture Trustee and the Owner Trustee are hereby authorized
and empowered to execute and deliver, for the benefit of the predecessor
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Receivables and related documents,
or otherwise.
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The predecessor Servicer shall cooperate with the successor Servicer, the
Indenture Trustee and the Owner Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this Agreement,
including the transfer to the successor Servicer for administration by it of all
cash amounts that shall at the time be held by the predecessor Servicer for
deposit, or shall thereafter be received by it with respect to any Receivable.
All reasonable costs and expenses (including attorneys' fees) incurred in
connection with transferring the Receivable Files to the successor Servicer and
amending this Agreement to reflect such succession as Servicer pursuant to this
section shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses. Upon receipt of notice of
the occurrence of a Servicer Default, the Owner Trustee shall give notice
thereof to the Rating Agencies.
Section 8.02 Appointment of Successor. (a) Upon the Servicer's
receipt of notice of termination pursuant to Section 8.01 or the Servicer's
resignation in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the later of
(i) the date 45 days from the delivery to the Owner Trustee and the Indenture
Trustee of written notice of such resignation (or written confirmation of such
notice) in accordance with the terms of this Agreement and (ii) the date upon
which the predecessor Servicer shall become unable to act as Servicer, as
specified in the notice of resignation and accompanying Opinion of Counsel. In
the event of the Servicer's termination hereunder, the Indenture Trustee shall
appoint a successor Servicer, and the successor Servicer shall accept its
appointment (including its appointment as Administrator under the Administration
Agreement as set forth in Section 8.02(b)) by a written assumption in form
acceptable to the Owner Trustee and the Indenture Trustee. In the event that a
successor Servicer has not been appointed at the time when the predecessor
Servicer has ceased to act as Servicer in accordance with this Section, the
Indenture Trustee without further action shall automatically be appointed the
successor Servicer and the Indenture Trustee shall be entitled to the Servicing
Fee. Notwithstanding the above, the Indenture Trustee shall, if it shall be
legally unable so to act, appoint or petition a court of competent jurisdiction
to appoint any established institution, having a net worth of not less than
$100,000,000 and whose regular business shall include the servicing of
automotive receivables, as the successor to the Servicer under this Agreement.
(b) Upon appointment, the successor Servicer (including the
Indenture Trustee acting as successor Servicer) shall (i) be the successor in
all respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the predecessor Servicer and shall be entitled to the Servicing Fee
and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement and (ii) become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement.
(c) The Servicer may not resign unless it is prohibited from
serving as such by law.
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Section 8.03 Notification to Noteholders and
Certificateholders. Upon any termination of, or appointment of a successor to,
the Servicer pursuant to this Article VIII, the Owner Trustee shall give prompt
written notice thereof to Certificateholders, and the Indenture Trustee shall
give prompt written notice thereof to Noteholders and the Rating Agencies.
Section 8.04 Waiver of Past Defaults. The Holders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes or
the Holders (as defined in the Trust Agreement) of Certificates evidencing not
less than a majority of the outstanding Certificate Balance may, on behalf of
all Noteholders and Certificateholders, waive in writing any default by the
Servicer in the performance of its obligations hereunder and its consequences,
except a default in making any required deposits to or payments from any of the
Trust Accounts in the Certificate Distribution Account or accordance with this
Agreement. Upon any such waiver of a past default, such default shall cease to
exist, and any Servicer Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereto.
ARTICLE IX
Termination
Section 9.01 Optional Purchase of All Receivables. (a) As of
the last day of any Collection Period immediately preceding a Distribution Date
as of which the then outstanding Pool Balance is 10% or less of the Original
Pool Balance and the Class [A-1] Notes, Class [A-2] Notes and Class [A-3] Notes
have been paid in full, the Servicer shall have the option to purchase the Owner
Trust Estate, other than the Trust Accounts and the Certificate Distribution
Account; provided, however, that, unless [__________] agrees otherwise, the
Servicer may not effect any such purchase if the rating of World Omni's
long-term debt obligations is less than A-1 by [__________], unless the Owner
Trustee and the Indenture Trustee shall have received an Opinion of Counsel to
the effect that such purchase would not constitute a fraudulent conveyance. To
exercise such option, the Servicer shall deposit pursuant to Section 5.05 in the
Collection Account an amount equal to the aggregate Purchase Amount for the
Receivables (including defaulted Receivables), plus the appraised value of any
such other property held by the Trust other than the Trust Accounts and the
Certificate Distribution Account, such value to be determined by an appraiser
mutually agreed upon by the Servicer, the Owner Trustee and the Indenture
Trustee, and shall succeed to all interests in and to the Trust. Notwithstanding
the foregoing, the Servicer shall not be permitted to exercise such option
unless the amount to be deposited in the Collection Account pursuant to the
preceding sentence is greater than or equal to the sum of the outstanding
principal balance of the Notes and all accrued but unpaid interest (including
any overdue interest and premium) thereon.
(b) As described in Article IX of the Trust Agreement, notice
of any termination of the Trust shall be given by the Servicer to the Owner
Trustee and the Indenture Trustee as soon as practicable after the Servicer has
received notice thereof.
