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Common use of Restrictions on Certificate Transfers Clause in Contracts

Restrictions on Certificate Transfers. (a) After the Closing Date, no Retained Certificate shall be sold, transferred, conveyed or assigned unless counsel satisfactory to the Owner Trustee has rendered an Opinion of Counsel to the effect that (i) such sale, transfer, conveyance or assignment by the Depositor would not cause the Grantor Trust to fail to qualify as a grantor trust for United States federal income tax purposes and (ii) all Retained Notes (excluding for this purpose Retained Notes to the extent such Retained Notes are not treated as outstanding for United States federal income tax purposes) that are Class A Notes, Class B Notes, Class C Notes and Class D Notes will, when issued, be characterized as indebtedness for United States federal income tax purposes and all Retained Notes (excluding for this purpose Retained Notes to the extent such Retained Notes are not treated as outstanding for United States federal income tax purposes) that are Class N Notes should, when issued, be characterized as indebtedness for United States federal income tax purposes, provided, that the Opinion of Counsel required by clauses (i) and (ii) shall not be required if either (A) at least a majority of the Percentage Interests in the Trust are beneficially owned by Persons who are not Affiliates of the Depositor or (B) the Depositor sells, transfers, conveys or assigns such Retained Certificate to (1) an Affiliate of the Depositor treated as the Depositor for United States federal income tax purposes or (2) an Affiliate of the Depositor where such Retained Certificates transferred to such Affiliate represents all of the issued Certificates of the Trust and such Affiliate (including a person treated as an Affiliate for United States federal income tax purposes) also owns all of the Retained Notes. (b) Each Certificateholder acknowledges and represents that it is not a member of an “expanded group” (within the meaning of the regulations issued under Section 385 of the Code) that includes a domestic corporation (as determined for U.S. federal income tax purposes) that holds any Notes if such domestic corporation, directly or indirectly (through one or more entities that are treated for U.S. federal income tax purposes as partnerships, disregarded entities, or grantor trusts), owns 80% or more of the capital or profits of the Trust. (c) Each Certificateholder, if it is acting as a nominee or in a similar capacity, represents and agrees that no beneficial owner for which it is acting as a nominee owns less than the minimum denomination for such Certificate. (d) Each Certificateholder or beneficial owner of a Certificate, represents and agrees that (i) either (A) it is not and will not become for U.S. federal income tax purposes a partnership, subchapter S corporation or grantor trust (or a disregarded entity the single owner of which is any of the foregoing) (each such entity a “Flow-Through Entity”) or (B) if it is or becomes a Flow-Through Entity, then (1) none of the direct or indirect beneficial owners of any of the interests in such Flow-Through Entity has or ever will have more than 50% of the value of its interest in such Flow-Through Entity attributable to the interest of such Flow-Through Entity in the Certificates, other interest (direct or indirect) in the Trust, or any interest created under the Indenture and (2) it is not and will not be a principal purpose of the arrangement involving the investment of such Flow-Through Entity in any Certificate to permit any partnership to satisfy the 100 partner limitation of Section 1.7704-1(h)(1)(ii) of the Treasury Regulations necessary for such partnership not to be classified as a publicly traded partnership under the Code, and (ii) it does not and will not beneficially own a Certificate (or any beneficial interest therein) in an amount that is less than the minimum denomination for such Certificate. (e) Each Certificateholder or beneficial owner of a Certificate represents and agrees that no transfer of a Certificate shall be permitted if such transfer is effected through an established securities market or secondary market (or the substantial equivalent thereof) within the meaning of Section 7704 of the Code and any regulation thereunder. (f) Each Certificateholder or beneficial owner of a Certificate, represents and agrees that it will not take any action that could cause, and will not omit to take any action, which omission could cause, the Trust to become taxable as a corporation for U.S. federal income tax purposes. (g) Each Certificateholder agrees that any purported transfer of any Certificate or any beneficial interest in a Certificate that is not made in accordance with the restrictions set forth herein will be null and void from the beginning and will not be given effect for any purpose thereunder. The Trust may sell, or direct the Administrator to sell on its behalf, any Certificate or beneficial interest therein acquired in violation of the foregoing at the cost and risk of the purported transferee. If the transferee fails to transfer such Certificate or such beneficial interests in such Certificate within thirty (30) days after notice of the voided transfer, then the Trust shall cause such transferee’s interest in such Certificate to be transferred in a commercially reasonable sale arranged by the Trust (conducted by the Trust or an agent of the Trust in accordance with Section 9-610(b) of the UCC as applied to securities that are sold on a recognized market or that may decline speedily in value).

Appears in 5 contracts

Samples: Trust Agreement (Carvana Auto Receivables Trust 2024-P2), Trust Agreement (Carvana Auto Receivables Trust 2024-P2), Trust Agreement (Carvana Auto Receivables Trust 2024-P4)

Restrictions on Certificate Transfers. (a) After the Closing Date, no Retained Certificate shall be sold, transferred, conveyed or assigned unless counsel satisfactory to the Owner Trustee has rendered an Opinion of Counsel to the effect that (i) such sale, transfer, conveyance or assignment by the Depositor would not cause the Grantor Trust to fail to qualify as a grantor trust for United States federal income tax purposes and (ii) all Retained Notes (excluding for this purpose Retained Notes to the extent such Retained Notes are not treated as outstanding for United States federal income tax purposes) that are Class A Notes, Class B Notes, Class C Notes and Class D Notes will, when issued, be characterized as indebtedness for United States federal income tax purposes and all Retained Notes (excluding for this purpose Retained Notes to the extent such Retained Notes are not treated as outstanding for United States federal income tax purposes) that are Class N Notes should, when issued, be characterized as indebtedness for United States federal income tax purposes, provided, that the Opinion of Counsel required by clauses (i) and (ii) shall not be required if either (A) at least a majority of the Percentage Interests in the Trust are beneficially owned by Persons who are not Affiliates of the Depositor or (B) the Depositor sells, transfers, conveys or assigns such Retained Certificate to (1) an Affiliate of the Depositor treated as the Depositor for United States federal income tax purposes or (2) an Affiliate of the Depositor where such Retained Certificates transferred to such Affiliate represents all of the issued Certificates of the Trust and such Affiliate (including a person treated as an Affiliate for United States federal income tax purposes) also owns all of the Retained Notes. (b) Each Certificateholder acknowledges and represents that it is not a member of an “expanded group” (within the meaning of the regulations issued under Section 385 of the Code) that includes a domestic corporation (as determined for U.S. federal income tax purposes) that holds any Notes if such domestic corporation, directly or indirectly (through one or more entities that are treated for U.S. federal income tax purposes as partnerships, disregarded entities, or grantor trusts), owns 80% or more of the capital or profits of the Trust. (c) Each Certificateholder, if it is acting as a nominee or in a similar capacity, represents and agrees that no beneficial owner for which it is acting as a nominee owns less than the minimum denomination for such Certificate. (d) Each Certificateholder or beneficial owner of a Certificate, represents and agrees that (i) either (A) it is not and will not become for U.S. federal income tax purposes a partnership, subchapter S corporation or grantor trust (or a disregarded entity the single owner of which is any of the foregoing) (each such entity a “Flow-Through Entity”) or (B) if it is or becomes a Flow-Through Entity, then (1) none of the direct or indirect beneficial owners of any of the interests in such Flow-Through Entity has or ever will have more than 50% of the value of its interest in such Flow-Through Entity attributable to the interest of such Flow-Through Entity in the Certificates, other interest (direct or indirect) in the Trust, or any interest created under the Indenture and (2) it is not and will not be a principal purpose of the arrangement involving the investment of such Flow-Through Entity in any Certificate to permit any partnership to satisfy the 100 partner limitation of Section 1.7704-1(h)(1)(ii) of the Treasury Regulations necessary for such partnership not to be classified as a publicly traded partnership under the Code, and (ii) it does not and will not beneficially own a Certificate (or any beneficial interest therein) in an amount that is less than the minimum denomination for such Certificate. (e) Each Certificateholder or beneficial owner of a Certificate represents and agrees that no transfer of a Certificate shall be permitted if such transfer is effected through an established securities market or secondary market (or the substantial equivalent thereof) within the meaning of Section 7704 of the Code and any regulation thereunder. (f) Each Certificateholder or beneficial owner of a Certificate, represents and agrees that it will not take any action that could cause, and will not omit to take any action, which omission could cause, the Trust to become taxable as a corporation for U.S. federal income tax purposes. (g) Each Certificateholder agrees that any purported transfer of any Certificate or any beneficial interest in a Certificate that is not made in accordance with the restrictions set forth herein will be null and void from the beginning and will not be given effect for any purpose thereunder. The Trust may sell, or direct the Administrator to sell on its behalf, any Certificate or beneficial interest therein acquired in violation of the foregoing at the cost and risk of the purported transferee. If the transferee fails to transfer such Certificate or such beneficial interests in such Certificate within thirty (30) days after notice of the voided transfer, then the Trust shall cause such transferee’s interest in such Certificate to be transferred in a commercially reasonable sale arranged by the Trust (conducted by the Trust or an agent of the Trust in accordance with Section 9-610(b) of the UCC as applied to securities that are sold on a recognized market or that may decline speedily in value).

Appears in 2 contracts

Samples: Trust Agreement (Carvana Auto Receivables Trust 2022-P3), Trust Agreement (Carvana Auto Receivables Trust 2022-P3)