SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-A/A
AMENDMENT NO. 1
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) or (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
WORLD OMNI DEALER FUNDING INC.
(Exact name of registrant as specified in its charter)
Florida 65-0296366
(State of incorporation (I.R.S. Employer Identification No.)
or organization)
120 Northwest 12th Avenue
P.O. Box 1160
Deerfield Beach, Florida 33442
(Address of principal (Zip Code)
executive offices)
SECURITIES TO BE REGISTERED PURSUANT TO
SECTION 12(b) OF THE ACT:
Name of each exchange
Title to each class on which each class
to be so registered is to be registered
None None
SECURITIES TO BE REGISTERED PURSUANT TO
SECTION 12(g) OF THE ACT:
Series 1996-2, Floating Rate
Dealer Loan Backed
Certificates, Class A
(Title of Class)
<PAGE>
Item 1. Description of Registrant's Securities to be
Registered.
Item 1 is answered by incorporating by reference to the "Description of
the Certificates" on pages 34-69 of the Prospectus dated May 16, 1996,
which is included in the Registration Statement File No. 333-3816.
A copy of these pages is filed as Exhibit 6.
Item 2. Exhibits.
Exhibit 1 Specimen copies of the Series 1996-2,
Floating Rate Dealer Loan Backed
Certificates, Class A
Exhibit 2 Conformed copy of the Master Pooling
and Servicing Agreement, dated as of
October 1, 1994, between World Omni
Dealer Funding Inc., as transferor,
World Omni Financial Corp., as
servicer, and Fleet National Bank
(successor trustee to NationsBank of
Virginia, N.A.), as trustee
Exhibit 3 Conformed copy of the Series 1996-2
Supplement, dated as of May 1, 1996,
to the Master Pooling and Servicing
Agreement between World Omni Dealer
Funding Inc., as transferor, World
Omni Financial Corp., as servicer, and
Fleet National Bank, as trustee
Exhibit 4 Conformed copy of the Receivables
Purchase Agreement dated as of Octo-
ber 1, 1994 between World Omni Dealer
Funding Inc. and World Omni Financial
Corp.
Exhibit 5 Underwriting Agreement, dated May 16,
1996, between World Omni Dealer
Funding Inc. and CS First Boston Cor-
poration as underwriter
Exhibit 6 "Description of the Certificates", pages
34-69 of the Prospectus dated May 16,
1996 relating to the sale of the Series
1996-2, Floating Rate Dealer Loan
Backed Certificates, Class A (Regis-
tration Statement on Form S-1, File
No. 333-3816)
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 to
Registration Statement on Form 8-A to be signed on its behalf by the under-
signed, thereunto duly authorized.
WORLD OMNI DEALER FUNDING INC.
(Registrant)
Dated: June 24, 1996 By:/s/ Patrick C. Ossenbeck
------------------------
Name: Patrick C. Ossenbeck
Title: Assistant Treasurer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
1 Specimen copies of the Series 1996-2,
Floating Rate Dealer Loan Backed Cer-
tificates, Class A(previously filed)
2 Conformed copy of the Master Pooling
and Servicing Agreement, dated as of
October 1, 1994, between World Omni
Dealer Funding Inc., as transferor,
World Omni Financial Corp., as
servicer, and Fleet National Bank
(successor trustee to NationsBank of
Virginia, N.A.), as trustee (incorporated
by reference to World Omni Dealer Funding
Inc.'s Current Report on Form 8-K, filed
on November 1, 1994, Exhibit 4.1)
3 Conformed copy of the Series 1996-2
Supplement, dated as of May 1, 1996,
to the Master Pooling and Servicing
Agreement between World Omni Dealer
Funding Inc., as transferor, World
Omni Financial Corp., as servicer, and
Fleet National Bank, as trustee (incor-
porated by reference to World Omni Dealer
Funding Inc.'s Current Report on Form 8-K,
filed on May 28, 1996, Exhibit 4.1)
4 Conformed copy of the Receivables
Purchase Agreement dated as of Octo-
ber 1, 1994 between World Omni Dealer
Funding Inc. and World Omni Financial
Corp. (incorporated by reference to World
Omni Dealer Funding Inc.'s Current Report
on Form 8-K, filed on November 1, 1994,
Exhibit 10.1)
5 Underwriting Agreement, dated May 16,
1996, between World Omni Dealer
Funding Inc. and CS First Boston Cor-
poration as underwriter (incorporated
by reference to World Omni Dealer
Funding Inc.'s Current Report on Form
8-K, filed on May 28, 1996, Exhibit 1.1)
6 "Description of the Certificates",
page 34-69, of the Prospectus dated
May 16, 1996 relating to the sale of
the Series 1996-2 Floating Rate Dealer
Loan Backed Certificates, Series A
(Registration Statement on Form S-1,
File No. 333-3816)
[EXHIBIT 6]
[Pages 34-69 of May 16, 1996 Prospectus]
DESCRIPTION OF THE CERTIFICATES
GENERAL
The Certificates will be issued pursuant to a Master Pooling and Servicing
Agreement, dated as of October 1, 1994, as supplemented by the Supplement
relating to the Certificates (as so supplemented or amended from time to time,
the "Pooling and Servicing Agreement"), among WODFI, as Transferor of the
Receivables, WOFCO, as Servicer of the Receivables, and the Trustee,
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus is a part. The Trustee will make available for inspection
a copy of the Pooling and Servicing Agreement (without exhibits or schedules) to
Certificateholders on written request. The following summary describes certain
terms of the Pooling and Servicing Agreement, does not purport to be complete
and is qualified in its entirety by reference to the Pooling and Servicing
Agreement.
The Certificates will evidence undivided beneficial interests in the assets
of the Trust representing the right to receive from the portion of such Trust
assets allocated to the Certificateholders' Interest funds up to (but not in
excess of) the amounts required to make payments of interest on and principal of
the Certificates pursuant to the Pooling and Servicing Agreement.
Each Class of Certificates will initially be represented by one or more
certificates registered in the name of the nominee of DTC (together with any
successor depository selected by the Transferor, the "Depository"), except as
set forth below. Each Class of Certificates will be available for purchase in
minimum denominations of $1,000 and integral multiples thereof in book-entry
form. Each $1,000 principal amount of the Class A Certificates and the Class B
Certificates will represent 1/167,500 and 1/7,500, respectively, of the
Certificateholders' Interest. The Transferor has been informed by DTC that DTC's
nominee will be Cede & Co. ("Cede"). Accordingly, Cede is expected to be the
holder of record of the Certificates. No Certificate Owner will be entitled to
receive a certificate representing such person's beneficial interest in its
Class of Certificates, except in the event Definitive Certificates are issued
under the limited circumstances described herein. Unless and until Definitive
Certificates are issued, all references herein to actions by Certificateholders
shall refer to actions taken by DTC upon instructions from its Direct
Participants (as defined below), and all references herein to distributions,
notices, reports and statements to Certificateholders shall refer to
distributions, reports and statements to DTC or Cede, as the registered holder
of the Certificates. See "-- Book-Entry Registration" and "-- Definitive
Certificates."
INTEREST
Interest on the principal balance of the Class A Certificates will accrue
at a per annum rate (the "Class A Certificate Rate") equal to One-Month LIBOR
plus 14 basis points (0.14%) (the "Class A LIBOR Rate"), and interest on the
principal balance of the Class B Certificates will accrue at a per annum rate
(the "Class B Certificate Rate") equal to One-Month LIBOR plus 27 basis points
(0.27%) (the "Class B LIBOR Rate"); provided that, on any Distribution Date, if
the weighted average of the Class A LIBOR Rate and the Class B LIBOR Rate is
greater than the Asset Receivables Rate, then the Class A Certificate Rate and
the Class B Certificate Rate for such Distribution Date will be the Asset
Receivables Rate.
<PAGE>
Interest at the Certificate Rate will be payable to the Certificateholders
on each Distribution Date, commencing in May 1996. Interest due on a
Distribution Date will accrue from and including the preceding Distribution Date
(or, in the case of the first Distribution Date, from and including the Closing
Date) to but excluding such Distribution Date. Interest due for any Distribution
Date will be calculated on the basis of the actual number of days elapsed during
the related Interest Period and a year assumed to consist of 360 days and
interest due but not paid on any Distribution Date will be due on the next
Distribution Date, together with, to the extent lawfully payable, interest on
such amount at the Class A Certificate Rate or the Class B Certificate Rate, as
applicable, plus 200 basis points (2.00%). Interest payments on the Certificates
at the Certificate Rate will be derived from Certificateholder Interest
Collections for a Collection Period, withdrawals, if any, from the Reserve Fund,
Investment Proceeds, if any, and, under certain circumstances, Available
Transferor Collections to the extent of the Available Subordinated Amount.
The "Asset Receivables Rate" for any Interest Period shall equal the
product of (a) the quotient obtained by dividing (i) 360 by (ii) the actual
number of days elapsed in such Interest Period and (b) a percentage, expressed
as a fraction, (i) the numerator of which is the sum of (A) the Floating
Allocation Percentage of Interest Collections allocable to the Regular Pool for
the latest Collection Period ending prior to the last day of such Interest
Period (which for their purpose only is based on interest amounts billed to the
Dealers which are due during such Collection Period) less, unless waived by the
Servicer, the Monthly Servicing Fee with respect to such immediately preceding
Collection Period and (B) the Investment Proceeds to be applied on the
Distribution Date related to such Interest Period and (ii) the denominator of
which is the sum of (A) the product of the Floating Allocation Percentage and
the average Regular Pool Balance (after giving effect to any Investor
Charge-Offs, and including Ineligible Receivables and certain excess
receivables) for such immediately preceding Collection Period and (B) the Series
1996-2 portion of the average principal balance of funds on deposit in the
Excess Funding Account for such Collection Period. If for any Interest Period,
the weighted average of the Class A LIBOR Rate and the Class B LIBOR Rate
exceeds the Asset
<PAGE>
Receivables Rate, funds available as provided herein after making all required
distributions and deposits with respect to each Class of Certificates, including
payments with respect to principal (including payments to the Excess Funding
Account), Class A Monthly Interest and Class B Monthly Interest, the Monthly
Servicing Fee, the Reserve Fund Deposit Amount, the Investor Default Amount and
the unreimbursed Monthly Dilution Amount, will be used to pay the Shortfall
Amount. If the Servicer determines that such amounts will not be sufficient to
pay the Shortfall Amount on the related Distribution Date, the Servicer shall
notify the Transferor, and the Transferor will be obligated to deposit an amount
sufficient to pay such Shortfall Amount in the Collection Account on the day
preceding the related Distribution Date for payment to Certificateholders. Under
certain circumstances specified in the Pooling and Servicing Agreement, failure
by the Transferor to pay any Shortfall Amount or any Carry-Over Amount may
result in an Early Amortization Event.
In the event that the Transferor fails to pay a Shortfall Amount on any
Distribution Date, interest shall accrue on such Shortfall Amount and shall be
payable, together with interest thereon at the applicable Certificate Rate plus
2% (such Shortfall Amount plus such interest thereon, a "Carry-Over Amount"), on
the next succeeding Distribution Date in the same manner as a Shortfall Amount.
At such time as (i) the Invested Amount of the Certificates is zero and all
interest due and owing on the Certificates has been paid in full and (ii) any
accrued and unpaid Carry-Over Amount exists at such time, then, in such event,
Available Transferor Collections will be applied by the Servicer to the extent
of the Available Subordinated Amount to pay any such accrued and unpaid
Carry-Over Amount.
"Interest Period" shall mean with respect to any Distribution Date, the
period from and including the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date.
One-Month LIBOR will be calculated on each Interest Determination Date in
the following manner. Two London Business Days (as defined below) preceding the
first day of an Interest Period (or two business days preceding the Closing
Date, in the case of the first Interest Period) (each, an "Interest
Determination Date"), WOFCO, as Servicer, will ascertain the One-Month LIBOR
Rate, which rate will be confirmed by Fleet National Bank (the "Reference
Agent"), as agent for the Trust. The One-Month LIBOR Rate shall be the rate for
deposits in U.S. dollars having a one-month maturity which appears on the
Telerate Page 3750 as of 11:00 A.M., London time, on such Interest Determination
Date. "Telerate Page 3750" means the display 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 or services as may be nominated by the British Banker's
Association for the purpose of displaying London interbank offered rates for
U.S. dollar deposits).
With respect to an Interest Determination Date for which the One-Month
LIBOR Rate does not appear on the Telerate Page 3750, the One-Month LIBOR Rate
will be determined on the basis of the rates at which deposits in U.S. dollars
are offered by four major banks in the London interbank market selected by the
Reference Agent (the "Reference Banks") at approximately 11:00 A.M., London
time, on such Interest Determination Date to prime banks in the London interbank
market, commencing on the second London Business Day immediately following such
Interest Determination Date and having a one-month maturity and in a principal
amount equal to an amount of not less than U.S. $1,000,000 that is
representative for a single transaction in such market at such time. "London
Business Day" shall mean any business day on which dealings in deposits in
United States dollars are transacted in the London interbank market. The
Reference Agent will request the principal London office of each such Reference
Bank to provide a quotation of its rate, and the Reference Agent will confirm
each such rate quoted by the Reference Banks. If at least two such quotations
are provided, the One-Month LIBOR Rate on such Interest Determination Date will
be the arithmetic mean (rounded upward, if necessary, to the nearest five
decimal points) of such quotations. If fewer than two quotations are provided,
the One-Month LIBOR Rate on such Interest Determination Date will be the
arithmetic mean (rounded upward, if necessary, to the nearest five decimal
points) of the rates quoted by three major banks in New York City selected by
the Reference Agent at approximately 11:00 A.M., New York City time, on such
Interest Determination Date for loans in U.S. dollars to leading European banks,
commencing on the second London Business Day immediately following such Interest
Determination Date and having a one-month maturity and in a principal amount
equal to an amount of not less than U.S.
<PAGE>
$1,000,000 that is representative for a single transaction in such market at
such time; provided, however, that if the banks in New York City selected as
aforesaid by the Reference Agent are not quoting as mentioned in this sentence,
the Class A Certificate Rate and the Class B Certificate Rate will be the Class
A Certificate Rate and the Class B Certificate Rate in effect on the day
immediately preceding such Interest Determination Date.
The establishment of One-Month LIBOR on each Interest Determination Date by
the Reference Agent and its calculation of the applicable rate of interest for
the Certificates for the related Interest Period shall (in the absence of
manifest error) be final and binding.
PRINCIPAL
In general, no principal payments will be made to the Certificateholders
until the Expected Final Payment Date or, upon the occurrence of an Early
Amortization Event, as described herein, until the first Distribution Date
following such event or as necessary upon the occurrence of an Asset Composition
Event. No principal payments will be made to the Class B Certificateholders
until the final principal payment with respect to the Class A Certificateholders
has been made. During the Revolving Period, collections of Principal Receivables
allocable to the Certificateholders' Interest, subject to certain limitations,
will either be (a) to the extent not retained by the Transferor, allocated to
the Excess Funding Account as described herein, (b) allocated to one or more
Series or Purchased Interests which are in amortization, early amortization or
accumulation periods to cover principal payments due to the investor
certificateholders or Purchasers of any such Series or Purchased Interest or
which provide for excess funding accounts or similar arrangements or (c) if no
such Series or Purchased Interest is then amortizing or accumulating principal
or otherwise does not provide for excess funding accounts or similar
arrangements, paid to the Transferor or held as Unallocated Principal
Collections. See "-- Allocation Percentages -- Principal Collections" and "--
Distributions from the Collection Account; Reserve Fund -- Principal
Collections."
Unless and until an Early Amortization Event shall have occurred and until
the outstanding principal balance of the Certificates is paid in full, on each
Distribution Date with respect to the Accumulation Period, collections of
Principal Receivables allocable to the Certificateholders' Interest plus certain
other amounts comprising Monthly Principal will no longer be applied entirely
for the benefit of another Series or Purchased Interest or to the Transferor as
described above but instead an amount thereof up to the Controlled Distribution
Amount for each such Distribution Date will be deposited in the Principal
Funding Account. The funds on deposit in the Principal Funding Account
(including any amounts deposited therein from the Excess Funding Account) will
be used to pay first the Class A Principal Amount on the Expected Final Payment
Date and then, to the extent funds are available, the outstanding balance of the
Class B Certificates. If, on the Expected Final Payment Date, the amount in the
Principal Funding Account is less than the outstanding principal balance of the
Certificates, the amounts in such accounts will nevertheless be distributed on
such date first to Class A Certificateholders and then, to the extent funds are
available after Class A Certificateholders are paid, the Class B
Certificateholders, the Early Amortization Period will commence and, on each
Special Payment Date thereafter, the Class A Certificateholders will receive
distributions of Class A Monthly Principal and Class A Monthly Interest until
the Class A Principal Amount has been paid in full or the Termination Date has
occurred. Following payment in full of all Class A Monthly Principal and Class A
Monthly Interest, respectively, the Class B Certificateholders will receive
distributions of Class B Monthly Principal and Class B Monthly Interest,
respectively, until the Class B Principal Amount has been paid in full or the
Termination Date has occurred.
