EXECUTION COPY
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SALE AND SERVICING AGREEMENT
among
WORLD OMNI AUTO RECEIVABLES TRUST 2001-A,
Issuer,
WORLD OMNI AUTO RECEIVABLES LLC,
Seller
and
WORLD OMNI FINANCIAL CORP.,
Servicer
Series 2001-A
Dated as of February 13, 2001
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions................................................................................ 1
Section 1.02 Other Definitional Provisions.............................................................. 15
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01 Conveyance of Receivables.................................................................. 16
Section 2.02 Intention of Parties....................................................................... 17
ARTICLE III
THE RECEIVABLES
Section 3.01 Representations and Warranties of World Omni with Respect to the Receivables............... 17
Section 3.02 Repurchase upon Breach..................................................................... 20
Section 3.03 Custody of Receivable Files................................................................ 21
Section 3.04 Duties of Servicer as Custodian............................................................ 21
Section 3.05 Instructions; Authority To Act............................................................. 22
Section 3.06 Custodian's Indemnification................................................................ 22
Section 3.07 Effective Period and Termination........................................................... 22
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 4.01 Duties of Servicer......................................................................... 23
Section 4.02 Collection and Allocation of Receivable Payments........................................... 23
Section 4.03 Realization upon Receivables............................................................... 24
Section 4.04 Physical Damage Insurance.................................................................. 24
Section 4.05 Maintenance of Security Interests in Financed Vehicles..................................... 24
Section 4.06 Covenants of Servicer...................................................................... 24
Section 4.07 Purchase of Receivables upon Breach........................................................ 24
Section 4.08 Servicing Fee.............................................................................. 25
Section 4.09 Servicer's Certificate..................................................................... 25
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Section 4.10 Annual Statement as to Compliance; Notice of Default....................................... 25
Section 4.11 Annual Independent Certified Public Accountants' Report.................................... 26
Section 4.12 Access to Certain Documentation and Information Regarding Receivables...................... 26
Section 4.13 Servicer Expenses.......................................................................... 26
Section 4.14 Appointment of Subservicer................................................................. 26
Section 4.15 Annual Transfer............................................................................ 26
ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
Section 5.01 Establishment of Trust Accounts............................................................ 27
Section 5.02 Collections................................................................................ 30
Section 5.03 Application of Collections................................................................. 30
Section 5.04 Advances................................................................................... 30
Section 5.05 Additional Deposits........................................................................ 30
Section 5.06 Distributions.............................................................................. 31
Section 5.07 Reserve Account............................................................................ 32
Section 5.08 Statements to Noteholders and Certificateholders........................................... 33
Section 5.09 Net Deposits............................................................................... 34
Section 5.10 Transfer of Certificates................................................................... 34
ARTICLE VI
THE SELLER
Section 6.01 Representations of Seller.................................................................. 34
Section 6.02 Corporate Existence........................................................................ 36
Section 6.03 Liability of Seller; Indemnities........................................................... 36
Section 6.04 Merger or Consolidation of, or Assumption of Obligations of Seller......................... 38
Section 6.05 Limitation on Liability of Seller and Others............................................... 38
Section 6.06 Seller May Own Notes....................................................................... 39
Section 6.07 Security Interest.......................................................................... 39
ARTICLE VII
THE SERVICER
Section 7.01 Representations of Servicer................................................................ 39
Section 7.02 Indemnities of Servicer.................................................................... 40
Section 7.03 Merger or Consolidation of, or Assumption of Obligations of, Servicer...................... 41
Section 7.04 Limitation on Liability of Servicer and Others............................................. 41
Section 7.05 World Omni Not To Resign as Servicer....................................................... 42
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ARTICLE VIII
DEFAULT
Section 8.01 Servicer Default........................................................................... 42
Section 8.02 Appointment of Successor................................................................... 44
Section 8.03 Notification to Noteholders and Certificateholders......................................... 44
Section 8.04 Waiver of Past Defaults.................................................................... 44
Section 8.05 Payment of Servicing Fees; Repayment of Advances........................................... 45
ARTICLE IX
TERMINATION
Section 9.01 Optional Purchase of All Receivables....................................................... 45
ARTICLE X
MISCELLANEOUS
Section 10.01 Amendment................................................................................. 45
Section 10.02 Protection of Title to Trust.............................................................. 46
Section 10.03 Notices................................................................................... 48
Section 10.04 Assignment by the Seller or the Servicer.................................................. 48
Section 10.05 Limitations on Rights of Others........................................................... 48
Section 10.06 Severability.............................................................................. 49
Section 10.07 Separate Counterparts..................................................................... 49
Section 10.08 Headings.................................................................................. 49
Section 10.09 Governing Law............................................................................. 49
Section 10.10 Assignment by Issuer...................................................................... 49
Section 10.11 Nonpetition Covenants..................................................................... 49
Section 10.12 Limitation of Liability of Owner Trustee and Indenture Trustee............................ 50
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
EXHIBIT A Form of Distribution Statement to Noteholders............................................A-1
EXHIBIT B Form of Servicer's Certificate...........................................................B-1
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SALE AND SERVICING AGREEMENT
This SALE AND SERVICING AGREEMENT is dated as of February 13, 2001,
among WORLD OMNI AUTO RECEIVABLES TRUST 2001-A, a Delaware business trust, WORLD
OMNI AUTO RECEIVABLES LLC, a Delaware limited liability company, as seller and
WORLD OMNI FINANCIAL CORP., a Florida corporation.
WHEREAS, the Issuer desires to purchase a portfolio of receivables
arising in connection with motor vehicle retail installment sale contracts
purchased by the Seller and originated or acquired by the Servicer in the
ordinary course of business;
WHEREAS, the Seller is willing to transfer such Receivables to the
Issuer; and
WHEREAS, the Servicer is willing to service, to make representations
and warranties and to make certain repurchase representations with respect to
such Receivables;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement, the
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following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Advance" means, with respect to any Payment Date, the amount of
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interest, if any, determined as of the close of business on the last day of the
related Collection Period, which the Servicer is required to advance on
Receivables more than 30 days past due determined as set forth in Section 5.04.
"Agreement" means this Sale and Servicing Agreement, as the same may
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be amended and supplemented from time to time.
"Amount Financed" means, with respect to a Receivable, the amount
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advanced under the Receivable toward the purchase price of the Financed Vehicle,
warranty or insurance premium and any related costs.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
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rate of finance charges stated in the related Contract.
"Available Funds" means, with respect to any Payment Date, (1) the sum
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of the following amounts, without duplication, with respect to the Receivables
in respect of the Collection Period preceding such Payment Date: (a) all
collections on Receivables, (b) Advances, (c) all Liquidation Proceeds
attributable to the Receivables that became Liquidated Receivables during such
Collection Period in accordance with the Servicer's customary servicing
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procedures and all Recoveries, (d) the Purchase Amount of each Receivable that
became a Purchased Receivable as of the last day of the related Collection
Period, (e) partial prepayments relating to refunds of warranty or insurance
financed by the respective Obligor thereon as part of the original contract and
only to the extent not included under clause (a) above, (f) amounts on deposit
in the Reserve Account after giving effect to all other deposits and withdrawals
thereto or therefrom on the Payment Date relating to such Collection Period in
excess of the Required Reserve Amount, (g) Investment Earnings for the related
Payment Date, (h) any Collection Account Redeposits for the related Payment Date
and (i) all amounts received from the Indenture Trustee pursuant to Section 5.04
of the Indenture minus (2) the Servicing Fee (unless the Servicer elects to
defer part or all of such fee), reimbursements for Advances and other amounts
payable to the Servicer pursuant to Section 4.08 hereof for the related Payment
Date; provided, however, that in calculating Available Funds all payments and
proceeds (including Liquidation Proceeds) of any Purchased Receivables the
Purchased Amount of which has been included in Available Funds in a prior
Collection Period shall be excluded.
"Basic Documents" has the meaning assigned in the Indenture.
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"Business Day" means any day other than (i) a Saturday or a Sunday or
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(ii) a day on which banking institutions or trust companies in the State of
Florida, the State of New York, the State of Delaware, the states in which the
servicing offices of the Servicer are located or the state in which the
Corporate Trust Office is located are required or authorized by law, regulation
or executive order to be closed.
"Certificateholders" has the meaning assigned to such term in the
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Trust Agreement.
"Certificates" means the Trust Certificates (as defined in the Trust
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Agreement).
"Class" means any one of the classes of Notes.
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"Class A-1 Final Scheduled Payment Date" means February 20, 2002.
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"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note
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is registered in the Note Register.
"Class A-2 Final Scheduled Payment Date" means the November 2003
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Payment Date.
"Class A-2 Noteholder" means the Person in whose name a Class A-2 Note
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is registered in the Note Register.
"Class A-3 Final Scheduled Payment Date" means the February 2005
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Payment Date.
"Class A-3 Noteholder" means the Person in whose name a Class A-3 Note
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is registered in the Note Register.
"Class A-4 Final Scheduled Payment Date" means the July 2007 Payment
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Date.
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"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note
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is registered in the Note Register.
"Class A Noteholders' Interest Carryover Shortfall" means, with
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respect to any Payment Date, the excess of the Class A Noteholders' Interest
Distributable Amount for the preceding Payment Date, over the amount in respect
of interest that was actually paid on the Class A Notes on such preceding
Payment Date, plus interest on the amount of interest due but not paid to
holders of the Class A Notes on the preceding Payment Date, to the extent
permitted by law, at the respective interest rates borne by each Class of the
Class A Notes for the related Interest Accrual Period.
"Class A Noteholders' Interest Distributable Amount" means, with
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respect to any Payment Date, the sum of the Class A Noteholders' Monthly
Interest Distributable Amount for such Payment Date and the Class A Noteholders'
Interest Carryover Shortfall for such Payment Date.
"Class A Noteholders' Monthly Interest Distributable Amount" means,
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with respect to any Payment Date, interest accrued for the related Interest
Accrual Period on each class of Class A Notes at the respective interest rate
for such Class on the Outstanding Amount of the Notes of such Class on the
immediately preceding Payment Date (or, in the case of the first Payment Date,
February 13, 2001), after giving effect to all payments of principal to the
Noteholders of such Class on or prior to such preceding Payment Date.
"Class B Final Scheduled Payment Date" means the July 2007 Payment
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Date.
"Class B Noteholder" means the Person in whose name a Class B Note is
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registered in the Note Register.
"Class B Noteholders' Interest Carryover Shortfall" means, with
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respect to any Payment Date, the excess of the Class B Noteholders' Interest
Distributable Amount for the preceding Payment Date, over the amount in respect
of interest that was actually paid on the Class B Notes on such preceding
Payment Date, plus interest on the amount of interest due but not paid to
holders of the Class B Notes on the preceding Payment Date, to the extent
permitted by law, at the respective interest rates borne by such Class of the
Notes for the related Interest Accrual Period.
"Class B Noteholders' Interest Distributable Amount" means, with
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respect to any Payment Date, the sum of the Class B Noteholders' Monthly
Interest Distributable Amount for such Payment Date and the Class B Noteholders'
Interest Carryover Shortfall for such Payment Date.
"Class B Noteholders' Monthly Interest Distributable Amount" means,
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with respect to any Payment Date, interest accrued for the related Interest
Accrual Period on the Class B Notes at the interest rate for such Class on the
Outstanding Amount of the Notes of such Class on the immediately preceding
Payment Date (or, in the case of the first Payment Date, on February 13, 2001),
after giving effect to all payments of principal to the Noteholders of such
Class on or prior to such preceding Payment Date.
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"Collection Account" means the account designated as such, established
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and maintained pursuant to Section 5.01(a)(i).
"Collection Account Redeposits" means, with respect to any Payment
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Date, amounts that would have been distributed to the Certificateholders on the
prior Payment Date but for the direction of the Certificateholders causing such
amounts to remain on deposit in the Collection Account.
"Collection Period" means, with respect to any Payment Date, the
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period from and including the first day of the calendar month immediately
preceding the calendar month in which such Payment Date occurs (or with respect
to the first Payment Date, from but excluding the Cutoff Date) to and including
the last day of the calendar month immediately preceding the calendar month in
which such Payment Date occurs. Any amount stated as of the last day of a
Collection Period shall give effect to the following applications as determined
as of the close of business on such last day: (1) all applications of
collections and (2) all distributions to be made on the related Payment Date.
"Contract" means a motor vehicle retail installment sale contract.
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"Controlling Securities" means the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3 and
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Class A-4 Notes.
"Corporate Trust Office" means the principal office of the Indenture
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Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn:
Capital Markets Fiduciary Services, World Omni 2001-A; or at such other address
as the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Seller, or the principal corporate trust office of any
successor Indenture Trustee (of which address such successor Indenture Trustee
will notify the Noteholders and the Seller).
"Cutoff Date" means the close of business on December 31, 2000.
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"Dealer" means the dealer who sold a Financed Vehicle and who
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originated and assigned the related Receivable to World Omni under an existing
agreement between such dealer and World Omni.
"Defaulted Receivable" means a Receivable as to which (a) all or any
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part of a monthly payment is 120 or more days past due and the Servicer has not
repossessed the related Financed Vehicle or (b) the Servicer has, in accordance
with its customary servicing procedures, determined that eventual payment in
full is unlikely and has either repossessed and liquidated the related Financed
Vehicle or repossessed and held the related Financed Vehicle in its repossession
inventory for 45 days, whichever occurs first. The Principal Balance of any
Receivable that becomes a Defaulted Receivable will be deemed to be zero as of
the date it becomes a Defaulted Receivable.
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"Delaware Trustee" means The Bank of New York (Delaware), its
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successors in interest and any successor Delaware trustee under the Trust
Agreement.
"Delivery" when used with respect to Trust Account Property means:
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(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC and are
susceptible of physical delivery, transfer thereof to the Indenture Trustee or
its nominee or custodian by physical delivery to the Indenture Trustee or its
nominee or custodian endorsed to, or registered in the name of, the Indenture
Trustee or its nominee or custodian or endorsed in blank, and, with respect to a
certificated security (as defined in Section 8-102 of the UCC) transfer thereof
(i) by delivery of such certificated security endorsed to, or registered in the
name of, the Indenture Trustee or its nominee or custodian or endorsed in blank
to a financial intermediary (as defined in Section 8-313 of the UCC) and the
making by such financial intermediary of entries on its books and records
identifying such certificated securities as belonging to the Indenture Trustee
or its nominee or custodian and the sending by such financial intermediary of a
confirmation of the purchase of such certificated security by the Indenture
Trustee or its nominee or custodian, or (ii) by delivery thereof to a "clearing
corporation" (as defined in Section 8-102(3) of the UCC) and the making by such
clearing corporation of appropriate entries on its books reducing the
appropriate securities account of the transferor and increasing the appropriate
securities account of a financial intermediary by the amount of such
certificated security, the identification by the clearing corporation of the
certificated securities for the sole and exclusive account of the financial
intermediary, the maintenance of such certificated securities by such clearing
corporation or a "custodian bank" (as defined in Section 8-102(4) of the UCC) or
the nominee of either subject to the clearing corporation's exclusive control,
the sending of a confirmation by the financial intermediary of the purchase by
the Indenture Trustee or its nominee or custodian of such securities and the
making by such financial intermediary of entries on its books and records
identifying such certificated securities as belonging to the Indenture Trustee
or its nominee or custodian (all of the foregoing, "Physical Property"), and,
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in any event, any such Physical Property in registered form shall be in the name
of the Indenture Trustee or its nominee or custodian; and such additional or
alternative procedures as may hereafter become appropriate to effect the
complete transfer of ownership of any such Trust Account Property (as defined
herein) to the Indenture Trustee or its nominee or custodian, consistent with
changes in applicable law or regulations or the interpretation thereof;
(b) with respect to any securities issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that are book-entry securities held through the Federal Reserve
System pursuant to Federal book-entry regulations, the following procedures, all
in accordance with applicable law, including applicable Federal regulations and
Articles 8 and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal Reserve
Bank by a financial intermediary which is also a "depository" pursuant to
applicable Federal regulations and issuance by such financial intermediary of a
deposit advice or other written confirmation of such book-entry registration to
the Indenture Trustee or its nominee or custodian of the purchase by the
Indenture Trustee or its nominee or custodian of such book-entry
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securities; the identification by the Federal Reserve Bank of such book-entry
securities on its record being credited to the financial intermediary's
Participant's securities account; the making by such financial intermediary of
entries in its books and records identifying such book-entry security held
through the Federal Reserve System pursuant to Federal book-entry regulations as
being credited to the Indenture Trustee's securities account or custodian's
securities account and indicating that such custodian holds such Trust Account
Property solely as agent for the Indenture Trustee or its nominee or custodian;
and such additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Trust Account
Property to the Indenture Trustee or its nominee or custodian, consistent with
changes in applicable law or regulations or the interpretation thereof; and
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not governed by
clause (b) above, registration on the books and records of the issuer thereof in
the name of the financial intermediary, the sending of a confirmation by the
financial intermediary of the purchase by the Indenture Trustee or its nominee
or custodian of such uncertificated security, the making by such financial
intermediary of entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee or custodian.
"Depositor" means the Seller in its capacity as Depositor under the
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Trust Agreement.
"Eligible Deposit Account" means either (a) a segregated account with
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an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories that signifies
investment grade.
"Eligible Institution" means (a) the corporate trust department of
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the Indenture Trustee or (b) a depository institution or trust company organized
under the laws of the United States of America or any one of the states thereof,
or the District of Columbia (or any domestic branch of a foreign bank), which at
all times (i) has either (A) a long-term unsecured debt rating of Aa2 or better
by ▇▇▇▇▇'▇, ▇▇ or better by Standard & Poor's and, if rated by Fitch and so long
as Fitch is a Rating Agency, AA or better by Fitch, or such other rating that is
acceptable to each Rating Agency, as evidenced by a letter from such Rating
Agency to the Indenture Trustee or (B) a certificate of deposit rating of P-1 by
▇▇▇▇▇'▇, A-1+ by Standard & Poor's and, if rated by Fitch and so long as Fitch
is a Rating Agency, F1 by Fitch, or such other rating that is acceptable to each
Rating Agency, as evidenced by a letter from such Rating Agency to the Indenture
Trustee and (ii) whose deposits are insured by the FDIC.
"Eligible Investments" shall mean any of the following in each case
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with a remaining term of no more than one year:
(a) (i) direct obligations of, and obligations guaranteed as to full
and timely payment of principal and interest by, the United States or any agency
or instrumentality of the
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▇▇▇▇▇▇ ▇▇▇▇▇▇ the obligations of which are backed by the full faith and credit
of the United States (other than the Government National Mortgage Association),
and (ii) direct obligations of, or obligations fully guaranteed by, ▇▇▇▇▇▇ ▇▇▇
or any State then rated with the highest available credit rating of ▇▇▇▇▇'▇,
Standard & Poor's and, if rated by Fitch and so long as Fitch is a Rating
Agency, Fitch, or such obligations, which obligations are, at the time of
investment, otherwise acceptable to each Rating Agency for securities having a
rating at least equivalent to the rating of the Notes;
(b) certificates of deposit, demand or time deposits of, bankers'
acceptances issued by, or federal funds sold by any depository institution or
trust company (including the Indenture Trustee or the Owner Trustee or their
successors) incorporated under the laws of the United States or any State and
subject to supervision and examination by federal and/or State banking
authorities and the deposits of which are fully insured by the FDIC; so long as
at the time of such investment or contractual commitment providing for such
investment either such depository institution or trust company has the Required
Rating or the Rating Agency Condition has been satisfied;
(c) repurchase obligations held by the Indenture Trustee that are
acceptable to the Indenture Trustee with respect to (i) any security described
in clause (a) above or (e) below, or (ii) any other security issued or
guaranteed by any agency or instrumentality of the United States, in either case
entered into with a federal agency or depository institution or trust company
(including the Indenture Trustee) acting as principal, whose obligations having
the same maturity as that of the repurchase agreement would be Eligible
Investments under clause (b) above; provided, however, that repurchase
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obligations entered into with any particular depository institution or trust
company (including the Indenture Trustee or Owner Trustee) will not be Eligible
Investments to the extent that the aggregate principal amount of such repurchase
obligations with such depository institution or trust company held by the
Indenture Trustee on behalf of the Trust shall exceed 10% of either the Pool
Balance or the aggregate unpaid balance or face amount, as the case may be, of
all Eligible Investments held by the Indenture Trustee on behalf of the Trust;
(d) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any State so
long as at the time of such investment or contractual commitment providing for
such investment, either the long-term, unsecured debt of such corporation has
the highest available credit rating from Moody's, Standard & Poor's and, if
rated by Fitch and so long as Fitch is a Rating Agency, Fitch, or the Rating
Agency Condition has been satisfied, or commercial paper or other short-term
debt having the Required Rating; provided, however, that any such commercial
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paper or other short-term debt may have a remaining term to maturity of no
longer than 30 days after the date of such investment or contractual commitment
providing for such investment, and that the securities issued by any particular
corporation will not be Eligible Investments to the extent that investment
therein will cause the then outstanding principal amount or face amount, as the
case may be, of securities issued by such corporation and held by the Indenture
Trustee on behalf of the Trust to exceed 10% of either the Pool Balance or the
aggregate unpaid principal balance or face amount, as the case may be, of all
Eligible Investments held by the Indenture Trustee on behalf of the Trust;
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(e) interest in any open-end or closed-end management type investment
company or investment trust (i) registered under the Investment Company Act of
1940, as amended, the portfolio of which is limited to the obligations of, or
guaranteed by, the United States and to agreements to repurchase such
obligations, which agreements, with respect to principal and interest, are at
least 100% collateralized by such obligations marked to market on a daily basis
and the investment company or investment trust shall take delivery of such
obligations either directly or through an independent custodian designated in
accordance with the Investment Company Act and (ii) acceptable to each Rating
Agency (as approved in writing by each Rating Agency) as collateral for
securities having ratings equivalent to the ratings of the Notes;
(f) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation for which the Rating Agency Condition has been
satisfied;
(g) investments in Eligible Investments maintained in "sweep
accounts," short-term asset management accounts and the like utilized for the
investment, on an overnight basis, of residual balances in investment accounts
maintained at the Indenture Trustee or any other depository institution or trust
company organized under the laws of the United States or any state that is a
member of the FDIC, the short-term debt of which has the highest available
credit rating of Moody's, Standard & Poor's and, if rated by Fitch and so long
as Fitch is a Rating Agency, Fitch;
(h) guaranteed investment contracts entered into with any financial
institution having a final maturity of not more than one month from the date of
acquisition, the short-term debt securities of which institution have the
Required Rating;
(i) funds classified as money market funds (including those for which
the Indenture Trustee acts as investment manager or advisor) consisting of: U.S.
Treasury bills, other obligations issued or guaranteed by the U.S. government,
its agencies or instrumentalities; certificates of deposit; banker's
acceptances; and commercial paper (including variable master demand notes);
provided, however, that the fund shall be rated with the highest available
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credit rating of Moody's, Standard & Poor's and, if rated by Fitch and so long
as Fitch is a Rating Agency, Fitch, and redemptions shall be permitted on a
daily or next business day basis; and
(j) such other investments for which the Rating Agency Condition has
been satisfied.
Notwithstanding anything to the contrary contained in the foregoing
definition:
(a) no Eligible Investment may be repurchased at a premium;
(b) any of the foregoing which constitutes a certificated security
shall not be considered an Eligible Investment unless:
(i) in the case of a certificated security that is in bearer
form, (A) the Indenture Trustee acquires physical possession of such
certificated security, or (B) a person, other than a securities
intermediary, acquires possession of such certificated security on
behalf of the Indenture Trustee; and
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(ii) in the case of a certificated security that is in
registered form (A)(1) the Indenture Trustee acquires physical
possession of such certificated security, (2) a person, other than a
securities intermediary, acquires possession of such certificated
security on behalf of the Indenture Trustee, or (3) a securities
intermediary acting on behalf of the Indenture Trustee acquires
possession of such certificated security and such certificated
security has been specially endorsed to the Indenture Trustee, and (B)
(1) such certificated security is endorsed to the Indenture Trustee or
in blank by an effective endorsement, or (2) such certificated
security is registered in the name of the Indenture Trustee;
(c) any of the foregoing that constitutes an uncertificated security
shall not be considered an Eligible Investment unless (A) the Indenture Trustee
is registered by the issuer as the owner thereof, (B) a person, other than a
securities intermediary, becomes the registered owner of such uncertificated
security on behalf of the Indenture Trustee, or (C) the issuer of such
uncertificated security agrees that it will comply with the instructions
originated by the Indenture Trustee without further consent by any registered
owner of such uncertificated security;
(d) any of the foregoing that constitutes a security entitlement
shall not be considered an Eligible Investment unless (A) the Indenture Trustee
becomes the entitlement holder thereof, or (B) the securities intermediary has
agreed to comply with the entitlement orders originated by the Indenture Trustee
without further consent by the entitlement holder;
(e) any of the foregoing shall not constitute an Eligible Investment
unless the Indenture Trustee (A) has given value, and (B) does not have notice
of an adverse claim; and
(f) for the purposes of funds held in the Collection Account only,
investments which would otherwise qualify as Eligible Investments but for the
fact that such investments are rated A-1 by Standard & Poor's or F1 by Fitch
shall be Eligible Investments, so long as the aggregate amount of such
investments does not exceed 10% of the Outstanding Amount of the Notes.
"Event of Default" has the meaning assigned to such term in the
----------------
Indenture.
"FDIC" means the Federal Deposit Insurance Corporation.
----
"Final Scheduled Maturity Date" means July 1, 2007.
-----------------------------
"Financial Asset" has the meaning given such term in Revised Article
---------------
8. As used herein, the Financial Asset "related to" a security entitlement is
the Financial Asset in which the entitlement holder (as defined in the New York
UCC) holding such Security Entitlement has the rights and property interest
specified in the New York UCC.
"Financed Vehicle" means an automobile or light-duty truck, together
----------------
with all accessions thereto, securing an Obligor's indebtedness under the
respective Receivable.
"Fitch" means Fitch, Inc. or its successor.
-----
-9-
"Indenture" means the Indenture, dated as of the date hereof, between
---------
the Issuer and the Indenture Trustee (that provides for the issuance of the
Issuer's Asset-Backed Notes, Series 2001-A), as it may be amended and
supplemented from time to time.
"Indenture Trustee" means the Person acting as Indenture Trustee under
-----------------
the Indenture, its successors in interest and any successor trustee under the
Indenture.
"Insolvency Event" means, with respect to a specified Person, (a) the
----------------
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable federal
or state bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"Interest Accrual Period" has the meaning assigned to such term in the
-----------------------
Indenture.
"Investment Earnings" means, with respect to any Payment Date, the
-------------------
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited into the Collection Account on
such Payment Date pursuant to Section 5.01(b).
"Issuer" means World Omni Auto Receivables Trust 2001-A.
------
"Lien" means a security interest, lien, charge, pledge, equity or
----
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable liquidated by the
---------------------
Servicer through the sale of a Financed Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to any Liquidated
--------------------
Receivable, the monies collected in respect thereof, from whatever source on a
Liquidated Receivable during the Collection Period in which such Receivable
became a Liquidated Receivable, net of the sum of any amounts expended by the
Servicer in connection with such liquidation and any amounts required by law to
be remitted to the Obligor on such Liquidated Receivable.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, or its successor.
-------
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"Non-Recoverable Advance Receivable" means a Receivable for which the
----------------------------------
Servicer has determined on or prior to the related Payment Date that an Advance
thereon would not be recoverable or that prior Advances thereon are not
recoverable.
"Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes,
-----
Class A-4 Notes and Class B Notes.
"Note Distribution Account" means the account designated as such,
-------------------------
established and maintained pursuant to Section 5.01.
"Note Pool Factor" means, with respect to each Class of Notes as of
----------------
the close of business on the last day of a Collection Period, a seven-digit
decimal figure equal to the Outstanding Amount of such Class of Notes (after
giving effect to any reductions thereof to be made on the immediately following
Payment Date) divided by the original Outstanding Amount of such Class of Notes.
The Note Pool Factor will be 1.0000000 as of the Closing Date; thereafter, the
Note Pool Factor will decline to reflect reductions in the Outstanding Amount of
such Class of Notes.
"Noteholders' Distributable Amount" means, with respect to any Payment
---------------------------------
Date, the sum of the Noteholders' Interest Distributable Amount and the
Noteholders' Principal Distributable Amount for such Payment Date.
"Noteholders' First Priority Principal Distributable Amount" means,
----------------------------------------------------------
with respect to any Payment Date, an amount equal to the excess, if any, of (a)
the Outstanding Amount of the Class A Notes as of the day immediately preceding
such Payment Date over (b) the Pool Balance for that Payment Date.
"Noteholders' Interest Distributable Amount" means, with respect to
------------------------------------------
any Payment Date, the sum of the Class A Noteholders' Interest Distributable
Amount for such Payment Date and the Class B Noteholders' Interest Distributable
Amount for such Payment Date. For all purposes of this Agreement and the Basic
Documents, interest with respect to all Classes of Notes (other than the Class
A-1 Notes) shall be computed on the basis of a 360-day year consisting of twelve
30-day months. Interest with respect to the Class A-1 Notes shall be computed
on the basis of the actual number of days in the related Interest Accrual Period
and a 360-day year.
"Noteholders' Principal Distributable Amount" means, with respect to
-------------------------------------------
any Payment Date, the excess, if any, of (a) the sum of the Outstanding Amount
of the Notes as of the day immediately preceding that Payment Date and the
Overcollateralization Target Amount for that Payment Date over (b) the Pool
Balance for that Payment Date.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
-------
Financed Vehicle and any other Person who owes payments under the Receivable.
"Officers' Certificate" means a certificate signed by the president, a
---------------------
vice president, a treasurer, assistant treasurer, secretary or assistant
secretary of the Seller, World Omni or the Servicer, as appropriate.