(c) Following the satisfaction and discharge of the Indenture
and the payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder other
than Section 5.07(b) and the Owner Trustee will
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succeed to the rights of, and assume the obligations of, the Indenture Trustee
pursuant to this Agreement.
ARTICLE X
Miscellaneous
Section 10.01 Amendment. This Agreement may be amended by the
Seller, the Servicer and the Issuer, with the consent of the Indenture Trustee,
but without the consent of any of the Noteholders or the Certificateholders, to
cure any ambiguity, to correct or supplement any provisions in this Agreement or
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel
delivered to the Owner Trustee and the Indenture Trustee, adversely affect in
any material respect the interests of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the
Seller, the Servicer and the Issuer, with the consent of the Indenture Trustee,
the consent of the Holders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes and the consent of the Holders (as defined in
the Trust Agreement) of Certificates evidencing not less than a majority of the
outstanding Certificate Balance, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (a) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that shall be required
to be made for the benefit of the Noteholders or the Certificateholders or (b)
reduce the aforesaid percentage of the Outstanding Amount of the Notes and the
Certificate Balance, the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all the outstanding Notes and
the Holders (as defined in the Trust Agreement) of all the outstanding
Certificates.
Promptly after the execution of any such amendment or consent,
the Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
of the Rating Agencies.
It shall not be necessary for the consent of
Certificateholders or Noteholders pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the
Owner Trustee and the Indenture 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 and the Opinion of Counsel referred to
in Section 10.02(i)(1). The Owner Trustee and the Indenture Trustee may, but
shall not be obligated to, enter into any such amendment which affects the Owner
Trustee's or the Indenture Trustee's, as applicable, own rights, duties or
immunities under this Agreement or otherwise.
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Section 10.02 Protection of Title to Trust. (a) The Seller
shall execute and file such financing statements and cause to be executed and
filed such continuation 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
Issuer and of the Indenture Trustee in the Receivables and in the proceeds
thereof. The Seller shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed 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 and the Indenture
Trustee at least five days' prior written notice thereof and shall have promptly
filed appropriate amendments to all previously filed financing statements or
continuation statements.
(c) Each of the Seller and the Servicer shall have an
obligation to give the Owner Trustee and the Indenture Trustee at least 60 days'
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 file any such
amendment or new financing statement. The Servicer shall at all times maintain
each office from which it shall service Receivables, and its principal executive
office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to
each Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under this Agreement of the Receivables, the
Servicer's master computer records (including any backup archives) that refer to
a Receivable shall indicate clearly the interest of the Issuer and the Indenture
Trustee in such Receivable and that such Receivable is owned by the Issuer and
has been pledged to the Indenture Trustee. Indication of the Issuer's and the
Indenture Trustee's interest in a Receivable shall be deleted from or modified
on the Servicer's computer systems when, and only when, the related Receivable
shall have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
automotive receivables to any prospective purchaser, lender or other transferee,
the Servicer shall give to such prospective purchaser, lender or other
transferee computer tapes, records or printouts (including any restored from
backup archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold and is
owned by the Issuer and has been pledged to the Indenture Trustee.
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(g) The Servicer shall permit the Indenture Trustee and its
agents at any time during normal business hours to inspect, audit and make
copies of and abstracts from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner
Trustee or to the Indenture Trustee, within five Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the
Indenture Trustee:
(A) promptly after the execution and delivery of this
Agreement and of each amendment hereto, an Opinion of Counsel
stating that, in the opinion of such counsel, either (1) 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 and the Indenture
Trustee in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which
such details are given, or (2) no such action shall be
necessary to preserve and protect such interest; and
(B) within 90 days after the beginning of each
calendar year beginning with the first calendar year beginning
more than three months after the Cutoff Date, an Opinion of
Counsel, dated as of a date during such 90-day period, stating
that, in the opinion of such counsel, either (1) 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 and the Indenture Trustee in the
Receivables, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details
are given, or (2) no such action shall be necessary to
preserve and protect such interest.
Each Opinion of Counsel referred to in clause (A) or (B) above
shall specify any action necessary (as of the date of such opinion) to be taken
in the following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable
law, cause the 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.
Section 10.03 Notices. All demands, notices, communications
and instructions upon or to the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies 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 (a) in the
case of the Seller, to World Omni Auto Receivables LLC, 120 N.W. 12th Avenue,
Deerfield Beach, Florida 33442, (954) 429-2200, (b) in the case of the Servicer,
World Omni Financial Corp., 120 N.W. 12th Avenue, Deerfield Beach, Florida
33442, (954) 429-2200, (c) in the case of the Issuer or the Owner Trustee, at
the Corporate Trust Office (as defined in the Trust
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Agreement), (d) in the case of the Indenture Trustee, at the Corporate Trust
Office, [(e)_________________________]; or, as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.
Section 10.04 Assignment by the Seller or the Servicer.
Notwithstanding anything to the contrary contained herein, except as provided in
the remainder of this Section, as provided in Sections 6.04 and 7.03 herein and
as provided in the provisions of this Agreement concerning the resignation of
the Servicer, this Agreement may not be assigned by the Seller or the Servicer.
Section 10.05 Limitations on Rights of Others. The provisions
of this Agreement are solely for the benefit of the Seller, the Servicer, the
Issuer, the Owner Trustee, the Certificateholders, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy or
claim in the Owner Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
Section 10.06 Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 10.07 Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section 10.08 Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
Section 10.09 Governing Law. This Agreement shall be construed
in accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
Section 10.10 Assignment by Issuer. The Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders of all right, title and interest of
the Issuer in, to and under the Receivables and/or the assignment of any or all
of the Issuer's rights and obligations hereunder to the Indenture Trustee.
Section 10.11 Nonpetition Covenants. (a) Notwithstanding any
prior termination of this Agreement, the Servicer and the Seller shall not,
prior to the date which is one year and one day after the termination of this
Agreement with respect to the Issuer, acquiesce, petition or otherwise invoke or
cause the Issuer to invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the Issuer under any
federal or state bankruptcy, insolvency or similar law, or appointing a
receiver, liquidator, assignee,
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<PAGE>
trustee, custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement,
the Servicer shall not, prior to the date which is one year and one day after
the termination of this Agreement with respect to the Seller, acquiesce,
petition or otherwise invoke or cause the Seller to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Seller under any federal or state bankruptcy, insolvency or similar
law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Seller or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Seller.
Section 10.12 Limitation of Liability of Owner Trustee and
Indenture Trustee. (a) Notwithstanding anything contained herein to the
contrary, this Agreement has been countersigned by ____________________ not in
its individual capacity but solely in its capacity as Owner Trustee of the
Issuer and in no event shall _________________________ in its individual
capacity or, except as expressly provided in the Trust Agreement, as beneficial
owner of the Issuer have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer. For all purposes
of this Agreement, in the performance of its duties or obligations hereunder or
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 Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by _____________________, not in its individual
capacity but solely as Indenture Trustee and in no event shall
___________________________ have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant hereto,
as to all of which recourse shall be had solely to the assets of the Issuer.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
WORLD OMNI AUTO RECEIVABLES
TRUST [____]-[__]
by:
-------------------------------
not in its individual capacity
but solely as Owner Trustee,
By:
-------------------------------
Name:
Title:
WORLD OMNI AUTO RECEIVABLES LLC,
Seller
By: World Omni Financial Corp.,
as its sole member
By:
-------------------------------
Name:
Title:
WORLD OMNI FINANCIAL CORP.,
Servicer
By:
-------------------------------
Name:
Title:
Acknowledged and accepted as of the day and
year first above written:
- -------------------------------------,
not in its individual capacity but solely as
Indenture Trustee
By:
- -------------------------------
Name:
Title:
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<PAGE>
SCHEDULE A
Schedule of Receivables
Delivered to the Owner Trustee and Indenture Trustee at Closing
<PAGE>
SCHEDULE B
Location of Receivable Files
World Omni Financial Corp.
120 N.W. 12th Avenue
Deerfield Beach, Florida 33442
<PAGE>
EXHIBIT A
Form of Distribution Statement to Noteholders
World Omni Financial Corp.
World Omni Auto Receivables Trust [___] Distribution Date Statement to
Noteholders
- --------------------------------------------------------------------------------
Principal Distribution Amount
Class [A-1] Notes: ($_______ per $1,000 original principal amount)
Class [A-2] Notes: ($_______ per $1,000 original principal amount)
Class [A-3] Notes: ($_______ per $1,000 original principal amount)
Class [A-4] Notes: ($_______ per $1,000 original principal amount)
Interest Distribution Amount
Class [A-1] Notes: ($_______ per $1,000 original principal amount)
Class [A-2] Notes: ($_______ per $1,000 original principal amount)
Class [A-3] Notes: ($_______ per $1,000 original principal amount)
Class [A-4] Notes: ($_______ per $1,000 original principal amount)
Note Balance
Class [A-1] Notes
Class [A-2] Notes
Class [A-3] Notes
Class [A-4] Notes
Note Pool Factor
Class [A-1] Notes
Class [A-2] Notes
Class [A-3] Notes
Class [A-4] Notes
Servicing Fee ____
Servicing Fee Per $1,000 Note
Realized Losses
Reserve Account Balance
<PAGE>
EXHIBIT B
Form of Servicer's Certificate
World Omni Financial Corp.
World Omni Auto Receivables Trust [____] Monthly Servicer's Certificate
- --------------------------------------------------------------------------------
Period
Distribution Date
Dates Covered From & Incl. To & Incl.