It is expected that the final principal payment with respect to the
Certificates will be made on the Expected Final Payment Date, but the principal
of the Certificates may be paid earlier or, depending on the actual payment rate
on the Receivables, later, as described under "Risk Factors -- Payments;
Delays." If the Receivables are sold or reassigned to the Transferor as
described below, principal payments on the Certificates will be made on the
Distribution Date following such sale or repurchase. See "-- Allocation
Percentages -- Principal Collections" and "-- Distributions from the Collection
Account; Reserve Fund -- Principal Collections."
<PAGE>
Distributions on the Certificates will be made on each Distribution Date to
the holders of Certificates in whose names the Certificates were registered
(expected to be Cede, as nominee of DTC) at the close of business on the day
preceding such Distribution Date (or, if Definitive Certificates are issued, on
the last day of the preceding calendar month) (each a "Record Date"). However,
the final distribution on the Certificates will be made only upon presentation
and surrender of the Certificates. Distributions will be made to DTC in
immediately available funds.
BOOK-ENTRY REGISTRATION
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 UCC and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was created
to hold securities for its participating organizations ("Direct Participants")
and facilitate the clearance and settlement of securities transactions between
Direct Participants through electronic book-entry changes in their accounts,
thereby eliminating the need for physical movements of certificates. Direct
Participants include the Underwriters, securities brokers and dealers, banks,
trust companies and clearing corporations and may include certain other
organizations. 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 Direct Participant, either directly or
indirectly ("Indirect Participants").
Certificateholders that are not Direct Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership of, or
other interests in, Certificates may do so only through Direct Participants and
Indirect Participants. In addition, Certificateholders will receive all
distributions of principal of and interest on the Certificates from the Trustee
through DTC and its Direct Participants and Indirect Participants. Under a
book-entry format, Certificateholders will receive payments after the related
Distribution Date because, while payments are required to be forwarded to Cede,
as nominee for DTC, on each such date, DTC will forward such payments to its
Direct Participants which thereafter will be required to forward them to
Indirect Participants or Certificateholders. It is anticipated that the only
Class A Certificateholder or Class B Certificateholder (as such term is used in
the Pooling and Servicing Agreement) will be Cede, as nominee of DTC, and that
Certificate Owners will not be recognized by the Trustee as Certificateholders
under the Pooling and Servicing Agreement. Certificate Owners will only be
permitted to exercise the rights of a Certificateholder under the Pooling and
Servicing Agreement indirectly through DTC and its Direct Participants (who in
turn will exercise their rights through DTC).
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 Certificateholders will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among Direct
Participants on whose behalf it acts with respect to the Certificates and is
required to receive and transmit distributions of principal of, and interest on,
the Certificates. Direct Participants and Indirect Participants with which
Certificate Owners have accounts with respect to the Certificates similarly are
required to make book-entry transfers and receive and transmit such payments on
behalf of their respective Certificate Owners.
Because DTC can only act on behalf of Direct Participants, who in turn act
on behalf of Indirect Participants and certain banks, the ability of a
Certificate Owner to pledge Certificates to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
Certificates, may be limited due to the lack of a physical certificate for such
Class of Certificates.
Neither DTC or Cede will comment or vote with respect to the Certificates.
DTC has advised the Transferor that it will take any action permitted to be
taken by a Certificateholder under the Pooling and Servicing Agreement only at
the direction of one or more Direct Participants to whose accounts with DTC the
Certificates are credited. Additionally, DTC has advised the Transferor that to
the extent that the Pooling and Servicing Agreement requires that any action may
be taken only by holders of Certificates representing a
<PAGE>
specified percentage of the aggregate outstanding principal amount thereof, DTC
will take such action only at the direction of and on behalf of Direct
Participants whose holdings include undivided interests that satisfy such
specified percentage. Under its usual procedures, DTC will mail an "Omnibus
Proxy" to the Trustee as soon as possible after any applicable record date with
respect to a consent or vote. The Omnibus Proxy will assign Cede's consenting or
voting rights to those Direct Participants to whose accounts the Certificates
will be credited on that record date (identified on a listing attached to the
Omnibus Proxy).
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of Certificates among participants of DTC, it is under no obligation
to perform or continue to perform such procedures and such procedures may be
discontinued at any time.
DEFINITIVE CERTIFICATES
The Class A Certificates and Class B Certificates will be issued in fully
registered, certificated form to Class A Certificate Owners and Class B
Certificate Owners, respectively, or their nominees ("Definitive Certificates"),
rather than to DTC or its nominee, only if (i) the Transferor advises the
Trustee in writing that DTC is no longer willing or able to discharge its
responsibilities as Depository with respect to a Class of Certificates properly
and the Transferor is unable to locate a qualified successor, (ii) the
Transferor, at its option, elects to terminate the book-entry system through
DTC, or (iii) after the occurrence of a Servicer Default, Certificateholders of
a Class representing not less than 51% of the aggregate unpaid principal amount
of the Certificates of such Class advise the Trustee and DTC through Direct
Participants in writing that the continuation of a book-entry system through DTC
(or a successor thereto) is no longer in the best interests of such
Certificateholders.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, DTC is required to notify all Direct Participants of the
availability through DTC of Definitive Certificates for the Certificates. Upon
surrender by DTC of the certificate or certificates representing such
Certificates and instructions for re-registration, the Trustee will issue such
Certificates in the form of Definitive Certificates, and thereafter the Trustee
will recognize the holders of such Definitive Certificates as Certificateholders
under the Pooling and Servicing Agreement ("Holders"). In the event that
Definitive Certificates are issued or DTC ceases to be the clearing agency for
either Class of Certificates, the Pooling and Servicing Agreement provides that
the Certificateholders will be notified of such event.
Distributions of principal of, and interest on, the Certificates will be
made by the Trustee directly to Holders in accordance with the procedures set
forth herein and in the Pooling and Servicing Agreement. Distributions on each
Distribution Date will be made to Holders in whose names the Definitive
Certificates were registered at the close of business on the related Record
Date. Distributions will be made by check mailed to the address of such Holder
as it appears on the register maintained by the Trustee. The final distribution
on any Certificate (whether Definitive Certificates or the certificate or
certificates registered in the name of Cede representing the Certificates),
however, will be made only upon presentation and surrender of such Certificate
on the final payment date at such office or agency as is specified in the notice
of final distribution to Certificateholders. The Trustee will provide such
notice to registered Class A Certificateholders not later than the first day of
the month of the final distribution.
Definitive Certificates will be transferable and exchangeable at the
offices of the Trustee, which shall initially be Fleet National Bank. No service
charge will be imposed for any registration of transfer or exchange, but the
Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge imposed in connection therewith.
SUPPLEMENTAL CERTIFICATES
The Pooling and Servicing Agreement provides that the Transferor may
exchange a portion of the certificate evidencing the Transferor Interest (the
"Transferor Certificate") for another certificate (a "Supplemental Certificate")
for transfer or assignment to a person designated by the Transferor upon the
execution and delivery of a supplement to the Pooling and Servicing Agreement
(which supplement shall be subject to the amendment section of the Pooling and
Servicing Agreement to the extent that it amends any of
<PAGE>
the terms of the Pooling and Servicing Agreement); provided that (a) the
Transferor shall, after giving effect thereto, have an interest in the Pool
Balance of not less than 2% of the Pool Balance, (b) the Transferor shall have
delivered to the Trustee, the Rating Agencies and any Enhancement Provider
certain opinions of counsel with respect to such exchange and (c) the Transferor
shall have delivered to the Trustee written confirmation from the Rating
Agencies that such exchange will not result in a reduction or withdrawal of the
rating of each Class of Certificates or any other outstanding Series or class of
certificates or any Purchased Interest. Any subsequent transfer or assignment of
a Supplemental Certificate is also subject to the conditions described in
clauses (a), (b) and (c) in the preceding sentence.
NEW ISSUANCES
The Pooling and Servicing Agreement provides that the Trust will issue or
sell three types of certificates or interests: (i) one or more Series, including
Concentration Series, of investor certificates (including the Certificates)
which are transferable and have the characteristics described below, (ii) one or
more Purchased Interests which are transferable and have the characteristics
described below, and (iii) the Transferor Certificate (and any Supplemental
Certificate) which will evidence the Transferor Interest and will be
transferable only upon the satisfaction of certain conditions described under
"Supplemental Certificates." The Pooling and Servicing Agreement also provides
that, pursuant to one or more Supplements or Purchase Agreements, the Transferor
may cause the Trustee to issue one or more new Series or sell one or more
Purchased Interests. Under the Pooling and Servicing Agreement, the Transferor
may specify, among other things, with respect to any Series or Purchased
Interest: (a) its name or designation, (b) its initial principal amount, (c) its
certificate rate or interest rate (or the method for determining its certificate
or interest rate), (d) a date on which it will begin its accumulation period,
amortization period or controlled amortization period, if any, (e) the method
for allocating principal and interest to certificateholders or Purchasers, (f)
the percentage used to calculate monthly servicing fees, (g) the issuer and
terms of any Enhancement with respect thereto or the level of subordination
provided by the Transferor Interest, (h) the terms on which the certificates of
such Series or the Purchased Interest may be exchanged for certificates of
another Series or for another Purchased Interest, be subject to repurchase,
optional redemption or mandatory redemption by the Transferor or be remarketed
by any remarketing agent, (i) the applicable termination date, (j) whether such
Series or Purchased Interest will be a part of a group or subject to being
paired with any other prefunded Series, (k) whether such Series is a Regular
Series or a Concentration Series, and (l) any other terms permitted by the
Pooling and Servicing Agreement (all such terms, the "Principal Terms" of such
Series or Purchased Interest). The Transferor may offer any Series or Purchased
Interest under a prospectus or other disclosure document in transactions either
registered under the Securities Act or exempt from registration thereunder,
directly or through the Underwriter or one or more other underwriters or
placement agents. There is no limit to the number of Series that may be issued
or Purchased Interests that may be sold under the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement provides that the Transferor may
specify Principal Terms of a new Series or Purchased Interest such that each
Series or Purchased Interest has an amortization period or accumulation period
which may have a different length and begin on a different date than the
amortization period or accumulation period for any other Series or Purchased
Interest. Further, one or more Series or Purchased Interests may be in their
early amortization periods or accumulation periods while other Series or
Purchased Interests are not. Thus, certain Series or Purchased Interests may be
amortizing or accumulating principal, while other Series or Purchased Interests
are not amortizing or accumulating principal. Moreover, different Series or
Purchased Interests may have the benefits of different forms of Enhancement
issued by different entities. Under the Pooling and Servicing Agreement, the
Trustee will hold each form of Enhancement only on behalf of the Series (or a
particular class within a Series) or the Purchased Interest to which it relates.
The Pooling and Servicing Agreement also provides that the Transferor may
specify different certificate or interest rates and monthly servicing fees with
respect to each Series (or a particular class within a Series) or Purchased
Interest. In addition, the Transferor will have the option under the Pooling and
Servicing Agreement to vary between Series (or classes within a Series) or
Purchased Interests the terms upon which a Series (or classes with a Series) or
Purchased Interest may be repurchased by the Transferor.
<PAGE>
Under the Pooling and Servicing Agreement and pursuant to a Supplement, a
new Series or Purchased Interest may be issued or sold only upon the
satisfaction of certain specified conditions. The Transferor may cause the
issuance of a new Series or Purchased Interest by notifying the Trustee, the
Servicer, each Rating Agency, any Agent or any Enhancement Provider at least
five business days in advance of the applicable date of New Issuance. The notice
shall state the designation of any Series (and classes with a Series, if any) or
Purchased Interest and with respect to such Series or Purchased Interest: (a)
its initial principal amount, (b) its certificate or interest rate and (c) the
issuer of any Enhancement with respect to such Series (or classes with a Series)
or Purchased Interest. The Pooling and Servicing Agreement will provide that the
Trustee will issue any such Series or Purchased Interest only upon delivery to
it of the following (i) a Supplement in form satisfactory to the Trustee signed
by the Transferor and the Servicer and specifying the Principal Terms of such
Series or Purchased Interest, (ii) the form of any Enhancement and any related
agreement, (iii) an opinion of counsel to the effect that, for certain income
tax purposes, (w) such issuance will not adversely affect the characterization
of the certificates (including the Certificates) of any outstanding Series or
class or Purchased Interest, (x) such issuance will not cause the Trust to be
classified as an association (or publicly traded partnership) taxable as a
corporation for Federal income tax purposes or taxable at the entity level for
Florida or Connecticut tax purposes and (y) such new Series or Purchased
Interest will be characterized as debt or a partnership interest and (iv)
written confirmation from the Rating Agencies that such issuance will not result
in a reduction or withdrawal of the rating of the Certificates or any other
outstanding Series or class of certificates or any Purchased Interest. Such
issuance is also subject to the conditions that (a) the Transferor shall have
represented and warranted that such issuance shall not, in the reasonable belief
of the Transferor, cause an Early Amortization Event to occur and (b) after
giving effect to such issuance, (i) the Transferor Amount shall not be less than
2% of the Pool Balance and (ii) the Regular Transferor Amount shall not be less
than 2% of the Regular Pool Balance. Upon satisfaction of all such conditions,
the Trustee will issue such Series.
CONVEYANCE OF RECEIVABLES AND COLLATERAL SECURITY
On the Initial Closing Date, WODFI transferred and assigned to the Trust
all of its right, title and interest in and to the Receivables and the related
Collateral Security as of the Initial Closing Date, all receivables thereafter
created in the Accounts and its interests in the related Collateral Security and
the Receivables Purchase Agreement, and the proceeds of all of the foregoing.
See "World Omni Dealer Funding Inc. and the Trust."
In connection with the sale of Receivables to the Transferor by WOFCO and
the transfer of such Receivables by the Transferor to the Trust, WOFCO has
delivered and will continue to deliver to the Trustee all instruments, if any
(as defined under the UCC) relating to the Receivables and, as a precautionary
measure, WOFCO has indicated and will continue to indicate in its computer
records that the Receivables in the Accounts and the related Collateral Security
have been conveyed to the Trust. To the extent the Receivables constitute
"accounts," "chattel paper" or "general intangibles (each as defined under the
UCC), the Transferor has filed one or more financing statements and has taken
other actions necessary in accordance with applicable state law to perfect the
Trust's interest in the Receivables, the Collateral Security, the Receivables
Purchase Agreement and the proceeds thereof. In addition, on the Initial Closing
Date the Transferor provided to the Trustee a computer file or microfiche or
written list containing a true and complete list showing for each Account (which
list has been updated by the Transferor and the Trustee since such date), as of
the Initial Closing Date, (i) its account number and (ii) the outstanding
balance of Principal Receivables in such Account. See "Risk Factors -- Sale and
Transfer of Receivables; Security Interest and Insolvency Considerations" and
"Certain Legal Aspects of the Receivables."
As described below under "Addition of Accounts," the Transferor has the
right and in some circumstances is obligated (subject to certain limitations and
conditions) to designate from time to time additional accounts to be included as
Additional Accounts, to purchase from WOFCO (subject to certain limitations and
conditions regarding WOFCO described above in "Risk Factors -- Release of Liens
under Existing Credit Arrangements") the Receivables then existing or thereafter
created in such Additional Accounts and to convey such Receivables to the Trust.
Each such Additional Account must be an Eligible Account. In respect of any
conveyance of Receivables in Additional Accounts, the Transferor will follow the
procedures set forth
<PAGE>
in the preceding paragraph, except the list will show information for Additional
Accounts as of the date such Additional Accounts are identified and selected
(the "Additional Cut-Off Date").
REPRESENTATIONS AND WARRANTIES
The Transferor has made and will make representations and warranties to the
Trust relating to the Accounts, the Receivables and the Collateral Security to
the effect, among other things, that (a) as of the Initial Closing Date and the
date of issuance of any other Series or Purchased Interest (a "Series Issuance
Date") (or, in the case of an Additional Account, as of the Additional Cut-Off
Date and the date the related Receivables are transferred to the Trust (an
"Addition Date")), each Account or Additional Account is an Eligible Account or,
if it is an Account not constituting an Eligible Account (an "Ineligible
Account") on such date, such Account is being removed from the Trust in
accordance with the requirements of the Pooling and Servicing Agreement, (b) as
of the Initial Closing Date (or as of the Additional Cut-Off Date, in the case
of any Additional Accounts) or as of the date any future Receivable is generated
(a "Transfer Date"), each Receivable is an Eligible Receivable or, if such
Receivable is not an Eligible Receivable, such Receivable is conveyed to the
Trust as described below under "Ineligible Receivables," (c) each Receivable and
all Collateral Security conveyed to the Trust on the Initial Closing Date and on
each Transfer Date or, in the case of Additional Accounts, on the Addition Date,
and all of the Transferor's right, title and interest in the Receivables
Purchase Agreement, have been conveyed to the Trust free and clear of any liens,
and (d) all appropriate consents and governmental authorizations required to be
obtained by the Transferor in connection with the conveyance of each such
Receivable or Collateral Security have been duly obtained. If the Transferor
breaches any representation and warranty described in this paragraph and such
breach remains uncured for 30 days or such longer period as may be agreed to by
the Trustee, after the earlier to occur of the discovery of such breach by the
Transferor or the Servicer or receipt of written notice from the Trustee or any
Purchaser of such breach by the Transferor or the Servicer, and such breach has
a materially adverse effect on the Certificateholders' Interest or the interests
of the holder of other outstanding Series or Purchased Interest in any
Receivable or Account, the Certificateholders' Interest and such other
certificateholders' or Purchaser's interests in such Receivable or, in the case
of a breach relating to an Account, all Receivables in the related Account will
be reassigned to the Transferor on the terms and conditions set forth below and
such Account shall no longer be included as an Account.