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"Opinion of Counsel" means one or more written opinions of counsel,
------------------
who may be an employee of or counsel to the Seller or the Servicer, which
counsel shall be acceptable to the Indenture Trustee, the Owner Trustee or the
Rating Agencies, as applicable.
"Original Pool Balance" means $720,584,873.87.
---------------------
"Outstanding Advances" means all Advances by the Servicer minus all
--------------------
reimbursements of Advances to the Servicer pursuant to Section 4.08 and Section
5.04.
"Outstanding Amount" has the meaning assigned to such term in the
------------------
Indenture.
"Overcollateralization Target Amount" means, with respect to any
-----------------------------------
Payment Date, an amount equal to 3.25% of the Pool Balance for that Payment Date
but not less than $7,205,848.74.
"Owner Trust Estate" has the meaning assigned to such term in the
------------------
Trust Agreement.
"Owner Trustee" means the Person acting as Owner Trustee under the
-------------
Trust Agreement, its successors in interest and any successor owner trustee
under the Trust Agreement.
"Payment Date" means, with respect to each Collection Period, the
------------
twentieth day of the following month or, if such day is not a Business Day, the
immediately following Business Day. The first Payment Date will be February 20,
2001.
"Payment Determination Date" means, with respect to any Payment Date,
--------------------------
the Business Day immediately preceding such Payment Date.
"Payment Extension Program" means a program where one month's payment
-------------------------
of principal is deferred in return for the payment of an extension fee
calculated generally at the APR of the contract for the month in which such
payment is deferred.
"Physical Property" has the meaning assigned to such term in the
-----------------
definition of "Delivery" above.
"Pool Balance" means, as of any Payment Date, the aggregate Principal
------------
Balance of the Receivables as of the last day of the related Collection Period
after giving effect to all payments of principal received from obligors and
Purchase Amounts to be remitted by the Servicer or the Seller, as the case may
be, for such Collection Period, and after reduction to zero of the aggregate
outstanding Principal Balance of any Receivable that became a Defaulted
Receivable during the related Collection Period.
"Principal Balance" of a Receivable, as of the close of business on
-----------------
the last day of a Collection Period, means the Amount Financed minus the sum of
(i) the portion of all payments made by or on behalf of the related Obligor on
or prior to such day and allocable to principal using the Simple Interest
Method; (ii) refunds of any warranty or insurance financed on
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the original Contract; and (iii) any payment of the Purchase Amount with respect
to the Receivable allocable to principal.
"Principal Distribution Amount" means, with respect to any Payment
-----------------------------
Date, the sum of the following amounts, without duplication, with respect to the
Receivables with respect to the related Collection Period: (a) that portion of
all collections on Receivables allocable to principal, (b) the principal amount
of Receivables that became Defaulted Receivables during such Collection Period,
(c) to the extent attributable to principal, the Purchase Amount of each
Receivable that became a Purchased Receivable during such Collection Period, and
(d) partial prepayments received by the Servicer relating to refunds of any
warranty or insurance, but only if such amounts were financed by the respective
Obligors thereon as of the date of the original contract and only to the extent
not included under clause (a) above; provided, however, that in calculating the
Principal Distribution Amount all payments on and proceeds (including
Liquidation Proceeds) of any Purchased Receivables the Purchase Amount of which
has been included in the Principal Distribution Amount in a prior Collection
Period will be excluded.
"Purchase Amount" means the amount, as of the close of business on the
---------------
last day of a Collection Period, required to prepay in full a Receivable under
the terms thereof including accrued and unpaid interest and interest to such
last day.
"Purchased Receivable" means a Receivable purchased as of the close of
--------------------
business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 or by World Omni pursuant to Section 3.02.
"Rating Agencies" means ▇▇▇▇▇'▇, Standard & Poor's and Fitch or, if
---------------
none of such organizations or successors is any longer in existence, a
nationally recognized statistical rating organization or other comparable Person
designated by the Seller, notice of which designation shall be given to the
Indenture Trustee, the Owner Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
-----------------------
Rating Agency (other than Moody's) shall have given its written approval that
the contemplated action will not result in a reduction or withdrawal of the
rating of the then current rating of the Notes and, with respect to Moody's,
prior written notice to Moody's and Moody's shall not have notified the Seller
that such action will result in a downgrade of the then current rating on any
Notes.
"Receivable" means any Contract listed on Schedule A (which Schedule
----------
may be in the form of microfiche), as such Schedule may be amended from time to
time, which Schedule is hereby incorporated into, and made a part of, this
Agreement.
"Receivables Purchase Agreement" shall mean the Receivables Purchase
------------------------------
Agreement, dated as of the date hereof, between World Omni, as seller and World
Omni Auto Receivables LLC, as purchaser, as amended from time to time.
"Receivable Files" means the documents specified in Section 3.03.
----------------
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"Recoveries" means, with respect to any Receivable that becomes a
----------
Liquidated Receivable, monies collected in respect thereof, from whatever
source, during any Collection Period following the Collection Period in which
such Receivable became a Liquidated Receivable, net of any expenses of the
Servicer in connection with such Receivable for which the Servicer has not been
previously reimbursed and any amounts required by law to be remitted to the
Obligor.
"Required Rating" means a rating on commercial paper or other short
---------------
term unsecured debt obligations of Prime-1 by Moody's so long as ▇▇▇▇▇'▇ is a
Rating Agency, A-1+ by Standard & Poor's so long as Standard & Poor's is a
Rating Agency and F1+ by Fitch so long as Fitch is a Rating Agency; and any
requirement that deposits or debt obligations have the "Required Rating" shall
mean that such deposits or debt obligations have the foregoing required ratings
from Moody's, Standard & Poor's and Fitch.
"Required Reserve Amount" means, with respect to any Payment Date, the
-----------------------
lesser of the Reserve Account Initial Deposit and the Outstanding Amount of the
Notes.
"Reserve Account" means the account designated as such, established
---------------
and maintained pursuant to Section 5.01.
"Reserve Account Initial Deposit" means the initial deposit of cash or
-------------------------------
Eligible Investments in the amount of $5,404,386.55 into the Reserve Account on
the Closing Date.
"Seller" means World Omni Auto Receivables LLC and its successors in
------
interest to the extent permitted hereunder.
"Servicer" means World Omni, as the servicer of the Receivables, and
--------
each successor to World Omni (in the same capacity) pursuant to Section 7.03 or
8.02.
"Servicer Default" means an event specified in Section 8.01.
----------------
"Servicer's Certificate" means a certificate of the Servicer delivered
----------------------
pursuant to Sections 4.09, substantially in the form of Exhibit B.
"Servicing Fee" means the fee payable to the Servicer for services
-------------
rendered during each Collection Period, determined pursuant to Section 4.08.
"Servicing Fee Rate" means 1% per annum.
------------------
"Simple Interest Method" means the method of allocating a fixed level
----------------------
payment to principal and interest, pursuant to which the portion of such payment
that is allocated to interest is equal to the product of the fixed rate of
interest multiplied by the unpaid principal balance multiplied by the period of
time elapsed since the preceding payment of interest was made and the remainder
of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable under which the
--------------------------
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
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"Standard & Poor's" means Standard & Poor's, a division of The McGraw-
-----------------
Hill Companies, Inc., or its successor.
"Total Required Advances" means, with respect to any Payment Date for
-----------------------
each Receivable (other than a Non-Recoverable Advance Receivable) that is more
than 30 days delinquent (determined as of the close of business on the last day
of the related Collection Period), an amount equal to the product of (A) one-
twelfth, (B) the APR of such Receivable, (C) the Principal Balance of such
Receivable and (D) the number of payments (minus one) that such Receivable is
delinquent as of the last day of the related Collection Period.
"Trust" means the Issuer.
-----
"Trust Account Property" means the Trust Accounts, all amounts and
----------------------
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account, and all proceeds of the
foregoing.
"Trust Accounts" has the meaning assigned thereto in Section 5.01.
--------------
"Trust Agreement" means the Trust Agreement, dated as of the date
---------------
hereof, among the Seller, the Owner Trustee and the Delaware Trustee.
"Trust Officer" means, in the case of the Indenture Trustee, any
-------------
Officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Secretary, Assistant Secretary or
any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject and, with respect to the Owner Trustee, any officer in the
Corporate Trust Administration Department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the Basic
Documents on behalf of the Owner Trustee.
"World Omni" means World Omni Financial Corp., a Florida corporation,
----------
or its successors.
Section 1.02 Other Definitional Provisions. (a) Capitalized terms
-----------------------------
used herein and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent that
the
-15-
definitions of accounting terms in this Agreement or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.
(d) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Article, Section, Schedule
and Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term "including" shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01 Conveyance of Receivables. In consideration of the
-------------------------
Issuer's delivery to or upon the order of the Seller of the Notes and the
Certificates, the Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Issuer, without recourse (subject to the obligations of
the Seller set forth herein), all right, title and interest of the Seller
whether now or hereafter acquired, and wherever located, in and to the
following:
(a) the Receivables (all of which are identified in World Omni's
computer files by a code indicating the Receivables are owned by the Trust and
pledged to the Indenture Trustee) and all monies received thereon and in respect
thereof after the Cutoff Date;
(b) the security interests in, and the liens on, the Financed
Vehicles granted by Obligors in connection with the Receivables and any other
interest of the Seller in the Financed Vehicles;
(c) any proceeds with respect to the Receivables from claims on any
physical damage, credit life or disability insurance policies covering the
Financed Vehicles or Obligors;
(d) any Financed Vehicle that shall have secured a Receivable and
shall have been acquired by or on behalf of the Seller, the Servicer or the
Trust;
(e) all right, title and interest in all funds on deposit in, and
"financial assets" (as such term is defined in the Uniform Commercial Code as
from time to time in effect) credited
-16-
to, the Trust Accounts from time to time, including the Reserve Account Initial
Deposit, and in all investments and proceeds thereof (including all income
thereon);
(f) all right, title and interest of World Omni Auto Receivables LLC
under the Receivables Purchase Agreement;
(g) all "accounts," "chattel paper" and "general intangibles" (as
such term is defined in the Uniform Commercial Code as from time to time in
effect) constituting or relating to the foregoing; and
(h) the proceeds of any and all of the foregoing.
Section 2.02 Intention of Parties. It is the intention of the Seller
--------------------
and the Issuer that the assignment and transfer contemplated herein constitute
(and shall be construed and treated for all purposes as) a true and complete
sale of the Receivables and the other property of the Seller specified in
Section 2.01 hereof, conveying good title thereto free and clear of any liens
and encumbrances, from the Seller to the Issuer. However, in the event that such
conveyance is deemed to be a pledge to secure a loan (in spite of the express
intent of the parties hereto that this conveyance constitutes, and shall be
construed and treated for all purposes, as a true and complete sale), the Seller
hereby grants to the Issuer, for the benefit of the Noteholders, a first
priority perfected security interest in all of the Seller's right, title and
interest in, to and under the Receivables and the other property of the Seller
specified in Section 2.01 hereof whether now existing or hereafter created and
all proceeds of the foregoing to secure the loan deemed to be made in connection
with such pledge and, in such event, this Agreement shall constitute a security
agreement under applicable law.
ARTICLE III
THE RECEIVABLES
Section 3.01 Representations and Warranties of World Omni with
-------------------------------------------------
Respect to the Receivables. World Omni which sold the related Receivable hereby
--------------------------
represents and warrants to the other parties hereto and to the Noteholders, with
respect to such Receivable as of the Cutoff Date:
(a) Characteristics of Receivables. Each Receivable (1) was
------------------------------
originated in the United States of America by a Dealer for the retail sale of a
Financed Vehicle in the ordinary course of such Dealer's business, was fully and
properly executed by the parties thereto, was purchased by World Omni from such
Dealer under an existing dealer agreement, or was originated by World Omni, (2)
contains customary and enforceable provisions such that the rights and remedies
of the holder thereof are adequate for realization against the collateral of the
benefits of the security, and (3) provides for level monthly payments (provided,
that the payment in the first or last month in the life of the Receivable may be
minimally different from the level payments and that certain of the Receivables
did not require a payment to be made for up to six months from the date of
execution of the contract) that fully amortize the Amount Financed by maturity
and yield interest at the Annual Percentage Rate.
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(b) Schedule of Receivables. The information set forth in Schedule A
-----------------------
to this Agreement is true and correct in all material respects as of the close
of business on the Cutoff Date, and no selection procedures believed by World
Omni to be adverse to the Noteholders were utilized in selecting the
Receivables. The computer tape or other listing regarding the Receivables made
available to the Issuer and its assigns (which computer tape or other listing is
required to be delivered as specified herein) is true and correct in all
material respects.
(c) Compliance with Law. To the best of World Omni's knowledge, each
-------------------
Receivable, the sale of the Financed Vehicle and the sale of any related
insurance policies thereon financed by the Receivables complied at the time it
was originated or made and, at the execution of this Agreement, complies in all
material respects with all requirements of applicable federal, state and local
laws and regulations thereunder, including usury laws, the federal Truth-in-
Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act,
the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the
▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve Board's Regulations B and Z, and
State adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code, and other consumer credit laws and equal credit opportunity and
disclosure laws.
(d) Binding Obligation. Each Receivable represents the genuine,
------------------
legal, valid and binding payment obligation in writing of the Obligor,
enforceable by the holder thereof in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting the enforcement of creditors' rights in general, and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(e) No Government Obligor. None of the Receivables are due from the
---------------------
United States of America or any State or from any agency, department or
instrumentality of the United States of America or any State.
(f) Security Interest in Financed Vehicle. Immediately prior to the
-------------------------------------
sale, assignment and transfer thereof, each Receivable shall be secured by a
validly perfected first security interest in the Financed Vehicle in favor of
World Omni as secured party or all necessary and appropriate actions have been
commenced that would result in the valid perfection of a first security interest
in the Financed Vehicle in favor of the Seller as secured party and is
assignable by World Omni to the Seller, by the Seller to the Issuer and by the
Issuer to the Indenture Trustee.
(g) Receivables in Force. No Receivable has been satisfied,
--------------------
subordinated or rescinded, nor has any Financed Vehicle been released from the
lien granted by the related Receivable in whole or in part.
(h) No Amendments. No Receivable has been amended such that the
-------------
amount of the Obligor's scheduled payments has been increased.
(i) No Waiver. No provision of a Receivable has been waived, other
---------
than a discretionary waiver of a late payment charge or any other fees that may
be collected in the
-18-
ordinary course of servicing a Receivable or in connection with any extension
which is reflected in the Servicer's computer system.
(j) No Defenses. No right of rescission, setoff, counterclaim or
-----------
defense has been asserted or, to World Omni's knowledge, threatened with respect
to any Receivable.
(k) No Liens. To the best of World Omni's knowledge, no liens or
--------
claims have been filed for work, labor or materials relating to a Financed
Vehicle that are liens prior to, or equal to or coordinate with, the security
interest in the Financed Vehicle granted by any Receivable.
(l) No Default. No Receivable has a payment that is more than 30 days
----------
overdue as of the Cutoff Date, and, except as permitted in this paragraph, to
the best of World Omni's knowledge, no default, breach, violation or event
permitting acceleration under the terms of any Receivable has occurred and no
continuing condition that with notice or the lapse of time would constitute a
default, breach, violation or event permitting acceleration under the terms of
any Receivable has arisen; and neither the Seller nor World Omni has waived and,
except as permitted hereby, shall not waive any of the foregoing.
(m) Insurance. World Omni, in accordance with its customary servicing
---------
procedures, has determined that, at the origination of the Receivable, the
Obligor had obtained physical damage insurance covering the Financed Vehicle.
Under the terms of the Receivable the Obligor is required to maintain physical
damage insurance covering the Financed Vehicle and having World Omni named as
the loss payee.
(n) Title. It is the intention of World Omni that the transfer and
-----
assignment contemplated in the Receivables Purchase Agreement constitute a sale
of the Receivables from World Omni to World Omni Auto Receivables LLC and that
the beneficial interest in and title to the Receivables not be part of the
debtor's estate in the event of the filing of a bankruptcy petition by or
against World Omni under any bankruptcy law. No Receivable has been sold,
transferred, assigned or pledged by World Omni to any Person other than the
Seller. Immediately prior to the transfer and assignment contemplated in the
Receivables Purchase Agreement, World Omni had good and marketable title to each
Receivable free and clear of all Liens, encumbrances, security interests and
rights of others and, immediately upon the transfer thereof, the Seller shall
have good and marketable title to each Receivable, free and clear of all Liens,
encumbrances, security interests and rights of others; and the transfer has been
perfected under the UCC. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Receivables from the
Seller to the Issuer and that the beneficial interest in and title to the
Receivables not be part of the debtor's estate in the event of the filing of a
bankruptcy petition by or against the Seller under any bankruptcy law. No
Receivable has been sold, transferred, assigned or pledged by the Seller to any
Person other than the Issuer. Immediately prior to the transfer and assignment
herein contemplated, the Seller had good and marketable title to each Receivable
free and clear of all Liens, encumbrances, security interests and rights of
others and, immediately upon the transfer thereof, the Issuer shall have good
and marketable title to each Receivable, free and clear of all Liens,
encumbrances, security interests and rights of others; and the transfer has been
perfected under the UCC.
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(o) Lawful Assignment. No Receivable has been originated in, or is
-----------------
subject to the laws of, any jurisdiction under which the sale, transfer and
assignment of such Receivable under this Agreement or the Indenture is unlawful,
void or voidable.
(p) All Filings Made. All filings (including UCC filings) necessary
----------------
in any jurisdiction to give the Issuer a first perfected ownership interest in
the Receivables, and to give the Indenture Trustee a first perfected security
interest therein, shall have been made.
(q) One Original. There is only one executed original of each
------------
Receivable.
(r) Maturity of Receivables. Each Receivable has a final maturity
-----------------------
date not later than December 27, 2006.
(s) Scheduled Payments. Each Receivable has a first scheduled due
------------------
date on or prior to the end of the month following the Cutoff Date.
(t) Location of Receivable Files. The Receivable Files are kept at
----------------------------
one or more of the locations listed in Schedule B.
(u) Outstanding Principal Balance. Each Receivable has an outstanding
-----------------------------
principal balance of at least $500.
(v) No Bankruptcies. No Obligor on any Receivable was noted in the
---------------
Servicer's computer system as having filed for bankruptcy.
(w) No Repossessions. No Receivable was secured by a Financed Vehicle
----------------
that had been repossessed without reinstatement of the related contract.
(x) Chattel Paper. Each Receivable constitutes "chattel paper" as
-------------
defined in the UCC.
(y) Computer Records. World Omni and the Seller will cause their
----------------
accounting and computer records to be marked to indicate the sale and assignment
of the Receivables from World Omni to the Seller and from the Seller to the
Trust.
(z) Code. Each of the Receivables is identified on World Omni's
----
computer files by a code indicating the Receivables are owned by the Trust and
pledged to the Indenture Trustee. The Receivables are the only Contracts listed
on Schedule A to this Agreement, are the only Contracts identified on World
Omni's computer files by such code, and are not identified on World Omni's
computer files by any other code.
Section 3.02 Repurchase upon Breach. The Seller, the Servicer or the
----------------------
Owner Trustee (on behalf of the Trust), as the case may be, shall inform the
other parties to this Agreement and the Indenture Trustee promptly, in writing,
upon the discovery of any breach of World Omni's representations and warranties
made pursuant to Section 3.01. Unless any such breach shall have been cured by
the last day of the second Collection Period following the discovery thereof by
the Owner Trustee or receipt by the Owner Trustee of written notice from the
Seller or the Servicer of such breach, World Omni shall be obligated to
repurchase any
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Receivable materially and adversely affected by any such breach as of such last
day (or, at World Omni's option, the last day of the first Collection Period
following the discovery) and World Omni shall deliver a revised Schedule A to
the Seller and the Trust which shall reflect the repurchase of such
Receivables). In consideration of the repurchase of any such Receivable, World
Omni shall remit the Purchase Amount, in the manner specified in Section 5.05.
Subject to the provisions of Section 6.03, the sole remedy of the Issuer, the
Owner Trustee, the Indenture Trustee, the Noteholders or the Certificateholders
with respect to a breach of representations and warranties pursuant to Section
3.01 and the agreement contained in this Section shall be to require World Omni
to repurchase Receivables pursuant to this Section, subject to the conditions
contained herein.
Section 3.03 Custody of Receivable Files. To assure uniform quality
---------------------------
in servicing the Receivables and to reduce administrative costs, the Issuer
hereby revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee as
custodian of the following documents or instruments which are hereby or will
hereby be constructively delivered to the Indenture Trustee, as pledgee of the
Issuer, as of the Closing Date with respect to each Receivable:
(a) the fully executed original of the Receivable;
(b) the original credit application fully executed by the Obligor or
such other information as the Servicer may keep on file in accordance with its
customary servicing procedures;
(c) the original certificate of title or such documents that the
Servicer or the Seller shall keep on file, in accordance with its customary
procedures, evidencing the security interest of World Omni in the Financed
Vehicle; and
(d) any and all other documents that the Servicer or the Seller shall
keep on file, in accordance with its customary procedures, relating to a
Receivable, an Obligor or a Financed Vehicle.
Section 3.04 Duties of Servicer as Custodian. (a) Safekeeping. The
------------------------------- -----------
Servicer shall hold the Receivable Files as custodian for the benefit of the
Issuer and maintain such accurate and complete accounts, records and computer
systems pertaining to each Receivable File as shall enable the Issuer to comply
with this Agreement. In performing its duties as custodian the Servicer shall
act with reasonable care, using that degree of skill and attention that the
Servicer exercises with respect to the receivable files relating to all
comparable automotive receivables that the Servicer services for itself or
others. The Servicer shall promptly report to the Issuer and the Indenture
Trustee any failure on its part to hold the Receivable Files and maintain its
accounts, records and computer systems as herein provided and shall promptly
take appropriate action to remedy any such failure. Nothing herein shall be
deemed to require an initial review or any periodic review by the Issuer or the
Indenture Trustee of the Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall maintain
------------------------------------
each Receivable File at one of its offices specified in Schedule B or at such
other office as shall be
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specified to the Issuer and the Indenture Trustee by written notice not later
than 90 days after any change in location.
The Servicer shall provide to the Indenture Trustee access to any and
all documentation regarding the Receivables in such cases where the Indenture
Trustee is required in connection with the enforcement of the rights of the
Noteholders, or by applicable statutes or regulations to review such
documentation, such access being afforded without charge but only (a) upon
reasonable request, (b) during normal business hours, (c) subject to the
Servicer's normal security and confidentiality procedures and (d) at offices
designated by the Servicer. Nothing in this Section 3.04(b) shall derogate from
the obligation of the Servicer or the Indenture Trustee to observe any
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of the Servicer to provide access as provided in this Section
3.04(b) as a result of such obligation shall not constitute a breach of this
Section 3.04(b).
(c) Release of Documents. Upon instruction from the Indenture
--------------------
Trustee, the Servicer shall release any Receivable File to the Indenture
Trustee, the Indenture Trustee's agent or the Indenture Trustee's designee, as
the case may be, at such place or places as the Indenture Trustee may designate,
as soon as practicable.
Section 3.05 Instructions; Authority To Act. The Servicer shall be
------------------------------
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Trust Officer of the
Indenture Trustee.
Section 3.06 Custodian's Indemnification. The Servicer as custodian
---------------------------
shall indemnify the Trust, the Owner Trustee, the Delaware Trustee and the
Indenture Trustee and each of their respective officers, directors, employees
and agents for any and all liabilities, obligations, losses, compensatory
damages, payments, costs or expenses of any kind whatsoever that may be imposed
on, incurred by or asserted against the Trust, the Owner Trustee, the Delaware
Trustee or the Indenture Trustee or any of their respective officers, directors,
employees and agents as the result of any improper act or omission in any way
relating to the maintenance and custody by the Servicer as custodian of the
Receivable Files; provided, however, that the Servicer shall not be liable to
the Owner Trustee or the Delaware Trustee for any portion of any such amount
resulting from the willful misfeasance, bad faith or negligence of the Owner
Trustee or the Delaware Trustee, respectively, and the Servicer shall not be
liable to the Indenture Trustee for any portion of any such amount resulting
from the willful misfeasance, bad faith or negligence of the Indenture Trustee.
Section 3.07 Effective Period and Termination. The Servicer's
--------------------------------
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section. If
World Omni shall resign as Servicer in accordance with the provisions of this
Agreement or if all of the rights and obligations of any Servicer shall have
been terminated under Section 8.01, the appointment of such Servicer as
custodian may be terminated by the Indenture Trustee or by the Holders of the
Controlling Securities evidencing not less than 25% of the Outstanding Amount of
the Controlling Securities or, with the consent of Holders of the Controlling
Securities evidencing not less than 25% of the Outstanding Amount of the
Controlling Securities, by the Owner Trustee, in the same manner as the
Indenture Trustee or such Holders may terminate the rights and obligations of
the Servicer under
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Section 8.01. As soon as practicable after any termination of such appointment,
the Servicer shall deliver the Receivable Files to the Indenture Trustee or the
Indenture Trustee's agent at such place or places as the Indenture Trustee may
reasonably designate.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 4.01 Duties of Servicer. The Servicer, for the benefit of the
------------------
Issuer (to the extent provided herein), shall manage, service, administer and
receive collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it services
for itself or others. The Servicer's duties shall include collection and posting
of all payments, making Advances, responding to inquiries of Obligors on such
Receivables, investigating delinquencies, sending payment coupons to Obligors,
reporting tax information to Obligors, accounting for collections, paying the
fee of the Administrator out of its own funds pursuant to Section 1.03 of the
Administration Agreement and furnishing a Servicer's Certificate to the
Indenture Trustee. Subject to the provisions of Section 4.02, the Servicer shall
follow its customary standards, policies and procedures in performing its duties
as Servicer. Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders and the
Noteholders or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Receivables or to the Financed Vehicles
securing such Receivables. If the Servicer shall commence a legal proceeding to
enforce a Receivable, the Issuer (in the case of a Receivable other than a
Purchased Receivable) shall thereupon be deemed to have automatically assigned,
solely for the purpose of collection, such Receivable to the Servicer. If in any
enforcement suit or legal proceeding it shall be held that the Servicer may not
enforce a Receivable on the ground that it shall not be a real party in interest
or a holder entitled to enforce such Receivable, the Owner Trustee shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders. The Owner Trustee
shall upon the written request of the Servicer furnish the Servicer with any
powers of attorney and other documents reasonably necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties
hereunder.
Section 4.02 Collection and Allocation of Receivable Payments. The
------------------------------------------------
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Receivables as and when the same shall become
due and shall follow such collection procedures as it follows with respect to
all comparable automotive receivables that it services for itself or others. The
Servicer shall allocate collections as set forth in Section 5.03. The Servicer
may grant extensions (although not more than six for the life of any Receivable
(excluding the Servicer's Payment Extension Program)), rebates or adjustments on
a Receivable, which shall not, for the purposes of this Agreement, modify the
day of the month on which payment is due (except in connection with a limited
number of accommodations for Obligors of occasional requests in accordance with
the Servicer's customary servicing procedures) or change the
-23-
method under which scheduled payments of interest are computed on such
Receivable (other than with respect to the Servicer's Payment Extension
Program); provided, however, that if the Servicer extends the date for final
payment by the Obligor of any Receivable beyond the Final Scheduled Maturity
Date, it shall promptly repurchase the Receivable from the Issuer in accordance
with the terms of Section 4.07. The Servicer shall not retain any fees in
connection with any extension of a Receivable but shall instead deposit such
fees into the Collection Account within two Business Days of receipt. The
Servicer may in its discretion waive any late payment charge or any other fees
that may be collected in the ordinary course of servicing a Receivable. The
Servicer shall not agree to any alteration of the interest rate or the
originally scheduled payments on any Receivable, other than as provided herein
or as required by law.
Section 4.03 Realization upon Receivables. On behalf of the Issuer,
----------------------------
the Servicer shall use commercially reasonable efforts, consistent with its
customary servicing procedures, to repossess or otherwise convert the ownership
of the Financed Vehicle securing any Receivable as to which the Servicer shall
have determined eventual payment in full is unlikely. The Servicer shall follow
such customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of automotive receivables, which may include selling
the Financed Vehicle at public or private sale.
Section 4.04 Physical Damage Insurance. To the extent applicable, the
-------------------------
Servicer shall not take any action that would result in noncoverage under such
physical damage insurance policy which, but for the actions of the Servicer,
would have been covered thereunder. Any amounts collected by the Servicer under
any physical damage insurance policy shall be deposited in the Collection
Account pursuant to Section 5.02. The parties hereto acknowledge that the
Servicer shall not force place any insurance coverage.
Section 4.05 Maintenance of Security Interests in Financed Vehicles.
------------------------------------------------------
The Servicer shall, in accordance with its customary servicing procedures, take
such steps as are necessary to maintain perfection of the security interest
created by each Receivable in the related Financed Vehicle. The Servicer is
hereby authorized to take such steps as are necessary to re-perfect such
security interest on behalf of the Issuer and the Indenture Trustee in the event
of the relocation of a Financed Vehicle or for any other reason.
Section 4.06 Covenants of Servicer. The Servicer shall not release
---------------------
the Financed Vehicle securing any Receivable from the security interest granted
by such Receivable in whole or in part except in the event of (i) payment by the
Obligor (a) in full or (b) in part with a remaining total payment shortage
amount which, according to the Servicer's customary procedures, does not exceed
the amount of total payment shortage that would permit the Servicer to release
the related Financed Vehicle from the security interest or (ii) repossession,
nor shall the Servicer impair the rights of the Issuer, the Indenture Trustee,
the Certificateholders or the Noteholders in such Receivable.
Section 4.07 Purchase of Receivables upon Breach. The Servicer or the
-----------------------------------
Owner Trustee, on behalf of the Trust, shall inform the other party and the
Indenture Trustee and the Seller promptly, in writing, upon the discovery of any
breach pursuant to Section 4.02, 4.05, 4.06 or 7.01. Unless the breach shall
have been cured by the last day of the second Collection Period following such
discovery or written notice (or, at the Servicer's election, the last day of the
first
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following Collection Period), the Servicer shall purchase any Receivable
materially and adversely affected by such breach as of such last day and the
Servicer shall deliver a revised Schedule A to the Seller and the Trust, which
shall reflect the repurchase of such Receivables. In consideration of the
purchase of any such Receivable pursuant to the preceding sentence, the Servicer
shall remit the Purchase Amount in the manner specified in Section 5.05. Subject
to Section 7.02, the sole remedy of the Issuer, the Owner Trustee, the Indenture
Trustee, the Certificateholders or the Noteholders with respect to a breach
pursuant to Section 4.02, 4.05, 4.06 or 7.01 shall be to require the Servicer to
purchase Receivables pursuant to this Section. The Owner Trustee shall have no
duty to conduct any affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Receivable pursuant to this Section.
Section 4.08 Servicing Fee. The Servicing Fee for a Payment Date
-------------
shall equal the product of (a) one-twelfth, (b) the Servicing Fee Rate and (c)
the Pool Balance as of the first day of the related Collection Period. The
Servicer shall also be entitled to all reimbursements for Advances as set forth
in Section 5.04, late fees, any prepayment charges, and other administrative
fees or similar charges allowed by applicable law with respect to the
Receivables, collected (from whatever source) on the Receivables, plus any
reimbursement pursuant to the last paragraph of Section 7.02. The Servicer may,
as long as it believes that sufficient collections will be available from
interest collections on one or more future Payment Dates to pay the Servicing
Fee, by notice to the Indenture Trustee on or before a Payment Date, elect to
defer all or a portion of the Servicing Fee with respect to the related
Collection Period, without interest. If the Servicer defers all of the Servicing
Fee, the Servicing Fee for such related Collection Period will be deemed to
equal zero.
Section 4.09 Servicer's Certificate. Not later than 11:00 A.M. (New
----------------------
York time) on each Payment Determination Date, the Servicer shall deliver a
Servicer's Certificate pursuant to Section 5.08. Receivables to be purchased by
the Servicer or to be repurchased by World Omni or the Seller shall be
identified by the Servicer by account number with respect to such Receivable (as
specified in Schedule A).
Section 4.10 Annual Statement as to Compliance; Notice of Default.
----------------------------------------------------
(a) The Servicer shall deliver to the Owner Trustee and the Indenture Trustee,
on or before April 30 of each year beginning April 30, 2002, an Officers'
Certificate, dated as of December 31 of the preceding year, stating that (i) a
review of the activities of the Servicer during the preceding 12-month period
(or such shorter period as shall have elapsed since the Closing Date) and of its
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers' knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
year or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officers and the nature and status
thereof. The Indenture Trustee shall send a copy of such certificate and the
report referred to in Section 4.11 to the Rating Agencies. A copy of such
certificate and the report referred to in Section 4.11 may be obtained by any
Certificateholder or Noteholder by a request in writing to the Owner Trustee
addressed to the Corporate Trust Office. Upon the telephone request of the Owner
Trustee, the Indenture Trustee will promptly furnish the Owner Trustee a list of
Noteholders as of the date specified by the Owner Trustee.
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(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter, written
notice in an Officers' Certificate of any event which with the giving of notice
or lapse of time, or both, would become a Servicer Default under Section 8.01(a)
or (b).
Section 4.11 Annual Independent Certified Public Accountants' Report.
-------------------------------------------------------
Within 120 days after December 31 of each year, beginning in 2002, the Servicer
shall deliver to the Owner Trustee and the Indenture Trustee a report, prepared
by the independent accountants of the Servicer, stating that such independent
accountants have audited the annual financial statements of the Servicer in
accordance with auditing standards generally accepted in the United States and
nothing came to such independent accountants' attention that caused them to
believe that the Servicer was not in compliance with the provisions of this
Agreement, except for (a) such exceptions as such firm shall believe to be
immaterial, and (b) such other exceptions as shall be set forth in such
statement.
Section 4.12 Access to Certain Documentation and Information
-----------------------------------------------
Regarding Receivables. The Servicer shall provide to the Certificateholders and
---------------------
Noteholders access to the Receivable Files in such cases where the
Certificateholders or Noteholders shall be required by applicable statutes or
regulations to review such documentation. Access shall be afforded without
charge, but only upon reasonable request and during the normal business hours at
the offices of the Servicer. Nothing in this Section shall affect the obligation
of the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors and the failure of the Servicer to provide
access to information as a result of such obligation shall not constitute a
breach of this Section.
Section 4.13 Servicer Expenses. The Servicer shall be required to pay
-----------------
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and reports
to Certificateholders and Noteholders.
Section 4.14 Appointment of Subservicer. The Servicer may at any time
--------------------------
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided, however, that the Rating Agency Condition shall
have been satisfied in connection therewith; and provided, further, that the
Servicer shall remain obligated and be liable to the Issuer, the Owner Trustee,
the Indenture Trustee, the Certificateholders and the Noteholders for the
servicing and administering of the Receivables in accordance with the provisions
hereof without diminution of such obligation and liability by virtue of the
appointment of such subservicer and to the same extent and under the same terms
and conditions as if the Servicer alone were servicing and administering the
Receivables. The fees and expenses of the subservicer shall be as agreed between
the Servicer and its subservicer from time to time, and none of the Issuer, the
Owner Trustee, the Indenture Trustee, the Certificateholders or the Noteholders
shall have any responsibility therefor. The Servicer shall give the Indenture
Trustee written notice of any subservicer appointed hereunder,
Section 4.15 Annual Transfer. The State of Florida imposes a value-
---------------
based intangibles tax on January 1 of each year on certain intangibles owned,
managed or controlled by
-26-
Florida domiciliaries or intangibles having a business situs in Florida. On the
last business day of each year, in an effort to minimize the impact of this
intangibles tax, the Seller will transfer 99% of its right, title and interest
in, to and under the Certificates owned by it as of such day, together with all
of its duties, rights and obligations under this Agreement and the
Administration Agreement to a special-purpose entity that is a wholly-owned
subsidiary of World Omni (the "Transferee"), located and managed outside the
State of Florida (such transfer, the "Annual Transfer"). In connection with such
---------------
Annual Transfer, World Omni will transfer all of its rights, obligations and
duties under this Agreement and the Administration Agreement to the Transferee.
The Trust will continue to maintain its first priority perfected security
interest in the receivables. Only 99% of the Seller's interest in the
receivables evidenced by the Certificates and its duties, rights and obligations
under this Agreement and the Administration Agreement, together with World
Omni's management and control authority and obligations, will be transferred to
the Transferee, to be held in escrow and returned to the Seller and World Omni,
respectively, on the first business day of the following year. World Omni shall
indemnify the Trust with respect to any liability for this intangibles tax.
World Omni will not conduct any servicing activities during the period of the
Annual Transfer.
ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
Section 5.01 Establishment of Trust Accounts. (a)(i) The Servicer,
-------------------------------
for the benefit of the Noteholders and the Certificateholders, shall cause to be
established and maintained with and in the name of the Indenture Trustee an
Eligible Deposit Account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Noteholders and the Certificateholders.
(ii) The Servicer, for the benefit of the Noteholders, shall
cause to be established and maintained with and in the name of the
Indenture Trustee an Eligible Deposit Account (the "Note Distribution
Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Noteholders.
(iii) The Servicer, for the benefit of the Noteholders and the
Certificateholders, shall cause to be established and maintained with and
in the name of the Indenture Trustee an Eligible Deposit Account (the
"Reserve Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Noteholders and the
Certificateholders.
(b) Funds on deposit in the Collection Account, the Note Distribution
Account and the Reserve Account (collectively the "Trust Accounts") shall be
invested by the Indenture Trustee in Eligible Investments selected by the
Servicer. In absence of written direction from the Servicer, such funds shall
be invested in Eligible Investments specified in clause (i) of the definition
thereof. All such Eligible Investments shall be held by the Indenture Trustee
for the benefit of the Noteholders and the Certificateholders or the
Noteholders, as applicable; provided, that on each Payment Determination Date
all interest and other Investment
-27-
Earnings on funds on deposit in the Trust Accounts shall be deposited into the
Collection Account and shall be deemed to constitute a portion of the Available
Funds for the related Payment Date. Other than as permitted by the Rating
Agencies, funds on deposit in the Collection Account, the Reserve Account and
the Note Distribution Account shall be invested in Eligible Investments that
will mature (A) not later than the Business Day immediately preceding the next
Payment Date or (B) on or before 10:00 a.m. on such next Payment Date if such
investment is held in the corporate trust department of the institution with
which the Collection Account, the Reserve Account or the Note Distribution
Account, as applicable, is then maintained and is invested either (i) in a time
deposit of the Indenture Trustee rated at least A-1 by Standard & Poor's, F1 by
Fitch and P-1 by Moody's (such account being maintained within the corporate
trust department of the Indenture Trustee), (ii) in the Indenture Trustee's
common trust fund so long as such fund is rated in the highest applicable rating
category by Standard & Poor's, Moody's and Fitch or (iii) in Eligible
Investments specified in clauses (g) or (i) of the definition thereof. In no
event shall the Indenture Trustee be held liable for investment losses in
Eligible Investments pursuant to this Section 5.01, except in its capacity as
obligor thereunder.
(c) (i) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and in
all proceeds thereof (including all income thereon) and all such funds,
investments, proceeds and income shall be part of the Trust Estate. The Trust
Accounts shall be under the sole dominion and control of the Indenture Trustee
for the benefit of the Noteholders or the Noteholders and the
Certificateholders, as the case may be. If, at any time, any of the Trust
Accounts ceases to be an Eligible Deposit Account, the Indenture Trustee (or
the Servicer on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) establish a new Trust Account as an Eligible Deposit Account and shall
transfer any cash and/or any investments to such new Trust Account. The
Indenture Trustee or the other Person holding the Trust Accounts as provided in
this Section 5.01(c)(i) shall be the "Securities Intermediary." If the
Securities Intermediary shall be a Person other than the Indenture Trustee, the
Servicer shall obtain the express agreement of such Person to the obligations of
the Securities Intermediary set forth in this Section 5.01.
(ii) With respect to the Trust Account Property, the Securities
Intermediary agrees, by its acceptance hereof, that:
(A) The Trust Accounts are accounts to which Financial Assets
will be credited.
(B) All securities or other property underlying any Financial
Assets credited to the Trust Accounts shall be registered in the name
of the Securities Intermediary, indorsed to the Securities
Intermediary or in blank or credited to another securities account
maintained in the name of the Securities Intermediary and in no case
will any Financial Asset credited to any of the Trust Accounts be
registered in the name of the Trust, the Servicer or the Seller,
payable to the order of the Trust, the Servicer or the Seller or
specially indorsed to the Owner Trustee, the Servicer or the Seller
except to the extent the foregoing have been specially indorsed to the
Securities Intermediary or in blank.
-28-
(C) All property delivered to the Securities Intermediary
pursuant to this Agreement will be promptly credited to the
appropriate Trust Account.
(D) Each item of property (whether investment property, Financial
Asset, security, instrument of cash) credited to a Trust Account shall
be treated as a "financial asset" within the meaning of Section 8-
102(a)(9) of the New York UCC.
(E) If at any time the Securities Intermediary shall receive any
order from the Indenture Trustee directing transfer or redemption of
any Financial Asset relating to the Trust Accounts, the Securities
Intermediary shall comply with such entitlement order without further
consent by the Trust, the Servicer, the Seller or any other Person.
(F) The Trust Accounts shall be governed by the laws of the State
of New York, regardless of any provision in any other agreement. For
purposes of the UCC, New York shall be deemed to be the Securities
Intermediary's jurisdiction and the Trust Accounts (as well as the
securities entitlements (as defined in Section F-102(a)(17) of the
UCC) related thereto) shall be governed by the laws of the State of
New York.
(G) The Securities Intermediary has not entered into, and until
the termination of this Agreement will not enter into, any agreement
with any other person relating to the Trust Accounts and/or any
Financial Assets credited thereto pursuant to which it has agreed to
comply with entitlement orders (as defined in Section 8-102(a)(8) of
the New York UCC) of such other person and the Securities Intermediary
has not entered into, and until the termination of this Agreement will
not enter into, any agreement with the Trust, the Seller, the Servicer
or the Indenture Trustee purporting to limit or condition the
obligation of the Securities Intermediary to comply with entitlement
orders as set forth in Section 5.01(c)(ii)(E) hereof.
(H) Except for the claims and interest of the Indenture Trustee
and of the Trust in the Trust Accounts, the Securities Intermediary
knows of no claim to, or interest in, the Trust Accounts or in any
Financial Asset credited thereto. If any other person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process) against
the Trust Accounts or in any Financial Asset carried therein, the
Securities Intermediary will promptly notify the Indenture Trustee,
the Servicer and the Trust thereof.
(I) The Securities Intermediary will promptly send copies of all
statements, confirmations and other correspondence concerning the
Trust Accounts and/or any Trust Account Property simultaneously to
each of the Servicer and the Indenture Trustee.
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(iii) The Servicer shall have the power, revocable by the
Indenture Trustee or by the Owner Trustee with the consent of the Indenture
Trustee, to instruct the Indenture Trustee to make withdrawals and payments
from the Trust Accounts for the purpose of permitting the Servicer or the
Owner Trustee to carry out its respective duties hereunder or permitting
the Indenture Trustee to carry out its duties under the Indenture.
Section 5.02 Collections. The Servicer shall remit within two Business
-----------
Days of receipt thereof to the Collection Account all payments by or on behalf
of the Obligors with respect to the Receivables (other than Purchased
Receivables) and all Liquidation Proceeds, both as collected during the
Collection Period. Notwithstanding the foregoing, for so long as (i) World Omni
remains the Servicer, (ii) no Servicer Default shall have occurred and be
continuing, (iii) the Rating Agency Condition is met and (iv) World Omni either
(a) maintains a short-term debt rating of at least A-1 by Standard & Poor's, P-1
by ▇▇▇▇▇'▇ Investors Service, Inc. and F1 by Fitch, Inc., (b) arranges for and
maintains a letter of credit or other form of enhancement for the Servicer's
obligations to make deposits of collections on the Receivables in the Collection
Account that is acceptable in form and substance to each Rating Agency or (c)
otherwise satisfies the Rating Agency Condition, the Servicer shall remit such
collections with respect to the preceding calendar month to the Collection
Account on the Payment Determination Date immediately preceding the related
Payment Date. For purposes of this Article V the phrase "payments by or on
behalf of Obligors" shall mean payments made with respect to the Receivables by
Persons other than the Servicer or the Seller.
Section 5.03 Application of Collections. With respect to each
--------------------------
Receivable (other than a Purchased Receivable), payments by or on behalf of the
Obligor shall be applied to interest and principal in accordance with the Simple
Interest Method.
Section 5.04 Advances. On each Payment Date, the Servicer shall
--------
deposit into the Collection Account an amount (such amount, an "Advance"), if
-------
positive, equal to (1) the Total Required Advances with respect to such Payment
Date minus (2) the Outstanding Advance immediately following the preceding
Payment Date. On each Payment Date, the Servicer shall be reimbursed for
Outstanding Advances in an amount, if positive, equal to (1) the Outstanding
Advances immediately following the preceding Payment Date minus (2) the Total
Required Advances with respect to such Payment Date. The Servicer shall not make
any advance in respect of principal on the Receivables.
Section 5.05 Additional Deposits. The Servicer and the Seller shall
-------------------
deposit or cause to be deposited in the Collection Account the aggregate
Purchase Amount with respect to Purchased Receivables and the Servicer shall
deposit therein all amounts to be paid under Section 9.01. The Servicer will
deposit the aggregate Purchase Amount with respect to Purchased Receivables when
such obligations are due. The Servicer shall, if necessary, deposit all Advances
required to be made pursuant to Section 5.04 in the Collection Account on each
Payment Date. All such other deposits shall be made on the Payment Determination
Date for the related Collection Period.
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Section 5.06 Distributions. (i) On or before each Payment
-------------
Determination Date, the Servicer shall calculate (A) all amounts required to be
deposited in the Note Distribution Account and (B) all amounts required to be
distributed to the Certificateholders.
(ii) Except as otherwise provided in clauses (iii) or (iv) below,
on each Payment Date, the Servicer shall instruct the Indenture Trustee
(based on the information contained in the Servicer's Certificate delivered
on the related Payment Determination Date pursuant to Section 4.09) to make
the following deposits and distributions to the extent of the Available
Funds, in the following order of priority:
(A) to the Note Distribution Account, from Available Funds, the
Class A Noteholders' Interest Distributable Amount;
(B) to the Note Distribution Account, from the Available Funds
remaining after the application of clause (A) above, if any, the
Noteholders' First Priority Principal Distributable Amount;
(C) to the Note Distribution Account, from the Available Funds
remaining after the application of clauses (A) and (B) above, if any,
the Class B Noteholders' Interest Distributable Amount;
(D) to the Reserve Account, from the Available Funds remaining
after the application of clauses (A) through (C) above, the amount, if
any, necessary to reinstate the balance in the Reserve Account up to
the Required Reserve Amount;
(E) to the Note Distribution Account, from the Available Funds
remaining after the application of clauses (A) through (D) above, if
any, an amount equal to the Noteholders' Principal Distribution Amount
minus any amounts allocated to the Note Distribution Account pursuant
to clause (B) above; and
(F) to the Certificateholders, the portion, if any, of the
Available Funds remaining after the application of clauses (A) through
(E) above; provided the Indenture Trustee has not received written
instruction from the Certificateholders of 100% percentage interest in
the Certificates to redeposit all or a portion of such Available Funds
into the Collection Account.
The Holders of 100% Percentage Interest of the Certificates will have the right,
but not the obligation, in their sole discretion, to instruct the Indenture
Trustee in writing to retain in the Collection Account all or a portion of
distributions otherwise payable to them pursuant to (F) above. If the
Certificateholders make this election, these amounts will be treated as
collections during the then current Collection Period and the Certificateholders
will have no claim to such amounts (unless distributed on a subsequent Payment
Date pursuant to (F) above).
To the extent the Class A-1 Notes are still outstanding on the Class A-1 Final
Scheduled Payment Date, deposits to the Note Distribution Account with respect
to the amounts described in clauses (A) and (B) above shall be made on the Class
A-1 Final Scheduled Payment Date.
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Notwithstanding that the Notes have been paid in full, the Indenture Trustee
shall continue to maintain the Collection Account hereunder until the Pool
Balance is reduced to zero.
(iii) In the event the Notes are declared to be due and payable
following the occurrence of an Event of Default pursuant to Section 5.01(i)
and (ii) of the Indenture, the Servicer shall instruct the Indenture
Trustee (based on the information contained in the Servicer's Certificate
delivered on the related Payment Determination Date pursuant to section
4.09) to make the following deposits and distributions to the extent of
Available Funds, in the following order of priority: (A) to the Note
Distribution Account, from Available Funds, an amount equal to the accrued
and unpaid interest on each Class of Class A Notes; (B) to the Note
Distribution Account, from the Available Funds remaining after the
application of clause (A) above, if any, an amount equal to the Outstanding
Amount of each class of Class A Notes; (C) to the Note Distribution
Account, from Available Funds remaining after the application of clauses
(A) and (B) above, if any, an amount equal to the accrued and unpaid
interest on the Class B Notes; (D) to the Note Distribution Account, from
Available Funds remaining after the application of clauses (A), (B) and (C)
above, if any, an amount equal to the Outstanding Amount of the Class B
Notes; and (E) to the Certificateholders, the portion, if any, of the
Available Funds remaining after application of clauses (A), (B), (C) and
(D), above.
(iv) In the event the Notes are declared to be due and payable
following the occurrence of an Event of Default pursuant to Section
5.01(iii), (iv) or (v) of the Indenture, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Payment Determination Date pursuant to
section 4.09) to make the following deposits and distributions to the
extent of Available Funds, in the following order of priority: (A) to the
Note Distribution Account, from Available Funds, an amount equal to the
accrued and unpaid interest on each Class of Class A Notes; (B) to the Note
Distribution Account, from Available Funds remaining after the application
of clause (A) above, if any, an amount equal to the accrued and unpaid
interest on the Class B Notes; (C) to the Note Distribution Account, from
the Available Funds remaining after the application of clauses (A) and (B)
above, if any, an amount equal to the Outstanding Amount of each class of
Class A Notes; (D) to the Note Distribution Account, from Available Funds
remaining after the application of clauses (A), (B) and (C) above, if any,
an amount equal to the Outstanding Amount of the Class B Notes; and (E) to
the Certificateholders, the portion, if any, of the Available Funds
remaining after application of clauses (A), (B), (C) and (D), above.
Section 5.07 Reserve Account.
---------------
(a) On the Closing Date, the Indenture Trustee will deposit, on behalf
of the Seller, the Reserve Account Initial Deposit into the Reserve Account.
(b) If the amount on deposit in the Reserve Account on any Payment
Date (after giving effect to all deposits thereto or withdrawals therefrom on
such Payment Date) is greater than the Required Reserve Amount for such Payment
Date, the Servicer shall instruct the Indenture Trustee to withdraw such amount
from the Reserve Account and apply it as Available Funds for such Payment Date.
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(c) In the event that the Noteholders' Distributable Amount for a
Payment Date exceeds the sum of the amounts deposited into the Note Distribution
Account pursuant to Section 5.06(ii)(A), (B) and (C) or Section 5.06(iii), as
the case may be, on such Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Payment Date an amount
equal to such excess, to the extent of funds available therein, and deposit such
amount into the Note Distribution Account; provided that such amount shall be
applied according to the priorities set forth in Section 5.06(ii) or Section
5.06(iii), as the case may be.
(d) Subject to Section 9.01, amounts will continue to be applied
pursuant to Section 5.06 following payment in full of the Outstanding Amount of
the Notes until the Pool Balance is reduced to zero. Following the payment in
full of the aggregate Outstanding Amount of the Notes and of all other amounts
owing or to be distributed hereunder or under the Indenture or the Trust
Agreement to Noteholders, any amount remaining on deposit in the Reserve Account
shall be distributed to the Certificateholders.
Section 5.08 Statements to Noteholders and Certificateholders. On
------------------------------------------------
each Payment Determination Date, the Servicer shall provide to the Indenture
Trustee (with a copy to the Rating Agencies) for the Indenture Trustee to
forward to The Depository Trust Company (which shall supply such statement to
Noteholders in accordance with its procedures), a statement substantially in the
form of Exhibit B, setting forth at least the following information as to the
Notes, to the extent applicable:
(a) the amount of such distribution allocable to principal allocable
to each Class of Notes;
(b) the amount of such distribution allocable to interest allocable to
each Class of Notes;
(c) the Outstanding Amount of each Class of Notes and the Note Pool
Factor for each such Class as of the close of business on the last day of the
preceding Collection Period, after giving effect to payments allocated to
principal reported under clause (a) above;
(d) the amount of the Servicing Fee paid to the Servicer with respect
to the related Collection Period;
(e) the balance of the Reserve Account on such Payment Determination
Date after giving effect to deposits and withdrawals to be made on the immediate
following Payment Date, if any;
(f) the Pool Balance as of the close of business on the last day of
the related Collection Period, after giving effect to payments allocated to
principal reported under clause (a) above;
(g) the Class A Noteholders' Interest Carryover Shortfall;
(h) the Class B Noteholders' Interest Carryover Shortfall;
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(i) the aggregate Purchase Amount paid by the Seller or the Servicer
with respect to the related Collection Period;
(j) delinquency information relating to the Receivables which are more
than 30, 60 or 90 days delinquent;
(k) the amount, if any, distributed to the Certificateholders;
(l) the Noteholders' First Priority Principal Distributable Amount;
(m) the Noteholders' Principal Distributable Amount; and
(n) the Overcollateralization Target Amount for the immediately
following Payment Date.
Each amount set forth on the Payment Date statement under clauses (a)
and (b) above shall be expressed as a dollar amount per $1,000 of original
principal amount of a Note.
Section 5.09 Net Deposits. As an administrative convenience, the
------------
Servicer will be permitted to make the deposit of collections on the
Receivables, Advances and Purchase Amounts for or with respect to the Collection
Period net of distributions to be made to the Servicer with respect to the
Collection Period. The Servicer, however, will account to the Owner Trustee, the
Indenture Trustee, the Noteholders and the Certificateholders as if all
deposits, distributions and transfers were made individually.
Section 5.10 Transfer of Certificates. In the event any Holder of a
------------------------
Certificate shall wish to transfer such Certificate, the Seller shall provide to
such Holder and any prospective transferee designated by such Holder information
regarding the Certificates and the Receivables and such other information as
shall be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act of 1933, as amended, pursuant to the exemption from
registration provided by Rule 144A.
ARTICLE VI
THE SELLER
Section 6.01 Representations of Seller. The Seller makes the
-------------------------
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the Closing Date, and
shall survive the sale of the Receivables to the Issuer and the pledge thereof
to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Seller is duly organized and
------------------------------
validly existing as a limited liability company in good standing under the laws
of the State of Delaware, with the requisite power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the requisite power, authority and legal right to acquire and own the
Receivables.
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(b) Due Qualification. The Seller is duly qualified to do business as
-----------------
a foreign limited liability company in good standing, and has obtained all
necessary material licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business shall require such
qualifications, except where the failure to be so qualified or to have obtained
such licenses or approvals would not have a material adverse effect on the
Seller's earnings, business affairs or business prospects.
(c) Power and Authority. The Seller has the requisite power and
-------------------
authority to execute and deliver this Agreement and to carry out its terms; the
Seller has full power and authority to sell and assign the property to be sold
and assigned to and deposited with the Issuer, and the Seller shall have duly
authorized such sale and assignment to the Issuer by all necessary action; and
the execution, delivery and performance of this Agreement has been duly
authorized by the Seller by all necessary action.
(d) Binding Obligation. This Agreement constitutes a legal, valid and
------------------
binding obligation of the Seller enforceable against the Seller in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or
hereafter in effect, affecting the enforcement of creditors' rights in general,
and except as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(e) No Violation. The consummation of the transactions contemplated
------------
by this Agreement and the fulfillment of the terms hereof do not (i) conflict
with, result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under, the limited liability
company agreement or bylaws of the Seller; (ii) breach, conflict with or violate
any of the material terms or provisions of, or constitute (with or without
notice or lapse of time) a default under, any indenture, agreement or other
instrument to which the Seller is a party or by which it is bound; (iii) result
in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than
pursuant to this Agreement and the Basic Documents); or, (iv) to the best of the
Seller's knowledge, violate any order, rule or regulation applicable to the
Seller of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the Seller
or its properties except, in the case of clauses (ii), (iii) and (iv), for such
breaches, defaults, conflicts, liens or violations that would not have a
material adverse effect on the Seller's earnings, business affairs or business
prospects.
(f) No Proceedings. To the Seller's best knowledge, there are no
--------------
proceedings or investigations pending or threatened before any court, regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties: (i) asserting the invalidity of
this Agreement, the Indenture or any of the other Basic Documents, the Notes or
the Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated by this
Agreement, the Indenture or any of the other Basic Documents, (iii) seeking any
determination or ruling that could reasonably be expected to materially and
adversely affect the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement, the Indenture, any of the other
Basic Documents, the Notes or the Certificates or (iv) which could reasonably
be expected to adversely affect the federal or state income tax attributes of
the Notes or the Certificates.
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(g) All Consents. All authorizations, licenses, consents, orders or
------------
approvals of, or registrations or declarations with, any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Seller in connection with the execution and
delivery by the Seller of this Agreement or any of the Basic Documents to which
it is a party and the performance by the Seller of the transactions contemplated
by this Agreement or any of the Basic Documents to which it is a party, have
been duly obtained, effected or given and are in full force and effect, except
where failure to obtain the same would not have a material adverse effect upon
the rights of the Trust, the Noteholders or the Certificateholders.
Section 6.02 Corporate Existence. (a) During the term of this
-------------------
Agreement, the Seller will keep in full force and effect its existence, rights
and franchises as a limited liability company under the laws of the jurisdiction
of its incorporation and will obtain and preserve its qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Basic Documents and each other instrument or agreement necessary or appropriate
to the proper administration of this Agreement and the transactions contemplated
hereby. In addition, all transactions and dealings between the Seller and its
Affiliates will be conducted on an arm's-length basis.
(b) During the term of this Agreement, the Seller shall observe the
applicable legal requirements for the recognition of the Seller as a legal
entity separate and apart from its affiliates, including the following:
(i) the Seller shall maintain corporate records and books of
account separate from those of its affiliates;
(ii) Except as otherwise provided in this Agreement, the Seller
shall not commingle its assets and funds with those of its affiliates;
(iii) the Seller shall hold such appropriate meetings of its
Board of Directors as are necessary to authorize all the Seller's corporate
actions required by law to be authorized by the Board of Directors, shall
keep minutes of such meetings and observe all other customary corporate
formalities (and any successor Seller not a limited liability company shall
observe similar procedures in accordance with its governing documents and
applicable law); and
(iv) the Seller shall at all times hold itself out to the
public under the Seller's own name as a legal entity separate and distinct
from its affiliates.
Section 6.03 Liability of Seller; Indemnities. The Seller shall be
--------------------------------
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement:
(a) The Seller shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Delaware Trustee, the Indenture Trustee and the Servicer
and any of the officers, directors, employees and agents of the Issuer, the
Owner Trustee and the Indenture Trustee from and against any taxes that may at
any time be asserted against any such Person with
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respect to the transactions contemplated herein and in the Basic Documents,
including any sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes (but, in the case of the Issuer, not
including any taxes asserted with respect to, and as of the date of, the sale of
the Receivables to the Issuer or the issuance and original sale of the
Certificates and the Notes, or asserted with respect to ownership of the
Receivables, or federal or other income taxes arising out of distributions on
the Certificates or the Notes) and costs and expenses in defending against the
same.
(b) The Seller shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Delaware Trustee, the Indenture Trustee, the
Certificateholders and the Noteholders and any of the officers, directors,
employees and agents of the Issuer, the Owner Trustee, the Delaware Trustee and
the Indenture Trustee from and against any loss, liability or reasonable and
documented expense incurred by reason of the Seller's willful misfeasance, bad
faith or negligence (except for errors in judgment) in the performance of its
duties under this Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement.
(c) The Seller shall indemnify, defend and hold harmless the Owner
Trustee, the Delaware Trustee and the Indenture Trustee and their respective
officers, directors, employees and agents from and against all reasonable and
documented cost and expense, and all other losses, claims, damages and
liabilities arising out of or incurred in connection with the acceptance or
performance of the trusts and duties herein and in the Trust Agreement, in the
case of the Owner Trustee and the Delaware Trustee, and in the Indenture, in the
case of the Indenture Trustee, except to the extent that such cost, expense,
loss, claim, damage or liability: (i) in the case of the Owner Trustee and the
Delaware Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Owner Trustee or Delaware
Trustee or, in the case of the Indenture Trustee, shall be due to the willful
misfeasance, bad faith or negligence (except for errors in judgment) of the
Indenture Trustee; (ii) in the case of the Owner Trustee, shall arise from the
breach by the Owner Trustee of any of its representations or warranties set
forth in Section 7.03 of the Trust Agreement or (iii) in the case of the
Delaware Trustee, shall arise from the breach by the Delaware Trustee of any of
its representations or warranties set forth in Section 7.04 of the Trust
Agreement.
(d) The Seller shall pay any and all taxes levied or assessed upon all
or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee, the Delaware Trustee or the Indenture Trustee and
the termination of this Agreement and shall include reasonable and documented
fees and expenses of counsel and expenses of litigation. If the Seller shall
have made any indemnity payments pursuant to this Section and the Person to or
on behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to the
Seller, without interest.
Notwithstanding anything to the contrary contained in this Agreement
or any other document, the obligations of the Seller under this Section 6.03 and
Section 7.5 of the Seller's Limited Liability Company Agreement are solely the
corporate obligations of the Seller and shall be payable by it (x) solely from
funds distributed to it in its capacity as
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Certificateholder available pursuant to, and in accordance with, the payment
priorities set forth in Section 5.06 of this Agreement and (z) only to the
extent that it receives additional funds designated for such purposes or to the
extent it has additional funds available (other than funds described in
preceding clause (x)). In addition, no amount owing by the Seller hereunder or
under Section 7.5 of its Limited Liability Company Agreement in excess of the
liabilities that it is required to pay in accordance with the preceding sentence
shall constitute a "claim" (as defined in Section 101(5) of the Bankruptcy Code)
against it. No recourse shall be had for the payment of any amount owing
hereunder or under Section 7.5 of the Seller's Limited Liability Company
Agreement or any other obligation of, or claim against, the Seller, arising out
of or based upon this Section 6.03 or under Section 7.5 of its Limited Liability
Company Agreement against any employee, officer, agent, directed or authorized
person of the Seller; provided, however, that the foregoing shall not relieve
any such person or entity of any liability they might otherwise have as a result
of fraudulent actions or omissions taken by them.
Section 6.04 Merger or Consolidation of, or Assumption of Obligations
--------------------------------------------------------
of Seller. Any Person (a) into which the Seller may be merged or consolidated,
---------
(b) which may result from any merger or consolidation to which the Seller shall
be a party or (c) which may succeed to the properties and assets of the Seller
substantially as a whole, which person in any of the foregoing cases executes an
agreement of assumption to perform every obligation of the Seller under this
Agreement, shall be the successor to the Seller hereunder without the execution
or filing of any document or any further act by any of the parties to this
Agreement; provided, however, that (i) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 3.01 shall
have been breached and no Servicer Default in respect of the Seller under
Section 8.01(b) or (c) shall have occurred and be continuing, and no event that,
after notice or lapse of time, or both, would become a Servicer Default in
respect of the Seller under Section 8.01(b) or (c) shall have occurred and be
continuing, (ii) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee an Officers' Certificate stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, (iii) the Rating Agency
Condition shall have been satisfied with respect to such transaction and (iv)
the Seller shall have delivered to the Owner Trustee and the Indenture Trustee
an Opinion of Counsel either (A) stating that, in the opinion of such counsel,
all financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and Indenture Trustee, respectively, in the
Receivables and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve and
protect such interests. Notwithstanding anything herein to the contrary, (a) the
execution of the foregoing agreement of assumption and compliance with clauses
(i), (ii), (iii) and (iv) above shall be conditions to the consummation of the
transactions referred to in clause (a), (b) or (c) above and (b) the Seller may
transfer its rights under this Agreement in accordance with Section 4.15 hereof.
Section 6.05 Limitation on Liability of Seller and Others. The Seller
--------------------------------------------
and any director, officer, employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear
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in, prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.
Section 6.06 Seller May Own Notes. The Seller and any Affiliate
--------------------
thereof may in its individual or any other capacity become the owner or pledgee
of Notes with the same rights as it would have if it were not the Seller or an
Affiliate thereof, except as expressly provided herein or in any Basic Document.
Section 6.07 Security Interest. During the term of this Agreement,
-----------------
the Seller will not take any action to assign the security interest in any
Financed Vehicle other than pursuant to the Basic Documents.
ARTICLE VII
THE SERVICER
Section 7.01 Representations of Servicer. The Servicer makes the
---------------------------
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is duly organized
------------------------------
and validly existing as a corporation in good standing under the laws of the
state of its incorporation, with the corporate power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the corporate power, authority and legal right to acquire, own, sell and
service the Receivables and to hold the Receivable Files as custodian.
(b) Due Qualification. The Servicer is duly qualified to do business
-----------------
as a foreign corporation in good standing, and has obtained all necessary
material licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business (including the servicing of the
Receivables as required by this Agreement) shall require such qualifications,
except where the failure to be so qualified or to have obtained such licenses or
approvals would not have a material adverse effect on the Servicer's earnings,
business affairs or business prospects.
(c) Power and Authority. The Servicer has the corporate power and
-------------------
authority to execute and deliver this Agreement and to carry out its terms; and
the execution, delivery and performance of this Agreement have been duly
authorized by the Servicer by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a legal, valid and
------------------
binding obligation of the Servicer enforceable against the Servicer in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws, now or hereafter in effect, affecting the enforcement of
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creditors' rights in general, and except as such enforceability may be limited
by general principles of equity (whether considered in a suit at law or in
equity).
(e) No Violation. The consummation of the transactions contemplated by
------------
this Agreement and the fulfillment of the terms hereof do not (i) conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the articles of
incorporation or bylaws of the Servicer; (ii) breach, conflict with or violate
any of the material terms or provisions of, or constitute (with or without
notice or lapse of time) a default under, any indenture, agreement or other
instrument to which the Servicer is a party or by which it is bound; (iii)
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than pursuant to this Agreement and the Basic Documents); or, (iv) to the
best of the Servicer's knowledge, violate any order, rule or regulation
applicable to the Servicer of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties except, in the case of clauses
(ii), (iii) and (iv), for such breaches, defaults, conflicts, liens or
violations that would not have a material adverse effect on the Servicer's
earnings, business affairs or business prospects.
(f) No Proceedings. To the Servicer's best knowledge, there are no
--------------
proceedings or investigations pending or threatened before any court, regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties: (i) asserting the invalidity
of this Agreement, the Indenture, any of the other Basic Documents, the Notes or
the Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated by this
Agreement, the Indenture or any of the other Basic Documents, (iii) seeking any
determination or ruling that could reasonably be expected to materially and
adversely affect the performance by the Servicer of its obligations under, or
the validity or enforceability of, this Agreement, the Indenture, any of the
other Basic Documents, the Notes or the Certificates or (iv) relating to the
Servicer and which could reasonably be expected to adversely affect the federal
or state income tax attributes of the Notes or the Certificates.
(g) Approvals. All approvals, licenses, authorizations, consents,
---------
orders or other actions of any person, corporation or other organization, or of
any court, governmental agency or body or official, required in connection with
the execution and delivery of this Agreement have been or will be taken or
obtained on or prior to the Closing Date, except where failure to obtain the
same would not have a material adverse effect upon the rights of the Seller, the
Trust, the Noteholders or the Certificateholders.
Section 7.02 Indemnities of Servicer. The Servicer shall be liable in
-----------------------
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Delaware Trustee, the Indenture Trustee, the Noteholders,
the Certificateholders and the Seller and any of the officers, directors,
employees and agents of the Issuer, the Owner Trustee, the Delaware Trustee and
the Indenture Trustee from and against any and all reasonable and documented
costs and expenses, and all other losses, damages, claims and
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liabilities arising out of or resulting from the use, ownership or operation by
the Servicer or any Affiliate thereof of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Delaware Trustee, the Indenture Trustee, the Seller, the
Certificateholders and the Noteholders and any of the officers, directors,
employees and agents of the Issuer, the Owner Trustee, the Delaware Trustee and
the Indenture Trustee from and against any and all costs, expenses, losses,
claims, damages and liabilities to the extent that such cost, expense, loss,
claim, damage or liability arose out of, or was imposed upon any such Person
through, the willful misfeasance, bad faith or negligence (except for errors in
judgment) of the Servicer in the performance of its duties under this Agreement
or by reason of reckless disregard of its obligations and duties under this
Agreement.
For purposes of this Section, in the event of the termination of the
rights and obligations of World Omni (or any successor thereto pursuant to
Section 7.03) as Servicer pursuant to Section 8.01, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the Indenture
Trustee) pursuant to Section 8.02.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee, the Delaware Trustee or the Indenture Trustee or
the termination of this Agreement and shall include reasonable fees and expenses
of counsel and expenses of litigation. If the Servicer shall have made any
indemnity payments pursuant to this Section and the Person to or on behalf of
whom such payments are made thereafter collects any of such amounts from others,
such Person shall promptly repay such amounts to the Servicer, without interest.
Section 7.03 Merger or Consolidation of, or Assumption of Obligations
--------------------------------------------------------
of, Servicer. The Servicer shall not consolidate with or merge into any other
------------
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(a) the corporation formed by such consolidation or into which the
Servicer is merged or the Person which acquires by conveyance or transfer the
properties and assets of the Servicer substantially as an entirety shall be a
corporation organized and existing under the laws of the United State of America
or the District of Columbia and, if the Servicer is not the surviving entity,
such corporation shall assume, without the execution or filing of any paper or
further act on the part of any of the parties hereto, the performance of every
covenant and obligation of the Servicer hereunder; and
(b) the Servicer has delivered to the Owner Trustee and the Indenture
Trustee and Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger, conveyance or transfer will comply with this Section
7.03 and that all conditions precedent herein provided for relating to such
transaction have been complied with.
Section 7.04 Limitation on Liability of Servicer and Others. Neither
----------------------------------------------
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this
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Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any person
respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its duties to service the Receivables in accordance with this
Agreement and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable action that it
may deem necessary or desirable in respect of this Agreement and the Basic
Documents and the rights and duties of the parties to this Agreement and the
Basic Documents and the interests of the Certificateholders under this Agreement
and the Noteholders under the Indenture.
Section 7.05 World Omni Not To Resign as Servicer. Subject to the
------------------------------------
provisions of Section 7.03, World Omni shall not resign from the obligations and
duties hereby imposed on it as Servicer under this Agreement except upon a
determination that the performance of its duties under this Agreement shall no
longer be permissible under applicable law and cannot be cured. Notice of any
such determination permitting the resignation of World Omni shall be
communicated to the Owner Trustee and the Indenture Trustee at the earliest
practicable time (and, if such communication is not in writing, shall be
confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Owner Trustee and the Indenture Trustee concurrently with or
promptly after such notice. No such resignation shall become effective until the
Indenture Trustee or a successor Servicer shall have assumed the
responsibilities and obligations of World Omni in accordance with Section 8.02.
ARTICLE VIII
DEFAULT
Section 8.01 Servicer Default. Any one of the following events shall
----------------
constitute a default by the Servicer (a "Servicer Default"):
(a) any failure by the Servicer to deliver to the Indenture Trustee
for deposit in any of the Trust Accounts or distribution to the
Certificateholders any required payment or to direct the Indenture Trustee to
make any required distributions therefrom, which failure continues unremedied
for a period of five Business Days after written notice of such failure is
received by the Servicer from the Owner Trustee or the Indenture Trustee or
after discovery of such failure by an officer of the Servicer; or
(b) failure by the Servicer or the Seller, as the case may be, duly to
observe or to perform in any material respect any other covenants or agreements
of the Servicer or the Seller
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(as the case may be) set forth in this Agreement or any other Basic Document,
which failure shall (i) materially and adversely affect the rights of
Certificateholders or Noteholders and (ii) continue unremedied for a period of
60 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given (A) to the Servicer or the Seller (as
the case may be) by the Owner Trustee or the Indenture Trustee or (B) to the
Servicer or the Seller (as the case may be), and to the Owner Trustee and the
Indenture Trustee by the Holders of the Notes evidencing not less than 50% of
the Outstanding Amount of the Controlling Securities and the Holders (as defined
in the Trust Agreement) of Certificates evidencing not less than 50% of the
percentage interest of the Certificates; or
(c) the occurrence of an Insolvency Event with respect to the Seller
or the Servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to under clause (a) above for a period of ten Business Days or referred
to under clause (b) for a period of 90 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 this Agreement and the Servicer
shall provide the Indenture Trustee, the Owner Trustee, the Noteholders and the
Certificateholders prompt notice of such failure or delay by it, together with a
description of its efforts to so perform its obligations.
So long as the Servicer Default shall not have been remedied or stayed
by the application of the above paragraph, either the Indenture Trustee or the
Holders of the Notes evidencing not less than 50% of the Outstanding Amount of
the Controlling Securities, by notice then given in writing to the Servicer (and
to the Indenture Trustee and the Owner Trustee if given by the Noteholders) may
terminate all the rights and obligations (other than the obligations set forth
in Section 7.02 hereof) of the Servicer under this Agreement. On or after the
receipt by the Servicer of such written notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Notes, the
Certificates or the Receivables or otherwise, shall, without further action,
pass to and be vested in the Indenture Trustee or such successor Servicer as may
be appointed under Section 8.02; and, without limitation, the Indenture Trustee
and the Owner Trustee are hereby authorized and empowered to execute and
deliver, for the benefit of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement of the
Receivables and related documents, or otherwise. The predecessor Servicer shall
cooperate with the successor Servicer, the Indenture Trustee and the Owner
Trustee in effecting the termination of the responsibilities and rights of the
predecessor Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all cash amounts that shall at
the time be held by the predecessor Servicer for deposit, or shall thereafter be
received by it with respect to any Receivable. Further, in such event, the
Servicer shall use commercially reasonable efforts to effect the orderly and
efficient transfer of the servicing of the Receivables to the successor
Servicer, and as promptly as practicable, the Servicer shall provide to the
successor Servicer a current computer tape containing all information from the
Receivables Files
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required for the proper servicing of the Receivables, together with the
documentation containing any and all information necessary for the use of the
tape. All reasonable and documented costs and expenses (including attorneys'
fees) incurred in connection with transferring the Receivable Files to the
successor Servicer and amending this Agreement to reflect such succession as
Servicer pursuant to this section shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of a Servicer Default, the Owner Trustee
shall give notice thereof to the Rating Agencies.
Section 8.02 Appointment of Successor. (a) Upon the Servicer's
------------------------
receipt of notice of termination pursuant to Section 8.01 or the Servicer's
resignation in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the later of
(i) the date 45 days from the delivery to the Owner Trustee and the Indenture
Trustee of written notice of such resignation (or written confirmation of such
notice) in accordance with the terms of this Agreement and (ii) the date upon
which the predecessor Servicer shall become unable to act as Servicer, as
specified in the notice of resignation and accompanying Opinion of Counsel. In
the event of the Servicer's termination hereunder, the Indenture Trustee shall
appoint a successor Servicer, and the successor Servicer shall accept its
appointment by a written assumption in form acceptable to the Owner Trustee and
the Indenture Trustee. In the event that a successor Servicer has not been
appointed at the time when the predecessor Servicer has ceased to act as
Servicer in accordance with this Section, the Indenture Trustee without further
action shall automatically be appointed the successor Servicer and the Indenture
Trustee shall be entitled to the Servicing Fee. Notwithstanding the above, the
Indenture Trustee shall, if it shall be legally unable so to act, appoint or
petition a court of competent jurisdiction to appoint any established
institution, having a net worth of not less than $100,000,000 and whose regular
business shall include the servicing of automotive receivables, as the successor
to the Servicer under this Agreement.
(b) Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor Servicer) shall be the successor in all respects to
the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer and shall be entitled to the Servicing Fee and all the
rights granted to the predecessor Servicer by the terms and provisions of this
Agreement.
(c) The successor Servicer may not resign unless it is prohibited
from serving as such by law.
Section 8.03 Notification to Noteholders and Certificateholders.
--------------------------------------------------
Upon any termination of, or appointment of a successor to, the Servicer pursuant
to this Article VIII, the Owner Trustee shall give prompt written notice thereof
to Certificateholders, and the Indenture Trustee shall give prompt written
notice thereof to Noteholders and the Rating Agencies.
Section 8.04 Waiver of Past Defaults. The Holders of Notes
-----------------------
evidencing not less than 50% of the Outstanding Amount of the Controlling
Securities may, on behalf of all Noteholders, waive in writing any default by
the Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to or payments
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from any of the Trust Accounts or to the Certificateholders in accordance with
this Agreement. Upon any such waiver of a past default, such default shall cease
to exist, and any Servicer Default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereto.
Section 8.05 Payment of Servicing Fees; Repayment of Advances. If
------------------------------------------------
the Servicer shall change, the predecessor Servicer shall be entitled to (i)
receive any accrued and unpaid Servicing Fees through the date of such Successor
Servicer's acceptance hereunder in accordance with Section 4.08 and (ii)
reimbursement for Outstanding Advances pursuant to Section 5.08 with respect to
all Advances made by the predecessor Servicer.
ARTICLE IX
TERMINATION
Section 9.01 Optional Purchase of All Receivables. (a) As of the
------------------------------------
last day of any Collection Period immediately preceding a Payment Date as of
which the then outstanding Pool Balance is 10% or less of the Original Pool
Balance, the Servicer shall have the option to purchase the Owner Trust Estate,
other than the Trust Accounts. To exercise such option, the Servicer shall
deposit pursuant to Section 5.05 in the Collection Account an amount equal to
the aggregate Purchase Amount for the Receivables (including Defaulted
Receivables), and shall succeed to all interests in and to the Trust.
Notwithstanding the foregoing, the Servicer shall not be permitted to exercise
such option unless the amount to be deposited in the Collection Account pursuant
to the preceding sentence is greater than or equal to the sum of the Outstanding
Amount of the Notes and all accrued but unpaid interest (including any overdue
interest and premium) thereon.
(b) As described in Article IX of the Trust Agreement, notice of any
termination of the Trust shall be given by the Servicer to the Owner Trustee and
the Indenture Trustee as soon as practicable after the Servicer has received
notice thereof.
(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder other
than Section 5.07(b) and the Owner Trustee will succeed to the rights of, and
assume the obligations of, the Indenture Trustee pursuant to this Agreement.
ARTICLE X
MISCELLANEOUS
Section 10.01 Amendment. This Agreement may be amended by the
---------
Seller, the Servicer and the Issuer, with the consent of the Indenture Trustee,
but without the consent of any of the Noteholders or the Certificateholders, to
cure any ambiguity or to correct or supplement any provisions in this Agreement
or for the purpose of adding any provisions to or changing in
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any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the Certificateholders;
provided that such amendments require: (i) satisfaction of the Rating Agency
Condition and (ii) an officer's certificate of the Servicer stating that the
amendment will not materially and adversely affect the interest of any
Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the Seller,
the Servicer and the Issuer, with the consent of the Indenture Trustee, the
consent of the Holders of the Notes evidencing not less than 50% of the
Outstanding Amount of the Controlling Securities and the consent of the Holders
(as defined in the Trust Agreement) of Certificates evidencing not less than 50%
of the percentage interest of the Certificates for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that shall be
required to be made for the benefit of the Noteholders or the Certificateholders
or (b) reduce the consent percentages in this sentence, without the consent of
the Holders of all the outstanding Notes and the Holders (as defined in the
Trust Agreement) of all the outstanding Certificates affected thereby.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification provided by the Servicer, of
the substance of such amendment or consent to each Certificateholder, the
Indenture Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee, on behalf of the Issuer, and the Indenture Trustee shall be entitled to
receive and rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and the Opinion of
Counsel referred to in Section 10.02(h)(A). The Owner Trustee and the Indenture
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's or the Indenture Trustee's, as applicable, own
rights, duties or immunities under this Agreement or otherwise.
Section 10.02 Protection of Title to Trust. (a) The Seller shall
----------------------------
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and of the Indenture Trustee in the Receivables and in the proceeds
thereof. The Seller shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity or corporate structure in any manner that could reasonably be expected
to make any financing
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statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of Section 9-402(7) of the UCC, unless
it shall have given the Owner Trustee and the Indenture Trustee at least five
days' prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) Each of the Seller and the Servicer shall have an obligation to
give the Owner Trustee and the Indenture Trustee at least 60 days' prior written
notice of any relocation of its principal executive office if, as a result of
such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation statement or
of any new financing statement and shall promptly file any such amendment or new
financing statement. The Servicer shall at all times maintain each office from
which it shall service Receivables, and its principal executive office, within
the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, within
five (5) Business Days from and after the time of sale under this Agreement of
the Receivables, the Servicer's master computer records (including any backup
archives) that refer to a Receivable shall indicate clearly that such Receivable
has been sold to the Issuer.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Issuer and has been pledged to the Indenture Trustee.
(g) Upon request, the Servicer shall furnish to the Owner Trustee or
to the Indenture Trustee, within five Business Days, a list of all Receivables
(by contract number and name of Obligor) then held as part of the Trust.
(h) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(A) promptly after the execution and delivery of this Agreement,
an Opinion of Counsel stating that, in the opinion of such counsel,
either (1) all financing statements and continuation statements have
been executed and filed that are necessary fully to preserve and
protect the interest of the Trust and the Indenture Trustee in the
Receivables, and reciting the details of such filings or
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referring to prior Opinions of Counsel in which such details are
given, or (2) no such action shall be necessary to preserve and
protect such interest; and
(B) on or before March 31, in each calendar year, beginning in
2002, an Opinion of Counsel, dated as of a date during such 90-day
period, stating that, in the opinion of such counsel, either (1) all
financing statements and continuation statements have been executed
and filed that are necessary fully to preserve and protect the
interest of the Trust and the Indenture Trustee in the Receivables,
and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (2) no such
action shall be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (A) or (B) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
(i) The Seller shall, to the extent required by applicable law, cause
the Notes to be registered with the Commission pursuant to Section 12(b) or
Section 12(g) of the Exchange Act within the time periods specified in such
sections.
Section 10.03 Notices. All demands, notices, communications and
-------
instructions upon or to the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies under this Agreement shall be by
facsimile or in writing, personally delivered or mailed by certified mail,
return receipt requested, and shall be deemed to have been duly given upon
receipt (a) in the case of the Seller, to World Omni Auto Receivables LLC, ▇▇▇
▇.▇. ▇▇/▇▇/ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, (b) in the case of the Servicer, World Omni Financial
Corp., ▇▇▇ ▇.▇. ▇▇/▇▇/ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, (c) in the case of the Issuer or the Owner
Trustee, at the Corporate Trust Office (as defined in the Trust Agreement), (d)
in the case of the Indenture Trustee, at the Corporate Trust Office, (e) in the
case of Moody's, to ▇▇▇▇▇'▇ Investors Service, ABS Monitoring Department, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (f) in the case of Standard & Poor's,
to Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of Asset Backed
Surveillance Department, and (g) in the case of Fitch, Inc., to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention of Asset Backed Surveillance; or, as to
each of the foregoing, at such other address as shall be designated by written
notice to the other parties.
Section 10.04 Assignment by the Seller or the Servicer.
----------------------------------------
Notwithstanding anything to the contrary contained herein, except as provided in
the remainder of this Section, as provided in Sections 6.04 and 7.03 herein and
as provided in the provisions of this Agreement concerning the resignation of
the Servicer, this Agreement may not be assigned by the Seller or the Servicer.
Section 10.05 Limitations on Rights of Others. The provisions of
-------------------------------
this Agreement are solely for the benefit of the Seller, the Servicer, the
Issuer, the Owner Trustee, the Delaware Trustee, the Certificateholders, the
Indenture Trustee and the Noteholders, and nothing in this
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Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Owner Trust Estate
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
Section 10.06 Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.07 Separate Counterparts. This Agreement may be executed
---------------------
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 10.08 Headings. The headings of the various Articles and
--------
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 10.09 Governing Law. This Agreement shall be construed in
-------------
accordance with the laws of the State of New York, without regard to any
otherwise applicable conflict of law provisions, and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
Section 10.10 Assignment by Issuer. Each of World Omni and the
--------------------
Seller hereby acknowledges and consents to any mortgage, pledge, assignment and
grant of a security interest by the Issuer to the Indenture Trustee pursuant to
the Indenture for the benefit of the Noteholders of all right, title and
interest of the Issuer in, to and under the Receivables and/or the assignment of
any or all of the Issuer's rights and obligations hereunder to the Indenture
Trustee.
Section 10.11 Nonpetition Covenants. (a) Notwithstanding any prior
---------------------
termination of this Agreement, the Servicer and the Seller shall not, prior to
the date which is one year and one day after the termination of this Agreement
with respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Issuer to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer under any federal
or state bankruptcy, insolvency or similar law, or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of their property, or ordering the winding
up or liquidation of the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, the
Servicer, solely in its capacity as a creditor of the Seller, shall not, prior
to the date which is one year and one day after the termination of this
Agreement with respect to the Seller, acquiesce, petition or otherwise invoke
the process of any court or government authority for the purpose of commencing
or sustaining an involuntary case against the Seller under any federal or state
bankruptcy, insolvency or similar law, or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Seller or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Seller.
-49-
Section 10.12 Limitation of Liability of Owner Trustee and Indenture
------------------------------------------------------
Trustee. (a) Notwithstanding anything contained herein to the contrary, this
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Agreement has been countersigned by The Bank of New York not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event shall The Bank of New York in its individual capacity or, except as
expressly provided in the Trust Agreement, as beneficial owner of the Issuer
have any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the certificates, notices
or agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Issuer. For all purposes of this Agreement, in
the performance of its duties or obligations hereunder or in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by The Chase Manhattan Bank, not in its individual
capacity but solely as Indenture Trustee and in no event shall The Chase
Manhattan Bank have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
-50-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first above
written.
WORLD OMNI AUTO RECEIVABLES TRUST 2001-A
By:THE BANK OF NEW YORK not in its
individual capacity but solely as Owner
Trustee,
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Assistant Treasurer
WORLD OMNI AUTO RECEIVABLES LLC,
Seller
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
WORLD OMNI FINANCIAL CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
Acknowledged and accepted as of the day
and year first above written:
THE CHASE MANHATTAN BANK,
not in its individual capacity but solely
as Indenture Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Trust Officer
-51-
SCHEDULE A
Schedule of Receivables
Bank Pool Elig. Cat. Elig. St. Type Account Number APR Orig. Term Rem. Term
---- ---- ---------- --------- ---- -------------- --- ---------- ---------
Sched Rem. Term Mthly. Pmt. Inv. Bal. Dealer Res.
--------------- ----------- --------- -----------
[Delivered to the Owner Trustee and Indenture Trustee at Closing]
-1-
SCHEDULE B
Location of Receivable Files
World Omni Financial Corp.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT A
Form of Distribution Statement to Noteholders
World Omni Financial Corp.
World Omni Auto Receivables Trust 2001-A Payment Date Statement to Noteholders
--------------------------------------------------------------------------------
Available Funds
Class A-1 Notes: ($_______ per $1,000 original principal amount)
Class A-2 Notes: ($_______ per $1,000 original principal amount)
Class A-3 Notes: ($_______ per $1,000 original principal amount)
Class A-4 Notes: ($_______ per $1,000 original principal amount)
Outstanding Amount
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Note Pool Factor
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Servicing Fee
Servicing Fee Per $1,000 Note
Reserve Account Balance
EXHIBIT B
Form of Servicer's Certificate
World Omni Financial Corp.
World Omni Auto Receivables Trust 2001-A Monthly Servicer's Certificate
________________________________________________________________________________
Period
Payment Date
Dates Covered From & Incl. To & Incl.
--------------------------------------------------------------------------------
Collections
Accrual
30/360 Days
Actual/360 Days
Receivables Balances Beginning Ending
--------------------------------------------------------------------------------
Pool Balance
Simple Interest
Original Pool Balance
Noteholders' First Priority Principal
Distributable Amount
Noteholders' Principal Distributable Amount
Collections - Simple Interest Contracts
+ Investment Earnings
Available Funds
--------------------------------------------------------------------------------
Loss & Delinquency
Account Activity
---------------------------------------------------------------
Interest
Beginning Ending Interest/ Servicing
Balance Balance Change Factor Shortfall
Initial Pool
Principal Paydown
Reserve
Notes
Class A-1
Class A-2
Class A-3
Class A-4
Class B
Total Principal
Principal Shortfall
Notes
Class A-1
Class A-2
Class A-3
Class A-4
Class B
Total
Miscellaneous
--------------------------------------------------------------------------------
Amounts released to the Certificateholders
Required Reserve Amount
Servicing Fee to Servicer
Collection Account Redeposits
Overcollaterlization Target Amount
Allocation of Funds
--------------------------------------------------------------------------------
Sources Principal Distribution
Amount Interest Distribution
Amount Redemption/Prepay Amount
Total Sources