Exhibit 4.1.2 - Form of Trust Agreement for Insured Offerings
CARMAX AUTO FUNDING LLC,
as Depositor,
and
[____________________],
as Owner Trustee
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AMENDED AND RESTATED TRUST AGREEMENT
Dated as of [__________], 20[__]
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.................................................... 1
SECTION 1.2 Other Definitional Provisions.................................. 5
ARTICLE II
ORGANIZATION OF THE TRUST
SECTION 2.1 Name........................................................... 6
SECTION 2.2 Office......................................................... 6
SECTION 2.3 Purposes and Powers............................................ 6
SECTION 2.4 Appointment of Owner Trustee................................... 7
SECTION 2.5 Initial Capital Contribution of Owner Trust Estate............. 7
SECTION 2.6 Declaration of Trust........................................... 7
SECTION 2.7 Liability of Certificateholders................................ 8
SECTION 2.8 Title to Trust Property........................................ 8
SECTION 2.9 Situs of Trust................................................. 8
SECTION 2.10 Representations and Warranties of the Depositor................ 8
SECTION 2.11 Federal Income Tax Matters..................................... 9
ARTICLE III
CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1 Initial Ownership............................................. 10
SECTION 3.2 The Certificates.............................................. 10
SECTION 3.3 Authentication of Certificates................................ 10
SECTION 3.4 Registration of Certificates; Transfer and Exchange of
Certificates.................................................. 11
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Certificates............. 12
SECTION 3.6 Persons Deemed Owners......................................... 13
SECTION 3.7 Access to List of Certificateholders' Names and
Addresses..................................................... 13
SECTION 3.8 Maintenance of Office or Agency............................... 13
SECTION 3.9 Appointment of Paying Agent................................... 14
SECTION 3.10 Book-Entry Certificates....................................... 14
SECTION 3.11 Notices to Clearing Agency.................................... 15
SECTION 3.12 Definitive Certificates....................................... 15
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 Prior Notice to Certificateholders with Respect to Certain
Matters....................................................... 16
SECTION 4.2 Action by Certificateholders with Respect to Certain
Matters....................................................... 16
SECTION 4.3 Action by Certificateholders with Respect to Bankruptcy....... 17
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SECTION 4.4 Restrictions on Certificateholders' Power..................... 17
SECTION 4.5 Majority Control.............................................. 17
SECTION 4.6 Certain Litigation Matters.................................... 17
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1 Establishment of Certificate Payment Account.................. 17
SECTION 5.2 Application of Trust Funds.................................... 18
SECTION 5.3 Method of Payment............................................. 19
SECTION 5.4 No Segregation of Monies; No Interest......................... 19
SECTION 5.5 Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service and Others... 19
SECTION 5.6 Signature on Returns; Tax Matters Partner..................... 20
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1 General Authority............................................. 20
SECTION 6.2 General Duties................................................ 20
SECTION 6.3 Action upon Instruction....................................... 21
SECTION 6.4 No Duties Except as Specified in this Agreement or in
Instructions.................................................. 21
SECTION 6.5 No Action Except Under Specified Documents or Instructions.... 22
SECTION 6.6 Restrictions.................................................. 22
ARTICLE VII
REGARDING THE OWNER TRUSTEE
SECTION 7.1 Acceptance of Trusts and Duties............................... 22
SECTION 7.2 Furnishing of Documents....................................... 24
SECTION 7.3 Representations and Warranties................................ 24
SECTION 7.4 Reliance; Advice of Counsel................................... 25
SECTION 7.5 Not Acting in Individual Capacity............................. 25
SECTION 7.6 Owner Trustee Not Liable for Certificates or Receivables...... 25
SECTION 7.7 Owner Trustee May Own Certificates and Notes.................. 26
ARTICLE VIII
OMPENSATION AND INDEMNIFICATION OF OWNER TRUSTEE
SECTION 8.1 Owner Trustee's Fees and Expenses............................. 26
SECTION 8.2 Indemnification............................................... 26
SECTION 8.3 Payments to the Owner Trustee................................. 27
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ARTICLE IX
TERMINATION
SECTION 9.1 Termination of Trust Agreement................................ 27
SECTION 9.2 Prepayment of the Certificates................................ 28
ARTICLE X
SUESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1 Eligibility Requirements for Owner Trustee.................... 29
SECTION 10.2 Resignation or Removal of Owner Trustee....................... 29
SECTION 10.3 Successor Owner Trustee....................................... 30
SECTION 10.4 Merger or Consolidation of Owner Trustee...................... 30
SECTION 10.5 Appointment of Co-Trustee or Separate Trustee................. 31
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Supplements and Amendments.................................... 32
SECTION 11.2 No Legal Title to Owner Trust Estate in Certificateholders.... 34
SECTION 11.3 Limitation on Rights of Others................................ 34
SECTION 11.4 Notices....................................................... 34
SECTION 11.5 Severability.................................................. 35
SECTION 11.6 Separate Counterparts......................................... 35
SECTION 11.7 Successors and Assigns........................................ 35
SECTION 11.8 Covenants of the Depositor.................................... 35
SECTION 11.9 No Petition................................................... 35
SECTION 11.10 No Recourse................................................... 35
SECTION 11.11 Headings...................................................... 36
SECTION 11.12 Governing Law................................................. 36
SECTION 11.13 Depositor Payment Obligation.................................. 36
SECTION 11.14 Certificates Nonassessable and Fully Paid..................... 36
SECTION 11.15 Ratification of Prior Actions................................. 36
SECTION 11.16 Third-Party Beneficiary....................................... 36
EXHIBITS
EXHIBIT A Form of Certificate
EXHIBIT B Form of Certificate of Trust
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AMENDED AND RESTATED TRUST AGREEMENT, dated as of [__________], 20[__]
(as amended, supplemented or otherwise modified and in effect from time to time,
this "Agreement"), between CARMAX AUTO FUNDING LLC, a Delaware limited liability
company, as depositor (the "Depositor"), and [____________________], a
[____________________], as owner trustee and not in its individual capacity (in
such capacity, the "Owner Trustee").
WHEREAS, the CarMax Auto Owner Trust 20[__]-[__] was created on
[__________], 20[__] pursuant to (i) a Trust Agreement dated as of [__________],
20[__] between the Depositor and the Owner Trustee (the "Initial Trust
Agreement"), and (ii) the filing of a certificate of trust with the Secretary of
State of the State of Delaware on [__________], 20[__]; and
WHEREAS, the Depositor and the Owner Trustee wish to amend and restate
the Initial Trust Agreement 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.
"CarMax" shall mean CarMax Auto Superstores, Inc., a Virginia
corporation, and its successors and assigns.
"CarMax Funding" shall mean CarMax Auto Funding LLC, a Delaware
limited liability company, and its successors and assigns.
"Certificate" shall mean a physical certificate evidencing the
beneficial interest of a Certificateholder in the Owner Trust Estate,
substantially in the form of Exhibit A to this Agreement. 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 Balance" shall mean, at any time, as the context may
require, (i) with respect to all of the Certificates, an amount equal to,
initially, the Initial Certificate Balance and, thereafter, an amount equal to
the Initial Certificate Balance as reduced from time to time by all amounts
allocable to principal previously distributed to the Certificateholders or (ii)
with respect to any Certificate, an amount equal to, initially, the initial
denomination of such Certificate and, thereafter, an amount equal to such
initial denomination as reduced from time to time by all amounts allocable to
principal previously distributed in respect of such Certificate; provided,
however, that in determining whether the Holders of Certificates evidencing the
requisite percentage of the Certificate Balance have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any other
Transaction Document, Certificates owned by the Trust, any other obligor upon
the Certificates, the Depositor, the Seller, the Servicer or any Affiliate of
any of the foregoing Persons shall be disregarded and deemed to be excluded from
the Certificate Balance (unless such Persons own 100% of the Certificate Balance
of the Certificates), except that, in determining whether the Indenture Trustee
or the Owner Trustee shall be protected in relying on any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates that a
Responsible Officer of the Indenture Trustee or the Owner Trustee, as
applicable, knows to be so owned shall be so disregarded; and, provided further,
that Certificates that have been pledged in good faith may be regarded as
included in the Certificate Balance if the pledgee establishes to the
satisfaction of the Indenture Trustee or the Owner Trustee, as applicable, the
pledgee's right so to act with respect to such Certificates and that the pledgee
is not the Trust, any other obligor upon the Certificates, the Depositor, the
Seller, the Servicer or any Affiliate of any of the foregoing Persons.
"Certificate Depository Agreement" shall mean the Letter of
Representations, dated [__________], 20[__], among the Issuer, the Indenture
Trustee, the Owner Trustee and The Depository Trust Company, as the initial
Clearing Agency, relating to the Certificates.
"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 Statutory
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.
"Certificateholder" shall mean a Person in whose name a Certificate is
registered on the Certificate Register.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the Treasury Regulations promulgated thereunder.
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"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
[____________________], [____________________], Attention:
[____________________], or at such other address as the Owner Trustee may
designate from time to time by notice to the Certificateholders, the Indenture
Trustee, the Depositor and the Servicer, 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, the Indenture Trustee, the
Depositor and the Servicer.
"Definitive Certificates" shall have the meaning specified in Section
3.10.
"Depositor" shall mean CarMax Funding in its capacity as depositor
under this Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Expenses" shall have the meaning specified in Section 8.2.
"Final Distribution Date" shall mean the [__________] 20[__]
Distribution Date.
"Holder" or "Certificateholder" shall mean a 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 [__________],
20[__], between the Trust and the Indenture Trustee, as amended, supplemented or
otherwise modified and in effect from time to time.
"Indenture Trustee" shall mean [____________________], a
[____________________], not in its individual capacity but solely as Indenture
Trustee under the Indenture, and any successor Indenture Trustee under the
Indenture.
"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 [____________________], a
[____________________], not in its individual capacity but solely as Owner
Trustee under this Agreement, and any successor Owner Trustee under this
Agreement.
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"Paying Agent" shall mean the Owner Trustee or any successor paying
agent or co-paying agent appointed pursuant to Section 3.9 who is authorized by
the Owner Trustee to make distributions from the Certificate Payment Account on
behalf of the Trust.
"Plan" shall have the meaning specified in Section 3.4.
"Plan Asset Regulation" shall mean 29 C.F.R. Section 2510.3-101 issued
by The United States Department of Labor concerning the definition of what
constitutes the assets of a Plan with respect to such Plan's investment in an
entity for purposes of the fiduciary responsibility provisions of Title I of
ERISA and Section 4975 of the Code.
"Prepayment Date" shall mean the Distribution Date specified by the
Servicer pursuant to Section 9.2(b).
"Prepayment Price" shall mean, with respect to any prepayment of
Certificates pursuant to Section 9.2, an amount equal to the sum of (i) the
Certificate Balance as of the related Prepayment Date plus (ii) the amount of
accrued but unpaid interest on such Certificate Balance to but excluding such
Prepayment Date.
"PTCE 95-60" shall have the meaning specified in Section 3.4.
"Rating Agency Condition" shall mean, with respect to any action, that
each Rating Agency shall have been given prior notice of such action and (i)
shall have notified the Depositor, the Owner Trustee and the Insurer in writing
that such action will not result in a reduction or withdrawal of the
then-current rating assigned by such Rating Agency to any Class of Notes or the
Certificates and (ii) shall have confirmed to the Insurer that such action will
not result in a withdrawal or reduction below investment grade of the then
current shadow rating assigned by such Rating Agency to any class of Notes or
the Certificates, in each case without giving effect to the benefit of the
Policy.
"Record Date" shall mean, with respect to any Distribution Date or
Prepayment Date, the close of business on the Business Day preceding such
Distribution 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 Distribution Date or Prepayment Date, the last Business Day
of the calendar month preceding such Distribution Date or Prepayment Date.
"Residual Interest" shall mean the right to receive the amounts in
respect of the Owner Trust Estate that are distributable to the Seller pursuant
to this Agreement, the Sale and Servicing Agreement or the Indenture.
"Responsible Officer" shall mean (i) in the case of the Indenture
Trustee, any managing director, principal, vice president, assistant vice
president, assistant secretary, assistant treasurer or trust officer of the
Indenture Trustee or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers and, with respect to a particular corporate trust matter, any other
officer of the Indenture Trustee to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject and (ii) in
the case of the Owner Trustee, any vice president, assistant vice president,
assistant secretary, assistant treasurer, trust officer or financial services
officer of
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the Owner Trustee or any other officer of the Owner Trustee customarily
performing functions similar to those performed by any of the above designated
officers and with direct responsibility for the administration of the Trust and,
with respect to a particular corporate trust matter, any other officer of the
Owner Trustee to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement, dated as of [__________], 20[__], by and among the Trust, the
Depositor 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.
"Statutory 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.
"Transfer" shall mean a sale, transfer, assignment, participation,
pledge or other disposition of a Certificate.
"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 CarMax Auto Owner Trust 20[__]-[__] created as
a Delaware statutory trust pursuant to this Agreement and the filing of the
Certificate of Trust.
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.
(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.
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(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 20[__]-[__]," 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 on behalf of the Trust.
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 as the
Owner Trustee may designate by written notice to the Certificateholders and the
Depositor.
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 and the
Certificates, at the direction of the Depositor, to fund the Reserve
Account, to pay the organizational, start-up and transactional expenses of
the Trust and to pay the balance to the Seller, as holder of the Residual
Interest, pursuant to the Sale and Servicing Agreement;
(iii) to pay interest on and principal of the Notes and the
Certificates and to pay Excess Collections to the Seller, as holder of the
Residual Interest;
(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;
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(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
Statutory Trust Statute.
SECTION 2.5 Initial Capital Contribution of Owner Trust Estate. The
Depositor has sold, assigned, transferred, conveyed and set over to the Owner
Trustee the sum of $1,000. The Owner Trustee hereby acknowledges receipt in
trust from the Depositor of such amount, which amount constituted the initial
Owner Trust Estate and was 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 statutory
trust under the Statutory Trust Statute and that this Agreement constitute the
governing instrument of such statutory 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 Receivables 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 Statutory Trust Statute with respect to accomplishing the purposes of the
Trust. The parties have caused the filing of the Certificate of Trust with the
Secretary of State.
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SECTION 2.7 Liability of Certificateholders. The Certificateholders
shall be entitled to the same limitation of personal liability extended to
stockholders of private corporations organized under the general corporation law
of the State of Delaware.
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.
SECTION 2.9 Situs of Trust. The Trust shall be located and
administered in the State of Delaware or the State of New York. 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 principal office of the Trust will be at the Corporate Trust Office in
the State of New York.
SECTION 2.10 Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Owner Trustee that:
(i) the Depositor has been duly organized and is validly
existing as a limited liability company in good standing under the laws of
the State of Delaware, has the power, authority and legal right to own its
properties and to conduct its business as such properties are currently
owned and such business is currently conducted, and has the power,
authority and legal right to acquire, own and sell the Receivables;
(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 each jurisdiction in which the failure
to so qualify or to obtain such licenses and approvals would materially and
adversely affect the performance by the Depositor of its obligations under,
or the validity or enforceability of, this Agreement, any of the other
Transaction Documents to which the Depositor is a party, the Receivables,
the Notes or the Certificates;
(iii) the Depositor has the power and authority to execute,
deliver and perform its obligations under this Agreement and the other
Transaction Documents to which it is a party, and the Depositor has the
power and authority to sell, assign, transfer and convey the property to be
sold and transferred to and deposited with the Trust and has duly
authorized such transfer and deposit by all necessary limited liability
company action, and the execution, delivery and performance of this
Agreement and the other Transaction Documents to which the Depositor is a
party have been duly authorized by the Depositor by all necessary limited
liability company action;
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(iv) the execution, delivery and performance by the Depositor
of this Agreement and the other Transaction Documents to which the
Depositor is a party, the consummation of the transactions contemplated
hereby and thereby and the fulfillment of the terms hereof and thereof will
not conflict with, result in a 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 formation or limited liability company agreement of
the Depositor or any material indenture, agreement, mortgage, deed of trust
or other instrument to which the Depositor is a party or by which the
Depositor is bound or to which any of its properties are subject, or result
in the creation or imposition of any lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument (other than pursuant to this Agreement), or
violate any law, order, rule or regulation applicable to the Depositor or
its properties of any federal or state regulatory body, court,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or any of its properties;
(v) there are no proceedings or investigations pending or, to
the knowledge of the Depositor, threatened against the Depositor before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its properties
(A) asserting the invalidity of this Agreement, the Sale and Servicing
Agreement, the Indenture, any of the other Transaction Documents, the Notes
or the Certificates, (B) seeking to prevent the issuance of the Notes or
the Certificates or the consummation of any of the transactions
contemplated by this Agreement, the Sale and Servicing Agreement, the
Indenture or any of the other Transaction Documents, (C) seeking any
determination or ruling that would materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement, the Sale and Servicing Agreement, the
Indenture, any of the other Transaction Documents, the Receivables, the
Notes or the Certificates, or (D) that would adversely affect the federal
tax attributes or Applicable Tax State franchise or income tax attributes
of the Trust or of the Notes or the Certificates; and
(vi) the representations and warranties of the Depositor in
Section 3.01 of the Receivables Purchase Agreement are true and correct.
SECTION 2.11 Federal Income Tax Matters. The Certificateholders and
the Certificate Owners 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 disregarded entity under Treasury
Regulation Section 301.7701-3 or as a partnership, and that the
Certificateholders will be treated as partners in that partnership. The holder
of the Residual Interest 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 Certificateholders for such year (or
other period) shall be treated as a guaranteed payment within the meaning
of Section 707(c) of the Code and the Certificateholders shall be allocated
losses for federal income tax purposes
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to the extent such losses cannot be allocated to the holder the Residual
Interest consistent with the requirement that such allocation have
substantial economic effect pursuant to Section 704(b) of the Code; and
(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
holder of the Residual Interest.
The Depositor is authorized to modify the allocations in this Section
2.11 if necessary or appropriate, in its sole discretion, for the allocations to
reflect fairly the economic income, gain or loss to the holder of the Residual
Interest or the Certificateholders or as otherwise required by the Code.
ARTICLE III
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.
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.
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 Receivables 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 president, any vice president, any assistant vice
president, its treasurer, any assistant treasurer, its secretary or any
assistant secretary, without
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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 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. Upon issuance, authentication and
delivery pursuant to the terms hereof, the Certificates will be entitled to the
benefits of this Agreement.
SECTION 3.4 Registration of Certificates; Transfer and Exchange of
Certificates.
(a) The Owner Trustee initially shall be the registrar (the
"Certificate Registrar") for the purpose of registering Certificates and
Transfers of Certificates as herein provided. The Certificate Registrar 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 Certificate Registrar shall provide for the
registration of Certificates and the registration of Transfers of Certificates.
Upon any resignation of any Certificate Registrar, the Owner Trustee shall, upon
receipt of written instructions from the Depositor, promptly appoint a
successor.
(b) The Certificates may not be acquired by or for the account of (i)
an employee benefit plan (as defined in Section 3(3) of ERISA) that is subject
to the provisions of Title 1 of ERISA, (ii) a plan described in Section
4975(e)(1) of the Code or (iii) any entity whose underlying assets include plan
assets by reason of a plan's investment in the entity (each, a "Plan"). Each
Certificate Owner, by its acceptance of a Certificate, shall be deemed to have
represented and warranted that such Certificate Owner (A) is not a Plan and is
not a Person acting on behalf of a Plan or a Person using the assets of a Plan
to effect the transfer of such Certificate, 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")) that includes the assets of a Plan for purposes of the
Plan Asset Regulation.
Any person who is not an affiliate of the Seller and acquires more
than 49.9% of the Certificates will be deemed to represent that it is not a
party in interest (within the meaning of ERISA) or a disqualified person (within
the meaning of Section 4975(e)(2) of the Code) with respect to any Plan, other
than a Plan that it sponsors for the benefit of its employees, and that no Plan
with respect to which it is a party in interest has or will acquire any interest
in the Notes.
To the extent permitted under applicable law (including, but not
limited to, ERISA), neither the Owner Trustee nor the Certificate Registrar
shall be under any liability to any Person for any registration of transfer of
any Certificate that is in fact not permitted or for taking any other action
with respect to such Certificate under the provisions of this Agreement so long
as such transfer was registered by the Owner Trustee or the Certificate
Registrar in accordance with this Agreement.
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(c) Upon surrender for registration of Transfer of any Certificate at
the office or agency of the Certificate Registrar 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 on behalf of the
Trust and the Owner Trustee 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 evidencing the same aggregate interest in the Trust. 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 ▇-▇ ▇▇▇, ▇-▇ ECI or W-9, as applicable, 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.
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Certificates.
(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 the 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" (as defined in the
Relevant UCC), the Owner Trustee shall execute on behalf of the Trust and the
Owner Trustee 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
Certificate Registrar'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 9.2, instead of issuing a
replacement Certificate, the Owner Trustee may direct the Paying Agent to 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" (as
defined in the Relevant UCC) 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" (as defined in
the Relevant UCC), 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.
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(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.
(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 Certificate Registrar shall furnish or cause to be furnished to
the Servicer and the Depositor, or to the Indenture Trustee or the Owner
Trustee, within fifteen (15) days after receipt by the Certificate Registrar of
a written request therefor from the Servicer, the Depositor or the Indenture
Trustee or the Owner 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 Certificate
Registrar, 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 Certificate
Registrar 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 Certificate
Registrar 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 Certificate Registrar in respect of the
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Certificates and the Transaction Documents may be served. The Certificate
Registrar shall give prompt written notice to the Depositor, the Owner Trustee
and the Certificateholders of any change in the location of the Certificate
Registrar or any such office or agency.
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 the Owner
Trustee and any co-paying agent chosen by the Owner Trustee. The Owner Trustee
shall be permitted to resign as Paying Agent upon thirty (30) days' written
notice to the Depositor. In the event that the Owner Trustee shall no longer be
the Paying Agent, the Owner Trustee, upon receipt of written instructions from
the Depositor and 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 direct 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 Book-Entry Certificates and shall 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 shall receive a definitive Certificate
representing such Certificate Owner's interest in a Certificate except as
provided in Section 3.12. Unless and until definitive, fully registered
Certificates (the "Definitive Certificates") have been issued to the Certificate
Owners pursuant to Section 3.12:
(i) the provisions of this Section 3.10 shall be in full force
and effect;
(ii) the Certificate Registrar, the Paying Agent and the Owner
Trustee shall be entitled to deal with the Clearing Agency for all purposes
of this Agreement (including the payment of principal of 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;
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(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 3.10 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 Certificate
Depository Agreement, and, unless and until Definitive Certificates have
been issued to the Certificate Owners 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 written 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 written 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 written 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 have been issued to the 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
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 in writing of
the occurrence of such event and of the availability of Definitive Certificates
to Certificate Owners requesting the same. Upon surrender by the Clearing Agency
to the Certificate Registrar of the Certificates representing the Book-Entry
Certificates, accompanied by registration instructions, the Owner Trustee shall
execute and 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 no Insurer Default shall have occurred and be continuing, or, if an
Insurer Default shall have occurred and be continuing, 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 or such Holders, as applicable, 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 Receivables) and the settlement of any action,
proceeding, investigation, 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 Receivables);
(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 Statutory 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;
provided, however, that the Owner Trustee shall not take action with respect to
any of the foregoing matters if such action would reasonably be expected to
materially adversely affect the interests of the Insurer.
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 no Insurer Default
shall have occurred and be continuing, or, if an Insurer Default
16
shall have occurred and be continuing, in accordance with the written direction
of 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 Receivables 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 no Insurer Default shall have occurred and be continuing,
or, if an Insurer Default shall have occurred and be continuing, each
Certificateholder approves of such commencement in writing in advance and
delivers to the Owner Trustee a certificate certifying that such Person
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 the Holders of Certificates evidencing not less than 51% of the
Certificate Balance at the time of the delivery of such notice.
SECTION 4.6 Certain Litigation Matters. The Owner Trustee shall
provide prompt written notice to the Depositor, the Seller, the Servicer and the
Insurer of any action, proceeding or investigation known to the Owner Trustee
that could reasonably be expected to adversely affect the Trust or the Owner
Trust Estate or the rights or obligations of the Insurer under any of the
Transaction Documents. If no Insurer Default shall have occurred and be
continuing, and neither the Depositor nor CarMax shall be actively defending any
such action, proceeding or investigation, then the Owner Trustee shall, upon
written notice from the Insurer, allow the Insurer to institute, assume or
control the defense of such action, proceeding or investigation.
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, the Servicer has agreed
to establish, on or before the Closing Date, and maintain in the name of the
Owner Trustee at an Eligible Institution (which shall initially be the Owner
Trustee) a segregated trust account designated as the "CarMax Auto Owner Trust
20[__]-[__] Trust Account" (the "Certificate Payment Account").
17
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, the Sale and Servicing Agreement and the
Indenture.
SECTION 5.2 Application of Trust Funds.
(a) On each Distribution Date, upon receipt of written instructions
from the Servicer pursuant to Section 4.9 of the Sale and Servicing Agreement,
the Owner Trustee shall, or, if the Owner Trustee is not the Paying Agent, shall
direct the Paying Agent to, apply the amount on deposit in the Certificate
Payment Account on such Distribution Date to make the following distributions in
the following order of priority:
(i) to the Certificateholders, the Total Certificate Interest
for such Distribution Date; and
(ii) to the Certificateholders, the Monthly Certificate
Principal for such Distribution Date.
If the amount on deposit in the Certificate Payment Account on any
Distribution Date is less than the amount described in clauses (i) and (ii)
above for such Distribution Date, the Owner Trustee shall, or, if the Owner
Trustee is not the Paying Agent, the Owner Trustee shall direct the Paying Agent
to, pay the available amount to the Holders of each Certificate pro rata based
on the outstanding principal amount of such Certificate as of such Distribution
Date.
(b) On each Distribution Date, the Owner Trustee shall, or, if the
Owner Trustee is not the Paying Agent, the Owner Trustee shall direct 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 Distribution Date.
(c) In the event that any withholding tax is imposed on any Trust
payment (or any allocation 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 are 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 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
18
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 Distribution 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 and the
Paying Agent appropriate written instructions at least five (5) Business Days
prior to such Distribution Date and such Certificateholder is a Clearing Agency
(or its nominee), 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 Distribution
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
Certificate Registrar 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.
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 Seller, (i) maintain (or cause to be
maintained) the books of the Trust on the basis of a fiscal year ending December
31, 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, on behalf of the Trust, shall elect under Section 1278 of the
Code to include in income currently any market discount that accrues with
respect to the Receivables. The Owner Trustee, on behalf of the Trust, 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 Seller, a firm of independent
public accountants (the "Accountants") selected by the Seller. The Owner Trustee
may require the Accountants to provide to the Owner Trustee, on or before March
31, 20[__], 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
19
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 Owner Trustee shall sign, on behalf of the Trust, the tax
returns of the Trust.
(b) The Seller, as holder of the Residual Interest, shall be
designated the "tax matters partner" of the Trust pursuant to Section
6231(a)(7)(A) of the Code and applicable Treasury Regulations.
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, 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
Certificateholders, the Servicer or the Administrator recommends in writing 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 to administer the Trust for the
benefit of the Certificateholders, subject to the lien of the Indenture and in
accordance with the provisions of this Agreement. Notwithstanding the foregoing,
the Owner Trustee shall be deemed to have discharged (or caused to be
discharged) its duties and responsibilities hereunder 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.
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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.
(b) The Owner Trustee shall not be required to take any action under
this Agreement or any other 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 of this Agreement or any other Transaction Document or is otherwise
contrary to law.
(c) Subject to Article IV, 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 or the Certificateholders, as applicable,
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 written 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) Subject to Article IV, 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 or the Certificateholders, as applicable, 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 written 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.
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
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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
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 in its
individual capacity 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 is a party and (iii) in accordance with
any document or written 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, the
Administrator, the Servicer and the Insurer shall not direct the Owner Trustee
to take action that would violate the provisions of this Section 6.6.
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. 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;
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(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,
the Servicer or the Insurer;
(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) the Owner Trustee shall not be liable for any indebtedness
evidenced by or arising under any of the Transaction Documents, including
the principal of and interest on the Notes or the Certificates or payments
of Excess Collections to the Seller, as holder of the Residual Interest;
(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;
(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 the Insurer or any of the
Certificateholders, unless the Insurer or such Certificateholders, as
applicable, 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;
(viii) 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;
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(ix) the Owner Trustee shall not be deemed to owe any fiduciary
duty to the Insurer, and no implied duties or obligations with respect to
the Insurer shall be read into this Agreement or any other Transaction
Document against the Owner Trustee;
(x) in no event shall the Owner Trustee be personally liable
(A) for special, consequential or punitive damages, (B) for the acts or
omissions of clearing agencies or securities depositories or any of their
respective nominees or correspondents, (C) for acts or omissions of brokers
or dealers or (D) for any losses due to forces beyond the control of the
Owner Trustee, including strikes, work stoppages, acts of war or terrorism,
insurrection, revolution, nuclear or natural catastrophes or acts of God
and interruptions, loss or malfunctions of utilities, communications or
computer (software and hardware) services provided by third parties
selected by the Owner Trustee with reasonable care;
(xi) the Owner Trustee shall have no responsibility for the
accuracy of any information provided to Certificateholders or any other
person that has been obtained from, or provided to the Owner Trustee by,
any other Person; and
(xii) the Owner Trustee shall not be liable for any failure to
anticipate incurring Expenses (as defined in Section 8.2) as long as the
Owner Trustee acts in good faith based on the facts reasonably available to
it at the time of such determination.
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.
(a) [RESERVED].
(b) 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 [____________________] duly organized and validly
existing in good standing under the laws of [____________________] and has
all requisite power and authority to execute, deliver and perform its
obligations under this Agreement;
(ii) it has taken all 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 [____________________] 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,
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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
Transaction 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.
SECTION 7.5 Not Acting in Individual Capacity. Except as provided
in Section 7.3, in accepting the trusts hereby created, [____________________]
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
Receivables. 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, the Certificates (other than the signature and
countersignature of the Owner Trustee on the Certificates) or the Notes, or of
any Receivable 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 Receivable, or the perfection and priority of any security
interest created by any Receivable 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
25
payments to be distributed to the Certificateholders or the Seller, as holder of
the Residual Interest, under this Agreement or to 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 Receivable on any computer or other
record thereof, the validity of the assignment of any Receivable to the Trust or
any intervening assignment, the completeness of any Receivable, the performance
or enforcement of any Receivable, 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 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.
ARTICLE VIII
COMPENSATION AND INDEMNIFICATION 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 Servicer and the Owner
Trustee, and the Owner Trustee shall be reimbursed by the Servicer 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. To the fullest extent permitted by
applicable law, the initial Servicer 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 initial
Servicer 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. In no event will the initial Servicer or
the Owner Trustee be entitled to make any claim upon the Owner Trust Estate 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
initial Servicer, which approval shall not be unreasonably withheld.
26
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.
ARTICLE IX
TERMINATION
SECTION 9.1 Termination of Trust Agreement.
(a) This Agreement (other than the provisions of Article VIII) shall
terminate and be of no further force or effect and the Trust shall dissolve upon
the earlier of (i) the payment to the Servicer, 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 and (ii) the Distribution Date next succeeding
the month which is one year after the maturity or other liquidation of the last
Receivable 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
Distribution 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 Distribution 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 Distribution 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, subject to Section 3808 of the
Statutory Trust Statute, amounts distributable on such Distribution 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
27
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 Seller, as holder of the
Residual Interest.
(d) Upon the winding up of the Trust, in accordance with Section 3808
of the Statutory Trust Statute, 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 Statutory Trust Statute.
SECTION 9.2 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 Distribution 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 Receivables and applied to pay all amounts due to
the Servicer under the Sale and Servicing Agreement plus the unpaid principal
amount of the Notes plus all accrued but unpaid interest (including any overdue
interest) on the Notes plus the Certificate Balance plus all accrued but unpaid
interest (including any overdue interest) on the Certificates plus all amounts
due to the Insurer under the Transaction Documents or the Policy. The Owner
Trustee shall furnish notice of such prepayment to each Certificateholder. If
the Certificates are to be prepaid pursuant to this Section 9.2(a), the
Prepayment Price shall be due and payable on the Prepayment Date.
(b) Notice of prepayment of the Certificates under Section 9.2(a)
shall be given by the Owner Trustee by first-class mail, postage prepaid, or by
facsimile mailed or transmitted promptly following receipt by the Owner Trustee
of notice from the Servicer pursuant to Section 9.1(a) of the Sale and Servicing
Agreement, 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
Certificate Registrar 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.
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(c) The Certificates to be prepaid shall, following notice of
prepayment as required by Section 9.2(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 (other than the provisions of Article VIII) and
the Trust shall terminate in accordance with Section 9.1(a).
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 authorized to exercise corporate trust powers,
(ii) have a combined capital and surplus of at least $50,000,000 and be subject
to supervision or examination by federal or state authorities, (iii) 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
and (iv) be a corporation or banking association satisfying the provisions of
Section 3807(a) of the Statutory Trust Statute. If such corporation or banking
association 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 or banking association 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, the Depositor and the
Insurer. Upon receiving such notice of resignation, the Administrator shall
promptly appoint a successor Owner Trustee (acceptable to the Depositor and the
Insurer) 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, or the Owner Trustee shall otherwise become
incapable of acting, 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 Depositor and the Insurer) by written
instrument, in duplicate, one
29
copy of which instrument shall be delivered to the removed Owner Trustee and one
copy to the successor Owner Trustee.
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 Depositor, the Certificateholders, the Indenture
Trustee, the Noteholders, the Insurer and 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, subject to the payment of all
fees and expenses owed to the predecessor Owner Trustee, 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.
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, except
the filing of an amendment to the Certificate of Trust, if required under the
Statutory Trust Statute, shall be the successor Owner Trustee; provided,
however, that such corporation or banking association must be otherwise
qualified and eligible under Section 10.1.
30
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 to the
contrary, 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.
(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;
31
(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.
(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
but 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 in any
offering document used in connection with the initial offer and sale of the
Notes or the Certificates or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement
which will not be inconsistent with other provisions of this Agreement;
provided, however, that (i) no such amendment may materially adversely affect
the interests of any Noteholder or Certificateholder, (ii) no such amendment
will be permitted unless an Opinion of Counsel is delivered to the Owner Trustee
to the effect that such amendment will not cause the Trust to be characterized
for federal income tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the federal income taxation of any
Notes Outstanding or outstanding Certificates or any Noteholder or
Certificateholder and (iii) no such amendment will be permitted without the
consent of the Insurer if such amendment would reasonably be expected to
materially adversely affect the interests of the Insurer.
32
(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 or, if
the Notes have been paid in full, 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 (x) no such amendment will be
permitted unless an Opinion of Counsel is delivered to the Owner Trustee to the
effect that such amendment will not cause the Trust to be characterized for
federal income tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the federal income taxation of any
Notes Outstanding or outstanding Certificates or any Noteholder or
Certificateholder and (y) no such amendment will be permitted without the
consent of the Insurer if such amendment would reasonably be expected to
materially adversely affect the interests of the Insurer; and, provided further,
that, subject to the express rights of the Insurer under the Transaction
Documents, no such amendment may:
(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 or in respect of the Receivables or
distributions that are required to be made for the benefit of the
Noteholders or the Certificateholders, or change any Note Rate or the
Certificate Rate, without the consent of all Noteholders and
Certificateholders adversely affected by such amendment;
(ii) reduce the percentage of the Note Balance or the
percentage of the Certificate Balance the consent of the Holders of which
is required for any amendment to this Agreement without the consent of all
the Noteholders and Certificateholders adversely affected by the amendment;
or
(iii) adversely affect the rating assigned by any Rating Agency
to any Class of Notes or the Certificates 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 or the consent of the Holders of Certificates evidencing not
less than 66 2/3% of the Certificate Balance.
(c) An amendment to this Agreement shall be deemed not to materially
adversely affect the interests of any Noteholder or Certificateholder if (i) the
Person requesting such amendment obtains and delivers to the Owner Trustee an
Opinion of Counsel to that effect or (ii) the Rating Agency Condition is
satisfied.
(d) 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 and the Depositor shall furnish
written notice of the substance of such amendment or consent to the Indenture
Trustee, the Insurer and the Rating Agencies.
(e) 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
33
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.
(f) 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.
(g) 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.
(h) 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, the Insurer 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: Treasurer, (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 &
34
Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed
Surveillance Department, and (vi) in the case of the Insurer, at the following
address: [____________________], [____________________] Attention:
[____________________]. 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.
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. To the fullest extent permitted by
applicable law, 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.
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
35
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.
SECTION 11.13 Depositor Payment Obligation. The Depositor shall be
responsible for payment of the Administrator's compensation under the
Administration Agreement and shall reimburse the Administrator for all expenses
and liabilities of the Administrator incurred under the Administration
Agreement.
SECTION 11.14 Certificates Nonassessable and Fully Paid. The
Certificateholders shall not be personally liable for the obligations of the
Issuer. The interests represented by the Certificates shall be nonassessable for
any losses or expenses of the Issuer or for any reason whatsoever, and, upon the
authentication thereof by the Owner Trustee pursuant to Section 3.3, 3.4 or 3.5,
the Certificates are and shall be deemed fully paid.
SECTION 11.15 Ratification of Prior Actions. Any actions taken by the
Owner Trustee in connection with the opening of bank accounts, deposit of monies
into such accounts, obtaining of sales finance company licenses on behalf of the
Trust and any actions related thereto are hereby confirmed and ratified in all
respects, and the Owner Trustee shall be entitled to the indemnity provided for
in Section 8.2 with respect to such actions.
SECTION 11.16 Third-Party Beneficiary. The parties hereto agree that
the Insurer is a third-party beneficiary hereof.
[SIGNATURE PAGE FOLLOWS]
36
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 FUNDING LLC,
as Depositor
By:
-----------------------------------
Name:
Title:
[____________________],
as Owner Trustee
By:
-----------------------------------
Name:
Title:
Accepted and agreed:
CARMAX AUTO SUPERSTORES, INC.,
as Servicer
By:
---------------------------
Name:
Title:
S-1
Exhibit A
Form of Certificate
-------------------
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE AS SET FORTH IN THE TRUST
AGREEMENT (AS DEFINED HEREIN). THE OUTSTANDING PRINCIPAL BALANCE OF THIS
CERTIFICATE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $[_______________]
NO. R-1 CUSIP NO. [__________]
CARMAX AUTO OWNER TRUST 20[__]-[__]
[____]% ASSET-BACKED CERTIFICATE
evidencing a beneficial interest in the property of CarMax Auto Owner Trust
20[__]-[__], a Delaware statutory trust (the "Trust"), which property includes a
pool of retail installment sale contracts secured by new and used motor vehicles
sold by CarMax Auto Superstores, Inc., a Virginia corporation (the "Seller"), to
CarMax Auto Funding LLC, a Delaware limited liability company (the "Depositor"),
and sold by the Depositor to the Trust. The property of the Trust (other than
the Certificate Payment Account and the proceeds thereof) has been pledged by
the Trust to [____________________], a [____________________], as Indenture
Trustee (in such capacity, the "Indenture Trustee"), pursuant to an Indenture
dated as of [__________], 20[__] (as amended, supplemented or otherwise modified
from time to time, the "Indenture") between the Trust and the Indenture Trustee
to secure the payment of the Notes issued thereunder.
This certifies that CEDE & CO. is the registered owner of a
[____________________] DOLLAR nonassessable, fully paid, beneficial interest in
the Trust. The Trust was created pursuant to a Trust Agreement dated
[__________], 20[__] between the
A-1
Depositor and [____________________], not in its individual capacity but solely
as owner trustee (in such capacity, the "Owner Trustee"), and as amended and
restated by an Amended and Restated Trust Agreement dated as of [__________],
20[__] (as amended, supplemented or otherwise modified and in effect from time
to time, the "Trust Agreement") among the Depositor and the Owner Trustee, a
summary of certain of the pertinent provisions of which is set forth below.
Capitalized terms used but not defined herein have the meanings assigned to them
in the Trust Agreement or in the Sale and Servicing Agreement dated as of
[__________], 20[__] (as amended, supplemented or otherwise modified and in
effect from time to time, the "Sale and Servicing Agreement") among the Trust,
the Depositor, and CarMax Auto Superstores, Inc., as servicer (in such capacity,
the "Servicer").
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 sale contracts originated in connection with the sale of new
or used motor vehicles (the "Receivables"); (ii) all amounts received on or in
respect of the Receivables after the Cutoff Date; (iii) the security interests
in the Financed Vehicles granted by the Obligors pursuant to the Receivables;
(iv) all proceeds from claims on or refunds of premiums with respect to physical
damage, theft, credit life or credit disability insurance policies relating to
the Financed Vehicles or the Obligors; (v) the Receivable Files; (vi) the
Collection Account, the Note Payment Account, the Certificate Payment Account,
and the Reserve Account and all amounts, securities, financial assets,
investments and other property deposited in or credited to any of the foregoing
and all proceeds thereof; (vii) all rights of the Depositor under the
Receivables Purchase Agreement, including the right to require the Seller to
repurchase Receivables from the Depositor; and (viii) 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 accounts, general intangibles, chattel paper, instruments,
documents, money, investment property, deposit accounts, letters of credit,
letter-of-credit rights, insurance proceeds, condemnation awards, rights to
payment of any and every kind and other forms of obligations and all other
property which at any time constitutes all or part of or is 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.
This Certificate represents the right to receive principal on each
Distribution Date in an amount equal to the aggregate amount, if any, payable
from the Certificate Payment Account in respect of principal on the Certificates
pursuant to Section 5.2 of the Trust Agreement; provided, however, that this
Certificate will not be entitled to receive principal until the Notes have been
paid in full; and, provided further, that, if not paid prior to such date, the
unpaid principal amount of this Certificate shall be due and payable on the
earlier of the [__________] 20[__] Distribution Date and the date, if any, on
which the Servicer exercises its option to purchase the Receivables as described
in the Sale and Servicing Agreement.
A-2
This Certificate represents the right to receive interest on each
Distribution Date in an amount equal to one-twelfth of the product of (i) the
rate per annum shown above and (ii) the principal amount of this Certificate
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on such preceding Distribution Date); provided,
however, that the interest payable on this Certificate on [__________], 20[__]
shall equal $[_______________]. Interest shall be computed on the basis of a
360-day year consisting of twelve 30-day months.
"Distribution Date" means the 15th day of each month or, if such 15th
day is not a Business Day, the following Business Day, commencing on
[__________], 20[__].
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 TRUST AGREEMENT, THE SALE AND
SERVICING AGREEMENT AND THE INDENTURE.
It is the intent of the Depositor, the Seller, the Servicer and the
Certificateholders that, for purposes of federal income taxes, state and local
income taxes 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 any 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 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 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 of the Certificate
Registrar maintained for that purpose 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 fully set forth on the face of this Certificate.
Unless the certificate of authentication hereon has been executed by
an authorized officer of the Owner Trustee, by manual signature, this
Certificate shall not entitle the Holder
A-3
hereof to any benefit under the Trust Agreement or the Sale and Servicing
Agreement or be valid for any purpose.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
A-4
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 as
of the date set forth below.
Dated: [__________], 20[__]
CARMAX AUTO OWNER TRUST 20[__]-[__],
By: [____________________],
not in its individual capacity
but solely as Owner Trustee
By:
-----------------------------------
Name:
Title:
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
Dated: [__________], 20[__]
[____________________],
not in its individual capacity but
solely as Owner Trustee
By:
-----------------------------------
Name:
Title:
A-5
[REVERSE OF CERTIFICATE]
This Certificate does not represent an obligation of, or an interest
in, the Depositor, the Seller, 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 Receivables (and certain other amounts), all as
more specifically set forth herein and in the Sale and Servicing Agreement.
The Trust Agreement permits the Depositor and the Owner Trustee, on
behalf of the Trust, with certain exceptions therein provided, to amend or waive
from time to time certain terms and conditions set forth in the Trust Agreement
without the consent of the Holders of the Certificates but with the consent of
the Insurer (if an Insurer Default shall not have occurred and be continuing).
The Trust Agreement also permits the Depositor and the Owner Trustee, on behalf
of the Trust, with certain exceptions as therein provided, to amend or waive
certain terms and conditions set forth in the Trust Agreement with the consent
of the Insurer (if an Insurer Default shall not have occurred and be continuing)
and the Holders of the Notes evidencing not less than 51% of the Note Balance
and the Holders of Certificates evidencing not less than 51% of the Certificate
Balance. Any such consent or waiver by the Insurer or 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 hereof or in lieu hereof whether or not
notation of such consent or waiver is made upon this Certificate.
As provided in the Trust Agreement, the Transfer of this Certificate
may be registered in the Certificate Register upon surrender of this Certificate
for registration of Transfer at the office or agency of the Certificate
Registrar maintained for that purpose in the Borough of Manhattan, The City of
New York 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
in any authorized denomination and in the same aggregate principal amount will
be issued to the designated transferee or transferees. 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 therewith. The initial Certificate Registrar appointed under the
Trust Agreement is the Indenture Trustee.
Each Certificateholder, by its acceptance of a Certificate, shall be
deemed to have represented and warranted that such Certificateholder (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 the transfer of such
Certificate, 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) that includes the assets
of a Plan for purposes of the Plan Asset Regulation.
A-6
The Certificates are issuable only in registered form in denominations
as provided in the Trust Agreement, subject to certain limitations therein set
forth.
The Owner Trustee, the Certificate Registrar and any Paying Agent may
treat the Person in whose name this Certificate is registered in the Certificate
Register (as of the day of determination) as the owner of this Certificate for
the purpose of receiving distributions pursuant to the Trust Agreement 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.
The Trust Agreement, with certain exceptions therein provided, and the
Trust shall terminate and be of no further force or effect upon the earlier of
(i) the payment to the Servicer, 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 the
Trust Agreement and (ii) the Distribution Date next succeeding the month which
is one year after the maturity or other liquidation of the last Receivable 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.
This Certificate shall be governed by, and 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.
A-7
ASSIGNMENT
SOCIAL SECURITY NUMBER
OR OTHER IDENTIFICATION
NUMBER OF ASSIGNEE: ________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto__________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ________________________, attorney, to transfer said
Certificate on the Certificate Register, with full power of substitution in the
premises.
Dated:
____________________________________*/
Signature Guaranteed:
____________________________________*/
*/ NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate in
every particular, without alteration, enlargement or any change whatsoever.
Such signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Certificate Registrar.
A-8
Exhibit B
Form of Certificate of Trust
----------------------------
Certificate of Trust of CarMax Auto Owner Trust 20[__]-[__]
This Certificate of Trust of CarMax Auto Owner Trust 20[__]-[__] (the
"Trust") is being duly executed and filed by [____________________], a
[____________________], as owner trustee (the "Owner Trustee"), to form a
statutory trust under the Delaware Statutory Trust Act (12 Del. Code,
Section 3801 et seq.) (the "Act").
1. Name. The name of the statutory trust formed hereby is CarMax Auto
Owner Trust 20[__]-[__].
2. Delaware Trustee. The name and business address of a trustee of the
Trust having its principal place of business in the State of Delaware is
[____________________], [____________________], [____________________], Delaware
[_____].
3. Effective Date. This Certificate of Trust shall be effective upon its
filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Trust
in accordance with Section 3811(a)(1) of the Act.
[____________________],
as Owner Trustee
By:
-----------------------------------
Name:
Title:
B-1