Each such Receivable shall be reassigned to the Transferor on or before the
end of the Collection Period in which such reassignment obligation arises by the
Transferor directing the Servicer to deduct the principal balance of such
Receivable from the Pool Balance. In the event that such deduction would cause
the Transferor Amount or the Regular Transferor Amount, respectively, to be less
than the sum of the Trust Available Subordinated Amount and the Minimum
Transferor Amount and the sum of the Regular Trust Available Subordinated Amount
and the Regular Minimum Transferor Amount, respectively, on the preceding
Determination Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on such Distribution Date), on the date on
which such reassignment is to occur, the Transferor will be obligated to make a
deposit into the Collection Account in immediately available funds in an amount
equal to the greater of the amount by which the Transferor Amount and the
Regular Transferor Amount, respectively, would be less than the sum of the Trust
Available Subordinated Amount and the Minimum Transferor Amount and the sum of
the Regular Trust Available Subordinated Amount and the Regular Minimum
Transferor Amount, respectively (the amount of such deposit being referred to
herein as a "Transfer Deposit Amount"), provided that if the Transfer Deposit
Amount is not so deposited, the principal balance of the related Receivables
will be deducted from each of the Pool Balance and the Regular Pool Balance only
to the extent (i) the Transferor Amount is not reduced below the sum of the
Trust Available Subordinated Amount and the Minimum Transferor Amount and (ii)
the Regular Transferor Amount is not reduced below the sum of Regular Trust
Available Subordinated Amount and the Regular Minimum Transferor Amount, and any
principal balance not so deducted will not be reassigned and will remain part of
the Trust. The reassignment of any such Receivable to the Transferor and the
payment of any related Transfer Deposit Amount will be the sole remedy
respecting any breach of the representations and warranties described in the
preceding paragraph with respect to such Receivable available to
Certificateholders or the Trustee on behalf of Certificateholders.
<PAGE>
The Transferor has made and will make representations and warranties to the
Trust to the effect, among other things, that as of the Initial Closing Date and
each Series Issuance Date (a) it is duly incorporated and in good standing, it
has the authority to consummate the transactions contemplated by the Pooling and
Servicing Agreement and the Pooling and Servicing Agreement constitutes a valid,
binding and enforceable agreement of the Transferor and (b) the Pooling and
Servicing Agreement constitutes either a valid transfer and assignment to the
Trust of, or the grant of a valid security interest in, of all right, title and
interest of the Transferor in, to and under the Receivables and the related
Collateral Security, whether then existing or thereafter created, the
Receivables Purchase Agreement, and the proceeds thereof (including proceeds in
any of the accounts established for the benefit of the certificateholders),
under the UCC or other applicable law which is effective as to each Receivable
existing on the Closing Date (or as of the Addition Date, if applicable) or, as
to each Receivable arising thereafter, upon the creation thereof and until
termination of the Trust. In the event that the breach of any of the
representations and warranties described in this paragraph has a materially
adverse effect on the Certificateholders' Interest or the interests of the
holders of all other outstanding Series or Purchased Interests in the
Receivables, either the Trustee or the holders of certificates of all
outstanding Series (including the Certificates) and Purchased Interests
evidencing not less than 51% of the aggregate unpaid principal amount of all
outstanding Series and Purchased Interests, by written notice to the Transferor
(and to the Trustee, the Servicer and the issuer or provider of any Enhancement
(an "Enhancement Provider") if given by certificateholders and Purchasers), may
direct the Transferor to accept the reassignment of the Certificateholders'
Interest and the certificateholders' interests of other Series and the
Purchasers' Interests within 60 days of such notice, or within such longer
period specified in such notice. The Transferor will be obligated to accept the
reassignment of the Certificateholders' Interest and such other
certificateholders' interests and the Purchasers' interests on a Distribution
Date occurring within such 60-day period. Such reassignment will not be required
to be made, however, if at the end of such applicable period, the
representations and warranties shall then be true and correct in all material
respects and any materially adverse effect caused by such breach shall have been
cured. The portion of the price for such reassignment in respect of the
Certificates will be equal to the sum of (i) the Invested Amount of the
Certificates on the Determination Date preceding the Distribution Date on which
the purchase is scheduled to be made and (ii) accrued and unpaid interest on the
unpaid principal amount of the Certificates at the applicable Certificate Rate
(together with interest on overdue interest at the applicable Certificate Rate
plus 200 basis points (2%), to the extent lawfully payable). The payment of the
reassignment price for all outstanding Series and Purchased Interests, in
immediately available funds, will be considered a payment in full of the
Certificateholders' Interest and such other certificateholders' interests and
Purchasers' interests. The portion of such funds allocable to the
Certificateholders' Interest will be distributed upon presentation and surrender
of the Certificates. If the Trustee or the certificateholders or the Purchasers
give a notice as provided above, the obligation of the Transferor to make any
such deposit will constitute the sole remedy respecting a breach of the
representations and warranties available to certificateholders or the Trustee on
behalf of the certificateholders and Purchasers.
ELIGIBLE ACCOUNTS AND ELIGIBLE RECEIVABLES
An "Eligible Account" is defined to mean each wholesale financing line of
credit extended by WOFCO to a Dealer, which line of credit, as of the date of
determination thereof (a) is established by WOFCO in the ordinary course of
business pursuant to a floorplan financing agreement, (b) is in favor of a
Dealer which is an eligible dealer (which excludes dealers subject to voluntary
or involuntary bankruptcy proceedings or voluntary or involuntary liquidation),
(c) is in existence and maintained and serviced by WOFCO (or a successor
Servicer) and (d) in respect of which no amounts have been charged off as
uncollectible.
An "Eligible Receivable" is defined to mean each Receivable: (a) which was
originated or acquired by WOFCO in the ordinary course of business, (b) which
arose under an Account that at such time was an Eligible Account, (c) which is
owned by WOFCO at the time of sale by WOFCO to the Transferor, (d) which
represents the obligation of a Dealer to repay an advance made to or on behalf
of such Dealer to finance Vehicles, (e) which, at the time of creation and at
the time of transfer to the Trust (except, on the Initial Closing Date, with
respect to Receivables relating to Vehicles that have already been sold), is
secured by a perfected first priority security interest in the Vehicle relating
thereto, (f) which was created in
<PAGE>
compliance in all respects with all requirements of law applicable thereto and
pursuant to a Dealer Agreement which complies in all respects with all
requirements of law applicable to any party thereto, (g) with respect to which
all consents and governmental authorizations required to be obtained by WOFCO or
the Transferor in connection with the creation of such Receivable or the
transfer thereof to the Trust or the performance by WOFCO of the Dealer
Agreement pursuant to which such Receivable was created, have been duly
obtained, (h) as to which at all times following the transfer of such Receivable
to the Trust, the Trust will have good and marketable title thereto free and
clear of all liens arising prior to the transfer or arising at any time, other
than liens permitted pursuant to the Pooling and Servicing Agreement, (i) which
has been the subject of a valid transfer and assignment from the Transferor to
the Trust of all the Transferor's interest therein (including any proceeds
thereof), (j) which will at all times be the legal and assignable payment
obligation of the Dealer relating thereto, enforceable against such Dealer in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy or other similar laws, (k) which at the time of transfer
to the Trust is not subject to any right of rescission, setoff, or any other
defense (including defenses arising out of violations of usury laws) of the
Dealer, (l) as to which, at the time of transfer of such Receivable to the
Trust, WOFCO and the Transferor have satisfied all their respective obligations
with respect to such Receivable required to be satisfied at such time, (m) as to
which, at the time of transfer of such Receivable to the Trust, neither WOFCO
nor the Transferor has taken or failed to take any action which would impair the
rights of the Trust or the certificateholders or Purchasers therein, (n) which
constitutes an "instrument," "account," "chattel paper" or a "general
intangible" as defined in Article 9 of the UCC as then in effect in the State of
Florida and (o) which was transferred to the Trust with all applicable
governmental authorization.
It is not required or anticipated that the Trustee will make any initial or
periodic general examination of the Receivables or any records relating to the
Receivables for the purpose of establishing the presence or absence of defects,
compliance with representations and warranties of the Transferor or for any
other purpose. In addition, it is not anticipated or required that the Trustee
will make any initial or periodic general examination of the Servicer for the
purpose of establishing the compliance by the Servicer with its representations
or warranties, the observation of its obligations under the Pooling and
Servicing Agreement or for any other purpose.
INELIGIBLE RECEIVABLES AND EXCESS RECEIVABLES
For the purpose of facilitating the administration and reporting
requirements of the Servicer under the Pooling and Servicing Agreement, all
Receivables that are not Eligible Receivables ("Ineligible Receivables") arising
in an Eligible Account shall be transferred to the Trust, provided that the
Incremental Subordinated Amount is adjusted by the portion of the aggregate
principal amount of Ineligible Receivables included therein allocable to the
Certificateholders' Interest. The Incremental Subordinated Amount also will be
increased by the portion of the aggregate principal amount allocable to the
Certificateholders' Interest of all Receivables arising in Eligible Accounts
which are no longer Eligible Accounts. See "Allocation of Collections; Deposits
in Collection Account; Limited Subordination of Transferor Interest -- Available
Subordinated Amount."
In addition, a portion of Principal Receivables during any Collection
Period, equal to the product of (i) without duplication, the sum of (A) the
aggregate amount by which Principal Receivables relating to used Vehicles
exceeds 25% (or, in the case of the Collection Period ending August 31,
September 30 or October 31 of each year, 35%) of the aggregate amount of
Principal Receivables included in the Trust, calculated as of the last day of
the preceding Collection Period, (B) the aggregate amount of Principal
Receivables in Eligible Accounts that have been placed on finance hold, (C) the
aggregate amount by which Principal Receivables arising in Eligible Accounts
relating to WOFCO's "Auction Advantage Program" exceeds 5% of the aggregate
amount of Principal Receivables included in the Trust or, without duplication,
the aggregate amount by which Principal Receivables in any such Eligible Account
exceeds $250,000, (D) the aggregate amount by which Principal Receivables
arising under Eligible Accounts under WOFCO's delayed payment privilege program
exceeds 2%, and (E) the aggregate amount of interest payments on Receivables
under certain inventory financing agreements with Dealers exceeds $500,000 per
month, times (ii) a fraction the numerator of which is the Adjusted Invested
Amount and the denominator of which is the aggregate adjusted invested amounts
of
<PAGE>
all outstanding Series and Purchased Interests (including adjusted invested
amounts relating to the Concentration Pool), in each case determined as of the
related Determination Date (such product, the "Excess Receivables") shall also
be added to the Incremental Subordinated Amount, together with certain other
Receivables exceeding percentage limits as specified in the Pooling and
Servicing Agreement. These percentages and dollar limits may be increased from
time to time subject to each Rating Agency confirming that such increase will
not result in a downgrade or withdrawal of its ratings assigned to the
Certificates.
"Adjusted Invested Amount" means, with respect to Series 1996-2 on any
date of determination, the amount necessary so that the Series 1996-2
Allocation Percentage (calculated in accordance with the definition
thereof) will equal the Target 1996-2 Allocation Percentage (calculated as
of the last day of the Collection Period immediately preceding such date of
determination). Using an iterative process to derive the appropriate
numbers, the Servicer will calculate the Adjusted Invested Amount by
reference to the Target 1996-2 Allocation Percentage, the Target 1996-2
Adjusted Invested Amount and the Target Adjusted Invested Amount.
"Target 1996-2 Adjusted Invested Amount" means, on any date of
determination, an amount equal to (a) (i) during the Revolving Period, the
Invested Amount as of the last day of the Collection Period immediately
preceding such day or (ii) during the Accumulation Period or an Early
Amortization Period, the Invested Amount as of the last day of the
Revolving Period minus (b) the amount of all unreimbursed Investor
Charge-Offs on such day plus (c) the Available Subordinated Amount (after
giving effect to the allocations, distributions, withdrawals and deposits
to be made on such day).
"Target 1996-2 Allocation Percentage" means, on any date of
determination, the percentage equivalent of a fraction, the numerator of
which is the Target 1996-2 Adjusted Invested Amount and the denominator of
which is the sum of (i) the Target 1996-2 Adjusted Invested Amount and the
Target Adjusted Invested Amounts for each other Series which is not a
Concentration Series.
"Target Adjusted Invested Amount" means, on any date of determination
for each Series which is outstanding (other than Series 1996-2), an amount
with respect to such Series which is equal to (a) (i) during its revolving
period, the invested amount as of the last day of the Collection Period
immediately preceding such day or (ii) during its accumulation period or
any early amortization period, the invested amount of such Series as of the
last day of its revolving period minus (b) the amount of all unreimbursed
Investor Charge-Offs on such day with respect to such Series plus (c) the
available subordinated amount for such Series (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on such
day).
ADDITION OF ACCOUNTS
Subject to the conditions described below, the Transferor has the right to
designate from time to time additional accounts to be included as Accounts (the
"Additional Accounts"). In addition, the Transferor is required to add the
Receivables of Additional Accounts if either (i) the Pool Balance or the Regular
Pool Balance, respectively, on the last day of any Collection Period is less
than the Minimum Receivables Amount or the Regular Minimum Receivables Amount,
respectively, as of the following Distribution Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on such
Distribution Date) or (ii) the Regular Transferor Amount is less than 2% of the
Regular Pool Balance on such last day. In either case, unless certain insolvency
events have occurred with respect to the Transferor or WOFCO, WOFCO under the
Receivables Purchase Agreement will be required (subject to certain limitations
and conditions regarding WOFCO described above in "Risk Factors -- Release of
Liens Under Existing Credit Arrangements") to sell to the Transferor, and the
Transferor under the Pooling and Servicing Agreement will be required to
transfer and assign to the Trust, within 15 business days after the end of such
Collection Period, interests in all Receivables arising in such Additional
Accounts, whether such Receivables are then existing or thereafter created. Any
designation of Additional Accounts is subject to the following conditions, among
others: (i) each such Additional Account must be an Eligible Account; (ii) the
Transferor shall represent and warrant that the addition of such Additional
Accounts shall not, in the reasonable belief of the Transferor, cause an Early
Amortization Event to occur, (iii) the Transferor shall not select such
Additional Accounts in a manner that it believes is adverse to the interests of
the certificateholders, the Purchasers or any
<PAGE>
Enhancement Provider, and (iv) solely in the event that, (A) unless certain
Rating Agency conditions are met, if in any twelve-month period, the percentage
derived by dividing the aggregate balance of all Receivables arising in
Additional Accounts added during that twelve-month period, as of the date of
such designation, by the Pool Balance at the beginning of such twelve-month
period exceeds 20% at any time, or (B) if, during any fiscal quarter the
percentage derived by dividing the aggregate balance of Receivables arising in
Additional Accounts added during that quarter, as of the date of such
designation, by the Pool Balance at the beginning of such fiscal quarter,
exceeds 10% at any time, then in either case the applicable Rating Agencies
shall have provided written confirmation that such addition will not result in a
reduction or withdrawal of the rating of the Certificates or any other
outstanding Series or class of certificates or Purchased Interest.
Each Additional Account must be an Eligible Account at the time of its
addition. However, because Additional Accounts may not have been a part of the
initial portfolio of WOFCO, they may not be of the same credit quality as the
initial Accounts. As a result of changing market conditions over time,
Additional Accounts may have been originated by WOFCO at a later date using
credit criteria different from those which were applied to the initial Accounts.
However, WOFCO will covenant in the Receivables Purchase Agreement not to make
any change in its credit criteria with respect to the Accounts if such change
would have a material adverse effect on the Certificateholders.
"Minimum Receivables Amount" for any date will mean an amount equal to
the sum of (a) for each Series or Purchased Interest, the initial invested
amount of such Series or Purchased Interest minus the amount of any
deposits into its portion of the Excess Funding Account in connection with
a reduction in the Pool Balance plus the amount of any withdrawals from its
portion of the Excess Funding Account in connection with an increase in the
Pool Balance plus (b) the Trust Available Subordinated Amount on the
immediately preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date following such Determination Date) plus (c) the Minimum
Transferor Amount.
"Regular Minimum Receivables Amount" for any date will mean an amount
equal to the sum of (a) for each Series or Purchased Interest (excluding
any Concentration Series), the initial invested amount of such Series or
Purchased Interest minus the amount of any deposits into its portion of the
Excess Funding Account in connection with a reduction in the Regular Pool
Balance plus the amount of any withdrawals from its portion of the Excess
Funding Account in connection with an increase in the Regular Pool Balance
plus (b) the Regular Trust Available Subordinated Amount on the immediately
preceding Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the Distribution Date
following such Determination Date) plus (c) the Regular Minimum Transferor
Amount.
REMOVAL OF ACCOUNTS
The Transferor shall have the right at any time to require the removal from
the Trust of Eligible Accounts, including all amounts then held by the Trust or
thereafter received by the Trust in respect of the Eligible Accounts to be
removed. To remove any Eligible Account and such amounts, the Transferor (or the
Servicer on its behalf) shall, among other things, (a) on or before the fifth
business day prior to the date of removal (the "Removal Date"), furnish to the
Trustee, any Enhancement Provider and the Rating Agencies a written notice (the
"Removal Notice") specifying the Removal Date; (b) on or before the fifth
business day after the Removal Date, the Transferor shall have furnished to the
Trustee a computer file, microfiche list or other list of the Accounts (the
"Removed Accounts") that were removed on the Removal Date, specifying for each
Removed Account as of the date of the Removal Notice its number and the
aggregate amount of Principal Receivables therein; (c) represent and warrant
that the removal of any such Eligible Account on the Removal Date will not, in
the reasonable belief of the Transferor, cause an Early Amortization Event to
occur or cause either (i) the Pool Balance to be less than the Minimum
Receivables Amount or (ii) the Regular Pool Balance to be less than the Regular
Minimum Receivables Amount; (d) represent and warrant that no selection
procedures believed by the Transferor to be adverse to the interest of the
certificateholders or Purchasers were utilized in selecting the Removed
Accounts; (e) represent and warrant that the Rating
<PAGE>
Agencies shall have been advised of such removal and shall not have notified the
Transferor or the Servicer that such removal will result in a reduction or
withdrawal of the rating of the Certificates or any other outstanding Series or
class of certificates or Purchased Interest; and (f) on or before the related
Removal Date, deliver to the Trustee and any Enhancement Provider an officers'
certificate confirming the items set forth in clauses (c), (d) and (e) above.
Upon satisfaction of the above conditions, the Trustee shall execute and
deliver to the Transferor a written reassignment and shall be deemed to reconvey
to the Transferor or its designee, without recourse, representation or warranty,
all the right, title and interest of the Trust in and to the Receivables arising
in the Removed Accounts, all amounts received or to be received with respect
thereto and all proceeds thereof.
COLLECTION ACCOUNT
The Servicer has caused to be established and maintained an Eligible
Deposit Account for the benefit of certificateholders and Purchasers in the name
of the Trustee, on behalf of the Trust (the "Collection Account"). "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 or trust company organized under the laws
of the United States 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 or trust company has a credit
rating from each Rating Agency in one of its generic rating categories which
signifies investment grade. "Eligible Institution" means (a) the corporate trust
department of the Trustee or (b) a depository institution or trust company
organized under the laws of the United States or any one of the states thereof
or the District of Columbia (or a domestic branch of a foreign bank) which at
all times (i) has either (x) a long-term unsecured debt rating acceptable to
each Rating Agency or (y) a certificate of deposit rating acceptable to each
Rating Agency and (ii) is a member of the FDIC. Funds in the Collection Account
generally will be invested in (i) direct obligations of, and obligations fully
guaranteed as to the full and timely payment of principal and interest by the
United States or any agency or instrumentality, (ii) demand deposits, time
deposits, bankers' acceptances or certificates of deposit of depository
institutions or trust companies incorporated under the laws of the United States
or any state of the United States (or any domestic branch of a foreign bank) and
insured by the FDIC, (iii) repurchase obligations held by the Trustee with
respect to any security described in clause (i) of this sentence, or any other
security issued or guaranteed by the United States or any agency or
instrumentality thereof, (iv) investments in commercial paper and, following the
Closing Date, money market funds which have the highest rating from, or have
otherwise been approved in writing by, each Rating Agency and (vii) other
investments acceptable to the Rating Agency as being consistent with the
then-current rating of the Certificates (collectively, "Eligible Investments").
Any earnings (net of losses and investment expenses) on funds in the Collection
Account will be credited to the Collection Account. The Servicer will have the
revocable power to instruct the Trustee to make investments and withdrawals and
payments from the Collection Account for the purpose of carrying out its duties
under the Pooling and Servicing Agreement.
EXCESS FUNDING ACCOUNT
The Servicer has caused to be established and maintained an Eligible
Deposit Account for the benefit of certificateholders and Purchasers in the name
of the Trustee, on behalf of the Trust (the "Excess Funding Account"). During
the Revolving Period, Available Certificateholder Principal Collections (to the
extent available therefor as described herein) will be deposited daily in the
Excess Funding Account and allocated to Series 1996-2 in an amount equal to the
excess, if any, of (a) the sum of (i) the Invested Amount, calculated as of the
last day of the previous Collection Period and (ii) the Available Subordinated
Amount (excluding the Incremental Subordinated Amount) on such day over (b) the
product of the Series 1996-2 Allocation Percentage and the Regular Pool Balance
on such date, multiplied by 98%. Funds on deposit in the Excess Funding Account
and allocable to Series 1996-2 will be withdrawn and paid to the Transferor
daily or allocated to one or more Series or Purchased Interests which are in
amortization, early amortization or accumulation periods to the extent of any
increases in the Certificateholders' Interest in the Regular Pool
<PAGE>
Balance as a result of the addition of Receivables to the Trust. The allocation
of additional Receivables to increase the Invested Amount and the invested
amounts of such other Series or Purchased Interests (other than any
Concentration Series) will be based on the general allocation provisions for the
Trust.
Any funds on deposit in the Excess Funding Account allocable to Series
1996-2 at the beginning of the Accumulation Period will be deposited in the
Principal Funding Account. In addition, no funds will be deposited in the Excess
Funding Account and allocated to Series 1996-2 during the Accumulation Period or
any Early Amortization Period, and certain funds on deposit in the Excess
Funding Account will be withdrawn and paid to Certificateholders if an Asset
Composition Event occurs.
Funds on deposit in the Excess Funding Account will be invested by the
Trustee at the direction of the Servicer in investments rated in the highest
short-term category of each Rating Agency or in such other investments as are
acceptable to each Rating Agency. Such investments are required to mature by the
next Distribution Date. On each Distribution Date, all net investment income
earned on amounts in the Excess Funding Account since the preceding Distribution
Date will be withdrawn from the Excess Funding Account and applied as described
under "-- Distributions from the Collection Account; Reserve Fund -- Interest
Collections."
ALLOCATION PERCENTAGES
Allocations Among Pools. Pursuant to the Pooling and Servicing Agreement,
during each Collection Period, the Servicer will first allocate Collections and
Defaulted Receivables, between the Concentration Pool Balance and the Regular
Pool Balance. With respect to each Concentrated Account, the product of (i)
Principal Collections from, Miscellaneous Payments relating to, and Defaulted
Receivables in, such Concentrated Account on each day during the Collection
Period, and (ii) the Concentration Percentage applicable on such day for such
Concentrated Account, will be allocated to the Concentration Pool Balance.
Interest Collections received from each Dealer during a Collection Period will
be allocated on the related Determination Date between the Concentration Pool
and the Regular Pool based on such Dealer's average concentration percentage,
calculated as set forth below. The portion of such Interest Collections
allocated to the Concentration Pool will equal the product of (x) such Interest
Collections and (y) a fraction, the numerator of which is the excess, if any, of
(i) the average daily outstanding balance of Receivables in such Account during
the Collection Period preceding such Collection Period over (ii) the product of
2% (or, with respect to each Account which is one of fifteen Accounts with the
largest average principal balances during such preceding Collection Period, 3%)
and the average daily Pool Balance during such preceding Collection Period, and
the denominator of which is the average daily Pool Balance during such preceding
Collection Period.
All Collections not allocated to the Concentration Pool Balance will be
allocated to the Regular Pool Balance.
"Concentrated Account" means, on any date of determination, any
Account with respect to which a Concentration Amount exists.
"Concentration Amount" means, with respect to any Account on any date
of determination, the aggregate amount of Receivables (other than
Ineligible Receivables) in such account on such day minus the product of
(i) the Concentration Limit and (ii) the aggregate amount of Principal
Receivables included in the Trust on such day; provided that if an Early
Amortization Event described in paragraph 11 under "Description of the
Certificates -- Early Amortization Events" occurs, the Concentration Amount
will instead equal the product of (x) the aggregate amount of Principal
Receivables (other than Ineligible Receivables) in such Account multiplied
by (y) the Concentration Percentage as of the last day prior to the day
upon which the condition giving rise to that Early Amortization Event
arose.
"Concentration Limit," with respect to any Account on any day, means
2% (or, with respect to each Account which is one of fifteen Accounts with
the largest average principal balances during such
<PAGE>
preceding Collection Period, 3%). Under the Pooling and Servicing
Agreement, these percentages may be increased if each Rating Agency
confirms that such increase will not lead to a downgrade or withdrawal of
its rating of either Class of the Certificates.
"Concentration Percentage," with respect to each Concentrated Account
on any day, means the percentage obtained by dividing (i) the Concentration
Amount in that Account as of the close of business on the preceding day by
(ii) the aggregate amount of Receivables in such Account on such preceding
day, except (a) in the case of a Concentrated Account which is in "finance
hold" status, in which case the Concentration Percentage at all times will
be equal to the percentage obtained by dividing (i) the Concentration
Amount in such Account as of the close of business on the day preceding the
day the Account was placed on "finance hold" by (ii) the aggregate
principal amount of Receivables in such Account on such day and (b) in the
case of all Concentration Accounts, if an Early Amortization Event
described in paragraph 11 under "Description of the Certificates -- Early
Amortization Events" occurs, in which case the Concentration Percentage for
each Account will be fixed at the Concentration Percentage (which may be
zero) that was in effect for that Account as of the last day prior to the
day upon which the condition giving rise to that Early Amortization Event.
"Concentration Pool" means, collectively, those portions of each
Concentration Account attributable to the Concentration Amounts.
"Concentration Pool Balance" on any day means the aggregate of all
Concentration Amounts.
"Concentration Series" means any Series or Purchased Interest of the
Trust on which payments may be made, in whole or in part, from Collections
allocable to the Concentration Pool.
"Regular Pool Balance," as of any date of determination, means the
Pool Balance minus the Concentration Pool Balance.
Allocation to the Certificateholders' Interest. On each Determination Date,
the Servicer will allocate the portion of Collections and Defaulted Amounts
allocated during the Collection Period to the Regular Pool Balance to the
Certificateholders' Interest for each Collection Period as follows:
(i) Interest Collections and the Defaulted Amount allocated to the
Regular Pool Balance will be allocated to the Certificateholders' Interest
based on the Floating Allocation Percentage;
(ii) during the Revolving Period, Principal Collections allocated to
the Regular Pool Balance will be allocated the Certificateholders' Interest
based on the Floating Allocation Percentage;
(iii) during the Accumulation Period and any Early Amortization
Period, Principal Collections allocated to the Regular Pool Balance will be
allocated to the Certificateholders' Interest based on the Principal
Allocation Percentage; and
(iv) Miscellaneous Payments allocable to Series 1996-2 will at all
times be allocated to Certificateholders.
Amounts not allocated to the Certificateholders as described above will be
allocated to the Transferor.
"Class A Initial Principal Amount" means, on the Closing Date,
$167,500,000.
"Class A Principal Amount" means, as of the last day of the previous
Collection Period, the Class A Initial Principal Amount minus the sum of
(i) the aggregate amount of principal payments made to Class A
Certificateholders and (ii) the aggregate amount of unreimbursed Class A
Investor Charge-Offs (which will not occur unless and until the Class B
Principal Amount is reduced to zero as a result of Class B Investor
Charge-Offs); provided that the Class A Principal Amount will in no event
be less than zero.
"Class B Initial Principal Amount" means, on the Closing Date,
$7,500,000.
"Class B Principal Amount" means, as of the last day of the previous
Collection Period, the Class B Initial Principal Amount minus the sum of
(i) the aggregate amount of principal payments made to
<PAGE>
Class B Certificateholders following payment in full of the Class A
Principal Amount and (ii) the aggregate amount of unreimbursed Class B
Investor Charge-Offs; provided that the Class B Principal Amount will in no
event be less than zero.
"Floating Allocation Percentage" for any Collection Period means the
percentage equivalent (which shall never exceed 100%) of a fraction, the
numerator of which is the Invested Amount as of the last day of the
immediately preceding Collection Period and the denominator of which is the
Regular Pool Balance as of such last day; provided, however, that, with
respect to the first Collection Period, the Floating Allocation Percentage
shall mean the percentage equivalent of a fraction, the numerator of which
is the Invested Amount and the denominator of which is the Regular Pool
Balance on the Closing Date; provided further, however, that the Floating
Allocation Percentage on the Closing Date and until the second
Determination Date thereafter will not exceed the Transferor Percentage at
such time minus 2%.
"Initial Invested Amount" means, on the Closing Date, the sum of the
Class A Initial Principal Amount and the Class B Initial Principal Amount
minus amounts deposited in the Excess Funding Account on the Closing Date.
"Invested Amount" means, on any date of determination, the Initial
Invested Amount minus the sum of (i) the amounts deposited in the Excess
Funding Account and available for Series 1996-2 in connection with a
reduction in Principal Receivables, (ii) the amount of principal payments
(except principal payments made from the Series 1996-2 portion of the
Excess Funding Account and transfers made from the Series 1996-2 portion of
the Excess Funding Account to the Principal Funding Account) made to
Certificateholders or deposited in the Principal Funding Account prior to
such date of determination and (iii) the aggregate amount of unreimbursed
Class A Investor Charge-Offs and Class B Investor Charge-Offs for all
previous Distribution Dates and plus the amount of any withdrawals from the
Excess Funding Account allocable to Series 1996-2 in connection with an
increase in Principal Receivables.
"Miscellaneous Payments" for any Collection Period means the sum of
(a) Adjustment Payments and Transfer Deposit Amounts received with respect
to such Collection Period and (b) Unallocated Principal Collections on such
Distribution Date available to be treated as Miscellaneous Payments as
described below under "-- Principal Collections."
"Principal Allocation Percentage" for any Collection Period during the
Accumulation Period and any Early Amortization Period means the percentage
equivalent (which shall never exceed 100%) of a fraction, the numerator of
which is the Invested Amount as of the last day of the Revolving Period and
the denominator of which is the greater of (x) the Regular Pool Balance as
of the last day of the immediately preceding Collection Period and (y) the
sum of the numerators used to calculate (i) for any Series or Purchased
Interest in its revolving period, the floating allocation percentage with
respect to Collections allocable to the Regular Pool Balance, and (ii) for
any Series or Purchased Interest in its accumulation period or an early
amortization period, the principal allocation percentage with respect to
Collections allocable to the Regular Pool Balance.
"Regular Trust Adjusted Invested Amount" means, with respect to any
Collection Period, the sum of the Adjusted Invested Amount and the adjusted
invested amounts for all other outstanding Series and Purchased Interests,
other than any adjusted invested amount relating to the Concentration Pool.
"Regular Trust Available Subordinated Amount" means the sum of the
Available Subordinated Amount and the aggregate available subordinated
amounts for all other outstanding Series and Purchased Interests, other
than any available subordinated amount related to the Concentration Pool.
"Series 1996-2 Allocation Percentage" means, for any Collection
Period, the percentage equivalent of a fraction, the numerator of which is
the Adjusted Invested Amount as of the last day of the immediately
preceding Collection Period and the denominator of which is the Regular
Trust Adjusted Invested Amount as of such last day, in each case excluding
any invested amount relating to the Concentration Pool.
<PAGE>
"Trust Available Subordinated Amount" means the sum of the Available
Subordinated Amount and the aggregate available subordinated amounts for
all other outstanding Series and Purchased Interests.
The Floating Allocation Percentage and the Principal Allocation Percentage
will be adjusted for any Collection Period in which Additional Accounts are
designated to reflect the additional Receivables added to the Trust.
Principal Collections. Principal Collections allocated to the
Certificateholders' Interest for any Collection Period with respect to the
Accumulation Period or any Early Amortization Period, will first be applied to
make required payments of principal to the Principal Funding Account during the
Accumulation Period and to the Certificateholders during the Early Amortization
Period. See "Distributions from the Collection Account; Reserve Fund --
Principal Collections" and "Distributions." The Servicer will determine the
amount of Available Certificateholder Principal Collections for any Collection
Period remaining after such required payments and the amount of any similar
excess for any other Series or Purchased Interests ("Shared Principal
Collections"). The Servicer will allocate Shared Principal Collections to cover
any principal distributions to certificateholders for any Series or to
Purchasers of Purchased Interests which are either scheduled or permitted and
which have not been covered out of Principal Collections and certain other
amounts allocated to such Series or Purchased Interest ("Principal Shortfalls").
Shared Principal Collections will generally not be used to cover investor charge
offs for any Series or Purchased Interest. If Principal Shortfalls exceed Shared
Principal Collections for any Collection Period, Shared Principal Collections
will be allocated pro rata among the applicable Series and Purchased Interests
based on the relative amounts of Principal Shortfalls. To the extent that Shared
Principal Collections exceed Principal Shortfalls, the balance will be paid to
the Transferor if either the Transferor Amount or the Regular Transferor Amount
(determined after giving effect to any Principal Receivables transferred to the
Trust on such date) exceeds the sum of the Trust Available Subordinated Amount
or the Regular Trust Available Subordinated Amount, respectively, for the
immediately preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date) and the Minimum
Transferor Amount or the Regular Minimum Transferor Amount, respectively. Any
amount not paid to the Transferor because either (i) the Transferor Amount does
not exceed the sum of the Trust Available Subordinated Amount and the Minimum
Transferor Amount or (ii) the Regular Transferor Amount does not exceed the sum
of the Regular Trust Available Subordinated Amount and the Regular Minimum
Transfer Amount will be held unallocated ("Unallocated Principal Collections")
until either (i) the Transferor Amount exceeds the sum of the Trust Available
Subordinated Amount and the Minimum Transferor Amount or (ii) the Regular
Transferor Amount exceeds the sum of the Regular Trust Available Subordinated
Amount and the Regular Minimum Transferor Amount, as applicable, at which time
such amount will be allocated to the Transferor, unless an early amortization
event occurs or an amortization period commences for any Series, after which
such amount will be treated as a Miscellaneous Payment and allocated among all
outstanding Series and Purchased Interests in accordance with their respective
adjusted invested amounts. As used herein, "Regular Minimum Transferor Amount"
means the product of the Regular Pool Balance and the Series 1996-2 Allocation
Percentage multiplied by 2%. "Minimum Transferor Amount" means the product of
the Pool Balance and the Series 1996-2 Allocation Percentage multiplied by 2%.
ALLOCATION OF COLLECTIONS; DEPOSITS IN COLLECTION ACCOUNT; LIMITED SUBORDINATION
OF TRANSFEROR INTEREST
The Servicer, no later than two business days after the processing date,
will deposit all collections received with respect to the Receivables
(excluding, with certain exceptions, certain portions thereof allocable to the
Transferor) in each Collection Period into the Collection Account.
Notwithstanding the foregoing requirement for daily deposits, for so long as (i)
WOFCO remains the Servicer under the Pooling and Servicing Agreement, (ii) no
Servicer Default has occurred and is continuing and (iii) (x) WOFCO arranges for
and maintains a letter of credit or other form of Enhancement in respect of the
Servicer's obligation to make deposits of collections on the Receivables in the
Collection Account that is acceptable in form and substance to each Rating
Agency or (y) WOFCO otherwise obtains the Rating Agency confirmations described
below, then, subject to any limitations in the confirmations referred to below,
during the Revolving Period WOFCO need not deposit collections constituting
Principal Collections into the Collection Account on
<PAGE>
the day indicated in the preceding sentence but may use such Principal
Collections (other than any amounts required to be deposited in the Excess
Funding Account) until the business day immediately preceding the related
Distribution Date, at which time WOFCO will make such deposits in an amount
equal to the net amount of such deposits and withdrawals which would have been
made had the conditions of this sentence not applied; provided, however, that
prior to ceasing daily deposits as described above the Transferor shall have
delivered to the Trustee written confirmation from the Rating Agencies that the
failure by WOFCO to make daily deposits of Principal Collections will not result
in a reduction or withdrawal of the rating of the Certificates or any other
outstanding Series or class of certificates or Purchased Interest.
In addition, during any Collection Period the Servicer will generally be
required to deposit Interest Collections and Principal Collections into the
Collection Account only to the extent of the distributions required to be made
to certificateholders, the amount required to be deposited into the Excess
Funding Account or any other deposit, trust, reserve or similar account
maintained for the benefit of certificateholders and Purchasers and the amounts
required to be paid to any Enhancement Provider on the Distribution Date
relating to such Collection Period and if, at any time prior to such
Distribution Date, the amount of collections deposited in the Collection Account
exceeds the amount required to be deposited, the Servicer will be permitted to
withdraw such excess from the Collection Account.
On any date on which all collections are deposited in the Collection
Account, the Servicer will distribute directly to the Transferor an amount equal
to (a) the Excess Transferor Percentage for the related Collection Period of
Interest Collections allocable to the Regular Pool for such date and (b) the
Excess Transferor Percentage for the related Collection Period of Principal
Collections allocable to the Regular Pool for such date, if the Regular
Transferor Amount (determined after giving effect to any Principal Receivables
transferred to the Trust on such date) exceeds the sum of the Regular Trust
Available Subordinated Amount for the immediately preceding Determination Date
(after giving effect to the allocations, distributions, withdrawals and deposits
to be made on the Distribution Date immediately following such Determination
Date) and the Regular Minimum Transferor Amount. In addition, during the
Revolving Period, subject to certain limitations, the Servicer will distribute
directly to the Transferor, or as may otherwise be provided in any Supplement
for another Series, on each such date of deposit an amount equal to the
Available Transferor Collections for such date, if the Regular Transferor Amount
(determined after giving effect to any Principal Receivables transferred to the
Trust on such date) exceeds the sum of the Regular Trust Available Subordinated
Amount for the immediately preceding Determination Date and the Regular Minimum
Transferor Amount (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the Distribution Date immediately
following such Determination Date).
"Available Transferor Collections" for any date means the sum of (a)
the Available Transferor Interest Collections for such date and (b) the
Available Transferor Principal Collections for such date; provided,
however, that the Available Transferor Collections will be zero for any
Collection Period with respect to which the Available Subordinated Amount
is zero on the Determination Date immediately following the end of such
Collection Period.
"Available Transferor Interest Collections" for any date means an
amount equal to the result obtained by multiplying (a) the excess of (i)
the Transferor Percentage for the related Collection Period over (ii) the
Excess Transferor Percentage for such Collection Period by (b) Interest
Collections allocable to the Regular Pool Balance for such date.
"Available Transferor Principal Collections" for any date means an
amount equal to the product of (a) the excess of (i) the Transferor
Percentage for the related Collection Period over (ii) the Excess
Transferor Percentage for such Collection Period and (b) Principal
Collections allocable to the Regular Pool Balance for such date.
"Excess Transferor Percentage" for any Collection Period means a
percentage (which percentage shall never be less than 0% nor more than
100%) equal to 100% minus (a) when used with respect to Interest
Collections allocable to the Regular Pool Balance, the sum of (i) the
aggregate of the floating allocation percentages for each Series and
Purchased Interest (other than any floating allocation percentage relating
to the Concentration Pool) with respect to such Collection Period and (ii)
the
<PAGE>
percentage equivalent of a fraction, the numerator of which is the
aggregate of the available subordinated amounts for each outstanding Series
and Purchased Interest (other than any available subordinated amount
relating to the Concentration Pool) as of the Determination Date occurring
in the immediately preceding Collection Period (after giving effect to the
allocation, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date), and the
denominator of which is the Regular Pool Balance as of the last day of such
immediately preceding Collection Period or (b) when used with respect to
Principal Collections allocable to the Regular Pool Balance, the sum of (i)
the aggregate of the principal allocation percentages of each Series and
Purchased Interest (other than any principal allocation percentages
relating to the Concentration Pool) in its amortization, accumulation, or
early amortization period and the aggregate of the floating allocation
percentages for each Series and Purchased Interest (other than any floating
allocation percentage relating to the Concentration Pool) in its revolving
period with respect to such Collection Period and (ii) the percentage
described in clause (a)(ii) above for such Collection Period.
"Regular Transferor Amount" for any date means an amount equal to the
Regular Pool Balance on such date minus the aggregate invested amounts for
all outstanding Series and Purchased Interests (other than any invested
amount relating to Concentration Pool) on such date.
"Transferor Amount" for any date means an amount equal to the Pool
Balance on such date minus the aggregate of invested amounts for all
outstanding Series and Purchased Interests on such date.
"Transferor Percentage" means 100% minus (a) when used with respect to
Interest Collections allocable to the Regular Pool Balance, the aggregate
of the floating allocation percentages for all Series and Purchased
Interests (other than any floating allocation percentage relating to the
Concentration Pool), and (b) when used with respect to Principal
Collections allocable to the Regular Pool Balance, the sum of the aggregate
of the principal allocation percentages of each Series and Purchased
Interest (other than any principal allocation percentages relating to the
Concentration Pool) in its amortization, accumulation, or early
amortization period and the aggregate of the floating allocation
percentages for each Series and Purchased Interest (other than any floating
allocation percentage relating to the Concentration Pool) in its revolving
period with respect to such Collection Period.
Deficiency Amount. On each Determination Date, the Servicer will determine
for the Certificates the amount (the "Deficiency Amount"), if any, by which (a)
the sum of (i) the Class A Monthly Interest and the Class B Monthly Interest for
the following Distribution Date, (ii) the Class A Monthly Interest and the Class
B Monthly Interest accrued but not paid with respect to prior Distribution Dates
(and interest thereon at the rates set forth herein to the extent permitted by
law), (iii) the Monthly Servicing Fee (unless waived) for such Distribution
Date, (iv) the Investor Default Amount for such Distribution Date, and (v) the
amount (the "Monthly Dilution Amount") of any Adjustment Payment allocated to
the Certificates for such Distribution Date that has not been deposited in the
Collection Account as required under the Pooling and Servicing Agreement,
exceeds (b) the sum of (i) Certificateholder Interest Collections and Investment
Proceeds for such Distribution Date and (ii) the amount of funds in the Reserve
Fund on such Distribution Date available to fund the amount by which the amount
in clause (a) exceeds the amount in clause (b)(i) above. See "-- Distributions
from the Collection Account; Reserve Fund -- Interest Collections." If there is
a Deficiency Amount, then the lesser of (x) the Deficiency Amount and (y) the
Available Subordinated Amount is the "Draw Amount." In the event any Shortfall
Amount or Carry-Over Amount remains outstanding at such time as the Invested
Amount is paid in full, then the Draw Amount for such Distribution Date (after
such payment of the Invested Amount) and subsequent Distribution Dates shall
include any Carry-Over Amount, until such Carry-Over Amounts have been paid in
full.
"Class A Monthly Interest" for any Distribution Date shall mean an
amount equal to (a) the actual number of days in the related Interest
Period divided by 360 multiplied by (b) the product of (x) the Class A
Certificate Rate and (y) the outstanding principal balance of the Class A
Certificates as of the close of business on the preceding Distribution Date
(or, in the case of the first Distribution Date, on the Closing Date) after
giving effect to all repayments of principal made to the Class A
Certificateholders on such preceding Distribution Date, if any.
<PAGE>
"Class B Monthly Interest" for any Distribution Date shall mean an
amount equal to (a) the actual number of days in the related Interest
Period divided by 360 multiplied by (b) the product of (x) the Class B
Certificate Rate and (y) the outstanding principal balance of the Class B
Certificates as of the close of business on the preceding Distribution Date
(or, in the case of the first Distribution Date, on the Closing Date) after
giving effect to all repayments of principal made to the Class B
Certificateholders on such preceding Distribution Date, if any.
Required Subordinated Amount. The "Required Subordinated Amount" shall
mean, as of any date of determination, either (A) if the amount on deposit in
the Series 1996-2 portion of the Excess Funding Account equals zero, the sum of
(i) the product of the Subordinated Percentage and the sum of the Class A
Principal Amount and the Class B Principal Amount and (ii) the Incremental
Subordinated Amount or (B) if the amount on deposit in the Series 1996-2 portion
of the Excess Funding Account is greater than zero, the sum of (i) the
Incremental Subordinated Amount plus (ii) the product of 4% multiplied by the
Regular Pool Balance multiplied by the Series 1996-2 Allocation Percentage and
multiplied by 98%; provided, however, that for any Determination Date following
the end of the Revolving Period, or on any Determination Date on which a
Carry-Over Amount exists, the Required Subordinated Amount shall in no event be
less than an amount equal to the Subordinated Percentage of the Initial
Principal Amount of the Certificates. The "Subordinated Percentage" will equal
the percentage equivalent of a fraction, the numerator of which is 4% and the
denominator of which will be the excess of 100% over 4%.
Available Subordinated Amount. The "Available Subordinated Amount" for any
day is equal to the lesser of (a) the Required Subordinated Amount for the
current date and (b) the Available Subordinated Amount for the preceding
Determination Date, minus (i) with certain limitations, the Draw Amount for the
preceding Distribution Date, minus (ii) funds from the Reserve Fund applied to
cover any portion of the Investor Default Amount, minus (iii) the Subordinated
Percentage of funds added or to be added to the Series 1996-2 portion of the
Excess Funding Account in the period from the preceding Distribution Date to the
current Distribution Date, plus (iv) the Subordinated Percentage of funds
withdrawn or to be withdrawn from the Series 1996-2 portion of the Excess
Funding Account in the period from the preceding Distribution Date to the
current Distribution Date and paid to the Transferor or allocated to one or more
Series or Purchased Interests, plus (v) the amount of Excess Interest available
to be paid to the Transferor as described under "-- Distributions from the
Collection Account; Reserve Fund -- Excess Interest," minus (vi) the Incremental
Subordinated Amount for such preceding Determination Date, plus (vii) the
Incremental Subordinated Amount for the current day. The Available Subordinated
Amount for the first Determination Date will be equal to the Required
Subordinated Amount.
The "Incremental Subordinated Amount" on any Determination Date will equal
the sum of (i) the excess of the aggregate amount of Ineligible Receivables on
such date over the aggregate amount of Ineligible Receivables that became
Defaulted Receivables during the preceding Collection Period and are subject to
reassignment from the Trust, unless certain insolvency events relating to the
Transferor or WOFCO have occurred, as further described in the Pooling and
Servicing Agreement and (ii) the Excess Receivables for the Collection Period
related to that Determination Date.
The Transferor may, in its sole discretion, at any time increase the
Available Subordinated Amount for so long as the cumulative amount of such
increases does not exceed the lesser of (i) $1,925,000 or (ii) 1.1% of the
Invested Amount on such date. The Transferor is not under any obligation to
increase the Available Subordinated Amount at any time. If the Available
Subordinated Amount were reduced to less than the Required Subordinated Amount,
an Early Amortization Event would occur. The Transferor could elect to increase
the Available Subordinated Amount at the time such an Early Amortization Event
would otherwise occur, thus preventing or delaying the occurrence of the Early
Amortization Event.
<PAGE>
DISTRIBUTIONS FROM THE COLLECTION ACCOUNT; RESERVE FUND
Interest Collections. On each Distribution Date, the Trustee will apply
Certificateholder Interest Collections and Investment Proceeds in respect of the
related Collection Period to make the following distributions in the following
order of priority:
(i) an amount equal to Class A Monthly Interest for such Distribution
Date, plus the amount of any Class A Monthly Interest previously due but
not distributed on a prior Distribution Date (plus, but only to the extent
permitted under applicable law, interest at the applicable Class A
Certificate Rate plus 200 basis points (2.0%) on Class A Monthly Interest
previously due but not distributed), shall be paid to Class A
Certificateholders;
(ii) an amount equal to Class B Monthly Interest for such Distribution
Date, plus the amount of any Class B Monthly Interest previously due but
not distributed on a prior Distribution Date (plus, but only to the extent
permitted under applicable law, interest at the applicable Class B
Certificate Rate plus 200 basis points (2.0%) on Class B Monthly Interest
previously due but not distributed), shall be paid to Class B
Certificateholders;
(iii) an amount equal to the Monthly Servicing Fee for such
Distribution Date shall be distributed to the Servicer (unless such amount
has been netted against deposits to the Collection Account as described
above or waived as described below);
(iv) an amount equal to the Reserve Fund Deposit Amount, if any, for
such Distribution Date shall be deposited in the Reserve Fund;
(v) an amount equal to the sum of the Investor Default Amount, if any,
and the Monthly Dilution Amount, if any, for such Distribution Date shall
be treated as a portion of Available Certificateholder Principal
Collections for such Distribution Date;
(vi) an amount equal to the sum of any Shortfall Amount and any
accrued and unpaid Carry-Over Amount shall be paid first to the Class A
Certificateholders and then to the Class B Certificateholders; and
(vii) the balance shall constitute Excess Interest.
If such Certificateholder Interest Collections and Investment Proceeds are
not sufficient to make the entire distributions required by clauses (i), (ii),
(iii) and (v), the Trustee shall withdraw funds from the Reserve Fund and apply
such funds to complete, to the extent available, the distributions pursuant to
such clauses in the numerical order thereof; provided that during an Early
Amortization Period, the application of funds in the Reserve Fund to cover the
amount in clause (v) will be reduced or eliminated to the extent necessary to
maintain the amount in the Reserve Fund at least equal to $1,000,000. If, after
application of Certificateholder Interest Collections pursuant to clause (vi)
above, a Shortfall Amount or a Carry-Over Amount exists, the Transferor will be
obligated to deposit the amount of such Shortfall Amount or Carry-Over Amount in
the Collection Account for distribution to Certificateholders. If, at such time
as the principal amount of the Certificates, and accrued unpaid interest
thereon, has been paid in full, any Carry-Over Amount exists, Series 1996-2
shall not terminate, and on such Distribution Date and subsequent Distribution
Dates, Available Transferor Collections up to the Available Subordinated Amount
shall be applied to pay such Carry-Over Amount.
If there is a Draw Amount for such Distribution Date, the Trustee shall
apply the amount of Available Transferor Collections for the related Collection
Period on deposit in the Collection Account on such Distribution Date, but only
up to the Draw Amount, to make the distributions required by clauses (i), (ii),
(iii) and (v) above that have not been made through the application of funds
from the Reserve Fund as described in the preceding paragraph. If the sum of the
draw amounts (including the Draw Amount) for all Series and Purchased Interests
in respect of a Distribution Date exceeds the Available Transferor Collections
for the related Collection Period, then such Available Transferor Collections
will be allocated among those Series and Purchased Interests with draw amounts
pro rata on the basis of such draw amounts. The Available Subordinated Amount
will be reduced by the amount of Available Transferor Collections so applied in
respect
<PAGE>
of the Certificates. If the Draw Amount exceeds such Available Transferor
Collections, the Available Subordinated Amount will be reduced by the amount of
such excess, but not by more than the sum of the Investor Default Amount and the
Monthly Dilution Amount for such Distribution Date.
The balance of Available Transferor Collections on any Distribution Date
will be distributed to the Transferor on such date, provided that, if the Trust
Available Subordinated Amount for the immediately preceding Determination Date
exceeds the Transferor Amount on such date (after giving effect to any Principal
Receivables transferred to the Trust on such Distribution Date), the balance of
Available Transferor Collections will be deposited into the Reserve Fund to the
extent of such excess.
"Certificateholder Interest Collections" for any Distribution Date
means the portion of Interest Collections allocable to the Regular Pool
Balance for the related Collection Period allocated to the
Certificateholders' Interest as described under "Allocation Percentages --
Allocation to the Certificateholders' Interest."
"Excess Interest" for any Distribution Date means the amount described
in clause (vi) above.
"Investment Proceeds" for any Distribution Date means an amount equal
to the sum of (a) the investment earnings credited to the Collection
Account on the related Determination Date with respect to funds held in the
Reserve Fund and the Principal Funding Account, (b) investment earnings
allocable to Series 1996-2 credited to the Collection Account on the
related Determination Date with respect to funds held in the Collection
Account and (c) all investment income earned on amounts in the Excess
Funding Account allocable to Series 1996-2 since the preceding Distribution
Date, in each case net of losses and investment expenses.
Reserve Fund. An Eligible Deposit Account will be established and
maintained in the name of the Trustee for the benefit of the Certificateholders
(the "Reserve Fund"). No deposit will be made into the Reserve Fund prior to the
first Distribution Date. The "Reserve Fund Required Amount" means an amount
which upon any Distribution Date will equal 0.50% of the outstanding principal
balance of the Certificates for such Distribution Date (after giving effect to
any change therein on such Distribution Date). If, after giving effect to the
allocations, distributions and deposits in the Reserve Fund described above
under "Interest Collections," the amount in the Reserve Fund is less than the
Reserve Fund Required Amount for the next following Distribution Date, the
Trustee shall deposit any remaining Available Transferor Collections for the
related Collection Period into the Reserve Fund until the amount in the Reserve
Fund is equal to such Reserve Fund Required Amount. The "Reserve Fund Deposit
Amount" is the amount, if any, by which the Reserve Fund Required Amount exceeds
the amount on deposit in the Reserve Fund. Funds in the Reserve Fund will be
invested in the same manner in which funds in the Collection Account may be
invested. On each Determination Date, the Servicer will credit to the Collection
Account any investment earnings (net of losses and investment expenses) with
respect to the Reserve Fund. After payment in full of the outstanding principal
balance of the Certificates and any Carry-Over Amount or Shortfall Amount, any
funds remaining on deposit in the Reserve Fund will be paid to the Transferor.
If, for any Distribution Date with respect to an Early Amortization Period,
after giving effect to the allocations, distributions and deposits described in
the preceding paragraph, the amount in the Reserve Fund is less than the Excess
Reserve Fund Required Amount as of such Distribution Date, the Trustee shall
deposit the remaining Available Transferor Collections for the related
Collection Period into the Reserve Fund until the amount in the Reserve Fund is
equal to such Excess Reserve Fund Required Amount. The "Excess Reserve Fund
Required Amount" for any Distribution Date means an amount equal to the greater
of (a) 5% of the Initial Principal Amount and (b) the excess of (i) the Minimum
Receivables Amount (after giving effect to any changes thereto on such
Determination Date) over (ii) the Pool Balance (after giving effect to changes
thereto on such Determination Date); provided that the Excess Reserve Fund
Required Amount shall in no event exceed the Available Subordinated Amount for
such Determination Date.
In connection with the allocations to the Reserve Fund referred to in the
two preceding paragraphs, if the remaining Available Transferor Collections are
not sufficient to fund the reserve funds for all outstanding Series and
Purchased Interests, then such remaining Available Transferor Collections will
be allocated to such reserve funds pro rata on the basis of the respective
amounts required to be deposited in such reserve funds.
<PAGE>
Excess Interest. On each Distribution Date, the Servicer will allocate the
Excess Interest with respect to the Collection Period immediately preceding such
Distribution Date, in the following order of priority:
(a) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed (after giving effect
to the allocation on such Distribution Date of the Miscellaneous Payments
allocable to Series 1996-2 with respect to such Distribution Date) will be
allocated in the same manner as Available Certificateholder Principal
Collections for such Distribution Date;
(b) an amount equal to the aggregate amount of Class B Investor
Charge-Offs which have not been previously reimbursed (after giving effect
to the allocation on such Distribution Date of the Miscellaneous Payments
allocable to Series 1996-2 with respect to such Distribution Date) will be
allocated in the same manner as Available Certificateholder Principal
Collections for such Distribution Date;
(c) an amount equal to the amount of reductions of the Available
Subordinated Amount on account of Investor Default Amounts that have not
previously been reinstated will be distributed to the Transferor and will
increase the Available Subordinated Amount;
(d) during any Dilution Reserve Period, an amount equal to the excess,
if any, of $1,000,000 over the balance on deposit in the Dilution Reserve
Fund shall be deposited in the Dilution Reserve Fund;
(e) an amount equal to the aggregate outstanding amounts of the
Monthly Servicing Fee which have been previously waived as described under
"-- Servicing Compensation and Payment of Expenses" will be distributed to
the Servicer; and
(f) the balance, if any, shall be distributed to the Transferor.
Principal Collections. On each Distribution Date, the Servicer will
allocate Available Certificateholder Principal Collections as follows:
(a) on each day during the Revolving Period, all Available
Certificateholder Principal Collections will be allocated, first, to make a
deposit to the Excess Funding Account if so required and, second, to Shared
Principal Collections as described under "Allocation Percentage --
Principal Collections for all Series"; and
(b) for each Distribution Date with respect to the Accumulation Period
or any Early Amortization Period:
(i) an amount equal to Monthly Principal for such Distribution Date
will be deposited to the Principal Funding Account; and
(ii) the balance, if any, will be treated as Shared Principal
Collections.
In the event that the aggregate Invested Amount is greater than zero on the
Termination Date, any funds remaining in the Reserve Fund (after the application
of funds in the Reserve Fund as described above under "Interest Collections")
will be treated as a portion of Available Certificateholder Principal
Collections for the Distribution Date occurring on the Termination Date.
"Available Certificateholder Principal Collections" for any
Distribution Date means the sum of (a) Principal Collections allocated to
the Regular Pool Balance and further allocated to the Certificateholders'
Interest, as described above, for the related Collection Period, (b) the
amount, if any, of Interest Collections, funds in the Reserve Fund and
Available Transferor Collections allocated to cover the Investor Default
Amount or reimburse Investor Charge-Offs, as described above, (c) the
Miscellaneous Payments allocable to Series 1996-2 on deposit in the
Collection Account for such Distribution Date and (d) Shared Principal
Collections, if any, from other Series or Purchased Interests allocated to
Series 1996-2.
"Class A Monthly Principal" with respect to any Distribution Date
relating to the Accumulation Period or any Early Amortization Period will
equal the Available Certificateholder Principal Collections for such
Distribution Date; provided, however, that for each Distribution Date with
respect to the Accumulation Period, Class A Monthly Principal will not
exceed the Controlled Distribution Amount for
<PAGE>
such Distribution Date; and provided, further that Class A Monthly
Principal will not exceed the Class A Invested Amount.
"Class B Monthly Principal" with respect to any Distribution Date
relating to the Accumulation Period or any Early Amortization Period will
equal the Available Certificateholder Principal Collections for such
Distribution Date after the Class A Certificates have been paid or provided
for in full; provided, however, that for each Distribution Date with
respect to the Accumulation Period, Class B Monthly Principal will not
exceed the excess of the Controlled Distribution Amount for such
Distribution Date over Class A Monthly Principal for such Distribution
Date; and provided, further that Class B Monthly Principal will not exceed
the Class B Invested Amount.
"Controlled Amortization Amount" means an amount equal to the
aggregate outstanding principal amount of the Certificates as of the June
1999 Distribution Date (after giving effect to any changes therein on such
date) divided by the number of months comprising the Accumulation Period
Length.
"Controlled Distribution Amount" for a Distribution Date means the
excess, if any, of (i) the product of the Controlled Amortization Amount
and the number of Distribution Dates with respect to the Accumulation
Period through and including such Distribution Date over (ii) the amount on
deposit in the Principal Funding Account (including any amounts deposited
therein from the Series 1996-2 portion of the Excess Funding Account),
before giving effect to any withdrawals from or deposits to such account on
such Distribution Date.
"Monthly Principal" with respect to any Distribution Date relating to
the Accumulation Period or any Early Amortization Period means the sum of
Class A Monthly Principal and Class B Monthly Principal.
DILUTION RESERVE FUND
On any Dilution Reserve Trigger Date, the Servicer will establish and
maintain in the name of the Trustee, on behalf of the Trust, an Eligible Deposit
Account for the benefit of the Certificateholders and the holders of
certificates of each Series (other than a Concentration Series and Series
1994-1) (the "Dilution Reserve Fund"). During any Dilution Reserve Period, so
long as the Trust Available Subordinated Amount for the immediately preceding
Determination Date does not exceed the Transferor Amount on such date (after
giving effect to any Principal Receivables transferred to the Trust on such
Distribution Date), any remaining Available Transferor Interest Collections will
be deposited in the Dilution Reserve Fund until the balance on deposit therein
equals $1,000,000. In addition, during a Dilution Reserve Period, excess
interest will be deposited into the Dilution Reserve Fund as described under "--
Distributions from the Collection Account; Reserve Fund -- Excess Interest."
If a Dilution Reserve Deposit Date occurs, the Servicer will deposit on
such date into the Dilution Reserve Fund an amount equal to the excess, if any,
of $1,000,000 over the balance on deposit in the Dilution Reserve Fund, and on
each Distribution Date thereafter, the Servicer shall withdraw from the Dilution
Reserve Fund and apply as Available Certificateholder Principal Collections an
amount equal to the excess, if any, of the related Monthly Dilution Amount over
the amounts allocated to cover all Monthly Dilution Amounts; provided that if
any Series which is not a Concentration Series is outstanding (other than Series
1994-1), and if the sum of such excess amount and the similar excess from each
other such Series is greater than funds on deposit in the Dilution Reserve Fund
on such day, then the balance on deposit in the Dilution Reserve Fund will be
shared pro rata among all Series which are not Concentration Series (other than
Series 1994-1) in accordance with the proportion that the series allocation
percentage of each bears to the sum of all such series allocation percentages. A
Dilution Reserve Deposit Date will occur following a Dilution Reserve Trigger
Date and the establishment of the Dilution Reserve Fund.
"Dilution Reserve Deposit Date" means any Business Day on which the
Regular Transferor Amount is less than the Regular Trust Available
Subordinated Amount (after giving effect to any deposits to the Excess
Funding Account on such day).
<PAGE>
"Dilution Reserve Period" means any period commencing on a Dilution
Reserve Trigger Date and ending on the first Business Day thereafter on
which the Regular Transferor Amount is equal to or greater than the sum of
the Regular Trust Available Subordinated Amount plus the Regular Minimum
Transferor Amount.
"Dilution Reserve Trigger Date" means any Business Day on which the
Regular Transferor Amount is less than the sum of the Regular Trust
Available Subordinated Amount plus 1% of the Regular Pool Balance (after
giving effect to any deposits to the Excess Funding Account on such date).
PRINCIPAL FUNDING ACCOUNT
The Servicer will establish and maintain in the name of the Trustee, on
behalf of the Trust, an Eligible Deposit Account for the benefit of the
Certificateholders (the "Principal Funding Account"). On each Distribution Date
with respect to the Accumulation Period, Monthly Principal will be deposited in
the Principal Funding Account as provided above under "Distributions from the
Collection Account; Reserve Fund"; provided that if any Early Amortization Event
occurs during the Accumulation Period (unless, in limited circumstances with
respect to the required addition of Accounts, such Early Amortization Event
shall have been cured), the Principal Funding Account Balance (as defined below)
shall be paid on the first Special Payment Date to the Class A
Certificateholders and, following payment in full of all principal of the Class
A Certificates, the balance to the Class B Certificateholders.
All amounts on deposit in the Principal Funding Account on any Distribution
Date (after giving effect to distributions to be made on such Distribution Date)
(the "Principal Funding Account Balance") will be invested from the date of
their deposit to a date on or prior to the succeeding Distribution Date (or the
next succeeding Special Payment Date if applicable) by the Trustee at the
direction of the Servicer in investments rated in the highest short-term
category of each Rating Agency or in such other investments that are acceptable
to each Rating Agency. On each Distribution Date, the interest and other
investment income on the Principal Funding Account Balance will be deposited in
the Collection Account.
DISTRIBUTIONS
Payment to Certificateholders will be made from the Collection Account, the
Principal Funding Account and the Series 1996-2 portion of the Excess Funding
Account. The Servicer shall instruct the Trustee to apply the funds on deposit
in the Collection Account, the Principal Funding Account and the Series 1996-2
portion of the Excess Funding Account and shall instruct the Trustee or the
applicable paying agent to make, without duplication, the following
distributions:
(a) On each Distribution Date, all amounts on deposit in the
Collection Account that are allocable to Series 1996-2 to the extent
required to pay accrued interest on the Certificates will be distributed
first to Class A Certificateholders to the extent of amounts due and owing
and, second, to Class B Certificateholders to the extent of amounts due and
owing, and payments of Shortfall Amounts and Carry-Over Amounts shall be
made to the extent of amounts available to make such payments;
(b) On each Special Payment Date and on the Expected Final Payment
Date, the Principal Funding Account Balance and the amount on deposit in
the Excess Funding Account allocable to Series 1996-2 shall be distributed
first to Class A Certificateholders up to a maximum amount on any such date
equal to the excess of the outstanding principal amount of the Class A
Certificates over unreimbursed Class A Investor Charge-Offs, each on such
date and second to Class B Certificateholders up to a maximum amount on any
such date equal to the excess of the outstanding principal amount of the
Class B Certificates over unreimbursed Class B Investor Charge-Offs, each
on such date.
DEFAULTED RECEIVABLES AND RECOVERIES
"Defaulted Receivables" will be allocated between the Regular Pool Balance
and the Concentration Amount daily, and the sum of the daily amounts allocated
to the Regular Pool Balance and to the Concentration Pool Balance for each
Collection Period will be allocated among Regular Series (including
<PAGE>
Purchased Interests) and Concentration Series, respectively, on a monthly basis.
Defaulted Receivables on any day are (i) all Receivables which were charged off
as uncollectible in respect of such day and (ii) all Receivables which were
Eligible Receivables at the time of transfer to the Trust, which arose in an
Account which became an ineligible Account after the date of transfer of such
Receivables to the Trust and which remained outstanding for six consecutive
Determination Dates thereafter. The "Regular Defaulted Amount" for any
Collection Period will be the sum, for each day in the Collection Period, of an
amount (which shall not be less than zero) equal to (a) the principal amount of
Receivables that became Defaulted Receivables during such Collection Period, to
the extent allocated to the Regular Pool Balance less (b) the full amount of any
Defaulted Receivables, to the extent allocated to the Regular Pool Balance
subject to reassignment to the Transferor for such Collection Period unless
certain events of bankruptcy, insolvency, or receivership have occurred with
respect to the Transferor, in which event the Regular Defaulted Amount will not
be reduced for those Defaulted Receivables. On each day during the Collection
Period, Defaulted Receivables for such day will be allocated between the Regular
Pool Balance and the Concentration Pool Balance based on the Concentration
Percentage that was applicable on the day on which the related Dealer was placed
on "finance hold." Receivables will be charged off as uncollectible in
accordance with the Servicer's customary and usual policies and procedures for
servicing its own comparable revolving dealer wholesale loan accounts.
Generally, Receivables relating to a particular Dealer are charged off by WOFCO
when the outstanding wholesale liabilities of such Dealer are considered
uncollectible because of bankruptcy, insolvency or conversion proceedings with
respect to the Dealer or the Dealer's refusal to pay its obligations to WOFCO
under its Dealer floorplan financing agreement. A portion of the Regular
Defaulted Amount equal to the product of (x) the Regular Defaulted Amount for
such Collection Period and (y) the Floating Allocation Percentage for such
Collection Period will be allocated to the Certificateholders. The portion of
the Regular Defaulted Amount allocated to the Certificateholders is referred to
as the "Investor Default Amount."
If the Servicer adjusts the amount of any Receivable because of a rebate,
billing error or certain other noncash items to a Dealer, or because such
Receivable was created in respect of inventory which was refused or returned by
a Dealer, the principal amount of the Transferor Interest will be reduced by the
amount of the adjustment or charge-off. After any such reduction in the amount
of the Transferor Interest occurs, the amount of such adjustment described above
will be deducted from the Pool Balance. Furthermore, to the extent that the
reduction in the Transferor Interest would reduce the Transferor Amount and the
Regular Transferor Amount, respectively, below the sum of the Trust Available
Subordinated Amount and the Minimum Transferor Amount, or the sum of the Regular
Trust Available Subordinated Amount and the Regular Minimum Transferor Amount,
respectively, for the immediately preceding Determination Date (after giving
effect to the allocations, distributions, withdrawals and deposits to be made on
the Distribution Date immediately following such Determination Date), the
Transferor will be required to deposit a cash amount equal to such deficiency
into the Collection Account in immediately available funds (an "Adjustment
Payment") on the day on which such adjustment occurs.
INVESTOR CHARGE-OFFS
If the Available Subordinated Amount is reduced to zero, and on any
Distribution Date the Deficiency Amount is greater than zero, the Class B
Principal Amount will be reduced by the Deficiency Amount, but not by more than
the Investor Default Amount and the unreimbursed Monthly Dilution Amount for
such Distribution Date (a "Class B Investor Charge-Off"). Any reduction in the
Invested Amount on account of Investor Default Amounts (an "Investor
Charge-Off") and any unreimbursed Monthly Dilution Amount will have the effect
of slowing or reducing the return of principal to the Certificateholders. If the
Invested Amount has been reduced by any Class B Investor Charge-Offs, the
Invested Amount and the Class B Principal Amount will thereafter be increased on
any Distribution Date (but not by an amount in excess of the aggregate Class B
Investor Charge-Offs) by the sum of (a) the Miscellaneous Payments allocable to
Series 1996-2 for such Distribution Date and (b) the amount of Excess Interest
allocated and available for such purpose as described above; provided that the
Class B Principal Amount will not be increased if and to the extent that the
Class A Principal Amount has been reduced by Class A Investor Charge-Offs, and
the Class A Principal Amount has not first been increased by the amount of such
reduction.
<PAGE>
In the event that any such reduction of the Class B Invested Amount would
cause the Class B Principal Amount to be less than zero, the Class B Principal
Amount will be reduced to zero, and the Class A Principal Amount will be reduced
by the amount by which the Class B Principal Amount would have been reduced
below zero, but not more than the Investor Default Amount and the unreimbursed
Monthly Dilution Amount for such Distribution Date (a "Class A Investor
Charge-Off"), which will have the effect of slowing or reducing the return of
principal to the Class A Certificateholders. If the Class A Principal Amount has
been reduced by the amount of any Class A Investor Charge-Offs, it will be
increased on any Distribution Date (but not by an amount in excess of the
aggregate amount of Class A Investor Charge-Offs) by the sum of (a) the
Miscellaneous Payments allocable to Series 1996-2 for such Distribution Date and
(b) the amount of Excess Interest allocated and available for such purpose as
described above. See " -- Allocation Percentages."
OPTIONAL REPURCHASE
On any Distribution Date occurring after the Invested Amount of the
Certificates is reduced to 10% of the initial outstanding principal amount of
the Certificates or less, the Transferor will have the option, subject to
certain conditions, to repurchase the Certificateholders' Interest. The purchase
price at such time will be equal to the sum of the Class A Principal Amount and
the Class B Principal Amount plus accrued and unpaid interest on the
Certificates at the applicable Certificate Rates. The purchase price will be
deposited in the Collection Account in immediately available funds on the
Distribution Date on which the Transferor exercises such option. Following any
such purchase, the Certificateholders will have no further rights with respect
to the Certificateholders' Interest, other than the right to receive the final
distribution on the Certificates. In the event that Transferor fails for any
reason to deposit such purchase price, payments will continue to be made to the
Certificateholders as described under " -- Distribution from the Collection
Account; Reserve Fund."
EARLY AMORTIZATION EVENTS
Commencing on the first Distribution Date following the Collection Period
in which an Early Amortization Event has occurred, Principal Collections will no
longer be paid to the Transferor or allocated to any other Series or Purchased
Interest but instead will be distributed to Certificateholders monthly on each
Distribution Date, except as described below, and the Controlled Distribution
Amount will no longer apply to distributions of principal on the Certificates.
An "Early Amortization Event" for Series 1996-2 refers to any of the following
events:
1. failure on the part of the Transferor, the Servicer or WOFCO, as
applicable, (i) to make any payment or deposit required by the Pooling and
Servicing Agreement or the Receivables Purchase Agreement, including but
not limited to any Transfer Deposit Amount or Adjustment Payment, on or
before the date occurring five business days after the date such payment or
deposit is required to be made therein; or (ii) to deliver a Distribution
Date Statement on the date required under the Pooling and Servicing
Agreement (or within the applicable grace period which will not exceed ten
business days); (iii) to comply with its covenant not to create any lien on
a Receivable; or (iv) to observe or perform any other covenants or
agreements set forth in the Pooling and Servicing Agreement or the
Receivables Purchase Agreement, which failure has a materially adverse
effect on the Certificateholders and which continues unremedied for a
period of 60 days after written notice of such failure, provided that for
so long as Moody's Investors Service, Inc. is providing a rating with
respect to a Series or Purchased Interest at the request of the Transferor,
then the period described in clauses (i) and (ii) above will be reduced to
two and five Business Days, respectively;
2. any representation or warranty made by WOFCO in the Receivables
Purchase Agreement or by the Transferor in the Pooling and Servicing
Agreement or any information required to be given by the Transferor to the
Trustee to identify the Accounts proves to have been incorrect in any
material respect when made and continues to be incorrect in any material
respect for a period of 60 days after written notice and as a result the
interests of the Certificateholders are materially and adversely affected;
provided, however, that an Early Amortization Event shall not be deemed to
occur thereunder if the Transferor has repurchased the related Receivables
or all such Receivables, if applicable, during such period in accordance
with the provisions of the Pooling and Servicing Agreement;
<PAGE>
3. the occurrence of certain events of bankruptcy, insolvency or
receivership relating to any of the Transferor, WOFCO or Toyota;
4. the Trust or the Transferor becomes an "investment company" within
the meaning of the Investment Company Act of 1940, as amended;
5. a failure by the Transferor to convey Receivables in Additional
Accounts to the Trust within 15 business days after any day on which it is
or would have been, if not for the limitations described in "Risk Factors
-- Release of Liens under Existing Credit Arrangements," required to convey
such Receivables pursuant to the Pooling and Servicing Agreement;
6. on any Determination Date, the Available Subordinated Amount for
the next Distribution Date will be reduced to an amount less than the
Required Subordinated Amount on such Determination Date after giving effect
to the distributions to be made on the next Distribution Date;
7. any Servicer Default with respect to the Certificates occurs;
8. on any Determination Date, the average of the Monthly Payment Rates
for the three preceding Collection Periods, where the Monthly Payment Rate
for a Collection Period is the percentage obtained by dividing Principal
Collections for such Collection Period by the daily average aggregate
amount of Principal Receivables included in the Trust for such Collection
Period, is less than 30%;
9. the failure to pay the outstanding principal amount of the
Certificates by the Expected Final Payment Date;
10. as of the end of any Collection Period, the Regular Transferor
Amount is less than 2% of the Regular Pool Balance, or the Transferor
Amount for all Series and Purchased Interests, including Concentration
Series, is less than 2% of the Pool Balance, and such condition continues
unremedied for a period of 15 business days;
11. as of the end of any Collection Period, the Regular Pool Balance
is less than the Regular Minimum Receivables Amount, or the Pool Balance is
less than the Minimum Receivables Amount for all Series and Purchased
Interests and such condition continues unremedied for a period of 15
business days; or
12. if, on any date, either (i) any Shortfall Amount arises with
respect to six consecutive Determination Dates, (ii) the amount available
to be drawn by WODFI under a demand note provided by WOFCO falls below the
amounts specified in the Pooling and Servicing Agreement or (iii) payment
is not made by WOFCO or WODFI with respect to the demand note or any
Shortfall Amount or Carry-Over Amount, respectively.
Upon the occurrence of any event described above, an Early Amortization
Event will be deemed to have occurred without any notice or other action on the
part of any other party immediately upon the occurrence of such event. The Early
Amortization Period will commence at the close of business on the business day
immediately preceding the day on which the Early Amortization Event occurs.
Monthly distribution of principal to the Certificateholders will begin on the
first Distribution Date following the Collection Period in which an Early
Amortization Period has commenced and will continue, to the extent described
under " -- Distributions" (each a "Special Payment Date").
Under certain limited circumstances, an Early Amortization Period which
commences prior to the scheduled end of the Revolving Period may terminate and
the Revolving Period recommence; provided that such recommencement will not
occur more than once with respect to any Series or Purchased Interest. If an
Early Amortization Period results from the failure by the Transferor to convey
Receivables in Additional Accounts to the Trust as described in paragraph 5
above during the Revolving Period and no other Early Amortization Event has
occurred, the Early Amortization Period resulting from such failure will
terminate and the Revolving Period will recommence (unless the scheduled
termination date of the Revolving Period has occurred) as of the end of the
first Collection Period during which the Transferor would no longer be required
to convey Receivables to the Trust. The Transferor may no longer be required to
convey Receivables as described above as a result of a reduction in the Invested
Amount occurring due to principal payments
<PAGE>
made on the Certificates and the certificates of other outstanding Series during
the Early Amortization Period or as a result of the subsequent addition of
Receivables to the Trust.
In addition to the consequences of an Early Amortization Event discussed
above, if an insolvency event occurs with respect to the Transferor as provided
in the Pooling and Servicing Agreement, on the day of such insolvency event, the
Transferor will (subject to the actions of the certificateholders and the
Purchasers) immediately cease to transfer Receivables to the Trust and promptly
give notice to the Trustee of such insolvency event or violation, as applicable.
Under the terms of the Pooling and Servicing Agreement, within 15 days the
Trustee will publish a notice of such insolvency event or violation stating that
the Trustee intends to sell, liquidate or otherwise dispose of the Receivables
in a commercially reasonable manner and on commercially reasonable terms, unless
within a specified period of time holders of Certificates and certificates of
each other outstanding Series and Purchasers representing more than 50% of the
aggregate outstanding principal amount of (i) the certificates of each such
Series (or, with respect to any Series with two or more classes, the
certificates of each such class), (ii) the Purchased Interests, (iii) and each
transferee of an interest in the Transferor Interest and each person holding a
Supplemental Certificate, instruct the Trustee not to sell, liquidate or dispose
of the Receivables and to continue transferring Receivables as before such
insolvency event or violation, as applicable. If the portion of such proceeds
allocated to the Certificateholders' Interest and Available Transferor Principal
Collections, together with the proceeds of any collections on the Receivables in
the Collection Account allocable to the Certificateholders' Interest are not
sufficient to pay the aggregate unpaid balance of the Certificates in full plus
accrued and unpaid interest thereon and any outstanding Carry-Over Amounts,
Certificateholders will incur a loss.
ASSET COMPOSITION EVENT
An "Asset Composition Event" will occur if, during the Revolving Period,
(a) the sum of all Eligible Investments and amounts on deposit in the Excess
Funding Account not allocable to any Concentration Series represents more than
25% of the total assets of the Trust on each of twelve or more consecutive
Determination Dates, after giving effect to all payments made or to be made on
the Distribution Date next succeeding each such respective Determination Date;
or (b) on any two consecutive Determination Dates, the sum of all Eligible
Investments and amounts on deposit in the Excess Funding Account not allocable
to any Concentration Series represents more than 50% of the total assets of the
Trust, after giving effect to all payments to be made on the next succeeding
Distribution Date.
Upon the occurrence of an Asset Composition Event, the Servicer will
calculate the "Asset Correction Amount," which equals the amount that would be
necessary to be paid out of the Series 1996-2 portion of the Excess Funding
Account and the portions of the Excess Funding Account allocable to other Series
and Purchased Interests (other than Concentration Series) on the next
Distribution Date to achieve compliance with the tests specified above, after
giving effect to such payment and to all payments that otherwise would have been
made on such Distribution Date. The Class A Principal Amount and, after the
Class A Principal Amount has been paid in full, the Class B Principal Amount,
will become payable on such Distribution Date to the extent of the Series 1996-2
Allocation Percentage of the Asset Correction Amount.
TERMINATION
The Trust will terminate on the earlier to occur of (a) the day following
the Distribution Date on which the aggregate Invested Amounts for all Series and
Purchased Interests is zero, if the Transferor elects to terminate the Trust at
such time, and (b) December 31, 2024. Upon termination of the Trust, all right,
title and interest in, to and under the Receivables, related Collateral Security
and other funds of the Trust (other than amounts in the Collection Account, the
Principal Funding Account or the Excess Funding Account for the final
distribution of principal and interest to certificateholders) will be conveyed
and transferred to the Transferor.
In any event, the last payment of principal and interest on the
Certificates will be due and payable no later than the October 2001 Distribution
Date (the "Termination Date"). In the event that the Invested Amount is greater
than zero on the Termination Date, the Trustee will sell or cause to be sold
(and apply the
<PAGE>
proceeds to the extent necessary to pay such remaining amounts to all
Certificateholders) an interest in the Receivables or certain Receivables, as
specified in the Pooling and Servicing Agreement, in an amount equal to 110% of
the Invested Amount (after giving effect to deposits and distributions otherwise
to be made on the Termination Date); provided, however, that in no event shall
such amount exceed the Series 1996-2 Allocation Percentage of the Regular Pool
Balance on such Termination Date. The net proceeds of such sale and any
collections on the Receivables will be paid on the Termination Date (i) first,
pro rata to the Class A Certificateholders until the principal amount of the
Class A Certificates has been paid in full, (ii) second, pro rata to the Class B
Certificateholders until the principal amount of the Class B Certificates has
been paid in full and (iii) third, any outstanding Carry-Over Amounts to the
Class A Certificateholders and then, to the extent the Class A
Certificateholders have been paid in full, to the Class B Certificateholders.
INDEMNIFICATION
The Pooling and Servicing Agreement provides that the Servicer will
indemnify the Trust and the Trustee from and against any loss, liability,
expense, damage or injury suffered or sustained arising out of any acts or
omissions arising out of activities of the Trust or the Trustee or the Servicer
pursuant to the Pooling and Servicing Agreement; provided that the Trust or the
Trustee will not be so indemnified if such acts or omissions constitute fraud,
gross negligence, breach of fiduciary duty or willful misconduct by the Trustee.
In addition, the Servicer will not indemnify the Trust, the Trustee, the
Certificateholders or the Purchasers for any act taken by the Trustee at the
request of the Certificateholders or the Purchasers or for any tax required to
be paid by the Trust or the Certificateholders.
Under the Pooling and Servicing Agreement, the Transferor agrees to be
liable directly to an injured party for the amount of any loss, liability,
expense, damage or injury suffered or sustained (other than those incurred by a
certificateholder or purchaser in its capacity as an investor in certificates or
purchaser of a purchased interest, respectively, of any Series) arising out of
or based upon the arrangement created by the Pooling and Servicing Agreement (to
the extent that the Trust assets remaining after the certificateholders of all
series have been paid in full are insufficient to pay any such loss, liability,
expense, damage or injury) as though such agreement created a partnership under
the Uniform Partnership Act as in effect in the State of Connecticut in which
the Transferor was a general partner. In addition, the Transferor will indemnify
the Trust for certain intangibles taxes which may be imposed by the State of
Florida. See "Certain Tax Matters -- State and Local Taxation." No assumption of
liability by the Transferor shall be borne by the Servicer.
The Pooling and Servicing Agreement further provides that, except as
described above and with certain other exceptions, neither the Transferor, the
Servicer nor any of their directors, officers, employees or agents will be under
any liability to the Trust, the Trustee, the Certificateholders, the Purchasers
or any other person for taking any action, or for refraining from taking any
action, pursuant to the Pooling and Servicing Agreement. However, neither the
Transferor, the Servicer nor any of their directors, officers, employees or
agents will be protected against any liability which would otherwise be imposed
by reason of willful misfeasance, bad faith or gross negligence of any such
person in the performance of their duties or by reason of reckless disregard of
their obligations and duties thereunder. In the event a successor Servicer is
named under the Pooling and Servicing Agreement, such successor Servicer will
indemnify and hold harmless the Transferor for any loss, liability, expense,
damage or injury as described in this paragraph arising from any act or omission
of such successor Servicer.
In addition, the Pooling and Servicing Agreement provides that the Servicer
is not under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its servicing responsibilities under the Pooling and
Servicing Agreement. The Servicer may, in its sole discretion, undertake any
such legal action which it may deem necessary or desirable for the benefit of
certificateholders or Purchasers with respect to the Pooling and Servicing
Agreement and the rights and duties of the parties thereto and the interest of
the certificateholders and the Purchasers thereunder.
<PAGE>
COLLECTION AND OTHER SERVICING PROCEDURES
Pursuant to the Pooling and Servicing Agreement, the Servicer is
responsible for servicing, collecting, enforcing and administering the
Receivables in accordance with customary and usual procedures for servicing its
own revolving credit line dealer wholesale loans, except where the failure to so
act would not materially and adversely affect the rights of the Trust.
The Servicer will only change the terms relating to the Accounts if (i) in
the Servicer's reasonable judgment, no Early Amortization Event will occur as a
result of the change and (ii) the change is made applicable to the comparable
segment of the dealer loan accounts with similar characteristics owned or
serviced by the Servicer and not only to the Accounts.
Servicing activities performed by the Servicer include collecting and
recording payments, communicating with dealers, investigating payment
delinquencies, evaluating the increase of credit limits, and maintaining
internal records with respect to each Account. Managerial and custodial services
performed by the Servicer on behalf of the Trust include providing assistance in
any inspections of the documents and records relating to the Accounts and
Receivables by the Trustee pursuant to the Pooling and Servicing Agreement,
maintaining the agreements, documents and files relating to the Accounts and
Receivables as custodian for the Trust and providing related data processing and
reporting services for certificateholders and Purchasers and on behalf of the
Trustee.
SERVICER COVENANTS
In the Pooling and Servicing Agreement the Servicer covenants, among other
things, that (a) it will duly satisfy all obligations on its part to be
fulfilled under or in connection with the Receivables and Accounts, will
maintain in effect all material qualifications required in order to service the
Receivables and Accounts and will comply in all material respects with all
requirements of law in connection with servicing the Receivables and the
Accounts, the failure to comply with which would have a materially adverse
effect on the certificateholders of any outstanding Series or on the Purchasers
of any Purchased Interest; (b) it will not permit any rescission or cancellation
of a Receivable except as ordered by a court of competent jurisdiction or other
government authority; (c) it will do nothing to impair the rights of the
Certificateholders or Purchasers in the Receivables or Accounts; and (d) it will
not reschedule, revise or defer payments due on any Receivable except in
accordance with its guidelines for servicing revolving credit line dealer
wholesale loans.
Under the terms of the Pooling and Servicing Agreement, if the Transferor
or the Servicer discovers, or receives written notice from the Trustee, any
Purchaser or any Enhancement Provider, that any covenant of the Servicer set
forth above has not been complied with in all material respects and such
noncompliance has not been cured within 30 days thereafter (or such longer
period as the Trustee may agree to) and has a materially adverse effect on the
interests of all certificateholders and Purchasers in any Receivable or Account,
the Servicer will purchase such Receivable or all Receivables in such Account,
as applicable. Such purchase will be made on the Determination Date following
the expiration of the 30 day cure period and the Servicer will be obligated to
deposit into the Collection Account an amount equal to the amount of such
Receivable plus accrued and unpaid interest thereon in the Collection Account.
The amount of such deposit shall be deemed a Transfer Deposit Amount. The
purchase by the Servicer constitutes the sole remedy available to the
certificateholders if such covenant or warranty of the Servicer is not satisfied
and the Trust's interest in any such purchased Receivables shall be
automatically assigned to the Servicer.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicer's compensation with respect to the Receivables for its
servicing activities and reimbursement for its expenses will be a monthly
servicing fee (the "Servicing Fee") in an amount payable in arrears on each
Distribution Date prior to the Termination Date generally equal to one-twelfth
of the product of (a) 1.0% or, if the Servicing Fee has been waived as described
below, 0% for the Distribution Date in respect of which the Servicing Fee has
been waived (the "Servicing Fee Rate"), and (b) the aggregate amount of
Principal Receivables included in the Trust as of the last day of the second
preceding Collection Period. The share of the Servicing Fee allocable to the
Certificateholders with respect to any Distribution Date (the
<PAGE>
"Monthly Servicing Fee") generally will be equal to one-twelfth of the product
of (a) the Servicing Fee Rate and (b) the Invested Amount as of the last day of
the second preceding Collection Period. The remainder of the Servicing Fee shall
be paid by the Transferor, the certificateholders of other Series and the
Purchasers of Purchased Interests. The Monthly Servicing Fee shall be payable to
the Servicer solely to the extent amounts are available for distribution
therefor in accordance with the terms of the Pooling and Servicing Agreement.
The Servicer will be permitted to waive its right to receive the Servicing
Fee on any Distribution Date, so long as it believes that sufficient Interest
Collections will be available on a future Distribution Date to pay the Monthly
Servicing Fee relating to such waived Servicing Fee, in which case the Servicing
Fee and the Monthly Servicing Fee for such Distribution Date shall be deemed to
be zero.
The Servicer will pay from its servicing compensation certain expenses
incurred in connection with servicing the Accounts and the Receivables
including, without limitation, payment of fees and disbursements of the Trustee
and independent accountants and all other fees and expenses which are not
expressly stated in the Pooling and Servicing Agreement to be payable by the
Trust, the certificateholders or the Purchasers other than Federal, state and
local income and franchise taxes, if any, of the Trust, the Certificateholders
or the Purchasers.
CERTAIN MATTERS REGARDING THE SERVICER
WOFCO, as Servicer, is permitted to delegate any of its duties as Servicer
to any of its affiliates, but any such delegation (other than any Annual
Servicing Transfer) will not relieve the Servicer of its obligations under the
Pooling and Servicing Agreement. The Servicer may not resign from its
obligations and duties under the Pooling and Servicing Agreement, except upon
determination that such duties are no longer permissible under applicable law.
No such resignation will become effective until the Trustee or a successor to
the Servicer has assumed the Servicer's responsibilities and obligations under
the Pooling and Servicing Agreement.
Any person into which, in accordance with the Pooling and Servicing
Agreement, the Servicer may be merged or consolidated or any person resulting
from any merger or consolidation to which the Servicer is a party, or any person
succeeding to the business of the Servicer, will be the successor to the
Servicer under the Pooling and Servicing Agreement.
SERVICER DEFAULT
In the event of any Servicer Default, the Trustee, by written notice to the
Servicer, may terminate all of the rights and obligations of the Servicer, as
servicer, under the Pooling and Servicing Agreement and in and to the
Receivables and the proceeds thereof and appoint a new Servicer (a "Service
Transfer"). The rights and interest of the Transferor under the Pooling and
Servicing Agreement in the Transferor Interest will not be affected by any
Service Transfer. The Trustee shall as promptly as possible appoint a successor
Servicer (subject to the consent of any Enhancement Provider and of any
Purchaser) and if no successor Servicer has been appointed by the Trustee and
has accepted such appointment by the time the Servicer ceases to act as
Servicer, all rights, authority, power and obligations of the Servicer under the
Pooling and Servicing Agreement shall pass to and be vested in the Trustee.
Prior to any Service Transfer, the Trustee will review any bids obtained from
potential servicers meeting certain eligibility requirements set forth in the
Pooling and Servicing Agreement to serve as successor Servicer for servicing
compensation not in excess of the Servicing Fee plus certain excess amounts
payable by the Transferor.
A "Servicer Default" refers to any of the following events:
1. failure by the Servicer to make any payment, transfer or deposit,
or to give instructions to the Trustee to make any payment, transfer or
deposit, on the date the Servicer is required to do so under the Pooling
and Servicing Agreement, which is not cured within a five business day
grace period after notice to the Servicer;
2. failure on the part of the Servicer duly to observe or perform any
other covenants or agreements of the Servicer in the Pooling and Servicing
Agreement (exclusive of breaches of covenants in respect of
<PAGE>
which the Servicer repurchases the related Receivables, as described under
"-- Servicer Covenants") which has a materially adverse effect on the
rights of the certificateholders of any outstanding Series or the Purchaser
of any Purchased Interest, and which material adverse effect continues
unremedied for a period of 30 days after the earlier of written notice or
actual knowledge of such breach, or the Servicer delegates its duties under
the Pooling and Servicing Agreement, except as specifically permitted
thereunder;
3. any representation, warranty or certification made by the Servicer
in the Pooling and Servicing Agreement or in any certificate delivered
pursuant to the Pooling and Servicing Agreement proves to have been
incorrect in any material respect when made, which has a material adverse
effect on the rights of the certificateholders of any outstanding Series or
the Purchaser of any Purchased Interest, and which material adverse effect
continues for a period of 60 days after written notice of such breach; or
4. the occurrence of certain events of bankruptcy, insolvency or
receivership with respect to the Servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to under clause (1) above for a period of ten business days or referred
to under clauses (2) or (3) for a period of 60 business days, shall not
constitute a Servicer Default if such delay or failure could not be prevented by
the exercise of reasonable diligence by the Servicer and was caused by an act of
God or other similar occurrence. Upon the occurrence of any such event, the
Servicer shall not be relieved from using its best efforts to perform its
obligations in a timely manner in accordance with the terms of the Pooling and
Servicing Agreement and the Servicer shall provide the Trustee, any Enhancement
Provider, the Transferor, the certificateholders and the Purchasers prompt
notice of such failure or delay by it, together with a description of its
efforts to so perform its obligations. The Servicer shall immediately notify the
Trustee in writing of any Servicer Default reports.
PERIODIC REPORTS
On each Distribution Date, the Trustee will forward (or cause to be
forwarded) to each Certificateholder of record (which is expected to be Cede, as
nominee for DTC, unless Definitive Certificates are issued) a statement (the
"Distribution Date Statement") prepared by the Servicer setting forth the
following information (which, in the case of (c), (d) and (e) below, will be
stated on the basis of an original principal amount of $1,000 per Certificate if
the Accumulation Period or an Early Amortization Period has commenced): (a) the
aggregate amount of collections, the aggregate amount of Interest Collections
and the aggregate amount of Principal Collections processed during the
immediately preceding Collection Period; (b) the Series 1996-2 Allocation
Percentage, the Floating Allocation Percentage and the Principal Allocation
Percentage for such Collection Period; (c) the total amount, if any, distributed
on the Certificates; (d) the amount of such distribution allocable to principal
on the Certificates; (e) the amount of such distribution allocable to interest
on the Certificates; (f) the Investor Default Amount for such Distribution Date;
(g) the Draw Amount, if any, for the preceding Collection Period; (h) the amount
of the Investor Charge-Offs and the amounts of reimbursements thereof for the
preceding Collection Period; (i) the amount of the Monthly Servicing Fee for the
preceding Collection Period; (j) the Controlled Distribution Amount; (k) the
Invested Amounts, the Excess Funding Account balance and the outstanding
principal balance of the Certificates for such distribution (after giving effect
to all distributions which will occur on each Distribution Date); (l) the "pool
factor" for the Certificates as of the Determination Date with respect to such
Distribution Date (consisting of an eleven-digit decimal expressing the sum of
the Class A Principal Amount and the Class B Principal Amount as of such
Determination Date (determined after taking into account any increases or
decreases which will occur on such Distribution Date) as a portion of the
Invested Amount); (m) the Available Subordinated Amount for such Determination
Date; (n) the Reserve Fund balance for such date; and (o) the Principal Funding
Account Balance with respect to such date.
On or before April 30 of each calendar year, beginning with April 30, 1997,
the Trustee will furnish (or cause to be furnished) to each person who at any
time during the preceding calendar year was a Certificateholder of record (which
is expected to be Cede, as nominee for DTC, unless Definitive Certificates are
issued) a statement containing the information required to be provided by an
issuer of indebtedness under
<PAGE>
the Code for such preceding calendar year or the applicable portion thereof
during which such person was a Certificateholder, together with such other
customary information as is required to be provided by an issuer of indebtedness
under the Code and such other customary information as is necessary to enable
the Certificateholders to prepare their United States Federal income tax
returns. Moreover, as long as the Certificateholder of record is Cede, as
nominee for DTC, Certificate Owners will receive such tax information from
Direct Participants and Indirect Participants rather than from the Trustee. See
"Certain Tax Matters."
EVIDENCE AS TO COMPLIANCE
The Pooling and Servicing Agreement provides that, on or before April 30 of
each calendar year, the Servicer will cause a firm of nationally recognized
independent public accountants (who may also render other services to the
Servicer or the Transferor) to furnish a report relating to certain matters in
connection with the servicing of WOFCO's portfolio of wholesale receivables.
The Pooling and Servicing Agreement provides for delivery to the Trustee on
or before April 30 of each calendar year of a statement signed by an officer of
the Servicer to the effect that the Servicer has fully performed, or caused to
be fully performed its obligations in all material respects under the Pooling
and Servicing Agreement throughout the preceding year or, if there has been a
default in the performance of any such obligation, specifying the nature and
status of the default.
Copies of all statements, certificates and reports furnished to the Trustee
may be obtained by a request in writing delivered to the Trustee.
AMENDMENTS
The Pooling and Servicing Agreement may be amended by the Transferor, the
Servicer and the Trustee, without certificateholder or Purchaser consent, so
long as any such action shall not, as evidenced by an opinion of counsel,
adversely affect in any material respect the interest of the certificateholders
or the Purchasers.
The Pooling and Servicing Agreement may be amended by the Transferor, the
Servicer and the Trustee with the consent of the holders of certificates and
Purchasers evidencing not less than 51% of the aggregate unpaid principal amount
of the certificates and Purchased Interests of all adversely affected Series and
Purchased Interests for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of the Pooling and Servicing
Agreement or of modifying in any manner the rights of certificateholders or
Purchasers. No such amendment, however, may (a) reduce in any manner the amount
of, or delay the timing of, distributions required to be made on any certificate
or Purchased Interest, (b) change the definition or the manner of calculating
any certificateholders' or Purchasers' interest, (c) reduce the amount available
under any Enhancement, (d) adversely affect the rating of any Series or class or
Purchased Interest by each Rating Agency without the consent of the holders of
certificates of such Series, or class or Purchased Interest evidencing not less
than 51% of the aggregate unpaid principal amount of the certificates of such
Series or class or Purchased Interest or (e) reduce the aforesaid percentage of
the unpaid principal amount of certificates or Purchasers the holders of which
are required to consent to any such amendment, in the case of (a), without the
consent of the holder of such certificate or Purchaser and, in the case of (b),
(c) and (e), without the consent of all certificateholders of the adversely
affected Series and all Purchasers of the adversely affected Purchased Interest.
Promptly following the execution of any amendment to the Pooling and Servicing
Agreement (other than an amendment described in the preceding paragraph), the
Trustee will furnish written notice of the substance of such amendment to each
certificateholder and Purchaser.
The Pooling and Servicing Agreement may not be amended in any manner which
materially adversely affects the interests of any Enhancement Provider without
its prior consent.
LIST OF CERTIFICATEHOLDERS AND PURCHASERS
Upon written request of any of the certificateholders or Purchasers of
record, the Trustee will afford, within five business days after receipt of such
request, such certificateholders and Purchasers access during business hours to
the current list of certificateholders and Purchasers for purposes of
communicating with
<PAGE>
other certificateholders or Purchasers with respect to their rights under the
Pooling and Servicing Agreement. See "-- Book-Entry Registration" and
"-- Definitive Certificates."
The Pooling and Servicing Agreement provides for special meetings of the
Certificateholders under certain limited circumstances but will not provide for
any annual or other meetings of Certificateholders.
THE TRUSTEE
Fleet National Bank, a national banking association, will act as Trustee
under the Pooling and Servicing Agreement. The Trustee's corporate trust
department is located at One Federal Street, Boston, Massachusetts 02211. The
Servicer and its affiliates (excluding, as to obtaining credit, the Transferor)
may from time to time enter into normal banking and trustee relationships with
the Trustee and its affiliates. In addition, for purposes of meeting the legal
requirements of certain local jurisdictions, the Trustee shall have the power to
appoint a co-trustee or separate trustees of all or a part of the Trust. In the
event of such appointments, all rights, powers, duties and obligations shall be
conferred or imposed upon the Trustee and such separate trustee or co-trustee
jointly, or in any jurisdiction in which the Trustee shall be incompetent or
unqualified to perform certain acts singly upon such separate trustee or
co-trustee, who shall exercise and perform such rights, powers, duties and
obligations solely at the direction of the Trustee.
The Trustee may resign at any time, in which event the Transferor will be
obligated to appoint a successor Trustee. The Servicer may also remove the
Trustee if the Trustee ceases to be eligible to continue as such under the
Pooling and Servicing Agreement or if the Trustee becomes insolvent. In such
circumstances, the Servicer may appoint a successor Trustee. Any resignation or
removal of the Trustee and appointment of a successor Trustee does not become
effective until the acceptance of the appointment by the successor Trustee.
