EXHIBIT 4.3
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CARMAX AUTO OWNER TRUST 1999-1,
as Issuer,
and
BANKERS TRUST COMPANY,
as Indenture Trustee
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INDENTURE
Dated as of September [__], 1999
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$[____________] [____]% Class A-1 Asset-Backed Notes
$[____________] [____]% Class A-2 Asset-Backed Notes
$[____________] [____]% Class A-3 Asset-Backed Notes
$[____________] [____]% Class A-4 Asset-Backed Notes
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CROSS REFERENCE TABLE(1)
TIA Indenture
Section Section
310 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . 6.10
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(b). . . . . . . . . . . . . . . . . . . . . . . . .6.8;6.11
(c). . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a). . . . . . . . . . . . . . . . . . . . . . . . . . .6.12
(b). . . . . . . . . . . . . . . . . . . . . . . . . . .6.12
(c). . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
312 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
313 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . 7.4
(b)(2). . . . . . . . . . . . . . . . . . . . . . . 7.4;11.5
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3
314 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 11.15
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . 6.5;11.5
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . .6.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . .6.1
(e). . . . . . . . . . . . . . . . . . . . . . . . . . .5.13
316 (a)(last sentence) . . . . . . . . . . . . . . . . . . . 1.1
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . .5.11
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . .5.12
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3
318 (a). . . . . . . . . . . . . . . . . . . . . . . . . . .11.7
_______________________
(1) Note: This Cross Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
(2) N.A. means Not Applicable.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions..................................................2
SECTION 1.2. Incorporation by Reference of Trust
Indenture Act.............................12
SECTION 1.3. Rules of Construction.......................................12
ARTICLE II
THE NOTES
SECTION 2.1. Form........................................................13
SECTION 2.2. Execution, Authentication and Delivery......................14
SECTION 2.3. Temporary Notes.............................................14
SECTION 2.4. Tax Treatment...............................................15
SECTION 2.5. Registration; Registration of Transfer and
Exchange..................................15
SECTION 2.6. Mutilated, Destroyed, Lost or Stolen Notes..................17
SECTION 2.7. Persons Deemed Owners.......................................18
SECTION 2.8. Payments 18
SECTION 2.9. Cancellation................................................22
SECTION 2.10. Release of Collateral.......................................22
SECTION 2.11. Book-Entry Notes............................................22
SECTION 2.12. Notices to Clearing Agency..................................23
SECTION 2.13. Definitive Notes ...........................................24
SECTION 2.14. Authenticating Agents ......................................24
ARTICLE III
COVENANTS
SECTION 3.1. Payment Covenant............................................25
SECTION 3.2. Maintenance of Office or Agency.............................25
SECTION 3.3. Money for Payments To Be Held in Trust......................26
SECTION 3.4. Existence...................................................27
SECTION 3.5. Protection of Trust Estate .................................28
SECTION 3.6. Opinions as to Trust Estate.................................28
SECTION 3.7. Performance of Obligations; Servicing
of Contracts..............................29
SECTION 3.8. Negative Covenants..........................................31
SECTION 3.9. Annual Statement as to Compliance...........................32
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain
Terms.....................................33
SECTION 3.11. Successor or Transferee.....................................35
SECTION 3.12. No Other Business ..........................................35
SECTION 3.13. No Borrowing................................................36
SECTION 3.14. Servicer's Obligations......................................36
SECTION 3.15. Guarantees, Loans, Advances and Other
Liabilities...............................36
SECTION 3.16. Capital Expenditures........................................36
SECTION 3.17. Restricted Payments.........................................36
SECTION 3.18. Notice of Events of Default.................................36
SECTION 3.19. Removal of Administrator....................................37
SECTION 3.20. Further Instruments and Acts................................37
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.....................37
SECTION 4.2. Satisfaction, Discharge and Defeasance of the
Notes.....................................38
SECTION 4.3. Application of Trust Money..................................39
SECTION 4.4. Repayment of Monies Held by Paying Agent....................40
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default...........................................40
SECTION 5.2. Acceleration of Maturity; Rescission and
Annulment.................................42
SECTION 5.3. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee..........43
SECTION 5.4. Remedies....................................................46
SECTION 5.5. Optional Preservation of the Contracts......................47
SECTION 5.6. Limitation of Suits.........................................48
SECTION 5.7. Unconditional Rights of Noteholders To Receive
Principal and Interest.....................49
SECTION 5.8. Restoration of Rights and Remedies..........................49
SECTION 5.9. Rights and Remedies Cumulative..............................49
SECTION 5.10. Delay or Omission Not a Waiver..............................49
SECTION 5.11. Control by Noteholders......................................50
SECTION 5.12. Waiver of Past Defaults.....................................50
SECTION 5.13. Undertaking for Costs.......................................51
SECTION 5.14. Waiver of Stay or Extension Laws............................51
SECTION 5.15. Action on Notes.............................................51
SECTION 5.16. Performance and Enforcement of Certain
Obligations...............................52
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1. Duties of Indenture Trustee.................................53
SECTION 6.2. Rights of Indenture Trustee.................................55
SECTION 6.3. Individual Rights of Indenture Trustee......................56
SECTION 6.4. Indenture Trustee's Disclaimer..............................56
SECTION 6.5. Notice of Defaults..........................................56
SECTION 6.6. Reports by Indenture Trustee to Holders.....................56
SECTION 6.7. Compensation and Indemnity..................................56
SECTION 6.8. Replacement of Indenture Trustee............................57
SECTION 6.9. Successor Indenture Trustee by Merger.......................58
SECTION 6.10. Appointment of Co-Indenture Trustee or
Separate Indenture Trustee................59
SECTION 6.11. Eligibility; Disqualification...............................60
SECTION 6.12. Preferential Collection of Claims Against
Issuer....................................61
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1. Issuer To Furnish Indenture Trustee Names
and Addresses of Noteholders..............61
SECTION 7.2. Preservation of Information; Communications
to Noteholders............................61
SECTION 7.3. Reports by Issuer...........................................62
SECTION 7.4. Reports by Indenture Trustee................................62
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1. Collection of Money.........................................63
SECTION 8.2. Trust Accounts..............................................63
SECTION 8.3. General Provisions Regarding Accounts.......................64
SECTION 8.4. Release of Trust Estate.....................................65
SECTION 8.5. Opinion of Counsel..........................................65
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent
of Noteholders............................66
SECTION 9.2. Supplemental Indentures with Consent of
Noteholders...............................67
SECTION 9.3. Execution of Supplemental Indentures........................69
SECTION 9.4. Effect of Supplemental Indenture............................70
SECTION 9.5. Conformity with Trust Indenture Act.........................70
SECTION 9.6. Reference in Notes to Supplemental Indentures...............70
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1. Redemption..................................................71
SECTION 10.2. Form of Redemption Notice...................................71
SECTION 10.3. Notes Payable on Redemption Date............................72
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Compliance Certificates and Opinions, etc...................72
SECTION 11.2. Form of Documents Delivered to Indenture
Trustee...................................74
SECTION 11.3. Acts of Noteholders.........................................75
SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer
and Rating Agencies.......................76
SECTION 11.5. Notices to Noteholders; Waiver..............................77
SECTION 11.6. Alternate Payment and Notice Provisions.....................77
SECTION 11.7. Conflict with Trust Indenture Act...........................78
SECTION 11.8. Effect of Headings and Table of Contents....................78
SECTION 11.9. Successors and Assigns......................................78
SECTION 11.10. Separability................................................78
SECTION 11.11. Benefits of Indenture.......................................78
SECTION 11.12. Legal Holiday...............................................78
SECTION 11.13. Governing Law...............................................79
SECTION 11.14. Counterparts................................................79
SECTION 11.15. Recording of Indenture......................................79
SECTION 11.16. Trust Obligation............................................79
SECTION 11.17. No Petition.................................................79
SECTION 11.18. Inspection..................................................80
SECTION 11.19. Certain Matters Regarding the Insurer.......................80
Exhibit A-1 Form of Class A-1 Note
Exhibit A-2 Form of Class A-2 Note
Exhibit A-3 Form of Class A-3 Note
Exhibit A-4 Form of Class A-4 Note
Exhibit B Form of Opinion of Counsel
INDENTURE, dated as of September [__], 1999 (as amended,
supplemented or otherwise modified and in effect from time to time, this
"Indenture"), between CARMAX AUTO OWNER TRUST 1999-1, a Delaware business trust
(the "Issuer"), and BANKERS TRUST COMPANY, a New York banking corporation, not
in its individual capacity but solely as indenture trustee (in such capacity,
the "Indenture Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the holders of the Issuer's
[____]% Class A-1 Asset-Backed Notes (the "Class A-1 Notes"), [____]% Class A-2
Asset-Backed Notes (the "Class A-2 Notes"), [____]% Class A-3 Asset-Backed Notes
(the "Class A-3 Notes") and [____]% Class A-4 Asset-Backed Notes (the "Class A-4
Notes" and, collectively with the Class A-1 Notes, the Class A-2 Notes and the
Class A-3 Notes, the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee on the
Closing Date, as Indenture Trustee for the benefit of the Holders of the Notes,
all of the Issuer's right, title and interest in, to and under, whether now
owned or existing or hereafter acquired or arising (i) the Contracts; (ii) all
amounts received on or in respect of the Contracts after the Cutoff Date; (iii)
the security interests in the Financed Vehicles granted by the Obligors pursuant
to the Contracts; (iv) all proceeds from claims on or refunds of premiums with
respect to any physical damage, credit life or credit disability insurance
policies covering the Financed Vehicles or the Obligors; (v) all of the Seller's
rights to the Contract Files; (vi) the Collection Account, the Reserve Account
and the Note Payment Account and all amounts, securities, financial assets,
investments and other property deposited in or credited to any of the foregoing
and all proceeds thereof; (vii) all of the Seller's rights under the Purchase
Agreement, including the right of the Seller to cause CarMax Auto Superstores,
Inc. to repurchase Contracts from the Seller; (viii) all of the Issuer's rights
under the Sale and Servicing Agreement, including the right of the Owner Trustee
to cause the Servicer to purchase Contracts from the Issuer; and (ix) all
present and future claims, demands, causes of action and choses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Holders of the Notes, acknowledges such Grant, accepts the trusts under this
Indenture in accordance with the provisions of this Indenture and agrees to
perform its duties required in this Indenture to the best of its ability to the
end that the interests of the Holders of the Notes may be adequately and
effectively protected.
ARTICLE I
DEFINITIONS; INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
(a) Except as otherwise specified herein or as the context may
otherwise require, the following terms shall have the respective meanings set
forth below for all purposes of this Indenture.
"Act" shall have the meaning specified in Section 11.3(a).
"Administration Agreement" shall mean the Administration
Agreement, dated as of September [__], 1999, by and among the Administrator, the
Issuer and the Indenture Trustee, as the same may from time to time be amended,
supplemented or otherwise modified and in effect.
"Administrator" shall mean CarMax, or any successor
Administrator under the Administration Agreement.
"Authenticating Agent" shall have the meaning specified in
Section 2.14.
"Authorized Officer" shall mean, with respect to the Issuer,
any officer of the Owner Trustee who is authorized to act for or on behalf of
the Owner Trustee in matters relating to the Issuer and who is identified on the
list of Authorized Officers delivered by the Owner Trustee to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter) and, for so long as the Administration Agreement is in
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full force and effect, any officer of the Administrator who is authorized to act
for the Administrator in matters relating to the Issuer and to be acted upon by
the Administrator pursuant to the Administration Agreement.
"Book-Entry Notes" shall mean a beneficial interest in the
Notes, ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.11.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions or trust companies in New York,
New York, Wilmington, Delaware or Richmond, Virginia are authorized or obligated
by law, executive order or governmental decree to remain closed.
"CarMax" shall mean CarMax Auto Superstores, Inc., a Virginia
corporation, and its successors and assigns.
"Certificate of Trust" shall have the meaning specified in the
Trust Agreement.
"Class" shall mean a class of Notes, which may be the Class
A-1 Notes, the Class A-2 Notes, the Class A-3 Notes or the Class A-4 Notes.
"Class A-1 Final Payment Date" shall mean the [____________]
Payment Date.
"Class A-1 Noteholder" shall mean the Person in whose name a
Class A-1 Note is registered on the Note Register.
"Class A-1 Notes" shall mean the [____]% Class A-1
Asset-Backed Notes issued by the Issuer pursuant to this Indenture in the
initial aggregate principal amount of $[____________].
"Class A-1 Rate" shall mean [____]% per annum.
"Class A-2 Final Payment Date" shall mean the [____________]
Payment Date.
"Class A-2 Noteholder" shall mean the Person in whose name a
Class A-2 Note is registered on the Note Register.
"Class A-2 Notes" shall mean the [____]% Class A-2
Asset-Backed Notes issued by the Issuer pursuant to this Indenture in the
initial aggregate principal amount of $[____________].
"Class A-2 Rate" shall mean [____]% per annum.
"Class A-3 Final Payment Date" shall mean the [____________]
Payment Date.
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"Class A-3 Noteholder" shall mean the Person in whose name a
Class A-3 Note is registered on the Note Register.
"Class A-3 Notes" shall mean the [____]% Class A-3
Asset-Backed Notes issued by the Issuer pursuant to this Indenture in the
initial aggregate principal amount of $[____________].
"Class A-3 Rate" shall mean [____]% per annum.
"Class A-4 Final Payment Date" shall mean the [____________]
Payment Date.
"Class A-4 Noteholder" shall mean the Person in whose name a
Class A-4 Note is registered on the Note Register.
"Class A-4 Notes" shall mean the [____]% Class A-4
Asset-Backed Notes issued by the Issuer pursuant to this Indenture in the
initial aggregate principal amount of $[____________].
"Class A-4 Rate" shall mean [____]% per annum.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" shall mean a broker, dealer,
bank, other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" shall mean September [__], 1999.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the Treasury Regulations promulgated thereunder.
"Collateral" shall have the meaning specified in the Granting
Clause of this Indenture.
"Commission" shall mean the Securities and Exchange
Commission.
"Corporate Trust Office" shall mean the principal office of
the Indenture Trustee at which at any particular time its corporate trust
business shall be administered, which office at date of execution of this
Indenture is located at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust and Agency Group - Structured Finance, or at such other address
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as the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Issuer, or the principal corporate trust office of any
successor Indenture Trustee at the address designated by such successor
Indenture Trustee by notice to the Noteholders and the Issuer.
"Default" shall mean any event that, with notice or the lapse
of time or both, would become an Event of Default.
"Definitive Notes" shall have the meaning specified in Section
2.11.
"Event of Default" shall have the meaning specified in Section
5.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Executive Officer" shall mean, with respect to any
corporation or limited liability company, as applicable, the Chief Executive
Officer, the Chief Operating Officer, the Chief Financial Officer, the
President, any Executive Vice President, any Senior Vice President, any Vice
President, the Secretary or the Treasurer of such corporation or limited
liability company, and, with respect to any partnership, any general partner of
such partnership.
"Final Payment Date" shall mean all or any of the Class A-1
Final Payment Date, the Class A-2 Final Payment Date, the Class A-3 Final
Payment Date and the Class A-4 Final Payment Date as the context requires.
"Fiscal Year" shall mean the period commencing on March 1 of
any year and ending on February 28 (or February 29, if applicable) of the
following year.
"Grant" shall mean to mortgage, pledge, bargain, sell,
warrant, alienate, remise, release, convey, assign, transfer, create, and to
▇▇▇▇▇ ▇ ▇▇▇▇ upon and a security interest in and right of set-off against, and
to deposit, set over and confirm pursuant to this Indenture. A Grant of the
Collateral or of any other agreement or instrument shall include all rights,
powers and options (but none of the obligations) of the granting party
thereunder, including the immediate and continuing right to claim for, collect,
receive and give receipt for principal and interest payments in respect of the
Collateral and all other monies payable thereunder, to give and receive notices
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and other communications, to make waivers or other agreements, to exercise all
rights and options, to bring Proceedings in the name of the granting party or
otherwise, and generally to do and receive anything that the granting party is
or may be entitled to do or receive thereunder or with respect thereto.
"Holder" or "Noteholder" shall mean the Person in whose name a
Note is registered in the Note Register.
"Indenture Trustee" shall mean Bankers Trust Company, a New
York banking corporation, not in its individual capacity but solely as Indenture
Trustee under this Indenture, and any successor indenture trustee under this
Indenture.
"Independent" shall mean, when used with respect to any
specified Person, that such Person (i) is in fact independent of the Issuer, any
other obligor on the Notes, the Seller, the Servicer and any Affiliate of any of
the foregoing Persons, (ii) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Seller, the Servicer or any Affiliate of any of the foregoing Persons and (iii)
is not connected with the Issuer, any such other obligor, the Seller, the
Servicer or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
"Independent Certificate" shall mean a certificate or opinion
to be delivered to the Indenture Trustee under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 11.1, made
by an Independent appraiser or other expert appointed by an Issuer Order and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Insurance Agreement" shall mean the Insurance and
Reimbursement Agreement, dated as of the Closing Date, by and among the Seller,
the Servicer, the Issuer, the Indenture Trustee and the Insurer, as the same may
be amended, supplemented or otherwise modified and in effect from time to time.
"Insurance Premium" shall have the meaning specified in the
Premium Side Letter Agreement.
"Insurer" shall mean MBIA Insurance Corporation, a corporation
domiciled in New York, and its successors.
"Insurer Default" shall mean a default by the Insurer under
the Policy (after giving effect to any applicable cure period).
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"Issuer" shall mean CarMax Auto Owner Trust 1999-1 or any
successor to CarMax Auto Owner Trust 1999-1 and, for purposes of any provision
contained herein and required by the TIA, each other obligor on the Notes.
"Issuer Order" shall mean a written order signed in the name
of the Issuer by an Authorized Officer of the Issuer and delivered to the
Indenture Trustee.
"Issuer Request" shall mean a written request signed in the
name of the Issuer by an Authorized Officer of the Issuer and delivered to the
Indenture Trustee.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., and its
successors.
"Net Principal Policy Amount" shall mean, as of any date, the
sum of the Note Balance plus the Certificate Balance, in each case as of the
Closing Date, minus all amounts drawn on the Policy or withdrawn from the
Reserve Account and applied on or before that date to pay principal to the
Noteholders or the Certificateholders.
"Note Balance" shall mean, at any time, the aggregate
principal amount of all Notes Outstanding at such time.
"Note Depository Agreement" shall mean the agreement dated
September [__], 1999, among the Issuer, the Indenture Trustee and The Depository
Trust Company, as the initial Clearing Agency, relating to the Notes.
"Note Interest Rate" shall mean, in the case of the Class A-1
Notes, the Class A-1 Rate, in the case of the Class A-2 Notes, the Class A- 2
Rate, in the case of the Class A-3 Notes, the Class A-3 Rate, and in the case of
the Class A-4 Notes, the Class A-4 Rate.
"Note Owner" shall mean, with respect to any Book-Entry Note,
the Person who is the beneficial owner of such Book-Entry Note as reflected on
the books of the Clearing Agency or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"Note Register" shall have the meaning specified in Section
2.5.
