Exhibit 4.7
________________________________________________________________________________
VARIABLE FUNDING NOTE PURCHASE AGREEMENT
dated as of
December 22, 2000
by and among
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WORLD OMNI FINANCIAL CORP.
as Servicer,
WORLD OMNI MASTER OWNER TRUST,
as Issuer,
PARK AVENUE RECEIVABLES CORPORATION,
as Conduit Investor
THE CHASE MANHATTAN BANK,
as Funding Agent, PARCO Administrative Agent and as an APA Bank
and
---
THE OTHER APA BANKS
FROM TIME TO TIME PARTIES HERETO
with respect to
$150,000,000 of the World Omni Master Owner Trust
2000-VFN Asset Backed Notes
________________________________________________________________________________
TABLE OF CONTENTS
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Page
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ARTICLE I Definitions
SECTION 1.01. Defined Terms......................................................................................... 2
SECTION 1.02. Terms Generally....................................................................................... 11
SECTION 1.03. Computation of Time Periods........................................................................... 12
ARTICLE II Purchase of VFNs; the Facility
SECTION 2.01. Purchase of the VFNs.................................................................................. 13
SECTION 2.02. Facility.............................................................................................. 13
SECTION 2.03. Variable Funding Advances............................................................................. 14
SECTION 2.04. Funding of Borrowings................................................................................. 15
SECTION 2.05. Termination and Reduction of Commitments
and Maximum Funded Amount............................................................................. 16
SECTION 2.06. VFNs.................................................................................................. 16
SECTION 2.07. Non-Renewing APA Banks; Defaulting
APA Banks............................................................................................. 16
SECTION 2.08. Calculation of Monthly Interest....................................................................... 18
ARTICLE III Representations and Warranties
SECTION 3.01. Representation and Warranties......................................................................... 19
SECTION 3.02. Information from the Servicer......................................................................... 20
SECTION 3.03. Reaffirmations of Issuer and Servicer................................................................. 20
SECTION 3.04. Amendments............................................................................................ 21
i
ARTICLE IV Conditions
SECTION 4.01. Conditions Precedent to Initial Purchase.............................................................. 22
SECTION 4.02. Each Variable Funding Advance......................................................................... 23
ARTICLE V Covenants of the Servicer
SECTION 5.01. Funding Costs......................................................................................... 25
SECTION 5.02. Taxes on Payments..................................................................................... 27
SECTION 5.03. Limited Recourse to Issuer............................................................................ 28
SECTION 5.04. Costs, Expenses and Taxes............................................................................. 28
ARTICLE VI The Funding Agent
SECTION 6.01. Limitation of Liability............................................................................... 30
ARTICLE VII Miscellaneous
SECTION 7.01. Assignment............................................................................................ 31
SECTION 7.02. Notices............................................................................................... 32
SECTION 7.03. Waivers; Amendments................................................................................... 33
SECTION 7.04. Indemnities by the Issuer............................................................................. 34
SECTION 7.05. Survival.............................................................................................. 35
SECTION 7.06. Counterparts; Integration; Effectiveness.............................................................. 35
SECTION 7.07. Severability.......................................................................................... 36
SECTION 7.08. Governing Law; Jurisdiction; Consent to Service of Process;
Waiver of Jury Trial.................................................................................. 36
SECTION 7.09. No Bankruptcy Petition against the Issuer or PARCO.................................................... 37
SECTION 7.10. Benefits of Indenture................................................................................. 37
SECTION 7.11. Headings.............................................................................................. 37
SECTION 7.12. No Recourse Against PARCO, etc........................................................................ 37
SECTION 7.13. Waiver of Confidentiality............................................................................. 38
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Page
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iii
Page
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SECTION 7.14. Conflict of Waiver.................................................................................... 39
EXHIBIT A Form of Borrowing Notice
EXHIBIT B Investor Representations and Warranties
SCHEDULE 1 List of Proceedings
iv
VARIABLE FUNDING NOTE PURCHASE AGREEMENT (as amended, supplemented or
otherwise modified and in effect from time to time, this "Agreement") dated as
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of December 22, 2000 among:
(i) WORLD OMNI FINANCIAL CORP., a Florida corporation (the
"Servicer");
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(ii) WORLD OMNI MASTER OWNER TRUST, a Delaware business trust
(the "Issuer");
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(iii) PARK AVENUE RECEIVABLES CORPORATION, a Delaware corporation,
as Conduit Investor ("PARCO");
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(iv) THE CHASE MANHATTAN BANK, a New York banking corporation
("Chase"), as Funding Agent for the Investors, as PARCO
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Administrative Agent and as an APA Bank; and
(v) THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTIES HERETO AS
APA BANKS.
WHEREAS, the World Omni Master Owner Trust (the "Issuer") and the
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Indenture Trustee are party to an Amended and Restated Indenture dated as of
April 6, 2000 and a Series 2000-VFN Supplement, dated as of the date hereof (the
"Series Supplement"), which the Servicer has signed as an acknowledging party
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(together and as amended, modified and supplemented and in effect from time to
time, the "Indenture") pursuant to which the Issuer has authorized and issued
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its Series 2000-VFN Asset Backed Notes (the "VFNs");
----
WHEREAS, the Investors desire to acquire the VFNs; and
WHEREAS, the Issuer and the Investors, as beneficial owners from time
to time of the VFNs, wish to evidence certain agreements relating to, among
other things, the right of the Issuer to borrow, repay and reborrow amounts
under the VFNs during the Revolving Period (as defined in the Indenture), all as
provided in this Agreement and in the Indenture.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.1. Defined Terms. Terms used but not defined herein have the
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respective meanings given to such terms in Appendix A to the Trust Sale and
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Servicing Agreement. As used in this Agreement, the following terms have the
meanings specified below:
"Accrual Period" means, initially, the period commencing on (and
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including) the Closing Date and ending on (and including) the last day of the
calendar month in which the Closing Date occurs and, thereafter, each calendar
month.
"Affected Party" means any of the Investors, the Funding Agent, the
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PARCO Administrative Agent and their respective officers, directors, employees,
counsel and other agents.
"Agent" means the Funding Agent.
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"APA Bank Percentage" means a fraction expressed as a percentage, the
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numerator of which is the portion of the Funded Amount funded by the APA Banks
and the denominator of which is the Funded Amount.
"APA Banks" means Chase and any other financial institution that shall
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become a party to the Asset Purchase Agreement.
"Alternate Rate" for any Fixed Period for any Funding Tranche means an
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interest rate per annum equal to LIBOR for the Accrual Period during which such
Fixed Period occurs plus the LIBOR Margin; provided, however, that in the case
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of
(i) any Fixed Period on or prior to the first day of which the
Funding Agent shall have been notified by the applicable Conduit
Investor or an APA Bank (A) that the introduction of or any change in
or in the interpretation of any law or regulation makes it unlawful, or
any central bank or other Governmental Authority asserts that it is
unlawful, for the applicable Conduit Investor or such APA Bank to fund
any Funding Tranche (based on LIBOR) set forth above (and the
applicable Conduit Investor or such APA Bank shall not have
subsequently notified the Funding Agent that such circumstances no
longer exist) or (B) that Funding based on LIBOR is not reasonably
available to such Conduit Investor or APA Bank for any reason,
2
(ii) any Fixed Period of one to (and including) 13 days, and
(iii) any Fixed Period relating to a Funding Tranche which is less
than $1,000,000,
the "Alternate Rate" for each such Fixed Period shall be an interest rate per
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annum equal to the Corporate Base Rate in effect on each day of such Fixed
Period. The "Alternate Rate" for any day on or after the occurrence and during
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the continuance of an Event of Default or Early Amortization Event shall be an
interest rate equal to 1.0% per annum above the Corporate Base Rate in effect on
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such day.
"Asset Purchase Agreement" means that certain Asset Purchase
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Agreement, dated as of December 22, 2000, by and among PARCO, Chase, as Funding
Agent, and the several financial institutions party thereto from time to time,
as the same may from time to time be amended, supplemented or otherwise modified
and in effect.
"Bankruptcy Code" means Title 11 of the U.S. Code.
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"Beneficial Owner" means initially PARCO and, to the extent of any
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purchase of an interest in, or funding of Variable Funding Advances pursuant to
VFNs by the APA Banks, the APA Banks.
"Borrowing" means a borrowing by the Issuer under the Indenture and
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this Agreement pursuant to a Variable Funding Advance.
"Borrowing Request" means a request by the Servicer on behalf of the
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Issuer for a Borrowing in accordance with Section 2.03(d).
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"Capitalized Interest" means an amount equal to the portion of the
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face amount of outstanding Commercial Paper that corresponds to the portion of
the proceeds of such Commercial Paper that was used to pay the interest
component of maturing Commercial Paper, to the extent that PARCO had not
received payments of interest in respect of such interest component prior to the
maturity date of such maturing Commercial Paper. For this purpose, the "interest
component" of any Commercial Paper equals the excess of the face amount thereof
over the net proceeds received by PARCO from issuance of such Commercial Paper,
except that if any Commercial Paper is issued on an interest-bearing basis its
"interest component" will equal the amount of interest accruing on that
Commercial Paper through its maturity date.
3
"Chase" is defined in the preamble.
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"Chase Roles" is defined in Section 7.14.
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"Closing Date" means the date on which the initial purchase and sale
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of the VFNs hereunder takes place.
"Commercial Paper" means the promissory notes issued or to be issued
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by PARCO in the commercial paper market.
"Commitment" means with respect to each APA Bank under this Agreement,
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as the context requires, (a) the commitment of such APA Bank to make Variable
Funding Advances to the Issuer, subject to Section 2.03(b) or to pay the
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purchase price for any assignment by PARCO, in an aggregate amount not to exceed
the amount described in the following clause (b), and (b) the dollar amount set
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forth opposite such APA Bank's name on Annex I to the Asset Purchase Agreement,
minus the amount of any reduction of such Commitment pursuant to Section 2.05,
- ----- ------------
minus the dollar amount of any Commitment or portion thereof assigned by such
- -----
APA Bank to another APA Bank pursuant to the Asset Purchase Agreement, plus the
----
dollar amount of any increase to such APA Bank's Commitment consented to by such
APA Bank prior to the time of determination; provided, however, that, except as
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otherwise provided in Section 2.07(b), in the event that the Maximum Funded
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Amount is reduced, the aggregate of the Commitments of all the APA Banks shall
be reduced in a like amount and the Commitment of each APA Bank shall be reduced
in proportion to such reduction.
"Commitment Expiry Date" means the earliest to occur of (i) the date
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on which the VFNs and all other amounts due and owing to PARCO and the APA Banks
under the VFNs and the other Transaction Documents have been indefeasibly paid
in full (as certified by the Funding Agent) and the aggregate Commitments have
been reduced to zero pursuant to Section 2.5 of the Asset Purchase Agreement,
and (ii) the Scheduled Commitment Termination Date.
"Conduit Assignee" means any commercial paper conduit administered by
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Chase or any of its Affiliates and designated by Chase from time to time to
accept an assignment from PARCO of all or a portion of its rights and
obligations hereunder and as a Beneficial Owner approved by the Servicer.
4
"Conduit Investor" means PARCO, a Delaware corporation, and any
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Conduit Assignee thereof.
"Corporate Base Rate" means for any day, a fluctuating interest rate
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per annum as shall be in effect from time to time, which rate shall be, on each
day, equal to the greater of (a) the rate of interest (or arithmetic mean of the
rate of interest) announced in The Wall Street Journal as the "Prime Rate"; and
(b) 0.50% per annum above the latest Federal Funds Rate.
"CP Rate" for any Accrual Period means a rate per annum equal to the
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sum of (i) the rate or, if more than one rate, the weighted average of the rates
per annum (determined by converting to an interest-bearing equivalent rate per
- --- -----
annum) the discount rate (or rates) at which Commercial Paper having a term
selected by the Funding Agent and to be issued to fund the purchase of or to
maintain such Funding Tranche (or portion thereof) by PARCO may be sold by any
placement agent or commercial paper dealer selected by the Funding Agent, as
agreed between each such agent or dealer and the Funding Agent, plus (ii) the
----
commissions and other charges charged by such placement agent or commercial
paper dealer with respect to such Commercial Paper expressed as a percentage of
the face amount of such Commercial Paper and converted to an interest-bearing
equivalent rate per annum.
--- -----
"Day Count Fraction" means, as to any Funding Tranche for any Accrual
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Period, a fraction (a) the numerator of which is the number of days in such
Fixed Period and (b) the denominator of which is 360 (or, with respect to any
Funding Tranche which accrues interest by reference to the Corporate Base Rate,
the actual number of days in the calendar year relating to the first day of the
applicable Accrual Period).
"Default" means any event or circumstance which, with the giving of
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notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default or an Early Amortization Event.
"Defaulting APA Bank" is defined in Section 2.07(c).
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"Excluded Taxes" is defined in Section 5.02(a).
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5
"Event of Bankruptcy" means, with respect to any Person, (a) that such
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Person (i) shall generally not pay its debts as such debts become due or (ii)
shall admit in writing its inability to pay its debts generally or (iii) shall
make a general assignment for the benefit of creditors; (b) any proceeding shall
be instituted by or against such Person seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
bankruptcy trustee or other similar official for it or any substantial part of
its property; or (c) such Person shall take any corporate, partnership or other
similar appropriate action to authorize any of the actions set forth in the
preceding clauses (a) or (b).
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"Federal Funds Rate" means, for any day, the rate per annum (rounded
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upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
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for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to the Funding Agent on
such day on such transactions by three Federal Funds dealers of recognized
standing selected by the Funding Agent in its sole discretion.
"Fee Letter" means that certain letter agreement, dated as of December
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22, 2000, between the Funding Agent, the Issuer and the Servicer, as the same
may from time to time be amended, supplemented or otherwise modified and in
effect.
"Fixed Period" means, with respect to any Funding Tranche and any
------------
Accrual Period, the portion of that Accrual Period during which that Funding
Tranche is outstanding.
"Funding Agent" means Chase, in its capacity as Funding Agent for the
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Investors, and any successor thereto appointed pursuant to Section 6.09.
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6
"Funding Agent-Related Person" means the Funding Agent, together with
----------------------------
its Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and their respected Affiliates.
"Funded Amount" is defined in the Indenture.
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"Funding Rate" means, with respect to any Fixed Period and any Funding
------------
Tranche, (a) to the extent PARCO is funding such Funding Tranche during such
Fixed Period, the CP Rate plus the Program Fee Rate, and (b) to the extent the
APA Banks are funding such Funding Tranche during such Accrual Period, a rate
per annum (expressed as a percentage and an interest yield equivalent and
calculated on the basis of a 360-day year (or a 365/366 day year, in the case of
the Corporate Base Rate) and the actual days elapsed) equal to the Alternate
Rate.
"Funding Tranche" means, at any time, each portion of the Funded
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Amount allocated to the same Fixed Period and accruing interest by reference to
the same Funding Rate at such time.
"Increased Costs" is defined in Section 5.01(a).
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"Indemnified Amounts" is defined in Section 7.04.
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"Indemnified Parties" is defined in Section 7.04.
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"Indenture" is defined in the Preamble.
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"Indenture Trustee" means BNY Midwest Trust Company (successor to
-----------------
Harris Trust and Savings Bank), an Illinois banking corporation, and its
permitted successors and assigns.
"Investor(s)" means PARCO and/or the APA Banks, as the context may
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require.
"LIBOR" means, for any Fixed Period falling in any Accrual Period, the
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rate for one-month deposits in United States dollars for a period equal in
length to the Fixed Period which appears on the Telerate Page 3750 as of 11:00
a.m., London time, on the Rate Determination Date for such Accrual Period. If
such rate does not appear on Telerate Page 3750, the rate for that Rate
Determination Date shall be determined on the basis of the rates at which
deposits in United States dollars are
7
offered by four reference banks selected by the Funding Agent at approximately
11:00 a.m., London time, on that day to prime banks in the London interbank
market for a period of the Accrual Period. The Funding Agent shall request the
principal London office of each of the reference banks it selects to provide a
quotation of such rate. If at least two such quotations are provided, the rate
for that Rate Determination Date shall be the arithmetic mean of such
quotations. If fewer than two quotations are provided as requested, the rate for
that Rate Determination Date shall be the arithmetic mean of the rates of four
reference banks selected by the Funding Agent at approximately 11:00 a.m., New
York City time, on that day for loans in United States dollars to leading
European banks for a period of the Accrual Period.
"LIBOR Margin" is defined in the Fee Letter.
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"Manager" means Global Securitization Services, LLC, a Delaware
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limited liability company, and its permitted successors and assigns.
"Maximum Funded Amount" means $150,000,000, as such amount may be
---------------------
reduced from time to time pursuant to Section 2.05.
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"Monthly Interest" means, with respect to any Accrual Period, the sum
----------------
of (i) the summation of the amount of interest accrued on each Funding Tranche
during the related Fixed Period, determined by multiplying (a) the applicable
Funding Rate times (b) the portion of the Funded Amount and any Capitalized
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Interest allocated to such Funding Tranche times (c) the applicable Day Count
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Fraction, (ii) any Monthly Interest due but not paid with respect to the prior
Accrual Period, plus interest on such unpaid amount calculated as the product of
(x) the weighted average Funding Rate for all Funding Tranches during the most
recent Accrual Period, times (y) the amount of such unpaid Monthly Interest,
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times (z) the Day Count Fraction for Funding Tranches that do not accrue
interest by reference to the Corporate Base Rate and (iii) the Unused Fee for
that Accrual Period.
"Moody's" means Moody's Investors Service, Inc., or any successor
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that is a nationally recognized statistical rating organization.
"Net Investment" means, with respect to each Beneficial Owner at any
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time, the portion of the Funded Amount held by such Beneficial Owner plus any
amounts paid by such Beneficial Owner (if such Beneficial Owner is an APA Bank)
to a Conduit Assignee under any assignment by PARCO in respect of accrued and
unpaid Monthly Interest.
8
"Non-Defaulting APA Bank" is defined in Section 2.07(c).
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"Non-Renewing Investor Percentage" means, at any time, a fraction,
--------------------------------
expressed as a percentage, the numerator of which is the portion of the Funded
Amount then funded by all non-renewing APA Banks pursuant to Section 2.07 and
the denominator of which is the Funded Amount at such time.
"PARCO" is defined in the Preamble.
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"PARCO Administrative Agent" means Chase or an Affiliate thereof, as
--------------------------
administrator for PARCO, or Chase or an Affiliate thereof, as administrator for
any Conduit Assignee.
"PARCO Percentage" means, on any date of determination, 100% less the
----------------
APA Bank Percentage.
"PARCO Termination Date" means the date of the delivery by PARCO to
----------------------
the Issuer of written notice that PARCO elects, in its sole discretion, to
commence the amortization of the Net Investment funded by it.
"Permitted Investments" means highly rated short-term debt or the
---------------------
other highly rated liquid investments in which PARCO is permitted to invest cash
pursuant to its commercial paper program documents.
"Pro Rata Share" means, for an APA Bank, (i) the Commitment of such
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APA Bank divided by the sum of the Commitments of all APA Banks or (ii) if any
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of the Commitments shall have been terminated, its pro rata share of the APA
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Bank Percentage of the Funded Amount.
"Program Fee Rate" means the rate per annum specified in the Fee
----------------
Letter.
"Purchase Price Deficit" is defined in Section 2.07(c).
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"Rate Determination Date" means, with respect to any Accrual Period,
-----------------------
the second London business day before the first day of such Accrual Period. For
this purpose, a "London business day" means a day (other than Saturday or
Sunday) on which dealings in U.S. Dollar deposits are carried out in the London
interbank market.
9
"Required APA Banks" means, at any time under this Agreement, APA
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Banks having Pro Rata Shares in the aggregate at least equal to 66 2/3% or, if
the Commitments have been terminated, having at least 66 2/3% of the Net
Investment.
"Scheduled Commitment Termination Date" means December 21, 2001 (as
-------------------------------------
may be extended for one or more additional periods of time each up to 364 days
from time to time in writing by PARCO, the Funding Agent and the APA Banks).
"Series Supplement" is defined in the Preamble.
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"Servicer" means World Omni Financial Corp., a Florida corporation,
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and its permitted successors and assigns.
"Standard & Poor's" or "S&P" means Standard & Poor's, a division of
----------------- ---
The McGraw-Hill Companies, Inc., or any successor that is a nationally
recognized statistical rating organization.
"Taxes" is defined in Section 5.02(a).
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"Telerate Page 3750" means the display page designated as such at the
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Closing Date on the Bridge Information Systems Telerate Service (or such other
page as may replace such page on such service for the purpose of displaying
comparable rates or prices).
"Termination Date" means the earliest to occur of (i) five Business
----------------
Days prior to the Commitment Expiry Date, (ii) the last day of the Revolving
Period and (iii) the day of the occurrence of a Termination Event.
"Termination Event" means the occurrence of: (i) an Early Amortization
-----------------
Event or Event of Default specified in the Indenture and the Series Supplement),
(ii) February 5, 2001, unless each of Moody's and S&P have provided confirmation
to the Funding Agent that the credit enhancement underlying the VFNs has an
implied rating of at least "A" and (iii) such other occurrences as may be
determined as determined by PARCO or APA Banks and agreed to by the Servicer.
"Transaction Documents" means, collectively, this Agreement, the
---------------------
Indenture, the Series Supplement, the VFNs, the Asset Purchase Agreement and all
other
10
instruments, documents and other agreements executed by the Transferor, the
Issuer or the Servicer in connection with any of the foregoing.
"Trust Sale and Servicing Agreement" means the Amended and Restated Trust
----------------------------------
Sale and Servicing Agreement, dated as of April 6, 2000, between the Transferor,
Servicer and Issuer, as amended by Amendment No. 1 thereto, dated as of August
11, 2000, as the same may from time to time be further amended, supplemented or
otherwise modified and in effect.
"Unused Fee" is defined in the Fee Letter.
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"Unused Fee Rate" is defined in the Fee Letter.
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"Variable Funding Advance" means any advance by a Beneficial Owner under a
------------------------
Variable Funding Note pursuant to the Indenture and this Agreement.
"Variable Funding Increased Cost Amount" means all amounts designated as
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such pursuant to Sections 2.03(e), 5.01(a), 5.01(b), 5.02(a), 5.04 and 7.04.
---------------- ------- ------- ------- ---- ----
"Variable Funding Note Interest" means each undivided interest in the VFNs
------------------------------
acquired by PARCO or the APA Banks in connection with the making of Variable
Funding Advances by PARCO or the APA Banks pursuant to Section 2.03 or the
------------
funding by the APA Banks of any assignment by PARCO.
"VFNs" is defined in the Preamble.
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SECTION 1.02. Terms Generally. All terms defined directly or by
---------------
incorporation herein shall have the defined meanings when used in any
certificate or other document delivered pursuant thereto unless otherwise
defined therein. For purposes of this Agreement and all such certificates and
other documents, unless the context otherwise requires: (a) accounting terms not
otherwise defined herein, and accounting terms partly defined herein to the
extent not defined, shall have the respective meanings given to them under, and
shall be construed in accordance with generally accepted accounting principles;
(b) terms used in Article 9 of the UCC in the State of New York, and not
specifically defined herein, are used herein as defined in such Article 9; (c)
references to any amount as on deposit or outstanding on any particular date
means such amount at the close of business on such day; (d) the words "hereof,"
"herein" and "hereunder" and words of similar import refer to this Agreement (or
the certificate or other document in which they are used) as a whole and not
11
to any particular provision of this Agreement (or such certificate or document);
(e) references to any Section, Schedule or Exhibit are references to Sections,
Schedules and Exhibits in or to this Agreement (or the certificate or other
document in which the reference is made) and references to any paragraph,
subsection, clause or other subdivision within any Section or definition refer
to such paragraph, subsection, clause or other subdivision of such Section or
definition; (f) the term "including" means "including without limitation"; (g)
references to any law refer to that law as amended from time to time and include
any successor law; (h) references to any agreement refer to that agreement as
from time to time amended or supplemented or as the terms of such agreement are
waived or modified in accordance with its terms; (i) references to any Person
include that Person's successors and permitted assigns; and (j) headings are for
purposes of reference only and shall not otherwise affect the meaning or
interpretation of any provision hereof.
SECTION 1.03. Computation of Time Periods. Unless otherwise stated in this
---------------------------
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including", the words "to"
and "until" each means "to but excluding", and the word "within" means "from and
excluding a specified date and to and including a later specified date".
12
ARTICLE II
Purchase of VFNs; the Facility
------------------------------
SECTION 2.01. Purchase of the VFNs. On the terms and subject to the
--------------------
conditions set forth in this Agreement and the Indenture, and in reliance on the
covenants, representations, warranties and agreements herein and therein set
forth, the Issuer shall issue and cause the Indenture Trustee to authorize and
deliver to the Funding Agent, and the Funding Agent shall purchase from the
Issuer, the VFNs issued on the Closing Date, on behalf of the Investors. The
Funding Agent shall hold the VFNs on behalf of PARCO and the APA Banks in
accordance with PARCO Percentage and the APA Bank Percentage, respectively, from
time to time. To the extent the Funding Agent holds the VFNs on behalf of the
APA Banks, except as otherwise provided in Section 2.07(b), the Funding Agent
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shall hold the APA Bank Percentage of the Funded Amount on behalf of the APA
Banks pro rata in accordance with their respective outstanding portions of the
--- ----
Funded Amount funded by them; provided that the APA Banks shall not be entitled
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to any portion of the Unused Fee payable under the Indenture with respect to
such portion of the Funded Amount held by the APA Banks. The VFNs so issued
shall be dated the Closing Date, registered in the name of the Funding Agent for
the benefit of the Investors and duly authenticated in accordance with the
provisions of the Indenture. Without limiting any other provision of this
Agreement, the issuance of the VFNs and the initial Borrowing thereunder on the
Closing Date is subject to the satisfaction of the conditions precedent set
forth in Article IV. Upon such issuance and Borrowing, (i) the Funding Agent
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shall thereby acquire the VFNs, under which the initial Funded Amount shall
total the principal amount of the Variable Funding Advance on the Closing Date,
and (ii) the Funding Agent and the Investors shall become subject to the terms
and conditions set forth in the Indenture including, in the case of PARCO, the
sole discretion to fund Borrowings, and, in the case of the APA Banks, the
obligation to fund Borrowings pursuant to the terms of the Indenture and Section
-------
2.03.
- ----
SECTION 2.02. Facility. Subject to the terms and conditions set forth
--------
herein, PARCO may make, and the APA Banks, to the extent provided for in Section
-------
2.03(a) and Section 2.03(b), shall make or maintain Variable Funding Advances to
- ------- ---------------
the Issuer from time to time during the Revolving Period in an aggregate
principal amount at any one time outstanding up to but not exceeding the Maximum
Funded Amount.
13
Within the foregoing limits and subject to the terms and conditions set forth
herein and in the Indenture, the Issuer may borrow, repay and reborrow Variable
Funding Advances.
SECTION 2.03. Variable Funding Advances.
-------------------------
(a) Upon the terms and subject to the conditions set forth herein and in
the Indenture, the Servicer on behalf of the Issuer may, at its option, submit a
Borrowing Request to the Funding Agent, and PARCO may, in PARCO's sole
discretion, or the APA Banks shall, prior to the Termination Date, to the extent
provided in Section 2.03(b), make or maintain the Variable Funding Advance so
---------------
requested. Variable Funding Advances shall be made hereunder on any Advance Date
(as such term is defined in the Series Supplement for the Series 2000-VFN
Notes). Without limiting any of the foregoing, it is understood that PARCO shall
not elect to fund Variable Funding Advances after the PARCO Termination Date
and, in any event, after the Termination Date.
(b) Under no circumstances shall PARCO or any APA Bank be required to make
any Variable Funding Advance to the extent that, after giving effect to such
Variable Funding Advance and the other Variable Funding Advances to be made by
the APA Banks concurrently therewith (i) the Funded Amount would exceed the
Maximum Funded Amount or (ii) with respect to any APA Bank, its Pro Rata Share
of the APA Bank Percentage of the Funded Amount would exceed its Commitment.
(c) The aggregate principal amount of all Variable Funding Advances made
in respect of any Borrowing (except for any Borrowing in an amount equal to the
aggregate then unused Maximum Funded Amount) shall be an integral multiple of
$10,000 and at least $ 1,000,000.
(d) To request a Borrowing, the Servicer will, on behalf of the Issuer,
notify the Funding Agent and the Indenture Trustee of such request by telephone
or telecopy not later than 1 p.m., New York time, on the Business Day before the
date of the proposed Borrowing. Each such telephonic Borrowing Request shall be
confirmed promptly by telecopy or hand delivery to the Indenture Trustee and the
Funding Agent of a written Borrowing Request signed by the Servicer
substantially in the form attached hereto as Exhibit A.
---------
(e) (i) The Funding Agent will promptly notify PARCO of the Funding
Agent's receipt of any Borrowing Request. If the Borrowing Request is received
14
prior to the earlier of the PARCO Termination Date and the Termination Date,
PARCO shall instruct the Funding Agent to accept or reject such Borrowing
Request by notice given to the Funding Agent by telephone or facsimile by no
later than 5 p.m. New York time on the Business Day of such Borrowing Request.
(ii) Each Borrowing Request shall be irrevocable and binding on the
Issuer (except as stated in Section 2.04), and, pursuant to Section 5.01,
------------ ------------
any loss or expense incurred by any Investor, either directly or indirectly
as a result of any failure by the Issuer to complete such Borrowing,
including any loss (including loss of profit), breakage fee, or expense
incurred by the Funding Agent or any Investor, either directly or
indirectly by reason of the liquidation or reemployment of funds acquired
by such Investor (including funds obtained by issuing commercial paper or
promissory notes or obtaining deposits or loans from third parties)
incurred in order to fund such Borrowing shall be included in the Variable
Funding Increased Cost Amount (upon notice of such loss given to the
Servicer by the Investor suffering such loss) and paid pursuant to the
Indenture.
(f) APA Bank's Commitment. At no time will PARCO have any obligation to
---------------------
fund any Borrowing, and all Borrowings shall be in PARCO's sole discretion. At
all times on and after the PARCO Termination Date, but prior to the Termination
Date, all Borrowings shall be made by the Funding Agent on behalf of the APA
Banks. At any time when PARCO has rejected a request for a Borrowing, the
Funding Agent shall so notify the APA Banks and the APA Banks shall fund such
Borrowing, on a pro rata basis, in accordance with their respective Pro Rata
--- ----
Shares. Notwithstanding anything contained in this Section 2.03(f) or elsewhere
---------------
in this Agreement to the contrary, no APA Bank shall be obligated to provide the
Funding Agent or the Issuer with funds in connection with a Borrowing in an
amount that would result in the portion of the Funded Amount then funded by it
exceeding its Commitment then in effect. The obligation of each APA Bank to
remit its Pro Rata Share of any such Borrowing shall be several from that of
each other APA Bank, and the failure of any APA Bank to so make such amount
available to the Funding Agent shall not relieve any other APA Bank of its
obligation hereunder.
SECTION 2.04. Funding of Borrowings. Each Variable Funding Advance to be
---------------------
made hereunder shall be made by PARCO or the APA Banks, as the case may be, on
the proposed date thereof by wire transfer of immediately available funds by
11:00 a.m., New York time, to the account of the Funding Agent most recently
designated by it in writing for such purpose by notice to such Person. Following
the
15
receipt by the Funding Agent of sufficient funds from the Investors as
aforesaid, the Funding Agent shall remit the Variable Funding Advance in like
funds to the Collection Account by 3 p.m. New York time. In addition, unless
PARCO has notified the Funding Agent that it will not make a Variable Funding
Advance, or an APA Bank has notified the Funding Agent that it does not intend
to pay its Pro Rata Share of a Variable Funding Advance, the Funding Agent may
assume that such payment has been made and may, but shall not be obligated to,
make the amount of such payment available as set forth in the preceding sentence
in reliance upon such assumption. If PARCO declines to make a Variable Funding
Advance, or any APA Bank fails to pay its Pro Rata Share of a Variable Funding
Advance, the Servicer, on behalf of the Issuer, shall have the right to withdraw
that portion of the Borrowing Request which has been unfunded with no penalty
for such withdrawal.
SECTION 2.05. Termination and Reduction of Commitments and Maximum Funded
-----------------------------------------------------------
Amount. The Commitments and the Maximum Funded Amount are subject to reduction
- ------
at any time by written agreement between the Issuer, the Servicer and the
Funding Agent on behalf of the APA Banks. Any reduction of the Commitments
pursuant to this Section 2.05 shall reduce the Commitments of the APA Banks in
------------
accordance with their respective Pro Rata Shares as set forth in such agreement.
Any termination or reduction of the Commitments and the Maximum Funded Amount
shall be permanent unless otherwise stated in such agreement.
SECTION 2.06. VFNs. All Variable Funding Advances made hereunder shall be
----
evidenced by the VFNs and shall be governed by and subject to the Indenture. The
Issuer shall cause the Indenture Trustee, in its capacity as Note Registrar
under the Indenture, to (subject to and in accordance with the Indenture)
maintain as part of the Note Register the Commitment applicable to each Variable
Funding Note, the aggregate principal amount of Variable Funding Advances from
time to time outstanding in respect of each Variable Funding Note and a copy of
the assignment delivered to the Issuer, Servicer and the Indenture Trustee. The
sole Holder of the VFNs shall be the Funding Agent which shall hold such Notes
for the benefit of PARCO and/or APA Banks.
SECTION 2.07. Non-Renewing APA Banks; Defaulting APA Banks.
--------------------------------------------
(a) If, at a time no earlier than 100 days and no later than 70 days prior
to Commitment Expiry Date, the Issuer (or the Servicer, on behalf of the Issuer)
requests that the APA Banks renew their Commitments hereunder and some but less
than all the APA Banks consent to such renewal within twenty-one (21) days of
the
16
Issuer's request, the Issuer may arrange for an assignment to one or more
financial institutions of all the rights and obligations hereunder of each such
non-consenting APA Bank in accordance with Section 7.01. Any such assignment
------------
shall become effective on the then-current Commitment Expiry Date. Each APA Bank
which does not so consent to any renewal shall cooperate fully with the Issuer
in effectuating any such assignment.
(b) If, at a time no earlier than 100 days and no later than 70 days
prior to Commitment Expiry Date, the Issuer (or the Servicer, on behalf of the
Issuer) requests that the APA Banks extend the Commitment Expiry Date hereunder
and some but less than all the APA Banks consent to such extension within
twenty-one (21) days after the request of the Issuer (or the Servicer, on behalf
of the Issuer), and if none or less than all the Commitments of the non-renewing
APA Banks are assigned as provided in Section 2.07(a), then (without limiting
---------------
the obligations of all the APA Banks to make Variable Funding Advances and pay
any amounts to PARCO under any assignment by PARCO prior to the Commitment
Expiry Date in accordance with the terms hereof) PARCO may sell an interest in
the Funded Amount hereunder for an aggregate purchase price equal to the lesser
of (i) the maximum aggregate amount which would be payable if PARCO assigned its
entire interest in the payments on the VFNs at that time under the Asset
Purchase Agreement, and (ii) the aggregate available Commitments of the non-
renewing APA Banks, which purchase price shall be paid solely by the non-
renewing APA Banks, pro rata according to their respective Commitments.
Following the payment of such purchase price, (A) the extended Commitment Expiry
Date shall be effective with respect to the renewing APA Banks, (B) the Maximum
Funded Amount shall automatically be reduced on the then-current Commitment
Expiry Date by the aggregate of the Commitments of all non-renewing APA Banks,
and (C) this Agreement and the Commitments of the renewing APA Banks shall
remain in effect in accordance with their terms notwithstanding the expiration
of the Commitments of the non-renewing APA Banks. Prior to the Termination Date,
all amounts which are to be applied in reduction of the Funded Amount, up to the
aggregate Funded Amount sold to the non-renewing APA Banks as described above in
this subsection, shall be distributed to the non-renewing APA Banks ratably
according to the aggregate Variable Funding Note Interests held by them, in
reduction of such Variable Funding Note Interests. On and after the Termination
Date, each non-renewing APA Bank shall be entitled to receive distributions as
otherwise provided herein based on its pro rata share of the Non-Renewing
Investor Percentage; provided that all distributions of proceeds on the VFNs
--------
thereafter shall be allocated between the non-renewing APA Banks and the other
Investors in accordance with the Non-Renewing
17
Investor Percentage and the APA Bank Percentage, respectively. When (after the
expiration of the Commitments of the non-renewing APA Banks) the aggregate of
the Variable Funding Note Interests described above in this subsection shall
have been reduced to zero and all accrued interest allocable thereto and all
other amounts owing to such APA Banks hereunder shall have been paid to such APA
Banks in full, then such APA Banks shall cease to be parties to this Agreement
and the Asset Purchase Agreement for any purpose.
(c) If, by 2:00 p.m. (New York time), whether or not the Funding Agent has
advanced the amount of the applicable Variable Funding Advance, one or more APA
Banks (each, a "Defaulting APA Bank", and each APA Bank other than a Defaulting
-------------------
APA Bank being referred to as a "Non-Defaulting APA Bank") fails to make
-----------------------
available to the Funding Agent either its Pro Rata Share of the Variable Funding
Advance required under Section 2.03 (the aggregate amount not so made available
------------
to the Funding Agent being herein called the "Purchase Price Deficit"), then
----------------------
upon notice from the Funding Agent, each Non-Defaulting APA Bank shall promptly
pay, by no later than 3:00 p.m. (New York time) to the Funding Agent, in
immediately available funds at an account designated by the Funding Agent, an
amount equal to the lesser of (x) such Non-Defaulting APA Banks's proportionate
share (based upon the relative Commitments of the Non-Defaulting APA Banks) of
the Purchase Price Deficit and (y) its unused Commitment. A Defaulting APA Bank
shall forthwith, upon demand, pay to the Funding Agent for the ratable benefit
of the Non-Defaulting APA Banks all amounts paid by each Non-Defaulting APA Bank
on behalf of such Defaulting APA Bank, together with interest thereon, for each
day from the date a payment was made by a Non-Defaulting APA Bank until the date
such Non-Defaulting APA Bank has been paid such amounts in full, at a rate per
---
annum equal to the sum of the Corporate Base Rate, plus 2.00% per annum. It is
- ----- ---- --- -----
understood and agreed that this Section 2.07(c) shall in no manner relieve any
---------------
APA Bank of its obligation to fund any Variable Funding Advance hereunder,
subject to the conditions of the Agreement.
SECTION 2.08. Calculation of Monthly Interest. No later than three (3)
-------------------------------
Business Days preceding the Determination Date for each Payment Date, the
Funding Agent shall calculate, for the applicable Accrual Period, the Monthly
Interest. The Funding Agent shall report the amount of such Monthly Interest to
the Servicer and the Indenture Trustee on the same day such amount is
calculated.
18
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Representation and Warranties.
-----------------------------
(a) Each of the Servicer (in all of its capacities under the Transaction
Documents) and the Issuer, severally and for itself alone, hereby makes all of
the representations and warranties made by it in the Indenture, for the benefit
of the Investors, as of the Closing Date and (except where otherwise specified
in the Indenture) as of each date in respect of which the Issuer has requested a
Variable Funding Advance, and each of the Investors shall rely on such
representations and warranties in entering into this Agreement and funding
Variable Funding Advances. Each of the Servicer and the Issuer, severally and
for itself alone, further represents and warrants to the Funding Agent, PARCO
and the APA Banks as to itself as of the date on which this Agreement becomes
effective (as set forth in Section 7.05) and as of the date of each Borrowing
-------------
that:
(i) It is a corporation or business trust duly organized and validly
existing under the laws of the jurisdiction of its incorporation.
(ii) it has the power to execute and deliver this Agreement and to
perform its obligations under this Agreement and has taken all necessary
action to authorize such execution, delivery and performance.
(iii) The execution, delivery and performance of this Agreement does
not violate or conflict with any law applicable, any provision of its
formation documents, any order or judgment of any court or other agency of
government applicable to it, or any of its assets or any contractual
restriction binding on or affecting it or any of its assets.
(iv) All governmental and other consents that are required to have
been obtained by it with respect to the execution, delivery and performance
of this Agreement have been obtained and are in full force and effect and
all conditions of any such consents have been complied with.
19
(v) Its obligations under this Agreement constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application (regardless
of whether enforcement is sought in a proceeding in equity or at law)).
(vi) Except as described in Schedule 1 hereto, there is not pending
----------
or, to its knowledge, threatened against it, or against any Affiliate, any
action, suit or proceeding at law or in equity or before any court,
tribunal, governmental body, agency or official or any arbitrator that is
likely to affect the legality, validity or enforceability against it of
this Agreement or its ability to perform its obligations under this
Agreement.
(vii) No Event of Default or Early Amortization Event or event that
with notice, the passage of time or both, would become an Event of Default
or an Early Amortization Event under the Indenture has occurred and is
continuing and all conditions precedent to the execution of the Series
Supplement and the issuance of the VFNs on its part have been complied
with.
(b) Each of PARCO and Chase, as APA Bank, hereby makes the representations
and warranties as set forth in Exhibit B.
---------
SECTION 3.02. Information from the Servicer. So long as the Funding Agent
-----------------------------
is the registered Holder of any VFNs for the benefit of PARCO and/or the APA
Banks, the Servicer will furnish to the Funding Agent:
(a) each Payment Date Statement (as defined in the Trust Sale and
Servicing Agreement) at the time of delivery thereof to the Indenture Trustee
pursuant to the Indenture and such information, documents, records or reports
respecting the VFNs, the assets securing such VFNs (if any) and any other
information relating to the Indenture and other documents related to the VFNs as
the Funding Agent may from time to time reasonably request without unreasonable
expense to the Servicer; and
(b) such publicly available information, documents, records or reports
respecting the Servicer, the Transferor and the Issuer or the condition or
operations, financial or otherwise of the Servicer, the Transferor and the
Issuer as the Funding Agent may from time to time reasonably request.
20
SECTION 3.03. Reaffirmations of Issuer and Servicer. Each of the Issuer
-------------------------------------
and Servicer (in all of its capacities under all of the Transaction Documents)
hereby remakes and reaffirms all of the representations, warranties and
covenants made by it under the Transaction Documents for the benefit of the
Investors.
SECTION 3.04. Amendments.
----------
(a) Issuer will not make, or permit any Person to make, any material
amendment, modification or change to, or provide any material waiver under any
Transaction Document without the prior written consent of the Funding Agent.
Issuer will provide notice to the Funding Agent of any material amendment,
modification or change to, or waiver under, the Transaction Documents.
(b) If, in order to obtain favorable credit ratings of any other series of
notes issued under the Indenture, the Issuer is required to enhance the credit
protections for the holders of such notes in any way that does not also apply to
the Series 2000-VFN Notes, then the Issuer shall notify the Series 2000-VFN
Holders of such enhanced protections (other than a higher Subordination Factor
commensurate with the rating on those notes) and offer the same protections to
the Series 2000-VFN Holders.
21
ARTICLE IV
Conditions
----------
SECTION 4.01. Conditions Precedent to Initial Purchase. On the Closing
-----------------------------------------
Date:
(i) the Funding Agent shall have received fully executed counterparts
of such legal opinions as the Funding Agent shall reasonably request;
(ii) each of the following statements shall be true, and the Issuer,
by issuing the VFNs on the Closing Date shall be deemed to have represented
that:
(A) all representations and warranties made by the Issuer in the
Transaction Documents are true and correct in all material respects,
as if repeated on the Closing Date with respect to the facts and
circumstances then existing;
(B) the Indenture and each other Transaction Document is in full
force and effect; and
(C) after making the initial Borrowing, no Default, Event of
Default or Early Amortization will exist;
(iii) Moody's and S&P each shall have delivered its rating letter
which shall have affirmed the Commercial Paper a rating of "P-1" in the
case of Moody's, and of "A-1" (or better) in the case of S&P;
(iv) each Transaction Document shall have been executed and delivered
by the parties thereto in form and substance satisfactory to the Funding
Agent and shall constitute the legal, valid and binding obligation of each
party thereto;
(v) the VFNs shall have been duly executed by the Issuer,
authenticated by the Indenture Trustee, delivered to the Funding Agent and
registered in the name of the Funding Agent for the benefit of the
Investors;
(vi) all other documents and opinions reasonably requested by the
Funding Agent and in form and substance satisfactory to the Funding Agent
shall have been delivered: and
(vii) the Issuer shall have paid the closing fee as such fee is
specified in the Fee Letter.
SECTION 4.02. Each Variable Funding Advance. The obligation of the APA
-----------------------------
Banks to make a Variable Funding Advance on the occasion of any Borrowing
(including through the purchase of the VFNs on the Closing Date) pursuant to
Article II is subject to the satisfaction of each of the following conditions:
(a) At the time of such Borrowing, the representations and warranties made
or deemed made by the Issuer pursuant to the Indenture or this Agreement on the
Closing Date (including any made in any officers' certificates delivered
pursuant thereto) are true and correct as if made as of the time of such
Borrowing, and the Issuer is not in a state of Default, Event of Default or
Early Amortization under any of the provisions of this Agreement.
(b) At the time of such Borrowing, the Revolving Period shall not have
ended and the Commitment Expiry Date shall not have occurred.
(c) After giving effect to such Borrowing, the aggregate principal amount
of outstanding Variable Funding Advances will not exceed the Maximum Funded
Amount.
(d) The Termination Date has not occurred.
(e) The Funding Agent shall have received a Borrowing Request pursuant to
Section 2.03.
- ------------
(f) At the time of and immediately after giving effect to such Borrowing,
no Early Amortization Event or Event of Default shall have occurred and be
continuing or would result from such Borrowing.
(g) Except as the Investors shall otherwise agree, no such Borrowing may
be made if, after giving effect to the requested Borrowing there would have been
Borrowings made on more than four (4) different days during any calendar month.
23
(h) After giving effect to such Borrowing, (i) the Pool Balance shall not
be less than the Required Pool Balance, (ii) the Available Subordinated Amount
shall not be less than the Required Subordinated Amount and (iii) the amount on
deposit in the Reserve Fund shall not be less than the Reserve Fund Required
Amount.
(i) At the time of and immediately after giving effect to such Borrowing,
the Funded Amount, the Series Allocation Percentage and the Floating Allocation
Percentage shall increase to the extent provided for in the Series Supplement
and in the Indenture.
Each Borrowing shall be deemed to constitute a representation and warranty
by the Issuer on the date thereof as to the matters specified in paragraphs
----------
(a)-(h) of this Section 4.02.
- ------- ------------
24
ARTICLE V
Covenants of the Servicer
-------------------------
SECTION 5.01. Funding Costs.
-------------
(a) Increased Costs. If, due to either (i) the introduction after the date
---------------
hereof of, or any change after the date hereof in or in the interpretation of,
any applicable law, rule or regulation by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or (ii) compliance by any Affected Party after the date hereof with any
request or directive issued after the date hereof of (whether or not having the
force of law) any such governmental authority, central bank or comparable
agency, and, as a result of any of the events set forth in the above clauses (i)
-----------
and (ii), (x) there shall be any material increase in the cost to an Affected
----
Party in maintaining its commitment under this Agreement or making a Variable
Funding Advance under this Agreement, (y) any Affected Party is subjected to any
charge or withholding on its obligations hereunder, or on or with respect to the
VFNs or the Collateral Loans or any amount payable to any Affected Party
hereunder, under the Indenture, or changes in the basis of taxation of payments
to any Affected Party in connection with any of the foregoing (except for
changes in the rate of tax on overall net income of any Affected Party)
(collectively, "Increased Costs"), then such Increased Costs shall be included
---------------
in the Variable Funding Increased Cost Amount (upon notice of such loss given to
the Servicer by the Investor suffering such loss) and paid pursuant to the
Indenture on the next Payment Date after such Affected Party shall have provided
notice to the Funding Agent (and the Funding Agent shall have provided notice to
the Servicer) of such Increased Cost; provided, however, that no amount shall be
-------- -------
included in the Variable Funding Increased Cost Amount pursuant to this Section
-------
5.01(a) with respect to any period commencing more than sixty (60) days before
- -------
delivery of such notice to Servicer. A certificate setting forth in reasonable
detail the computation of the amount of such Increased Costs (which increase in
cost shall be determined by such Affected Party's reasonable allocation of the
aggregate of such cost increases resulting from such event), submitted to the
Funding Agent by such Affected Party and to the Servicer by the Funding Agent,
shall be conclusive and binding for all purposes, absent manifest error.
25
(b) Increased Capital. If either (i) the introduction after the date
-----------------
hereof of, or any change in or in the interpretation after the date hereof of,
any applicable law, rule or regulation regarding capital adequacy by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof or (ii) the compliance by an Affected
Party with any guideline or request from any governmental authority, central
bank or comparable agency regarding capital adequacy issued after the date
hereof (whether or not having the force of law), has or would have the effect of
materially reducing the rate of return on such Affected Party's capital as a
consequence of such Affected Party's commitment under this Agreement or the
making of Variable Funding Advances to a level below that which such Affected
Party could have achieved but for such introduction, change, interpretation or
compliance, then the Servicer shall, from time to time, cause the Issuer to pay
to the Funding Agent for the benefit of such Affected Party on the next Payment
Date after such Affected Party shall have provided notice to the Funding Agent
(and the Funding Agent shall have provided notice to the Servicer) of such
reduction, additional amounts sufficient to compensate such Affected Party for
such reduction; provided, however, that no amount shall be payable by the Issuer
-------- -------
pursuant to this Section 5.01(b) with respect to any period commencing more than
---------------
sixty (60) days before delivery of such notice to Servicer; and provided,
--------
further, that such additional amounts shall be payable solely in accordance with
- -------
the Indenture. A certificate setting forth in reasonable detail the computation
of the amount of such reduction (it being understood that the reduction in
return allocable hereunder shall be determined by such Affected Party's
reasonable allocation of the aggregate of reductions in return on capital
resulting from such event) and the basis therefor, submitted to the Funding
Agent by such Affected Party and to the Servicer by the Funding Agent, shall be
conclusive and binding for all purposes, in the absence of manifest error. Any
such cost shall be included in the Variable Funding Increased Cost Amount (upon
notice of such loss given to the Servicer by the Investor suffering such loss)
and paid pursuant to the Indenture.
(c) Breakage Fees. If either (a) any Investor shall receive payment of
-------------
principal with respect to its Variable Funding Note Interest, or any assignment
by PARCO to the APA Banks pursuant to Section 2.01 of the Asset Purchase
Agreement occurs, on any day other than a Payment Date, or (b) any Investor
shall have suffered any loss or expense as a result of a default by the Issuer
in effecting a Variable Funding Advance on the scheduled date therefor after
having submitted a Borrowing Request to the Funding Agent in accordance with
Section 2.03, then in either case, the Issuer shall, on the Payment Date after
- ------------
demand therefor from the Funding Agent, cause the Issuer to pay the Funding
Agent for the benefit of such
26
Investor for any resulting loss or expense incurred by such Investor including
any loss incurred in obtaining, liquidating or employing deposits from third
parties; provided, that such Investor shall have delivered to the Funding Agent
--------
and the Funding Agent shall have delivered to the Issuer, on or prior to the
date on which the Funding Agent demanded reimbursement for such costs, a
certificate as to the amount of such loss or expense and showing, in reasonable
detail, the calculation, which calculation shall conform to Section 5.01(d)
---------------
hereunder, when applicable, made by such Investor to determine the amount of
such loss or expense, which certificate shall be conclusive in the absence of
manifest error. Any such cost shall be included in the Variable Funding
Increased Cost Amount (upon notice of such loss given to the Servicer by the
Investor suffering such loss) and paid pursuant to the Indenture.
(d) Calculation of Breakage Fees. If on any Pay Down Date the Issuer pays
----------------------------
PARCO a principal payment which exceeds the amount of Commercial Paper which
PARCO can repay using the proceeds of repayment (taking into account other funds
received by PARCO on that day), then the Investor shall invest the excess
proceeds in Permitted Investments and the Breakage Fee which the Investor may
charge the Issuer shall be the difference between the CP Rate and the investment
rate for such excess funds.
SECTION 5.02. Taxes on Payments. (a) All payments made under this
-----------------
Agreement to an Affected Party shall, to the extent allowed by law, be made free
and clear of, and without reduction for or on account of, any present or future
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
governmental authority (hereinafter "Taxes"), excluding (A) franchise taxes (in
-----
lieu of income taxes) or any other tax upon or measured by the overall net
income of such Affected Party and (B) any Taxes that would not have been imposed
but for the failure of such Affected Party to provide and keep current to the
extent permitted by law any certification or other documentation required to
qualify for an exemption therefrom or reduction in rate thereof or required by
this Agreement to be furnished by such Affected Party (all such excluded Taxes
hereinafter "Excluded Taxes"). In the event that any withholding or deduction
--------------
from any payment made hereunder is required in respect of any Taxes (other than
Excluded Taxes) then the Servicer shall:
(i) cause the Issuer to pay directly to the relevant authority the
full amount required to be so withheld or deducted;
27
(ii) promptly forward to the Funding Agent an official receipt or
other documentation satisfactory to the Funding Agent evidencing such
payment to such authority; and
(iii) pay to the recipient such additional amount or amounts as is
necessary to ensure that the net amount actually received by the recipient
will equal the full amount such recipient would have received has not such
withholding or deduction been required.
Moreover, if any Taxes (other than Excluded Taxes) are directly asserted
against any recipient with respect to any payment received by such recipient
hereunder, the recipient may pay such Taxes (other than Excluded Taxes) and the
Issuer will promptly pay such additional amounts (including any penalties,
interests or expenses) as shall be necessary in order that the net amount
received by the recipient after the payment of such Taxes (including Taxes on
such additional amount) shall equal the amount of such recipient would have
received has such Taxes not been asserted.
If the Issuer fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the recipient the required receipts or other
required documentary evidence, the Issuer shall cause the Issuer to indemnify
the recipient for any incremental Taxes, interest, or penalties that may become
payable by any recipient as a result of such failure. Any amounts payable under
this Section 5.02 shall constitute Variable Funding Increased Cost Amounts (upon
------------
notice of such loss given to the Servicer by the party suffering such loss) and
shall be payable as provided in the Indenture.
(b) The agreements in this Section 5.02 shall survive the termination of
------------
this Agreement and the payment of all amounts payable hereunder.
SECTION 5.03. Limited Recourse to Issuer. Notwithstanding anything to the
--------------------------
contrary contained in this Agreement, the obligations of the Issuer under this
Agreement are solely the obligations of the Issuer and shall be payable solely
in accordance with the Indenture. The Owner Trustee shall have no liability for
the obligations of the Issuer hereunder, and no recourse shall be had against
the Owner Trustee, in its individual capacity, or any stockholder, employee,
officer, director or beneficial owner of the Owner Trustee, for any obligation,
covenant or agreement of the Issuer or any other claim against the Issuer.
28
SECTION 5.04. Costs, Expenses and Taxes. In addition to the rights of
-------------------------
indemnification granted under Section 7.04 hereof, the Servicer agrees to pay on
------------
demand all costs and expenses in connection with (x) any amendment, waiver or
modification of this Agreement, the VFNs, any other Transaction Document or
related agreements in each case requested by the Issuer, the Servicer or their
respective agents and advisors, (y) advice to the Indemnified Parties in respect
of their rights and remedies under or in connection with this Agreement, the
VFNs, or any other Transaction Document, in connection with any circumstance
that could reasonably be expected to adversely affect their interests therein
(including any attempted restructuring or "workout" of the liabilities of the
Issuer), and (z) the enforcement of this Agreement, the VFNs and the other
Transaction Documents. Such costs and expenses include in each case reasonable
attorneys' fees for the Indemnified Parties. Any such cost shall be included in
the Variable Funding Increased Cost Amount (upon notice of such loss given to
the Servicer by the party suffering such loss) and paid pursuant to the
Indenture.
29
ARTICLE VI
The Funding Agent
-----------------
SECTION 6.01. Limitation of Liability. Notwithstanding any provision of
-----------------------
this Agreement: (i) the Funding Agent shall not have any obligations under this
Agreement other than those specifically set forth herein, and no implied
obligations of the Funding Agent shall be read into this Agreement; and (ii) in
no event shall the Funding Agent be liable under or in connection with this
Agreement for indirect, special, or consequential losses or damages of any kind,
including lost profits, even if advised of the possibility thereof and
regardless of the form of action by which such losses or damages may be claimed.
Neither the Funding Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken in good
faith by it or them under or in connection with this Agreement, except for its
or their own gross negligence or willful misconduct. Without limiting the
foregoing, the Funding Agent (a) may consult with legal counsel (including
counsel for PARCO and the APA Banks), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts, (b) shall not be responsible to PARCO or the APA Banks
for any statements, warranties or representations made in or in connection with
this Agreement, or the other Transaction Documents, (c) shall not be responsible
to PARCO or the APA Banks for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Transaction Documents, (d) shall incur no liability under or in respect of any
of the Commercial Paper or other obligations of PARCO under this Agreement or
the other Transaction Documents and (e) shall incur no liability under or in
respect of this Agreement or the other Transaction Documents by acting upon any
notice (including notice by telephone), consent, certificate or other instrument
or writing (which may be by facsimile) believed by it to be genuine and signed
or sent by the proper party or parties. Notwithstanding anything else herein or
in the other Transaction Documents, it is agreed that where the Funding Agent
may be required under this Agreement or the other Transaction Documents to give
notice of any event or condition or to take any action as a result of the
occurrence of any event or the existence of any condition, the Funding Agent
agrees to give such notice or take such action only to the extent that it has
actual knowledge of the occurrence of such event or the existence of such
condition, and
30
shall incur no liability for any failure to give such notice or take such action
in the absence of such knowledge.
31
ARTICLE VII
Miscellaneous
-------------
SECTION 7.01. Assignment. (a) This Agreement shall be binding on the
----------
parties hereto and their respective successors and assigns; provided, however,
-------- -------
that the Issuer may not assign any of its rights or delegate any of its duties
hereunder without the prior written consent of the Funding Agent and a
confirmation from each of Moody's and S&P that such an assignment would not lead
to a downgrade or a withdrawal of their respective ratings of the Commercial
Paper. Except as provided in paragraph (b) and paragraph (d) below, no provision
------------- -------------
of this Agreement shall in any manner restrict the ability of any Investor to
assign, participate, grant security interests in, or otherwise transfer any
portion of its Variable Funding Note Interests, provided that any such transfer
shall be in accordance with the terms of the Indenture.
(b) Any APA Bank may assign all or any portion of its Commitment and its
Variable Funding Note Interests and its other rights and obligations hereunder
to any Person with the written approval of the PARCO Administrative Agent (on
behalf of PARCO), the Servicer and the Funding Agent. Any such assignment shall
be made in accordance with the terms of the Asset Purchase Agreement (with
notice to the Issuer, the Indenture Trustee and the Servicer), and each assignee
shall, upon effectiveness of any assignment, make the representations and
warranties set forth on Exhibit B hereto.
---------
(c) Without limiting the foregoing, PARCO may, from time to time, with
prior or concurrent notice to the Servicer and the Indenture Trustee, in one
transaction or a series of transactions, assign all or a portion of its Variable
Funding Note Interests and its rights and obligations under this Agreement and
any other Transaction Document to which it is a party to a Conduit Assignee.
Upon and to the extent of such assignment by PARCO to a Conduit Assignee, (i)
such Conduit Assignee shall be the owner of the assigned portion of the Net
Investment, (ii) the related administrative agent for such Conduit Assignee will
act in the same capacity with respect to such Conduit Assignee as the PARCO
Administrative Agent acts hereunder with respect to PARCO, with all
corresponding rights and powers, express or implied, granted to the PARCO
Administrative Agent hereunder or under the other Transaction Documents, (iii)
such Conduit Assignee and its liquidity support
32
provider(s) and credit support provider(s) and other related parties shall have
the benefit of all the rights and protections provided to PARCO herein and in
the other Transaction Documents (including any limitation on recourse against
such Conduit Assignee or related parties, any agreement not to file or join in
the filing of a petition to commence an insolvency proceeding against such
Conduit Assignee, and the right to assign to another Conduit Assignee as
provided in this paragraph), (iv) such Conduit Assignee shall assume all (or the
assigned or assumed portion) of PARCO's obligations, if any, hereunder or any
other Transaction Document, and PARCO shall be released from such obligations,
in each case to the extent of such assignment, and the obligations of PARCO and
such Conduit Assignee shall be several and not joint, (v) all distributions in
respect of the assigned Variable Funding Note Interests shall be made to the
applicable agent or PARCO Administrative Agent, as applicable, on behalf of
PARCO and such Conduit Assignee on a pro rata basis according to their
--- ----
respective interests, (vi) the defined terms and other terms and provisions of
this Agreement and the other Transaction Documents shall be interpreted in
accordance with the foregoing, (vii) if requested by the Funding Agent or PARCO
Administrative Agent with respect to the Conduit Assignee, the parties will
execute and deliver such further agreements and documents and take such other
actions as the Funding Agent or such PARCO Administrative Agent may reasonably
request to evidence and give effect to the foregoing and (viii) such Conduit
Assignee makes the representations and warranties set forth in Exhibit B
---------
attached hereto by delivering to the Servicer and the Indenture Trustee a
certification in the form of Exhibit B. No assignment by PARCO to a Conduit
---------
Assignee of all or any portion of the Funded Amount shall in any way diminish
the related APA Banks' obligation under Section 2.03 to fund any Advance not
------------
funded by PARCO or such Conduit Assignee or to acquire from PARCO or such
Conduit Assignee all or any portion of the Net Investment pursuant to Section
-------
2.07.
- ----
(d) Each of the Servicer and the Issuer hereby agrees and consents to the
assignment by PARCO from time to time of all or any part of its rights under,
interest in and title to this Agreement and the VFNs to any APA Bank pursuant to
the Asset Purchase Agreement.
SECTION 7.02. Notices. Except in the case of notices and other
-------
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service or sent by telecopy, as follows:
33
if to the Transferor, at its address or telecopy number set forth in
the Indenture:
if to PARCO:
Park Avenue Receivables Corporation
c/o Global Securitization Services, LLC
114 West 47/th/ Street, Suite 1715
New York, New York 10036
Attention: President
Telephone: (212) 302-5151
Fax: (212) 302-8767
if to the Funding Agent:
The Chase Manhattan Bank
450 West 33/rd/ Street, 15/th/ Floor
New York, New York 10001
Attention: PARCO Administration, CMFS
Telephone: (212) 946-2748
Fax: (212)946-8098
if to the Servicer:
World Omni Financial Corp.
190 NW 12/th/ Avenue
Deerfield Beach, Florida 33442
Attention: Patrick C. Ossenbeck
Telephone: (954) 429-2599
Fax: (954)429-2685
If to the APA Banks, to the Funding Agent at the address specified above. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
SECTION 7.03. Waivers; Amendments.
-------------------
(a) No waiver of any provision of this Agreement or consent to any
departure by the Issuer therefrom shall in any event be effective unless the
same shall be permitted by Section 7.03(b) and the Indenture, and then such
--------------
waiver or consent shall be effective only in the specific instance and for the
purpose for which given.
34
Without limiting the generality of the foregoing, the making of a Variable
Funding Advance shall not be construed as a waiver of any Default, regardless of
whether the Indenture Trustee, PARCO or any APA Bank may have had notice or
knowledge of such Default at the time. Notice of any waiver, amendment or
modification whatsoever shall be given to the appropriate Rating Agencies and no
material waiver, amendment or modification shall take effect until the Funding
Agent has received confirmation from each Rating Agency that such waiver,
amendment or modification will not result in a downgrade or withdrawal of such
Rating Agency's rating of the Commercial Paper.
(b) Any provision of the Agreement may be amended or waived as to the
Issuer if, but only if, it is in writing and signed by the Issuer and as to the
Funding Agent, PARCO and the APA Banks, if, but only if, it is in writing and
signed by the Funding Agent, PARCO and the Required APA Banks. Any consent or
other election or action to be taken by the Beneficial Owners of the VFNs
pursuant to the Indenture shall be taken by the Funding Agent as registered
Holder thereof, in each case with the consent of the Required APA Banks.
(c) No waiver, amendment or modification of the Indenture or any other
agreement referred to herein or therein to which the Issuer is a party (other
than this Agreement) shall affect any of the rights or obligations under this
Agreement of any party hereto unless such party has given its written consent to
such waiver, amendment or modification.
(d) A failure or delay in exercising any right, power or privilege in
respect of this Agreement will not be presumed to operate as a waiver, and a
single or partial exercise of any right, power or privilege will not be presumed
to preclude any subsequent or further exercise, of that right, power or
privilege or the exercise of any other right, power or privilege.
SECTION 7.04. Indemnities by the Issuer. Without limiting any other rights
-------------------------
which the Investors, the Funding Agent, the PARCO Administrative Agent and any
successors and permitted assigns and their respective officers, directors,
employees, counsel and agents (collectively, the "Indemnified Parties") may have
-------------------
hereunder or under applicable law, the Issuer hereby agrees to indemnify each
Indemnified Party from and against any and all damages, losses, claims,
liabilities, reasonable costs and expenses, including reasonable attorneys' fees
(which attorneys may be employees of the Investors, the Funding Agent or the
PARCO Administrative Agent, as applicable) and disbursements (all of the
foregoing being collectively
35
referred to as "Indemnified Amounts") awarded against or incurred by any of them
-------------------
in any action or proceeding between the Issuer and any of the Indemnified
Parties or between any of the Indemnified Parties and any third party or
otherwise arising out of or as a result of the inaccuracy of any representation
or warranty made hereunder or the failure of the Issuer to comply with any term
or provision of this Agreement, the other Transaction Documents, the ownership
or maintenance, either directly or indirectly, by any Investor of a Variable
Funding Note or any of the other transactions contemplated hereby or thereby,
excluding, however, Indemnified Amounts to the extent resulting from gross
negligence, bad faith or willful misconduct on the part of such Indemnified
Party or any actual or alleged breach of law or regulation caused by and
applicable to such Indemnified Party and not the Issuer or Affiliates thereof or
any actual or alleged breach by such Indemnified Party of a contract between
such Indemnified Party and a third party. If the Indemnified Parties retain more
than one law firm in connection with the matters described in this Section 7.04,
------------
the Indemnified Amounts shall include the attorneys' fees and expenses of only
one such law firm identified from time to time by the Indemnified Parties for
reimbursement under this Section 7.04 as Indemnified Amounts. Any Indemnified
------------
Amounts payable hereunder shall be included in the Variable Funding Increased
Cost Amount (upon notice of such loss given to the Servicer by the party
suffering such loss) and paid pursuant to the Indenture.
SECTION 7.05. Survival. All covenants, agreements, representations and
--------
warranties made by the Issuer and the Investors herein and in the certificates
or other instruments delivered in connection with or pursuant to this Agreement
shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement and the making of any
Variable Funding Advances, regardless of any investigation made by any such
other party or on its behalf and notwithstanding that the Indenture Trustee,
PARCO, the Issuer or any APA Bank may have had notice or knowledge of any
Default, Event of Default or Early Amortization Event or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as any Variable Funding Note or
any amount payable under this Agreement is outstanding and unpaid and so long as
the Commitments have not expired or terminated.
SECTION 7.06. Counterparts; Integration; Effectiveness. This Agreement may
----------------------------------------
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the
Indenture, the Series Supplement, the Asset Purchase Agreement and the other
Transaction Documents
36
constitute the entire contract among the parties relating to the subject matter
hereof and thereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof and
thereof. Except as provided in Section 4.01, this Agreement shall become
------------
effective when it shall have been executed by each of the parties hereto and
when the VFNs shall have been issued to and receipted for by the Funding Agent,
and thereafter the Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 7.07. Severability. Any provision of this Agreement held to be
------------
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 7.08. Governing Law; Jurisdiction; Consent to Service of Process;
-----------------------------------------------------------
Waiver of Jury Trial Right.
- --------------------------
(a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
(b) The Issuer hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Indenture Trustee or any Beneficial
37
Owner may otherwise have to bring any action or proceeding relating this
Agreement against the Issuer or its properties in the courts of any
jurisdiction.
(c) The Issuer hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in Section
-------
7.08(b). Each of the parties hereto hereby irrevocably waives, to the fullest
- -------
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 7.02. Nothing in this Agreement
------------
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
(e) EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY PROCEEDING.
SECTION 7.09. No Bankruptcy Petition against the Issuer or PARCO. Each of
--------------------------------------------------
the Investors, the Funding Agent and the PARCO Administrative Agent hereby
covenants and agrees that, prior to the date which is one year and one day (or
the then applicable preference period) after the payment in full of all
outstanding rated indebtedness of the Issuer, it will not institute against, or
join any other Person in instituting against, the Issuer any proceeding of a
type referred to in the definition of Event of Bankruptcy. Each of the
Investors, the Funding Agent, the PARCO Administrative Agent, the Servicer and
the Issuer hereby covenants and agrees that, prior to the date which is one year
and one day (or the then applicable preference period) after the payment in full
of all outstanding Commercial Paper or other rated indebtedness of PARCO, it
will not institute against, or join any other Person in instituting against,
PARCO any proceeding of a type referred to in the definition of Event of
Bankruptcy.
SECTION 7.10. Benefits of Indenture. The Issuer hereby acknowledges and
---------------------
confirms that each representation, warranty, covenant and agreement made
pursuant to the Indenture by the Issuer to the Indenture Trustee is also made
herein,
38
all for the benefit and security of the Investors, the Funding Agent and the
PARCO Administrative Agent.
SECTION 7.11. Headings. Article and Section headings and the Table of
--------
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 7.12. No Recourse Against PARCO, etc. (a) Notwithstanding anything
-------------------------------
to the contrary contained herein or in the other Transaction Documents, the
obligations of PARCO under this Agreement are solely the corporate obligations
of PARCO and, in the case of obligations of PARCO other than Commercial Paper,
shall be payable at such time as funds are received by or are available to PARCO
in excess of funds necessary to pay in full all outstanding Commercial Paper
and, to the extent funds are not available to pay such obligations, the claims
relating thereto shall not constitute a claim against PARCO but shall continue
to accrue. Each party hereto agrees that the payment of any claim (as defined in
Section 101 of Title 11 of the Bankruptcy Code) of any such party shall be
subordinated to the payment in full of all Commercial Paper.
No recourse under any obligation, covenant or agreement of PARCO
contained in this Agreement shall be had against any incorporator, stockholder,
officer, director, employee or agent of PARCO, the PARCO Administrative Agent,
the Funding Agent, the Manager or any of their Affiliates (solely by virtue of
such capacity) by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise; it being expressly agreed and
understood that this Agreement is solely a corporate obligation of PARCO
individually, and that no personal liability whatever shall attach to or be
incurred by any incorporator, stockholder, officer, director, employee or agent
of PARCO, the PARCO Administrative Agent, the Funding Agent, the Manager or any
of their Affiliates (solely by virtue of such capacity) or any of them under or
by reason of any of the obligations, covenants or agreements of PARCO contained
in this Agreement, or implied therefrom, and that any and all personal liability
for breaches by PARCO of any of such obligations, covenants or agreements,
either at common law or at equity, or by statute, rule or regulation, of every
such incorporator, stockholder, officer, director, employee or agent is hereby
expressly waived as a condition of and in consideration for the execution of
this Agreement; provided that the foregoing shall not relieve any such Person
--------
from any liability it might otherwise have as a result of its own
misrepresentation, bad faith or willful misconduct or as a result of fraudulent
actions taken or
39
omissions made by it. The provisions of this Section 7.12 shall survive
termination of this Agreement.
(b) Each of the parties hereto hereby waives any right of setoff it
may have or to which it may be entitled under this Agreement from time to time
against PARCO or its assets.
SECTION 7.13. Waiver of Confidentiality. The Issuer hereby consents to the
------------------------
disclosure of any non-public information with respect to it received by the
Funding Agent, any Investor or the PARCO Administrative Agent to any other
Investor or potential Investor, the Funding Agent, any nationally recognized
statistical rating organization rating PARCO's Commercial Paper, any dealer or
placement agent of or depositary for PARCO's Commercial Paper, the PARCO
Administrative Agent or any of such Person's counsel or accountants in relation
to this Agreement or any other Transaction Document.
SECTION 7.14. Conflict Waiver. Chase acts as Funding Agent and APA Bank
---------------
hereunder, as administrative agent, depositary and placement agent for PARCO, as
provider of other backup facilities for PARCO, and may provide other services or
facilities from time to time (the "Chase Roles"). Each of the parties hereto
-----------
hereby acknowledges and consents to any and all Chase Roles, waives any
objections it may have to any actual or potential conflict of interest caused by
Chase's acting as an APA Bank and as Funding Agent and acting as or maintaining
any of the Chase Roles, and agrees that in connection with any Chase Role, Chase
may take, or refrain from taking, any action which it in its discretion deems
appropriate
40
IN WITNESS WHEREOF, the parties hereto have caused this Variable
Funding Note Purchase Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
PARK AVENUE RECEIVABLES
CORPORATION, as Conduit Investor
By:
---------------------------------
Name:
Title:
WORLD OMNI FINANCIAL CORP., as
Servicer
By:
---------------------------------
Name:
Title:
WORLD OMNI MASTER OWNER TRUST, as
Issuer
By: Chase Manhattan Bank USA,
National Association, not in its
individual capacity, but solely as
Owner Trustee
By:
---------------------------------
Name
Title:
THE CHASE MANHATTAN BANK, as
Funding Agent
By:
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
as APA Bank
By:
---------------------------------
Name:
Title:
EXHIBIT A
FORM OF BORROWING REQUEST
[Date]
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Dear Sir or Madam:
WORLD OMNI MASTER OWNER TRUST (the "Issuer"), hereby provides written
------
confirmation of the Borrowing Request made by telephone to [name of officer] of
The Chase Manhattan Bank ("Chase") at approximately [______] [am/pm] on [date]
-----
pursuant to Section 2.03(d) of the Variable Funding Note Purchase Agreement,
---------------
dated as of December __, 2000 (as amended, the "Variable Funding Note Purchase
------------------------------
Agreement") among the issuer, Park Avenue Receivables Corporation, Chase as
- ----------
Funding Agent and PARCO Administrative Agent and the APA Banks that may be party
thereto from time to time. Terms defined in, or incorporated by reference into,
the Variable Funding Note Purchase Agreement are used herein with the same
meanings.
1. Issuer hereby confirms:
. the aggregate amount of the requested Borrowings is $[____]
. the date of this Borrowing request is [_____]
. the proposed Borrowing Date is [_____].
2. Issuer hereby certifies that each of the conditions set forth in
Section 4.02 of the Variable Funding Note Purchase Agreement and the Indenture
- ------------
is met as of the date hereof.
The foregoing is provided to Chase as Funding Agent with respect to
PARCO and the APA Bank. Capitalized terms used herein have the meanings ascribed
thereto in the Variable Funding Note Purchase Agreement.
A-1
Very truly yours.
WORLD OMNI MASTER OWNER TRUST, as Issuer
By:
_____________________________________
Name:
Title:
A-2
EXHIBIT B
Investor Representations and Warranties
---------------------------------------
PARCO, each Conduit Assignee and each APA Bank (herein, a "purchaser")
---------
represents and agrees, for the benefit of each party to the Variable Funding
Note Purchase Agreement, as follows, in the case of PARCO, and The Chase
Manhattan Bank ("Chase") as an APA Bank, as of the Closing Date, in the case of
-----
each other APA Bank as of the date of execution and delivery of its Assignment
and Assumption Agreement and in the case of each Conduit Assignee as of the date
of assignment thereto pursuant to Section 7.01(c) (Capitalized terms used herein
--------------
have the meanings ascribed to them in the Variable Funding Note Purchase
Agreement except that terms used below that are defined in Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act") or in Regulation S
--------------
under the Securities Act are used herein as defined therein):
1. The purchaser either (i)(A) is a qualified institutional buyer, (B) is
aware that the assignment of an interest in the Variable Funding Notes (the
"VFNs") to it (other than on the Closing Date by the Issuer) is being made in
----
reliance on the exemption from registration provided by Rule l44A under the
Securities Act and (C) is acquiring its interest in VFNs for its own account or
for one or more accounts, each of which is a qualified institutional buyer and
as to each of which the purchaser exercises sole investment discretion, and in a
principal amount of not less than $U.S. 1,000,000 in each case for the purchaser
and for each such account or (ii) is not a U.S. person and is purchasing the
VFNs pursuant to Rule 903 or 904 of Regulation S. The purchaser has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of its investment in the VFNs, and the purchaser
and any accounts for which it is acting are each able to bear the economic risk
and reduced liquidity of the purchaser's or of its investment.
2. The purchaser understands that the VFNs are being offered only in a
transaction not involving any public offering in the United States within the
meaning of the Securities Act. The VFNs have not been and will not be registered
under the Securities Act, and, if in the future the purchaser decides to offer,
resell, pledge or otherwise transfer the VFNs, such Notes may be offered,
resold, pledged or otherwise transferred only in accordance with the legend on
such Notes described below. The purchaser acknowledges that no representation is
made by the Issuer as to the availability of any exemption under the Securities
Act or any state securities laws for resale of the VFNs.
B-1
3. The purchaser is not purchasing the VFNs with a view to the resale,
distribution or other disposition thereof in violation of the Securities Act.
The purchaser understands that an investment in the VFNs involves certain risks,
including the risk of loss of a substantial part of its investment under certain
circumstances. The purchaser has had access to such financial and other
information concerning the Issuer and the VFNs as it deemed necessary or
appropriate in order to make an informed investment decision with respect to its
purchase of the VFNs, including an opportunity to ask questions of and request
information from the Issuer and the Servicer.
4. The purchaser understands that the VFNs will bear the legend set forth
below. Before any interest in a certificated Note may be offered, resold,
pledged or otherwise transferred to a person who takes delivery in the form of a
Global Note, the Issuer will be required to provide the Indenture Trustee with a
written certification (in the form provided in the Indenture) as to compliance
with the transfer restrictions. Before any interest in a restricted global note
may be offered, resold, pledged or otherwise transferred to a person who takes
delivery in the form of a Regulation S global note, or vice versa, the Issuer
will be required to provide the Indenture Trustee with a written certificate (in
the form provided in the Indenture) as to compliance with the transfer
restrictions.
5. The VFNs will bear a legend to the following effect unless the Issuer
determines otherwise in compliance with applicable law:
THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT
(A)(1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
ACT IN A TRANSACTION (EXCEPT THE INITIAL SALE BY THE ISSUER) MEETING THE
REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A IN ACCORDANCE WITH RULE 144A. SUBJECT TO THE
SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE REFERRED TO
BELOW OR (2) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 903 OR RULE
B-2
904 (AS APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT OR (3)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) IN A PRINCIPAL AMOUNT OF NOT LESS
THAN $1,000,000 FOR THE PURCHASER AND FOR EACH ACCOUNT FOR WHICH IT IS
ACTING, SUBJECT TO SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE
INDENTURE AND (B), IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE UNITED STATES OR ANY STATE OF THE UNITED STATES AND ANY OTHER
APPLICABLE JURISDICTION. EACH PURCHASER OF THIS SECURITY WILL BE DEEMED
TO HAVE MADE THE REPRESENTATIONS AND AGREEMENTS SET FORTH IN EXHIBIT A
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OF THE INDENTURE. ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF
NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT OPERATE TO
TRANSFER ANY RIGHTS TO THE TRANSFEREE. NOTWITHSTANDING ANY INSTRUCTIONS
TO THE CONTRARY TO THE ISSUER, THE INDENTURE TRUSTEE OR ANY
INTERMEDIARY. IF AT ANY TIME, THE ISSUER DETERMINES OR IS NOTIFIED THAT
THE HOLDER OF SUCH BENEFICIAL INTEREST IN SUCH NOTE WAS IN BREACH, AT
THE TIME GIVEN, OF ANY OF THE REPRESENTATIONS SET FORTH IN THE
INDENTURE, THE INDENTURE TRUSTEE MAY CONSIDER THE ACQUISITION OF THIS
NOTE OR SUCH INTEREST, IN SUCH NOTE VOID AND REQUIRE THAT THIS NOTE OR
SUCH INTEREST HEREIN BE TRANSFERRED TO A PERSON DESIGNATED BY THE
ISSUER.
6. The purchaser will not, at any time, offer to buy or offer to
sell the VFNs by any form of general solicitation or advertising, including, but
not limited to, any advertisement, article, notice of other communication
published in any newspaper, magazine or similar medium or broadcast over
television or radio or seminar or meeting whose attendees have been invited by
general solicitations or advertising.
B-3
Schedule 1
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List of Proceedings
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JM Family Enterprises, Inc. ("JMFE") and its subsidiaries (which
include World Omni) are included in the Internal Revenue Service ("IRS")
coordinated industry program. JMFE and its subsidiaries recently brought to
closure the review of the 1990-1994 consolidated tax returns by reaching a
settlement with the IRS.
As part of the IRS' regular examination of JMFE's 1995 B 1997
consolidated federal income tax returns, the IRS is again reviewing the
transactions relating to retail lease contracts as well as other positions that
were taken on the tax returns. Specifically, the IRS is considering treating the
origination trust and each securitization trust created for those transactions
as an association taxable as a corporation rather than a trust for federal
income tax purposes. In connection with each transaction, World Omni received an
opinion of counsel to the effect that neither the origination trust nor the
relevant securitization trusts would be treated as an association taxable as a
corporation for federal income tax purposes. While the IRS has not yet formally
proposed any changes to JMFE's tax returns for 1995 B 1997, management believes
that a challenge by the IRS with respect to the securitizations would be
unsuccessful; however, we cannot assure you of this result.
Management intends to vigorously defend its positions and believes that
the ultimate resolution of all of the issues will not have a material adverse
effect on JM Family Enterprises' or World Omni's operations and financial
condition. However, if the IRS were to prevail on certain of these issues, it
could have a material adverse effect on JM Family Enterprises' or World Omni's
operations and financial condition. Nevertheless, management believes that, even
if the IRS were to prevail on all of these issues it would not result in any
material impairment of World Omni's ability to perform its obligations and
duties. Management cannot, however, assure you of this result.