EXHIBIT 4.1
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CARMAX AUTO RECEIVABLES LLC,
as Depositor,
and
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
as Owner Trustee
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TRUST AGREEMENT
Dated as of September [__], 1999
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions..................................................1
SECTION 1.2. Other Definitional Provisions................................4
ARTICLE II
ORGANIZATION OF THE TRUST
SECTION 2.1. Name.........................................................5
SECTION 2.2. Office.......................................................5
SECTION 2.3. Purposes and Powers..........................................5
SECTION 2.4. Appointment of Owner Trustee.................................6
SECTION 2.5. Initial Capital Contribution of Owner Trust
Estate.................................................6
SECTION 2.6. Declaration of Trust.........................................7
SECTION 2.7. [RESERVED]...................................................7
SECTION 2.8. Title to Trust Property......................................7
SECTION 2.9. Situs of Trust...............................................7
SECTION 2.10. Representations and Warranties of the
Depositor..............................................8
SECTION 2.11. Federal Income Tax Matters...................................9
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Ownership...........................................10
SECTION 3.2. The Certificates............................................10
SECTION 3.3. Authentication of Certificates..............................11
SECTION 3.4. Registration of Certificates; Transfer and
Exchange of Certificates..............................11
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen
Certificates..........................................13
SECTION 3.6. Persons Deemed Owners.......................................14
SECTION 3.7. Access to List of Certificateholders' Names
and Addresses.........................................15
SECTION 3.8. Maintenance of Office or Agency.............................15
SECTION 3.9. Appointment of Paying Agent.................................15
SECTION 3.10. Book-Entry Certificates.....................................16
SECTION 3.11. Notices to Clearing Agency..................................17
SECTION 3.12. Definitive Certificates.....................................17
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Certificateholders with
Respect to Certain Matters............................19
SECTION 4.2. Action by Certificateholders with Respect
to Certain Matters....................................20
SECTION 4.3. Action by Certificateholders with Respect
to Bankruptcy.........................................20
SECTION 4.4. Restrictions on Certificateholders' Power...................20
SECTION 4.5. Majority Control............................................20
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate Payment
Account...............................................21
SECTION 5.2. Application of Trust Funds..................................21
SECTION 5.3. Method of Payment...........................................22
SECTION 5.4. No Segregation of Monies; No Interest.......................22
SECTION 5.5. Accounting and Reports to the Noteholders,
Certificateholders, the Internal
Revenue Service and Others............................22
SECTION 5.6. Signature on Returns; Tax Matters Partner...................23
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority...........................................24
SECTION 6.2. General Duties..............................................24
SECTION 6.3. Action upon Instruction.....................................24
SECTION 6.4. No Duties Except as Specified in this
Agreement or in Instructions..........................26
SECTION 6.5. No Action Except Under Specified Documents
or Instructions.......................................26
SECTION 6.6. Restrictions................................................26
ARTICLE VII
REGARDING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties.............................27
SECTION 7.2. Furnishing of Documents.....................................28
SECTION 7.3. Representations and Warranties..............................28
SECTION 7.4. Reliance; Advice of Counsel.................................29
SECTION 7.5. Not Acting in Individual Capacity...........................30
SECTION 7.6. Owner Trustee Not Liable for Certificates
or Contracts..........................................30
SECTION 7.7. Owner Trustee May Own Certificates and Notes................30
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and Expenses...........................31
SECTION 8.2. Indemnification.............................................31
SECTION 8.3. Payments to the Owner Trustee...............................31
ARTICLE IX
TERMINATION
SECTION 9.1. Termination of Trust Agreement..............................32
SECTION 9.2. Notification Regarding Bankruptcy of the
Depositor.............................................33
SECTION 9.3. Prepayment of the Certificates..............................33
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner Trustee..................35
SECTION 10.2. Resignation or Removal of Owner Trustee.....................35
SECTION 10.3. Successor Owner Trustee.....................................36
SECTION 10.4. Merger or Consolidation of Owner Trustee....................37
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee...............37
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Supplements and Amendments..................................39
SECTION 11.2. No Legal Title to Owner Trust Estate
in Certificateholders.................................41
SECTION 11.3. Limitation on Rights of Others..............................41
SECTION 11.4. Notices.....................................................41
SECTION 11.5. Severability................................................42
SECTION 11.6. Separate Counterparts.......................................42
SECTION 11.7. Successors and Assigns......................................42
SECTION 11.8. Covenants of the Depositor..................................42
SECTION 11.9. No Petition.................................................42
SECTION 11.10. No Recourse.................................................43
SECTION 11.11. Headings....................................................43
SECTION 11.12. Governing Law...............................................43
EXHIBITS
Exhibit A Form of Certificate.........................................47
Exhibit B Form of Certificate of Trust................................55
TRUST AGREEMENT, dated as of September [__], 1999 (as amended,
supplemented or otherwise modified and in effect from time to time, this
"Agreement"), between CARMAX AUTO RECEIVABLES LLC, a Virginia limited liability
company, as depositor (the "Depositor"), and FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, a national banking association, as trustee and not in its
individual capacity (in such capacity, the "Owner Trustee").
WHEREAS, the parties hereto intend to create the "CarMax Auto Owner
Trust 1999-1" on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Depositor and the Owner
Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. 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 Agreement.
"Accountants" shall have the meaning specified in Section 5.5.
"Book-Entry Certificates" shall mean a beneficial interest in the
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 3.10.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code section 3801 et seq., as the same may be amended,
supplemented or otherwise modified and in effect from time to time.
"CarMax" shall mean CarMax Auto Superstores, Inc., a Virginia
corporation, and its successors and assigns.
"Certificate" shall mean a physical certificate evidencing the
beneficial interest of a Certificateholder in the property of the Trust,
substantially in the form of Exhibit A attached hereto. Such certificate shall
entitle the Holder thereof to distributions pursuant to this Agreement from
collections and other proceeds in respect of the Owner Trust Estate; provided,
however, that the Owner Trust Estate has been pledged to the Indenture Trustee
to secure payment of the Notes and that the rights of the Certificateholders to
receive distributions on the Certificates are subordinated to the rights of the
Noteholders as described in the Sale and Servicing Agreement and the Indenture.
"Certificate of Trust" shall mean the Certificate of Trust in the form
of Exhibit B filed for the Trust pursuant to Section 3810(a) of the Business
Trust Statute.
"Certificate Owner" shall mean, with respect to any Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate as reflected on the books of the Clearing Agency or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Certificate Payment Account" shall have the meaning specified in
Section 5.1.
"Certificate Register" shall have the meaning specified in Section
3.4.
"Certificate Registrar" shall have the meaning specified in Section
3.4.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean the principal office of the Owner
Trustee at which at any particular time its corporate trust business shall be
administered, which office at date of execution of this Agreement is located at
One ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Corporate Trust Department, or at such other address as the Owner
Trustee may designate from time to time by notice to the Certificateholders and
the Depositor, or the principal corporate trust office of any successor Owner
Trustee at the address designated by such successor Owner Trustee by notice to
the Certificateholders and the Depositor.
"Definitive Certificates" shall have the meaning specified in Section
3.10.
"Depositor" shall mean CarMax Auto Receivables LLC, a Virginia limited
liability company, in its capacity as depositor under this Agreement, and its
successors.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Expenses" shall have the meaning specified in Section 8.2.
"Final Payment Date" shall mean the [____________] Payment Date.
"Holder" or "Certificateholder" shall mean the Person in whose name a
Certificate is registered in the Certificate Register.
"Indemnified Parties" shall have the meaning specified in Section 8.2.
"Indenture" shall mean the Indenture, dated as of September [__],
1999, between the Trust and Bankers Trust Company, a New York banking
corporation, as indenture trustee, as amended, supplemented or otherwise
modified and in effect from time to time.
"Initial Certificate Balance" shall mean $[____________].
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in, to and under the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement.
"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 this Agreement, and any successor Owner Trustee
under this Agreement.
"Paying Agent" shall mean the Owner Trustee or any other Person that
meets the eligibility standards for the Owner Trustee specified in Section 10.1
and is authorized by the Owner Trustee to make distributions from the
Certificate Payment Account, including payment of principal of or interest on
the Certificates, on behalf of the Trust.
"Plan" shall have the meaning specified in Section 3.4.
"Prepayment Date" shall mean the Payment Date specified by the
Servicer pursuant to Section 9.3(a).
"Prepayment Price" shall mean, in the case of a prepayment of
Certificates pursuant to Section 9.3(a), an amount equal to the Certificate
Balance plus accrued but unpaid interest to the date of payment.
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"PTCE 95-60" shall have the meaning specified in Section 3.4.
"Record Date" shall mean, with respect to any Payment Date or
Prepayment Date, the close of business on the Business Day immediately preceding
such Payment Date or Prepayment Date; provided, however, that if Definitive
Certificates have been issued pursuant to Section 3.12, "Record Date" shall
mean, with respect to any Payment Date or Prepayment Date, the last day of the
calendar month preceding such Payment Date or Prepayment Date.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement, dated as of September [__], 1999, by and among the Owner Trustee, the
Seller and the Servicer, as amended, supplemented or otherwise modified and in
effect from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Transfer" shall have the meaning specified in Section 3.2.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. All references herein to
specific provisions of proposed or temporary Treasury Regulations shall include
analogous provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
"Void Transfer" shall have the meaning specified in Section 3.2.
SECTION 1.2. Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined herein
have the meanings assigned to them in the Sale and Servicing Agreement or, if
not defined therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
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(c) As used in this Agreement and in any certificate or other
documents made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
assigned to them under generally accepted accounting principles. To the extent
that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Article, Section and Exhibit
references contained in this Agreement are references to Articles, Sections and
Exhibits in or to this Agreement unless otherwise specified. The term
"including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
ARTICLE II
ORGANIZATION OF THE TRUST
SECTION 2.1. Name. The Trust shall be known as "CarMax Auto Owner
Trust 1999-1," in which name the Owner Trustee may conduct the business of the
Trust, make and execute contracts and other instruments on behalf of the Trust
and ▇▇▇ and be sued.
SECTION 2.2. Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in the
State of Delaware as the Owner Trustee may designate by written notice to the
Certificateholders and the Depositor.