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"Note Registrar" shall have the meaning specified in Section
2.5.
"Noteholders" shall mean the Class A-1 Noteholders, the Class
A-2 Noteholders, the Class A-3 Noteholders and the Class A-4 Noteholders,
collectively.
"Notes" shall mean the Class A-1 Notes, the Class A-2 Notes,
the Class A-3 Notes and the Class A-4 Notes, collectively.
"Officer's Certificate" shall mean a certificate signed by an
Authorized Officer of the Issuer and delivered to the Indenture Trustee, which
certificate shall comply with the applicable requirements of Section 11.1.
"Opinion of Counsel" shall mean one or more written opinions
of counsel who may, except as otherwise expressly provided in this Indenture, be
an employee of, or outside counsel to, the Issuer, the Seller or the Servicer
and who shall be acceptable to the Indenture Trustee, which opinion or opinions
shall be addressed to the Indenture Trustee as Indenture Trustee, shall comply
with any applicable requirements of Section 11.1 and shall be in form and
substance satisfactory to the Indenture Trustee.
"Outstanding" shall mean, as of the date of determination, all
Notes theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar
or delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money
in the necessary amount has been theretofore deposited with the
Indenture Trustee or any Paying Agent in trust for the Holders of such
Notes; provided, however, that if such Notes are to be redeemed, notice
of such redemption must have been duly given pursuant to this Indenture
or provision for such notice must have been made in a manner
satisfactory to the Indenture Trustee; and
(iii) Notes in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a protected purchaser;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Notes Outstanding have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any
Transaction Document, Notes owned by the Issuer, any other obligor upon the
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Notes, the Seller, the Servicer or any Affiliate of any of the foregoing Persons
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in relying on any
such request, demand, authorization, direction, notice, consent or waiver, only
Notes that a Responsible Officer knows to be so owned shall be so disregarded.
Notes so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obligor upon the Notes, the Seller, the
Servicer or any Affiliate of any of the foregoing Persons.
"Owner Trustee" shall mean First Union Trust Company, National
Association, a national banking association, not in its individual capacity but
solely as Owner Trustee under the Trust Agreement, and any successor owner
trustee under the Trust Agreement.
"Paying Agent" shall mean the Indenture Trustee or any other
Person that meets the eligibility standards for the Indenture Trustee specified
in Section 6.11 and is authorized by the Issuer to make payments to and
distributions from the Collection Account and the Note Payment Account,
including payment of principal of or interest on the Notes, on behalf of the
Issuer.
"Payment Date" shall mean the 15th day of each month, or if
such 15th day is not a Business Day, the following Business Day, commencing on
[____________], 1999.
"Policy" shall mean the irrevocable financial guaranty
insurance policy dated as of September [__], 1999, issued by the Insurer to the
Indenture Trustee for the benefit of the Noteholders and the Certificateholders
and having a maximum amount available to be drawn with respect to any Payment
Date equal to the Policy Amount for such Payment Date.
"Policy Amount" shall mean, for any Payment Date:
(A) the sum of:
(w) the Total Servicing Fee for the
preceding Collection Period;
(x) the Total Note Interest for such
Payment Date;
(y) the Total Certificate Interest for
such Payment Date; and
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(z) the lesser of (i) the sum of the
Note Balance plus the Certificate Balance, in each case as of
such Payment Date (after giving effect to any distribution of
Available Funds or funds withdrawn from the Reserve Account to
pay principal to the Noteholders or the Certificateholders on
or before such Payment Date) and (ii) the Net Principal Policy
Amount (after giving effect to any distribution of Available
Funds or funds withdrawn from the Reserve Account to pay
principal to the Noteholders or the Certificateholders on or
before such Payment Date).
less:
(B) the amount on deposit in and available for
withdrawal from the Reserve Account on such Payment Date.
"Predecessor Note" shall mean, with respect to any particular
Note, every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note. Any Note authenticated and delivered under
Section 2.6 in lieu of a mutilated, lost, destroyed or stolen Note shall be
deemed, for purposes of this definition, to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Premium Side Letter Agreement" shall have the meaning
specified in the Insurance Agreement.
"Proceeding" shall mean any suit in equity, action at law or
other judicial or administrative proceeding.
"Rating Agency" shall mean Standard & Poor's or ▇▇▇▇▇'▇ or, if
Standard & Poor's and ▇▇▇▇▇'▇ cease to exist, any nationally recognized
statistical rating organization or other comparable Person designated by the
Issuer, notice of which designation shall have been given to the Indenture
Trustee, the Owner Trustee and the Servicer.
"Rating Agency Condition" shall mean, with respect to any
action, that each Rating Agency shall have notified the Seller, the Servicer,
the Indenture Trustee and the Owner Trustee that such action shall not result in
a reduction or withdrawal of the then current rating assigned to any Class of
Notes.
"Record Date" shall mean, with respect to any Payment Date or
Redemption Date, the close of business on the Business Day preceding such
Payment Date or Redemption Date; provided, however, that if Definitive Notes
have been issued pursuant to Section 2.13, Record Date shall mean, with respect
to any Payment Date or Redemption Date, the last day of the preceding Collection
Period.
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"Redemption Date" shall mean the Payment Date specified by the
Servicer pursuant to Section 10.1 on which date the Indenture Trustee shall
withdraw any amount remaining in the Reserve Account and deposit the portion of
such amount payable to the Noteholders in the Note Payment Account.
"Redemption Price" shall mean, in the case of a redemption of
Notes pursuant to Section 10.1, an amount equal to the unpaid principal amount
of the Notes redeemed plus accrued and unpaid interest thereon.
"Responsible Officer" shall mean any officer within the
Corporate Trust Department of the Indenture Trustee with direct responsibility
for the administration of this Indenture and also, with respect to a particular
matter, any other officer of the Indenture Trustee to whom such matter is
referred because of such officer's knowledge of and familiarity with such matter
or other similar matters.
"Sale and Servicing Agreement" shall mean the Sale and
Servicing Agreement, dated as of September [__], 1999, by and among the Issuer,
the Seller, the Servicer, and the Owner Trustee as the same may be amended,
supplemented or otherwise modified and in effect from time to time.
"Seller" shall mean CarMax Auto Receivables LLC, a Virginia
limited liability company, in its capacity as seller under the Sale and
Servicing Agreement, and its successors in such capacity.
"Servicer" shall mean CarMax, in its capacity as servicer
under the Sale and Servicing Agreement, and any Successor Servicer.
"Standard & Poor's" shall mean Standard & Poor's, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
"State" shall mean any of the fifty states of the United
States of America or the District of Columbia.
"Successor Servicer" shall have the meaning specified in
Section 3.7(e).
"Transaction Documents" shall mean the Purchase Agreement, the
Sale and Servicing Agreement, the Trust Agreement, the Certificate of Trust,
this Indenture, the Administration Agreement, the Note Depository Agreement and
the other documents and certificates delivered in connection therewith, in each
case as the same may from time to time be amended, supplemented or otherwise
modified and in effect.
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"Trust Accounts" shall mean the Collection Account, the Note
Payment Account and the Certificate Payment Account.
"Trust Estate" shall mean all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of this Indenture for the benefit of the Noteholders
(including, but not limited to, all property and interests Granted to the
Indenture Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA" shall mean the Trust Indenture
Act of 1939, as amended.
(b) Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein have
the respective meanings set forth in, or incorporated by reference into, the
Sale and Servicing Agreement for all purposes of this Indenture.
SECTION 1.2. Incorporation by Reference of Trust Indenture
Act. Whenever this Indenture refers to a provision of the TIA, that provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Indenture securities" shall mean the Notes.
"Indenture security holder" shall mean a Noteholder.
"Indenture to be qualified" shall mean this Indenture.
"Indenture trustee" or "Institutional trustee" shall mean the
Indenture Trustee.
"Obligor on the indenture securities" shall mean the Issuer
and any other obligor on the Notes.
All other TIA terms used in this Indenture that are defined in
the TIA, defined by TIA reference to another statute or defined by Commission
rule have the respective meanings assigned to them by such definitions.
SECTION 1.3. Rules of Construction. Unless the context
otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
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(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words
in the plural include the singular;
(vi) any agreement, instrument or statute defined or
referred to herein or in any instrument or certificate delivered in
connection herewith means such agreement, instrument or statute as from
time to time amended, modified or supplemented and includes (in the
case of agreements or instruments) references to all attachments
thereto and instruments incorporated therein; and
(vii) references to a Person are also to its permitted
successors and assigns.
ARTICLE II
THE NOTES
SECTION 2.1. Form.
(a) The Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes and the Class A-4 Notes, together with the Indenture Trustee's
certificates of authentication, shall be substantially in the form set forth in
Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit A-3 and Exhibit A-4, respectively, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may, consistently herewith, be determined by the officers executing such Notes,
as evidenced by their execution thereof. Any portion of the text of any Note may
be set forth on the reverse thereof, with an appropriate reference thereto on
the face of the Note.
(b) The Definitive Notes shall be typewritten, printed,
lithographed or engraved, or produced by any combination of these methods (with
or without steel engraved borders), all as determined by the officers executing
such Notes, as evidenced by their execution of such Notes.
(c) Each Note shall be dated the date of its authentication.
The terms of the Notes set forth in Exhibits A-1 through A-4 hereto are part of
the terms of this Indenture and are incorporated herein by reference.
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SECTION 2.2. Execution, Authentication and Delivery.
(a) The Notes shall be executed on behalf of the Issuer by any
of its Authorized Officers. The signatures of any such Authorized Officer on the
Notes may be manual or facsimile.
(b) Notes bearing the manual or facsimile signature of
individuals who were at any time Authorized Officers of the Issuer shall bind
the Issuer, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or did
not hold such offices on the date of such Notes.
(c) The Indenture Trustee shall, upon Issuer Order,
authenticate and deliver the Class A-1 Notes for original issue in an aggregate
principal amount of $[____________], the Class
A-2 Notes for original issue in an aggregate principal amount
of $[____________], the Class A-3 Notes for original issue in an aggregate
principal amount of $[____________] and the Class A-4 Notes for original issue
in an aggregate principal amount of $[____________]. The aggregate principal
amounts of Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes
outstanding at any time may not exceed those respective amounts except as
provided in Section 2.6.
(d) Each Note shall be dated the date of its authentication.
The Notes shall be issuable as registered Notes in minimum denominations of
$1,000 and integral multiples thereof.
(e) No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Note a certificate of authentication substantially in the form provided for
herein executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.3. Temporary Notes.
(a) Pending the preparation of Definitive Notes, the Issuer
may execute, and upon receipt of an Issuer Order the Indenture Trustee shall
authenticate and deliver, temporary Notes that are printed, lithographed,
typewritten, mimeographed or otherwise produced of the tenor of the Definitive
Notes in lieu of which they are issued and with such variations not inconsistent
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with the terms of this Indenture as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
(b) If temporary Notes are issued, the Issuer shall cause
Definitive Notes to be prepared without unreasonable delay. After the
preparation of Definitive Notes, the temporary Notes shall be exchangeable for
Definitive Notes upon surrender of the temporary Notes at the office or agency
of the Issuer to be maintained as provided in Section 3.2, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Issuer shall execute, and the Indenture Trustee shall authenticate and deliver
in exchange therefor, a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.4. Tax Treatment. The Issuer has entered into this
Indenture, and the Notes shall be issued, with the intention that, for federal,
state and local income and franchise tax purposes, the Notes shall qualify as
indebtedness of the Issuer secured by the Trust Estate. The Issuer, by entering
into this Indenture, and each Noteholder, by its acceptance of a Note (and each
Note Owner by its acceptance of an interest in the applicable Book-Entry Note),
agree to treat the Notes as indebtedness of the Issuer for federal, state and
local income and franchise tax purposes.
SECTION 2.5. Registration; Registration of Transfer and
Exchange.
(a) The Issuer shall cause to be kept a register (the "Note
Register") in which, subject to such reasonable regulations as it may prescribe,
the Issuer shall provide for the registration of Notes and the registration of
transfers of Notes. The Indenture Trustee initially shall be the registrar (the
"Note Registrar") for the purpose of registering Notes and transfers of Notes as
herein provided. Upon any resignation of any Note Registrar, the Issuer shall
promptly appoint a successor or, if it elects not to make such an appointment,
assume the duties of Note Registrar.
(b) If a Person other than the Indenture Trustee is appointed
by the Issuer as Note Registrar, (i) the Issuer shall give the Indenture Trustee
prompt written notice of the appointment of such Note Registrar and of the
location, or any change in the location, of the Note Register, (ii) the
Indenture Trustee shall have the right to inspect the Note Register at all
reasonable times and to obtain copies thereof and (iii) the Indenture Trustee
shall have the right to rely upon a certificate executed on behalf of the Note
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Registrar by an Executive Officer thereof as to the names and addresses of the
Holders of the Notes and the principal amounts and number of such Notes.
(c) Upon surrender for registration of transfer of any Note at
the office or agency of the Issuer to be maintained as provided in Section 3.2,
if the requirements of Section 8-401 or 8A-401, as applicable, of the Relevant
UCC are met, the Issuer shall execute, and the Indenture Trustee shall
authenticate and deliver to the Noteholder making such surrender, in the name of
the designated transferee or transferees, one or more new Notes of the same
Class in any authorized denomination, of a like aggregate principal amount. The
Indenture Trustee may rely upon the Administrator with respect to the
determination of whether the requirements of Section 8-401 or 8A-401, as
applicable, of the Relevant UCC are met.
(d) At the option of the Noteholder, Notes may be exchanged
for other Notes of the same Class in any authorized denominations, of a like
aggregate principal amount, upon surrender of the Notes to be exchanged at such
office or agency. Whenever any Notes are so surrendered for exchange, if the
requirements of Section 8-401 or 8A-401, as applicable, of the Relevant UCC are
met, the Issuer shall execute, and the Indenture Trustee shall authenticate and
deliver to the Noteholder making such exchange, the Notes which such Noteholder
is entitled to receive. The Indenture Trustee may rely upon the Administrator
with respect to the determination of whether the requirements of Section 8-401
or 8A-401, as applicable, of the Relevant UCC are met.
(e) All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Issuer, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
(f) All Notes presented or surrendered for registration of
transfer or exchange shall be duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar.
(g) No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Issuer may require
payment by such Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Notes, other than exchanges pursuant to Section 2.3 or
9.6 not involving any transfer.
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(h) The Issuer shall not be required to make, and the Note
Registrar need not register, transfers or exchanges of Notes selected for
redemption or Notes with respect to which the due date for any payment will
occur within 15 days.
SECTION 2.6. Mutilated, Destroyed, Lost or Stolen Notes.
(a) If (i) any mutilated Note is surrendered to the Indenture
Trustee, or the Indenture Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered to the
Indenture Trustee such security or indemnity as may be required by it to hold
the Issuer and the Indenture Trustee harmless, then, in the absence of notice to
the Issuer, the Note Registrar or the Indenture Trustee that such Note has been
acquired by a protected purchaser, and provided that the requirements of Section
8-405 or 8A-405, as applicable, of the Relevant UCC are met, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
replacement Note of the same Class; provided, however, that if any such
destroyed, lost or stolen Note, but not a mutilated Note, shall have become or
within seven (7) days of the Indenture Trustee's receipt of evidence to its
satisfaction of such destruction, loss or theft shall be due and payable, or
shall have been called for redemption in whole pursuant to Section 10.1, instead
of issuing a replacement Note of the same Class, the Issuer may pay such
destroyed, lost or stolen Note when so due or payable or upon the Redemption
Date without surrender thereof. The Indenture Trustee may rely upon the
Administrator with respect to the determination of whether the requirements of
Section 8-405 or 8A-405, as applicable, of the Relevant UCC are met. If, after
the delivery of such replacement Note or payment of a destroyed, lost or stolen
Note pursuant to the proviso to the preceding sentence, a protected purchaser of
the original Note in lieu of which such replacement Note was issued presents for
payment such original Note, the Issuer and the Indenture Trustee shall be
entitled to recover such replacement Note (or such payment) from the Person to
whom such replacement Note was delivered or any Person taking such replacement
Note from such Person to whom such replacement Note was delivered or any
assignee of such Person, except a protected purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.
(b) Upon the issuance of any replacement Note under this
Section 2.6, the Issuer may require the payment by the Holder of such Note of a
sum sufficient to cover any tax or other governmental charge that may be imposed
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in connection with such issuance and any other reasonable expenses (including
the fees and expenses of the Indenture Trustee) related thereto.
(c) Every replacement Note issued pursuant to this Section 2.6
in replacement of any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
(d) The provisions of this Section 2.6 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.7. Persons Deemed Owners. Prior to due presentation
of a Note for registration of transfer, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in whose
name such Note is registered in the Note Register (as of the day of
determination) as the owner of such Note for the purpose of receiving payments
of principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note shall be overdue, and none of the Issuer, the Indenture
Trustee or any agent of the Issuer or the Indenture Trustee shall be affected by
any notice to the contrary.
SECTION 2.8. Payments.
(a) On each Payment Date, upon receipt of instructions from
the Servicer pursuant to Section 4.6(d) of the Sale and Servicing Agreement, the
Indenture Trustee shall apply or cause to be applied the amount on deposit in
the Collection Account on such Payment Date to make the following payments in
the following order of priority:
(i) to the Servicer, the Total Servicing Fee for the
preceding Collection Period;
(ii) to the Note Payment Account, the Total Note Interest
for such Payment Date;
(iii) if the Notes have not been declared immediately due
and payable, to the Certificate Payment Account, the Total Certificate
Interest for such Payment Date;
(iv) to the Note Payment Account, the Monthly Note
Principal for such Payment Date; provided, however, that if the Notes
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have been declared immediately due and payable following the occurrence
of an Event of Default, the amount to be deposited in the Note Payment
Account pursuant to this clause (iv) shall equal the lesser of the
amount of Total Available Funds available to be applied on such Payment
Date pursuant to this clause (iv) and the outstanding principal balance
of the Notes;
(v) if the Notes have been declared immediately due and
payable following the occurrence of an Event of Default, to the
Certificate Payment Account, the Total Certificate Interest for such
Payment Date;
(vi) to the Certificate Payment Account, the Monthly
Certificate Principal for such Payment Date;
(vii) to the Insurer, the Insurance Premium for such
Payment Date plus any overdue Insurance Premiums for previous Payment
Dates;
(viii) to the Insurer, the aggregate amount of any
unreimbursed payments under the Policy to the extent payable to the
Insurer under the Insurance Agreement plus accrued interest on any
unreimbursed payments under the Policy at the rate provided in the
Insurance Agreement plus any other amounts due the Insurer under the
Insurance Agreement and the Policy;
(ix) to the Reserve Account, the Reserve Account
Deficiency, if any, for such Payment Date; and
(x) to the Seller, any remaining amount of Total
Available Funds.