- --------------------------------------------------------------------------------
Collections
Accrual
30/360 Days
Actual/360 Days
Receivables Balances Beginning Ending
- --------------------------------------------------------------------------------
Pool Balance
Simple Interest
Original Pool Balance
Principal Distribution Amount
Principal Collections
+ Repurchases
+ Liquidation Proceeds
+ Realized Losses
Interest Distribution Amount
- --------------------------------------------------------------------------------
Collections - Simple Interest Contracts
+ Investment Earnings
Total Distribution Amount
- --------------------------------------------------------------------------------
Principal Distribution Amount
+ Interest Distribution Amount
-- Realized Losses
Total Distribution Amount
<PAGE>
Loss & Delinquency
Account Activity
-----------------------------------------------------
Interest
Beginning Ending Interest/ Servicing
Balance Balance Change Factor Shortfall
Initial Pool
Principal Paydown
Reserve
Notes
Class [A-1]
Class [A-2]
Class [A-3]
Class [A-4]
[Overcollateralization]
[Overcollateralization Percentage]
Principal Allocation
----------------------------------------------------------
Mandatory
Regular Accelerated Redemption/ Total Principal
Principal Principal Repayment Principal Shortfall
Notes
Class [A-1]
Class [A-2]
Class [A-3]
Class [A-4]
Total
Miscellaneous
- --------------------------------------------------------------------------------
Amounts released to the Certificate Distribution Account
Cash Release Amount
Receivables to be released
Specified Reserve Account Balance
Distribution Amount to Seller Servicing Fee to Servicer
Allocation of Funds
- --------------------------------------------------------------------------------
Sources Principal Distribution
Amount Interest Distribution
Amount Redemption/Prepay Amount
Total Sources
Exhibit 10.2
RECEIVABLES PURCHASE AGREEMENT dated as of [________], [____]
among World Omni Financial Corp., a Florida corporation (the "Seller") and World
Omni Auto Receivables LLC, a Delaware limited liability company (the
"Purchaser").
WHEREAS in the regular course of its business, the Seller has
purchased certain motor vehicle retail installment sale contracts secured by new
and used automobiles, and light-duty trucks from motor vehicle dealers; and
WHEREAS the Purchaser wishes to purchase the Receivables (as
hereinafter defined) and to transfer the Receivables to World Omni Auto
Receivables Trust [____]-[_] (the "Trust"), which will issue the [Class [A-1]
_________% Asset Backed Notes (Series ___) (the "Class [A-1] Notes")], [Class
[A-2] ________% Asset Backed Notes (Series ___) (the "Class [A-2] Notes")],
[Class [A-3] ________% Asset Backed Notes (Series ___) (the "Class [A-3]
Notes")] [and Class [A-4]______% Asset Backed Notes (Series ___)] (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") payment of which will be secured by the
Receivables and [the _____% Asset Backed Certificates] representing fractional
undivided interests in the property of the Trust including the Receivables,
subject to the rights of the Indenture Trustee on behalf of the Noteholders;
WHEREAS the Seller has agreed to make certain representations
and warranties relating to the Receivables and to pay certain expenses and
amounts with respect hereto; and
WHEREAS the Seller and the Purchaser wish to set forth the
terms pursuant to which the Seller will sell the Receivables to the Purchaser;
NOW, THEREFORE, in consideration of the foregoing, other good
and valuable consideration and the mutual terms and covenants contained herein,
the parties hereto agree as follows:
ARTICLE I
Certain Definitions
Terms not defined in this Agreement shall have the meaning set
forth in the Sale and Servicing Agreement or the Indenture, as applicable. As
used in this Agreement, the following terms shall, unless the context otherwise
requires, have the following meanings (such meanings to be equally applicable to
the singular and plural forms of the terms defined):
"Agreement" shall mean this Receivables Purchase Agreement, as
the same may be amended and supplemented from time to time.
"Assignment" shall mean the document of assignment
substantially in the form of Exhibit A.
<PAGE>
"Certificates" shall mean the Trust Certificates (as defined
in the Trust Agreement).
"Certificateholders" shall mean the holders of Certificates.
"Closing Date" shall mean [_______], [ ].
"Collections" shall mean all amounts collected by the Servicer
(from whatever source) on or with respect to the Receivables.
"Cutoff Date" means [_______], [ ].
"Indenture" shall mean the Indenture dated as of [______], [ ]
between the Trust and[_________], as trustee (the "Indenture Trustee"), as the
same may be amended and supplemented from time to time.
"Noteholders" shall mean the holders of the Notes.
"Prospectus Supplement" shall mean the Prospectus Supplement
dated [_________] relating to the Notes.
"Purchaser" shall mean World Omni Auto Receivables LLC, a
Delaware limited liability company, its successors and assigns.
"Receivable" shall mean any Contract listed on Schedule I
hereto (which Schedule may be in the form of microfiche).
"Repurchase Event" shall have the meaning specified in Section
6.02.
"Sale and Servicing Agreement" shall mean the Sale and
Servicing Agreement dated as of [______], among the Trust, the Purchaser, and
the Seller, as the same may be amended and supplemented from time to time.
"Schedule of Receivables" shall mean the list of Receivables
annexed hereto as Schedule I.
"Seller" shall mean World Omni Financial Corp., a Florida
corporation, its successors and assigns.
"Trust Agreement" shall mean the Trust Agreement dated as of
[_______], between the Purchaser and [___________], [ ], as the owner trustee
(the "Owner Trustee"), as the same may be amended and supplemented from time to
time.