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SECTION 2.3. Purposes and Powers. The purpose of the Trust is, and the
Trust shall have the power and authority, to engage solely in the following
activities:
(i) to issue the Notes pursuant to the Indenture, and the
Certificates pursuant to this Agreement, and to sell the Notes and the
Certificates upon the written order of the Depositor;
(ii) to use the proceeds of the sale of the Notes to fund the
Reserve Account, to pay the organizational, start-up and transactional
expenses of the Trust and to pay the balance to the Depositor pursuant to
the Sale and Servicing Agreement;
(iii) to pay interest on and principal of the Notes and the
Certificates.
(iv) to assign, grant, transfer, pledge, mortgage and convey the
Owner Trust Estate (other than the Certificate Payment Account and the
proceeds thereof) to the Indenture Trustee pursuant to the Indenture;
(v) to enter into and perform its obligations under the
Transaction Documents to which it is to be a party;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Transaction Documents, to
engage in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions to
the Noteholders and the Certificateholders.
The Trust is hereby authorized to engage in the foregoing activities.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the other Transaction Documents.
SECTION 2.4. Appointment of Owner Trustee. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein and in the
Business Trust Statute.
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SECTION 2.5. Initial Capital Contribution of Owner Trust Estate. As of
September [__], 1999, the Depositor sold, assigned, transferred, conveyed and
set over to the Owner Trustee the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of such date, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Certificate Payment Account. The Depositor shall
pay organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee.
SECTION 2.6. Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Certificateholders,
subject to the obligations of the Trust under the Transaction Documents. It is
the intention of the parties hereto that (i) the Trust constitute a business
trust under the Business Trust Statute and that this Agreement constitute the
governing instrument of such business trust and (ii) solely for income and
franchise tax purposes, the Trust shall be treated (A) if it has one beneficial
owner, as a non-entity and (B) if it has more than one beneficial owner, as a
partnership, with the assets of the partnership being the Contracts and other
assets held by the Trust, the partners of the partnership being the
Certificateholders and the Notes constituting indebtedness of the partnership.
Unless otherwise required by the appropriate tax authorities, the Trust shall
file or cause to be filed annual or other necessary returns, reports and other
forms consistent with the characterization of the Trust either as a nonentity or
as a partnership for such tax purposes. Effective as of the date hereof, the
Owner Trustee shall have all rights, powers and duties set forth herein and in
the Business Trust Statute with respect to accomplishing the purposes of the
Trust. The Owner Trustee has filed the Certificate of Trust with the Secretary
of State.
SECTION 2.7. [RESERVED]
SECTION 2.8. Title to Trust Property. Legal title to the entirety of
the Owner Trust Estate shall be vested at all times in the Trust as a separate
legal entity, except where applicable law in any jurisdiction requires title to
any part of the Owner Trust Estate to be vested in a trustee or trustees, in
which case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
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SECTION 2.9. Situs of Trust. The Trust shall be located and
administered in the State of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the State of Delaware or the
State of New York. The Trust shall not have any employees in any state other
than the State of Delaware; provided, however, that nothing herein shall
restrict or prohibit the Owner Trustee from having employees within or without
the State of Delaware. Payments will be received by the Trust only in the State
of Delaware or the State of New York, and payments will be made by the Trust
only from the State of Delaware or the State of New York. The only office of the
Trust will be at the Corporate Trust Office in the State of Delaware.
SECTION 2.10. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Owner Trustee that:
(i) the Depositor is duly organized and validly existing as a
limited liability company in good standing under the laws of the
Commonwealth of Virginia, with power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is presently conducted;
(ii) the Depositor is duly qualified to do business as a foreign
limited liability company in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease
of property or the conduct of its business requires such qualifications;
(iii) the Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms, and the Depositor has
full power and authority to sell and assign the property to be sold and
assigned to, and deposited with, the Trust, the Depositor has duly
authorized such sale and assignment and deposit to the Trust by all
necessary limited liability company action and the execution, delivery and
performance of this Agreement has been duly authorized by the Depositor by
all necessary limited liability company action;
(iv) the consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under, the
articles of organization or operating agreement of the Depositor, or any
indenture, agreement or other instrument to which the Depositor is a party
or by which it is bound do not result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to the
Transaction Documents) and do not violate any law or, to the knowledge of
the Depositor, any order, rule or regulation applicable to the Depositor of
any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the
Depositor or its properties;
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(v) there are no proceedings or investigations pending or, to the
knowledge of the Depositor, threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties (i) asserting the
invalidity of this Agreement, the Indenture, any of the other Transaction
Documents, the Notes or the Certificates, (ii) seeking to prevent the
issuance of the Notes or the Certificates or the consummation of any of the
transactions contemplated by this Agreement, the Indenture or any of the
other Transaction Documents, (iii) seeking any determination or ruling that
might materially and adversely affect the performance by the Depositor of
its obligations under, or the validity or enforceability of, this Agreement
or (iv) which might adversely affect the federal income tax attributes, or
Applicable Tax State franchise or income tax attributes, of the Notes; and
(vi) the representations and warranties of the Depositor in
Section 3.1 of the Purchase Agreement are true and correct.
SECTION 2.11. Federal Income Tax Matters. The Certificateholders
acknowledge that it is their intent and that they understand it is the intent of
the Depositor and the Servicer that, for purposes of federal income, state and
local income and franchise tax and any other income taxes, the Trust will be
treated either as a "nonentity" under Treasury Regulation section 301.7701-3 or
as a partnership, and the Certificateholders (including the Depositor) will be
treated as partners in that partnership. The Depositor and the
Certificateholders by acceptance of a Certificate agree to such treatment and
agree to take no action inconsistent with such treatment. For each taxable year
(or portion thereof), other than periods in which there is only one
Certificateholder:
(i) amounts paid to the Depositor pursuant to Sections 4.7(a) and
4.7(d) of the Sale and Servicing Agreement for such year (or other period)
shall be treated as a guaranteed payment within the meaning of Section
707(c) of the Code; and
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(ii) all remaining net income or net loss, as the case may be, of
the Trust for such year (or other period) as determined for federal income
tax purposes (and each item of income, gain, credit, loss or deduction
entering into the computation thereof) shall be allocated to the
Certificateholders pro rata in accordance with the outstanding principal
balances of their respective Certificates. The Depositor is authorized to
modify the allocations in this paragraph if necessary or appropriate, in
its sole discretion, for the allocations to reflect fairly the economic
income, gain or loss to the Depositor or the Certificateholders or as
otherwise required by the Code.
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.5 and until the issuance of
the Certificates, the Depositor shall be the sole beneficiary of the Trust.
SECTION 3.2. The Certificates. The Certificates shall be issued in one
or more registered, definitive, physical certificates, in the form set forth in
Exhibit A, in minimum denominations of at least $1,000 and integral multiples of
$1,000 in excess thereof; provided, however, that a single Certificate may be
issued in a denomination equal to the Initial Certificate Balance less the
aggregate denominations of all other Certificates or a denomination less than
$1,000. No Certificate may be sold, transferred, assigned, participated, pledged
or otherwise disposed of (any such act, a "Transfer") to any Person except in
accordance with the provisions of Section 3.4, and any attempted Transfer in
violation of this section or Section 3.4 shall be null and void (each, a "Void
Transfer"). Notwithstanding the foregoing, following the delivery to the Owner
Trustee of an Opinion of Counsel to the effect that the elimination of
restrictions on transfer will not cause the Trust to be taxable as a corporation
for federal income tax purposes or for purposes of the tax laws of any
Applicable Tax State, this Agreement may be amended to modify or delete transfer
restrictions in accordance with such Opinion of Counsel.
The Certificates may be in printed or typewritten form and shall be
executed on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Owner Trustee. Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefits of this Agreement, notwithstanding
that such individuals or any of them shall have ceased to be so authorized prior
to the authentication and delivery of such Certificates or did not hold such
offices at the date of authentication and delivery of such Certificates.
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If Transfer of the Certificates is permitted pursuant to this Section
3.2 and Section 3.4, a transferee of a Certificate shall become a
Certificateholder, and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder upon such transferee's acceptance
of a Certificate duly registered in such transferee's name pursuant to Section
3.4.
SECTION 3.3. Authentication of Certificates. Concurrently with the
initial sale of the Contracts to the Trust pursuant to the Sale and Servicing
Agreement, the Owner Trustee shall cause the Certificates, in an aggregate
principal amount equal to the Initial Certificate Balance, to be executed on
behalf of the Trust, authenticated and delivered to or upon the written order of
the Depositor, signed by its manager, its president, any vice president, its
secretary or its treasurer, without further limited liability company action by
the Depositor, in authorized denominations. No Certificate shall entitle its
Holder to any benefit under this Agreement, or shall be valid for any purpose,
unless there shall appear on such Certificate a certificate of authentication
substantially in the form set forth in Exhibit A executed by the Owner Trustee
or [____________________], as the Owner Trustee's authenticating agent, by
manual signature, which authentication shall constitute conclusive evidence that
such Certificate shall have been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
SECTION 3.4. Registration of Certificates; Transfer and Exchange of
Certificates.
(a) The Owner Trustee shall cause to be kept, at the office or agency
maintained pursuant to Section 3.8, a register (the "Certificate Register") in
which, subject to such reasonable regulations as it may prescribe, the Owner
Trustee shall provide for the registration of Certificates and the registration
of Transfers of Certificates. The Indenture Trustee initially shall be the
registrar (the "Certificate Registrar") for the purpose of registering
Certificates and Transfers of Certificates as herein provided. Upon any
resignation of any Certificate Registrar, the Owner Trustee shall promptly
appoint a successor or, if it elects not to make such an appointment, assume the
duties of Certificate Registrar.
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(b) No Transfer of a Certificate shall be made unless the Owner
Trustee shall have received a representation from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the Owner
Trustee to the effect that:
(i) such transferee (A) is not an employee benefit plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section
4975 of the Code (a "Plan"), nor a person acting on behalf of a Plan nor
using the assets of a Plan to effect such transfer, and (B) is not an
insurance company purchasing a Certificate with funds contained in an
"insurance company general account" (as defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") as to which
there is a Plan with respect to which the amount of such general account's
reserves and liabilities for the contracts held by or on behalf of such
Plan and all other Plans maintained by the same employer (or affiliate
thereof as defined in Section V(a)(1) of PTCE 95-60) or by the same
employee organization exceed 10% of the total of all reserves and
liabilities of such general account (as such amounts are determined under
Section I(a) of PTCE 95-60) at the date of acquisition; or
(ii) such transferee is a Plan or is an insurance company
purchasing a Certificate with funds contained in an insurance company
general account, having delivered to the Owner Trustee and opinion of
counsel satisfactory to the Owner Trustee, which opinion of counsel shall
not be an expense of either the Owner Trustee or the Trust, addressed to
the Owner Trustee, to the effect that the purchase or holding of such
Certificate will not result in the assets of the Owner Trust Estate being
deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Owner Trustee to
any obligation in addition to those expressly undertaken in this Agreement
or to any liability; and
(iii) such transferee understands that any purported Transfer of
any Certificate (or any interest therein) in contravention of any of the
restrictions and conditions (including any violation of the representations
in paragraphs (i) and (ii)) in this Section 3.4 shall be a Void Transfer,
and the purported transferee in a Void Transfer shall not be recognized by
the Trust or any other Person as a Certificateholder for any purpose.
Notwithstanding anything else to the contrary herein, any purported
Transfer of a Certificate to or on behalf of a Plan or to an insurance company
purchasing with funds from a general account not exempt pursuant to PTCE 95-60
without the delivery to the Owner Trustee of an opinion of counsel satisfactory
to the Owner Trustee as described in paragraph (ii) above shall be a Void
Transfer.
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To the extent permitted under applicable law (including, but not
limited to, ERISA), the Owner Trustee shall be under no liability to any Person
for any registration of transfer of any Certificate that is in fact not
permitted by this Section 3.4(b) or for taking any other action with respect to
such Holder under the provisions of this Agreement or the Sale and Servicing
Agreement so long as the transfer was registered by the Certificate Registrar or
the Owner Trustee in accordance with the foregoing requirements.
(c) Upon surrender for registration of Transfer of any Certificate at
the office or agency of the Owner Trustee to be maintained as provided in
Section 3.8, and upon compliance with any provisions of this Agreement relating
to such Transfer, the Owner Trustee shall execute and the Owner Trustee, or
[____________________], as the Owner Trustee's authenticating agent, shall
authenticate and deliver to the Certificateholder making such surrender, in the
name of the designated transferee or transferees, one or more new Certificates
in any authorized denomination, of a like aggregate principal amount. Each
Certificate presented or surrendered for registration of Transfer or exchange
shall be accompanied by a written instrument of transfer and accompanied by IRS
Form 4224 or W-9 in form satisfactory to the Owner Trustee and the Certificate
Registrar, duly executed by the Certificateholder or his attorney duly
authorized in writing. Each Certificate presented or surrendered for
registration of Transfer or exchange shall be canceled and subsequently disposed
of by the Certificate Registrar in accordance with its customary practice. No
service charge shall be made for any registration of Transfer or exchange of
Certificates, but the Owner Trustee or the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any Transfer or exchange of Certificates.
(d) The provisions of this Section 3.4 and of this Agreement generally
are intended to prevent the Trust from being characterized as a "publicly traded
partnership" within the meaning of Section 7704 of the Code, in reliance on
Treasury Regulation sections 1.7704-1(e) and (h).
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates.
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(a) If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (ii) there is delivered
to the Certificate Registrar and Owner Trustee such security or indemnity as may
be required by them to hold each of the Trust, the Certificate Registrar and the
Owner Trustee harmless, then, in the absence of notice to the Trust, the
Certificate Registrar or the Owner Trustee that such Certificate has been
acquired by a protected purchaser, the Owner Trustee shall execute and the Owner
Trustee, or [____________________], as the Owner Trustee's authenticating agent,
shall authenticate and deliver, in exchange for, or in lieu of, any such
mutilated, destroyed, lost or stolen Certificate, as the case may be, a
replacement Certificate, as the case may be, of like tenor and denomination;
provided, however, that if any such destroyed, lost or stolen Certificate, but
not a mutilated Certificate, shall have become or within seven (7) days of the
Owner 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 prepayment
in whole pursuant to Section 9.3, instead of issuing a replacement Certificate,
the Owner Trustee may pay such destroyed, lost or stolen Certificate when so due
or payable or upon the Prepayment Date without surrender thereof. If, after the
delivery of such replacement Certificate or payment of a destroyed, lost or
stolen Certificate pursuant to the proviso to the preceding sentence, a
protected purchaser of the original Certificate in lieu of which such
replacement Certificate was issued presents for payment such original
Certificate, the Trust and the Owner Trustee shall be entitled to recover such
replacement Certificate (or such payment) from the Person to whom such
replacement Certificate was delivered or any Person taking such replacement
Certificate from such Person to whom such replacement Certificate 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 Trust or the Owner
Trustee in connection therewith.
(b) Upon the issuance of any replacement Certificate under this
Section 3.5, the Trust may require the payment by the Holder of such Certificate
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with such issuance and any other reasonable expenses
(including the fees and expenses of the Owner Trustee) related thereto.
(c) Every replacement Certificate issued pursuant to this Section 3.5
in replacement of any mutilated, destroyed, lost or stolen Certificate shall
constitute an original additional contractual obligation of the Trust, whether
or not the mutilated, destroyed, lost or stolen Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other Certificates duly
issued hereunder.
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(d) The provisions of this Section 3.5 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 Certificates.
SECTION 3.6. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Owner Trustee, the Certificate
Registrar and any Paying Agent may treat the Person in whose name such
Certificate is registered in the Certificate Register (as of the day of
determination) as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 5.2 and for all other purposes whatsoever, and
none of the Owner Trustee, the Certificate Registrar or any Paying Agent shall
be bound by any notice to the contrary.
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer and the Depositor, or to the Indenture Trustee, within fifteen (15)
days after receipt by the Owner Trustee of a written request therefor from the
Servicer, the Depositor or the Indenture Trustee, as the case may be, a list, in
such form as the requesting party may reasonably require, of the names and
addresses of the Certificateholders as of the most recent Record Date. If three
or more Certificateholders or one or more Holders of Certificates evidencing not
less than 25% of the Certificate Balance apply in writing to the Owner Trustee,
and such application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Owner Trustee
shall, within five (5) Business Days after the receipt of such application,
afford such applicants access during normal business hours to the current list
of Certificateholders. Each Certificateholder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Depositor,
the Certificate Registrar or the Owner Trustee accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 3.8. Maintenance of Office or Agency. The Owner Trustee shall
maintain in [the Borough of Manhattan, The City of New York], an office or
offices or agency or agencies where Certificates may be surrendered for
registration of Transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Certificates and the Transaction Documents
may be served. The Owner Trustee shall give prompt written notice to the
Depositor and to the Certificateholders of any change in the location of the
Certificate Registrar or any such office or agency.
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SECTION 3.9. Appointment of Paying Agent. The Paying Agent shall make
distributions to Certificateholders from the Certificate Payment Account
pursuant to Section 5.2 and shall report the amounts of such distributions to
the Owner Trustee. Any Paying Agent shall have the revocable power to withdraw
funds from the Certificate Payment Account for the purpose of making the
distributions referred to above. The Owner Trustee may revoke such power and
remove the Paying Agent if the Owner Trustee determines in its sole discretion
that the Paying Agent shall have failed to perform its obligations under this
Agreement in any material respect. The Paying Agent shall initially be
[____________________], and any co-paying agent chosen by the Owner Trustee.
[____________________] shall be permitted to resign as Paying Agent upon thirty
(30) days' written notice to the Owner Trustee. In the event that
[____________________] shall no longer be the Paying Agent, the Owner Trustee,
with the consent of the Insurer, shall appoint a successor to act as Paying
Agent (which shall be a bank or trust company). The Owner Trustee shall cause
such successor Paying Agent or any additional Paying Agent appointed by the
Owner Trustee to execute and deliver to the Owner Trustee an instrument in which
such successor Paying Agent or additional Paying Agent shall agree with the
Owner Trustee that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be paid to such Certificateholders. The Paying
Agent shall return all unclaimed funds to the Owner Trustee and upon removal of
a Paying Agent such Paying Agent shall also return all funds in its possession
to the Owner Trustee. The provisions of Sections 7.1, 7.3 and 8.1 shall apply to
the Owner Trustee also in its role as Paying Agent, for so long as the Owner
Trustee shall act as Paying Agent and, to the extent applicable, to any other
paying agent appointed hereunder. Any reference in this Agreement to the Paying
Agent shall include any co-paying agent unless the context requires otherwise.
SECTION 3.10. Book-Entry Certificates. The Certificates, upon original
issuance, shall be issued as provided in Section 3.2 representing the Book-Entry
Certificates, to be delivered to The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Trust. The Book-Entry Certificates
shall be registered initially on the Certificate Register in the name of Cede &
Co. , the nominee of the initial Clearing Agency, and no Certificate Owner
thereof shall receive a definitive Certificate representing such Certificate
Owner's interest in such Certificate, except as provided in Section 3.12. Unless
and until definitive, fully registered Certificates (the "Definitive
Certificates") have been issued to such Certificate Owners pursuant to Section
3.12:
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(i) the provisions of this Section 3.10 shall be in full force
and effect;
(ii) the Certificate Registrar and the Owner Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Agreement (including the payment of principal and interest on the
Certificates and the giving of instructions or directions hereunder) as the
sole Holder of the Certificates, and shall have no obligation to the
Certificate Owners;
(iii) to the extent that the provisions of this Section 3.10
conflict with any other provisions of this Agreement, the provisions of
this Section shall control;
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Certificate Owners and the Clearing Agency
and/or the Clearing Agency Participants pursuant to the Depository
Agreement, and, unless and until Definitive Certificates are issued
pursuant to Section 3.12, 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 Certificates to such Clearing
Agency Participants; and
(v) whenever this Agreement requires or permits actions to be
taken based upon instructions or directions of Holders of Certificates
evidencing a specified percentage of the Certificate Balance, the Clearing
Agency shall be deemed to represent such percentage only to the extent that
it has received instructions to such effect from Certificate Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Certificates and has
delivered such instructions to the Owner Trustee.
SECTION 3.11. Notices to Clearing Agency. Whenever a notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to such Certificate
Owners pursuant to Section 3.12, the Owner Trustee shall give all such notices
and communications specified herein to be given to Holders of the Certificates
to the Clearing Agency, and shall have no obligation to such Certificate Owners.
SECTION 3.12. Definitive Certificates. If (i) the Depositor, the
Administrator or the Servicer advises the Owner Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Book-Entry Certificates and the Owner
Trustee or the Administrator is unable to locate a qualified successor, (ii) the
Depositor, at its option, advises the Owner Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Servicing Termination, Certificate Owners of the
Book-Entry Certificates representing beneficial interests aggregating not less
than 51% of the Certificate Balance advise the Owner 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 Certificate Owners,
then the Clearing Agency shall notify all Certificate Owners and the Owner
Trustee of the occurrence of such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Owner Trustee of the typewritten Certificates representing the Book-Entry
Certificates by the Clearing Agency, accompanied by registration instructions,
the Depositor shall execute and the Owner Trustee shall authenticate the
Definitive Certificates in accordance with the instructions of the Clearing
Agency. None of the Trust, the Certificate Registrar or the Owner Trustee shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Certificates, the Owner Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders.
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ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Certificateholders with Respect to
Certain Matters. With respect to the following matters, the Owner Trustee shall
not take action unless (i) at least thirty (30) days before the taking of such
action, the Owner Trustee shall have notified the Certificateholders, the
Insurer and the Rating Agencies in writing of the proposed action and (ii) the
Insurer, if an Insurer Default shall not have occurred and be continuing, and
the Holders of Certificates evidencing not less than 51% of the Certificate
Balance shall not have notified the Owner Trustee in writing prior to the 30th
day after such notice is given that the Insurer and such Holders have withheld
consent or provided alternative direction:
(i) the initiation of any claim or lawsuit by the Trust (except
claims or lawsuits brought by the Servicer in connection with the
collection of the Contracts) and the settlement of any action, claim or
lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection by the Servicer of the
Contracts);
(ii) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under
the Business Trust Statute);
(iii) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is required;
(iv) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is not required and
such amendment materially adversely affects the interests of the
Certificateholders;
(v) the amendment, change or modification of the Sale and
Servicing Agreement or the Administration Agreement, except to cure any
ambiguity or to amend or supplement any provision in a manner or add any
provision that would not materially adversely affect the interests of the
Certificateholders; or
(vi) the appointment pursuant to the Indenture of a successor
Note Registrar, Paying Agent for the Notes or Indenture Trustee or pursuant
to this Agreement of a successor Certificate Registrar, or the consent to
the assignment by the Note Registrar, Paying Agent for the Notes or
Indenture Trustee or Certificate Registrar of its obligations under the
Indenture or this Agreement, as applicable.
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SECTION 4.2. Action by Certificateholders with Respect to Certain
Matters. The Owner Trustee may not, except upon the occurrence of an Event of
Servicing Termination subsequent to the payment in full of the Notes and in
accordance with the written direction of the Insurer, if an Insurer Default
shall not have occurred and be continuing, and the Holders of Certificates
evidencing not less than 51% of the Certificate Balance, (i) remove the Servicer
pursuant to Article VIII of the Sale and Servicing Agreement, (ii) appoint a
successor Servicer pursuant to Article VIII of the Sale and Servicing Agreement,
(iii) remove the Administrator pursuant to Section 9 of the Administration
Agreement, (iv) appoint a successor Administrator pursuant to Section 9 of the
Administration Agreement or (v) sell the Contracts after the termination of the
Indenture, except as expressly provided in the Transaction Documents.
SECTION 4.3. Action by Certificateholders with Respect to Bankruptcy.
The Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust unless (i) the Notes have been paid in full and
(ii) the Insurer, if an Insurer Default shall not have occurred and be
continuing, and each Certificateholder approves of such commencement in advance
and delivers to the Owner Trustee a certificate certifying that such
Certificateholder reasonably believes that the Trust is insolvent.
SECTION 4.4. Restrictions on Certificateholders' Power. Neither the
Insurer nor the Certificateholders shall direct the Owner Trustee to take or
refrain from taking any action if such action or inaction would be contrary to
any obligation of the Trust or the Owner Trustee under this Agreement or any of
the other Transaction Documents or would be contrary to Section 2.3, nor shall
the Owner Trustee be obligated to follow any such direction, if given.
SECTION 4.5. Majority Control. Except as expressly provided herein,
any action that may be taken by the Certificateholders under this Agreement may
be taken by the Holders of Certificates evidencing not less than 51% of the
Certificate Balance. Except as expressly provided herein, any written notice of
the Certificateholders delivered pursuant to this Agreement shall be effective
if signed by Holders of Certificates evidencing not less than 51% of the
Certificate Balance at the time of the delivery of such notice.
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ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate Payment Account. Pursuant to
Section 4.1(c) of the Sale and Servicing Agreement, there has been established
and there shall be maintained in the name of the Owner Trustee at an Eligible
Institution a segregated trust account designated as the Certificate Payment
Account (the "Certificate Payment Account"). The Certificate Payment Account
shall be held in trust for the benefit of the Certificateholders. Except as
expressly provided in Section 3.9, the Certificate Payment Account shall be
under the sole dominion and control of the Owner Trustee. All monies deposited
from time to time in the Certificate Payment Account pursuant to the Sale and
Servicing Agreement or the Indenture shall be applied as provided in this
Agreement and the Sale and Servicing Agreement or the Indenture.
SECTION 5.2. Application of Trust Funds. (a) On each Payment Date,
upon receipt of instructions from the Servicer pursuant to Section 4.9 of the
Sale and Servicing Agreement, the Owner Trustee shall, or shall cause the Paying
Agent to, apply the amount on deposit in the Certificate Payment Account on such
Payment Date to make the following distributions in the following order of
priority:
(i) to the Certificateholders, the Total Certificate Interest for
such Payment Date; and
(ii) to the Certificateholders, the Monthly Certificate Principal
for that Payment Date.
If the amount on deposit in the Certificate Payment Account on any
Payment Date is less than the amount described in clause (i) or (ii) above for
such Payment Date, the Owner Trustee shall pay the available amount to the
Holders of each Certificate pro rata based on the outstanding principal amount
of such Certificate as of such Payment Date.
(b) On each Payment Date, the Owner Trustee shall, or shall cause the
Paying Agent to, send to each Certificateholder the statement provided to the
Owner Trustee by the Servicer pursuant to Section 4.9 of the Sale and Servicing
Agreement with respect to such Payment Date.
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(c) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall reduce
the amount otherwise distributable to the Certificateholder in accordance with
this Section 5.2. The Owner Trustee and each Paying Agent is hereby authorized
and directed to retain from amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of any such withholding tax
that is legally owed by the Trust (but such authorization shall not prevent the
Owner Trustee from contesting any such tax in appropriate proceedings, and
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings). The amount of any withholding tax imposed with respect to a
Certificateholder shall be treated as cash distributed to such Certificateholder
at the time it is withheld by the Trust and remitted to the appropriate taxing
authority. If there is a possibility that withholding tax is payable with
respect to a distribution (such as a distribution to a non-U.S.
Certificateholder), the Owner Trustee may, in its sole discretion, withhold such
amounts in accordance with this Section 5.2. If a Certificateholder wishes to
apply for a refund of any such withholding tax, the Owner Trustee shall
reasonably cooperate with such Certificateholder in making such claim so long as
such Certificateholder agrees to reimburse the Owner Trustee for any
out-of-pocket expenses incurred.
SECTION 5.3. Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Payment Date
shall be made to each Certificateholder of record on the preceding Record Date
either by wire transfer, in immediately available funds, to the account of such
Holder at a bank or other entity having appropriate facilities therefor, if (i)
such Certificateholder shall have provided to the Certificate Registrar
appropriate written instructions at least five (5) Business Days prior to such
Payment Date, or (ii) such Certificateholder is the Depositor or, if not, by
check mailed to such Certificateholder at the address of such Holder appearing
in the Certificate Register. Notwithstanding the foregoing, the final
distribution in respect of any Certificate (whether on the Final Payment Date or
otherwise) will be payable only upon presentation and surrender of such
Certificate at the office or agency maintained for that purpose by the Owner
Trustee pursuant to Section 3.8.
SECTION 5.4. No Segregation of Monies; No Interest. Subject to
Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law, the Indenture or
the Sale and Servicing Agreement and may be deposited under such general
conditions as may be prescribed by law, and the Owner Trustee shall not be
liable for any interest thereon.
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SECTION 5.5. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. The Owner Trustee
shall, based on information provided by the Depositor, (i) maintain (or cause to
be maintained) the books of the Trust on the basis of a fiscal year ending
February 28 or 29, as applicable, and based on the accrual method of accounting,
(ii) deliver to each Certificateholder, as may be required by the Code and
applicable Treasury Regulations, such information as may be required (including
Schedule K-1) to enable such Certificateholder to prepare its federal and state
income tax returns, (iii) file such tax returns relating to the Trust (including
a partnership information return, IRS Form 1065) and make such elections as may
from time to time be required or appropriate under any applicable state or
federal statute or rule or regulation thereunder so as to maintain the Trust's
characterization as a partnership for federal income tax purposes, (iv) cause
such tax returns to be signed in the manner required by law and (v) collect or
cause to be collected any withholding tax as described in and in accordance with
Section 5.2(c) with respect to income or distributions to Certificateholders.
The Owner Trustee shall elect under Section 1278 of the Code to include in
income currently any market discount that accrues with respect to the Contracts.
The Owner Trustee shall not make the election provided under Section 754 of the
Code.
The Owner Trustee may satisfy its obligations with respect to this
Section 5.5 by retaining, at the expense of the Depositor, a firm of independent
public accountants (the "Accountants") chosen by the Depositor which shall
perform the filing obligations of the Owner Trustee hereunder. The Owner Trustee
may require the Accountants to provide to the Owner Trustee, on or before
[____________], 1999, a letter in form and substance satisfactory to the Owner
Trustee as to whether any federal tax withholding on Certificates is then
required and, if required, the procedures to be followed with respect thereto to
comply with the requirements of the Code. The Accountants shall be required to
update such letter in each instance that any additional tax withholding is
subsequently required or any previously required tax withholding shall no longer
be required. The Owner Trustee shall be deemed to have discharged its
obligations pursuant to this Section 5.5 upon its retention of the Accountants,
and the Owner Trustee shall not have any liability with respect to the default
or misconduct of the Accountants.
SECTION 5.6. Signature on Returns; Tax Matters Partner.
(a) The Depositor, as general partner for income tax purposes, shall
sign, on behalf of the Trust, the tax returns of the Trust.
(b) The Depositor shall be designated the "tax matters partner" of the
Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable Treasury
Regulations.
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ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Transaction Documents to which the Trust is
to be a party and each certificate or other document attached as an exhibit to
or contemplated by the Transaction Documents to which the Trust is to be a party
and any amendment or other agreement, in each case in such form as the Depositor
shall approve, as evidenced conclusively by the Owner Trustee's execution
thereof and the Depositor's execution of this Agreement, and to direct the
Indenture Trustee to authenticate and deliver Notes in the aggregate principal
amount of $[____________] (comprised of $[____________] in aggregate principal
amount of Class A-1 Notes, $[____________] in aggregate principal amount of
Class A-2 Notes, $[____________] in aggregate principal amount of Class A-3
Notes and $[____________] in aggregate principal amount of Class A-4 Notes). In
addition to the foregoing, the Owner Trustee is authorized to take all actions
required of the Trust pursuant to the Transaction Documents. The Owner Trustee
is further authorized from time to time to take such action on behalf of the
Trust as is permitted by the Transaction Documents and which the Servicer or the
Administrator recommends with respect to the Transaction Documents, except to
the extent that this Agreement expressly requires the consent of
Certificateholders for such action.
SECTION 6.2. General Duties. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the other Transaction Documents to which the
Trust is a party and to administer the Trust in the interest of the
Certificateholders, subject to the lien of the Indenture and in accordance with
the provisions of this Agreement and the other Transaction Documents.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Transaction
Documents to the extent the Administrator is required in the Administration
Agreement to perform any act or to discharge such duty of the Owner Trustee or
the Trust hereunder or under any other Transaction Document, and the Owner
Trustee shall not be held liable for the default or failure of the Administrator
to carry out its obligations under the Administration Agreement.
SECTION 6.3. Action upon Instruction.
(a) Subject to Article IV, and in accordance with the terms of the
Transaction Documents, the Certificateholders may, by written instruction,
direct the Owner Trustee in the management of the Trust.
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(b) The Owner Trustee shall not be required to take any action
hereunder or under any Transaction Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is contrary
to the terms hereof or of any other Transaction Document or is otherwise
contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
other Transaction Document, the Owner Trustee shall promptly give notice (in
such form as shall be appropriate under the circumstances) to the Insurer and
the Certificateholders requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Insurer or the Certificateholders received,
the Owner Trustee shall not be liable on account of such action to any Person.
If the Owner Trustee shall not have received appropriate instruction within ten
(10) days of such notice (or within such shorter period of time as reasonably
may be specified in such notice or may be necessary under the circumstances) it
may, but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the other Transaction Documents, as it shall
deem to be in the best interests of the Certificateholders, and shall have no
liability to any Person for such action or inaction.
(d) In the event the Owner Trustee is unsure as to the application of
any provision of this Agreement or any other Transaction Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Insurer and
the Certificateholders requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any such
instruction received, the Owner Trustee shall not be liable, on account of such
action or inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within ten (10) days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Agreement or the
other Transaction Documents, as it shall deem to be in the best interests of the
Certificateholders and shall have no liability to any Person for such action or
inaction.
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SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee or the Trust is a party, except as expressly provided
by the terms of this Agreement or in any document or written instruction
received by the Owner Trustee pursuant to Section 6.3, and no implied duties or
obligations shall be read into this Agreement or any other Transaction Document
against the Owner Trustee. The Owner Trustee shall have no responsibility for
filing any financing or continuation statement in any public office at any time
or otherwise to perfect or maintain the perfection of any security interest or
lien granted to it hereunder or to prepare or file any Securities and Exchange
Commission filing for the Trust or to record this Agreement or any other
Transaction Document. The Owner Trustee shall, however, at its own cost and
expense, promptly take all action as may be necessary to discharge any lien
(other than the lien of the Indenture) on any part of the Owner Trust Estate
that results from actions by, or claims against, the Owner Trustee that are not
related to the ownership or the administration of the Owner Trust Estate.
SECTION 6.5. No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the other
Transaction Documents to which the Trust or the Owner Trust is a party and (iii)
in accordance with any document or instruction delivered to the Owner Trustee
pursuant to Section 6.3.
SECTION 6.6. Restrictions. The Owner Trustee shall not take any action
(i) that is inconsistent with the purposes of the Trust set forth in Section 2.3
or (ii) that, to the actual knowledge of the Owner Trustee, would (A) affect the
treatment of the Notes as indebtedness for federal income or Virginia income or
franchise tax purposes, (B) be deemed to cause a taxable exchange of the Notes
for federal income or Virginia income or franchise tax purposes or (C) cause the
Trust or any portion thereof to be taxable as an association or publicly traded
partnership taxable as a corporation for federal income or Virginia income or
franchise tax purposes. The Certificateholders shall not direct the Owner
Trustee to take action that would violate the provisions of this Section 6.6.
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ARTICLE VII
REGARDING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee also agrees to disburse all monies actually received by it constituting
part of the Owner Trust Estate upon the terms of this Agreement to which the
Trust or Owner Trustee is a party and the other Transaction Documents. The Owner
Trustee shall not be answerable or accountable hereunder or under any other
Transaction Document under any circumstances, except (i) for its own willful
misconduct, bad faith or negligence or (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 7.3 expressly made by the Owner
Trustee, in its individual capacity. In particular, but not by way of limitation
(and subject to the exceptions set forth in the preceding sentence):
(i) the Owner Trustee shall not be liable for any error of
judgment made in good faith by a responsible officer of the Owner Trustee
unless it is proved that the Owner Trustee was negligent in ascertaining
the pertinent facts;
(ii) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken in good faith by it in accordance with
the provisions of this Agreement at the instructions of any
Certificateholder, the Indenture Trustee, the Depositor, the Administrator
or the Servicer;
(iii) no provision of this Agreement or any other Transaction
Document shall require the Owner 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 or
under any other Transaction Document if the Owner Trustee shall have
reasonable grounds to believe that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or
provided to it;
(iv) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Transaction
Documents, including the principal of and interest on the Notes or the
Certificates.
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(v) the Owner Trustee shall not be responsible for or in respect
of the validity or sufficiency of this Agreement or for the due execution
hereof by the Depositor or for the form, character, genuineness,
sufficiency, value or validity of any of the Owner Trust Estate or for or
in respect of the validity or sufficiency of the other Transaction
Documents, other than the certificate of authentication on the
Certificates, and the Owner Trustee shall in no event assume or incur any
liability, duty, or obligation to any Noteholder or to any
Certificateholder, other than as expressly provided for herein and in the
other Transaction Documents;
(vi) the Owner Trustee shall not be liable for the default or
misconduct of the Servicer, the Administrator, the Depositor or the
Indenture Trustee under any of the Transaction Documents or otherwise, and
the Owner Trustee shall have no obligation or liability to perform the
obligations of the Trust under this Agreement or the other Transaction
Documents that are required to be performed by the Administrator under the
Administration Agreement, the Servicer under the Sale and Servicing
Agreement or the Indenture Trustee under the Indenture; and
(vii) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any other Transaction
Document, at the request, order or direction of any of the
Certificateholders, unless such Certificateholders have offered to the
Owner Trustee security or indemnity satisfactory to it against the costs,
expenses and liabilities that may be incurred by the Owner Trustee therein
or thereby. The right of the Owner Trustee to perform any discretionary act
enumerated in this Agreement or any other Transaction Document shall not be
construed as a duty, and the Owner Trustee shall not be answerable other
than for its willful misconduct, bad faith or negligence in the performance
of any such act.
SECTION 7.2. Furnishing of Documents. The Owner Trustee shall furnish
to the Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Transaction Documents.
SECTION 7.3. Representations and Warranties. The Owner Trustee, in its
individual capacity, hereby represents and warrants to the Depositor, for the
benefit of the Certificateholders, that:
(i) it is a banking corporation duly organized and validly
existing in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement;
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(ii) it has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf; and
(iii) neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof will
contravene any federal or Delaware law, governmental rule or regulation
governing the banking or trust powers of the Owner Trustee or any judgment
or order binding on it, or constitute any default under its charter
documents or by-laws or any indenture, mortgage, contract, agreement or
instrument to which it is a party or by which any of its properties may be
bound.
SECTION 7.4. Reliance; Advice of Counsel.
(a) The Owner Trustee may rely upon, shall be protected in relying
upon, and shall incur no liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. The Owner Trustee
may accept a certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the method of the determination of which is
not specifically prescribed herein, the Owner Trustee may for all purposes
hereof rely on a certificate, signed by the president or any vice president or
by the treasurer or other authorized officers of the relevant party, as to such
fact or matter and such certificate shall constitute full protection to the
Owner Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the other
Transactions Documents, the Owner Trustee (i) may act directly or through its
agents or attorneys pursuant to agreements entered into with any of them, and
the Owner Trustee shall not be liable for the conduct or misconduct of such
agents or attorneys if such agents or attorneys shall have been selected by the
Owner Trustee with reasonable care and (ii) may consult with counsel,
accountants and other skilled Persons to be selected with reasonable care and
employed by it. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the written opinion
or advice of any such counsel, accountants or other such Persons and not
contrary to this Agreement or any other Transaction Document.
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SECTION 7.5. Not Acting in Individual Capacity. Except as provided in
this Article VII, in accepting the trusts hereby created, First Union Trust
Company, National Association, acts solely as Owner Trustee hereunder and not in
its individual capacity, and all Persons having any claim against the Owner
Trustee by reason of the transactions contemplated by this Agreement or any
other Transaction Document shall look only to the Owner Trust Estate for payment
or satisfaction thereof.
SECTION 7.6. Owner Trustee Not Liable for Certificates or Contracts.
The recitals contained herein and in the Certificates (other than the signature
and countersignature of the Owner Trustee on the Certificates) shall be taken as
the statements of the Depositor, and the Owner Trustee assumes no responsibility
for the correctness thereof. The Owner Trustee makes no representations as to
the validity or sufficiency of this Agreement, any other Transaction Document or
the Certificates (other than the signature and countersignature of the Owner
Trustee on the Certificates) or the Notes, or of any Contract or related
documents. The Owner Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Contract, or the perfection and priority of any security interest created by
any Contract in any Financed Vehicle or the maintenance of any such perfection
and priority, or for or with respect to the sufficiency of the Owner Trust
Estate or its ability to generate the payments to be distributed to
Certificateholders under this Agreement or the Noteholders under the Indenture,
including, without limitation, the existence, condition and ownership of any
Financed Vehicle, the existence and enforceability of any insurance thereon, the
existence and contents of any Contract on any computer or other record thereof,
the validity of the assignment of any Contract to the Trust or any intervening
assignment, the completeness of any Contract, the performance or enforcement of
any Contract, the compliance by the Depositor or the Servicer with any warranty
or representation made under any Transaction Document or in any related
document, or the accuracy of any such warranty or representation or any action
of the Indenture Trustee, the Administrator or the Servicer or any subservicer
taken in the name of the Owner Trustee.
SECTION 7.7. Owner Trustee May Own Certificates and Notes. The Owner
Trustee, in its individual or any other capacity, may become the owner or
pledgee of Certificates or Notes and may deal with the Depositor, the Servicer,
the Administrator and the Indenture Trustee in banking transactions with the
same rights as it would have if it were not Owner Trustee.
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ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Depositor and the
Owner Trustee, and the Owner Trustee shall be reimbursed by the Depositor for
its other reasonable expenses hereunder, including the reasonable compensation,
expenses and disbursements of such agents, representatives, experts and counsel
as the Owner Trustee may employ in connection with the exercise and performance
of its rights and its duties hereunder.
SECTION 8.2. Indemnification. The Depositor shall be liable as prime
obligor for, and shall indemnify the Owner Trustee and its successors, assigns,
agents and servants (collectively, the "Indemnified Parties") from and against,
any and all liabilities, obligations, losses, damages, taxes, claims, actions
and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any other Indemnified Party in any way
relating to or arising out of this Agreement, the other Transaction Documents,
the Owner Trust Estate, the administration of the Owner Trust Estate or the
action or inaction of the Owner Trustee hereunder; provided, however, that the
Depositor shall not be liable for or required to indemnify an Indemnified Party
from and against Expenses arising or resulting from any of the matters described
in the third sentence of Section 7.1. The Depositor will in no event be entitled
to make any claim upon the Trust Property for the payment or reimbursement of
any Expenses. The indemnities contained in this Section 8.2 shall survive the
resignation or termination of the Owner Trustee or the termination of this
Agreement. In the event of any claim, action or proceeding for which indemnity
will be sought pursuant to this Section 8.2, the Owner Trustee's choice of legal
counsel shall be subject to the approval of the Depositor, which approval shall
not be unreasonably withheld.
SECTION 8.3. Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.
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ARTICLE IX
TERMINATION
SECTION 9.1. Termination of Trust Agreement.
(a) This Agreement (other than the provisions of Article VIII) and the
Trust shall terminate and be of no further force or effect (i) upon the payment
to the Noteholders, the Certificateholders and the Insurer of all amounts
required to be paid to them pursuant to the terms of the Indenture, the Sale and
Servicing Agreement, the Insurance Agreement and Article V or (ii) on the
Payment Date next succeeding the month which is one year after the maturity or
other liquidation of the last Contract and the disposition of any amounts
received upon liquidation of any property remaining in the Trust; provided,
however, in each case, that the Policy shall have been terminated in accordance
with its terms and returned to the Insurer for cancellation. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust, entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of all
or any part of the Trust or Owner Trust Estate or otherwise affect the rights,
obligations and liabilities of the parties hereto.
(b) No Certificateholder shall be entitled to revoke or terminate the
Trust.
(c) Notice of any termination of the Trust, specifying the Payment
Date upon which the Certificateholders shall surrender their Certificates to the
Paying Agent for payment of the final distribution and cancellation, shall be
given by the Owner Trustee by letter to Certificateholders mailed within five
(5) Business Days of receipt of notice of such termination from the Servicer,
stating (i) the Payment Date upon or with respect to which final payment of the
Certificates shall be made upon presentation and surrender of the Certificates
at the office of the Paying Agent therein specified, (ii) the amount of any such
final payment and (iii) that the Record Date otherwise applicable to such
Payment Date is not applicable, payments being made only upon presentation and
surrender of the Certificates at the office of the Paying Agent therein
specified. The Owner Trustee shall give such notice to the Certificate Registrar
(if other than the Owner Trustee) and the Paying Agent at the time such notice
is given to Certificateholders. Upon presentation and surrender of the
Certificates, the Paying Agent shall cause to be distributed to the
Certificateholders amounts distributable on such Payment Date pursuant to
Section 5.2. In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six (6) months after the date
specified in the above mentioned written notice, the Owner Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement. Subject to applicable escheat laws, any funds
remaining in the Trust after exhaustion of such remedies shall be distributed by
the Owner Trustee to the Depositor.
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(d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
SECTION 9.2. Notification Regarding Bankruptcy of the Depositor.
Promptly after the occurrence of any Insolvency Event with respect to the
Depositor, (i) the Depositor shall give the Owner Trustee, the Indenture Trustee
and the Insurer written notice of such Insolvency Event, (ii) the Owner Trustee
shall, upon receipt of such written notice from the Depositor, give prompt
written notice to the Certificateholders and the Indenture Trustee of the
occurrence of such event and (iii) the Indenture Trustee shall, upon receipt of
such written notice from the Depositor or the Owner Trustee, give prompt written
notice to the Noteholders of the occurrence of such event.
SECTION 9.3. Prepayment of the Certificates.
(a) The Certificates are subject to prepayment 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 Trust pursuant to such Section 9.1(a), and
the amount paid by the Servicer shall be treated as collections of payments on
the Contracts and applied to pay the unpaid principal amount of the Notes plus
accrued but unpaid interest thereon and the Certificate Balance plus accrued but
unpaid interest thereon. The Owner Trustee shall furnish or cause the Servicer
to furnish notice of such prepayment to the Rating Agencies, the Insurer and the
Certificateholders. If the Certificates are to be prepaid pursuant to this
Section 9.3(a), the Owner Trustee shall furnish or cause the Servicer to furnish
notice of such election to the Owner Trustee not later than twenty (20) days
prior to the Prepayment Date and the Trust shall deposit the Prepayment Price in
the Certificate Payment Account by 10:00 A.M. (New York City time) on the
Prepayment Date, whereupon the Certificates shall be due and payable on the
Prepayment Date.
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(b) Notice of prepayment of the Certificates under Section 9.3(a)
shall be given by the Owner Trustee by first-class mail, postage prepaid, or by
facsimile mailed or transmitted promptly following receipt of notice from the
Trust or the Servicer pursuant to Section 9.3(a), but not later than ten (10)
days prior to the applicable Prepayment Date, to each Holder of the Certificates
as of the close of business on the Record Date preceding the applicable
Prepayment Date, at such Holder's address or facsimile number appearing in the
Certificate Register.
All notices of prepayment shall state:
(i) the Prepayment Date;
(ii) the Prepayment Price; and
(iii) the place where the Certificates are to be surrendered for
payment of the Prepayment Price (which shall be the office or agency of the
Owner Trustee to be maintained as provided in Section 3.8).
Notice of prepayment of the Certificates shall be given by the Owner
Trustee in the name and at the expense of the Trust. Any failure to give notice
of prepayment, or any defect therein, to any Holder of any Certificate shall
not, however, impair or affect the validity of the prepayment of any other
Certificate.
(c) The Certificates to be prepaid shall, following notice of
prepayment as required by Section 9.3(b), become due and payable on the
Prepayment Date at the Prepayment Price and (unless the Trust shall default in
the payment of the Prepayment Price) no interest shall accrue on the Prepayment
Price for any period after the date to which accrued interest is calculated for
purposes of calculating the Prepayment Price. Following payment in full of the
Prepayment Price, this Agreement and the Trust shall terminate.
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ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times (i) be a corporation satisfying the provisions of
Section 3807(a) of the Business Trust Statute, (ii) be authorized to exercise
corporate trust powers, (iii) have a combined capital and surplus of at least
$50,000,000 and be subject to supervision or examination by federal or state
authorities and (iv) have (or have a parent that has) a long-term debt rating of
investment grade by each of the Rating Agencies or otherwise be acceptable to
each of the Rating Agencies. If such corporation shall publish reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section 10.1 the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Owner Trustee shall cease
to be eligible in accordance with the provisions of this Section 10.1, the Owner
Trustee shall resign immediately in the manner and with the effect specified in
Section 10.2.
SECTION 10.2. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Administrator and the Insurer. Upon
receiving such notice of resignation, the Administrator shall promptly appoint a
successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to the
successor Owner Trustee. If no successor Owner Trustee shall have been so
appointed and have accepted appointment within thirty (30) days after the giving
of such notice of resignation, the resigning Owner Trustee may petition any
court of competent jurisdiction for the appointment of a successor Owner
Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Administrator, or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Administrator may remove the Owner
Trustee. If the Administrator shall remove the Owner Trustee under the authority
of the immediately preceding sentence, the Administrator shall promptly appoint
a successor Owner Trustee (acceptable to the Insurer) by written instrument, in
duplicate, one copy of which instrument shall be delivered to the removed Owner
Trustee and one copy to the successor Owner Trustee.
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Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to this Section 10.2 shall not become effective
until acceptance of appointment by the successor Owner Trustee pursuant to
Section 10.3 and payment of all fees and expenses owed to the outgoing Owner
Trustee. The Administrator shall provide notice of such resignation or removal
of the Owner Trustee to the Certificateholders, the Indenture Trustee, the
Noteholders and each of the Rating Agencies.
SECTION 10.3. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Administrator and to its predecessor Owner Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor under
this Agreement, with like effect as if originally named as Owner Trustee. The
predecessor Owner Trustee shall, upon payment of its fees and expenses, deliver
to the successor Owner Trustee all documents, statements and monies held by it
under this Agreement, and the Administrator and the predecessor Owner Trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for fully and certainly vesting and confirming in the
successor Owner Trustee all such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section 10.3 unless, at the time of such acceptance, such successor Owner
Trustee shall be eligible pursuant to Section 10.1.
Any successor Owner Trustee appointed pursuant to this Section 10.3
shall file an amendment to the Certificate of Trust with the Secretary of State
reflecting the name and principal place of business of such successor in the
State of Delaware.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section 10.3, the Administrator shall mail notice of such appointment to
all Certificateholders, the Indenture Trustee, the Noteholders and the Rating
Agencies. If the Administrator shall fail to mail such notice within ten (10)
days after acceptance of appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Administrator.
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SECTION 10.4. Merger or Consolidation of Owner Trustee.
(a) If the Owner 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 Owner Trustee; provided, however, that such corporation or banking
association must be otherwise qualified and eligible under Section 10.1. The
Owner 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 Owner Trustee shall succeed to the trusts created by
this Agreement any of the Certificates shall have been authenticated but not
delivered, any such successor to the Owner Trustee may adopt the certificate of
authentication of any predecessor trustee and deliver such Certificates so
authenticated, and in case at that time any of the Certificates shall not have
been authenticated, any such successor to the Owner Trustee may authenticate
such Certificates either in the name of any predecessor trustee or in the name
of the successor to the Owner Trustee. In all such cases such certificates shall
have the full force which the Certificates or this Agreement provide that the
certificate of the Owner Trustee shall have.
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Owner Trust Estate or any Financed Vehicle may at the time
be located, the Administrator and the Owner Trustee acting jointly shall have
the power and may execute and deliver an instrument to appoint one or more
Persons approved by the Owner Trustee to act as co-trustee or co-trustees,
jointly with the Owner Trustee, or separate trustee or separate trustees, of all
or any part of the Owner Trust Estate, and to vest in such Person or Persons, in
such capacity and for the benefit of the Certificateholders, such title to the
Owner Trust Estate, or any part thereof, and, subject to the other provisions of
this Section 10.5, such powers, duties, obligations, rights and trusts as the
Administrator and the Owner Trustee may consider necessary or desirable. If the
Administrator shall not have joined in such appointment within fifteen (15) days
after the receipt by it of a request so to do, the Owner Trustee alone shall
have the power to make such appointment. No co-trustee or separate trustee under
this Agreement shall be required to meet the terms of eligibility as a successor
trustee under Section 10.1 and no notice of the appointment of any co-trustee or
separate trustee shall be required under Section 10.3.
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(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 Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee shall not be authorized to act separately without the Owner
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Owner Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Owner Trust Estate or any portion
thereof in any such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the direction of the
Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable
by reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Administrator and the Owner Trustee acting jointly 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 Owner Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article X. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Administrator.
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(d) Any separate trustee or co-trustee may at any time constitute the
Owner 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
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Supplements and Amendments.
(a) This Agreement may be amended from time to time by the Depositor
and the Owner Trustee, with prior written notice to the Rating Agencies and the
Insurer, without the consent of any of the Noteholders or the Certificateholders
and with the consent of the Insurer (if no Insurer Default shall have occurred
and be continuing) to cure any ambiguity, to correct or supplement any provision
herein that may be inconsistent with any other provision herein or for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions in this Agreement; provided, however, that (i) such action
shall not, as evidenced by an Opinion of Counsel satisfactory to the Owner
Trustee and the Indenture Trustee, adversely affect in any material respect the
interests of any Noteholder, any Certificateholder or the Insurer and (ii) an
Opinion of Counsel shall be furnished to the Owner Trustee and the Indenture
Trustee to the effect that such amendment (A) will not materially adversely
affect the federal or any Applicable Tax State income or franchise taxation of
any outstanding Note or Certificate or any Holder thereof and (B) will not cause
the Trust to be taxable as a corporation for federal or any Applicable Tax State
income or franchise tax purposes.
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(b) This Agreement may be amended from time to time by the Depositor
and the Owner Trustee, with prior written notice to the Rating Agencies and the
Insurer, with the consent of the Insurer (if no Insurer Default shall have
occurred and be continuing) and with the consent of the Holders (as defined in
the Indenture) of Notes evidencing not less than 51% of the Note Balance and the
consent of the Holders of Certificates evidencing not less than 51% of the
Certificate Balance, for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Agreement or modifying
in any manner the rights of the Noteholders or the Certificateholders; provided,
however, that, subject to the express rights of the Insurer under the
Transaction Documents, no such amendment shall (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, or change the
allocation or priority of, collections of payments on the Contracts or
distributions that are required to be made on any Note or Certificate, or change
any Note Interest Rate, or (ii) reduce the aforesaid percentage of the Note
Balance and the Certificate Balance required to consent to any such amendment,
without the consent of all the Noteholders and Certificateholders affected
thereby or (iii) adversely affect the ratings of any Class of Notes by the
Rating Agencies without the consent of the Holders (as defined in the Indenture)
of Notes evidencing not less than 66 2/3% of the aggregate principal amount of
the then outstanding Notes of such Class; and, provided further, that (i) such
action shall not, as evidenced by an Opinion of Counsel satisfactory to the
Owner Trustee and the Indenture Trustee, adversely affect in any material
respect the interests of any Noteholder, any Certificateholder or the Insurer
and (ii) an Opinion of Counsel shall be furnished to the Indenture Trustee and
the Owner Trustee to the effect that such amendment (A) will not materially
adversely affect the federal or any Applicable Tax State income or franchise
taxation of any outstanding Note or Certificate or any Holder thereof and (B)
will not cause the Trust to be taxable as a corporation for federal or any
Applicable Tax State income or franchise tax purposes.
(c) Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
of the Rating Agencies.
(d) It shall not be necessary for the consent of the
Certificateholders, the Noteholders or the Indenture Trustee pursuant to this
Section 11.1 to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of
Certificateholders provided for in this Agreement or in any other Transaction
Document) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the Owner
Trustee may prescribe.
(e) Promptly after the execution of any amendment to the Certificate
of Trust, the Owner Trustee shall file such amendment or cause such amendment to
be filed with the Secretary of State.
(f) The Owner Trustee may, but shall not be obligated to, enter into
any such amendment that affects the Owner Trustee's own rights, duties,
liabilities or immunities under this Agreement or otherwise.
-40-
(g) Prior to the execution of any amendment to this Agreement or any
amendment to any other agreement to which the Trust is a party, the Owner
Trustee shall be entitled to receive and shall be fully protected in relying
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent in
this Agreement to the execution and delivery of such amendment have been
satisfied.
SECTION 11.2. No Legal Title to Owner Trust Estate in
Certificateholders. The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided beneficial interest
therein only in accordance with Articles V and IX. No transfer, by operation of
law or otherwise, of any right, title or interest of the Certificateholders in
and to their beneficial interest in the Owner Trust Estate shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
SECTION 11.3. Limitation on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Owner Trustee, the Depositor, the
Administrator, the Certificateholders, the Servicer and, to the extent expressly
provided herein, the Indenture Trustee and the Noteholders, and nothing in this
Agreement or in the Certificates, whether express or implied, shall be construed
to give to any other Person any legal or equitable right, remedy or claim in the
Owner Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
SECTION 11.4. Notices. All demands, notices and other communications
under this Agreement shall be in writing, personally delivered, sent by
telecopier, overnight courier or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (i) in the
case of the Owner Trustee, at the Corporate Trust Office, (ii) in the case of
the Depositor, at the following address: ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Treasury Department, (iii) in the case of the Indenture
Trustee, at the Corporate Trust Office (as defined in the Indenture), (iv) in
the case of Moody's, at the following address: ▇▇▇▇▇'▇ Investors Service, Inc.,
ABS Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (v) in
the case of Standard & Poor's, at the following address: Standard & Poor's, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed Surveillance Department, and (vi)
in the case of the Insurer, at the following address: MBIA Insurance
Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Insured
Portfolio Management, Structured Finance. Any notice required or permitted to be
mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder shall receive such notice.
-41-
SECTION 11.5. Severability. If any provision of this Agreement or the
Certificates shall be held for any reason whatsoever invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions of this Agreement and the Certificates shall not in any way be
affected or impaired thereby.
SECTION 11.6. Separate Counterparts. This Agreement 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 11.7. Successors and Assigns. All covenants and agreements in
this Agreement and the Certificates shall be binding upon, and inure to the
benefit of, the Depositor, the Owner Trustee and its successors and each
Certificateholder and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument or
action by a Certificateholder shall bind the successors and assigns of such
Certificateholder.
SECTION 11.8. Covenants of the Depositor. The Depositor shall not at
any time institute against the Trust, or join in any institution against the
Trust 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
Certificates, the Notes, this Agreement or any of the other Transaction
Documents.
SECTION 11.9. No Petition. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Certificate, and the Indenture Trustee and
each Noteholder, by accepting the benefits of this Agreement, hereby covenant
and agree that they will not at any time institute against the Depositor or the
Trust, or join in any institution against the Depositor or the Trust of, any
bankruptcy, 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 Certificates, the
Notes, this Agreement or any of the other Transaction Documents.
-42-
SECTION 11.10. No Recourse. Each Certificateholder, by accepting a
Certificate, acknowledges that the Certificates represent beneficial interests
in the Trust only and do not represent interests in or obligations of the
Depositor, the Servicer, the Administrator, the Owner Trustee, the Indenture
Trustee or any Affiliate thereof, and no recourse may be had against such
parties or their assets, except as may be expressly set forth or contemplated in
this Agreement, the Certificates or the other Transaction Documents.
SECTION 11.11. Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not define or limit any
of the terms or provisions hereof.
SECTION 11.12. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Delaware and the obligations, rights
and remedies of the parties under this Agreement shall be determined in
accordance with such laws.
-43-
IN WITNESS WHEREOF, the Depositor and the Owner Trustee have
caused this Agreement 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 RECEIVABLES LLC,
as Depositor
By:______________________________
Name:
Title:
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By:______________________________
Name:
Title:
-44-
STATE OF )
) ss. :
COUNTY OF )
The foregoing instrument was acknowledged before me this
[____] day of September, 1999, by [____________________], as
[____________________] of CARMAX AUTO RECEIVABLES LLC, a Virginia limited
liability company.
------------------------
Notary Public in and for
the State of [____________]
[SEAL]
My commission expires: [____________]
-45-
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: [____________]
-46-
EXHIBIT A
NUMBER $[ ]
R-[ ]
THIS CERTIFICATE IS NOT TRANSFERABLE
EXCEPT UNDER THE LIMITED CONDITIONS
SPECIFIED IN THE TRUST AGREEMENT
SEE REVERSE FOR CERTAIN DEFINITIONS
THE PRINCIPAL OF THIS CERTIFICATE IS DISTRIBUTABLE AS SET FORTH IN THE
TRUST AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS CERTIFICATE AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CARMAX AUTO OWNER TRUST 1999-1
ASSET BACKED CERTIFICATE
evidencing a beneficial interest in the property of the Trust, as defined below,
which property includes a pool of retail installment sales contracts secured by
new and used motor vehicles sold to CarMax Auto Receivables LLC by CarMax Auto
Superstores, Inc. and sold by CarMax Auto Receivables LLC to the Trust. The
property of the Trust (other than the Certificate Payment Account and the
proceeds thereof) has been pledged to the Indenture Trustee pursuant to the
Indenture to secure the payment of the Notes issued thereunder.
(This Certificate does not represent an interest in or obligation of CarMax Auto
Superstores, Inc., CarMax Auto Receivables LLC or any of their respective
affiliates, except to the extent described below.)
THIS CERTIFIES THAT [ ] is the registered owner of a [ ] DOLLARS AND
[ ] CENTS nonassessable, fully-paid, beneficial interest in Certificates of
CarMax Auto Owner Trust 1999-1 (the "Trust") formed by CarMax Auto Receivables
LLC, a Virginia limited liability company (the "Depositor"). The Certificates
have an aggregate Initial Certificate Balance of $[ ].
-47-
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
Dated: [____________], 1999
FIRST UNION TRUST COMPANY, FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, NATIONAL ASSOCIATION,
as Owner Trustee or as Owner Trustee
By:________________________ By:________________________
Authorized Officer as Authenticating Agent
By:________________________
Authorized Officer
The Trust was created pursuant to a Trust Agreement, dated as of
September [__], 1999 (as amended, supplemented or otherwise modified and in
effect from time to time, the "Trust Agreement"), by and between the Depositor
and First Union Trust Company, National Association, as owner trustee (the
"Owner Trustee"), a summary of certain of the pertinent provisions of which is
set forth below. To the extent not otherwise defined herein, the capitalized
terms used herein have the meanings assigned to them in the Trust Agreement or
the Sale and Servicing Agreement, dated as of September [__], 1999 (as amended,
supplemented or otherwise modified and in effect from time to time, the "Sale
and Servicing Agreement"), by and among the Trust, the Depositor, as seller (in
such capacity, the "Seller"), and CarMax Auto Superstores, Inc., as servicer
(the "Servicer"), as applicable.
-48-
This Certificate is one of the duly authorized Certificates designated
as "Asset Backed Certificates" (herein called the "Certificates"). This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound. The property of the Trust includes (i) a pool of retail installment
sales contracts for new and used motor vehicles and certain rights and
obligations thereunder (the "Contracts"); (ii) monies due or received thereunder
on or after the related Cutoff Date; (iii) the security interests in the
Financed Vehicles granted by Obligors pursuant to the Contracts and any other
interest of the Trust in the Financed Vehicles; (iv) all rights to receive
proceeds with respect to the Contracts from claims on any physical damage,
theft, credit life or disability insurance policies covering the Financed
Vehicles or Obligors; (v) all of the Seller's rights to the Contract Files; (vi)
the Trust Accounts, the Certificate Payment Account and the Reserve Account and
all amounts, securities, investments in financial assets 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) payments and proceeds with respect to the Contracts held by
the Servicer; (ix) all property, guarantees and other collateral securing a
Contract (other than a Contract repurchased by the Servicer or purchased by the
Seller); (x) all rebates of premiums and other amounts relating to insurance
policies and other items financed under the Contracts in effect as of the
related Cutoff Date; and (xi) all present and future claims, demands, causes of
action and chooses 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. THE RIGHTS OF THE TRUST IN
THE FOREGOING PROPERTY OF THE TRUST (OTHER THAN THE CERTIFICATE PAYMENT ACCOUNT
AND THE PROCEEDS THEREOF) HAVE BEEN PLEDGED TO THE INDENTURE TRUSTEE TO SECURE
THE PAYMENT OF THE NOTES.
Under the Trust Agreement, there will be distributed on the fifteenth
day of each month or, if such fifteenth day is not a Business Day, the next
Business Day (each, a "Payment Date"), commencing [____________] 15, 1999, to
the Person in whose name this Certificate is registered at the close of business
on the fourteenth day of such calendar month (the "Record Date") such
Certificateholder's percentage interest in the amount to be distributed to
Certificateholders on such Payment Date; provided, however, that principal will
be distributed to the Certificateholders on each Payment Date (to the extent of
funds remaining after the Total Servicing Fee, all required payments on Notes
and any required deposit to the Reserve Account have been made on such Payment
Date). Notwithstanding the foregoing, following the occurrence and during the
continuation of an Event of Default under the Indenture which has resulted in an
acceleration of the Notes or following certain events of insolvency with respect
to the Depositor, no distributions of principal or interest will be made on the
Certificates until all the Notes have been paid in full.
-49-
THE HOLDER OF THIS CERTIFICATE ACKNOWLEDGES AND AGREES THAT ITS RIGHTS
TO RECEIVE DISTRIBUTIONS IN RESPECT OF THIS CERTIFICATE ARE SUBORDINATED TO THE
RIGHTS OF THE NOTEHOLDERS AS DESCRIBED IN THE SALE AND SERVICING AGREEMENT, THE
INDENTURE AND THE TRUST AGREEMENT.
It is the intent of the Depositor, the Servicer and the
Certificateholders that, for purposes of federal income, state and local income
tax and any other income taxes, the Trust will be treated as a partnership and
the Certificateholders (including the Depositor) will be treated as partners in
that partnership. The Depositor and the other Certificateholders by acceptance
of a Certificate, agree to treat, and to take no action inconsistent with the
treatment of, the Certificates for such tax purposes as partnership interests in
the Trust.
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the Depositor or the Trust, or join in any institution against the Depositor or
the Trust of, any bankruptcy, 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, the Certificates, the Trust Agreement or any of the other Transaction
Documents.
Distributions on this Certificate will be made as provided in the
Trust Agreement by the Owner Trustee or the Paying Agent by wire transfer or
check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of this Certificate or the making of any
notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Owner Trustee of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency maintained for the purpose by the Owner Trustee in [the Borough of
Manhattan, The City of New York].
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
-50-
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Certificate shall not entitle the Holder hereof to any benefit under the
Trust Agreement or the Sale and Servicing Agreement or be valid for any purpose.
This Certificate shall be construed in accordance with the laws of the
State of Delaware, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
In WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Certificate to be duly executed.
CARMAX AUTO OWNER TRUST 1999-1
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By:________________________________
Authorized Officer
-51-
[REVERSE OF CERTIFICATE]
The Certificates do not represent an obligation of, or an interest in,
the Depositor, the Servicer, the Administrator, the Owner Trustee or any
Affiliates of any of them and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated herein, in
the Trust Agreement or in the other Transaction Documents. In addition, this
Certificate is not guaranteed by any governmental agency or instrumentality and
is limited in right of payment to certain collections with respect to the
Contracts (and certain other amounts), all as more specifically set forth herein
and in the Sale and Servicing Agreement. A registration statement, which
includes each of the Trust Agreement and the Sale and Servicing Agreement as
exhibits thereto, has been filed with the Securities and Exchange Commission
with respect to the Certificates and to the Notes of the Trust issued
concurrently with this Certificate.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Trust Agreement at
any time by the Depositor and the Owner Trustee with the consent of the Holders
of the Notes and the Holders of the Certificates each voting as a class
evidencing not less than a majority of the principal amount of the then
outstanding Notes and the Certificate Balance, respectively. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and on all future Holders of this Certificate and of any Certificate issued upon
the registration of Transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent is made upon this Certificate. The Trust
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the Holders of any of the Certificates.
This Certificate may be Transferred only under the circumstances
described in Section 3.4 of the Trust Agreement. Any attempted Transfer in
contravention of the restrictions and conditions of Section 3.4 of the Trust
Agreement shall be null and void. As provided in the Trust Agreement, the
Transfer of this Certificate is registerable in the Certificate Register upon
surrender of this Certificate for registration of Transfer at the offices or
agencies of the Certificate Registrar maintained by the Owner Trustee in [the
Borough of Manhattan, The City of New York], ACCOMPANIED BY THE WRITTEN
REPRESENTATIONS REQUIRED BY THE TRUST AGREEMENT and a written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same aggregate interest in the Trust will be issued to the designated
transferee. The initial Certificate Registrar appointed under the Trust
Agreement is [the Indenture Trustee].
-52-
This Certificate may not be acquired by (a) an employee benefit plan
(as defined in Section 3(3) of ERISA) that is subject to the provisions of Title
I of ERISA, (b) a plan described in Section 4975(e)(1) of the Code or (c) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding this
Certificate, the Holder hereof shall be deemed to have represented and warranted
that it is not a Benefit Plan.
Except for Certificates issued to the Depositor, the Certificates are
issuable only as registered Certificates without coupons in denominations of
$1,000 and in integral multiples of $1,000 in excess thereof. Certificates are
exchangeable for new Certificates of authorized denominations evidencing the
same aggregate denomination, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of Transfer or
exchange, but the Owner Trustee or the Certificate Registrar may require payment
of a sum sufficient to cover any tax or governmental charge payable in
connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Owner Trustee, the Certificate Registrar or any such agent shall be affected
by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the payment to the
Noteholders and the Certificateholders of all amounts required to be paid to
them pursuant to the Indenture, the Trust Agreement and the Sale and Servicing
Agreement and any remaining assets of the Trust shall be distributed to the
Depositor, in its capacity as Depositor. The Servicer of the Contracts may at
its option purchase the assets of the Trust at a price specified in the Sale and
Servicing Agreement, and such purchase of the Contracts and other property of
the Trust will effect early retirement of the Notes and the Certificates;
however, such right of purchase is exercisable only as of the last day of any
Collection Period as of which the Pool Balance is less than or equal to 10% of
the Initial Pool Balance.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Certificate shall not entitle the Holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
-53-
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
____________________________________________________________________ Attorney to
transfer said Certificate on the books of the Certificate Registrar, with full
power of substitution in the premises.
Dated:
_________________________________*/
Signature Guaranteed:
_________________________________*/
*/ NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
-54-
EXHIBIT B
[FORM OF CERTIFICATE OF TRUST]
CERTIFICATE OF TRUST OF
CARMAX AUTO OWNER TRUST 1999-1
This Certificate of Trust of CARMAX AUTO OWNER TRUST 1999-1 (the
"Trust") is being duly executed and filed by the Undersigned as trustee, to form
a business trust under the Delaware Business Trust Act (12 Del. Code, section
3801 et seq.) (the "Act").
1. Name. The name of the business trust formed hereby is CARMAX AUTO
OWNER TRUST 1999-1.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is First Union Trust Company, National
Association, One ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Department.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust in accordance with Section 3811 of
the Act.
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
as trustee
By:________________________
Name:
Title: