EXHIBIT 4.1
[EXECUTION COPY]
POOLED AUTO SECURITIES SHELF LLC,
as Depositor,
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
and
THE BANK OF NEW YORK,
as Owner Trustee
------------------------------
AMENDED AND RESTATED TRUST AGREEMENT
Dated as of December 1, 2002
------------------------------
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.......................................... 7
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.............................................. 13
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....... 15
SECTION 4.2 Action by Certificateholders with Respect to Certain Matters............. 16
SECTION 4.3 Action by Certificateholders with Respect to Bankruptcy.................. 16
i
Page
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........................................................ 18
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.................................................. 20
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
COMPENSATION 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
ii
Page
ARTICLE IX
TERMINATION
SECTION 9.1 Termination of Trust Agreement........................................... 27
SECTION 9.2 Prepayment of the Certificates........................................... 28
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1 Eligibility Requirements for Owner Trustee and Delaware 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................................. 31
SECTION 10.5 Appointment of Co-Trustee or Separate Trustee............................ 31
SECTION 10.6 Delaware Trustee......................................................... 32
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Supplements and Amendments............................................... 35
SECTION 11.2 No Legal Title to Owner Trust Estate in Certificateholders............... 37
SECTION 11.3 Limitation on Rights of Others........................................... 37
SECTION 11.4 Notices.................................................................. 37
SECTION 11.5 Severability............................................................. 37
SECTION 11.6 Separate Counterparts.................................................... 38
SECTION 11.7 Successors and Assigns................................................... 38
SECTION 11.8 Covenants of the Depositor............................................... 38
SECTION 11.9 No Petition.............................................................. 38
SECTION 11.10 No Recourse.............................................................. 38
SECTION 11.11 Headings................................................................. 38
SECTION 11.12 Governing Law............................................................ 38
SECTION 11.13 Depositor Payment Obligation............................................. 38
SECTION 11.14 Certificates Nonassessable and Fully Paid................................ 39
SECTION 11.15 Ratification of Prior Actions............................................ 39
SECTION 11.16 Third-Party Beneficiary.................................................. 39
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
iii
AMENDED AND RESTATED TRUST AGREEMENT, dated as of December 1, 2002 (as
amended, supplemented or otherwise modified and in effect from time to time,
this "Agreement"), among POOLED AUTO SECURITIES SHELF LLC, a Delaware limited
liability company, as depositor (the "Depositor"), THE BANK OF NEW YORK
(DELAWARE), a Delaware banking corporation, as Delaware trustee and not in its
individual capacity (in such capacity, the "Delaware Trustee"), and The Bank of
New York, a New York banking corporation, as owner trustee and not in its
individual capacity (in such capacity, the "Owner Trustee").
WHEREAS, the CarMax Auto Owner Trust 2002-2 was created on October 15, 2002
pursuant to (i) a Trust Agreement dated as of October 15, 2002 among the
Depositor, the Delaware Trustee 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 October 15, 2002; and
WHEREAS, the Depositor, the Delaware Trustee 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, the Delaware
Trustee 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.
"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 December 5, 2002, 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.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean the principal office of the Owner
Trustee at which at any particular time its corporate trust business shall be
administered, which office at date of execution of this Agreement is located at
The Bank of New York, 000 Xxxxxxx Xxxxxx,
0
0X, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust Division, Asset Backed
Securities Group, 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.
"Delaware Trustee" shall mean The Bank of New York (Delaware), a Delaware
banking corporation, not in its individual capacity but solely as Delaware
Trustee under this Agreement, and any successor Delaware Trustee under this
Agreement.
"Depositor" shall mean Pooled Auto Securities Shelf LLC, a Delaware limited
liability company, in its capacity as depositor under this Agreement, and its
successors.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"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 June 2009 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 December 1, 2002, between
the Trust and Xxxxx Fargo Bank Minnesota, National Association, a national
banking association, as indenture trustee, as amended, supplemented or otherwise
modified and in effect from time to time.
"Initial Certificate Balance" shall mean $10,000,000.
"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 The Bank of New York, a New York banking
corporation, not in its individual capacity but solely as owner trustee under
this Agreement, and any successor Owner Trustee under this Agreement.
"Paying Agent" shall mean the Owner Trustee or any 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.
3
"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
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
4
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 December 1, 2002, by and among the Trust, the Depositor, the Seller
and the Servicer, as amended, supplemented or otherwise modified and in effect
from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"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 2002-2 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.
(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
5
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
2002-2," 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 xxx
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, 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 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;
(v) to enter into and perform its obligations under the Transaction
Documents to which it is to be a party;
6
(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.
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.
7
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;
(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
8
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 "nonentity" 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 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
9
(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 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
10
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.
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.
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.
(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 X-0 XXX, X-0 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
11
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.
(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.
12
(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 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
13
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 provided in Section 3.2 representing the Book-Entry
Certificates, to be delivered to The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Trust. The Book-Entry Certificates
shall be registered initially on the Certificate Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Certificate Owner
thereof shall receive a definitive Certificate representing such Certificate
Owner's interest in such Certificate, except as provided in Section 3.12. Unless
and until definitive, fully registered Certificates (the "Definitive
Certificates") have been issued to such Certificate Owners pursuant to Section
3.12:
(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 and interest on the
Certificates and the giving of instructions or directions hereunder) as the
sole Holder of the Certificates, and shall have no obligation to the
Certificate Owners;
(iii) to the extent that the provisions of this Section 3.10 conflict
with any other provisions of this Agreement, the provisions of this Section
shall control;
(iv) the rights of Certificate Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency and/or
the Clearing Agency Participants pursuant to the Certificate Depository
Agreement, and, unless and until Definitive Certificates are issued
pursuant to Section 3.12, the initial Clearing Agency shall make book-entry
transfers among the Clearing Agency Participants and receive and transmit
payments of principal of and interest on the Certificates to such Clearing
Agency Participants; and
14
(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 shall have been issued to such Certificate
Owners pursuant to Section 3.12, the Owner Trustee shall give all such notices
and communications specified herein to be given to Holders of the Certificates
to the Clearing Agency, and shall have no obligation to such Certificate Owners.
Section 3.12 Definitive Certificates. If (i) the Depositor, the
Administrator or the Servicer advises the Owner Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Book-Entry Certificates and the
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 to the Certificate
Registrar of the typewritten Certificates representing the Book-Entry
Certificates by the Clearing Agency, 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.
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
15
the 30th day after such notice is given that the Insurer and such Holders have
withheld consent or provided alternative direction:
(i) the initiation of any claim or lawsuit by the Trust (except claims
or lawsuits brought by the Servicer in connection with the collection of
the 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 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
16
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 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 and the Delaware
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 or the Delaware 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 2002-2
Trust Account" (the "Certificate Payment Account"). The Certificate Payment
Account shall be held in trust for the benefit of the Certificateholders. Except
as expressly provided in Section 3.9, the Certificate Payment Account shall be
under the sole dominion and control of the Owner Trustee. All monies deposited
from time to time in the Certificate Payment Account pursuant to the Sale and
Servicing Agreement or the Indenture shall be applied as provided in this
Agreement, the Sale and Servicing Agreement and the Indenture.
17
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
that Distribution Date.
If the amount on deposit in the Certificate Payment Account on any
Distribution Date is less than the amount described in clause (i) or (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
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
18
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 15,
2003, a letter in form and substance satisfactory to the Owner Trustee as to
whether any federal tax withholding on Certificates is then required and, if
required, the procedures to be followed with respect thereto to comply with the
requirements of the Code. The Accountants shall be required to update such
letter in each instance that any additional tax withholding is subsequently
required or any previously required tax withholding shall no longer be required.
The Owner Trustee shall be deemed to have discharged its obligations pursuant to
this Section 5.5 upon its retention of the Accountants, and the Owner Trustee
shall not have any liability with respect to the default or misconduct of the
Accountants.
19
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 $490,000,000 (comprised
of $75,000,000 in aggregate principal amount of Class A-1 Notes, $159,000,000 in
aggregate principal amount of Class A-2 Notes, $121,000,000 in aggregate
principal amount of Class A-3 Notes and $135,000,000 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.
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
20
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 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,
21
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;
(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 Insurer, the Depositor, the Administrator or the
Servicer;
(iii) no provision of this Agreement or any other Transaction Document
shall require the Owner Trustee to expend or risk its own funds or
otherwise incur
22
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;
(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
23
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) The Delaware Trustee, in its individual capacity, hereby represents and
warrants to the Depositor, for the benefit of the Certificateholders, that:
(i) it is a Delaware banking corporation duly organized and validly
existing in good standing under the laws of the State of Delaware 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 Delaware law, governmental rule or regulation governing the
banking or trust powers of the Delaware Trustee or any judgment or order
binding on it, or constitute any default under its charter documents or
by-laws or any indenture, mortgage, contract, agreement or instrument to
which it is a party or by which any of its properties may be bound.
(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 New York banking corporation duly organized and validly
existing in good standing under the laws of the State of New York and has
all requisite power and authority to execute, deliver and perform its
obligations under this Agreement;
24
(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 New York law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order
binding on it, or constitute any default under its charter documents or
by-laws or any indenture, mortgage, contract, agreement or instrument to
which it is a party or by which any of its properties may be bound.
Section 7.4 Reliance; Advice of Counsel.
(a) The Owner Trustee may rely upon, shall be protected in relying upon,
and shall incur no liability to anyone in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion, bond
or other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a certified
copy of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of the determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter
and such certificate shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under this Agreement or the other
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, The Bank of New York 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
25
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 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. Each of the Owner Trustee
and the Delaware 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 such trustee, and each of the Owner Trustee and the
Delaware 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 such
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 each of the Owner Trustee and the Delaware 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, the Delaware 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
26
administration of the Owner Trust Estate or the action or inaction of the Owner
Trustee or the Delaware 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, the
Owner Trustee or the Delaware 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 and the Delaware 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 and the
Delaware Trustee's choice of legal counsel shall be subject to the approval of
the initial Servicer, which approval shall not be unreasonably withheld.
Section 8.3 Payments to the Owner Trustee. Any amounts paid to the Owner
Trustee or the Delaware 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
27
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
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.
28
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.
(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 and Delaware
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 and (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. The Delaware Trustee shall at all times (i) be a
corporation or banking association satisfying the provisions of Section 3807(a)
of the Statutory Trust Statute, (ii) be authorized to exercise corporate trust
powers, (iii) have a combined capital and surplus of at least $50,000,000 and be
subject to supervision or examination by federal or state authorities and (iv)
have (or have a parent that has) a long-term debt rating of investment grade by
each of the Rating Agencies or otherwise be acceptable to each of the Rating
Agencies. If such corporation 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
29
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 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.
30
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. 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
31
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;
(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.
Section 10.6 Delaware Trustee.
(a) The Delaware Trustee has been appointed solely for the purpose of
complying with the requirements of the Statutory Trust Statute that the Trust
have one trustee, which, in the case of a natural person, is a resident of the
State of Delaware, or which in all other cases, has its principal place of
business in the State of Delaware. The duties and responsibilities
32
of the Delaware Trustee shall be limited solely to (i) accepting legal process
served on the Trust in the State of Delaware, (ii) the execution and delivery of
all documents, and the maintenance of all records, necessary to form and
maintain the existence of the Trust under the Statutory Trust Statute and (iii)
monitoring the Trust's compliance with the Statutory Trust Statute and advising
the Administrator when action is necessary to comply with the Statutory Trust
Statute. Except for the purpose set forth in the foregoing sentence, the
Delaware Trustee shall not be deemed a trustee of, shall have no management
responsibilities with respect to or owe any fiduciary duties to the Trust or the
Certificateholders.
(b) By its execution hereof, the Delaware Trustee accepts the trust created
herein. Except as otherwise expressly required by clause (a) above, the Delaware
Trustee shall not have any duty or liability with respect to the administration
of the Trust, the investment of any of the Trust Property or the payment of
dividends or other distributions of income or principal with respect to the
Trust.
(c) The Delaware Trustee shall not be liable for the acts or omissions of
the Owner Trustee or the Administrator, nor shall the Delaware Trustee be liable
for supervising or monitoring the performance of the duties and obligations of
the Owner Trustee or the Trust under this Agreement. The Delaware Trustee shall
not be answerable or accountable hereunder or under any other Transaction
Document under any circumstances, except (x) for its own willful misconduct, bad
faith or negligence or (y) in the case of the inaccuracy of any representation
or warranty contained in Section 7.3 expressly made by the Delaware 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 Delaware Trustee shall not be liable for any error of judgment
made in good faith by a responsible officer of the Delaware Trustee unless
it is proved that the Delaware Trustee was negligent in ascertaining the
pertinent facts;
(ii) no provision of this Agreement or any other Transaction Document
shall require the Delaware 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 Delaware 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;
(iii) under no circumstances shall the Delaware Trustee be personally
liable for any representation, warranty, covenant, agreement or
indebtedness of the Trust;
(iv) the Delaware 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, the Owner Trustee, the Servicer or the Certificate
Registrar;
(v) the Delaware Trustee 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
33
to be signed by the proper party or parties. The Delaware 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 determination of
which is not specifically prescribed herein, the Delaware 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 Delaware Trustee for any action taken or
omitted to be taken by it in good faith in reliance thereon;
(vi) in the exercise or administration of the trust hereunder, the
Delaware Trustee (A) may act directly or through agents or attorneys
pursuant to agreements entered into with any of them, and the Delaware
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
Delaware Trustee with reasonable care and (B) may consult with counsel,
accountants and other skilled Persons to be selected with reasonable care
and employed by it, and the Delaware 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; and
(vii) except as expressly provided in this Section 10.6, in accepting
and performing the trust hereby created, The Bank of New York (Delaware)
acts solely as Delaware Trustee hereunder and not in its individual
capacity, and all Persons having any claim against the Delaware 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.
(d) The Delaware Trustee (or any successor trustee) shall be entitled to
receive compensation from the Servicer for its services in accordance with such
schedules as shall have been separately agreed to from time to time by the
Delaware Trustee and the Servicer. The Delaware Trustee may consult with counsel
(who may be counsel for the Owner Trustee or for the Delaware Trustee). The
reasonable legal fees incurred in connection with such consultation shall be
reimbursed to the Delaware Trustee pursuant to Article 8.
(e) The Delaware Trustee shall serve for the duration of the Trust and
until the earlier of (i) the effective date of the Delaware Trustee's
resignation or (ii) the effective date of the removal of the Delaware Trustee.
The Delaware Trustee may resign at any time by giving thirty (30) days written
notice to the Administrator, the Depositor and the Insurer; provided, however,
that such resignation shall not be effective until such time as a successor
Delaware Trustee has accepted such appointment. The Delaware Trustee may be
removed at any time by the Administrator by providing thirty (30) days written
notice to the Delaware Trustee; provided, however, that such removal shall not
be effective until such time as a successor Delaware Trustee has accepted such
appointment. Upon the resignation or removal of the Delaware Trustee, the
Administrator shall appoint a successor Delaware Trustee. If no successor
Delaware Trustee shall have been appointed and shall have accepted such
appointment within forty-five (45) days after the giving of such notice of
resignation or removal, the Delaware Trustee may
34
petition any court of competent jurisdiction for the appointment of a successor
Delaware Trustee. Any successor Delaware Trustee appointed pursuant to this
Section 10.6 shall be eligible to act in such capacity in accordance with this
Agreement and, following compliance with this Section, shall become fully vested
with the rights, powers, duties and obligations of its predecessor under this
Agreement, with like effect as if originally named as Delaware Trustee.
(f) The Delaware Trustee shall not be obligated to give any bond or other
security for the performance of any of its duties hereunder.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Supplements and Amendments.
(a) This Agreement may be amended from time to time by the Depositor and
the Owner Trustee with prior written notice to the Rating Agencies and the
Insurer, without the consent of any of the Noteholders or the Certificateholders
and with the consent of the Insurer (if no Insurer Default shall have occurred
and be continuing) to cure any ambiguity, to correct or supplement any provision
herein that may be inconsistent with any other provision herein or 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.
(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
35
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 either 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 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.
36
(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: 000 Xxxxx Xxxxxxx Xxxxxx, Xxx Wachovia Center, Mail
Code NC0610, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: General Counsel, (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:
Xxxxx'x Investors Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, (v) in the case of Standard & Poor's, at the following
address: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., 00
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset Backed
Surveillance Department, and (vi) in the case of the Insurer, at the following
address: MBIA Insurance Corporation, 000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000,
Attention: Insured Portfolio Management, Structured Finance. Any notice required
or permitted to be mailed to a Certificateholder shall be given by first-class
mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder shall receive such notice.
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.
37
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 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
38
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 or the Delaware 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 and the Delaware
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]
39
IN WITNESS WHEREOF, the Depositor, the Delaware Trustee 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.
POOLED AUTO SECURITIES SHELF LLC,
as Depositor
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Senior Vice President
THE BANK OF NEW YORK,
as Owner Trustee
By: /s/ Xxxxx Xxx
----------------------------
Name: Xxxxx Xxx
Title: Assistant Treasurer
Accepted and agreed:
CARMAX AUTO SUPERSTORES, INC.,
as Servicer
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chief Financial Officer
S-1