(b) The principal of each Note shall be payable in
installments on each Payment Date in an aggregate amount (unless the Notes have
been declared immediately due and payable in accordance with Section 5.2
following the occurrence of an Event of Default) for all Classes of Notes equal
to the Monthly Note Principal for such Payment Date. On each Payment Date
(unless the Notes have been declared immediately due and payable in accordance
with Section 5.2 following the occurrence of an Event of Default), upon receipt
of instructions from the Servicer pursuant to Section 4.6(d) of the Sale and
Servicing Agreement, the Indenture Trustee shall apply or cause to be applied
the amount on deposit in the Note Payment Account on such Payment Date to make
the following payments in the following order of priority:
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(i) to the Holders of each Class of Notes, the portion of
the Total Note Interest payable to such Class for such Payment Date;
(ii) to the Class A-1 Noteholders, the Monthly Note
Principal for that Payment Date until the principal amount of the Class
A-1 Notes has been paid in full;
(iii) following payment in full of the Class A-1 Notes, to
the Class A-2 Noteholders, the Monthly Note Principal for that Payment
Date until the principal amount of the Class A-2 Notes has been paid in
full;
(iv) following payment in full of the Class A-2 Notes, to
the Class A-3 Noteholders, the Monthly Note Principal for that Payment
Date until the principal amount of the Class A-3 Notes has been paid in
full; and
(v) following payment in full of the Class A-3 Notes, to
the Class A-4 Noteholders, the Monthly Note Principal for that Payment
Date until the principal amount of the Class A-4 Notes has been paid in
full.
If the amount on deposit in the Note Payment Account on any
Payment Date is less than the amount described in clause (i) above for such
Payment Date, the Indenture Trustee shall pay the available amount to the
Holders of each Class of Notes pro rata based on the Total Note Interest payable
to such Class on such Payment Date. If the amount available to pay principal of
the Notes on any Payment Date is less than the Monthly Note Principal for such
Payment Date, the Indenture Trustee shall pay the available amount to the
Holders of each Class of Notes pro rata based on the outstanding principal
amount of such Class as of such Payment Date.
(c) The principal amount of the Class A-1 Notes, to the extent
not previously paid, shall be due on the Class A-1 Final Payment Date, the
principal amount of the Class A-2 Notes, to the extent not previously paid,
shall be due on the Class A-2 Final Payment Date, the principal amount of the
Class A-3 Notes, to the extent not previously paid, shall be due on the Class
A-3 Final Payment Date and the principal amount of the Class A-4 Notes, to the
extent not previously paid, shall be due on the Class A-4 Final Payment Date.
(d) The Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes and the Class A-4 Notes shall accrue interest at the Class A-1 Rate, the
Class A-2 Rate, the Class A-3 Rate and the Class A-4 Rate, respectively, and
such interest shall be due and payable on each Payment Date. Interest on the
Class A-1 Notes shall be calculated on the basis of the actual number of days
elapsed and a 360-day year. Interest on the Class A-2 Notes, the Class A-3 Notes
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and the Class A-4 Notes shall be calculated on the basis of a 360-day year of
twelve 30-day months. Subject to Section 3.1, any installment of interest or
principal, if any, payable on any Note that is punctually paid or duly provided
for by the Issuer on the applicable Payment Date shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is registered on the
related Record Date by check mailed first-class postage prepaid to such Person's
address as it appears on the Note Register on such Record Date; provided,
however, that, unless Definitive Notes have been issued pursuant to Section
2.13, with respect to Notes registered on the Record Date in the name of the
nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payment shall be made by wire transfer in immediately available funds to the
account designated by such nominee, and except for the final installment of
principal payable with respect to such Note on a Payment Date or on the related
Final Payment Date (and except for the Redemption Price for any Note called for
redemption in whole pursuant to Section 10.1(a) or (b)), which shall be payable
as provided below. The funds represented by any such checks returned undelivered
shall be held in accordance with Section 3.3. The Indenture Trustee shall pay
all Total Note Interest for any Payment Date to the Holders of the Notes on the
related Record Date even if a portion of such Total Note Interest relates to an
earlier Payment Date.
(e) All principal and interest payments on a Class of Notes
shall be made pro rata to the Holders of such Class. The Indenture Trustee
shall, before the Payment Date on which the Issuer expects to pay the final
installment of principal of and interest on any Note, notify the Holder of such
Note as of the related Record Date of such final installment. Such notice shall
be mailed or transmitted by facsimile and shall specify that such final
installment shall be payable only upon presentation and surrender of such Note
and shall specify the place where such Note may be presented and surrendered for
payment of such installment. Notices in connection with redemption of Notes
shall be mailed to Noteholders as provided in Section 10.2.
(f) Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable, if not previously paid, on the
date on which the Notes have been declared immediately due and payable in
accordance with Section 5.2 following the occurrence of an Event of Default. On
each Payment Date following acceleration of the Notes, upon receipt of
instructions from the Servicer pursuant to Section 4.6(d) of the Sale and
Servicing Agreement, the Indenture Trustee shall apply or cause to be applied
the amount on deposit in the Note Payment Account on such Payment Date to make
the following payments in the following order of priority:
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(i) to the Holders of each Class of Notes, the portion of
the Total Note Interest payable to such Class for such Payment Date;
and
(ii) to the Holders of each Class of Notes, the amount
remaining on deposit in the Note Payment Account on such Payment Date
pro rata based on the outstanding principal amount of such Class as of
such Payment Date.
If the amount on deposit in the Note Payment Account
(including the Reserve Account Draw Amount) on any Payment Date following
acceleration of the Notes is less than the amount described in clause (i) above
for such Payment Date, the Indenture Trustee shall pay the available amount to
the Holders of each Class of Notes pro rata based on the Total Note Interest
payable to such Class on such Payment Date.
SECTION 2.9. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption in whole pursuant to Section
10.1(a) or (b) shall, if surrendered to any Person other than the Indenture
Trustee, be delivered to the Indenture Trustee and shall be promptly canceled by
the Indenture Trustee. The Issuer may at any time deliver to the Indenture
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Issuer may have acquired in any manner whatsoever, and all
Notes so delivered shall be promptly canceled by the Indenture Trustee. No Notes
shall be authenticated in lieu of or in exchange for any Notes canceled as
provided in this Section 2.9, except as expressly permitted by this Indenture.
All canceled Notes may be held or disposed of by the Indenture Trustee in
accordance with its standard retention or disposal policy as in effect at the
time unless the Issuer shall direct by an Issuer Order that they be destroyed or
returned to it, provided that such Issuer Order is timely and the Notes have not
been previously disposed of by the Indenture Trustee.
SECTION 2.10. Release of Collateral. Subject to Section 11.1
and the terms of the Transaction Documents, the Indenture Trustee shall release
property from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(1) or an Opinion
of Counsel in lieu of such Independent Certificates to the effect that the TIA
does not require any such Independent Certificates. If the Commission shall
issue an exemptive order under TIA Section 304(d) modifying the Owner Trustee's
obligations under TIA Sections 314(c) and 314(d)(1), the Indenture Trustee shall
release property from the lien of this Indenture in accordance with the
conditions and procedures set forth in such exemptive order.
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SECTION 2.11. Book-Entry Notes. The Notes, upon original
issuance, shall be issued in the form of typewritten Notes representing the
Book-Entry Notes, to be delivered to The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Issuer. The Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co. , the
nominee of the initial Clearing Agency, and no Note Owner thereof shall receive
a definitive Note representing such Note Owner's interest in such Note, except
as provided in Section 2.13. Unless and until definitive, fully registered Notes
(the "Definitive Notes") have been issued to such Note Owners pursuant to
Section 2.13:
(i) the provisions of this Section 2.11 shall be in full
force and effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
Notes and the giving of instructions or directions hereunder) as the
sole Holder of the Notes, and shall have no obligation to the Note
Owners;
(iii) to the extent that the provisions of this Section
2.11 conflict with any other provisions of this Indenture, the
provisions of this Section shall control;
(iv) the rights of Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those established
by law and agreements between such Note Owners and the Clearing Agency
and/or the Clearing Agency Participants pursuant to the Note Depository
Agreement; unless and until Definitive Notes are issued pursuant to
Section 2.13, the initial Clearing Agency shall make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions
to be taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the principal amount of the Notes
or any Class of Notes Outstanding, the Clearing Agency shall be deemed
to represent such percentage only to the extent that it has received
instructions to such effect from Note Owners and/or Clearing Agency
Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Notes or such Class of
Notes and has delivered such instructions to the Indenture Trustee.
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SECTION 2.12. Notices to Clearing Agency. Whenever a notice or
other communication to the Noteholders is required under this Indenture, unless
and until Definitive Notes shall have been issued to such Note Owners pursuant
to Section 2.13, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Clearing Agency, and shall have no obligation to such Note Owners.
SECTION 2.13. Definitive Notes. If (i) the Issuer, the
Administrator or the Servicer advises the Indenture Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Book-Entry Notes and the Indenture Trustee
or the Administrator is unable to locate a qualified successor, (ii) the
Administrator, at its option, advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or (iii)
after the occurrence of an Event of Default or an Event of Servicing
Termination, Note Owners of the Book-Entry Notes representing beneficial
interests aggregating not less than 51% of the principal amount of such Notes
advise the Indenture Trustee and the Clearing Agency in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of such Note Owners, then the Clearing Agency shall notify
all Note Owners and the Indenture Trustee of the occurrence of such event and of
the availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the typewritten Notes representing the
Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
SECTION 2.14. Authenticating Agents. The Indenture Trustee may
appoint one or more Persons (each, an "Authenticating Agent") with power to act
on its behalf and subject to its direction in the authentication of Notes in
connection with issuance, transfers and exchanges under Sections 2.2, 2.3, 2.5
and 2.6, as fully to all intents and purposes as though each such Authenticating
Agent had been expressly authorized by those Sections to authenticate such
Notes. For all purposes of this Indenture, the authentication of Notes by an
Authenticating Agent pursuant to this Section 2.14 shall be deemed to be the
authentication of Notes "by the Indenture Trustee. "
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Any corporation into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of any Authenticating Agent,
shall be the successor of such Authenticating Agent hereunder, without the
execution or filing of any further act on the part of the parties hereto or such
Authenticating Agent or such successor corporation.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Indenture Trustee and the Owner Trustee.
The Indenture Trustee may at any time terminate the agency of any Authenticating
Agent by giving written notice of termination to such Authenticating Agent and
the Owner Trustee. Upon receiving such notice of resignation or upon such a
termination, the Indenture Trustee may appoint a successor Authenticating Agent
and shall give written notice of any such appointment to the Owner Trustee.
The Administrator agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services. The provisions of
Sections 2.9 and 6.4 shall be applicable to any Authenticating Agent.
ARTICLE III
COVENANTS
SECTION 3.1. Payment Covenant. The Issuer shall duly and
punctually pay the principal of and interest, if any, on the Notes in accordance
with the terms of the Notes and this Indenture. Amounts properly withheld under
the Code by any Person from a payment to any Noteholder of interest and/or
principal shall be considered as having been paid by the Issuer to such
Noteholder for all purposes of this Indenture.
SECTION 3.2. Maintenance of Office or Agency. The Issuer shall
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange, and
where notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Issuer shall give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If, at any time, the
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Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.
SECTION 3.3. Money for Payments To Be Held in Trust.
(a) As provided in Section 8.2, all payments of amounts due
and payable with respect to the Notes that are to be made from amounts withdrawn
from the Trust Accounts shall be made on behalf of the Issuer by the Indenture
Trustee or by another Paying Agent, and no amounts so withdrawn from the Trust
Accounts shall be paid over to the Issuer, except as provided in this Section
3.3.
(b) On or before each Payment Date and Redemption Date, the
Issuer shall deposit or cause to be deposited in the Note Payment Account an
aggregate sum sufficient to pay the amounts then becoming due under the Notes,
such sum to be held in trust for the benefit of the Persons entitled thereto,
and (unless the Paying Agent is the Indenture Trustee) shall promptly notify the
Indenture Trustee of its action or failure so to act.
(c) The Issuer shall cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section 3.3, that such Paying Agent shall:
(i) hold all sums held by it for the payment of amounts
due with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by
the Issuer (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with respect
to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee, forthwith
pay to the Indenture Trustee all sums so held in trust by such Paying
Agent;
(iv) immediately resign as a Paying Agent and forthwith
pay to the Indenture Trustee all sums held by it in trust for payment
of the Notes if at any time it ceases to meet the standards required to
be met by a Paying Agent at the time of its appointment; and
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(v) comply with all requirements of the Code and any
state or local tax law with respect to the withholding from any
payments made by it on the Notes of any applicable withholding taxes
imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
(d) The Issuer may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which such sums were held by such
Paying Agent, and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such sums.
(e) Subject to applicable laws with respect to escheat of
funds, any money held by the Indenture Trustee or any Paying Agent in trust for
the payment of any amount due with respect to any Note and remaining unclaimed
for two (2) years after such amount has become due and payable shall be
discharged from such trust and be paid to the Issuer on Issuer Request, and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof (but only to the extent of the amounts so
paid to the Issuer), and all liability of the Indenture Trustee or such Paying
Agent with respect to such trust money shall thereupon cease; provided, however,
that the Indenture Trustee or such Paying Agent, before being required to make
any such repayment, shall at the expense and direction of the Issuer cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than thirty (30) days from the date of such
publication, any unclaimed balance of such money then remaining shall be repaid
to the Issuer. The Indenture Trustee shall also adopt and employ, at the expense
and direction of the Issuer, any other reasonable means of notification of such
repayment (including, but not limited to, mailing notice of such repayment to
Holders whose Notes have been called but have not been surrendered for
redemption in whole pursuant to Section 10.1 or whose right to or interest in
monies due and payable but not claimed is determinable from the records of the
Indenture Trustee or of any Paying Agent at the last address of record for each
such Holder).
SECTION 3.4. Existence. The Issuer shall keep in full effect
its existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
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becomes, organized under the laws of any other State or of the United States of
America, in which case the Issuer shall keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and shall
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.5. Protection of Trust Estate. The Issuer shall from
time to time execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of further
assurance and other instruments, and shall take such other action necessary or
advisable to:
(i) maintain or preserve the lien and security interest
(and the priority thereof) of this Indenture or carry out more
effectively the purposes hereof;
(ii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee and the Noteholders in the Trust Estate
against the claims of all Persons.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.5.
SECTION 3.6. Opinions as to Trust Estate.
(a) On the Closing Date, the Issuer shall deliver to the
Indenture Trustee an Opinion of Counsel substantially in the form attached
hereto as Exhibit B.
(b) On or before March 31 of each year (commencing with the
year 2000), the Issuer shall deliver to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and with respect to the execution and filing of any financing
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statements and continuation statements as is necessary to maintain the lien and
security interest created by this Indenture and reciting the details of such
action or stating that, in the opinion of such counsel, no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and the execution and filing of any financing statements and continuation
statements that shall, in the opinion of such counsel, be required to maintain
the lien and security interest of this Indenture until March 31 in the following
year.
SECTION 3.7. Performance of Obligations; Servicing of
Contracts.
(a) The Issuer shall not take any action and shall use its
best efforts not to permit any action to be taken by others that would release
any Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture and the other Transaction Documents.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Servicer and the Administrator to assist the Issuer in
performing its duties under this Indenture.
(c) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Transaction
Documents and the instruments and agreements included in the Trust Estate,
including, but not limited to, filing or causing to be filed all financing
statements and continuation statements required to be filed under the Relevant
UCC by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Transaction Document or any provision
thereof without the consent of the Indenture Trustee or the Holders of Notes
evidencing not less than 51% of the Note Balance.
(d) If the Issuer shall have knowledge of the occurrence of an
Event of Servicing Termination under the Sale and Servicing Agreement, the
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Issuer shall promptly notify the Indenture Trustee, the Insurer and the Rating
Agencies thereof and shall specify in such notice the action, if any, the Issuer
is taking in respect of such default. If an Event of Servicing Termination shall
arise from the failure of the Servicer to perform any of its duties or
obligations under the Sale and Servicing Agreement with respect to the
Contracts, the Issuer shall take all reasonable steps available to it to remedy
such failure.
(e) As promptly as possible after the giving of notice of
termination to the Servicer of the Servicer's rights and powers pursuant to
Section 8.1 of the Sale and Servicing Agreement, the Issuer shall (subject to
the rights of the Indenture Trustee to direct such appointment pursuant to
Section 8.2 of the Sale and Servicing Agreement) appoint a successor servicer
acceptable to the Insurer (the "Successor Servicer"), and such Successor
Servicer shall accept its appointment by a written assumption in a form
acceptable to the Indenture Trustee. In the event that a Successor Servicer has
not been appointed and has not accepted its appointment at the time when the
Servicer ceases to act as Servicer, the Indenture Trustee, without further
action, shall automatically be appointed the Successor Servicer. The Indenture
Trustee may resign as the Servicer by giving written notice of such resignation
to the Issuer and in such event shall be released from such duties and
obligations, such release not to be effective until the date a new servicer
enters into a servicing agreement with the Issuer as provided below. Upon
delivery of any such notice to the Issuer, the Issuer shall obtain a new
servicer as the Successor Servicer under the Sale and Servicing Agreement. Any
Successor Servicer (other than the Indenture Trustee) shall (i) be an
established financial institution having a net worth of not less than
$50,000,000 and whose regular business includes the servicing of installment
sale contracts and (ii) enter into a servicing agreement with the Issuer having
substantially the same provisions as the provisions of the Sale and Servicing
Agreement applicable to the Servicer. If, within thirty (30) days after the
delivery of the notice referred to above, the Issuer shall not have obtained
such a new servicer, the Indenture Trustee may appoint, or may petition a court
of competent jurisdiction to appoint, a Successor Servicer. In connection with
any such appointment, the Indenture Trustee may make such arrangements for the
compensation of such successor as it and such successor shall agree, subject to
the limitations set forth below and in the Sale and Servicing Agreement, and, in
accordance with Section 8.2 of the Sale and Servicing Agreement, the Issuer
shall enter into an agreement with such successor for the servicing of the
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Contracts (such agreement to be in form and substance satisfactory to the
Indenture Trustee). If the Indenture Trustee shall succeed to the Servicer's
duties as servicer of the Contracts as provided herein, it shall do so in its
individual capacity and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article VI shall be inapplicable to the Indenture
Trustee in its duties as the successor to the Servicer and the servicing of the
Contracts. In case the Indenture Trustee shall become successor to the Servicer
under the Sale and Servicing Agreement, the Indenture Trustee shall be entitled
to appoint as Servicer any one of its Affiliates; provided, however, that the
Indenture Trustee, in its capacity as the Servicer, shall be fully liable for
the actions and omissions of such Affiliate in such capacity as Successor
Servicer.
(f) Upon any termination of the Servicer's rights and powers
pursuant to Section 8.1 of the Sale and Servicing Agreement, the Issuer shall
promptly notify the Indenture Trustee and the Insurer of such termination. Upon
any appointment of a Successor Servicer by the Issuer, the Issuer shall promptly
notify the Indenture Trustee and the Insurer of such appointment, specifying in
such notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the
assignment granted to the Indenture Trustee under this Indenture or the rights
of the Indenture Trustee hereunder, the Issuer shall not, without the prior
written consent of the Insurer (if no Insurer Default shall have occurred an be
continuing), the Indenture Trustee and the Holders of not less than 51% of the
Note Balance, amend, modify, waive, supplement, terminate or surrender, or agree
to any amendment, modification, waiver, supplement, termination or surrender of,
the terms of any Collateral (except to the extent otherwise provided in the Sale
and Servicing Agreement or the other Transaction Documents).
SECTION 3.8. Negative Covenants. If any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture, the
Trust Agreement, the Purchase Agreement or the Sale and Servicing
Agreement, sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, including those included in the
Trust Estate, unless directed to do so by the Indenture Trustee with
the prior written consent of the Insurer;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code or
applicable state law) or assert any claim against any present or former
Noteholder by reason of the payment of taxes levied or assessed upon
the Issuer;
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(iii) dissolve or liquidate in whole or in part;
(iv) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations with
respect to the Notes under this Indenture except as may be expressly
permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or
burden the Trust Estate or any part thereof or any interest therein or
the proceeds thereof (other than tax liens, mechanics' liens and other
liens that arise by operation of law, in each case on any of the
Financed Vehicles and arising solely as a result of an action or
omission of the related Obligor) or (C) permit the lien of this
Indenture not to constitute a valid first priority (other than with
respect to any such tax, mechanics' or other lien) security interest in
the Trust Estate;
(v) engage in any activities other than financing,
acquiring, owning, pledging and managing the Contracts as contemplated
by the Purchase Agreement, the Trust Agreement, the Sale and Servicing
Agreement and this Indenture and activities incidental to such
activities; or
(vi) incur, assume or guarantee any indebtedness other
than the indebtedness evidenced by the Notes or indebtedness otherwise
permitted by the Purchase Agreement, the Trust Agreement, the Sale and
Servicing Agreement or this Indenture.
SECTION 3.9. Annual Statement as to Compliance. On or before
May 31 of each year (commencing with the year 2000), the Issuer shall deliver to
the Indenture Trustee and the Insurer an Officer's Certificate stating, as to
the Authorized Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during the
preceding Fiscal Year (or, in the case of the Officer's Certificate to
be delivered in the year 2000, during the period beginning on the
Closing Date and ending on February 29, 2000) and of its performance
under this Indenture has been made under such Authorized Officer's
supervision; and
(ii) to the best of such Authorized Officer's knowledge,
based on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such preceding Fiscal Year
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(or, in the case of the Officer's Certificate to be delivered in the
year 2000, during the period beginning on the Closing Date and ending
on February 29, 2000) or, if there has been a default in its compliance
with any such condition or covenant, specifying each such default known
to such Authorized Officer and the nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain
Terms.
(a) The Issuer shall not consolidate or merge with or into any
other Person, unless:
(i) the Person formed by or surviving such consolidation
or merger (if other than the Issuer) shall be a Person organized and
existing under the laws of the United States of America or any State
and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory
to the Indenture Trustee and the Insurer (if no Insurer Default shall
have occurred and be continuing), the due and punctual payment of the
principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Indenture Trustee) to
the effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating
that such consolidation or merger and such supplemental indenture
comply with this Article III and that all conditions precedent provided
for in this Indenture relating to such transaction have been complied
with (including any filing required by the Exchange Act); and
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(vii) if no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Insurer written notice of
such consolidation or merger at least 20 Business Days prior to the
consummation of such consolidation or merger and shall have received
the prior written approval of the Insurer of such consolidation or
merger and the Issuer or the Person (if other than the Issuer) formed
by or surviving such consolidation or merger has a net worth,
immediately after such consolidation or merger, that is (A) greater
than zero and (B) not less than the net worth of the Issuer immediately
prior to giving effect to such consolidation or merger.
(b) Other than as specifically contemplated by the Transaction
Documents, the Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any other Person,
unless:
(i) the Person that acquires by conveyance or transfer
the properties or assets of the Issuer the conveyance or transfer of
which is hereby restricted (A) shall be a United States citizen or a
Person organized and existing under the laws of the United States of
America or any State, (B) shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee,
in form satisfactory to the Indenture Trustee and the Insurer (if no
Insurer Default shall have occurred and be continuing), the due and
punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein, (C) shall expressly agree by means of such
supplemental indenture that all right, title and interest so conveyed
or transferred shall be subject and subordinate to the rights of the
Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, shall expressly agree to indemnify, defend and
hold harmless the Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes and
(E) shall expressly agree by means of such supplemental indenture that
such Person (or if a group of Persons, then one specified Person) shall
make all filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing;
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(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Indenture Trustee and
the Insurer) to the effect that such transaction will not have any
material adverse tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture
Trustee and the Insurer an Officer's Certificate and an Opinion of
Counsel each stating that such conveyance or transfer and such
supplemental indenture comply with this Article III and that all
conditions precedent provided for in this Indenture relating to such
transaction have been complied with (including any filing required by
the Exchange Act); and
(vii) if no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Insurer written notice of
such transaction at least 20 Business Days prior to the consummation of
such transaction and shall have received the prior written approval of
the Insurer of such transaction and the Person that acquires by
conveyance or transfer the properties or assets of the Issuer has a net
worth, immediately after such transaction, that is (A) greater than
zero and (B) not less than the net worth of the Issuer immediately
prior to giving effect to such transaction.
SECTION 3.11. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in
accordance with Section 3.10(a), the Person formed by or surviving such
consolidation or merger (if other than the Issuer) shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein.
(b) Upon any conveyance or transfer of all the properties and
assets of the Issuer in accordance with Section 3.10(b), CarMax Auto Owner Trust
1999-1 shall be released from every covenant and agreement of this Indenture to
be observed or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery of written notice to the Indenture Trustee and the
Insurer stating that CarMax Auto Owner Trust 1999-1 is to be so released.
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SECTION 3.12. No Other Business. The Issuer shall not engage
in any business other than financing, acquiring, owning and pledging the
Contracts in the manner contemplated by this Indenture and the other Transaction
Documents and activities incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue,
incur, assume, guarantee or otherwise become liable, directly or indirectly, for
any indebtedness except for the Notes.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause
the Servicer to comply with the Sale and Servicing Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other
Liabilities. Except as contemplated by this Indenture and the other Transaction
Documents, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not
make any expenditure (by long-term or operating lease or otherwise) for capital
assets (either realty or personalty).
SECTION 3.17. Restricted Payments. The Issuer shall not,
directly or indirectly, (i) make any distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, to
the Owner Trustee or any owner of a beneficial interest in the Issuer or
otherwise with respect to any ownership or equity interest or security in or of
the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii) set
aside or otherwise segregate any amounts for any such purpose; provided,
however, that the Issuer may make, or cause to be made, (A) payments to the
Servicer, the Owner Trustee and the Certificateholders as contemplated by, and
to the extent funds are available for such purpose under, the Sale and Servicing
Agreement or the Trust Agreement and (B) payments to the Indenture Trustee
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pursuant to Section 2(a)(ii) of the Administration Agreement. The Issuer shall
not, directly or indirectly, make payments to or distributions from the
Collection Account except in accordance with this Indenture and the other
Transaction Documents.
SECTION 3.18. Notice of Events of Default. The Issuer shall
give the Indenture Trustee, the Insurer and the Rating Agencies prompt written
notice of each Event of Default hereunder, each default on the part of the
Seller or the Servicer of its obligations under the Sale and Servicing Agreement
and each default on the part of CarMax or the Seller of its obligations under
the Purchase Agreement.
SECTION 3.19. Removal of Administrator. For so long as any
Notes are Outstanding, the Issuer shall not remove the Administrator without
cause unless the Rating Agency Condition shall have been satisfied in connection
therewith.
SECTION 3.20. Further Instruments and Acts. Upon request of
the Indenture Trustee or the Insurer, the Issuer shall execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to the Notes except
as to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections 3.3,
3.4, 3.5, 3.8, 3.10, 3.12, 3.13, 3.16 and 3.17, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.7 and the obligations of the Indenture Trustee
under Section 4.3), and (vi) the rights of Noteholders as beneficiaries hereof
with respect to the property so deposited with the Indenture Trustee payable to
all or any of them, and the Indenture Trustee, on demand of and at the expense
of the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, when:
(A) either
(1) all Notes of all Classes theretofore
authenticated and delivered (other than (i) Notes that have been
destroyed, lost or stolen and that have been replaced or paid as
provided in Section 2.6 and (ii) Notes for whose payment money has
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theretofore been irrevocably deposited in trust or segregated and held
in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.3) have been
delivered to the Indenture Trustee for cancellation and the Policy has
expired and has been returned to the Insurer for cancellation; or
(2) all Notes not theretofore delivered to the
Indenture Trustee for cancellation have become due and payable and the
Issuer has irrevocably deposited or caused to be irrevocably deposited
with the Indenture Trustee, in trust, cash or direct obligations of or
obligations guaranteed by the United States of America (which will
mature prior to the date needed), in an amount sufficient to pay and
discharge the entire indebtedness on such Notes when due on the
applicable Final Payment Date or Redemption Date (if Notes shall have
been called for redemption pursuant to Section 10.1(a)), as the case
may be;
(B) the Issuer has paid or caused to be paid all other sums
payable by the Issuer hereunder and under the other Transaction Documents;
(C) the Issuer has delivered to the Indenture Trustee and the
Insurer an Officer's Certificate, an Opinion of Counsel and (if required by the
TIA or the Indenture Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements of
Section 11.1(a) and, subject to Section 11.2, each stating that all conditions
precedent provided for in this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with; and
(D) the Issuer has delivered to the Indenture Trustee an
Opinion of Counsel to the effect that the satisfaction and discharge of this
Indenture pursuant to this Section 4.1 will not cause any Noteholder to be
treated as having sold or exchanged any of its Notes for purposes of Section
1001 of the Code.
SECTION 4.2. Satisfaction, Discharge and Defeasance of the
Notes.
(a) Upon satisfaction of the conditions set forth in
subsection (b) below, the Issuer shall be deemed to have paid and discharged the
entire indebtedness on all the Notes Outstanding, and the provisions of this
Indenture, as it relates to such Notes, shall no longer be in effect (and the
Indenture Trustee, at the expense of the Issuer, shall execute proper
instruments acknowledging the same), except as to:
(i) the rights of the Noteholders to receive, from the
trust funds described in subsection (b)(i) hereof, payment of the
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principal of and interest on the Notes Outstanding at maturity of such
principal or interest;
(ii) the obligations of the Issuer with respect to the
Notes under Sections 2.5, 2.6, 3.2 and 3.3;
(iii) the obligations of the Issuer to the Indenture
Trustee under Section 6.7; and
(iv) the rights, powers, trusts and immunities of the
Indenture Trustee hereunder and the duties of the Indenture Trustee
hereunder.
(b) The satisfaction, discharge and defeasance of the Notes
pursuant to subsection (a) of this Section 4.2 is subject to the satisfaction of
all of the following conditions:
(i) the Issuer has deposited or caused to be deposited
irrevocably (except as provided in Section 4.4) with the Indenture
Trustee as trust funds in trust, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of the Notes,
which, through the payment of interest and principal in respect thereof
in accordance with their terms will provide, not later than one day
prior to the due date of any payment referred to below, money in an
amount sufficient, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written
certification thereof delivered to the Indenture Trustee, to pay and
discharge the entire indebtedness on the Notes Outstanding, for
principal thereof and interest thereon to the date of such deposit (in
the case of Notes that have become due and payable) or to the maturity
of such principal and interest, as the case may be;
(ii) such deposit will not result in a breach or violation
of, or constitute an event of default under, any Transaction Document
or other agreement or instrument to which the Issuer is bound;
(iii) no Event of Default has occurred and is continuing on
the date of such deposit or on the ninety-first (91st) day after such
date;
(iv) the Issuer has delivered to the Indenture Trustee and
the Insurer an Opinion of Counsel to the effect that the satisfaction,
discharge and defeasance of the Notes pursuant to this Section 4.2 will
not cause any Noteholder to be treated as having sold or exchanged any
of its Notes for purposes of Section 1001 of the Code; and
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(v) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for in this Indenture relating to the
defeasance contemplated by this Section 4.2 have been complied with.
SECTION 4.3. Application of Trust Money. All monies deposited
with the Indenture Trustee pursuant to Section 4.1 shall be held in trust and
applied by the Indenture Trustee, in accordance with the provisions of the Notes
and this Indenture, to the payment, either directly or through any Paying Agent,
as the Indenture Trustee may determine, to the Holders of the Notes for the
payment or redemption of which such monies have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest, but such monies need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
SECTION 4.4. Repayment of Monies Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all monies then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes shall,
upon demand of the Issuer, be paid to the Indenture Trustee to be held and
applied according to Section 3.3, and thereupon such Paying Agent shall be
released from all further liability with respect to such monies.
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default. "Event of Default" means the
occurrence of any one of the following events (whatever the reason for such
event and whether such event shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest on any
Note when the same becomes due and payable and such default shall
continue for a period of five Business Days after notice thereof is
given to the Issuer by the Indenture Trustee, the Insurer or the
Servicer or to the Issuer and the Indenture Trustee by the Holders of
Notes evidencing not less than 25% of the Note Balance;
(ii) default in the payment of any principal due and
payable on any Class of Notes on the Final Payment Date for such Class,
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and such default shall continue for a period of five Business Days
after notice thereof is given to the Issuer by the Indenture Trustee,
the Insurer and the Servicer or to the Issuer and the Indenture Trustee
by the Holders of Notes evidencing not less than 25% of the Note
Balance;
(iii) default in the observance or performance of any
material covenant or agreement of the Issuer made in this Indenture
(other than a covenant or agreement a default in the observance or
performance of which is specifically dealt with elsewhere in this
Section 5.1), and such default shall continue or not be cured for a
period of sixty (60) days after there shall have been given, by
registered or certified mail, to the Issuer by the Indenture Trustee or
to the Issuer and the Indenture Trustee by the Holders of Notes
evidencing not less than 25% of the Note Balance, a written notice
specifying such default and requiring it to be remedied and stating
that such notice is a notice of Default hereunder;
(iv) any representation or warranty of the Issuer made in
this Indenture or in any certificate delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and the
circumstance or condition in respect of which such representation or
warranty was incorrect shall not have been eliminated or otherwise
cured for a period of thirty (30) days after there shall have been
given, by registered or certified mail, to the Issuer by the Indenture
Trustee or to the Issuer and the Indenture Trustee by the Holders of
Notes evidencing not less than 25% of the Note Balance, a written
notice specifying such incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a notice of
Default hereunder;
(v) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Trust Estate in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Trust Estate, or ordering the
winding-up or liquidation of the Issuer's affairs, and such decree or
order shall remain unstayed and in effect for a period of sixty (60)
consecutive days; or
(vi) the commencement by the Issuer of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer to
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the entry of an order for relief in an involuntary case under any such
law, or the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the Trust Estate, or the making by the Issuer of any general
assignment for the benefit of creditors, or the failure by the Issuer
generally to pay its debts as such debts become due, or the taking of
any action by the Issuer in furtherance of any of the foregoing;
provided, however, that if no Insurer Default shall have occurred and be
continuing, neither the Indenture Trustee nor the Noteholders may declare an
Event of Default under the Indenture. If no Insurer Default shall have occurred
and be continuing, an Event of Default shall occur only upon delivery by the
Insurer to the Indenture Trustee of notice of the occurrence of such Event of
Default. The failure to pay principal on any Class of Notes shall not result in
the occurrence of an Event of Default until the Final Maturity Date for such
Class of Notes.
The Issuer shall deliver to the Indenture Trustee, within five (5) days after
the occurrence of any event that, with notice or the lapse of time or both,
would become an Event of Default under clause (iii) or (iv), written notice of
such Default in the form of an Officer's Certificate, the status of such Default
and what action the Issuer is taking or proposes to take with respect to such
Default.
SECTION 5.2. Acceleration of Maturity; Rescission and
Annulment.
(a) If no Insurer Default shall have occurred and be
continuing, if an Event of Default shall have occurred and be continuing, then
the Insurer shall have the right, but not the obligation, upon prior written
notice to each Rating Agency, to declare the Notes to be immediately due and
payable by written notice to the Issuer, the Servicer and the Indenture Trustee,
and upon any such declaration the unpaid principal amount of the Notes, together
with accrued and unpaid interest thereon through the date of acceleration, shall
become immediately due and payable. The Indenture Trustee shall have no
discretion with respect to the acceleration of the Notes under the foregoing
circumstances. In the event of any such acceleration of the Notes, the Indenture
Trustee shall continue to make claims under the Policy with respect to the
Notes.
(b) If an Insurer Default has occurred and is continuing and
an Event of Default has occurred and is continuing, then and in every such case
the Indenture Trustee or the Holders of Notes evidencing not less than 66 2/3%
of the Note Balance may, upon prior written notice to each Rating Agency,
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declare the Notes to be immediately due and payable by written notice to the
Issuer (and to the Indenture Trustee if given by Noteholders), and upon any such
declaration the unpaid principal amount of the Notes, together with accrued and
unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.
(c) At any time after a declaration of acceleration of
maturity has been made and before a judgment or decree for payment of the amount
due has been obtained by the Indenture Trustee as hereinafter provided in this
Article V, the Holders of Notes evidencing not less than 66 2/3% of the Note
Balance, by written notice to the Issuer and the Indenture Trustee, may rescind
and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay all principal of and interest on the
Notes and all other amounts that would then be due hereunder or upon
the Notes if the Event of Default giving rise to such acceleration had
not occurred; and
(ii) all Events of Default, other than the nonpayment of
the principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
(d) If an Event of Default has occurred and is continuing, the
Insurer may elect to prepay all or any portion of the Note Balance, plus accrued
but unpaid interest thereon to the date of payment; provided, however, that the
Insurer shall fulfill its obligations under the Policy.
(e) If an Event of Default has occurred and is continuing and
the Note Balance has been paid in full, the Insurer may elect to prepay all or
any portion of the Certificate Balance, plus accrued but unpaid interest thereon
to the date of payment; provided, however, that the Insurer shall fulfill its
obligations under the Policy.
SECTION 5.3. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee.
(a) If (i) default is made in the payment of any interest on
any Note when the same becomes due and payable, and such default continues for a
period of five (5) Business Days, or (ii) default is made in the payment of the
principal of any Note when the same becomes due and payable, the Issuer shall,
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upon demand of the Indenture Trustee, pay to the Indenture Trustee, for the
benefit of the Holders of the Notes, the amount then due and payable on the
Notes for principal and interest, with interest upon the overdue principal at
the applicable Note Interest Rate and, to the extent payment at such rate of
interest shall be legally enforceable, upon overdue installments of interest at
the applicable Note Interest Rate and in addition thereto such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel and other amounts due and owing to the
Indenture Trustee pursuant to Section 6.7.