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<PAGE>
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables. In consideration of
the Purchaser's delivery to or upon the order of the Seller of $_______________,
the Seller does hereby sell, transfer, assign, set over and otherwise convey to
the Purchaser, without recourse (subject to the obligations of the Seller
herein), all right, title and interest of the Seller in and to (but none of the
obligations of the Seller with respect to):
(a) the Receivables, and all moneys received thereon on and
after the Cutoff Date;
(b) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables, any other right to realize upon property
securing a Receivable and any other interest of the Seller in such Financed
Vehicles including the Seller's right, title and interest in the lien on the
Financed Vehicles in the name of World Omni Financial Corp. or the Seller's
agents;
(c) any proceeds with respect to the Receivables from claims
on any Insurance Policies relating to the Financed Vehicles or Obligors;
(d) proceeds of any recourse (but none of the obligations) to
Dealers on Receivables;
(e) any Financed Vehicle that shall have secured a Receivable
and shall have been acquired by or on behalf of the Seller, the Purchaser, or,
upon the assignment contemplated by the Sale and Servicing Agreement, the
Servicer or the Trust;
(f) the Receivables Files; and
(g) the proceeds of any and all of the foregoing.
SECTION 2.02. The Closing. The sale and purchase of the
Receivables shall take place at a closing (the "Closing") at the offices of
[____________], [___________] on the Closing Date, simultaneously with the
closings under (a) the Sale and Servicing Agreement and (b) the Indenture.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Purchaser.
The Purchaser hereby represents and warrants to the Seller as of the Closing
Date:
(a) Organization and Good Standing. The Purchaser has been
duly organized and is validly existing as a limited liability company in good
standing under the laws of the State of Delaware, with the power and authority
to own its properties and to conduct its business as
3
<PAGE>
such properties are currently owned and such business is presently conducted,
and had at all relevant times, and has, the power, authority and legal right to
acquire and own the Receivables.
(b) Due Qualification. The Purchaser is duly qualified to do
business as a foreign limited liability company in good standing, and has
obtained all necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of its property or the conduct of its business shall require
such qualifications.
(c) Power and Authority. The Purchaser has the power and
authority to execute and deliver this Agreement and to carry out its terms, and
the execution, delivery and performance of this Agreement has been duly
authorized by the Purchaser by all necessary action.
(d) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
limited liability company agreement of the Purchaser, or any indenture,
agreement or other instrument to which the Purchaser is a party or by which it
is bound; or 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 the Sale and Servicing Agreement, the Indenture and the
Trust Agreement); or violate any law or, to the best of the Purchaser's
knowledge, any order, rule or regulation applicable to the Purchaser of any
court or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Purchaser or its
properties.
(e) No Proceedings. There are no proceedings or investigations
pending or, to the Purchaser's best knowledge, threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Purchaser or its properties: (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Purchaser of its obligations under, or the validity or
enforceability of, this Agreement.
SECTION 3.02. Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants to the Purchaser as of the Closing
Date:
(i) Organization and Good Standing. The Seller has
been duly organized and is validly existing as a corporation in good standing
under the laws of the State of Florida, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to acquire and own the Receivables.
(ii) Due Qualification. The Seller is duly qualified
to do business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership or
lease of its property or the conduct of its business shall require such
qualifications.
4
<PAGE>
(iii) Power and Authority. The Seller has the power
and authority to execute and deliver this Agreement and to carry out its terms;
the Seller has full power and authority to sell and assign the property sold and
assigned to the Purchaser hereby and has duly authorized such sale and
assignment to the Purchaser by all necessary corporate action; and the
execution, delivery and performance of this Agreement has been duly authorized
by the Seller by all necessary corporate action.
(iv) No Violation. The consummation of the
transactions contemplated by this Agreement and the fulfillment of the terms
hereof shall not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a default
under, the articles of incorporation or bylaws of the Seller, or any indenture,
agreement or other instrument to which the Seller is a party or by which it is
bound; or 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); or violate any law or, to the best of
the Seller's knowledge, any order, rule or regulation applicable to the Seller
of any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Seller or its
properties.
(v) No Proceedings. There are no proceedings or
investigations pending or, to the Seller's best knowledge, threatened before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties: (A)
asserting the invalidity of this Agreement, (B) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or (C)
seeking any determination or ruling that might materially and adversely affect
the performance by the Seller of its obligations under or the validity or
enforceability of, this Agreement.
(vi) Principal Place of Business. The principal place
of business and chief executive office of the Seller are located at the place
set forth in Section 6.08(a) and such location has not changed since the date
the Seller was incorporated.
(vii) Use of Names. The legal name of the Seller is
the name used by it in this Agreement and the Seller has not changed its name
since 1993 and does not have trade names, fictitious names, assumed names or
"doing business" names.
(viii) Solvency. The Seller is solvent and will not
become insolvent after giving effect to the transactions contemplated in this
Agreement; the Seller is paying its debts, if any, as they become due; the
Seller, after giving effect to the transactions contemplated in this Agreement,
will have adequate capital to conduct its business.
The Seller agrees that such representations and warranties
shall be conveyed hereunder by the Purchaser to the Issuer under the Sale and
Servicing Agreement, and pledged by the Issuer to the Indenture Trustee. The
Seller further agrees that any such Person to whom such rights are conveyed may
enforce any and all remedies for the breach thereof directly against the Seller.
The Seller agrees that the Purchaser shall rely on such representations and
warranties in accepting the Receivables.
5
<PAGE>
(c) The Seller makes the representations and warranties to the
Purchaser in respect of the Receivables set forth in Section 3.01 of the Sale
and Servicing Agreement, and in that connection agrees to execute the Sale and
Servicing Agreement. The Seller agrees that such representations and warranties
shall be conveyed hereunder by the Purchaser to the Issuer under the Sale and
Servicing Agreement, and pledged by the Issuer to the Indenture Trustee. The
Seller further agrees that any such Person to whom such rights are conveyed may
enforce any and all remedies for the breach thereof directly against the Seller.
The Seller agrees that the Purchaser shall rely on such representations and
warranties in accepting the Receivables. Such representations and warranties
speak as of the execution and delivery of this Agreement, but shall survive the
sale, transfer and assignment of the Receivables to the Purchaser and the
subsequent sale, assignment and transfer of the Receivables pursuant to the Sale
and Servicing Agreement and the Grant thereof pursuant to the Indenture.
ARTICLE IV
Conditions
SECTION 4.01. Conditions to Obligation of the Purchaser. The
obligation of the Purchaser to purchase the Receivables is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True. The representations
and warranties of the Seller hereunder shall be true and correct on the Closing
Date with the same effect as if then made, and the Seller shall have performed
all obligations to be performed by it hereunder on or prior to the Closing Date.
(b) Computer Files Marked. The Seller shall, at its own
expense, on or prior to the Closing Date indicate in its computer files that the
Receivables have been sold to the Purchaser pursuant to this Agreement, and
deliver to the Purchaser the Schedule of Receivables.
(c) Documents To Be Delivered by the Seller at the Closing.
(i) The Assignment. At the Closing, the Seller will
execute and deliver an Assignment substantially in the form of Exhibit A hereto.
(ii) Evidence of UCC Filing. On or prior to the
Closing Date, the Seller shall record and file, at its own expense, a UCC-1
financing statement in each jurisdiction in which required by applicable law,
executed by the Seller, as seller or debtor, and naming the Purchaser as
purchaser or secured party, describing the Receivables and the other property
included in the Owner Trust Estate, meeting the requirements of the laws of each
such jurisdiction and in such manner as is necessary to perfect the sale,
transfer, assignment and conveyance of such Receivables to the Purchaser. The
Seller shall deliver a file-stamped copy or other evidence satisfactory to the
Purchaser of such filing to the Purchaser on or prior to the Closing Date.
(iii) Other Documents. Such other documents as the
Purchaser may reasonably request.
6
<PAGE>
(d) Other Transactions. The transactions contemplated by the
Sale and Servicing Agreement, the Indenture and the Trust Agreement to be
consummated on the Closing Date shall be consummated on such date.
SECTION 4.02. Conditions to Obligation of the Seller. The
obligation of the Seller to sell the Receivables to the Purchaser is subject to
the satisfaction of the following conditions:
(a) Representations and Warranties True. The
representations and warranties of the Purchaser hereunder shall be true and
correct on the Closing Date with the same effect as if then made, and the Seller
shall have performed all obligations to be performed by it hereunder on or prior
to the Closing Date.
(b) Receivables Purchase Price. On the Closing Date,
the Purchaser shall have delivered to the Seller the purchase price specified in
Section 2.01.
ARTICLE V
Covenants of the Seller
The Seller agrees with the Purchaser as follows:
SECTION 5.01. Protection of Right, Title and Interest. (a)
Filings. The Seller shall cause all financing statements and continuation
statements and any other necessary documents covering the right, title and
interest of the Seller and the Purchaser, respectively, in and to the
Receivables and the other property included in the Owner Trust Estate to be
promptly filed and at all times to be kept recorded, registered and filed, all
in such manner and in such places as may be required by law fully to preserve
and protect the right, title and interest of the Purchaser hereunder in and to
the Receivables and the other property included in the Owner Trust Estate. The
Seller shall deliver to the Purchaser file stamped copies of, or filing receipts
for, any document recorded, registered or filed as provided above, as soon as
available following such recordation, registration or filing. The Purchaser
shall cooperate fully with the Seller in connection with the obligations set
forth above and will execute any and all documents reasonably required to
fulfill the intent of this paragraph.
(b) Name Change. Within 15 days after the Seller makes any
change in its name, identity or corporate structure that would make any
financing statement or continuation statement filed in accordance with paragraph
(a) above seriously misleading within the applicable provisions of the UCC or
any title statute, the Seller shall give the Purchaser notice of any such change
and, no later than 5 days after the effective date thereof, shall file such
financing statements or amendments as may be necessary to continue the
perfection of the Purchaser's interest in the property included in the Owner
Trust Estate.
(c) Resolution. The Seller shall have an obligation to give
the Purchaser at least 60 days' 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
7
<PAGE>
statement and shall promptly file any such amendment or new financing statement.
The Servicer shall at all times maintain each office from which it shall service
Receivables, and its principal executive office, within the United States of
America.
(d) Notice. If at any time the Seller shall propose to sell,
grant a security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, the Seller
shall give to such prospective purchaser, lender or other transferee computer
tapes, records or printouts (including any restored from backup archives) that,
if they shall refer in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been sold and is owned by the Purchaser. Should
any third party inquire of the Seller as to the Receivables, the Seller will
promptly indicate to such party that the Receivables have been sold to the
Purchaser pursuant to this Agreement.
SECTION 5.02. Other Liens or Interests. Except for the
conveyances hereunder and under the Sale and Servicing Agreement, the Indenture,
the Trust Agreement and the other Basic Documents, the Seller will not sell,
pledge, assign or transfer to any Person, or grant, create, incur, assume or
suffer to exist any Lien on, or any interest in, to or under the Receivables,
and the Seller shall defend the right, title and interest of the Purchaser in,
to and under the Receivables against all claims of third parties claiming
through or under the Seller; provided, however, that the Seller's obligations
under this Section shall terminate upon the termination of the Trust pursuant to
the Trust Agreement.
SECTION 5.03. Indemnification. The Seller shall indemnify the
Purchaser for any liability resulting from the failure of a Receivable to be
originated in compliance with all requirements of law and for any breach of any
of its or the Seller's representations and warranties contained herein and for
any failure by the Seller to comply with its obligations under Sections 5.01 and
5.02 hereof. These indemnity obligations shall be in addition to any obligation
that the Seller may otherwise have.
ARTICLE VI
Miscellaneous Provisions
SECTION 6.01. Obligations of Seller. The obligations of the
Seller under this Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable.
SECTION 6.02. Repurchase Events. The Seller hereby covenants
that the occurrence of a breach of any of the Seller's representations and
warranties contained in Section 3.02(c), unless any such breach shall have been
cured by the last day of the Collection Period following the discovery thereof
by the Seller, or receipt by the Seller of written notice from the Owner
Trustee, the Indenture Trustee, the Depositor, or the Servicer, shall constitute
an event obligating the Seller to purchase as of such last day any Receivable
hereunder with respect to which such breach occurred if such breach has had a
material and adverse effect on the interests of the Purchaser or the Trust in
and to such Receivable (each, a "Repurchase Event"), at the Purchase Amount from
the Purchaser or, upon the assignment contemplated by the Sale and Servicing
Agreement, from the Trust. The repurchase obligation of the Seller shall
constitute the
8
<PAGE>
sole remedy (other than that provided by Section 5.04) of the
Purchaser, the Trust, the Indenture Trustee, the Noteholders, the Owner Trustee
or the Certificateholders against the Seller with respect to any Repurchase
Event.
SECTION 6.03. Purchaser Assignment of Repurchased Receivables.
With respect to all Receivables repurchased by the Seller pursuant to this
Agreement, the Purchaser shall assign, without recourse, representation or
warranty, to the Seller all the Purchaser's right, title and interest in and to
such Receivables and all security and documents relating thereto.
SECTION 6.04. The Trust. The Seller acknowledges and agrees
that (a) the Purchaser will, pursuant to the Sale and Servicing Agreement, sell
the Receivables to the Trust and assign its rights under this Agreement to the
Trust, (b) the Trust will, pursuant to the Indenture, Grant the Receivables and
its rights under this Agreement and the Sale and Servicing Agreement to the
Indenture Trustee on behalf of the Noteholders and (c) the representations and
warranties contained in this Agreement and the rights of the Purchaser under
this Agreement, including under Section 6.02, are intended to benefit the Trust,
the Certificateholders and the Noteholders. The Seller hereby consents to all
such sales and assignments and agrees that the Owner Trustee or, if pursuant to
the Indenture, the Indenture Trustee may exercise the rights of the Purchaser
and enforce the obligations of the Seller hereunder directly and without the
consent of the Purchaser.
SECTION 6.05. Amendment. This Agreement may be amended from
time to time, with prior written notice to the rating agency, by a written
amendment duly executed and delivered by the Seller and the Purchaser, to cure
any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to add any other provision with
respect to matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement or the Sale and Servicing
Agreement, the Trust Agreement or the Indenture; provided that such amendment
shall not, in the Opinion of Counsel satisfactory to the Owner Trustee and the
Indenture Trustee, materially and adversely affect the interest of any
Noteholder or Certificateholder in the Trust or the Receivables. This Agreement
may also be amended by the Seller and the Purchaser, with prior written notice
to the rating agency, with the consent of the holders of Notes evidencing at
least a majority of the Outstanding Amount of the Notes and the holders of
Certificates evidencing at least a majority of the Certificate Balance for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Noteholders or the Certificateholders in the Trust or Receivables; provided,
however, that no such amendment may (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that are required to be made for the benefit of
Noteholders or Certificateholders or (ii) reduce the aforesaid percentage of the
Notes and Certificates that is required to consent to any such amendment,
without the consent of the holders of all the outstanding Notes and
Certificates.
SECTION 6.06. Accountants' Letters. (a) [____________] will
review the characteristics of the Receivables and will compare those
characteristics to the information with respect to the Receivables contained in
the Prospectus Supplement; (b) the Seller will cooperate with the Purchaser and
[____________] in making available all information and taking all steps
reasonably necessary to permit such accountants to complete the review set forth
in clause (a)
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above and to deliver the letters required of them under the Prospectus
Supplement; (c) [____________] will deliver to the Purchaser a letter, dated the
date of the Prospectus Supplement, in the form previously agreed to by the
Seller and the Purchaser, with respect to the financial and statistical
information contained in the Prospectus Supplement and with respect to such
other information as may be agreed in the form of letter.
SECTION 6.07. Waivers. No failure or delay on the part of the
Purchaser, or any assignee of the Purchaser, in exercising any power, right or
remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any other
or further exercise thereof or the exercise of any other power, right or remedy.
SECTION 6.08. Notices. All demands, notices and communications
under this Agreement shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, or recognized overnight courier or by
facsimile confirmed by delivery or mail as described above, and shall be deemed
to have been duly given upon receipt (a) in the case of the Seller, to World
Omni Financial Corp., 120 N.W. 12th Avenue, Deerfield Beach, Florida 33442,
(954) 429-2200; (b) in the case of the Purchaser, to World Omni Auto Receivables
LLC, 120 N.W. 12th Avenue, Deerfield Beach, Florida 33442, (954) 429-2200; and
(d) in the case of the rating agency, to [________________]; or as to each of
the foregoing, at such other address as shall be designated by written notice to
the other parties.
SECTION 6.09. Costs and Expenses. The Seller shall pay all
expenses incident to the performance of its obligations under this Agreement and
all reasonable out-of-pocket costs and expenses of the Purchaser, excluding fees
and expenses of counsel, in connection with the perfection as against third
parties of the Purchaser's right, title and interest in and to the Receivables
and the enforcement of any obligation of the Seller hereunder.
SECTION 6.10. Representations of the Seller and the Purchaser.
The respective agreements, representations, warranties and other statements by
the Seller and the Purchaser set forth in or made pursuant to this Agreement
shall remain in full force and effect and will survive the sales and assignments
referred to in Section 6.04.
SECTION 6.11. Confidential Information. The Purchaser agrees
that it will neither use nor disclose to any Person the names and addresses of
the Obligors, except in connection with the enforcement of the Purchaser's
rights hereunder, under the Receivables, under the Sale and Servicing Agreement,
the Indenture, the Trust Agreement or any other Basic Document or as required by
any of the foregoing or by law.
SECTION 6.12. Headings and Cross-References. The various
headings in this Agreement are included for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement.
References in this Agreement to Section names or numbers are to such Sections of
this Agreement.
SECTION 6.13. GOVERNING LAW. THIS AGREEMENT AND THE ASSIGNMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW
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PROVISIONS AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER OR
THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 6.14. Counterparts. This Agreement may be executed in
two or more counterparts and by different parties on separate counterparts, each
of which shall be an original, but all of which together shall constitute one
and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers duly authorized as of the date and year
first above written.
WORLD OMNI FINANCIAL CORP.,
Seller
By: ____________________________________
Name:
Title:
WORLD OMNI AUTO RECEIVABLES LLC
Purchaser
By: World Omni Financial Corp.,
as its sole member
By: __________________________________
Name:
Title:
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ASSIGNMENT
For value received, in accordance with the Receivables Purchase
Agreement dated as of [________],[____] among WORLD OMNI FINANCIAL CORP. (the
"Seller") and WORLD OMNI AUTO RECEIVABLES LLC. (the "Purchaser"), the Seller
does hereby sell, assign, transfer and otherwise convey unto the Purchaser,
without recourse (subject to the obligations of the Seller in the Receivables
Purchase Agreement), all right, title and interest of the Seller in and to (but
none of the obligations of the Seller with respect to) (i) the Receivables, and
all moneys received thereon on and after the Cutoff Date plus all Payaheads as
of the Cutoff Date; (ii) the security interests in the Financed Vehicles granted
by Obligors pursuant to the Receivables, any other right to realize upon
property securing a Receivable and any other interest of the Seller in such
Financed Vehicles including the Seller's right, title and interest in the lien
on the Financed Vehicles in the name of World Omni Financial Corp. or the
Seller's agents; (iii) any proceeds with respect to the Receivables from claims
on any Insurance Policies relating to the Financed Vehicles or Obligors; (iv)
proceeds of any recourse (but none of the obligations) to Dealers on
Receivables; (v) any Financed Vehicle that shall have secured a Receivable and
shall have been acquired by or on behalf of the Purchaser, or, upon the
assignment contemplated by the Sale and Servicing Agreement, the Servicer or the
Trust; and (vi) the Receivables Files. The foregoing sale does not constitute
and is not intended to result in any assumption by the Purchaser of any
obligation of the undersigned to the Obligors, insurers, Dealers or any other
person in connection with the Receivables, Receivable Files, any insurance
policies or any agreement or instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Receivables Purchase Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Receivables Purchase Agreement.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of [_______], [----].
WORLD OMNI FINANCIAL CORP.,
By: ____________________________________
Name:
Title:
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SCHEDULE I
Schedule of Receivables
[To Be Delivered at Closing]
II-1