(b) If the Issuer shall fail forthwith to pay such amounts
upon such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, may institute a Proceeding for the collection of the sums so due
and unpaid, and may prosecute such Proceeding to judgment or final decree, and
may enforce the same against the Issuer or any other obligor upon the Notes and
collect in the manner provided by law out of the property of the Issuer or such
other obligor, wherever situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the
Indenture Trustee may, as more particularly provided in Section 5.4, in its
discretion, proceed to protect and enforce its rights and the rights of the
Noteholders and the Insurer by such appropriate Proceedings as the Indenture
Trustee shall deem most effective to protect and enforce such rights, whether
for the specific enforcement of any covenant or agreement in this Indenture or
in aid of the exercise of any power granted herein or to enforce any other
proper remedy or legal or equitable right vested in the Indenture Trustee by
this Indenture or by law.
(d) If there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, Proceedings under Title 11 of the United States
Code or any other applicable federal or state bankruptcy, insolvency or other
similar law, or if a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or if there shall be pending any other comparable judicial
Proceedings relative to the Issuer or any other obligor upon the Notes, or to
the creditors or property of the Issuer or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Notes shall then be due
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and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section 5.3, shall be entitled and empowered, by intervention
in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee
(including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and all other amounts due and owing to
the Indenture Trustee pursuant to Section 6.7) and of the Noteholders
allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations,
to vote on behalf of the Noteholders in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to pay all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee or the Noteholders allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of the Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to the Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee and each predecessor Indenture Trustee,
and their respective agents, attorneys and counsel, and all other amounts due
and owing to the Indenture Trustee pursuant to Section 6.7.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
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(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such action or Proceedings
instituted by the Indenture Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and
also any Proceedings involving the interpretation of any provision of this
Indenture to which the Indenture Trustee shall be a party), the Indenture
Trustee shall be held to represent all the Noteholders, and it shall not be
necessary to make any Noteholder a party to any such Proceedings.
SECTION 5.4. Remedies.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall, at the direction of the Insurer (if no Insurer Default
has occurred and is continuing), or at the direction of the Holders of Notes
evidencing not less than 66 2/3% of the Note Balance (if an Insurer Default has
occurred and is continuing), take one or more of the following actions as so
directed (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee
of an express trust for the collection of all amounts then payable on
the Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon the Notes monies adjudged
due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Trust Estate;
(iii) exercise any remedies of a secured party under the
Relevant UCC and take any other appropriate action to protect and
enforce the rights and remedies of the Indenture Trustee and the
Noteholders; and
(iv) sell the Trust Estate or any portion thereof or
rights or interest therein at one or more public or private sales
called and conducted in any manner permitted by law;
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provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than an Event of
Default described in Section 5.1(i) or (ii), unless (A) the Holders of 100% of
the Note Balance consent thereto, (B) the proceeds of such sale or liquidation
are sufficient to pay in full the outstanding principal balance of and all
accrued but unpaid interest on the outstanding Notes or (C) the Indenture
Trustee determines that the Trust Estate will not continue to provide sufficient
funds for the payment of principal of and interest on the Notes as they would
have become due if the Notes had not been declared due and payable, and the
Indenture Trustee obtains the consent of the Holders of Notes evidencing not
less than 66 2/3% of the Note Balance. In determining such sufficiency or
insufficiency with respect to clauses (B) and (C) above, the Indenture Trustee
may, but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property
pursuant to this Section 5.4, it shall pay out such money or property in the
following order of priority:
(i) to the Indenture Trustee, all amounts due to the
Indenture Trustee as compensation pursuant to Section 6.7;
(ii) to the Servicer, all amounts due to the Servicer as
compensation pursuant to Section 3.8 of the Sale and Servicing
Agreement;
(iii) to the Noteholders, all accrued but unpaid interest
on the Notes;
(iv) to the Noteholders, the outstanding principal balance
of the Notes;
(v) to the Certificateholders, all accrued but unpaid
interest on the Certificates; and
(vi) to the Certificateholders, the outstanding principal
balance of the Certificates.
The Indenture Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 5.4. At least fifteen (15) days before such
record date, the Issuer shall mail to each Noteholder and the Indenture Trustee
a notice that states the record date, the payment date and the amount to be
paid.
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SECTION 5.5. Optional Preservation of the Contracts. If the
Notes have been declared to be due and payable under Section 5.2 following an
Event of Default, and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Trust Estate and apply proceeds as if there had been
no declaration of acceleration; provided, however, that the Total Available
Funds shall be applied in accordance with such declaration of acceleration in
the manner specified in Section 4.6(d) of the Sale and Servicing Agreement. It
is the desire of the parties hereto and the Noteholders that there be at all
times sufficient funds for the payment of principal of and interest on the
Notes, and the Indenture Trustee shall take such desire into account when
determining whether or not to maintain possession of the Trust Estate. In
determining whether to maintain possession of the Trust Estate, the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
SECTION 5.6. Limitation of Suits. No Holder of any Note shall
have any right to institute any Proceeding with respect to this Indenture or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(i) such Holder has previously given written notice
to the Indenture Trustee of a continuing Event of Default;
(ii) the Holders of Notes evidencing not less than 25% of
the Note Balance have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for sixty (60) days after its
receipt of such notice, request and offer of indemnity has failed to
institute such Proceedings;
(v) no direction inconsistent with such written
request has been given to the Indenture Trustee during such 60-day
period by the Holders of Notes evidencing not less than 51% of the Note
Balance; and
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(vi) an Insurer Default has occurred and is continuing.
It is understood and intended that no one or more Holders of
Notes shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other Holders of Notes or to obtain or to seek to obtain priority or
preference over any other Holders of Notes or to enforce any right under this
Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting
or inconsistent requests and indemnity from two or more groups of Holders of
Notes, each evidencing less than 51% of the Note Balance, the Indenture Trustee
in its sole discretion may determine what action, if any, shall be taken,
notwithstanding any other provisions of this Indenture.
SECTION 5.7. Unconditional Rights of Noteholders To Receive
Principal and Interest. Notwithstanding any other provisions in this Indenture,
the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Note on or after the respective due dates thereof expressed in such Note or
in this Indenture (or, in the case of redemption, on or after the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder.
SECTION 5.8. Restoration of Rights and Remedies. If the
Indenture Trustee, the Insurer or any Noteholder has instituted any Proceeding
to enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely to the
Indenture Trustee, the Insurer or such Noteholder, then and in every such case
the Issuer, the Indenture Trustee, the Insurer and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee and the Noteholders shall continue as though
no such Proceeding had been instituted.
SECTION 5.9. Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Indenture Trustee, the Insurer
or the Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
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existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or
omission of the Indenture Trustee, the Insurer or any Holder of any Note to
exercise any right or remedy accruing upon any Default or Event of Default shall
impair any such right or remedy or constitute a waiver of any such Default or
Event of Default or any acquiescence therein. Every right and remedy given by
this Article V or by law to the Indenture Trustee, the Insurer or the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee, the Insurer or the Noteholders, as the case
may be.
SECTION 5.11. Control by Noteholders. The Holders of Notes
evidencing not less than 51% of the Note Balance shall have the right to direct
the time, method and place of conducting any Proceeding for any remedy available
to the Indenture Trustee with respect to the Notes or exercising any trust or
power conferred on the Indenture Trustee; provided, however, that:
(i) such direction shall not be in conflict with any rule
of law or with this Indenture;
(ii) subject to the express terms of Section 5.4, any
direction to the Indenture Trustee to sell or liquidate the Trust
Estate shall be by the Holders of Notes evidencing not less than 100%
of the Note Balance;
(iii) if the conditions set forth in Section 5.5 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such section, then any direction to the Indenture Trustee
by the Holders of Notes evidencing less than 100% of the Note Balance
to sell or liquidate the Trust Estate shall be of no force and effect;
and
(iv) the Indenture Trustee may take any other action
deemed proper by the Indenture Trustee that is not inconsistent with
such direction.
Notwithstanding the rights of Noteholders set forth in this
Section 5.11, subject to Section 6.1, the Indenture Trustee need not take any
action that it reasonably believes might involve it in costs, expenses and
liabilities for which it will not be adequately indemnified or might materially
adversely affect the rights of any Noteholders not consenting to such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the
declaration of the acceleration of the maturity of the Notes as provided in
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Section 5.2, the Insurer (if no Insurer Default shall have occurred and be
continuing) or the Holders of Notes evidencing not less than 51% of the Note
Balance, with the consent of the Insurer (if no Insurer Default shall have
occurred and be continuing), may waive any past Default or Event of Default and
its consequences except a Default or Event of Default (i) in the payment of
principal of or interest on any of the Notes or (ii) in respect of a covenant or
provision hereof that cannot be amended, supplemented or modified without the
consent of all the Holders. Upon any such waiver, the Issuer, the Indenture
Trustee, the Insurer and the Holders shall be restored to their former positions
and rights hereunder, respectively, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto. Upon any such waiver, such Default or Event of Default shall cease to
exist and be deemed to have been cured and not to have occurred, and any Event
of Default arising therefrom shall be deemed to have been cured and not to have
occurred, for every purpose of this Indenture, but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereto.
SECTION 5.13. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Note by such Holder's acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or omitted
by it as Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorney's fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; provided,
however, that the provisions of this Section 5.13 shall not apply to (i) any
suit instituted by the Indenture Trustee, (ii) any suit instituted by any
Noteholder or group of Noteholders, in each case holding Notes evidencing in the
aggregate more than 10% of the Note Balance or (iii) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on any
Note on or after the respective due dates expressed in such Note and in this
Indenture (or, in the case of redemption, on or after the Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture, and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
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shall not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right
to seek and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Noteholders shall be impaired
by the recovery of any judgment by the Indenture Trustee against the Issuer or
by the levy of any execution under such judgment upon any portion of the Trust
Estate or upon any of the assets of the Issuer. Any money or property collected
by the Indenture Trustee shall be applied in accordance with Section 5.4(b).
SECTION 5.16. Performance and Enforcement of Certain
Obligations.
(a) Promptly following a request from the Indenture Trustee to
do so, and at the Administrator's expense, the Issuer shall take all such lawful
action as the Indenture Trustee may request to compel or secure the performance
and observance by the Seller and the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Sale and Servicing
Agreement or by the Seller of each of its obligations under or in connection
with the Purchase Agreement, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in connection
with the Sale and Servicing Agreement to the extent and in the manner directed
by the Indenture Trustee, including the transmission of notices of default on
the part of the Seller or the Servicer thereunder and the institution of legal
or administrative actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the Sale and Servicing
Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in writing
or by telephone (confirmed in writing promptly thereafter)) of the Holders of
Notes evidencing not less than 66 2/3% of the Note Balance shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the Seller
or the Servicer under or in connection with the Sale and Servicing Agreement or
against the Seller under or in connection with the Purchase Agreement, including
the right or power to take any action to compel or secure performance or
observance by the Seller or the Servicer, as the case may be, of each of their
obligations to the Issuer thereunder and to give any consent, request, notice,
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direction, approval, extension or waiver under the Sale and Servicing Agreement
or the Purchase Agreement, as the case may be, and any right of the Issuer to
take such action shall be suspended.
(c) Promptly following a request from the Indenture Trustee to
do so and at the Administrator's expense, the Issuer agrees to take all such
lawful action as the Indenture Trustee may request to compel or secure the
performance and observance by CarMax of each of its obligations to the Seller
under or in connection with the Purchase Agreement in accordance with the terms
thereof, and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Purchase
Agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of the Seller
thereunder and the institution of legal or administrative actions or proceedings
to compel or secure performance by CarMax of each of its obligations under the
Purchase Agreement.
(d) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in writing
or by telephone (confirmed in writing promptly thereafter)) of the Holders of
Notes evidencing not less than 66 2/3% of the Note Balance shall, exercise all
rights, remedies, powers, privileges and claims of the Seller against CarMax
under or in connection with the Purchase Agreement, including the right or power
to take any action to compel or secure performance or observance by CarMax of
each of its obligations to the Seller thereunder and to give any consent,
request, notice, direction, approval, extension or waiver under the Purchase
Agreement, and any right of the Seller to take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1. Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) Except during the continuance of an Event of Default:
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(i) the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be read into
this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and, if
required by the terms of this Indenture, conforming to the requirements
of this Indenture; provided, however, that the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section 6.1;
(ii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer unless it
is proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates
to the Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section 6.1.
(e) The Indenture Trustee shall not be liable for interest on
any money received by it except as the Indenture Trustee may agree in writing
with the Issuer.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers hereunder if the Indenture Trustee shall have reasonable
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grounds to believe that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section 6.1 and to the provisions of
the TIA.
(i) The Indenture Trustee shall not be charged with knowledge
of any Event of Default unless either (1) a Responsible Officer shall have
actual knowledge of such Event of Default or (2) written notice of such Event of
Default shall have been given to the Indenture Trustee in accordance with the
provisions of this Indenture.
SECTION 6.2. Rights of Indenture Trustee.
(a) The Indenture Trustee may rely on any document believed by
it to be genuine and to have been signed or presented by the proper Person.
(b) Before the Indenture Trustee acts or refrains from acting,
it may require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel unless it is
proved that the Indenture Trustee was negligent in such reliance.
(c) The Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian or nominee, and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of, or for
the supervision of, any such agent, attorney, custodian or nominee appointed
with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that such action or omission by
the Indenture Trustee does not constitute willful misconduct, negligence or bad
faith.
(e) The Indenture Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
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(f) The Indenture Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Noteholders pursuant to this Indenture,
unless such Noteholders shall have offered to the Indenture Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
(g) The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture or other paper or document, but the Indenture Trustee, in
its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Indenture Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Issuer, personally or by agent or attorney.
SECTION 6.3. Individual Rights of Indenture Trustee. The
Indenture Trustee, in its individual or any other capacity, may become the owner
or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not Indenture Trustee. Any Paying
Agent, Note Registrar, co-registrar or co-paying agent hereunder may do the same
with like rights.
SECTION 6.4. Indenture Trustee's Disclaimer. The Indenture
Trustee (i) shall not be responsible for, and makes no representation as to, the
validity or adequacy of this Indenture or the Notes and (ii) shall not be
accountable for the Issuer's use of the proceeds from the Notes or responsible
for any statement of the Issuer in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
SECTION 6.5. Notice of Defaults. If a Default occurs and is
continuing and if it is known to a Responsible Officer of the Indenture Trustee,
the Indenture Trustee shall mail to each Noteholder notice of such Default
within ninety (90) days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Note (including payments pursuant to
the mandatory redemption provisions of such Note), the Indenture Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of
Noteholders.
SECTION 6.6. Reports by Indenture Trustee to Holders. The
Indenture Trustee shall deliver, within a reasonable period of time after the
end of each calendar year, to each Person who at any time during such calendar
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year was a Noteholder, such information as may be required to enable such Person
to prepare its federal and state income tax returns.
SECTION 6.7. Compensation and Indemnity.
(a) The Issuer shall, or shall cause the Administrator to, pay
to the Indenture Trustee from time to time reasonable compensation for its
services. The Indenture Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Issuer shall, or shall
cause the Administrator to, reimburse the Indenture Trustee for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services; provided, however, that neither
the Issuer nor the Administrator need reimburse the Indenture Trustee for any
expense incurred through the Indenture Trustee's willful misconduct, negligence,
or bad faith. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall, or shall cause the Administrator to,
indemnify the Indenture Trustee against any and all loss, liability or expense
(including attorneys' fees) incurred by it in connection with the administration
of this trust and the performance of its duties hereunder; provided, however,
that neither the Issuer nor the Administrator need indemnify the Indenture
Trustee for any such loss, liability or expense incurred through the Indenture
Trustee's willful misconduct, negligence, or bad faith. The Indenture Trustee
shall notify the Issuer and the Administrator promptly of any claim for which it
may seek indemnity. Any failure by the Indenture Trustee to so notify the Issuer
and the Administrator shall not, however, relieve the Issuer or the
Administrator of its obligations hereunder. The Issuer shall, or shall cause the
Servicer to, defend any such claim, and the Indenture Trustee may have separate
counsel and the Issuer shall, or shall cause the Servicer to, pay the fees and
expenses of such counsel.
(b) The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section 6.7 shall survive the resignation or removal of the
Indenture Trustee and the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.1(v) or (vi) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
SECTION 6.8. Replacement of Indenture Trustee.
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(a) No resignation or removal of the Indenture Trustee, and no
appointment of a successor Indenture Trustee, shall become effective until the
acceptance of appointment by the successor Indenture Trustee pursuant to this
Section 6.8. The Indenture Trustee may resign at any time by so notifying the
Issuer and the Insurer. The Holders of Notes evidencing not less than 51% of the
Note Balance may remove the Indenture Trustee without cause by so notifying the
Indenture Trustee, the Insurer and the Issuer and may appoint a successor
Indenture Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section
6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or
insolvent;
(iii) a receiver or other public officer takes charge of
the Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee acceptable to the
Insurer.
(b) Any successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee, the Insurer and
the Issuer. Upon delivery of such written acceptance, the resignation or removal
of the retiring Indenture Trustee shall become effective and the successor
Indenture Trustee shall have all the rights, powers and duties of the Indenture
Trustee under this Indenture. The successor Indenture Trustee shall mail a
notice of its succession to the Noteholders. The retiring Indenture Trustee
shall promptly transfer all property held by it as Indenture Trustee to the
successor Indenture Trustee.
(c) If a successor Indenture Trustee does not take office
within sixty (60) days after the retiring Indenture Trustee resigns or is
removed, the retiring Indenture Trustee, the Issuer or the Holders of Notes
evidencing not less than 51% of the Note Balance may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee. If
the Indenture Trustee fails to comply with Section 6.11, any Noteholder may
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petition any court of competent jurisdiction for the removal of the Indenture
Trustee and the appointment of a successor Indenture Trustee.
(d) Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section 6.8, the Issuer's and the Administrator's obligations
under Section 6.7 shall continue for the benefit of the retiring Indenture
Trustee.
SECTION 6.9. Successor Indenture Trustee by Merger.
(a) If the Indenture Trustee consolidates with, merges or
converts into, or transfers all or substantially all its corporate trust
business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation or banking association without
any further act shall be the successor Indenture Trustee; provided, however,
that such corporation or banking association must be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the Rating
Agencies with prior written notice of any such transaction.
(b) If at the time such successor or successors by
consolidation, merger or conversion to the Indenture Trustee shall succeed to
the trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Indenture Trustee may
adopt the certificate of authentication of any predecessor trustee and deliver
such Notes so authenticated, and in case at that time any of the Notes shall not
have been authenticated, any such successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor trustee or in the
name of the successor to the Indenture Trustee. In all such cases such
certificates shall have the full force which the Notes or this Indenture provide
that the certificate of the Indenture Trustee shall have.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at
any time, for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver an instrument to
appoint one or more Persons to act as a co-trustee or co-trustees, jointly with
the Indenture Trustee, or separate trustee or separate trustees, of all or any
part of the Trust Estate, and to vest in such Person or Persons, in such
capacity and for the benefit of the Noteholders, such title to the Trust Estate,
or any part hereof, and, subject to the other provisions of this Section 6.10,
such powers, duties, obligations, rights and trusts as the Indenture Trustee may
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consider necessary or desirable. No co-trustee or separate trustee under this
Indenture shall be required to meet the terms of eligibility as a successor
trustee under Section 6.11 and no notice of the appointment of any co-trustee or
separate trustee shall be required under Section 6.8.
(b) Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Indenture Trustee shall be conferred or imposed
upon and exercised or performed by the Indenture Trustee and such
separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee shall not be authorized to act
separately without the Indenture Trustee joining in such act), except
to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed the Indenture Trustee shall
be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the
holding of title to the Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Indenture
Trustee;
(ii) no trustee under this Indenture shall be personally
liable by reason of any act or omission of any other trustee under this
Indenture; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co- trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall refer to
this Indenture and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the liability
of, or affording protection to, the Indenture Trustee. Each such instrument
shall be filed with the Indenture Trustee.
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(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee its agent or attorney-in-fact with full power
and authority, to the extent permitted by law, to do any lawful act under or in
respect of this Indenture on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Indenture
Trustee shall at all times satisfy the requirements of TIA Section 310(a). The
Indenture Trustee or its parent shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition and shall have a long-term debt rating of investment grade by each of
the Rating Agencies or shall otherwise be acceptable to each of the Rating
Agencies. The Indenture Trustee shall comply with TIA Section 310(b).
SECTION 6.12. Preferential Collection of Claims Against
Issuer. The Indenture Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). An Indenture Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders. The Issuer shall furnish or cause to be furnished to
the Indenture Trustee (i) not more than five (5) days after each Record Date, a
list, in such form as the Indenture Trustee may reasonably require, of the names
and addresses of the Holders of Notes as of such Record Date and (ii) at such
other times as the Indenture Trustee may request in writing, within thirty (30)
days after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than ten (10) days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the Note
Registrar or the Notes are issued as Book-Entry Notes, no such list shall be
required to be furnished.
SECTION 7.2. Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
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in Section 7.1 and the names and addresses of the Holders of Notes received by
the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee
may destroy any list furnished to it as provided in Section 7.1 upon receipt of
a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b)
with other Noteholders with respect to their rights under this Indenture or
under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar
shall have the protection of TIA Section 312(c).
SECTION 7.3. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within fifteen (15)
days after the Issuer is required to file the same with the Commission,
copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as
the Commission may from time to time by rules and regulations
prescribe) that the Issuer may be required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with the rules and regulations prescribed from time to time
by the Commission such additional information, documents and reports
with respect to compliance by the Issuer with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
Section 313(c)) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i) and
(ii) of this Section 7.3(a) and by the rules and regulations prescribed
from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of
the Issuer shall correspond to the calendar year.
SECTION 7.4. Reports by Indenture Trustee.
(a) If required by TIA Section 313(a), within sixty (60) days
after each March 31, beginning with March 31, 2000, the Indenture Trustee shall
mail to each Noteholder as required by TIA Section 313(c) a brief report dated
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as of such date that complies with TIA Section 313(a). The Indenture Trustee
shall also comply with TIA Section 313(b).
(b) The Indenture Trustee shall file with the Commission and
each stock exchange, if any, on which the Notes are listed a copy of each report
mailed to Noteholders pursuant to this Indenture. The Issuer shall notify the
Indenture Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1. Collection of Money. Except as otherwise
expressly provided herein, the Indenture Trustee may demand payment or delivery
of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this
Indenture and the Sale and Servicing Agreement. The Indenture Trustee shall
apply all such money received by it as provided in this Indenture and the Sale
and Servicing Agreement. Except as otherwise expressly provided in this
Indenture, if any default occurs in the making of any payment or performance
under any agreement or instrument that is part of the Trust Estate, the
Indenture Trustee may take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim a
Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
SECTION 8.2. Trust Accounts.
(a) On or before the Closing Date, the Issuer shall cause the
Servicer to establish and maintain, in the name of the Indenture Trustee, for
the benefit of the Insurer, the Noteholders and the Certificateholders, the
Collection Account as provided in Section 4.1 of the Sale and Servicing
Agreement. On or before each Payment Date, the Servicer shall deposit in the
Collection Account all amounts required to be deposited therein with respect to
the preceding Collection Period as provided in Section 4.2 of the Sale and
Servicing Agreement.
(b) On or before the Closing Date, the Issuer shall cause the
Servicer to establish and maintain, in the name of the Insurer, the Indenture
Trustee, for the benefit of the Noteholders and the Certificateholders, the
Reserve Account as provided in Section 4.7 of the Sale and Servicing Agreement.
On each Payment Date, upon receipt of instructions from the Servicer pursuant to
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Section 4.6(d) of the Sale and Servicing Agreement, the Indenture Trustee shall
withdraw from the Reserve Account (up to the amount on deposit in the Reserve
Account) and deposit in the Collection Account the amount, if any, by which the
Required Payment Amount for such Payment Date exceeds the Available Funds for
such Payment Date.
(c) [RESERVED]
(d) On each Payment Date, the Indenture Trustee shall apply or
cause to be applied the amount on deposit in the Collection Account on such
Payment Date in accordance with Section 2.8(a).
(e) On or before the Closing Date, the Issuer shall cause the
Servicer to establish and maintain, in the name of the Indenture Trustee, for
the exclusive benefit of the Noteholders, the Note Payment Account as provided
in Section 4.1 of the Sale and Servicing Agreement. On each Payment Date, the
Indenture Trustee shall apply or cause to be applied the amount on deposit in
the Note Payment Account on such Payment Date in accordance with Section 2.8(b)
or (f), as applicable.
SECTION 8.3. General Provisions Regarding Accounts.
(a) So long as no Default or Event of Default shall have
occurred and be continuing, all or a portion of the funds in the Trust Accounts
shall be invested by the Indenture Trustee at the direction of the Servicer in
Eligible Investments as provided in Sections 4.1 and 4.7 of the Sale and
Servicing Agreement. All income or other gain (net of losses and investment
expenses) from investments of monies deposited in the Trust Accounts shall be
withdrawn by the Indenture Trustee from such accounts and distributed (but only
under the circumstances set forth in the Sale and Servicing Agreement) as
provided in Sections 4.1 and 4.7 of the Sale and Servicing Agreement. The
Servicer shall not direct the Indenture Trustee to make any investment of any
funds or to sell any investment held in any of the Trust Accounts unless the
security interest Granted and perfected in such account will continue to be
perfected in such investment or the proceeds of such sale, in either case
without any further action by any Person, and, in connection with any direction
to the Indenture Trustee to make any such investment or sale, if requested by
the Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an
Opinion of Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not
in any way be held liable by reason of any insufficiency in any of the Trust
Accounts resulting from any loss on any Permitted Investment included therein,
except for losses attributable to the Indenture Trustee's failure to make
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payments on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as trustee, in accordance with
their terms.
(c) If (i) the Servicer shall have failed to give investment
directions for any funds on deposit in the Trust Accounts to the Indenture
Trustee by 11:00 A.M. (New York City time) (or such other time as may be agreed
upon by the Issuer and Indenture Trustee), on the Business Day preceding each
Payment Date, (ii) a Default or Event of Default shall have occurred and be
continuing with respect to the Notes but the Notes shall not have been declared
due and payable pursuant to Section 5.2 or (iii) the Notes shall have been
declared due and payable following an Event of Default, amounts collected or
receivable from the Trust Estate are being applied in accordance with Section
5.4 as if there had not been such a declaration, then the Indenture Trustee
shall, to the fullest extent practicable, invest and reinvest funds in the Trust
Accounts in one or more Eligible Investments.
SECTION 8.4. Release of Trust Estate.
(a) Subject to the payment of its fees and expenses pursuant
to Section 6.7, the Indenture Trustee may, and when required by the provisions
of this Indenture shall, execute instruments to release property from the lien
of this Indenture, or convey the Indenture Trustee's interest in the same, in a
manner and under circumstances that are not inconsistent with the provisions of
this Indenture. No party relying upon an instrument executed by the Indenture
Trustee as provided in this Article VIII shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as there are no
Notes Outstanding, the Policy has been terminated in accordance with its terms
and has been returned to the Insurer for cancellation and all sums due the
Indenture Trustee and the Insurer pursuant to Section 6.7 have been paid in
full, release any remaining portion of the Trust Estate that secured the Notes
from the lien of this Indenture and release to the Issuer or any other Person
entitled thereto any funds then on deposit in the Trust Accounts. The Indenture
Trustee shall release property from the lien of this Indenture pursuant to this
Section 8.4(b) only upon receipt of an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel and (if required by the TIA)
Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.1.
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SECTION 8.5. Opinion of Counsel. The Indenture Trustee shall
receive at least seven (7) days notice when requested by the Issuer to take any
action pursuant to Section 8.4(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, except in connection
with any action contemplated by Section 8.4(b), as a condition to such action,
an Opinion of Counsel, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete such action, and concluding that all conditions precedent
to the taking of such action have been complied with and such action will not
materially and adversely impair the security for the Notes or the rights of the
Noteholders in contravention of the provisions of this Indenture; provided,
however, that such Opinion of Counsel shall not be required to express an
opinion as to the fair value of the Trust Estate. Counsel rendering any such
opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of
Noteholders. The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies and the Insurer and with the consent of the
Insurer (if no Insurer Default shall have occurred and be continuing), at any
time and from time to time, enter into one or more indentures supplemental
hereto, in form satisfactory to the Indenture Trustee, for any of the following
purposes:
(i) to correct or amplify the description of any
property at any time subject to the lien of this Indenture, or better
to assure, convey and confirm unto the Indenture Trustee any property
subject or required to be subjected to the lien of this Indenture, or
to subject to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another Person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Holders of the Notes, or to surrender any right or power
herein conferred upon the Issuer;
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(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement
any provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture which will not be inconsistent
with other provisions of this Indenture;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA;
provided, however, that (i) such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder or the Insurer, (ii) the Rating Agency Condition shall have been
satisfied with respect to such action and (iii) such action shall not, as
evidenced by an Opinion of Counsel, cause the Issuer to be characterized for
federal income tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the federal income taxation of any
Notes Outstanding or outstanding Certificates or any Noteholder or
Certificateholder. The Indenture Trustee is hereby authorized to join in the
execution of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
SECTION 9.2. Supplemental Indentures with Consent of
Noteholders. The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, with the consent of the Insurer (if no Insurer Default shall have
occurred and be continuing) and the Holders of Notes evidencing not less than
51% of the Note Balance and with prior notice to the Rating Agencies and the
Insurer, by Act of such Holders delivered to the Issuer and the Indenture
Trustee, at any time and from time to time, enter into one or more indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
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any manner or eliminating any of the provisions of, this Indenture or modifying
in any manner the rights of the Holders of the Notes under this Indenture;
provided, however, that (i) such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder or the Insurer, (ii) the Rating Agency Condition shall have been
satisfied with respect to such action and (iii) such action shall not, as
evidenced by an Opinion of Counsel, cause the Issuer to be characterized for
federal income tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the federal income taxation of any
Notes Outstanding or outstanding Certificates or any Noteholder or
Certificateholder; and, provided further, that, subject to the express rights of
the Insurer under the Transaction Documents, no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Note affected
thereby:
(i) change any Final Payment Date or the date of payment
of any installment of principal of or interest on any Note, or reduce
the principal amount thereof, the interest rate thereon or the
Redemption Price with respect thereto, change the provisions of this
Indenture relating to the application of collections on, or the
proceeds of the sale of, the Trust Estate to payment of principal of or
interest on the Notes, or change any place of payment where, or the
coin or currency in which, any Note or the interest thereon is payable;
(ii) impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the
application of available funds, as provided in Article V, to the
payment of any amount due on the Notes on or after the respective due
dates thereof (or, in the case of redemption, on or after the
Redemption Date);
(iii) reduce the percentage of the Note Balance the consent
of the Holders of which is required for any such supplemental indenture
or for any waiver of compliance with certain provisions of this
Indenture or of certain defaults hereunder and their consequences as
provided in this Indenture;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) reduce the percentage of the Note Balance the consent
of the Holders of which is required to direct the Indenture Trustee to
sell or liquidate the Trust Estate pursuant to Section 5.4 if the
proceeds of such sale would be insufficient to pay in full the
principal amount of and accrued but unpaid interest on the Notes and
the Certificates;
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(vi) modify any provision of this Indenture specifying a
percentage of the principal amount of the Notes necessary to amend this
Indenture or the other Transaction Documents except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the other Transaction Documents cannot
be modified or waived without the consent of the Holders of each
Outstanding Note affected thereby;
(vii) modify any of the provisions of this Indenture in
such a manner as to affect the calculation of the amount of any payment
of interest or principal due on any Note on any Payment Date (including
the calculation of any of the individual components of such
calculation) or to affect the rights of the Holders of the Notes to the
benefit of any provisions for the mandatory redemption of the Notes
contained herein; or
(viii) permit the creation of any lien ranking prior to or
on a parity with the lien of this Indenture with respect to any part of
the Trust Estate or, except as otherwise permitted or contemplated
herein, terminate the lien of this Indenture on any such collateral at
any time subject hereto or deprive the Holder of any Note of the
security provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether
or not any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
The Indenture Trustee may in its discretion determine whether
or not any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under
this Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof. Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.2, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or supplemental
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indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.3. Execution of Supplemental Indentures. In
executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modification thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to receive
and, subject to Sections 6.1 and 6.2, shall be fully protected in relying upon
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture and that all conditions precedent
in this Indenture to the execution and delivery of such supplemental indenture
have been satisfied. The Indenture Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Indenture Trustee's
own rights, duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and shall be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.5. Conformity with Trust Indenture Act. Every
amendment of this Indenture and every supplemental indenture executed pursuant
to this Article IX shall conform to the requirements of the Trust Indenture Act
as then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
SECTION 9.6. Reference in Notes to Supplemental Indentures.
Any Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article IX may, and if required by the Indenture
Trustee shall, bear a notation in form approved by the Indenture Trustee as to
any matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
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the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1. Redemption.
(a) The Notes are subject to redemption in whole, but not in
part, at the direction of the Servicer pursuant to Section 9.1(a) of the Sale
and Servicing Agreement, on any Payment Date on which the Servicer exercises its
option to purchase the assets of the Issuer pursuant to such Section 9.1(a), and
the amount paid by the Servicer shall be treated as collections in respect of
the Contracts and applied to pay the unpaid principal amount of the Notes plus
accrued and unpaid interest thereon and the Certificate Balance. The Issuer
shall furnish or cause the Servicer to furnish notice of such redemption to the
Rating Agencies and the Noteholders. If the Notes are to be redeemed pursuant to
this Section 10.1(a), the Issuer shall furnish or cause the Servicer to furnish
notice of such election to the Indenture Trustee not later than twenty (20) days
prior to the Redemption Date and the Issuer shall deposit the Redemption Price
of the Notes to be redeemed in the Note Payment Account by 10:00 A.M. (New York
City time) on the Redemption Date, whereupon all such Notes shall be due and
payable on the Redemption Date.
(b) In the event that the assets of the Issuer are sold
pursuant to Section 9.3 of the Trust Agreement, all amounts on deposit in the
Note Payment Account shall be paid to the Noteholders up to the unpaid principal
amount of the Notes and all accrued and unpaid interest thereon. If such amounts
are to be paid to Noteholders pursuant to this Section 10.1(b), the Issuer
shall, to the extent practicable, furnish or cause the Servicer to furnish
notice of such event to the Indenture Trustee not later than twenty (20) days
prior to the Redemption Date, whereupon all such amounts shall be payable on the
Redemption Date.
SECTION 10.2. Form of Redemption Notice. Notice of redemption
of the Notes under Section 10.1(a) shall be given by the Indenture Trustee by
first-class mail, postage prepaid, or by facsimile mailed or transmitted
promptly following receipt of notice from the Issuer or the Servicer pursuant to
Section 10.1(a), but not later than ten (10) days prior to the applicable
Redemption Date, to each Holder of the Notes as of the close of business on the
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Record Date preceding the applicable Redemption Date, at such Holder's address
or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where the Notes are to be surrendered for
payment of the Redemption Price (which shall be the office or agency of
the Issuer to be maintained as provided in Section 3.2).
Notice of redemption of the Notes shall be given by the
Indenture Trustee in the name and at the expense of the Issuer. Any failure to
give notice of redemption, or any defect therein, to any Holder of any Note
shall not, however, impair or affect the validity of the redemption of any other
Note.
SECTION 10.3. Notes Payable on Redemption Date. The Notes to
be redeemed shall, following notice of redemption as required by Section 10.2
(in the case of redemption pursuant to Section 10.1(a)), become due and payable
on the Redemption Date at the Redemption Price and (unless the Issuer shall
default in the payment of the Redemption Price) no interest shall accrue on the
Redemption Price for any period after the date to which accrued interest is
calculated for purposes of calculating the Redemption Price.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the
Indenture Trustee to take any action under any provision of this Indenture, the
Issuer shall furnish to the Indenture Trustee (i) an Officer's Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, (ii) an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent, if any, have been complied with and (iii) (if required by the TIA) an
Independent Certificate from a firm of certified public accountants meeting the
applicable requirements of this Section 11.1, except that, in the case of any
such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such
certificate or opinion has read or has caused to be read such covenant
or condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or investigation as
is necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(iv) a statement as to whether, in the opinion of each
such signatory, such condition or covenant has been complied with.
(b) Prior to the deposit of any Collateral or other property
or securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 11.1(a) or
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elsewhere in this Indenture, deliver to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within ninety (90) days of such deposit) to
the Issuer of the Collateral or other property or securities to be so deposited.
(c) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in Section 11.1(b), the Issuer
shall also furnish to the Indenture Trustee an Independent Certificate as to the
same matters if the fair value to the Issuer of the property or securities to be
so deposited and of all other such property or securities made the basis of any
such withdrawal or release since the commencement of the then-current fiscal
year of the Issuer, as set forth in the certificates furnished pursuant to
Section 11.1(b) and this Section 11.1(c), is ten percent (10%) or more of the
Note Balance, but such a certificate need not be furnished with respect to any
property or securities so deposited if the fair value thereof to the Issuer as
set forth in the related Officer's Certificate is less than $25,000 or less than
one percent (1%) of the Note Balance.
(d) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within ninety (90) days of
such release) of the property or securities proposed to be released and stating
that in the opinion of such person the proposed release will not impair the
security under this Indenture in contravention of the provisions hereof.
(e) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in Section 11.1(d), the Issuer
shall also furnish to the Indenture Trustee an Independent Certificate as to the
same matters if the fair value of the property or securities and of all other
property, other than property as contemplated by Section 11.1(f) or securities
released from the lien of this Indenture since the commencement of the
then-current calendar year, as set forth in the certificates required by Section
11.1(d) and this Section 11.1(e), is ten percent (10%) or more of the Note
Balance, but such a certificate need not be furnished in the case of any release
of property or securities if the fair value thereof as set forth in the related
Officer's Certificate is less than $25,000 or less than one percent (1%) of the
Note Balance.
(f) Notwithstanding Section 2.10 or any other provisions of
this Section 11.1, the Issuer may, without compliance with the requirements of
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the other provisions of this Section 11.1, (i) collect, liquidate, sell or
otherwise dispose of Contracts and Financed Vehicles as and to the extent
permitted or required by the Transaction Documents and (ii) make cash payments
out of the Trust Accounts as and to the extent permitted or required by the
Transaction Documents.
SECTION 11.2. Form of Documents Delivered to Indenture
Trustee.
(a) In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.
(b) Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, one or
more officers of the Servicer, the Seller, the Administrator or the Issuer,
stating that the information with respect to such factual matters is in the
possession of the Servicer, the Seller, the Administrator or the Issuer, unless
such Authorized Officer or counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
(c) Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
(d) Whenever in this Indenture, in connection with any
application or certificate or report to the Indenture Trustee, it is provided
that the Issuer shall deliver any document as a condition of the granting of
such application, or as evidence of the Issuer's compliance with any term
hereof, it is intended that the truth and accuracy, at the time of the granting
of such application or at the effective date of such certificate or report (as
the case may be), of the facts and opinions stated in such document shall in
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such case be conditions precedent to the right of the Issuer to have such
application granted or to the sufficiency of such certificate or report. The
foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion contained
in any such document as provided in Article VI.
SECTION 11.3. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by the Noteholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by the Noteholders in person or by agents
duly appointed in writing, and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.1) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section 11.3.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any manner that the Indenture
Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the Holder
of every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver, Act of Noteholders is to be made upon, given
or furnished to or filed with:
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(i) the Indenture Trustee by any Noteholder or by the
Issuer, shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Indenture Trustee at its
Corporate Trust Office;
(ii) the Issuer by the Indenture Trustee or by any
Noteholder, shall be sufficient for every purpose hereunder if in
writing and mailed first-class, postage prepaid to the Issuer addressed
to: CarMax Auto Owner Trust 1999-1, in care of First Union Trust
Company, National Association, One ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust
Department, with a copy to the Administrator at ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasury Department, or at any other
address previously furnished in writing to the Indenture Trustee by the
Issuer or the Administrator. The Issuer shall promptly transmit any
notice received by it from the Noteholders to the Indenture Trustee; or
(iii) the Insurer by the Indenture Trustee, the Servicer or
any Noteholder, shall be sufficient for every purpose hereunder if in
writing and mailed first-class, postage prepaid to the Insurer
addressed to MBIA Insurance Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention:
Insured Portfolio Management, Structured Finance.
Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, telecopied or mailed by certified mail, return receipt
requested, to (i) in the case of Moody's, at the following address: ▇▇▇▇▇'▇
Investors Service, Inc., ABS Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and (ii) in case of Standard & Poor's, at the following address:
Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
(▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed Surveillance
Department.
SECTION 11.5. Notices to Noteholders; Waiver.
(a) Where this Indenture provides for notice to Noteholders of
any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class, postage prepaid to
each Noteholder affected by such event, at its address as it appears on the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Noteholders is given by mail, neither the failure to mail such notice nor any
defect in any notice so mailed to any particular Noteholder shall affect the
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sufficiency of such notice with respect to other Noteholders, and any notice
that is mailed in the manner herein provided shall conclusively be presumed to
have been duly given.
(b) Where this Indenture provides for notice in any manner,
such notice may be waived in writing by any Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Noteholders shall be filed with
the Indenture Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such a waiver.
(c) If, by reason of the suspension of regular mail service as
a result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
(d) Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute a
Default or Event of Default.
SECTION 11.6. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such Holder, that is different from the methods provided for in
this Indenture for such payments or notices. The Issuer shall furnish to the
Indenture Trustee a copy of each such agreement and the Indenture Trustee shall
cause payments to be made and notices to be given in accordance with such
agreements.
SECTION 11.7. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this Indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control. The provisions
of TIA Sections 310 through 317 that impose duties on any Person (including the
provisions automatically deemed included herein unless expressly excluded by
this Indenture) are a part of and govern this Indenture, whether or not
physically contained herein.
SECTION 11.8. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
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convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 11.9. Successors and Assigns. All covenants and
agreements in this Indenture and the Notes by the Issuer shall bind its
successors and assigns, whether so expressed or not. All agreements of the
Indenture Trustee in this Indenture shall bind its successors, co-trustees and
agents.
SECTION 11.10. Severability. If any provision of this
Indenture or the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions of this Indenture and
the Notes shall not in any way be affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this
Indenture or in the Notes, express or implied, shall give to any Person, other
than the parties hereto and their successors hereunder, the Insurer, the
Noteholders, any other party secured hereunder and any other Person with an
ownership interest in any part of the Trust Estate, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 11.12. Legal Holiday. If the date on which any payment
is due shall not be a Business Day, then (notwithstanding any other provision of
the Notes or this Indenture) payment need not be made on such date but may be
made on the next succeeding Business Day with the same force and effect as if
made on the date on which nominally due, and no interest shall accrue for the
period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 11.14. Counterparts. This Indenture may be executed in
any number of counterparts, each of which counterparts when so executed shall be
deemed to be an original, and all of which counterparts shall together
constitute but one and the same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is
subject to recording in any appropriate public recording office, such recording
shall be effected by the Issuer at its expense and shall be accompanied by an
Opinion of Counsel (which may be counsel to the Indenture Trustee or any other
counsel reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
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SECTION 11.16. Trust Obligation. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any holder of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of the
Indenture Trustee or the Owner Trustee in its individual capacity, of any holder
of a beneficial interest in the Issuer, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Owner
Trustee in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Owner Trustee
have no such obligations in their individual capacities), and except that any
such partner, owner or beneficiary shall be fully liable, to the extent provided
by applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity. For
all purposes of this Indenture, in the performance of any duties or obligations
of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to
the benefits of, the terms and provisions of Article VI, VII and VIII of the
Trust Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering
into this Indenture, and each Noteholder or Note Owner, by accepting a Note or
beneficial interest in a Note, as the case may be, hereby covenant and agree
that they will not at any time institute against the Seller or the Issuer, or
join in any institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the other Transaction Documents.
SECTION 11.18. Inspection. The Issuer shall, with reasonable
prior notice, permit any representative of the Indenture Trustee or the Insurer,
during the Issuer's normal business hours, to examine the books of account,
records, reports and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by Independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with the
Issuer's officers, employees, and Independent certified public accountants, all
at such reasonable times and as often as may be reasonably requested. The
Indenture Trustee shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
-80-
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
SECTION 11.19. Certain Matters Regarding the Insurer. If no
Insurer Default shall have occurred and be continuing, the Insurer shall have
the right to exercise all rights, including voting rights, which the Noteholders
or the Certificateholders are entitled to exercise pursuant to this Indenture,
without any consent of such Noteholders or Certificateholders; provided,
however, that, without the consent of each Noteholder and Certificateholder
affected thereby, the Insurer shall not exercise such rights to amend this
Indenture in any manner that would (i) reduce the amount of, or delay the timing
of, collections of payments on the Contracts or distributions which are required
to be made on any Note or Certificate or (ii) alter the rights of any such
Holder to consent to such amendment.
Notwithstanding any provision of this Indenture to the
contrary, if an Insurer Default has occurred and is continuing, the Insurer
shall not have the right to take any action under this Indenture or to control
or direct the actions of the Issuer, the Seller, the Indenture Trustee or the
Owner Trustee pursuant to the terms of this Indenture, nor shall the consent of
the Insurer be required with respect to any action (or waiver of a right to take
action) to be taken by the Issuer, the Seller, the Indenture Trustee, the Owner
Trustee, the Noteholders or the Certificateholders; provided, however, that the
consent of the Insurer shall be required at all times with respect to any
amendment of this Indenture.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers,
thereunto duly authorized and duly attested, all as of the day and year first
above written.
CARMAX AUTO OWNER TRUST 1999-1
By: FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By:______________________________
Name:
Title:
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By:______________________________
Name:
Title:
-82-
STATE OF )
) ss. :
COUNTY OF )
The foregoing instrument was acknowledged before me this
[____] day of September, 1999, by [____________________], as
[____________________] of FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, a
national banking association, as Owner Trustee of CARMAX AUTO OWNER TRUST
1999-1, a Delaware business trust.
------------------------
Notary Public in and for
the State of [____________]
[SEAL]
My commission expires: [____________]
-83-
STATE OF )
) ss. :
COUNTY OF )
The foregoing instrument was acknowledged before me this
[____] day of September, 1999, by [____________________], as
[____________________] of BANKERS TRUST COMPANY, a New York banking corporation.
------------------------
Notary Public in and for
the State of [____________]
[SEAL]
My commission expires: [____________]
EXHIBIT A-1
Form of Class A-1 Note
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $[ ]
No. R-[ ] CUSIP NO. [ ]
CARMAX AUTO OWNER TRUST 1999-1
[ ]% CLASS A-1 ASSET-BACKED NOTES
CarMax Auto Owner Trust 1999-1, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co. , or its
registered assigns, the principal sum of [ ] DOLLARS payable on each Payment
Date in the aggregate amount, if any, payable from the Note Payment Account in
respect of principal on the Class A-1 Notes pursuant to Section 2.8 of the
Indenture dated as of September [ ], 1999 (as amended, supplemented or otherwise
modified and in effect from time to time, the "Indenture"), between the Issuer
and Bankers Trust Company, a New York banking corporation, as Indenture Trustee
(in such capacity the "Indenture Trustee"); provided, however, that if not paid
prior to such date, the entire unpaid principal amount of this Class A-1 Note
shall be due and payable on the earlier of the [ ] Payment Date (the "Class A-1
Final Payment Date") and the Redemption Date, if any, pursuant to Section
10.1(a) or (b) of the Indenture. In addition, the unpaid principal amount of
this Class A-1 Note may be redeemed in whole but not in part on the Redemption
Date, if any, pursuant to Section 10.1(c) of the Indenture. Capitalized terms
used but not defined herein are defined in Article I of the Indenture, which
also contains rules as to construction that shall be applicable herein.
The Issuer shall pay interest on this Class A-1 Note at the rate per
annum shown above on each Payment Date until the principal of this Class A-1
Note is paid or made available for payment, on the principal amount of this
Class A-1 Note outstanding on the preceding Payment Date (after giving effect to
all payments of principal made on the preceding Payment Date), subject to
certain limitations contained in Section 3.1 of the Indenture. Interest on this
Class A-1 Note will accrue for each Payment Date from and including the previous
Payment Date (or, in the case of the initial Payment Date or if no interest has
been paid, from the Closing Date) to but excluding such Payment Date. Interest
will be computed on the basis of actual days elapsed and a 360-day year. Such
principal of and interest on this Class A-1 Note shall be paid in the manner
specified on the reverse hereof.
The principal of and interest on this Class A-1 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Issuer with respect to this Class A-1 Note shall be applied first to
interest due and payable on this Class A-1 Note as provided above and then to
the unpaid principal of this Class A-1 Note.
Reference is made to the further provisions of this Class A-1 Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Class A-1 Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Class
A-1 Note shall not be entitled to any benefit under the Indenture referred to on
the reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
Date: September [ ], 1999
CARMAX AUTO OWNER TRUST 1999-1,
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement
By: ___________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: September [ ], 1999
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By: ___________________________
Authorized Officer
[REVERSE OF CLASS A-1 NOTE]
This Class A-1 Note is one of a duly authorized issue of Notes of the
Issuer, designated as its [ ]% Class A-1 Asset- Backed Notes, which, together
with the [ ]% Class A-2 Asset-Backed Notes, the [ ]% Class A-3 Asset-Backed
Notes and the [ ]% Class A-4 Asset-Backed Notes (collectively, the "Notes"), are
issued under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Class A-1 Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month or, if any such day is not a Business Day, the next succeeding
Business Day, commencing [ ] 15, 1999.
As described above, the entire unpaid principal amount of this Class
A-1 Note shall be due and payable on the earlier of the Class A-1 Final Payment
Date and the Redemption Date, if any, pursuant to Section 10.1(a) or (b) of the
Indenture. In addition, the unpaid principal amount of this Class A-1 Note may
be redeemed in whole but not in part on the Redemption Date, if any, pursuant to
Section 10.1(c) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and (i) the
Insurer (if no Insurer Default shall have occurred and be continuing) or (ii)
(if an Insurer Default shall have occurred and be continuing) the Indenture
Trustee or the Holders of the Notes representing not less than 66 2/3% of the
Note Balance have declared the Notes to be immediately due and payable in the
manner provided in Section 5.2 of the Indenture. All principal payments on the
Class A-1 Notes shall be made pro rata to the Holders entitled thereto.
Payments of interest on this Class A-1 Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Class A-1 Note, shall be made by check mailed to the
Person whose name appears as the Registered Holder of this Class A-1 Note (or
one or more Predecessor Notes) on the Note Register as of the close of business
on each Record Date, except that with respect to Class A-1 Notes registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co. ), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Such
checks shall be mailed to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Class A-1 Note be submitted for notation of payment.
Any reduction in the principal amount of this Class A-1 Note (or any one or more
Predecessor Notes) effected by any payments made on any Payment Date shall be
binding upon all future Holders of this Class A-1 Note and of any Class A-1 Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Class A-1 Note on a Payment Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Registered Holder hereof as of the Record Date preceding such Payment
Date by notice mailed or transmitted by facsimile prior to such Payment Date,
and the amount then due and payable shall be payable only upon presentation and
surrender of this Class A-1 Note at the Indenture Trustee's Corporate Trust
Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in New York, New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed, in whole but
not in part, in the manner and to the extent described in the Indenture and the
Sale and Servicing Agreement.
As provided in the Indenture, and subject to certain limitations set
forth therein, the transfer of this Class A-1 Note may be registered on the Note
Register upon surrender of this Class A-1 Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, and thereupon one or more new Class A-1 Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Class A-1 Note, but the transferor
may be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee,
each in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee, each in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture Trustee
or the Owner Trustee, each in its individual capacity, except as any such Person
may have expressly agreed and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller, or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Transaction Documents.
The Issuer has entered into the Indenture and this Class A-1 Note is
issued with the intention that, for federal, state and local income, and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by its acceptance of a Note (and
each Note Owner by its acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Class A-1 Note, the Issuer, the Indenture Trustee and any agent of the Issuer or
the Indenture Trustee may treat the Person in whose name this Class A-1 Note (as
of the day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Class A-1 Note be overdue, and none of the Issuer, the Indenture Trustee or
any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer and the Indenture Trustee with the consent of the Insurer (if
no Insurer Default shall have occurred and be continuing) and the Holders of
Notes representing not less than 51% of the Note Balance, voting as a group. The
Indenture also contains provisions permitting the Insurer (if no Insurer Default
shall have occurred and be continuing) or the Holders of Notes representing not
less than 51% of the Note Balance, with the consent of the Insurer (if no
Insurer Default shall have occurred and be continuing), on behalf of the Holders
of all the Notes, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Insurer or the Holder of this
Class A-1 Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Class A-1 Note and
of any Class A-1 Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Class A-1 Note. The Indenture also permits the Issuer
and the Indenture Trustee to amend or waive certain terms and conditions set
forth in the Indenture without the consent of Holders of any Notes but with the
consent of the Insurer (if no Insurer Default shall have occurred and be
continuing).
The term "Issuer", as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Class A-1 Note and the Indenture shall be governed by, and
construed in accordance with the laws of the State of New York, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture, and no provision of this Note or
of the Indenture, shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Transaction Documents, none of Bankers Trust Company, in its
individual capacity, First Union Trust Company, National Association, in its
individual capacity, any owner of a beneficial interest in the Issuer, or any of
their respective partners, beneficiaries, agents, officers, directors, employees
or successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal or of interest on this Class
A-1 Note or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The Holder of this
Note, by his acceptance hereof, agrees that, except as expressly provided in the
Transaction Documents, in the case of an Event of Default under the Indenture,
the Holder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Class A-1 Note.
ASSIGNMENT
Social Security or taxpayer I. D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________, attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated:
-------------------------*/
Signature Guaranteed:
-------------------------*/
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar.
EXHIBIT A-2
Form of Class A-2 Note
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $[ ]
No. R-[ ] CUSIP NO. [ ]
CARMAX AUTO OWNER TRUST 1999-1
[ ]% CLASS A-2 ASSET-BACKED NOTES
CarMax Auto Owner Trust 1999-1, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co. , or its
registered assigns, the principal sum of [ ] DOLLARS payable on each Payment
Date in the aggregate amount, if any, payable from the Note Payment Account in
respect of principal on the Class A-2 Notes pursuant to Section 2.8 of the
Indenture dated as of September [ ], 1999 (as amended, supplemented or otherwise
modified and in effect from time to time, the "Indenture"), between the Issuer
and Bankers Trust Company, a New York banking corporation, as Indenture Trustee
(in such capacity the "Indenture Trustee"); provided, however, that if not paid
prior to such date, the entire unpaid principal amount of this Class A-2 Note
shall be due and payable on the earlier of the [ ] Payment Date (the "Class A-2
Final Payment Date") and the Redemption Date, if any, pursuant to Section
10.1(a) or (b) of the Indenture. In addition, the unpaid principal amount of
this Class A-2 Note may be redeemed in whole but not in part on the Redemption
Date, if any, pursuant to Section 10.1(c) of the Indenture. Capitalized terms
used but not defined herein are defined in Article I of the Indenture, which
also contains rules as to construction that shall be applicable herein.
The Issuer shall pay interest on this Class A-2 Note at the rate per
annum shown above on each Payment Date until the principal of this Class A-2
Note is paid or made available for payment, on the principal amount of this
Class A-2 Note outstanding on the preceding Payment Date (after giving effect to
all payments of principal made on the preceding Payment Date), subject to
certain limitations contained in Section 3.1 of the Indenture. Interest on this
Class A-2 Note will accrue for each Payment Date from and including the 15th day
of the calendar month preceding each Payment Date (or, in the case of the
initial Payment Date or if no interest has been paid, from the Closing Date) to
but excluding the 15th day of the following calendar month. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. Such principal
of and interest on this Class A-2 Note shall be paid in the manner specified on
the reverse hereof.
The principal of and interest on this Class A-2 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Issuer with respect to this Class A-2 Note shall be applied first to
interest due and payable on this Class A-2 Note as provided above and then to
the unpaid principal of this Class A-2 Note.
Reference is made to the further provisions of this Class A-2 Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Class A-2 Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Class
A-2 Note shall not be entitled to any benefit under the Indenture referred to on
the reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
Date: September [ ], 1999
CARMAX AUTO OWNER TRUST 1999-1,
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement
By: ___________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: September [ ], 1999
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By: ___________________________
Authorized Officer
[REVERSE OF CLASS A-2 NOTE]
This Class A-2 Note is one of a duly authorized issue of Notes of the
Issuer, designated as its [ ]% Class A-2 Asset- Backed Notes, which, together
with the [ ]% Class A-1 Asset-Backed Notes, the [ ]% Class A-3 Asset-Backed
Notes and the [ ]% Class A-4 Asset-Backed Notes (collectively, the "Notes"), are
issued under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Class A-2 Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month or, if any such day is not a Business Day, the next succeeding
Business Day, commencing [ ] 15, 1999.
As described above, the entire unpaid principal amount of this Class
A-2 Note shall be due and payable on the earlier of the Class A-2 Final Payment
Date and the Redemption Date, if any, pursuant to Section 10.1(a) or (b) of the
Indenture. In addition, the unpaid principal amount of this Class A-2 Note may
be redeemed in whole but not in part on the Redemption Date, if any, pursuant to
Section 10.1(c) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and (i) the
Insurer (if no Insurer Default shall have occurred and be continuing) or (ii)
(if an Insurer Default shall have occurred and be continuing) the Indenture
Trustee or the Holders of the Notes representing not less than 66 2/3% of the
Note Balance have declared the Notes to be immediately due and payable in the
manner provided in Section 5.2 of the Indenture. All principal payments on the
Class A-2 Notes shall be made pro rata to the Holders entitled thereto.
Payments of interest on this Class A-2 Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Class A-2 Note, shall be made by check mailed to the
Person whose name appears as the Registered Holder of this Class A-2 Note (or
one or more Predecessor Notes) on the Note Register as of the close of business
on each Record Date, except that with respect to Class A-2 Notes registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co. ), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Such
checks shall be mailed to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Class A-2 Note be submitted for notation of payment.
Any reduction in the principal amount of this Class A-2 Note (or any one or more
Predecessor Notes) effected by any payments made on any Payment Date shall be
binding upon all future Holders of this Class A-2 Note and of any Class A-2 Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Class A-2 Note on a Payment Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Registered Holder hereof as of the Record Date preceding such Payment
Date by notice mailed or transmitted by facsimile prior to such Payment Date,
and the amount then due and payable shall be payable only upon presentation and
surrender of this Class A-2 Note at the Indenture Trustee's Corporate Trust
Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in New York, New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed, in whole but
not in part, in the manner and to the extent described in the Indenture and the
Sale and Servicing Agreement.
As provided in the Indenture, and subject to certain limitations set
forth therein, the transfer of this Class A-2 Note may be registered on the Note
Register upon surrender of this Class A-2 Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, and thereupon one or more new Class A-2 Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Class A-2 Note, but the transferor
may be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee,
each in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee, each in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture Trustee
or the Owner Trustee, each in its individual capacity, except as any such Person
may have expressly agreed and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller, or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Transaction Documents.
The Issuer has entered into the Indenture and this Class A-2 Note is
issued with the intention that, for federal, state and local income, and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by its acceptance of a Note (and
each Note Owner by its acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Class A-2 Note, the Issuer, the Indenture Trustee and any agent of the Issuer or
the Indenture Trustee may treat the Person in whose name this Class A-2 Note (as
of the day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Class A-2 Note be overdue, and none of the Issuer, the Indenture Trustee or
any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer and the Indenture Trustee with the consent of the Insurer (if
no Insurer Default shall have occurred and be continuing) and the Holders of
Notes representing not less than 51% of the Note Balance, voting as a group. The
Indenture also contains provisions permitting the Insurer (if no Insurer Default
shall have occurred and be continuing) or the Holders of Notes representing not
less than 51% of the Note Balance, with the consent of the Insurer (if no
Insurer Default shall have occurred and be continuing), on behalf of the Holders
of all the Notes, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Insurer or the Holder of this
Class A-2 Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Class A-2 Note and
of any Class A-2 Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Class A-2 Note. The Indenture also permits the Issuer
and the Indenture Trustee to amend or waive certain terms and conditions set
forth in the Indenture without the consent of Holders of any Notes but with the
consent of the Insurer (if no Insurer Default shall have occurred and be
continuing).
The term "Issuer", as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Class A-2 Note and the Indenture shall be governed by, and
construed in accordance with the laws of the State of New York, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture, and no provision of this Note or
of the Indenture, shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Transaction Documents, none of Bankers Trust Company, in its
individual capacity, First Union Trust Company, National Association, in its
individual capacity, any owner of a beneficial interest in the Issuer, or any of
their respective partners, beneficiaries, agents, officers, directors, employees
or successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal or of interest on this Class
A-2 Note or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The Holder of this
Note, by his acceptance hereof, agrees that, except as expressly provided in the
Transaction Documents, in the case of an Event of Default under the Indenture,
the Holder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Class A-2 Note.
ASSIGNMENT
Social Security or taxpayer I. D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________, attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated:
-----------------------------*/
Signature Guaranteed:
-----------------------------*/
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar.
EXHIBIT A-3
Form of Class A-3 Note
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $[ ]
No. R-[ ] CUSIP NO. [ ]
CARMAX AUTO OWNER TRUST 1999-1
[ ]% CLASS A-3 ASSET-BACKED NOTES
CarMax Auto Owner Trust 1999-1, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or its
registered assigns, the principal sum of [ ] DOLLARS payable on each Payment
Date in the aggregate amount, if any, payable from the Note Payment Account in
respect of principal on the Class A-3 Notes pursuant to Section 2.8 of the
Indenture dated as of September [ ], 1999 (as amended, supplemented or otherwise
modified and in effect from time to time, the "Indenture"), between the Issuer
and Bankers Trust Company, a New York banking corporation, as Indenture Trustee
(in such capacity the "Indenture Trustee"); provided, however, that if not paid
prior to such date, the entire unpaid principal amount of this Class A-3 Note
shall be due and payable on the earlier of the [ ] Payment Date (the "Class A-3
Final Payment Date") and the Redemption Date, if any, pursuant to Section
10.1(a) or (b) of the Indenture. In addition, the unpaid principal amount of
this Class A-3 Note may be redeemed in whole but not in part on the Redemption
Date, if any, pursuant to Section 10.1(c) of the Indenture. Capitalized terms
used but not defined herein are defined in Article I of the Indenture, which
also contains rules as to construction that shall be applicable herein.
The Issuer shall pay interest on this Class A-3 Note at the rate per
annum shown above on each Payment Date until the principal of this Class A-3
Note is paid or made available for payment, on the principal amount of this
Class A-3 Note outstanding on the preceding Payment Date (after giving effect to
all payments of principal made on the preceding Payment Date), subject to
certain limitations contained in Section 3.1 of the Indenture. Interest on this
Class A-3 Note will accrue for each Payment Date from and including the 15th day
of the calendar month preceding each Payment Date (or, in the case of the
initial Payment Date or if no interest has been paid, from the Closing Date) to
but excluding the 15th day of the following calendar month. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. Such principal
of and interest on this Class A-3 Note shall be paid in the manner specified on
the reverse hereof.
The principal of and interest on this Class A-3 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Issuer with respect to this Class A-3 Note shall be applied first to
interest due and payable on this Class A-3 Note as provided above and then to
the unpaid principal of this Class A-3 Note.
Reference is made to the further provisions of this Class A-3 Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Class A-3 Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Class
A-3 Note shall not be entitled to any benefit under the Indenture referred to on
the reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
Date: September [ ], 1999
CARMAX AUTO OWNER TRUST 1999-1,
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement
By: ___________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: September [ ], 1999
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By: ___________________________
Authorized Officer
[REVERSE OF CLASS A-3 NOTE]
This Class A-3 Note is one of a duly authorized issue of Notes of the
Issuer, designated as its [ ]% Class A-3 Asset- Backed Notes, which, together
with the [ ]% Class A-1 Asset-Backed Notes, the [ ]% Class A-2 Asset-Backed
Notes and the [ ]% Class A-4 Asset-Backed Notes (collectively, the "Notes"), are
issued under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Class A-3 Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-3 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month or, if any such day is not a Business Day, the next succeeding
Business Day, commencing [ ], 1999.
As described above, the entire unpaid principal amount of this Class
A-3 Note shall be due and payable on the earlier of the Class A-3 Final Payment
Date and the Redemption Date, if any, pursuant to Section 10.1(a) or (b) of the
Indenture. In addition, the unpaid principal amount of this Class A-3 Note may
be redeemed in whole but not in part on the Redemption Date, if any, pursuant to
Section 10.1(c) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and (i) the
Insurer (if no Insurer Default shall have occurred and be continuing) or (ii)
(if an Insurer Default shall have occurred and be continuing) the Indenture
Trustee or the Holders of the Notes representing not less than 66 2/3% of the
Note Balance have declared the Notes to be immediately due and payable in the
manner provided in Section 5.2 of the Indenture. All principal payments on the
Class A-3 Notes shall be made pro rata to the Holders entitled thereto.
Payments of interest on this Class A-3 Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Class A-3 Note, shall be made by check mailed to the
Person whose name appears as the Registered Holder of this Class A-3 Note (or
one or more Predecessor Notes) on the Note Register as of the close of business
on each Record Date, except that with respect to Class A-3 Notes registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co. ), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Such
checks shall be mailed to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Class A-3 Note be submitted for notation of payment.
Any reduction in the principal amount of this Class A-3 Note (or any one or more
Predecessor Notes) effected by any payments made on any Payment Date shall be
binding upon all future Holders of this Class A-3 Note and of any Class A-3 Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Class A-3 Note on a Payment Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Registered Holder hereof as of the Record Date preceding such Payment
Date by notice mailed or transmitted by facsimile prior to such Payment Date,
and the amount then due and payable shall be payable only upon presentation and
surrender of this Class A-3 Note at the Indenture Trustee's Corporate Trust
Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in New York, New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-3 Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed, in whole but
not in part, in the manner and to the extent described in the Indenture and the
Sale and Servicing Agreement.
As provided in the Indenture, and subject to certain limitations set
forth therein, the transfer of this Class A-3 Note may be registered on the Note
Register upon surrender of this Class A-3 Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, and thereupon one or more new Class A-3 Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Class A-3 Note, but the transferor
may be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee,
each in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee, each in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture Trustee
or the Owner Trustee, each in its individual capacity, except as any such Person
may have expressly agreed and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller, or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Transaction Documents.
The Issuer has entered into the Indenture and this Class A-3 Note is
issued with the intention that, for federal, state and local income, and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by its acceptance of a Note (and
each Note Owner by its acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Class A-3 Note, the Issuer, the Indenture Trustee and any agent of the Issuer or
the Indenture Trustee may treat the Person in whose name this Class A-3 Note (as
of the day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Class A-3 Note be overdue, and none of the Issuer, the Indenture Trustee or
any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer and the Indenture Trustee with the consent of the Insurer (if
no Insurer Default shall have occurred and be continuing) and the Holders of
Notes representing not less than 51% of the Note Balance, voting as a group. The
Indenture also contains provisions permitting the Insurer (if no Insurer Default
shall have occurred and be continuing) or the Holders of Notes representing not
less than 51% of the Note Balance, with the consent of the Insurer (if no
Insurer Default shall have occurred and be continuing), on behalf of the Holders
of all the Notes, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Insurer or the Holder of this
Class A-3 Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Class A-3 Note and
of any Class A-3 Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Class A-3 Note. The Indenture also permits the Issuer
and the Indenture Trustee to amend or waive certain terms and conditions set
forth in the Indenture without the consent of Holders of any Notes but with the
consent of the Insurer (if no Insurer Default shall have occurred and be
continuing).
The term "Issuer", as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Class A-3 Note and the Indenture shall be governed by, and
construed in accordance with the laws of the State of New York, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture, and no provision of this Note or
of the Indenture, shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Transaction Documents, none of Bankers Trust Company, in its
individual capacity, First Union Trust Company, National Association, in its
individual capacity, any owner of a beneficial interest in the Issuer, or any of
their respective partners, beneficiaries, agents, officers, directors, employees
or successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal or of interest on this Class
A-3 Note or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The Holder of this
Note, by his acceptance hereof, agrees that, except as expressly provided in the
Transaction Documents, in the case of an Event of Default under the Indenture,
the Holder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Class A-3 Note.
ASSIGNMENT
Social Security or taxpayer I. D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________, attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated:
-----------------------------*/
Signature Guaranteed:
-----------------------------*/
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar.
EXHIBIT A-4
Form of Class A-4 Note
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $[ ]
No. R-[ ] CUSIP NO. [ ]
CARMAX AUTO OWNER TRUST 1999-1
[ ]% CLASS A-4 ASSET BACKED NOTES
CarMax Auto Owner Trust 1999-1, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or its
registered assigns, the principal sum of [ ] DOLLARS payable on each Payment
Date in the aggregate amount, if any, payable from the Note Payment Account in
respect of principal on the Class A-4 Notes pursuant to Section 2.8 of the
Indenture dated as of September [ ], 1999 (as amended, supplemented or otherwise
modified and in effect from time to time, the "Indenture"), between the Issuer
and Bankers Trust Company, a New York banking corporation, as Indenture Trustee
(in such capacity the "Indenture Trustee"); provided, however, that if not paid
prior to such date, the entire unpaid principal amount of this Class A-4 Note
shall be due and payable on the earlier of the [ ] Payment Date (the "Class A-4
Final Payment Date") and the Redemption Date, if any, pursuant to Section
10.1(a) or (b) of the Indenture. In addition, the unpaid principal amount of
this Class A-4 Note may be redeemed in whole but not in part on the Redemption
Date, if any, pursuant to Section 10.1(c) of the Indenture. Capitalized terms
used but not defined herein are defined in Article I of the Indenture, which
also contains rules as to construction that shall be applicable herein.
The Issuer shall pay interest on this Class A-4 Note at the rate per
annum shown above on each Payment Date until the principal of this Class A-4
Note is paid or made available for payment, on the principal amount of this
Class A-4 Note outstanding on the preceding Payment Date (after giving effect to
all payments of principal made on the preceding Payment Date), subject to
certain limitations contained in Section 3.1 of the Indenture. Interest on this
Class A-4 Note will accrue for each Payment Date from and including the 15th day
of the calendar month preceding each Payment Date (or, in the case of the
initial Payment Date or if no interest has been paid, from the Closing Date) to
but excluding the 15th day of the following calendar month. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. Such principal
of and interest on this Class A-4 Note shall be paid in the manner specified on
the reverse hereof.
The principal of and interest on this Class A-4 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Issuer with respect to this Class A-4 Note shall be applied first to
interest due and payable on this Class A-4 Note as provided above and then to
the unpaid principal of this Class A-4 Note.
Reference is made to the further provisions of this Class A-4 Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Class A-4 Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Class
A-4 Note shall not be entitled to any benefit under the Indenture referred to on
the reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
Date: September [ ], 1999
CARMAX AUTO OWNER TRUST 1999-1,
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement
By: ___________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: September [ ], 1999
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By: ___________________________
Authorized Officer
[REVERSE OF CLASS A-4 NOTE]
This Class A-4 Note is one of a duly authorized issue of Notes of the
Issuer, designated as its [ ]% Class A-4 Asset- Backed Notes, which, together
with the [ ]% Class A-1 Asset-Backed Notes, the [ ]% Class A-2 Asset-Backed
Notes and the [ ]% Class A-3 Asset-Backed Notes (collectively, the "Notes"), are
issued under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Class A-4 Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-4 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month or, if any such day is not a Business Day, the next succeeding
Business Day, commencing [ ] 15, 1999.
As described above, the entire unpaid principal amount of this Class
A-4 Note shall be due and payable on the earlier of the Class A-4 Final Payment
Date and the Redemption Date, if any, pursuant to Section 10.1(a) or (b) of the
Indenture. In addition, the unpaid principal amount of this Class A-4 Note may
be redeemed in whole but not in part on the Redemption Date, if any, pursuant to
Section 10.1(c) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and (i) the
Insurer (if no Insurer Default shall have occurred and be continuing) or (ii)
(if an Insurer Default shall have occurred and be continuing) the Indenture
Trustee or the Holders of the Notes representing not less than 66 2/3% of the
Note Balance have declared the Notes to be immediately due and payable in the
manner provided in Section 5.2 of the Indenture. All principal payments on the
Class A-4 Notes shall be made pro rata to the Holders entitled thereto.
Payments of interest on this Class A-4 Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Class A-4 Note, shall be made by check mailed to the
Person whose name appears as the Registered Holder of this Class A-4 Note (or
one or more Predecessor Notes) on the Note Register as of the close of business
on each Record Date, except that with respect to Class A-4 Notes registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co. ), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Such
checks shall be mailed to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Class A-4 Note be submitted for notation of payment.
Any reduction in the principal amount of this Class A-4 Note (or any one or more
Predecessor Notes) effected by any payments made on any Payment Date shall be
binding upon all future Holders of this Class A-4 Note and of any Class A-4 Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Class A-4 Note on a Payment Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Registered Holder hereof as of the Record Date preceding such Payment
Date by notice mailed or transmitted by facsimile prior to such Payment Date,
and the amount then due and payable shall be payable only upon presentation and
surrender of this Class A-4 Note at the Indenture Trustee's Corporate Trust
Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in New York, New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-4 Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed, in whole but
not in part, in the manner and to the extent described in the Indenture and the
Sale and Servicing Agreement.
As provided in the Indenture, and subject to certain limitations set
forth therein, the transfer of this Class A-4 Note may be registered on the Note
Register upon surrender of this Class A-4 Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, and thereupon one or more new Class A-4 Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Class A-4 Note, but the transferor
may be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee,
each in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee, each in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture Trustee
or the Owner Trustee, each in its individual capacity, except as any such Person
may have expressly agreed and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller, or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Transaction Documents.
The Issuer has entered into the Indenture and this Class A-4 Note is
issued with the intention that, for federal, state and local income, and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by its acceptance of a Note (and
each Note Owner by its acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Class A-4 Note, the Issuer, the Indenture Trustee and any agent of the Issuer or
the Indenture Trustee may treat the Person in whose name this Class A-4 Note (as
of the day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Class A-4 Note be overdue, and none of the Issuer, the Indenture Trustee or
any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer and the Indenture Trustee with the consent of the Insurer (if
no Insurer Default shall have occurred and be continuing) and the Holders of
Notes representing not less than 51% of the Note Balance, voting as a group. The
Indenture also contains provisions permitting the Insurer (if no Insurer Default
shall have occurred and be continuing) or the Holders of Notes representing not
less than 51% of the Note Balance, with the consent of the Insurer (if no
Insurer Default shall have occurred and be continuing), on behalf of the Holders
of all the Notes, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Insurer or the Holder of this
Class A-4 Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Class A-4 Note and
of any Class A-4 Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Class A-4 Note. The Indenture also permits the Issuer
and the Indenture Trustee to amend or waive certain terms and conditions set
forth in the Indenture without the consent of Holders of any Notes but with the
consent of the Insurer (if no Insurer Default shall have occurred and be
continuing).
The term "Issuer", as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Class A-4 Note and the Indenture shall be governed by, and
construed in accordance with the laws of the State of New York, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture, and no provision of this Note or
of the Indenture, shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Transaction Documents, none of Bankers Trust Company, in its
individual capacity, First Union Trust Company, National Association, in its
individual capacity, any owner of a beneficial interest in the Issuer, or any of
their respective partners, beneficiaries, agents, officers, directors, employees
or successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal or of interest on this Class
A-4 Note or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The Holder of this
Note, by his acceptance hereof, agrees that, except as expressly provided in the
Transaction Documents, in the case of an Event of Default under the Indenture,
the Holder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Class A-4 Note.
ASSIGNMENT
Social Security or taxpayer I. D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________, attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated:
------------------------------*/
Signature Guaranteed:
------------------------------*/
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar.