EXHIBIT 10.1

 

CARMAX AUTO OWNER TRUST 2015-2,

as Issuer,

 

CARMAX AUTO FUNDING LLC,

as Depositor

 

and

 

CARMAX BUSINESS SERVICES, LLC,

as Servicer

 

 

 

SALE AND SERVICING AGREEMENT

Dated as of May 1, 2015

 

 

 

 

 

  

Table of Contents

 

    Page         Article I     DEFINITIONS   1.1 Definitions 1 1.2 Other
Definitional Provisions 18         Article II     TRUST PROPERTY   2.1
Conveyance of Trust Property 19 2.2 Representations and Warranties of the Seller
as to the Receivables 20 2.3 Representations and Warranties of the Depositor as
to the Receivables 21 2.4 Repurchase by Depositor upon Breach 25 2.5 Custody of
Receivable Files 25 2.6 Duties of Servicer as Custodian 26 2.7 Instructions;
Authority to Act 27 2.8 Indemnification by the Custodian 27 2.9 Effective Period
and Termination 27         Article III     ADMINISTRATION AND SERVICING OF
RECEIVABLES AND     OTHER TRUST PROPERTY   3.1 Duties of Servicer 28 3.2
Collection and Allocation of Receivable Payments 29 3.3 Realization upon
Receivables 29 3.4 Physical Damage Insurance 29 3.5 Maintenance of Security
Interests in Financed Vehicles 30 3.6 Amendment of Receivable Terms 30 3.7
Purchase by Servicer upon Breach 30 3.8 Servicing Compensation 30 3.9 Monthly
Servicer’s Certificate 31 3.10 Annual Servicing Report; Annual Compliance
Statement; Notice of Event of Servicing Termination 31 3.11 Annual Public
Accounting Firm Report 32 3.12 Access to Certain Documentation and Information
Regarding Receivables 32 3.13 Reports to the Commission 33 3.14 Reports to
Rating Agencies 33         Article IV     DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO     NOTEHOLDERS AND CERTIFICATEHOLDERS   4.1 Accounts 33 4.2
Collections 35

 

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4.3 Application of Collections 35 4.4 Simple Interest Advances and Unreimbursed
Servicer Advances 36 4.5 Additional Deposits 36 4.6 Determination Date
Calculations; Application of Available Funds 36 4.7 Reserve Account 38 4.8 Net
Deposits 40 4.9 Statements to Noteholders and Certificateholders 40 4.10 Control
of Securities Accounts 42         Article V     [RESERVED]           Article VI
    THE DEPOSITOR   6.1 Representations and Warranties of Depositor 42 6.2
Liability of Depositor; Indemnities 44 6.3 Merger or Consolidation of, or
Assumption of the Obligations of, Depositor 45 6.4 Limitation on Liability of
Depositor and Others 45 6.5 Depositor May Own Notes or Certificates 46 6.6
[RESERVED] 46 6.7 Certain Limitations 46         Article VII     THE SERVICER  
7.1 Representations and Warranties of Servicer 48 7.2 Liability of Servicer;
Indemnities 49 7.3 Merger or Consolidation of, or Assumption of the Obligations
of, Servicer 51 7.4 Limitation on Liability of Servicer and Others 51 7.5
Delegation of Duties 52 7.6 Servicer Not to Resign 52 7.7 Servicer May Own Notes
or Certificates 52         Article VIII     SERVICING TERMINATION   8.1 Events
of Servicing Termination 53 8.2 Indenture Trustee to Act; Appointment of
Successor Servicer 55 8.3 Effect of Servicing Transfer 56 8.4 Notification to
Noteholders, Certificateholders and Rating Agencies 57 8.5 Waiver of Past Events
of Servicing Termination 57 8.6 Repayment of Advances 57         Article IX    
TERMINATION   9.1 Optional Purchase of All Receivables 58

 

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  Article X     MISCELLANEOUS PROVISIONS   10.1 Amendment 58 10.2 Protection of
Title to Trust 60 10.3 GOVERNING LAW 62 10.4 Notices 62 10.5 Severability of
Provisions 63 10.6 Assignment 63 10.7 Further Assurances 63 10.8 No Waiver;
Cumulative Remedies 63 10.9 Third-Party Beneficiaries 63 10.10 Actions by
Noteholder or Certificateholders 63 10.11 Counterparts 64 10.12 No Bankruptcy
Petition 64 10.13 Limitation of Liability of Owner Trustee and Indenture Trustee
64 10.14 Regulation AB 65 10.15 Communications Regarding Demands to Repurchase
Receivables 65

 

schedules

 

SCHEDULE 1 Receivable Schedule SCHEDULE 2 Location of Receivable Files

 

EXHIBITS

 

EXHIBIT A Form of Servicer’s Certificate EXHIBIT B Form of Statement to
Noteholders EXHIBIT C Form of Statement to Certificateholders EXHIBIT D
Servicing Criteria to Be Addressed in Assessment of Compliance

 

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SALE AND SERVICING AGREEMENT, dated as of May 1, 2015 (as amended, supplemented
or otherwise modified and in effect from time to time, this “Agreement”), among
CARMAX AUTO OWNER TRUST 2015-2, a Delaware statutory trust (the “Trust”), CARMAX
AUTO FUNDING LLC, a Delaware limited liability company (the “Depositor”), and
CARMAX BUSINESS SERVICES, LLC, a Delaware limited liability company (“CarMax”),
as servicer (in such capacity, the “Servicer”).

 

WHEREAS, the Trust desires to purchase certain motor vehicle retail installment
sale contracts originated or acquired by CarMax in the ordinary course of
business and sold to the Depositor as of the date hereof;

 

WHEREAS, the Depositor is willing to sell such contracts to the Trust as of the
date hereof; and

 

WHEREAS, the Servicer is willing to service such contracts on behalf of the
Trust;

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

 

Article I
DEFINITIONS

 

1.1          Definitions. Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, whenever capitalized shall
have the following meanings:

 

“Additional Note Interest” shall mean, for any Distribution Date and any Class
of Notes, the sum of (i) all accrued but unpaid Monthly Note Interest for
previous Distribution Dates for such Class plus (ii) to the extent permitted by
law, interest on such accrued but unpaid Monthly Note Interest at the Note Rate
applicable to such Class.

 

“Additional Servicing Fee” shall mean, for any Collection Period, if a successor
Servicer has been appointed pursuant to Section 8.2, the amount, if any, by
which (i) the compensation payable to such successor Servicer for such
Collection Period exceeds (ii) the Monthly Servicing Fee for such Collection
Period.

 

“Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such Person. For purposes of this definition, “control” when used with
respect to any Person shall mean the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.

 

“Amount Financed” shall mean, with respect to any Receivable, the aggregate
amount advanced under such Receivable toward the purchase price of the related
Financed Vehicle and any related costs, including accessories, extended service
plan contracts, insurance premiums and other items customarily financed as part
of a motor vehicle retail installment sale contract.

 

 

 

  

“Applicable Tax State” shall mean, as of any date, (i) any State in which the
Owner Trustee maintains the Corporate Trust Office, (ii) any State in which the
Owner Trustee maintains its principal executive offices and (iii) any State in
which the Servicer regularly conducts servicing and collection activities (other
than purely ministerial activities) with respect to a material portion of the
Receivables.

 

“APR” shall mean, with respect to any Receivable, the annual percentage rate of
interest stated in such Receivable.

 

“Authorized Officer” shall mean, as applicable, (i) any officer within the
Corporate Trust Office of the Indenture Trustee, including any vice president,
assistant vice president, secretary or assistant secretary, or any financial
services officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer of the Indenture Trustee
to whom such matter is referred because of such officer’s knowledge of and
familiarity with the particular subject or (ii) any officer of the Owner Trustee
who is authorized to act for or on behalf of the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
or authorized signatories delivered by the Owner Trustee to the Servicer on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter).

 

“Available Collections” shall mean, for any Distribution Date, (i) all Obligor
payments received with respect to the Receivables during the preceding
Collection Period, (ii) all Liquidation Proceeds received with respect to the
Receivables during the preceding Collection Period, (iii) all interest earned on
funds on deposit in the Collection Account during the preceding Collection
Period, (iv) the aggregate Purchase Amount deposited in the Collection Account
on the Business Day preceding such Distribution Date, (v) all prepayments
received with respect to the Receivables during the preceding Collection Period
attributable to any refunded item included in the Amount Financed (including
amounts received as a result of rebates of extended service plan contract costs
and insurance premiums and proceeds received under physical damage, theft, GAP,
credit life and credit disability insurance policies) and (vi) all Simple
Interest Advances deposited into the Collection Account by the Servicer on the
Business Day preceding such Distribution Date; provided, however, that Available
Collections for any Distribution Date shall not include any payments or other
amounts (including Liquidation Proceeds) received with respect to any Purchased
Receivable the Purchase Amount for which was included in Available Collections
for a previous Distribution Date; provided further, that Available Collections
for any Distribution Date shall not include any payments or other amounts
(including Liquidation Proceeds) received with respect to any Receivable to the
extent that the Servicer has made an unreimbursed Simple Interest Advance with
respect to such Receivable and is entitled to reimbursement from such payments
or other amounts pursuant to Section 4.4; and, provided further, that Available
Collections for any Distribution Date shall not include any payments or other
amounts (including Liquidation Proceeds) received with respect to the
Receivables that are retained by the Servicer as reimbursement for Unreimbursed
Servicer Advances pursuant to Section 4.4.

 

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“Available Funds” shall mean, for any Distribution Date, the sum of (i) the
Available Collections for such Distribution Date plus (ii) the Reserve Account
Draw Amount, if any, for such Distribution Date (to the extent deposited in the
Collection Account).

 

“Bankruptcy Code” shall mean Title 11 of the United States Code, as amended.

 

“Business Day” shall mean any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in New York, New York, Chicago,
Illinois, Wilmington, Delaware, Minneapolis, Minnesota or Richmond, Virginia are
authorized or obligated by law, executive order or governmental decree to remain
closed.

 

“CarMax” shall mean CarMax Business Services, LLC, a Delaware limited liability
company.

 

“CarMax Auto” shall mean CarMax Auto Superstores, Inc., a Virginia corporation.

 

“CarMax, Inc.” shall mean CarMax, Inc., a Virginia corporation.

 

“CarMax Funding” shall mean CarMax Auto Funding LLC, a Delaware limited
liability company.

 

“Certificate” shall have the meaning specified in the Trust Agreement.

 

“Certificate Payment Account” shall mean the account established and maintained
as such pursuant to Section 4.1(c).

 

“Certificate Percentage Interest” shall mean, with respect to a Certificate, the
percentage specified on such Certificate as the Certificate Percentage Interest,
which percentage represents the beneficial interest of such Certificate in the
Trust. The initial Certificate Percentage Interest held by the Depositor shall
be 100%.

 

“Certificateholder” shall have the meaning specified in the Trust Agreement.

 

“Class” shall mean a class of Notes, which may be the Class A-1 Notes, the Class
A-2a Notes, the Class A-2b Notes, the Class A-3 Notes, the Class A-4 Notes, the
Class B Notes, the Class C Notes or the Class D Notes.

 

“Class A Notes” shall mean the Class A-1 Notes, the Class A-2a Notes, the Class
A-2b Notes, the Class A-3 Notes and the Class A-4 Notes.

 

“Class A-1 Final Distribution Date” shall mean the May 16, 2016 Distribution
Date.

 

“Class A-1 Monthly Interest” shall mean (i) for the initial Distribution Date,
$64,808.33, and (ii) for any Distribution Date thereafter, the product of
(A) the actual number of days elapsed during the period from and including the
preceding Distribution Date to but excluding such Distribution Date divided by
360, (B) the Class A-1 Rate and (C) the outstanding principal balance of the
Class A-1 Notes as of the preceding Distribution Date (after giving effect to
all payments of principal made to the Holders of the Class A-1 Notes on or
before such preceding Distribution Date).

 

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“Class A-1 Notes” shall mean the 0.35000% Class A-1 Asset-backed Notes issued by
the Trust pursuant to the Indenture in the initial aggregate principal amount of
$202,000,000.

 

“Class A-1 Rate” shall mean 0.35000% per annum.

 

“Class A-2a Final Distribution Date” shall mean the June 15, 2018 Distribution
Date.

 

“Class A-2a Monthly Interest” shall mean (i) for the initial Distribution Date,
$139,946.67, and (ii) for any Distribution Date thereafter, one-twelfth of the
product of (A) the Class A-2a Rate and (B) the outstanding principal balance of
the Class A-2a Notes as of the preceding Distribution Date (after giving effect
to all payments of principal made to the Holders of the Class A-2a Notes on or
before such preceding Distribution Date).

 

“Class A-2a Notes” shall mean the 0.82% Class A-2 Asset-backed Notes issued by
the Trust pursuant to the Indenture in the initial aggregate principal amount of
$192,000,000.

 

“Class A-2a Rate” shall mean 0.82% per annum.

 

“Class A-2b Final Distribution Date” shall mean the June 15, 2018 Distribution
Date.

 

“Class A-2b Monthly Interest” shall mean (i) for the initial Distribution Date,
$81,004.00, and (ii) for any Distribution Date thereafter, the product of
(A) the actual number of days elapsed during the period from and including the
preceding Distribution Date to but excluding such Distribution Date divided by
360, (B) the Class A-2b Rate and (C) the outstanding principal balance of the
Class A-2b Notes as of the preceding Distribution Date (after giving effect to
all payments of principal made to the Holders of the Class A-2b Notes on or
before such preceding Distribution Date).

 

“Class A-2b Notes” shall mean the LIBOR + 0.28% Class A-2b Asset-backed Notes
issued by the Trust pursuant to the Indenture in the initial aggregate principal
amount of $192,000,000.

 

“Class A-2b Rate” shall mean LIBOR + 0.28% per annum.

 

“Class A-3 Final Distribution Date” shall mean the March 16, 2020 Distribution
Date.

 

“Class A-3 Monthly Interest” shall mean (i) for the initial Distribution Date,
$467,626.67, and (ii) for any Distribution Date thereafter, one-twelfth of the
product of (A) the Class A-3 Rate and (B) the outstanding principal balance of
the Class A-3 Notes as of the preceding Distribution Date (after giving effect
to all payments of principal made to the Holders of the Class A-3 Notes on or
before such preceding Distribution Date).

 

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“Class A-3 Notes” shall mean the 1.37% Class A-3 Asset-backed Notes issued by
the Trust pursuant to the Indenture in the initial aggregate principal amount of
$384,000,000.

 

“Class A-3 Rate” shall mean 1.37% per annum.

 

“Class A-4 Final Distribution Date” shall mean the March 15, 2021 Distribution
Date.

 

“Class A-4 Monthly Interest” shall mean (i) for the initial Distribution Date,
$187,112.00, and (ii) for any Distribution Date thereafter, one-twelfth of the
product of (A) the Class A-4 Rate and (B) the outstanding principal balance of
the Class A-4 Notes as of the preceding Distribution Date (after giving effect
to all payments of principal made to the Holders of the Class A-4 Notes on or
before such preceding Distribution Date).

 

“Class A-4 Notes” shall mean the 1.80% Class A-4 Asset-backed Notes issued by
the Trust pursuant to the Indenture in the initial aggregate principal amount of
$116,945,000.

 

“Class A-4 Rate” shall mean 1.80% per annum.

 

“Class B Final Distribution Date” shall mean the March 15, 2021 Distribution
Date.

 

“Class B Monthly Interest” shall mean (i) for the initial Distribution Date,
$44,528.89, and (ii) for any Distribution Date thereafter, one-twelfth of the
product of (A) the Class B Rate and (B) the outstanding principal balance of the
Class B Notes as of the preceding Distribution Date (after giving effect to all
payments of principal made to the Holders of the Class B Notes on or before such
preceding Distribution Date).

 

“Class B Notes” shall mean the 2.15% Class B Asset-backed Notes issued by the
Trust pursuant to the Indenture in the initial aggregate principal amount of
$23,300,000.

 

“Class B Rate” shall mean 2.15% per annum.

 

“Class C Final Distribution Date” shall mean the March 15, 2021 Distribution
Date.

 

“Class C Monthly Interest” shall mean (i) for the initial Distribution Date,
$49,499.56, and (ii) for any Distribution Date thereafter, one-twelfth of the
product of (A) the Class C Rate and (B) the outstanding principal balance of the
Class C Notes as of the preceding Distribution Date (after giving effect to all
payments of principal made to the Holders of the Class C Notes on or before such
preceding Distribution Date).

 

“Class C Notes” shall mean the 2.39% Class C Asset-backed Notes issued by the
Trust pursuant to the Indenture in the initial aggregate principal amount of
$23,300,000.

 

“Class C Rate” shall mean 2.39% per annum.

 

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“Class D Final Distribution Date” shall mean the November 15, 2021 Distribution
Date.

 

“Class D Monthly Interest” shall mean (i) for the initial Distribution Date,
$84,998.40, and (ii) for any Distribution Date thereafter, one-twelfth of the
product of (A) the Class D Rate and (B) the outstanding principal balance of the
Class D Notes as of the preceding Distribution Date (after giving effect to all
payments of principal made to the Holders of the Class D Notes on or before such
preceding Distribution Date).

 

“Class D Notes” shall mean the 3.04% Class D Asset-backed Notes issued by the
Trust pursuant to the Indenture in the initial aggregate principal amount of
$31,455,000.

 

“Class D Rate” shall mean 3.04% per annum.

 

“Class Final Distribution Date” shall mean, as applicable, the Class A-1 Final
Distribution Date, the Class A-2 Final Distribution Date, the Class A-3 Final
Distribution Date, the Class A-4 Final Distribution Date, the Class B Final
Distribution Date, the Class C Final Distribution Date or the Class D Final
Distribution Date.

 

“Closing Date” shall mean May 13, 2015.

 

“Collection Account” shall mean the account established and maintained as such
pursuant to Section 4.1(a).

 

“Collection Period” shall mean each calendar month during the term of this
Agreement or, in the case of the initial Collection Period, the period from but
excluding the Cutoff Date to and including May 31, 2015.

 

“Commission” shall mean the Securities and Exchange Commission.

 

“Consolidated Tangible Net Worth” shall mean, as of any date, all amounts which,
in conformity with generally accepted accounting principles, would be included
under stockholders’ equity on the consolidated balance sheet of CarMax, Inc. as
of such date; provided, however, that, in any event, such amounts shall be net
of amounts carried on the consolidated financial statements of CarMax, Inc. for
any write-up in the book value of any assets of CarMax, Inc. resulting from a
revaluation thereof subsequent to February 28, 2009, treasury stock, intangible
assets and indebtedness owing from officers, employees, shareholders or
affiliates of CarMax, Inc. (but only if the aggregate amount of such
indebtedness exceeds $1,000,000).

 

“Controlling Class” shall mean (i) the Class A Notes so long as any Class A
Notes are Outstanding, (ii) thereafter the Class B Notes so long as any Class B
Notes are Outstanding, (iii) thereafter the Class C Notes so long as any Class C
Notes are Outstanding and (iv) thereafter the Class D Notes.

 

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“Corporate Trust Office” shall mean, as applicable, (i) the principal office of
the Indenture Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of the execution of
this Agreement is located at Sixth and Marquette Avenue, MAC N9311-161,
Minneapolis, Minnesota 55479 Attention: Asset Backed Securities Department, or
at such other address as the Indenture Trustee may designate from time to time
by notice to the Noteholders, the Owner Trustee, the Depositor, the Seller and
the Servicer, or the principal corporate trust office of any successor Indenture
Trustee at the address designated by such successor Indenture Trustee by notice
to the Noteholders, the Owner Trustee, the Depositor, the Seller and the
Servicer or (ii) the corporate trust office of the Owner Trustee at which at any
particular time its corporate trust business shall be administered, which office
at the date of the execution of this Agreement is located at 190 South LaSalle
Street, Chicago, Illinois 60603, Attention: CarMax 2015-2, 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, the Seller 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, the Seller and the
Servicer.

 

“Cutoff Date” shall mean April 30, 2015.

 

“Defaulted Receivable” shall mean a Receivable as to which (i) any payment, or
any part of any payment, due under such Receivable is 120 days or more
delinquent as of the last day of any Collection Period (whether or not the
Servicer has repossessed the related Financed Vehicle), (ii) the Servicer has
repossessed and sold the related Financed Vehicle or (iii) the Servicer has
determined in accordance with its customary practices that such Receivable is
uncollectible; provided, however, that a Receivable shall not be classified as a
Defaulted Receivable until the last day of the Collection Period during which
one of the foregoing events first occurs; and, provided further, that a
Purchased Receivable shall not be deemed to be a Defaulted Receivable.

 

“Depositor” shall mean CarMax Funding.

 

“Determination Date” shall mean the ninth day of each month or, if such ninth
day is not a Business Day, the following Business Day, commencing on June 9,
2015.

 

“Distribution Date” shall mean the 15th day of each month or, if such 15th day
is not a Business Day, the following Business Day, commencing on June 15, 2015.

 

“Eligible Institution” shall mean (i) the corporate trust department of the
Indenture Trustee or the Owner Trustee or (ii) any other depository institution
organized under the laws of the United States or any State or incorporated under
the laws of a foreign jurisdiction with a branch or agency located in the United
States or any State qualified to take deposits and subject to supervision and
examination by federal or State banking authorities which at all times has
either a long term unsecured debt rating of at least “Baa3” from Moody’s or a
long-term unsecured debt rating, a short-term unsecured debt rating or a
certificate of deposit rating acceptable to Moody’s and whose deposits are
insured by the Federal Deposit Insurance Corporation; provided, however, that
(A) the commercial paper, short-term debt obligations or other short-term
deposits of the depository institution described in clause (ii) above must be
rated at least “F1+” by Fitch and at least “Prime-1” by Moody’s if deposits are
to be held in an account maintained with such depository institution pursuant to
this Agreement for fewer than 30 days and (B) the long-term unsecured debt
obligations of the depository institution described in clause (ii) above must be
rated at least “AA” by Fitch if deposits are to be held in an account maintained
with such depository institution pursuant to this Agreement for more than 30
days.

 

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“Eligible Servicer” shall mean a Person which, at the time of its appointment as
Servicer, (i) has a net worth of not less than $50,000,000, (ii) is servicing a
portfolio of motor vehicle retail installment sale contracts and/or motor
vehicle loans, (iii) is legally qualified, and has the capacity, to service the
Receivables, (iv) has demonstrated the ability to service a portfolio of motor
vehicle retail installment sale contracts and/or motor vehicle loans similar to
the Receivables professionally and competently in accordance with standards of
skill and care that are consistent with prudent industry standards and (v) is
qualified and entitled to use pursuant to a license or other written agreement,
and agrees to maintain the confidentiality of, the software which the Servicer
uses in connection with performing its duties and responsibilities under this
Agreement or obtains rights to use, or develops at its own expense, software
which is adequate to perform its duties and responsibilities under this
Agreement.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974.

 

“Event of Servicing Termination” shall mean an event specified in Section 8.1.

 

“Excess Collections” shall have the meaning specified in Section 2.8(a)(xv) of
the Indenture.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934.

 

“Final Scheduled Maturity Date” shall mean the November 15, 2021 Distribution
Date.

 

“Financed Vehicle” shall mean a new or used motor vehicle, together with all
accessions thereto, securing an Obligor’s indebtedness under a Receivable.

 

“Fiscal Quarter” shall mean a fiscal quarter of a Fiscal Year.

 

“Fiscal Year” shall mean the 12-month period ending on the last day in February
in each year.

 

“Fitch” shall mean Fitch Ratings, Inc.

 

“HB3” shall mean Texas House Bill 3 (enrolled May 19, 2006) and the
corresponding sections of the Texas Tax Code, Title 2 and the rules and
regulations promulgated thereunder.

 

“Holder” shall mean a Noteholder or a Certificateholder, as the case may be.

 

“Indenture” shall mean the Indenture, dated as of May 1, 2015, between the Trust
and the Indenture Trustee.

 

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“Indenture Trustee” shall mean Wells Fargo Bank, National Association, a
national banking association, not in its individual capacity but solely as
Indenture Trustee under the Indenture, and any successor Indenture Trustee under
the Indenture.

 

“Initial Note Balance” shall mean, as the context may require, (i) with respect
to all of the Notes, $1,165,000,000, or (ii) with respect to any Note, an amount
equal to the initial denomination of such Note.

 

“Initial Reserve Account Deposit” shall mean $2,912,500.03.

 

“Insolvency Event” shall mean, with respect to any Person, (i) the making by
such Person of a general assignment for the benefit of creditors, (ii) the
filing by such Person of a voluntary petition in bankruptcy, (iii) such Person
being adjudged bankrupt or insolvent, or having had entered against such Person
an order for relief in any bankruptcy or insolvency proceeding, (iv) the filing
by such Person of a petition or answer seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation, (v)  the filing by such Person of an answer or other
pleading admitting or failing to contest the material allegations of a petition
filed against such Person in any proceeding specified in clause (vii) below,
(vi) seeking, consenting to or acquiescing in the appointment of a trustee,
receiver or liquidator of such Person or of all or any substantial part of the
assets of such Person or (vii) the failure to obtain dismissal within 60 days of
the commencement of any proceeding against such Person seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation, or the entry of any order
appointing a trustee, liquidator or receiver of such Person of all or any
substantial portion of the assets of such Person.

 

“Issuer” shall mean CarMax Auto Owner Trust 2015-2, a Delaware statutory trust,
and its successors.

 

“Lien” shall mean a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics’ or materialmen’s
liens, judicial liens and any liens that may attach to a Financed Vehicle by
operation of law.

 

“Liquidation Proceeds” shall mean all amounts received by the Servicer, from
whatever source, with respect to any Defaulted Receivable, net of the sum of (i)
any expenses incurred by the Servicer in connection with collection of such
Receivable and the repossession and disposition of the related Financed Vehicle
(to the extent determinable by the Servicer and not previously reimbursed) and
(ii) any amounts required by law to be remitted to the related Obligor.

 

“Monthly Note Interest” shall mean, for any Distribution Date, the sum of the
Class A-1 Monthly Interest, the Class A-2a Monthly Interest, the Class A-2b
Monthly Interest, the Class A-3 Monthly Interest, the Class A-4 Monthly
Interest, the Class B Monthly Interest, the Class C Monthly Interest and the
Class D Monthly Interest, in each case for such Distribution Date.

 

9

 

  

“Monthly P&I” shall mean, with respect to any Receivable, the amount of each
monthly installment of principal and interest payable with respect to such
Receivable in accordance with the terms thereof, exclusive of any charges
allocable to the financing of any insurance premium and charges which represent
late payment charges or extension fees.

 

“Monthly Remittance Condition” shall have the meaning specified in Section 4.2.

 

“Monthly Servicing Fee” shall mean, for any Collection Period, the fee payable
to the Servicer on the following Distribution Date for services rendered during
such Collection Period as determined pursuant to Section 3.8.

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

“Net Losses” shall mean, with respect to any Collection Period, the excess, if
any, of (i) the aggregate Principal Balance of all Receivables that became
Defaulted Receivables during such Collection Period over (ii) the aggregate
Liquidation Proceeds received by the Servicer during such Collection Period.

 

“Note Balance” shall mean, at any time, as the context may require, (i) with
respect to all of the Notes, an amount equal to, initially, the Initial Note
Balance and, thereafter, an amount equal to the Initial Note Balance as reduced
from time to time by all amounts allocable to principal previously distributed
to the Noteholders or (ii) with respect to any Note, an amount equal to,
initially, the initial denomination of such Note 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 Note; provided,
however, that in determining whether the Holders of Notes evidencing the
requisite percentage of the Note Balance have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any other
Transaction Document, Notes owned by the Trust, any other obligor upon the
Notes, 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 Note
Balance (unless such Persons own 100% of the Note Balance), 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 Notes 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 Notes that have been
pledged in good faith may be regarded as included in the Note 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 Notes
and that the pledgee is not the Trust, any other obligor upon the Notes, the
Depositor, the Seller, the Servicer or any Affiliate of any of the foregoing
Persons.

 

“Note Payment Account” shall mean the account established and maintained as such
pursuant to Section 4.1(b).

 

“Note Pool Factor” shall mean, with respect to any Class of Notes as of any
Distribution Date, a seven-digit decimal figure equal to the outstanding
principal balance of such Class as of such Distribution Date (after giving
effect to any reductions of such outstanding principal balance to be made on
such Distribution Date) divided by the original outstanding principal balance of
such Class.

 

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“Note Rate” shall mean, in the case of the Class A-1 Notes, the Class A-1 Rate;
in the case of the Class A-2a Notes, the Class A-2a Rate; in the case of the
Class A-2b Notes, the Class A-2b Rate; in the case of the Class A-3 Notes, the
Class A-3 Rate; in the case of the Class A-4 Notes, the Class A-4 Rate; in the
case of the Class B Notes, the Class B Rate; in the case of the Class C Notes,
the Class C Rate; and in the case of the Class D Notes, the Class D Rate.

 

“Noteholder” shall mean a Person in whose name a Note is registered on the Note
Register.

 

“Obligor” shall mean the purchaser or co-purchasers of a Financed Vehicle
purchased in whole or in part by the execution and delivery of a Receivable or
any other Person who owes or may be liable for payments under a Receivable.

 

“Officer’s Certificate” shall mean a certificate signed by the chairman, the
president, any executive vice president, any senior vice president, any vice
president or the treasurer of the Depositor or the Servicer, as the case may be,
and delivered to the Owner Trustee and the Indenture Trustee.

 

“Opinion of Counsel” shall mean one or more written opinions of counsel who may,
except as otherwise expressly provided in this Agreement, be an employee of, or
outside counsel to, the Depositor or the Servicer and who shall be acceptable to
the Indenture Trustee, the Owner Trustee or the Rating Agencies, as applicable.

 

“Overcollateralization Target Amount” shall mean, for any Distribution Date, the
greater of (i) 0.60% of the Pool Balance as of the last day of the preceding
Collection Period and (ii) 0.50% of the Pool Balance as of the Cutoff Date.

 

“Owner Trust Estate” shall have the meaning specified in the Trust Agreement.

 

“Owner Trustee” shall mean U.S. Bank Trust National Association, a national
banking association, not in its individual capacity but solely as Owner Trustee
under the Trust Agreement, and any successor Owner Trustee under the Trust
Agreement.

 

“Permitted Investments” shall mean, on any date of determination, book-entry
securities, negotiable instruments or securities represented by instruments in
bearer or registered form which evidence:

 

(i)          direct obligations of, and obligations fully guaranteed by, the
United States or any agency or instrumentality thereof the obligations of which
are backed by the full faith and credit of the United States;

 

(ii)         demand deposits, time deposits, bankers’ acceptances or
certificates of deposit of any depository institution or trust company
incorporated under the laws of the United States or any State (or any domestic
branch of a foreign bank) and subject to supervision and examination by federal
or State banking or depository institution authorities; provided, however, that
such investment shall not have an “r” highlighter affixed to its rating and its
terms shall have a predetermined fixed dollar amount of principal due at
maturity that cannot vary or change; and, provided further, that, at the time of
the investment, the commercial paper or other short-term unsecured debt
obligations (other than such obligations the rating of which is based on the
credit of a Person other than such depository institution or trust company) of
such depository institution or trust company shall have a rating from Fitch of
at least “F1+” and from Moody’s of at least “Prime-1”;

 

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(iii)        repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States or any agency or
instrumentality thereof the obligations of which are backed by the full faith
and credit of the United States, in either case entered into with a depository
institution or trust company (acting as principal) described in clause (ii)
above;

 

(iv)        short-term corporate securities bearing interest or sold at a
discount issued by any corporation incorporated under the laws of the United
States or any State thereof; provided, however, that such investment shall not
have an “r” highlighter affixed to its rating and its terms shall have a
predetermined fixed dollar amount of principal due at maturity that cannot vary
or change; and, provided further, that, at the time of the investment, the
short-term unsecured debt obligations (other than such obligations the rating of
which is based on the credit of a Person other than such corporation) of such
corporation shall have a rating from Fitch of at least “AAA” and from Moody’s of
at least “Aaa”;

 

(v)         commercial paper having, at the time of the investment, a rating
from Fitch of at least “F1+” and from Moody’s of at least “Prime-1”; provided,
however, that such investment shall not have an “r” highlighter affixed to its
rating and its terms shall have a predetermined fixed dollar amount of principal
due at maturity that cannot vary or change;

 

(vi)        guaranteed investment contracts issued by an insurance company or
other corporation as to which the Rating Agency Condition shall have been
satisfied;

 

(vii)       investments in money market funds having a rating from Fitch of at
least “AAA” and from Moody’s of at least “Aaa-mf” (including funds for which the
Indenture Trustee or the Owner Trustee or any of their respective Affiliates is
investment manager or advisor); and

 

(viii)      any other investment as to which the Rating Agency Condition shall
have been satisfied.

 

“Person” shall mean a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, limited liability partnership, trust, unincorporated
organization, or government or any agency or political subdivision thereof, or
any other entity of whatever nature.

 

“Pool Balance” shall mean, as of the last day of any Collection Period, the
aggregate Principal Balance of the Receivables as of such last day; provided,
however, that if the Receivables are purchased by the Servicer pursuant to
Section 9.1(a) or are sold or otherwise liquidated by the Indenture Trustee
following an Event of Default pursuant to Section 5.4(a) of the Indenture, the
Pool Balance shall be deemed to be zero as of the last day of the Collection
Period during which such purchase, sale or other liquidation occurs.

 

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“Principal Balance” shall mean, with respect to any Receivable as of any date,
the Amount Financed under such Receivable minus the sum of (i) that portion of
all Scheduled Payments actually received on or prior to such date allocable to
principal using the Simple Interest Method (to the extent collected) plus
(ii) any rebates of extended service plan contract costs or physical damage,
theft, GAP, credit life or credit disability insurance premiums included in the
Amount Financed plus (iii) any full or partial prepayment applied to reduce the
unpaid principal balance of such Receivable; provided, however, that (i) the
Principal Balance of a Defaulted Receivable shall be zero as of the last day of
the Collection Period during which it became a Defaulted Receivable and (ii) the
Principal Balance of a Purchased Receivable shall be zero as of the last day of
the Collection Period during which it became a Purchased Receivable.

 

“Priority Principal Distributable Amount” shall mean, with respect to any
Distribution Date, the excess, if any, of the Note Balance of the Class A Notes
as of the day preceding such Distribution Date over the Pool Balance as of the
last day of the preceding Collection Period; provided, however, that the
Priority Principal Distributable Amount for each Distribution Date on and after
the Class Final Distribution Date for any Class of Class A Notes shall equal the
greater of (i) the amount otherwise calculated pursuant to this definition and
(ii) the outstanding principal balance of the Class A Notes of such Class as of
the day preceding such Distribution Date.

 

“Purchase Amount” shall mean, with respect to any Distribution Date and any
Receivable to be repurchased by the Depositor or purchased by the Servicer on
such Distribution Date, an amount equal to the sum of (i) the Principal Balance
of such Receivable plus (ii) the amount of accrued but unpaid interest on such
Principal Balance at the related APR to but excluding such Distribution Date.

 

“Purchased Receivable” shall mean a Receivable as to which payment of the
Purchase Amount has been made by the Depositor pursuant to Section 2.4 or by the
Servicer pursuant to Section 3.7 or 9.1.

 

“Quaternary Principal Distributable Amount” shall mean, with respect to any
Distribution Date, (i) the excess, if any, of the sum of the Note Balance of the
Class A Notes, the Note Balance of the Class B Notes, the Note Balance of the
Class C Notes and the Note Balance of the Class D Notes, in each case as of the
day preceding such Distribution Date, over the Pool Balance as of the last day
of the preceding Collection Period minus (ii) the sum of the Priority Principal
Distributable Amount, if any, for such Distribution Date, the Secondary
Principal Distributable Amount, if any, for such Distribution Date and the
Tertiary Principal Distributable Amount, if any, for such Distribution Date;
provided, however, that the Quaternary Principal Distributable Amount for each
Distribution Date on and after the Class D Final Distribution Date shall equal
the greater of (i) the amount otherwise calculated pursuant to this definition
and (ii) the outstanding principal balance of the Class D Notes as of the day
preceding such Distribution Date.

 

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“Rating Agencies” shall mean Fitch and Moody’s and their respective successors;
provided, however, that if no such organization or successor is any longer in
existence, Rating Agency shall mean a nationally recognized statistical rating
organization or other comparable Person designated by the Trust, notice of which
designation shall have been given to the Indenture Trustee, the Owner Trustee
and the Servicer.

 

“Rating Agency Condition” shall mean, with respect to any action, a condition
that is satisfied if the person requesting such action (i) delivers a letter
from each Rating Agency to the Depositor, the Seller, the Servicer, the
Indenture Trustee and the Owner Trustee to the effect 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 (ii) provides ten (10) Business Days’
prior written notice of such action to each Rating Agency and such Rating Agency
has not notified the Depositor, the Seller, the Servicer, the Indenture Trustee
and the Owner Trustee in writing that such action will result in a reduction or
withdrawal of the then-current rating assigned by such Rating Agency to any
Class of Notes.

 

“Receivable” shall mean a motor vehicle retail installment sale contract
identified on the Receivable Schedule (as such contract may be amended,
supplemented or otherwise modified and in effect from time to time).

 

“Receivable File” shall mean, with respect to any Receivable, the electronic
entries, documents, instruments and writings with respect to such Receivable
specified in Section 2.5.

 

“Receivable Schedule” shall mean the list identifying the Receivables attached
as Schedule 1 to this Agreement (which list may be in the form of microfiche or
compact disk).

 

“Receivables Purchase Agreement” shall mean the Receivables Purchase Agreement,
dated as of May 1, 2015, between the Seller and the Depositor.

 

“Record Date” shall mean, with respect to any Distribution Date, the close of
business on the Business Day preceding such Distribution Date; provided,
however, that if Definitive Notes have been issued with respect to any Class of
Notes, Record Date shall mean, with respect to any Distribution Date for such
Class, the last Business Day of the calendar month preceding such Distribution
Date.

 

“Regular Principal Distributable Amount” shall mean, with respect to any
Distribution Date, the lesser of (i) the Note Balance as of the day preceding
such Distribution Date and (ii) (A) the excess, if any, of (x) the sum of the
Note Balance as of the day preceding such Distribution Date and the
Overcollateralization Target Amount for such Distribution Date over (y) the Pool
Balance as of the last day of the preceding Collection Period minus (B) the sum
of the Priority Principal Distributable Amount, if any, the Secondary Principal
Distributable Amount, if any, the Tertiary Principal Distributable Amount, if
any, and the Quaternary Principal Distributable Amount, if any, in each case for
such Distribution Date.

 

“Regulation AB” shall mean Subpart 229.1100 – Asset-Backed Securities
(Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such regulation may be
amended, clarified or interpreted from time to time by the Commission or its
staff.

 

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“Related Fiscal Quarter” shall mean (i) for any Distribution Date occurring in
August, September or October, the Fiscal Quarter ending on the last day of the
preceding May, (ii) for any Distribution Date occurring in November, December or
January, the Fiscal Quarter ending on the last day of the preceding August,
(iii) for any Distribution Date occurring in February, March or April, the
Fiscal Quarter ending on the last day of the preceding November and (iv) for any
Distribution Date occurring in May, June or July, the Fiscal Quarter ending on
the last day of the preceding February.

 

“Relevant UCC” shall mean the Uniform Commercial Code as in effect from time to
time in any relevant jurisdiction.

 

“Required Payment Amount” shall have, for any Distribution Date, the meaning
specified for such Distribution Date in Section 4.6(a).

 

“Required Rating” shall mean a short-term unsecured debt rating of “F1+” by
Fitch and “Prime-1” by Moody’s.

 

“Required Reserve Account Amount” shall mean, for any Distribution Date,
$2,912,500.03; provided, however, that the Required Reserve Account Amount for
any Distribution Date shall not exceed the Note Balance as of such Distribution
Date (after giving effect to all payments of principal made to the Noteholders
on such Distribution Date); and, provided further, that, if the Pool Balance as
of the last day of the preceding Collection Period is zero, the Required Reserve
Account Amount for the related Distribution Date shall be $0; and, provided
further, that, if, pursuant to Section 4.1(d), all amounts on deposit in the
Reserve Account on such Distribution Date are transferred from the Reserve
Account to the Collection Account and included in Available Funds for purposes
of application pursuant to Section 2.8(a) of the Indenture on such Distribution
Date, the Required Reserve Account Amount for such Distribution Date shall be
$0.

 

“Reserve Account” shall mean the account established and maintained as such
pursuant to Section 4.7(a).

 

“Reserve Account Amount” shall mean, for any Distribution Date, the amount on
deposit in and available for withdrawal from the Reserve Account on such
Distribution Date (after giving effect to all deposits to and withdrawals from
the Reserve Account on the preceding Distribution Date, or, in the case of the
initial Distribution Date, the Closing Date), including all interest and other
income (net of losses and investment expenses) earned on such amount during the
preceding Collection Period.

 

“Reserve Account Deficiency” shall have, for any Distribution Date, the meaning
specified for such Distribution Date in Section 4.6(b).

 

“Reserve Account Draw Amount” shall have the meaning specified in Section
4.6(b).

 

“Reserve Account Property” shall have the meaning specified in Section 4.7(a).

 

15

 

  

“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, senior associate, 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 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.

 

“Scheduled Payment” shall mean, for any Receivable, each payment required to be
made by the related Obligor in accordance with the terms of such Receivable
(after giving effect to any deferral of payments pursuant to Section 3.2 or any
rescheduling of payments as a result of any Insolvency Event with respect to
such Obligor).

 

“Secondary Principal Distributable Amount” shall mean, with respect to any
Distribution Date, (i) the excess, if any, of the sum of the Note Balance of the
Class A Notes and the Note Balance of the Class B Notes, in each case as of the
day preceding such Distribution Date, over the Pool Balance as of the last day
of the preceding Collection Period minus (ii) the Priority Principal
Distributable Amount, if any, for such Distribution Date; provided, however,
that the Secondary Principal Distributable Amount for each Distribution Date on
and after the Class B Final Distribution Date shall equal the greater of (i) the
amount otherwise calculated pursuant to this definition and (ii) the outstanding
principal balance of the Class B Notes as of the day preceding such Distribution
Date.

 

“Securities” shall have the meaning specified in Section 6.7(a).

 

“Securities Act” shall mean the Securities Act of 1933.

 

“Securitization Trust” shall have the meaning specified in Section 6.7(a).

 

“Seller” shall mean CarMax, in its capacity as seller of the Receivables under
the Receivables Purchase Agreement, and its successors in such capacity.

 

“Servicer” shall mean CarMax, in its capacity as servicer of the Receivables
under this Agreement, and its successors in such capacity (including the
Indenture Trustee if the Indenture Trustee is appointed successor Servicer
pursuant to Section 8.2(a)).

 

“Servicer’s Certificate” shall have the meaning specified in Section 3.9.

 

“Servicing Officer” shall mean any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Receivables whose name
appears on a list of servicing officers attached to an Officer’s Certificate
furnished on the Closing Date to the Owner Trustee and the Indenture Trustee by
the Servicer, as such list may be amended from time to time by the Servicer in
writing.

 

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“Servicing Rate” shall mean 1.00% per annum.

 

“Simple Interest Advance” shall mean, with respect to a Simple Interest
Receivable, the amount, as of the last day of a Collection Period, which is
advanced with respect to such Simple Interest Receivable by the Servicer
pursuant to Section 4.4(a).

 

“Simple Interest Method” shall mean the method of allocating a fixed level
payment between principal and interest, pursuant to which such payment is
allocated, first, to interest in an amount equal to the product of the APR of
the related Receivable multiplied by the unpaid Principal Balance of such
Receivable multiplied by the period of time (expressed as a fraction of a year,
based on the actual number of days in the applicable calendar month and a
365-day year) elapsed since the preceding payment was made, then to any
applicable late charges, then to principal due on the date of payment, then to
any other fees due under the related Receivable that are not included in the
related Amount Financed and then to reduce further the principal balance of such
Receivable .

 

“Simple Interest Receivable” shall mean any Receivable under which each payment
is allocated in accordance with the Simple Interest Method.

 

“Special Unrated Servicer Tangible Net Worth Event” shall mean, as of any
Distribution Date, the failure of CarMax, Inc. to have, as of the last day of
the Related Fiscal Quarter, a Consolidated Tangible Net Worth of at least
$1,000,000,000.

 

“State” shall mean any of the 50 states of the United States or the District of
Columbia.

 

“Tertiary Principal Distributable Amount” shall mean, with respect to any
Distribution Date, (i) the excess, if any, of the sum of the Note Balance of the
Class A Notes, the Note Balance of the Class B Notes and the Note Balance of the
Class C Notes, in each case as of the day preceding such Distribution Date, over
the Pool Balance as of the last day of the preceding Collection Period minus
(ii) the sum of the Priority Principal Distributable Amount, if any, for such
Distribution Date and the Secondary Principal Distributable Amount, if any, for
such Distribution Date; provided, however, that the Tertiary Principal
Distributable Amount for each Distribution Date on and after the Class C Final
Distribution Date shall equal the greater of (i)  the amount otherwise
calculated pursuant to this definition and (ii) the outstanding principal
balance of the Class C Notes as of the day preceding such Distribution Date.

 

“Total Note Interest” shall mean, for any Distribution Date and any Class of
Notes, the sum of (i) the Monthly Note Interest for such Distribution Date for
such Class plus (ii) the Additional Note Interest for such Distribution Date for
such Class.

 

“Total Servicing Fee” shall mean, for any Collection Period, the sum of (i)  the
Monthly Servicing Fee for such Collection Period plus (ii) all accrued but
unpaid Monthly Servicing Fees for previous Collection Periods.

 

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“Transition Costs” shall have the meaning specified in Section 8.2(b).

 

“Trust” shall mean the CarMax Auto Owner Trust 2015-2, a Delaware statutory
trust.

 

“Trust Agreement” shall mean the Amended and Restated Trust Agreement, dated as
of May 1, 2015, between the Depositor and the Owner Trustee, as amended,
supplemented or otherwise modified and in effect from time to time.

 

“Trust Fiscal Year” shall mean the period commencing on March 1 of any year and
ending on February 28 (or February 29, if applicable) of the following year.

 

“Trust Property” shall mean the Receivables and the other related property sold,
transferred, assigned and otherwise conveyed by the Depositor to the Trust
pursuant to Section 2.1(a).

 

“United States” shall mean the United States of America.

 

“Unreimbursed Servicer Advance” shall mean a Simple Interest Advance which the
Servicer determines in its sole discretion is unrecoverable.

 

1.2          Other Definitional Provisions.

 

(a)          Capitalized terms used herein and not otherwise defined herein have
the meanings assigned to them 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 document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings assigned
to them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.

 

(d)          The words “hereof,” “herein,” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Article, Section, Schedule
and Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified. The term “including” shall mean “including without limitation.”

 

18

 

  

(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
TRUST PROPERTY

 

2.1          Conveyance of Trust Property.

 

(a)          In consideration of the Trust’s delivery to, or upon the written
order of, the Depositor of authenticated Notes, in authorized denominations in
aggregate principal amounts equal to the Initial Note Balance, and authenticated
Certificates, the Depositor hereby irrevocably sells, transfers, assigns, sets
over and otherwise conveys to the Trust, without recourse (subject to the
obligations herein), all right, title and interest of the Depositor, whether now
owned or hereafter acquired, in, to and under the following:

 

(i)          the Receivables;

 

(ii)         all amounts received on or in respect of the Receivables after the
Cutoff Date;

 

(iii)        the security interests in the Financed Vehicles granted by the
Obligors pursuant to the Receivables and any other interest of the Depositor in
such Financed Vehicles;

 

(iv)        all proceeds from claims on or refunds of premiums with respect to
physical damage, theft, GAP, credit life or credit disability insurance policies
relating to the Financed Vehicles or the Obligors;

 

(v)         the Receivable Files;

 

(vi)        the Collection Account, the Note Payment Account, the Certificate
Payment Account and the Reserve Account and all amounts, securities, financial
assets, investments and other property deposited in or credited to any of the
foregoing and all proceeds thereof;

 

(vii)       all rights of the Depositor under the Receivables Purchase
Agreement, including the right to require the Seller to repurchase Receivables
from the Depositor;

 

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(viii)      the right to realize upon any property (including the right to
receive future Liquidation Proceeds) that shall have secured a Receivable and
have been repossessed by or on behalf of the Trust; and

 

(ix)         all present and future claims, demands, causes of action and choses
in action in respect of any or all of the foregoing and all payments on or under
and all proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property; all accounts, general
intangibles, chattel paper, instruments, documents, money, investment property,
deposit accounts, letters of credit, letter-of-credit rights, insurance
proceeds, condemnation awards, rights to payment of any and every kind and other
forms of obligations; and all other property which at any time constitutes all
or part of or is included in the proceeds of any of the foregoing.

 

(b)          The Depositor and the Trust intend that the transfer of the Trust
Property contemplated by Section 2.1(a) constitute a sale of the Trust Property,
conveying good title to the Trust Property, from the Depositor to the Trust. If
such transfer is deemed to be a pledge to secure the payment of the Notes,
however, the Depositor hereby grants to the Trust a first priority security
interest in all of the Depositor’s right, title and interest in, to and under
the Trust Property, and all proceeds thereof, to secure the payment of the
Notes, and in such event, this Agreement shall constitute a security agreement
under applicable law.

 

(c)          The sale, transfer, assignment and conveyance of the Trust Property
made under Section 2.1(a) shall not constitute and is not intended to result in
an assumption by the Trust of any obligation of the Depositor or the Seller to
the Obligors or any other Person in connection with the Receivables and the
other Trust Property or any obligation of the Depositor or the Seller under any
agreement, document or instrument related thereto.

 

2.2          Representations and Warranties of the Seller as to the Receivables.
The Seller has made to the Depositor the representations and warranties as to
the Receivables set forth in Section 3.2(b) of the Receivables Purchase
Agreement. The Trust shall be deemed to have relied on such representations and
warranties in accepting the Receivables. The representations and warranties set
forth in Section 3.2(b) of the Receivables Purchase Agreement speak as of the
execution and delivery of this Agreement, except to the extent otherwise
provided, but shall survive the sale, transfer, assignment and conveyance of the
Receivables to the Trust pursuant to this Agreement and the pledge of the
Receivables to the Indenture Trustee pursuant to the Indenture. Pursuant to
Section 2.1, the Depositor has sold, transferred, assigned, set over and
otherwise conveyed to the Trust, as part of the Trust Property, its rights under
the Receivables Purchase Agreement, including its right to require the Seller to
repurchase Receivables in accordance with the Receivables Purchase Agreement
upon a breach of the representations and warranties set forth in Section 3.2(b)
of the Receivables Purchase Agreement.

 

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2.3          Representations and Warranties of the Depositor as to the
Receivables. The Depositor makes the following representations and warranties as
to the Receivables on which the Trust shall be deemed to have relied in
accepting the Receivables. The representations and warranties speak as of the
Closing Date, except to the extent otherwise provided, but shall survive the
sale, transfer, assignment and conveyance of the Receivables to the Trust
pursuant to this Agreement and the pledge of the Receivables to the Indenture
Trustee pursuant to the Indenture.

 

(a)          Characteristics of Receivables. Each Receivable (i) has been
originated by CarMax Auto or an Affiliate of CarMax Auto in the United States in
the ordinary course of business in connection with the sale of a new or used
motor vehicle and has been fully and properly executed by the parties thereto,
(ii) contains customary and enforceable provisions such that the rights and
remedies of the holder thereof are adequate for realization against the
collateral of the benefits of the security, (iii) provides for level scheduled
monthly payments that fully amortize the Amount Financed by maturity (except
that the period between the date of such Receivable and the date of the first
Scheduled Payment may be less than or greater than one month and the amount of
the first and last Scheduled Payments may be less than or greater than the level
payments) and yield interest at the related APR, (iv) provides for, in the event
that such Receivable is prepaid, a prepayment that fully pays the Principal
Balance of such Receivable with interest at the related APR through the date of
payment, (v) is a retail installment sale contract substantially in the form of
Exhibit B to the Receivables Purchase Agreement, (vi) is secured by a new or
used motor vehicle that had not been repossessed as of the Cutoff Date, (vii) is
a Simple Interest Receivable, (viii) relates to an Obligor who has made at least
one payment under such Receivable as of the Cutoff Date and (ix) relates to an
Obligor whose mailing address is located in any State.

 

(b)          Receivable Schedule. The information set forth in the Receivable
Schedule was true and correct in all material respects as of the close of
business on the Cutoff Date, and no selection procedures believed to be adverse
to the Depositor and/or the Noteholders were utilized in selecting the
Receivables from those retail installment sale contracts which met the criteria
contained in this Agreement. The information set forth in the compact disk or
other listing regarding the Receivables made available to the Depositor and its
assigns (which compact disk or other listing is required to be delivered as
specified herein) is true and correct in all material respects.

 

(c)          Compliance with Law. Each Receivable and the sale of the related
Financed Vehicle complied, at the time such Receivable was originated and
complies, as of the Closing Date, in all material respects with all requirements
of applicable federal, State and local laws, and regulations thereunder,
including usury laws, the Federal Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act,
the Consumer Financial Protection Bureau’s Regulations B and Z, the
Servicemembers Civil Relief Act, State adaptations of the National Consumer Act
and the Uniform Consumer Credit Code and any other consumer credit, equal
opportunity and disclosure laws applicable to such Receivable and sale.

 

(d)          Binding Obligation. Each Receivable represents the genuine, legal,
valid and binding payment obligation in writing of the related Obligor,
enforceable by the holder thereof in all material respects in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, liquidation or other similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity.

 

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(e)          No Government Obligor. No Receivable is due from the United States
or any State or from any agency, department or instrumentality of the United
States or any State.

 

(f)          Security Interest in Financed Vehicles. Immediately prior to the
transfer of the Receivables by the Seller to the Depositor, each Receivable was
secured by a valid, binding and enforceable first priority perfected security
interest in favor of the Seller in the related Financed Vehicle, which security
interest has been validly assigned by the Seller to the Depositor. The Servicer
has received, or will receive within 180 days after the Closing Date, the
original certificate of title for each Financed Vehicle (other than any Financed
Vehicle that is subject to a certificate of title statute or motor vehicle
registration law that does not require that the original certificate of title
for such Financed Vehicle be delivered to the Seller).

 

(g)          Receivables in Force. No Receivable has been satisfied,
subordinated or rescinded, nor has any Financed Vehicle been released in whole
or in part from the Lien granted by the related Receivable.

 

(h)          No Waiver. No provision of any Receivable has been waived in such a
manner that such Receivable fails to meet all of the representations and
warranties made by the Depositor in this Section 2.3 with respect thereto.

 

(i)          No Defenses. No Receivable is subject to any right of rescission,
setoff, counterclaim or defense, including the defense of usury, and the
operation of any of the terms of any Receivable, or the exercise of any right
thereunder, will not render such Receivable unenforceable in whole or in part or
subject to any right of rescission, setoff, counterclaim or defense, including
the defense of usury, and the Depositor has no knowledge of any such right of
rescission, setoff, counterclaim or defense being asserted or threatened with
respect to any Receivable.

 

(j)          No Liens. The Depositor has no knowledge of any liens or claims
that have been filed, including liens for work, labor or materials or for unpaid
State or federal taxes, relating to any Financed Vehicle that are prior to, or
equal or coordinate with, the security interest in such Financed Vehicle created
by the related Receivable.

 

(k)          No Default. Except for payment defaults continuing for a period of
not more than 30 days as of the Cutoff Date, the Depositor has no knowledge that
any default, breach, violation or event permitting acceleration under the terms
of any Receivable has occurred or that any continuing condition that with notice
or the lapse of time or both would constitute a default, breach, violation or
event permitting acceleration under the terms of any Receivable has arisen, and
the Depositor has not waived any such event or condition.

 

(l)          Title. The Depositor has purchased the Receivables from the Seller.
The Depositor intends that the transfer of the Receivables contemplated by
Section 2.1 constitute a sale of the Receivables from the Depositor to the Trust
and that the beneficial interest in, and title to, the Receivables not be part
of the Depositor’s estate in the event of the filing of a bankruptcy petition by
or against the Depositor under any bankruptcy law. The Depositor has not sold,
transferred, assigned or pledged any Receivable to any Person other than the
Trust. The Depositor has not created, incurred or suffered to exist any Lien,
encumbrance or security interest on any Receivable except for the Lien of the
Receivables Purchase Agreement, this Agreement and the Indenture.

 

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(m)          Security Interest Matters. This Agreement creates a valid and
continuing “security interest” (as defined in the Relevant UCC) in the
Receivables in favor of the Trust, which security interest is prior to all other
Liens and is enforceable as such as against creditors of and purchasers from the
Depositor. With respect to each Receivable, the Seller has taken all steps
necessary to perfect its security interest against the related Obligor in the
related Financed Vehicle. The Receivables constitute “tangible chattel paper”
(as defined in the Relevant UCC). The Depositor owns and has good and marketable
title to the Receivables free and clear of any Lien, claim or encumbrance of any
Person. The Depositor has caused or will cause prior to the Closing Date the
filing of all appropriate financing statements in the proper filing offices in
the appropriate jurisdictions under applicable law necessary to perfect the
security interest in the Receivables granted to the Trust under this Agreement.
Other than the security interest granted to the Trust under this Agreement, the
Depositor has not pledged, assigned, sold, granted a security interest in or
otherwise conveyed any of the Receivables. The Depositor has not authorized the
filing of and is not aware of any financing statements against the Depositor
that include a description of collateral covering the Receivables other than any
financing statement relating to the security interest granted to the Trust under
this Agreement or that has been terminated. The Depositor is not aware of any
judgment or tax lien filings against the Depositor. The security interest of the
Seller in each Financed Vehicle has been validly assigned by the Depositor to
the Trust.

 

(n)          Financing Statements. All financing statements filed or to be filed
against the Depositor in favor of the Indenture Trustee (as assignee of the
Trust) contain a statement substantially to the following effect: “A purchase of
or security interest in any collateral described in this financing statement
will violate the rights of the Indenture Trustee.”

 

(o)          Valid Assignment. No Receivable has been originated in, or is
subject to the laws of, any jurisdiction under which the sale, transfer,
assignment and conveyance of such Receivable under the Receivables Purchase
Agreement or this Agreement or the pledge of such Receivable under the Indenture
is unlawful, void or voidable or under which such Receivable would be rendered
void or voidable as a result of any such sale, transfer, assignment, conveyance
or pledge. The Depositor has not entered into any agreement with any account
debtor that prohibits, restricts or conditions the assignment of the
Receivables.

 

(p)          One Original. There is only one original executed copy of each
Receivable.

 

(q)          Principal Balance. Each Receivable had a remaining Principal
Balance as of the Cutoff Date of not less than $500.

 

(r)          No Bankrupt Obligors. As of the Cutoff Date, no Receivable was due
from an Obligor that was the subject of a proceeding under the Bankruptcy Code
of the United States or was bankrupt.

 

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(s)          New and Used Vehicles. As of the Cutoff Date, approximately 0.78%
of the Pool Balance related to Receivables secured by new Financed Vehicles and
approximately 99.22% of the Pool Balance related to Receivables secured by used
Financed Vehicles.

 

(t)          Origination. Each Receivable was originated after January 10, 2009.

 

(u)          Term to Maturity. Each Receivable had an original term to maturity
of not more than 72 months and not less than 12 months and a remaining term to
maturity as of the Cutoff Date of not more than 71 months and not less than 3
months.

 

(v)         Weighted Average Remaining Term to Maturity. As of the Cutoff Date,
the weighted average remaining term to maturity of the Receivables was
approximately 61.55 months.

 

(w)          Annual Percentage Rate. Each Receivable has an APR of not more than
25.00%.

 

(x)          Location of Receivable Files. The Receivable Files are maintained
at the location listed in Schedule 2 to this Agreement.

 

(y)          Simple Interest Method. All payments with respect to the
Receivables have been allocated consistently in accordance with the Simple
Interest Method.

 

(z)          No Delinquent Receivables. As of the Cutoff Date, no payment due
under any Receivable was more than 30 days past due.

 

(aa)         Insurance. Each Obligor has obtained or agreed to obtain physical
damage insurance (which insurance shall not be force placed insurance) covering
the related Financed Vehicle in accordance with the Seller’s normal
requirements.

 

(bb)         Fair Market Value. The Receivables Purchase Price represents the
fair market value of the Receivables.

 

(cc)         Custodial Agreements. Immediately prior to the transfer of the
Receivables by the Seller to the Depositor, the Seller or an Affiliate of the
Seller had possession of the Receivable Files and there were no, and there will
not be any, custodial agreements in effect materially adversely affecting the
right or ability of the Seller to make, or cause to be made, any delivery
required under this Agreement.

 

(dd)         Bulk Transfer Laws. The transfer of the Receivables and the
Receivable Files by the Depositor to the Trust pursuant to this Agreement is not
subject to the bulk transfer laws or any similar statutory provisions in effect
in any applicable jurisdiction.

 

(ee)         No Transfer Restrictions. The Depositor has not created, incurred
or suffered to exist any restriction on transferability of the Receivables
except for the restrictions on transferability imposed by this Agreement.

 

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2.4          Repurchase by Depositor upon Breach. The Depositor, the Servicer or
the Administrator (on behalf of the Trust), as the case may be, shall inform the
other parties to this Agreement, the Seller and the Indenture Trustee promptly,
in writing, upon the discovery of any breach or failure to be true of the
representations and warranties set forth in Section 2.3. If such breach or
failure shall not have been cured by the close of business on the last day of
the Collection Period which includes the 30th day after the date on which the
Depositor becomes aware of, or receives written notice from the Servicer or the
Administrator (on behalf of the Trust) of, such breach or failure, and such
breach or failure materially and adversely affects the interest of the Trust in
a Receivable, the Depositor shall repurchase such Receivable from the Trust on
the Distribution Date immediately following such Collection Period. In
consideration of the repurchase of a Receivable hereunder, the Depositor shall
remit the Purchase Amount of such Receivable in the manner specified in Section
4.5. The sole remedy of the Trust, the Owner Trustee, the Indenture Trustee, the
Noteholders and the Certificateholders with respect to a breach or failure to be
true of the representations and warranties set forth in Section 2.3 shall be to
require the Depositor to repurchase Receivables pursuant to this Section 2.4.
None of the Administrator, the Owner Trustee or the Indenture Trustee shall have
any duty to conduct an affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Receivable pursuant to this Section
2.4 or the eligibility of any Receivable for purposes of this Agreement.

 

2.5          Custody of Receivable Files. To assure uniform quality in servicing
the Receivables and to reduce administrative costs, the Trust, upon the
execution and delivery of this Agreement, hereby revocably appoints the Servicer
as its agent, and the Servicer hereby accepts such appointment, to act as
custodian on behalf of the Trust and the Indenture Trustee of the following
documents or instruments, which are hereby constructively delivered to the
Indenture Trustee, as pledgee of the Trust pursuant to the Indenture with
respect to each Receivable (collectively, a “Receivable File”):

 

(i)          the original, executed copy of such Receivable;

 

(ii)         the original credit application with respect to such Receivable
fully executed by the related Obligor or a photocopy thereof or a record thereof
on a computer file or disc or on microfiche;

 

(iii)        the original certificate of title for the related Financed Vehicle
or such other documents that the Seller or the Servicer shall keep on file, in
accordance with its customary practices and procedures, evidencing the security
interest of the Seller in such Financed Vehicle;

 

(iv)        documents evidencing the commitment of the related Obligor to
maintain physical damage insurance covering the related Financed Vehicle; and

 

(v)         any and all other documents (including any computer file or disc or
microfiche) that the Seller or the Servicer shall keep on file, in accordance
with its customary practices and procedures, relating to such Receivable, the
related Obligor or the related Financed Vehicle.

 

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On the Closing Date, the Servicer shall deliver to the Trust and the Indenture
Trustee an Officer’s Certificate confirming that the Servicer has received, on
behalf of the Trust and the Indenture Trustee, all the documents and instruments
necessary for the Servicer to act as the agent of the Trust and the Indenture
Trustee for the purposes set forth in this Section 2.5, including the documents
referred to herein, and the Trust and the Indenture Trustee are hereby
authorized to rely on such Officer’s Certificate. In addition, within 180 days
after the Closing Date, the Servicer shall deliver to the Trust and the
Indenture Trustee an Officer’s Certificate certifying that the Servicer has
received the original certificate of title for each Financed Vehicle except each
Financed Vehicle securing an outstanding Receivable for which the Servicer has
not received the original certificate of title as shall be identified in such
Officer’s Certificate (and indicating whether such Financed Vehicle is subject
to a certificate of title statute or motor vehicle registration law that
requires that the original certificate of title for such Financed Vehicle be
delivered to the Seller).

 

2.6          Duties of Servicer as Custodian.

 

(a)          Safekeeping. The Servicer, in its capacity as custodian, shall hold
the Receivable Files for the benefit of the Trust and the Indenture Trustee and
maintain such accurate and complete accounts, records and computer systems
pertaining to each Receivable File as shall enable the Servicer and the Trust to
comply with the terms and provisions of this Agreement and the Indenture Trustee
to comply with the terms and conditions of the Indenture. In performing its
duties as custodian, the Servicer shall act with reasonable care, using that
degree of skill and attention that the Servicer exercises with respect to the
files relating to comparable motor vehicle retail installment sale contracts
that the Servicer services for itself or others. The Servicer shall conduct, or
cause to be conducted, in accordance with its customary practices and
procedures, periodic audits of the Receivable Files held by it under this
Agreement, and of the related accounts, records and computer systems, in such a
manner as shall enable the Trust or the Indenture Trustee to verify the accuracy
of the Servicer’s record keeping. The Servicer shall promptly report to the
Owner Trustee and the Indenture Trustee any failure on its part to hold the
Receivable Files and maintain its accounts, records and computer systems as
herein provided and promptly take appropriate action to remedy any such failure.
Nothing herein shall be deemed to require an initial review or any periodic
review by the Trust, the Owner Trustee or the Indenture Trustee of the
Receivable Files, and none of the Trust, the Owner Trustee or the Indenture
Trustee shall be liable or responsible for any action or failure to act by the
Servicer in its capacity as custodian hereunder.

 

(b)          Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at the location listed in Schedule 2 or at such other
location as shall be specified to the Trust, the Owner Trustee and the Indenture
Trustee by written notice not later than ninety (90) days after any change in
location. The Servicer shall make available to the Owner Trustee and the
Indenture Trustee or its duly authorized representatives, attorneys or auditors,
a list of locations of the Receivable Files, the Receivable Files, and the
related accounts, records, and computer systems maintained by the Servicer, at
such times as the Trust or the Indenture Trustee shall instruct.

 

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(c)          Release of Documents. As soon as practicable after receiving
written instructions from the Indenture Trustee, the Servicer shall release any
document in the Receivable Files to the Indenture Trustee, the Indenture
Trustee’s agent or the Indenture Trustee’s designee, as the case may be, at such
place as the Indenture Trustee may reasonably designate.

 

(d)          Title to Receivables. The Servicer shall not at any time have or in
any way attempt to assert any interest in any Receivable held by it as custodian
hereunder or in the related Receivable File other than for collecting or
enforcing such Receivable for the benefit of the Trust. The entire equitable
interest in such Receivable and the related Receivable File shall at all times
be vested in the Trust.

 

2.7          Instructions; Authority to Act. The Servicer shall be deemed to
have received proper instructions with respect to the Receivable Files upon its
receipt of written instructions signed by an Authorized Officer. A certified
copy of excerpts of authorizing resolutions of the Board of Directors of the
Indenture Trustee shall constitute conclusive evidence of the authority of any
such Authorized Officer to act and shall be considered in full force and effect
until receipt by the Servicer of written notice to the contrary given by the
Indenture Trustee.

 

2.8          Indemnification by the Custodian. The Servicer, in its capacity as
custodian, shall indemnify and hold harmless the Trust, the Owner Trustee and
the Indenture Trustee and each of their respective officers, directors,
employees and agents from and against any and all liabilities, obligations,
losses, compensatory damages, payments, costs or expenses (including legal fees
if any) of any kind whatsoever that may be imposed on, incurred or asserted
against the Trust, the Owner Trustee or the Indenture Trustee or any of their
respective officers, directors, employees and agents as the result of any act or
omission by the Servicer relating to the maintenance and custody of the
Receivable Files; provided, however, that the Servicer shall not be liable
hereunder to the Owner Trustee or the Indenture Trustee, as applicable, to the
extent that such liabilities, obligations, losses, compensatory damages,
payments, costs or expenses result from the willful misfeasance, bad faith or
negligence of the Owner Trustee or the Indenture Trustee, as applicable.

 

2.9          Effective Period and Termination. The Servicer’s appointment as
custodian shall become effective as of the Cutoff Date and shall continue in
full force and effect until terminated pursuant to this Section 2.9. If the
Servicer shall resign as Servicer under Section 7.6, or if all of the rights and
obligations of the Servicer shall have been terminated under Section 8.1, the
appointment of the Servicer as custodian hereunder may be terminated (i) by the
Trust, with the consent of the Indenture Trustee, (ii) by the Holders of Notes
evidencing not less than 25% of the Note Balance of the Controlling Class or, if
the Notes have been paid in full, by the Holders of Certificates evidencing not
less than 25% of the aggregate Certificate Percentage Interest or (iii) by the
Owner Trustee, with the consent of the Holders of Notes evidencing not less than
25% of the Note Balance of the Controlling Class, in each case by notice then
given in writing to the Depositor and the Servicer (with a copy to the Indenture
Trustee and the Owner Trustee if given by the Noteholders or the
Certificateholders). As soon as practicable after any termination of such
appointment, the Servicer shall deliver, or cause to be delivered, the
Receivable Files and the related accounts and records maintained by the Servicer
to the Indenture Trustee, the Indenture Trustee’s agent or the Indenture
Trustee’s designee, as the case may be, at such place as the Indenture Trustee
may reasonably designate or, if the Notes have been paid in full, at such place
as the Owner Trustee may reasonably designate.

 

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Article III
ADMINISTRATION AND SERVICING OF RECEIVABLES AND
OTHER TRUST PROPERTY

 

3.1          Duties of Servicer. The Servicer shall administer the Receivables
with reasonable care. The Servicer’s duties shall include, but not be limited
to, the collection and posting of all payments, responding to inquiries by
Obligors on the Receivables, or by federal, State or local governmental
authorities, investigating delinquencies, reporting tax information to Obligors,
furnishing monthly and annual statements to the Owner Trustee and the Indenture
Trustee with respect to distributions and providing collection and repossession
services in the event of Obligor default. In performing its duties as Servicer
hereunder, the Servicer shall use reasonable care and exercise that degree of
skill and attention that the Servicer exercises with respect to all comparable
motor vehicle retail installment sale contracts that it services for itself or
others. Subject to the foregoing and to Section 3.2, the Servicer shall follow
its customary standards, policies, practices and procedures in performing its
duties hereunder as Servicer. Without limiting the generality of the foregoing,
the Servicer is hereby authorized and empowered to execute and deliver, on
behalf of itself, the Depositor, the Trust, the Owner Trustee, the Indenture
Trustee, the Certificateholders, the Noteholders or any one or more of them, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Receivables or the Financed Vehicles, all in accordance with this Agreement;
provided, however, that, notwithstanding the foregoing, the Servicer shall not,
except pursuant to an order from a court of competent jurisdiction, release an
Obligor from payment of any unpaid amount under any Receivable or waive the
right to collect the unpaid balance (including accrued interest) of any
Receivable from the related Obligor, except in connection with a de minimis
deficiency which the Servicer would not attempt to collect in accordance with
its customary procedures, in which event the Servicer shall indemnify the Trust
for such deficiency. If the Servicer shall commence a legal proceeding to
enforce a Receivable, the Trust shall thereupon be deemed to have automatically
assigned such Receivable to the Servicer, which assignment shall be solely for
purposes of collection. If in any enforcement suit or legal proceeding it shall
be held that the Servicer may not enforce a Receivable on the ground that it
shall not be a real party in interest or a holder entitled to enforce such
Receivable, the Trust shall (or the Administrator on behalf of the Trust shall),
at the Servicer’s expense and written direction, take steps to enforce such
Receivable, including bringing suit in its name or the names of the Indenture
Trustee, the Certificateholders, the Noteholders or any of them. The Trust shall
execute and deliver to the Servicer any powers of attorney and other documents
as shall be prepared by the Servicer and reasonably necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties
hereunder. The Servicer, at its expense, shall obtain on behalf of the Trust all
licenses, if any, required by the laws of any jurisdiction to be held by the
Trust in connection with ownership of the Receivables and shall make all filings
and pay all fees as may be required in connection therewith during the term
hereof. If the Servicer fails to perform its obligations under this Agreement
and the Indenture Trustee or any other successor Servicer is appointed as
Servicer in accordance with Section 8.2, such successor Servicer shall be
responsible for the Servicer’s duties under this Agreement except as specified
in Section 8.2; provided, however, that such successor Servicer shall not be
liable for the terminated Servicer’s failure to perform such obligations.

 

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3.2          Collection and Allocation of Receivable Payments. The Servicer
shall make reasonable efforts to collect all payments called for under the terms
and provisions of the Receivables as and when the same shall become due and
otherwise act with respect to the Receivables and the other Trust Property in
such manner as will, in the reasonable judgment of the Servicer, maximize the
amount to be received by the Trust with respect thereto and in accordance with
the standard of care required by Section 3.1. The Servicer shall allocate
collections on or in respect of the Receivables between principal and interest
in accordance with the customary servicing practices and procedures it follows
with respect to all comparable motor vehicle retail installment sale contracts
that it services for itself or others. The Servicer shall not increase or
decrease the number or amount of any Scheduled Payment, the Amount Financed
under any Receivable or the APR of any Receivable, or extend, rewrite or
otherwise modify the payment terms of any Receivable; provided, however, that
the Servicer may, in its sole discretion, extend the due date for one or more
payments due on any Receivable for credit-related reasons that would be
acceptable to the Servicer with respect to comparable motor vehicle retail
installment sale contracts that it services for itself or others and in
accordance with its customary standards, policies, practices and procedures if
the cumulative extensions with respect to any Receivable shall not cause the
term of such Receivable to extend beyond the Final Scheduled Maturity Date. If
the Servicer fails to comply with the provisions of the preceding sentence, the
Servicer shall be required to purchase each Receivable affected thereby for the
related Purchase Amount, in the manner specified in Section 3.7, as of the close
of the Collection Period during which such failure occurs. The Servicer may, in
its discretion (but only in accordance with its customary standards, policies,
practices and procedures), waive any late payment charge or any other fee that
may be collected in the ordinary course of servicing a Receivable.

 

3.3          Realization upon Receivables. The Servicer shall use reasonable
efforts on behalf of the Trust, in accordance with the standard of care required
under Section 3.1, to repossess or otherwise convert the ownership of each
Financed Vehicle securing a Defaulted Receivable. In taking such action, the
Servicer shall follow such customary practices and procedures as it shall deem
necessary or advisable in its servicing of comparable motor vehicle retail
installment sale contracts and as are otherwise consistent with the standard of
care required under Section 3.1. The Servicer shall be entitled to recover all
reasonable expenses incurred by it in the course of repossessing and liquidating
a Financed Vehicle into cash proceeds, but only out of the cash proceeds of such
Financed Vehicle and any deficiency obtained from the related Obligor. If a
Financed Vehicle shall have suffered damage, the Servicer shall not expend funds
in connection with the repair or the repossession of such Financed Vehicle
unless it shall determine in its discretion that such repair and/or repossession
will increase the Liquidation Proceeds received with respect to the related
Receivable.

 

3.4          Physical Damage Insurance. The Servicer shall follow its customary
practices and procedures to determine whether or not each Obligor shall have
maintained physical damage insurance covering the related Financed Vehicle.

 

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3.5          Maintenance of Security Interests in Financed Vehicles. The
Servicer shall take such steps, in accordance with the standard of care required
under Section 3.1, as are necessary to maintain perfection of the security
interest created by each Receivable in the related Financed Vehicle at all
times. The Trust hereby authorizes the Servicer, and the Servicer hereby agrees,
to take such steps as are necessary to re-perfect such security interest on
behalf of the Trust and the Indenture Trustee in the event the Servicer receives
notice of, or otherwise has actual knowledge of, the fact that such security
interest is not perfected as a result of the relocation of a Financed Vehicle or
for any other reason. The Servicer shall not release, in whole or in part, any
security interest in a Financed Vehicle created by the related Receivable except
as permitted herein or in accordance with its customary standards, policies,
practices and procedures.

 

3.6          Amendment of Receivable Terms. The Servicer shall not impair in any
material respect the rights of the Depositor, the Trust, the Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders in the Receivables
or, except as permitted under Section 3.2, otherwise amend or alter the terms of
the Receivables if, as a result of such amendment or alteration, the interests
of the Depositor, the Trust, the Owner Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders hereunder would be materially adversely
affected.

 

3.7          Purchase by Servicer upon Breach. The Depositor, the Servicer or
the Administrator (on behalf of the Trust), as the case may be, shall inform the
other parties to this Agreement, the Seller and the Indenture Trustee promptly,
in writing, upon the discovery of any breach of Section 3.2, 3.5 or 3.6. If such
breach shall not have been cured by the close of business on the last day of the
Collection Period which includes the 30th day after the date on which the
Servicer becomes aware of, or receives written notice from the Depositor or the
Administrator (on behalf of the Trust) of, such breach, and such breach
materially and adversely affects the interest of the Trust in a Receivable, the
Servicer shall purchase such Receivable from the Trust on the Distribution Date
following such Collection Period; provided, however, that, with respect to a
breach of Section 3.2, the Servicer shall purchase the affected Receivable from
the Trust at the end of the Collection Period in which such breach occurs. In
consideration of the purchase of a Receivable hereunder, the Servicer shall
remit the Purchase Amount of such Receivable in the manner specified in Section
4.5. The sole remedy of the Trust, the Owner Trustee, the Indenture Trustee, the
Noteholders and the Certificateholders with respect to a breach of Section 3.2,
3.5 or 3.6 shall be to require the Servicer to purchase Receivables pursuant to
this Section 3.7. None of the Administrator, the Owner Trustee or the Indenture
Trustee shall have any duty to conduct an affirmative investigation as to the
occurrence of any condition requiring the purchase of any Receivable pursuant to
this Section 3.7.

 

3.8          Servicing Compensation. The Servicer shall receive the Monthly
Servicing Fee for servicing the Receivables. The Monthly Servicing Fee for any
Collection Period shall equal the product of one-twelfth (1/12) of the Servicing
Rate and the Pool Balance as of the first day of such Collection Period (or, in
the case of the initial Collection Period, as of the Cutoff Date); provided,
however, that the Monthly Servicing Fee payable to a successor Servicer other
than the Indenture Trustee may equal such other amount as may be determined in
accordance with Section 8.2(c). The Servicer shall pay all expenses incurred by
it in connection with its activities hereunder (including the fees and expenses
of the Owner Trustee and the Indenture Trustee, including the reasonable fees
and expenses of their attorneys, and any custodian appointed by the Owner
Trustee and the Indenture Trustee, the fees and expenses of independent
accountants, taxes imposed on the Servicer and expenses incurred in connection
with distributions and reports to the Certificateholders and the Noteholders),
except expenses incurred in connection with realizing upon Receivables under
Section 3.3.

 

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3.9         Monthly Servicer’s Certificate. On or before the Determination Date
immediately preceding each Distribution Date, the Servicer shall deliver to the
Depositor, the Seller, the Owner Trustee, the Indenture Trustee and each Paying
Agent, with a copy to the Rating Agencies, a certificate of a Servicing Officer
substantially in the form of Exhibit A (a “Servicer’s Certificate”) and attached
to a Servicer’s report containing all information necessary to make the
transfers and distributions pursuant to Sections 4.5, 4.6 and 4.7, together with
the written statements to be furnished by the Owner Trustee to the
Certificateholders pursuant to Section 4.9 and by the Indenture Trustee to the
Noteholders pursuant to Section 4.9 and pursuant to Section 6.6 of the
Indenture. The Servicer shall separately identify (by account number) in a
written notice to the Depositor, the Owner Trustee and the Indenture Trustee the
Receivables to be repurchased by the Depositor or to be purchased by the
Servicer, as the case may be, on the Business Day preceding such Distribution
Date, and, upon request of one of the foregoing parties, each Receivable which
became a Defaulted Receivable during the related Collection Period. The Servicer
shall deliver to the Rating Agencies any information, to the extent it is
available to the Servicer, that the Rating Agencies reasonably request (and the
initial Servicer shall specify in writing to the successor Servicer any such
requests that remain unsatisfied during the servicing transition to the
successor Servicer) in order to monitor the Trust.

 

3.10        Annual Servicing Report; Annual Compliance Statement; Notice of
Event of Servicing Termination.

 

(a)          On or before May 31 of each year (commencing with the year 2016),
the Servicer shall deliver to the Depositor, the Owner Trustee and the Indenture
Trustee a report regarding its assessment of compliance with the servicing
criteria specified in Item 1122(d) of Regulation AB as of the end of and for the
preceding Trust Fiscal Year (or, in the case of the report to be delivered in
the year 2016, as of the end of and for the period beginning on the Closing Date
and ending on February 28, 2016) that satisfies the requirements of Rules 13a-18
and 15d-18 of the Exchange Act and Item 1122 of Regulation AB. A copy of such
report may be obtained by any Certificateholder by a request in writing to the
Owner Trustee, or by any Noteholder or Person certifying that it is a Note Owner
by a request in writing to the Indenture Trustee, in either case addressed to
the applicable Corporate Trust Office.

 

(b)          On or before May 31 of each year (commencing with the year 2016),
the Servicer shall deliver to the Depositor, the Owner Trustee and the Indenture
Trustee an Officer’s Certificate stating, as to the officer signing such
Officer’s Certificate, that:

 

(i)          a review of the activities of the Servicer during the preceding
Trust Fiscal Year (or, in the case of the Officer’s Certificate to be delivered
in the year 2016, during the period beginning on the Closing Date and ending on
February 28, 2016) and of its performance under this Agreement has been made
under such officer’s supervision; and

 

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(ii)         to the best of such officer’s knowledge, based on such review, the
Servicer has fulfilled all of its obligations under this Agreement in all
material respects throughout such Trust Fiscal Year (or, in the case of the
Officer’s Certificate to be delivered in the year 2016, such period) or, if
there has been a failure to fulfill any such obligation in any material respect,
specifying each such failure known to such officer and the nature and status
thereof.

 

A copy of such certificate may be obtained by any Certificateholder by a request
in writing to the Owner Trustee, or by any Noteholder or Person certifying that
it is a Note Owner by a request in writing to the Indenture Trustee, in either
case addressed to the applicable Corporate Trust Office.

 

(c)          The Servicer shall deliver to the Depositor, the Owner Trustee, the
Indenture Trustee and the Rating Agencies, promptly after having obtained
knowledge thereof, but in no event later than five (5) Business Days thereafter,
an Officer’s Certificate specifying any event which constitutes or, with the
giving of notice or lapse of time or both, would become an Event of Servicing
Termination.

 

3.11         Annual Public Accounting Firm Report. On or before May 31 of each
year (commencing with the year 2016), the Servicer shall cause a registered
public accounting firm to deliver to the Depositor, the Owner Trustee and the
Indenture Trustee a report addressed to the Board of Directors of the Servicer
that attests to, and reports on, the Servicer’s assessment of compliance with
the servicing criteria specified in Item 1122(d) of Regulation AB with respect
to the preceding Trust Fiscal Year (or, in the case of the report to be
delivered in the year 2016, with respect to the period beginning on the Closing
Date and ending on February 28, 2016) and that otherwise satisfies the
requirements of Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. A copy of such report may be obtained by any Certificateholder by
a request in writing to the Owner Trustee, or by any Noteholder or Person
certifying that it is a Note Owner by a request in writing to the Indenture
Trustee, in either case addressed to the applicable Corporate Trust Office.

 

3.12         Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide the Depositor, the Owner Trustee, the
Indenture Trustee, the Certificateholders and the Noteholders with access to the
Receivable Files in the cases where the Depositor, the Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders shall be required
by applicable statutes, regulations or the provisions of any Transaction
Document to have access to such documentation. Such access shall be afforded
without charge, but only upon reasonable request and during normal business
hours at the offices of the Servicer. Nothing in this Section 3.12 shall affect
the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors, and the failure of the
Servicer to provide access to information as a result of such obligation shall
not constitute a breach of this Section 3.12. Each Certificateholder or
Noteholder, by its acceptance of a Certificate or a Note, as the case may be,
shall be deemed to have agreed to keep any information obtained by it pursuant
to this Section 3.12 confidential, except as may be required by applicable law.

 

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3.13         Reports to the Commission. The Servicer shall, on behalf of the
Trust, cause to be filed with the Commission any periodic reports required to be
filed under the provisions of the Exchange Act, and the rules and regulations of
the Commission thereunder. The Servicer shall, or shall cause the Administrator
to, prepare, execute and deliver all certificates and other documents required
to be delivered by the Trust pursuant to the Sarbanes-Oxley Act of 2002 or the
rules and regulations promulgated thereunder. The Depositor shall, at its
expense, cooperate in any reasonable request made by the Servicer in connection
with such filings. The Servicer shall provide or cause to be provided to the
Depositor copies of all documents filed by the Servicer after the Closing Date
with the Commission pursuant to the Securities Act or the Exchange Act that
relate specifically to the Trust, the Notes or the Certificates.

 

3.14         Reports to Rating Agencies. The Servicer shall deliver to each
Rating Agency, at such address as such Rating Agency may request, a copy of all
reports or notices furnished or delivered pursuant to this Article III and a
copy of any amendments, supplements or modifications to this Agreement and any
other information reasonably requested by such Rating Agency to monitor this
transaction. If CarMax is no longer the Servicer, the successor Servicer shall
provide any required Rating Agency notices, reports or other communications to
the Depositor, who promptly shall provide such notices, reports or
communications to the Rating Agencies.

 

Article IV
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO
NOTEHOLDERS AND CERTIFICATEHOLDERS

 

4.1          Accounts.

 

(a)          The Servicer shall establish, on or before the Closing Date, and
maintain in the name of the Indenture Trustee at an Eligible Institution (which
shall initially be the Indenture Trustee) a segregated trust account designated
as the Collection Account (the “Collection Account”). The Collection Account
shall be held in trust for the benefit of the Noteholders and the
Certificateholders. The Collection Account shall be under the sole dominion and
control of the Indenture Trustee; provided, however, that the Servicer may make
deposits to and direct the Indenture Trustee in writing to make withdrawals from
the Collection Account in accordance with this Agreement, the Indenture and the
Trust Agreement. All monies deposited from time to time in the Collection
Account pursuant to this Agreement shall be held by the Indenture Trustee as
part of the Trust Property and shall be applied as provided in this Agreement.
All deposits to and withdrawals from the Collection Account shall be made only
upon the terms and conditions of the Transaction Documents.

 

If the Servicer is required to remit collections on a daily basis pursuant to
the first sentence of Section 4.2, all amounts held in the Collection Account
shall, to the extent permitted by applicable law, rules and regulations, be
invested, as directed in writing by the Servicer, by the bank or trust company
then maintaining the Collection Account in Permitted Investments that mature not
later than the Business Day preceding the Distribution Date following the
Collection Period during which such investment is made. All such Permitted
Investments shall be held to maturity. If the Collection Account is no longer to
be maintained at the Indenture Trustee, the Servicer shall, with the Indenture
Trustee’s assistance as necessary, promptly (and in any case within ten (10)
calendar days or such longer period not to exceed thirty (30) calendar days as
to which each Rating Agency shall consent) cause the Collection Account to be
moved to an Eligible Institution. The Servicer shall promptly notify the
Indenture Trustee and the Owner Trustee of any change in the account number or
location of the Collection Account.

 

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(b)          The Servicer shall establish, on or before the Closing Date, and
maintain in the name of the Indenture Trustee at an Eligible Institution (which
shall initially be the Indenture Trustee) a segregated trust account designated
as the Note Payment Account (the “Note Payment Account”). The Note Payment
Account shall be held in trust for the benefit of the Noteholders. The Note
Payment Account shall be under the sole dominion and control of the Indenture
Trustee; provided, however, that the Servicer may make deposits to and direct
the Indenture Trustee in writing to make withdrawals from the Note Payment
Account in accordance with this Agreement and the Indenture. All monies
deposited from time to time in the Note Payment Account pursuant to this
Agreement and the Indenture shall be held by the Indenture Trustee as part of
the Trust Property and shall be applied as provided in this Agreement and the
Indenture. The amounts on deposit in the Note Payment Account shall not be
invested. If the Note Payment Account is no longer to be maintained at the
Indenture Trustee, the Servicer shall, with the Indenture Trustee’s assistance
as necessary, promptly (and in any case within ten (10) calendar days or such
longer period not to exceed thirty (30) calendar days as to which each Rating
Agency may consent) cause the Note Payment Account to be moved to an Eligible
Institution. The Servicer shall promptly notify the Indenture Trustee and the
Owner Trustee of any change in the account number or location of the Note
Payment Account.

 

(c)          The Servicer shall 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 2015-2 Trust Account” (the “Certificate Payment
Account”). The Certificate Payment Account shall be held in trust for the
benefit of the Certificateholders. The Certificate Payment Account shall be
under the sole dominion and control of the Owner Trustee; provided, however,
that the Servicer may direct the Indenture Trustee in writing to make deposits
to the Certificate Payment Account in accordance with this Agreement and the
Indenture and may direct the Owner Trustee to make withdrawals from the
Certificate Payment Account in accordance with this Agreement and the Trust
Agreement. All monies deposited from time to time in the Certificate Payment
Account pursuant to this Agreement and the Indenture shall be held by the Owner
Trustee as part of the Trust Property and shall be applied as provided in this
Agreement and the Trust Agreement. The amounts on deposit in the Certificate
Payment Account shall not be invested. If the Certificate Payment Account is no
longer to be maintained at the Owner Trustee, the Servicer shall, with the Owner
Trustee’s assistance as necessary, promptly (and in any case within ten (10)
calendar days or such longer period not to exceed thirty (30) calendar days as
to which each Rating Agency may consent) cause the Certificate Payment Account
to be moved to an Eligible Institution. The Servicer shall promptly notify the
Indenture Trustee and the Owner Trustee in writing of any change in the account
number or location of the Certificate Payment Account.

 

(d)          If, on any Distribution Date, the aggregate amount on deposit in
the Collection Account and the Reserve Account equals or exceeds the sum of (i)
the Note Balance as of the day preceding such Distribution Date, (ii) the Total
Note Interest for each Class of Notes for such Distribution Date and (iii) the
Total Servicing Fee for the preceding Collection Period and any Unreimbursed
Servicer Advances for the preceding Collection Period, the Servicer shall
instruct the Indenture Trustee to (A) transfer all amounts on deposit in the
Reserve Account on such Distribution Date from the Reserve Account to the
Collection Account and (B) include such amounts in Available Funds for purposes
of application pursuant to Section 2.8(a) of the Indenture on such Distribution
Date.

 

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4.2          Collections. The Servicer shall remit to the Collection Account all
amounts received by the Servicer on or in respect of the Receivables (including
Liquidation Proceeds and all amounts received by the Servicer in connection with
the repossession and sale of a Financed Vehicle (whether or not the related
Receivable has been classified as a Defaulted Receivable) but excluding payments
with respect to Purchased Receivables) as soon as practicable and in no event
after the close of business on the second Business Day after such receipt;
provided, however, that for so long as (i) CarMax is the Servicer, (ii) no Event
of Servicing Termination shall have occurred and be continuing and (iii) the
Rating Agency Condition shall have been satisfied (each, a “Monthly Remittance
Condition”), the Servicer may remit any such amounts received during any
Collection Period to the Collection Account in immediately available funds on
the Business Day preceding the Distribution Date following such Collection
Period (it being understood that the Monthly Remittance Condition has not been
satisfied as of the Closing Date); provided further, that if any such amounts
(including Liquidation Proceeds and all amounts received by the Servicer in
connection with the repossession and sale of a Financed Vehicle (whether or not
the related Receivable has been classified as a Defaulted Receivable)) are
received in respect of a Receivable as to which there is an unreimbursed Simple
Interest Advance, the Servicer shall retain such amounts to the extent of such
unreimbursed Simple Interest Advance (and shall apply the amount retained to
reimburse itself for such unreimbursed Simple Interest Advance) and shall remit
the balance of such amounts to the Collection Account; and, provided further,
that the Servicer shall, if it determines that it has made an Unreimbursed
Servicer Advance, retain amounts received on or in respect of the Receivables to
the extent set forth in Section 4.4(b). The Owner Trustee and the Indenture
Trustee shall not be deemed to have knowledge of any event or circumstance under
clause (ii) or (iii) of the definition of Monthly Remittance Condition that
would require daily remittance by the Servicer to the Collection Account unless
the Owner Trustee or the Indenture Trustee, as applicable, has received notice
of such event or circumstance at its Corporate Trust Office from the Depositor
or the Servicer in an Officer’s Certificate or written notice of such event or
circumstance from the Holders of Notes evidencing not less than 25% of the Note
Balance of the Controlling Class or unless a Responsible Officer of the Owner
Trustee or the Indenture Trustee, as applicable, has actual knowledge of such
event or circumstance. The Servicer shall remit to the Collection Account on the
Closing Date all amounts received by the Servicer on or in respect of the
Receivables (including Liquidation Proceeds and all amounts received by the
Servicer in connection with the repossession and sale of a Financed Vehicle
(whether or not the related Receivable has been classified as a Defaulted
Receivable)) during the period from but excluding the Cutoff Date to and
including the second Business Day preceding the Closing Date.

 

4.3          Application of Collections. For purposes of this Agreement, all
amounts received on or in respect of a Receivable during any Collection Period
(including Liquidation Proceeds and all amounts received by the Servicer in
connection with the repossession and sale of a Financed Vehicle (whether or not
the related Receivable has been classified as a Defaulted Receivable) but
excluding payments with respect to Purchased Receivables) shall be applied by
the Servicer, as of the last day of such Collection Period, to interest and
principal on such Receivable in accordance with the Simple Interest Method.

 

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4.4          Simple Interest Advances and Unreimbursed Servicer Advances.

 

(a)          If, as of the end of any Collection Period, one or more payments of
Monthly P&I due under any Receivable (other than a Defaulted Receivable)
outstanding at the end of such Collection Period shall not have been received by
the Servicer and remitted to the Collection Account pursuant to Section 4.2, the
Servicer may, at its option, make, on the Business Day preceding the
Distribution Date immediately following such Collection Period, a Simple
Interest Advance with respect to such Receivable by depositing in or crediting
to the Collection Account the amount of Monthly P&I allocable to interest
scheduled to have been paid during such Collection Period, assuming that such
Receivable was paid on its due date, minus the amount of Monthly P&I actually
received and allocated to interest, if any, with respect to such Receivable
during such Collection Period.

 

(b)          If the Servicer determines that it has made an Unreimbursed
Servicer Advance, the Servicer shall reimburse itself for such Unreimbursed
Servicer Advance from unrelated amounts received by the Servicer on or in
respect of the Receivables (including Liquidation Proceeds and all amounts
received by the Servicer in connection with the repossession and sale of a
Financed Vehicle (whether or not the related Receivable has been classified as a
Defaulted Receivable)); provided, however, that the Servicer shall furnish to
the Indenture Trustee and the Owner Trustee, on or before the Distribution Date
following the Collection Period during which such reimbursement is taken, a
certificate of a Servicing Officer setting forth the basis for such
determination, the amount of such Unreimbursed Servicer Advance, the Receivable
with respect to which such Unreimbursed Servicer Advance was made and the
installments or other proceeds with respect to which such reimbursement was
taken.

 

4.5          Additional Deposits. The Depositor and the Servicer shall deposit
or cause to be deposited in the Collection Account the aggregate Purchase Amount
with respect to Purchased Receivables pursuant to Section 2.4, 3.7 or 9.1. All
such deposits described above with respect to a Collection Period shall be made
in immediately available funds no later than 5:00 p.m., New York City time, on
the Business Day preceding the Distribution Date following such Collection
Period.

 

4.6          Determination Date Calculations; Application of Available Funds.

 

(a)          On each Determination Date, the Servicer shall calculate the
following amounts:

 

(i)          the Available Collections for the following Distribution Date;

 

(ii)         the Total Servicing Fee and any Unreimbursed Servicer Advances for
the preceding Collection Period;

 

(iii)        any payments pursuant to Section 2.8(a)(ii) of the Indenture;

 

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(iv)        the Total Note Interest for each Class of Class A Notes for the
following Distribution Date;

 

(v)         the Priority Principal Distributable Amount for the following
Distribution Date;

 

(vi)        the Total Note Interest for the Class B Notes for the following
Distribution Date;

 

(vii)       the Secondary Principal Distributable Amount for the following
Distribution Date;

 

(viii)      the Total Note Interest for the Class C Notes for the following
Distribution Date;

 

(ix)         the Tertiary Principal Distributable Amount for the following
Distribution Date;

 

(x)          the Total Note Interest for the Class D Notes for the following
Distribution Date;

 

(xi)         the Quaternary Principal Distributable Amount for the following
Distribution Date;

 

(xii)        the sum of the amounts described in clauses (ii) through (xi) above
(the “Required Payment Amount”); and

 

(xiii)       the Regular Principal Distributable Amount for the following
Distribution Date.

 

(b)          On each Determination Date, the Servicer shall calculate the
following amounts:

 

(i)          the lesser of (A) the amount, if any, by which the Required Payment
Amount for the following Distribution Date exceeds the Available Collections for
such Distribution Date and (B) the Reserve Account Amount for such Distribution
Date (before giving effect to any deposits to or withdrawals from the Reserve
Account on such Distribution Date) (such lesser amount, the “Reserve Account
Draw Amount”); provided, however, that if on the last day of the preceding
Collection Period the Pool Balance is zero, the Reserve Account Draw Amount for
such Distribution Date shall equal the Reserve Account Amount for such
Distribution Date;

 

(ii)         the Reserve Account Amount for the following Distribution Date
(after giving effect to the withdrawal of the Reserve Account Draw Amount for
such Distribution Date); and

 

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(iii)        the amount, if any, by which the Required Reserve Account Amount
for the following Distribution Date exceeds the Reserve Account Amount for such
Distribution Date (after giving effect to the withdrawal of the Reserve Account
Draw Amount for such Distribution Date) (such excess, the “Reserve Account
Deficiency”).

 

On each Distribution Date, the Servicer shall instruct the Indenture Trustee to
transfer the Reserve Account Draw Amount, if any, for such Distribution Date
from the Reserve Account to the Collection Account.

 

(c)          [RESERVED].

 

(d)          On each Distribution Date, the Servicer shall instruct the
Indenture Trustee (or, if the Indenture Trustee is not the Paying Agent, the
Paying Agent) in writing to apply the Available Funds for such Distribution Date
to make the payments and deposits set forth in Section 2.8(a) or 5.4(b) of the
Indenture, as applicable.

 

4.7          Reserve Account.

 

(a)          The Servicer shall establish, on or before the Closing Date, and
maintain in the name of the Indenture Trustee at an Eligible Institution (which
shall initially be the Indenture Trustee) a segregated trust account designated
as the Reserve Account (the “Reserve Account”). The Reserve Account shall be
held in trust for the benefit of the Noteholders and the Certificateholders. The
Reserve Account shall be under the sole dominion and control of the Indenture
Trustee; provided, however, that the Servicer may make deposits to and direct
the Indenture Trustee in writing to make withdrawals from the Reserve Account in
accordance with this Agreement and the Indenture. On the Closing Date, the
Depositor shall deposit the Initial Reserve Account Deposit into the Reserve
Account from the net proceeds of the sale of the Notes. The Reserve Account and
all amounts, securities, investments, financial assets and other property
deposited in or credited to the Reserve Account (the “Reserve Account Property”)
has been conveyed by the Depositor to the Trust pursuant to Section 2.1.
Pursuant to the Indenture, the Trust will pledge all of its right, title and
interest in, to and under the Reserve Account and the Reserve Account Property
to the Indenture Trustee on behalf of the Noteholders and the Certificateholders
to secure its obligations under the Notes and the Indenture.

 

(b)          The Reserve Account Property shall, to the extent permitted by
applicable law, rules and regulations, be invested, as directed in writing by
the Servicer, by the bank or trust company then maintaining the Reserve Account
in Permitted Investments that mature not later than the Business Day preceding
the next Distribution Date. All such Permitted Investments shall be held to
maturity. On any Distribution Date, all interest and other income (net of losses
and investment expenses) on funds on deposit in the Reserve Account, to the
extent that funds on deposit therein, as certified by the Servicer, exceed the
Required Reserve Account Amount, shall, at the written direction of the
Servicer, (i) first, be deposited into the Note Payment Account, for payment of
principal of the Notes in the priority set forth in Section 2.8(d) of the
Indenture, to the extent of any unfunded Regular Principal Distributable Amount,
if any, on such Distribution Date (after giving effect to the application of
Available Funds on such Distribution Date), (ii) second, be paid to the
Indenture Trustee or any other successor Servicer, as applicable, to the extent
of any unfunded amounts payable pursuant to Section 2.8(a)(xiii) or (xiv) of the
Indenture, if any, on such Distribution Date (after giving effect to the
application of Available Funds on such Distribution Date), (iii) third, be
deposited into the Certificate Payment Account for payment to the
Certificateholders. If the Reserve Account is no longer to be maintained at the
Indenture Trustee, the Servicer shall, with the Indenture Trustee’s assistance
as necessary, promptly (and in any case within ten (10) calendar days or such
longer period not to exceed thirty (30) calendar days as to which each Rating
Agency may consent) cause the Reserve Account to be moved to an Eligible
Institution. The Servicer shall promptly notify the Indenture Trustee and the
Owner Trustee in writing of any change in the account number or location of the
Reserve Account.

 

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(c)          With respect to any Reserve Account Property:

 

(i)          any Reserve Account Property that is a “financial asset” (as
defined in Section 8-102(a)(9) of the Relevant UCC) shall be physically
delivered to, or credited to an account in the name of, the Eligible Institution
maintaining the Reserve Account, in accordance with such institution’s customary
procedures such that such institution establishes a “securities entitlement” in
favor of the Indenture Trustee with respect thereto;

 

(ii)         any Reserve Account Property that is held in deposit accounts shall
be held solely in the name of the Indenture Trustee at one or more depository
institutions having the Required Rating and each such deposit account shall be
subject to the exclusive custody and control of the Indenture Trustee and the
Indenture Trustee shall have sole signature authority with respect thereto; and

 

(iii)        except for any deposit accounts specified in clause (ii) above, the
Reserve Account shall only be invested in securities or in other assets which
the Eligible Institution maintaining the Reserve Account agrees to treat as
“financial assets” (as defined in Section 8-102(a)(9) of the Relevant UCC).

 

(d)          If the Reserve Account Amount for any Distribution Date (after
giving effect to the withdrawal of the Reserve Account Draw Amount for such
Distribution Date) exceeds the Required Reserve Account Amount for such
Distribution Date, the Servicer shall instruct the Indenture Trustee in writing
to distribute the amount of such excess (i) first, to the Note Payment Account,
for payment of principal of the Notes in the priority set forth in Section
2.8(d) of the Indenture, to the extent of any unfunded Regular Principal
Distributable Amount, if any, on such Distribution Date (after giving effect to
the application of Available Funds on such Distribution Date), (ii) second, be
paid to the Indenture Trustee or any other successor Servicer, as applicable, to
the extent of any unfunded amounts payable pursuant to Section 2.8(a)(xiii) or
(xiv) of the Indenture, if any, on such Distribution Date (after giving effect
to the application of Available Funds on such Distribution Date) and (iii)
third, to the Certificate Payment Account for payment to the Certificateholders.
The Indenture Trustee and the Owner Trustee hereby release, on each Distribution
Date, their security interest in, to and under Reserve Account Property
distributed to the Certificateholders.

 

(e)          If the Note Balance, and all other amounts owing or to be
distributed hereunder or under the Indenture or the Trust Agreement to the
Noteholders or the Certificateholders, have been paid in full and the Trust has
been terminated, any remaining Reserve Account Property shall be distributed to
the Certificateholders.

 

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4.8          Net Deposits. As an administrative convenience, unless the Servicer
is required to remit collections on a daily basis pursuant to the first sentence
of Section 4.2, the Depositor and the Servicer may make any remittance pursuant
to this Article IV with respect to a Collection Period net of distributions or
reimbursements to be made to the Depositor or the Servicer with respect to such
Collection Period; provided, however, that such obligations shall remain
separate obligations, no party shall have a right of offset and each such party
shall account for all of the above described remittances and distributions as if
the amounts were deposited and/or transferred separately.

 

4.9          Statements to Noteholders and Certificateholders. On or prior to
each Distribution Date, the Servicer shall provide to the Indenture Trustee
(with copies to the Depositor, the Rating Agencies and each Paying Agent), for
the Indenture Trustee to make available to each Note Owner as described below,
and to the Owner Trustee (with copies to the Depositor, the Rating Agencies and
each Paying Agent), for the Owner Trustee to make available to each
Certificateholder of record as of the most recent Record Date, a statement in
substantially the form of Exhibit B or Exhibit C, as applicable. Each such
statement shall set forth at least the following information as to the Notes and
the Certificates (to the extent applicable) with respect to the distribution to
be made on such Distribution Date:

 

(i)          the amount of such distribution allocable to principal for each
Class of Notes;

 

(ii)         the Priority Principal Distributable Amount for such Distribution
Date;

 

(iii)        the Secondary Principal Distributable Amount for such Distribution
Date;

 

(iv)        the Tertiary Principal Distributable Amount for such Distribution
Date;

 

(v)         the Quaternary Principal Distributable Amount for such Distribution
Date;

 

(vi)        the Regular Principal Distributable Amount for such Distribution
Date;

 

(vii)       the amount of such distribution allocable to current and overdue
interest (including any interest on overdue interest) for each Class of Notes;

 

(viii)      the Total Servicing Fee for the preceding Collection Period;

 

(ix)         the aggregate outstanding principal balance of each Class of Notes
and the Note Pool Factor with respect to each Class of Notes (in each case after
giving effect to payments allocated to principal reported under clause (i)
above);

 

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(x)          the Pool Balance as of the close of business on the last day of the
preceding Collection Period;

 

(xi)         the Reserve Account Amount on such Distribution Date (after giving
effect to all deposits to or withdrawals from the Reserve Account on such
Distribution Date);

 

(xii)        the Reserve Account Draw Amount for such Distribution Date;

 

(xiii)       the aggregate Purchase Amount of Receivables repurchased by the
Depositor or purchased by the Servicer, if any, with respect to the preceding
Collection Period;

 

(xiv)      the number and aggregate Principal Balance of Receivables that were
31-60 days, 61-90 days or 91 days or more delinquent as of the last day of the
preceding Collection Period;

 

(xv)       the number of Receivables that were outstanding as of the last day of
the preceding Collection Period;

 

(xvi)      the Net Losses with respect to the preceding Collection Period;

 

(xvii)     the Overcollateralization Target Amount for such Distribution Date
and the amount by which the Pool Balance exceeds the Note Balance as of such
Distribution Date (after giving effect to any payments made to the Holders of
the Notes on such Distribution Date);

 

(xviii)    the amount of Available Collections for the preceding Collection
Period;

 

(xix)       the amount of Excess Collections with respect to such Distribution
Date;

 

(xx)        the Note Rate applicable to the Class A-2b Notes with respect to the
Accrual Period ending on the day preceding such distribution date;

 

(xxi)       LIBOR applicable to the Accrual Period ending on the day preceding
such Distribution Date; and

 

(xxii)      the Consolidated Tangible Net Worth as of the last day of the
Related Fiscal Quarter for such Distribution Date.

 

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The Indenture Trustee will make available each month to each Note Owner the
statements referred to above (and certain other documents, reports and
information regarding the Receivables provided by the Servicer from time to
time) via the Indenture Trustee’s internet website, with the use of a password
provided by the Indenture Trustee. The Indenture Trustee’s internet website will
be located at www.CTSLink.com or at such other address as the Indenture Trustee
shall notify the Note Owners from time to time. For assistance with regard to
this service, Note Owners can call the Indenture Trustee’s Corporate Trust
Office at (866) 846-4526. The Indenture Trustee shall have the right to change
the way the statements referred to above are distributed in order to make such
distribution more convenient and/or more accessible to the parties entitled to
receive such statements so long as such statements are only provided to the then
current Note Owners. The Indenture Trustee shall provide notification of any
such change to all parties entitled to receive such statements in the manner
described in Section 10.4, Section 11.4 of the Indenture or Section 11.5 of the
Indenture, as appropriate.

 

4.10         Control of Securities Accounts. Notwithstanding anything to the
contrary contained herein, the Trust agrees that each of the Collection Account,
the Note Payment Account, the Certificate Payment Account and the Reserve
Account will only be established at an Eligible Institution that agrees
substantially as follows: (i) it will comply with “entitlement orders” (as
defined in Section 8-102(a)(8) of the Relevant UCC) relating to such accounts
issued by the Indenture Trustee without further consent by the Trust; (ii) until
the termination of the Indenture, it will not enter into any other agreement
relating to any such account pursuant to which it agrees to comply with
entitlement orders of any Person other than the Indenture Trustee; and (iii) all
assets delivered or credited to it in connection with such accounts and all
investments thereof will be promptly credited to such accounts.

 

Article V
[RESERVED]

 

Article VI
THE DEPOSITOR

 

6.1          Representations and Warranties of Depositor. The Depositor makes
the following representations and warranties on which the Trust shall be deemed
to have relied in accepting the Trust Property. The representations and
warranties speak as of the execution and delivery of this Agreement and shall
survive the sale, transfer, assignment and conveyance of the Trust Property to
the Trust pursuant to this Agreement and the pledge of the Trust Property to the
Indenture Trustee pursuant to the Indenture:

 

(a)          Organization and Good Standing. 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.

 

(b)          Due Qualification. 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, in the reasonable
judgment of the Depositor, 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.

 

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(c)          Power and Authority. 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. The Depositor has the power and
authority to sell, assign, transfer and convey the property to be 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.

 

(d)          Valid Transfer; Binding Obligation. This Agreement effects a valid
sale, transfer, assignment and conveyance to the Trust of the Receivables and
the other Trust Property enforceable against all creditors of and purchasers
from the Depositor. This Agreement and the other Transaction Documents to which
the Depositor is a party constitute legal, valid and binding obligations of the
Depositor, enforceable against the Depositor in accordance with their terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws and to general equitable principles.

 

(e)          No Violation. The execution, delivery and performance by the
Depositor of this Agreement and the other Transaction Documents to which the
Depositor is a party, the consummation of the transactions contemplated hereby
and thereby and the fulfillment of the terms hereof and thereof will not
conflict with, result in a breach of any of the terms and provisions of or
constitute (with or without notice or lapse of time or both) a default under the
certificate 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.

 

(f)          No Proceedings. 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 (i)
asserting the invalidity of this Agreement, the Indenture, the Trust Agreement,
any of the other Transaction Documents, the Notes or the Certificates, (ii)
seeking to prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement, the
Indenture, the Trust Agreement or any of the other Transaction Documents, (iii)
seeking any determination or ruling that, in the reasonable judgment of the
Depositor, would materially and adversely affect the performance by the
Depositor of its obligations under, or the validity or enforceability of, this
Agreement, the Indenture, the Trust Agreement, any of the other Transaction
Documents, the Receivables, the Notes or the Certificates, or (iv) that, in the
reasonable judgment of the Depositor, would adversely affect the federal or
Applicable Tax State income, excise, franchise or similar tax attributes of the
Trust or of the Notes or the Certificates.

 

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6.2          Liability of Depositor; Indemnities.

 

(a)          The Depositor shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Depositor under this
Agreement.

 

(b)          The Depositor shall indemnify, defend and hold harmless the Trust,
the Owner Trustee and the Indenture Trustee from and against any taxes that may
at any time be asserted against any such Person with respect to, and as of the
date of, the transfer of the Receivables to the Trust or the issuance and
original sale of the Notes or the Certificates, including any sales, gross
receipts, general corporation, tangible personal property, privilege or license
taxes (but, in the case of the Trust, not including any taxes asserted with
respect to ownership of the Receivables or federal or other Applicable Tax State
income taxes arising out of the transactions contemplated by this Agreement and
the other Transaction Documents), and all costs and expenses in defending
against such taxes.

 

(c)          The Depositor shall indemnify, defend and hold harmless the Trust,
the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders from and against any loss, liability or expense incurred by
reason of (i) the Depositor’s willful misfeasance, bad faith or gross negligence
in the performance of its duties under this Agreement or any other Transaction
Document to which it is a party or by reason of a reckless disregard of its
obligations and duties under this Agreement or any other Transaction Document to
which it is a party and (ii) the Depositor’s violation of federal or State
securities laws in connection with the registration or the sale of the Notes.

 

(d)          The Depositor shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers, directors,
employees and agents from and against all costs, expenses, losses, claims,
actions, suits, damages and liabilities arising out of or incurred in connection
with the acceptance or performance of the trusts and duties contained herein and
in the Trust Agreement, in the case of the Owner Trustee, and in the Indenture,
in the case of the Indenture Trustee, except to the extent that such cost,
expense, loss, claim, damage or liability (i) shall be due to the willful
misfeasance, bad faith or gross negligence (except for errors in judgment) of
the Owner Trustee or the Indenture Trustee, as applicable, (ii) in the case of
the Owner Trustee, shall arise from the breach by the Owner Trustee of any of
its representations or warranties set forth in the Trust Agreement, (iii) in the
case of the Indenture Trustee, shall arise from the breach by the Indenture
Trustee of any of its representations and warranties set forth in the Indenture
or (iv) relates to any tax other than the taxes with respect to which either the
Depositor or the Servicer shall be required to indemnify the Owner Trustee or
the Indenture Trustee, as applicable.

 

(e)          The Depositor shall pay any and all taxes levied or assessed upon
all or any part of the Owner Trust Estate.

 

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Indemnification under this Section 6.2 shall survive the resignation or removal
of the Owner Trustee or the Indenture Trustee and the termination of this
Agreement and shall include reasonable fees and expenses of counsel and expenses
of litigation. If the Depositor shall have made any indemnity payments pursuant
to this Section 6.2 and the Person to or on behalf of whom such payments are
made thereafter shall collect any of such amounts from others, such Person shall
promptly repay such amounts to the Depositor, without interest. Notwithstanding
anything to the contrary contained herein, the Depositor shall only be required
to pay (i) any fees, expenses, indemnities or other liabilities that it may
incur under the Transaction Documents from funds available pursuant to, and in
accordance with, the payment priorities set forth in this Agreement and (ii) to
the extent the Depositor has additional funds available (other than funds
described in the preceding clause (i)) that would be in excess of amounts that
would be necessary to pay the debt and other obligations of the Depositor in
accordance with the Depositor’s certificate of formation, operating agreement
and all financing documents to which the Depositor is a party. The agreement set
forth in the preceding sentence shall constitute a subordination agreement for
purposes of Section 510(a) of the Bankruptcy Code. In addition, no amount owing
by the Depositor hereunder in excess of liabilities that it is required to pay
in accordance with the preceding sentence shall constitute a “claim” (as defined
in Section 101(5) of the Bankruptcy Code) against it.

 

6.3          Merger or Consolidation of, or Assumption of the Obligations of,
Depositor. Any Person (i) into which the Depositor shall be merged or
consolidated, (ii) resulting from any merger, conversion or consolidation to
which the Depositor shall be a party or (iii) that shall succeed by purchase and
assumption to all or substantially all of the business of the Depositor, which
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Depositor under this Agreement, shall be the
successor to the Depositor under this Agreement without the execution or filing
of any other document or any further act on the part of any of the parties to
this Agreement; provided, however, that (x) the Depositor shall have delivered
to the Owner Trustee and the Indenture Trustee an Officer’s Certificate and an
Opinion of Counsel each stating that such merger, conversion, consolidation or
succession and such agreement of assumption comply with this Section 6.3, (y)
the Depositor shall have delivered to the Owner Trustee and the Indenture
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements and amendments
thereto have been authorized and filed that are necessary to fully preserve and
protect the interest of the Trust and the Indenture Trustee, respectively, in
the Receivables, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (B) stating that, in the
opinion of such counsel, no such action shall be necessary to fully preserve and
protect such interest and (z) the Rating Agency Condition shall have been
satisfied. Notwithstanding anything to the contrary contained herein, the
execution of the foregoing agreement of assumption and compliance with clauses
(x), (y) and (z) above shall be conditions to the consummation of the
transactions referred to in clauses (i), (ii) and (iii) above.

 

6.4          Limitation on Liability of Depositor and Others.

 

(a)          Neither the Depositor nor any of the directors, officers, employees
or agents of the Depositor shall be under any liability to the Trust, the
Noteholders or the Certificateholders for any action taken or for refraining
from the taking of any action pursuant to this Agreement or for errors in
judgment; provided, however, that this provision shall not protect the Depositor
or any such Person against any liability that would otherwise be imposed by
reason of willful misfeasance or bad faith in the performance of duties or by
reason of reckless disregard of obligations and duties under this Agreement, or
by reason of gross negligence in the performance of duties under this Agreement
(except for errors in judgment). The Depositor, and its directors, officers,
employees and agents, may rely in good faith on the advice of counsel or on any
document of any kind prima facie properly executed and submitted by any Person
in respect of any matters arising under this Agreement.

 

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(b)          The Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement and that in its opinion may involve it in any
expense or liability.

 

6.5          Depositor May Own Notes or Certificates. The Depositor, and any
Affiliate of the Depositor, may, in its individual or any other capacity, become
the owner or pledgee of Notes or Certificates with the same rights as it would
have if it were not the Depositor or an Affiliate of the Depositor, except as
otherwise expressly provided herein (including in the definition of “Note
Balance”) or in the other Transaction Documents. Except as otherwise expressly
provided herein (including the definition of “Note Balance”) or in the other
Transaction Documents, Notes and Certificates so owned by or pledged to the
Depositor or such Affiliate shall have an equal and proportionate benefit under
the provisions of this Agreement and the other Transaction Documents, without
preference, priority or distinction as among the Notes and the Certificates.

 

6.6          [RESERVED].

 

6.7          Certain Limitations.

 

(a)          The purpose of the Depositor shall be limited to the conduct or
promotion of the following activities: (i) to acquire, lease, own, hold, sell,
transfer, convey, dispose of, pledge, assign, borrow money against, grant a
security interest in, finance, refinance or otherwise deal with, publicly or
privately and whether with unrelated third parties or with affiliated entities,
automotive installment sale contracts and service contracts originated or
acquired by CarMax or its Affiliates or interests therein, the related motor
vehicles or interests therein and the related documentation and monies due or to
become due thereunder, proceeds from claims on insurance policies related
thereto and all related rights and the proceeds of any of the foregoing
(collectively, the “Assets”), (ii)  to perform its obligations under the Basic
Documents (as defined in the limited liability company agreement of the
Depositor (the “LLC Agreement”)), (iii)  to act as settlor or grantor of one or
more trusts or special purpose entities (each, a “Securitization Trust”) formed
pursuant to a trust agreement or other agreement, which Securitization Trust may
issue one or more series or classes of certificates, bonds, notes or other
evidences of interest or indebtedness (collectively, “Securities”) secured by or
representing beneficial interests in the Assets, (iv) to acquire Securities or
other property of a Securitization Trust (including remainder interests in
collateral or reserve accounts) or any interest in any of the foregoing, (v) to
cause the issuance of, authorize, sell and deliver Securities or other
instruments secured or collateralized by Securities, (vi) to own equity
interests in other limited liability companies or partnerships whose purposes
are substantially restricted to those described in clauses (i) through (v)
above, (vii) to borrow money other than pursuant to clause (i) above, but only
to the extent that such borrowing is permitted by the terms of the transactions
contemplated by clauses (i) through (vi) above, (viii) to loan or otherwise
invest funds received as a result of the Depositor’s interest in any
Securitization Trust or Securities and any other income, as determined by the
Member (as defined in the LLC Agreement) of the Depositor from time to time, and
(ix) to (A) negotiate, authorize, execute, deliver or assume or perform the
obligations under any agreement, instrument or document relating to the
activities set forth in clauses (i) through (viii) above, including the Basic
Documents (as defined in the LLC Agreement) and (B) engage in any lawful act or
activity and to exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware that are incidental to and
necessary, convenient or advisable for the accomplishment of the above-mentioned
purposes, including the entering into of (x) interest rate or basis swap, cap,
floor or collar agreements, currency exchange agreements or similar hedging
transactions, (y) any agreement providing for the funding of any amount due
under any of the Securities through direct borrowings, letters of credit,
insurance or otherwise and (z) referral, management, servicing and
administration agreements. Capitalized terms used in the following sentence,
other than the terms “Depositor” and “LLC Agreement”, have the respective
meanings assigned to them in the LLC Agreement. So long as any Obligation is
outstanding, the Depositor shall not (i) except as contemplated in the Basic
Documents, guarantee any obligation of any Person, including any Affiliate,
(ii) engage, directly or indirectly, in any business other than the activities
required or permitted to be performed under Article Three of the LLC Agreement,
the Basic Documents or Section 4.10 of the LLC Agreement, (iii) incur, create or
assume any indebtedness other than as expressly permitted under Article Three of
the LLC Agreement, the Basic Documents or Section 4.10 of the LLC Agreement,
(iv) make or permit to remain outstanding any loan or advance to, or own or
acquire any stock or securities of, any Person, except that the Depositor may
invest in those investments permitted under Article Three of the LLC Agreement,
the Basic Documents or Section 4.10 of the LLC Agreement and may make any
advance required or expressly permitted to be made pursuant to any provision of
Article Three of the LLC Agreement, the Basic Documents or Section 4.10 of the
LLC Agreement and permit the same to remain outstanding in accordance with such
provisions, (v) to the fullest extent permitted by law, engage in any
dissolution, liquidation, consolidation, merger, asset sale or transfer of
ownership interests other than such activities as are expressly permitted
pursuant to any provision of Article Three of the LLC Agreement, the Basic
Documents or Section 4.10 of the LLC Agreement or (vi) except as contemplated by
Article Three of the LLC Agreement or the Basic Documents, form, acquire or hold
any subsidiary (whether a corporation, partnership, limited liability company or
other entity).

 

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(b)          Notwithstanding any other provision of this Section 6.7 and any
provision of law, the Depositor shall not do any of the following:

 

(i)          engage in any business or activity other than as set forth in
clause (a) above; or

 

(ii)         without the unanimous written consent of the members of the
Depositor and the members of the Board of Directors of the Depositor (including
all independent directors of the Depositor), (A) consolidate or merge the
Depositor with or into any Person or sell all or substantially all of the assets
of the Depositor, (B) institute proceedings to have the Depositor be adjudicated
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against Depositor, (C) file a petition seeking, or consent to,
reorganization or relief with respect to the Depositor under any applicable
federal or State law relating to bankruptcy, (D) consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Depositor or a substantial part of its property, (E) make any assignment
for the benefit of creditors of the Depositor, (F) admit in writing the
Depositor’s inability to pay its debts generally as they become due, (G) take
any action in furtherance of any action set forth in clauses (A) through (F)
above or (H)  to the fullest extent permitted by law, dissolve or liquidate the
Depositor.

 

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(c)          The Depositor shall not amend its organizational documents except
in accordance with the provisions thereof.

 

Article VII
THE SERVICER

 

7.1          Representations and Warranties of Servicer. The Servicer makes the
following representations and warranties on which the Trust shall be deemed to
have relied in accepting the Trust Property. The representations and warranties
speak as of the execution and delivery of this Agreement and shall survive the
sale, transfer, assignment and conveyance of the Trust Property to the Trust
pursuant to this Agreement and the pledge of the Trust Property to the Indenture
Trustee pursuant to the Indenture:

 

(a)          Organization and Good Standing. The Servicer 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, sell and service the Receivables and
to hold the Receivable Files as custodian on behalf of the Trust.

 

(b)          Due Qualification. The Servicer 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, in the reasonable
judgment of the Servicer, materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or enforceability of, this
Agreement, the Indenture, the Trust Agreement, any of the other Transaction
Documents, the Receivables, the Notes or the Certificates.

 

(c)          Power and Authority. The Servicer 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 execution, delivery and
performance of this Agreement and the other Transaction Documents to which the
Servicer is a party have been duly authorized by the Servicer by all necessary
action.

 

(d)          Binding Obligation. This Agreement and the other Transaction
Documents to which the Servicer is a party constitute legal, valid and binding
obligations of the Servicer, enforceable against the Servicer in accordance with
their terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation and other
similar laws and to general equitable principles.

 

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(e)          No Violation. The execution, delivery and performance by the
Servicer of this Agreement and the other Transaction Documents to which the
Servicer is a party, the consummation of the transactions contemplated hereby
and thereby and the fulfillment of the terms hereof and thereof will not
conflict with, result in a breach of any of the terms and provisions of or
constitute (with or without notice or lapse of time or both) a default under the
certificate of formation or limited liability company agreement of the Servicer
or any material indenture, agreement, mortgage, deed of trust or other
instrument to which the Servicer is a party or by which the Servicer 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, or
violate any law, order, rule or regulation applicable to the Servicer or its
properties of any federal or State regulatory body, court, administrative agency
or other governmental instrumentality having jurisdiction over the Servicer or
any of its properties.

 

(f)          No Proceedings. There are no proceedings or investigations pending,
or, to the knowledge of the Servicer, threatened, against the Servicer before
any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over the Servicer or its
properties (i) asserting the invalidity of this Agreement, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or (iii) seeking any determination or ruling that, in the reasonable
judgment of the Servicer would materially and adversely affect the performance
by the Servicer of its obligations under, or the validity or enforceability of,
this Agreement or the Receivables.

 

(g)          Security Interest Matters. The Servicer has in its possession all
original copies of the motor vehicle retail installment sale contracts that
constitute or evidence the Receivables. The motor vehicle retail installment
sale contracts that constitute or evidence the Receivables do not have any marks
or notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Depositor, the Trust or the Indenture
Trustee.

 

7.2          Liability of Servicer; Indemnities.

 

(a)          The Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Servicer under this
Agreement.

 

(b)          The Servicer shall indemnify, defend and hold harmless the Trust,
the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Depositor from and against all costs, expenses,
losses, claims, actions, suits, damages and liabilities arising out of or
incurred in connection with the use, ownership or operation by the Servicer or
any Affiliate of the Servicer of a Financed Vehicle.

 

(c)          The Servicer shall indemnify, defend and hold harmless the Trust,
the Owner Trustee and the Indenture Trustee from and against any taxes that may
at any time be asserted against any such Person with respect to the transactions
contemplated in this Agreement or the other Transaction Documents, including any
sales, gross receipts, general corporation, tangible personal property,
privilege or license taxes (including any tax imposed under HB3 but, in the case
of the Trust, not including any taxes asserted with respect to, and as of the
date of, the transfer of the Receivables to the Trust or the issuance and
original sale of the Notes or the Certificates or asserted with respect to
ownership of the Receivables or federal or other Applicable Tax State income
taxes arising out of the transactions contemplated by this Agreement and the
other Transaction Documents), and all costs and expenses in defending against
such taxes.

 

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(d)          The Servicer shall indemnify, defend and hold harmless the Trust,
the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Depositor from and against any loss, liability or
expense incurred by reason of the Servicer’s willful misfeasance, bad faith or
gross negligence in the performance of its duties under this Agreement or any
other Transaction Document to which it is a party or by reason of a reckless
disregard of its obligations and duties under this Agreement or any other
Transaction Document to which it is a party.

 

(e)          The Servicer shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers, directors,
employees and agents from and against all costs, expenses, losses, claims,
actions, suits, damages and liabilities arising out of or incurred in connection
with the acceptance or performance of the trusts and duties contained herein and
in the Trust Agreement, in the case of the Owner Trustee, and in the Indenture,
in the case of the Indenture Trustee, except to the extent that such cost,
expense, loss, claim, damage or liability (i) shall be due to the willful
misfeasance, bad faith or gross negligence (except for errors in judgment) of
the Owner Trustee or the Indenture Trustee, as applicable, (ii) in the case of
the Owner Trustee, shall arise from the breach by the Owner Trustee of any of
its representations or warranties set forth in the Trust Agreement, (iii) in the
case of the Indenture Trustee, shall arise from the breach by the Indenture
Trustee of any of its representations and warranties set forth in the Indenture
or (iv) relates to any tax other than the taxes with respect to which either the
Depositor or the Servicer shall be required to indemnify the Owner Trustee or
the Indenture Trustee, as applicable.

 

(f)          For purposes of this Section 7.2, in the event of a termination of
the rights and obligations of CarMax (or any successor Servicer, as applicable)
as Servicer pursuant to Section 8.1 or a resignation by CarMax (or any successor
Servicer, as applicable) as Servicer pursuant to Section 7.6, CarMax (or the
successor Servicer, as applicable) shall be deemed to be the Servicer pending
appointment of a successor Servicer pursuant to Section 8.2. Indemnification
under this Section 7.2 by CarMax (or the successor Servicer, as applicable) as
Servicer, with respect to the period such Person was (or was deemed to be) the
Servicer, shall survive the termination of such Person as Servicer or a
resignation by such Person as Servicer as well as the resignation or removal of
the Owner Trustee or the Indenture Trustee and the termination of this Agreement
and shall include the reasonable fees and expenses of counsel and expenses of
litigation and the fees and expenses of the Owner Trustee and the Indenture
Trustee. If the Servicer shall have made any indemnity payments pursuant to this
Section 7.2 and the Person to or on behalf of whom such payments are made
thereafter shall collect any of such amounts from others, such Person shall
promptly repay such amounts to the Servicer, without interest.

 

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7.3          Merger or Consolidation of, or Assumption of the Obligations of,
Servicer.

 

(a)          Any Person (i) into which the Servicer shall be merged or
consolidated, (ii) resulting from any merger, conversion or consolidation to
which the Servicer shall be a party or (iii) that shall succeed by purchase and
assumption to all or substantially all of the business of the Servicer, which
Person in any of the foregoing cases is an Eligible Servicer and executes an
agreement of assumption to perform every obligation of the Servicer under this
Agreement, shall be the successor to the Servicer under this Agreement without
the execution or filing of any other document or any further act on the part of
any of the parties to this Agreement; provided, however, that (x) the Servicer
shall have delivered to the Depositor, the Owner Trustee and the Indenture
Trustee an Officer’s Certificate and an Opinion of Counsel each stating that
such merger, conversion, consolidation or succession and such agreement of
assumption comply with this Section 7.3 and (y) the Servicer shall have
delivered to the Depositor, the Owner Trustee and the Indenture Trustee an
Opinion of Counsel either (A)  stating that, in the opinion of such counsel, all
financing statements and continuation statements and amendments thereto have
been authorized and filed that are necessary to fully preserve and protect the
interest of the Trust and the Indenture Trustee, respectively, in the
Receivables, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (B) stating that, in the
opinion of such counsel, no such action shall be necessary to fully preserve and
protect such interest. The Servicer shall provide prior written notice of any
merger, conversion, consolidation or succession pursuant to this Section 7.3 to
the Rating Agencies. Notwithstanding anything to the contrary contained herein,
the execution of the foregoing agreement of assumption and compliance with
clauses (x) and (y) above shall be conditions to the consummation of the
transactions referred to in clauses (i), (ii) and (iii) above.

 

7.4          Limitation on Liability of Servicer and Others.

 

(a)          Neither the Servicer nor any of the directors, officers, employees
or agents of the Servicer shall be under any liability to the Trust, the
Noteholders or the Certificateholders for any action taken or for refraining
from the taking of any action pursuant to this Agreement or for errors in
judgment; provided, however, that this provision shall not protect the Servicer
or any such Person against any liability that would otherwise be imposed by
reason of willful misfeasance or bad faith in the performance of duties or by
reason of reckless disregard of obligations and duties under this Agreement, or
by reason of negligence in the performance of duties under this Agreement
(except for errors in judgment). The Servicer and its directors, officers,
employees and agents, may rely in good faith on the advice of counsel or on any
document of any kind prima facie properly executed and submitted by any Person
in respect of any matters arising under this Agreement.

 

(b)          The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its duties
to service the Receivables in accordance with this Agreement and that in its
opinion may involve it in any expense or liability; provided, however, that the
Servicer may undertake any reasonable action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the parties
to this Agreement and the interests of the Noteholders and the
Certificateholders under this Agreement. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Servicer.

 

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(c)          The parties expressly acknowledge and consent to Wells Fargo Bank,
National Association, acting in the capacity of Indenture Trustee and in the
possible dual capacity of successor Servicer and Indenture Trustee. Wells Fargo
Bank, National Association, may, in such dual or other capacity, discharge its
separate functions fully, without hindrance or regard to conflict of interest
principles, duty of loyalty principles or other breach of fiduciary duties to
the extent that any such conflict or breach arises from the performance by Wells
Fargo Bank, National Association, of express duties set forth in this Agreement
in any of such capacities, all of which defenses, claims or assertions are
hereby expressly waived by the other parties hereto and the Noteholders except
in the case of gross negligence and willful misconduct by Wells Fargo Bank,
National Association.

 

7.5          Delegation of Duties. The Servicer may at any time delegate its
duties as servicer under this Agreement to third parties; provided, however,
that no such delegation shall relieve the Servicer of its responsibilities with
respect to such duties and the Servicer shall be solely responsible for the fees
of any such third party.

 

7.6          Servicer Not to Resign. Subject to the provisions of Section
7.3(a), the Servicer shall not resign from its obligations and duties under this
Agreement except (i) upon a determination that the performance of its duties is
no longer permissible under applicable law or (ii) upon the appointment of a
successor Servicer and satisfaction of the Rating Agency Condition with respect
to such resignation and appointment. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Depositor, the Owner Trustee and the Indenture Trustee.
No such resignation shall become effective until the Indenture Trustee or
another successor Servicer shall have (i) assumed the obligations and duties of
the Servicer in accordance with Section 8.2 and (ii) become the Administrator
under the Administration Agreement pursuant to Section 20 thereof.

 

7.7          Servicer May Own Notes or Certificates. The Servicer, and any
Affiliate of the Servicer, may, in its individual or any other capacity, become
the owner or pledgee of Notes or Certificates with the same rights as it would
have if it were not the Servicer or an Affiliate of the Servicer, except as
otherwise expressly provided herein (including in the definition of “Note
Balance”) or in the other Transaction Documents. Except as otherwise expressly
provided herein (including in the definition of “Note Balance”) or in the other
Transaction Documents, Notes and Certificates so owned by or pledged to the
Servicer or such Affiliate shall have an equal and proportionate benefit under
the provisions of this Agreement and the other Transaction Documents, without
preference, priority or distinction as among the Notes and the Certificates.

 

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Article VIII
SERVICING TERMINATION

 

8.1          Events of Servicing Termination.

 

(a)          The occurrence of any one of the following events shall constitute
an event of servicing termination hereunder (each, an “Event of Servicing
Termination”):

 

(i)          any failure by the Servicer to deliver to the Owner Trustee, the
Indenture Trustee, the Depositor, the Seller, each Paying Agent or the Rating
Agencies the Servicer’s Certificate for any Collection Period, which failure
shall continue unremedied beyond the earlier of three (3) Business Days
following the date such Servicer’s Certificate was required to be delivered and
the Business Day preceding the related Distribution Date, or any failure by the
Servicer to make any required payment or deposit under this Agreement, which
failure shall continue unremedied beyond the earlier of five (5) Business Days
following the date such payment or deposit was due and, in the case of a payment
or deposit to be made no later than a Distribution Date or the Business Day
preceding a Distribution Date, such Distribution Date or preceding Business Day,
as applicable; or

 

(ii)         any failure by the Servicer duly to observe or perform in any
material respect any other covenant or agreement in this Agreement, which
failure shall materially and adversely affect the rights of the Depositor or the
Noteholders and shall continue unremedied for a period of sixty (60) days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Depositor, the Owner
Trustee or the Indenture Trustee or to the Depositor, the Seller, the Servicer,
the Owner Trustee and the Indenture Trustee by the Holders of Notes evidencing
not less than 25% of the Note Balance of the Controlling Class; or

 

(iii)        any representation or warranty of the Servicer made in this
Agreement or in any certificate delivered pursuant hereto or in connection
herewith, other than any representation and warranty relating to a Receivable
that has been purchased by the Servicer, proving to have been incorrect in any
material respect as of the time when the same shall have been made, and the
circumstance or condition in respect of which such representation or warranty
was incorrect shall not have been eliminated or otherwise cured for a period of
thirty (30) days after the date on which written notice of such circumstance or
condition, requiring the same to be eliminated or cured, shall have been given
to the Servicer by the Depositor, the Owner Trustee or the Indenture Trustee or
to the Depositor, the Seller, the Servicer, the Owner Trustee and the Indenture
Trustee by the Holders of Notes evidencing not less than 25% of the Note Balance
of the Controlling Class; or

 

(iv)        the entry of a decree or order by a court or agency or supervisory
authority of competent jurisdiction for the appointment of a conservator,
receiver, liquidator or trustee for the Servicer in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceeding, or for the winding up or liquidation of its affairs, which decree or
order continues unstayed and in effect for a period of sixty (60) consecutive
days; or

 

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(v)         the consent by the Servicer to the appointment of a conservator,
receiver, liquidator or trustee in any bankruptcy, insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceeding of or relating
to the Servicer or relating to substantially all of its property, the admission
in writing by the Servicer of its inability to pay its debts generally as they
become due, the filing by the Servicer of a petition to take advantage of any
applicable bankruptcy, insolvency or reorganization statute, the making by the
Servicer of an assignment for the benefit of its creditors or the voluntary
suspension by the Servicer of payment of its obligations; or

 

(vi)        if CarMax is the Servicer, the occurrence, as of any Distribution
Date, of a Special Unrated Servicer Tangible Net Worth Event.

 

If an Event of Servicing Termination shall have occurred and be continuing, the
Indenture Trustee or the Holders of Notes evidencing not less than 51% of the
Note Balance of the Controlling Class, in each case by notice then given in
writing to the Depositor, the Administrator and the Servicer (with a copy to the
Indenture Trustee and the Owner Trustee if given by the Noteholders), may
terminate all of the rights and obligations of the Servicer under this
Agreement; provided, however, that the indemnification obligations of the
Servicer under Section 7.2 shall survive such termination. On or after the
receipt by the Servicer of such written notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Notes, the
Certificates, the Trust Property or otherwise, shall pass to and be vested in
the Indenture Trustee or other successor Servicer appointed under Section 8.2;
provided, however, that the Indenture Trustee or such other successor Servicer
shall have no liability with respect to any obligation that was required to be
performed by the terminated Servicer prior to the appointment of the Indenture
Trustee or such other successor Servicer or any claim of any third party base on
any alleged action or inaction of the terminated Servicer.

 

(b)          The Indenture Trustee and the Owner Trustee shall have no
obligation to notify the Noteholders, the Certificateholders or any other Person
of the occurrence of any event specified in Section 8.1(a) prior to the
continuance of such event through the end of any cure period specified in
Section 8.1(a).

  

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8.2          Indenture Trustee to Act; Appointment of Successor Servicer.

 

(a)          Upon the resignation of the Servicer pursuant to Section 7.6 or the
termination of the Servicer pursuant to Section 8.1, the Indenture Trustee shall
be the successor in all respects to the Servicer in its capacity as Servicer
under this Agreement and shall be subject to all the obligations and duties
placed on the Servicer by the terms and provisions of this Agreement; provided,
however, that the Indenture Trustee, as successor Servicer, shall not, in any
event, make any Simple Interest Advances pursuant to Section 4.4, shall have no
obligations pursuant to Section 3.7 with respect to the repurchase of
Receivables and shall have no obligations pursuant to Section 3.8 with respect
to the fees and expenses of the Owner Trustee or the Indenture Trustee, the fees
and expenses of the Owner Trustee’s attorneys or the Indenture Trustee’s
attorneys, the fees and expenses of any custodian appointed by the Owner Trustee
or the Indenture Trustee, the fees and expenses of independent accountants or
expenses incurred in connection with distributions and reports to the
Certificateholders or the Noteholders. As compensation therefor, the Indenture
Trustee shall be entitled to such compensation (whether payable out of the
Collection Account or otherwise) as the Servicer would have been entitled to
under this Agreement if no such resignation or termination had occurred, except
that all collections on or in respect of the Receivables shall be deposited in
the Collection Account within two (2) Business Days of receipt and shall not be
retained by the successor Servicer. Notwithstanding the foregoing, the Indenture
Trustee may, if it shall be unwilling so to act, or shall, if it is legally
unable so to act, appoint, or petition a court of competent jurisdiction to
appoint, an Eligible Servicer as the successor to the terminated Servicer under
this Agreement. In connection with such appointment, the Indenture Trustee may
make such arrangements for the compensation of such successor Servicer out of
collections on or in respect of the Receivables as it and such successor shall
agree; provided, however, that such compensation shall not be greater than that
payable to CarMax as Servicer hereunder without the prior consent of the Holders
of Notes evidencing at least 51% of the Note Balance of the Controlling Class.
The Indenture Trustee and such successor Servicer shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. The Indenture Trustee shall not be relieved of its duties as
successor Servicer under this Section 8.2 until a newly appointed Servicer shall
have assumed the obligations and duties of the terminated Servicer under this
Agreement. Notwithstanding anything to the contrary contained herein, in no
event shall the Indenture Trustee be liable for any servicing fee or for any
differential in the amount of the servicing fee paid hereunder and the amount
necessary to induce any successor Servicer to act as successor Servicer
hereunder.

 

(b)          The successor Servicer is authorized and empowered to execute and
deliver, on behalf of the outgoing Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the transfer of servicing to
the successor Servicer, whether to complete the transfer and endorsement of the
Receivable Files or the certificates of title to the Financed Vehicles or
otherwise. The outgoing Servicer shall cooperate with the Indenture Trustee, the
Owner Trustee and such successor Servicer in effecting the termination of its
responsibilities and rights as Servicer under this Agreement, including the
transfer to the successor Servicer for administration of all cash amounts that
are at the time held by the outgoing Servicer for deposit or thereafter shall be
received with respect to a Receivable, all Receivable Files and all information
or documents that the successor Servicer may require. In addition, the outgoing
Servicer shall transfer its electronic records relating to the Receivables to
the successor Servicer in such electronic form as the successor Servicer may
reasonably request. All reasonable costs and expenses (including reasonable
attorneys’ fees) incurred or payable by the successor Servicer in connection
with the transfer of servicing (whether due to termination, resignation or
otherwise), including allowable compensation of employees and overhead costs
incurred or payable in connection with the transfer of the Receivable Files or
any amendment to this Agreement required in connection with the transfer of
servicing, (the “Transition Costs”) shall be paid by any applicable then
outgoing Servicer upon presentation of reasonable documentation of such costs
and expenses. Any such Transition Costs not paid by the outgoing Servicer shall
be paid solely from the application of Available Funds pursuant to Section
2.8(a)(ii) and (xiii) or Section 5.4(b)(ii) of the Indenture, as applicable.

 

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(c)          If the Indenture Trustee is appointed successor Servicer pursuant
to Section 8.2, it shall be entitled to such compensation (whether payable out
of the Collection Account or otherwise) as the outgoing Servicer would have been
entitled to under this Agreement if such outgoing Servicer had not resigned or
been terminated. If a Person other than the Indenture Trustee is appointed
successor Servicer pursuant to Section 8.2(a), the Indenture Trustee may make
such arrangements for the compensation of such successor Servicer out of
collections on or in respect of the Receivables as it and such successor
Servicer shall agree; provided, however, that such compensation shall not be
greater than that payable to CarMax as Servicer hereunder without the prior
consent of the Holders of Notes evidencing at least 51% of the Note Balance of
the Controlling Class; and, provided further, that, if a Person other than the
Indenture Trustee is appointed successor Servicer pursuant to Section 8.2(a)
because the Indenture Trustee refuses to act as successor Servicer (in breach of
the terms of this Agreement and notwithstanding that it is legally able to do
so), the Indenture Trustee shall be liable for any Additional Servicing Fees
with respect to such successor Servicer in an aggregate amount not to exceed
$150,000 per year. Notwithstanding anything to the contrary contained herein, in
no event shall the Indenture Trustee be liable for any servicing fee or for any
differential in the amount of the servicing fee paid hereunder and the amount
necessary to induce any successor Servicer to act as successor Servicer
hereunder other than pursuant to the preceding sentence.

 

(d)          Notwithstanding anything contained in this Agreement to the
contrary, the successor Servicer is authorized to accept and rely on all of the
accounting records (including computer records) and work of the prior Servicer
relating to the Receivables (collectively, the “Predecessor Servicer Work
Product”) without any audit or other examination thereof, and the successor
Servicer shall have no duty, responsibility, obligation or liability for the
acts and omissions of the prior Servicer. If any error, inaccuracy, omission or
incorrect or non-standard practice or procedure (collectively, “Errors”) exists
in any Predecessor Servicer Work Product and such Error makes it materially more
difficult to service or should cause or materially contribute to the successor
Servicer making or continuing any Error (collectively, “Continuing Errors”), the
successor Servicer shall have no duty, responsibility, obligation or liability
for such Continuing Errors; provided, however, that the successor Servicer
agrees to use its best efforts to prevent further Continuing Errors. If the
successor Servicer becomes aware of Errors or Continuing Errors, it shall, with
the prior consent of the Holders of Notes evidencing at least 51% of the Note
Balance of the Controlling Class, use its best efforts to reconstruct and
reconcile such data as is commercially reasonable to correct such Errors and
Continuing Errors and to prevent future Continuing Errors. The successor
Servicer shall be entitled to recover its costs expended in connection with such
efforts in accordance with Section 2.8(a)(ii) and (xiii) of the Indenture, as
applicable.

 

8.3          Effect of Servicing Transfer.

 

(a)          After a transfer of servicing hereunder, the Indenture Trustee or
successor Servicer shall notify the Obligors to make directly to the successor
Servicer payments that are due under the Receivables after the effective date of
such transfer.

 

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(b)          Except as provided in Section 8.2, after a transfer of servicing
hereunder, the outgoing Servicer shall have no further obligations with respect
to the administration, servicing, custody or collection of the Receivables and
the successor Servicer shall have all of such obligations, except that the
outgoing Servicer will transmit or cause to be transmitted directly to the
successor Servicer for its own account, promptly on receipt and in the same form
in which received, any amounts or items held by the outgoing Servicer (properly
endorsed where required for the successor Servicer to collect any such items)
received as payments upon or otherwise in connection with the Receivables.

 

(c)          Any successor Servicer shall provide the Depositor with access to
the Receivable Files and to the successor Servicer’s records (whether written or
automated) with respect to the Receivable Files. Such access shall be afforded
without charge, but only upon reasonable request and during normal business
hours at the offices of the successor Servicer. Nothing in this Section 8.3
shall affect the obligation of the successor Servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors, and the
failure of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section 8.3.

 

(d)          Any transfer of servicing hereunder shall not constitute an
assumption by the related successor Servicer of any liability of the related
outgoing Servicer arising out of any breach by such outgoing Servicer of such
outgoing Servicer’s duties hereunder prior to such transfer of servicing.

 

8.4          Notification to Noteholders, Certificateholders and Rating
Agencies. Upon any notice of an Event of Servicing Termination or upon any
termination of, or any appointment of a successor to, the Servicer pursuant to
this Article VIII, the Indenture Trustee shall give prompt written notice
thereof to the Noteholders and the Owner Trustee shall give prompt written
notice thereof to the Certificateholders, the Administrator and the Depositor
(who shall promptly give such notice to the Rating Agencies).

 

8.5          Waiver of Past Events of Servicing Termination. The Holders of
Notes evidencing not less than 51% of the Note Balance of the Controlling Class
may, on behalf of all Noteholders, waive any Event of Servicing Termination and
its consequences, except an event resulting from the failure to make any
required deposits to or payments from the Collection Account, the Note Payment
Account, the Certificate Payment Account or the Reserve Account in accordance
with this Agreement. Upon any such waiver of an Event of Servicing Termination,
such event shall cease to exist, and shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other event or impair any right arising therefrom, except to the extent
expressly so waived.

 

8.6          Repayment of Advances. If the identity of the Servicer shall
change, the predecessor Servicer shall be entitled to receive reimbursement for
outstanding and unreimbursed Simple Interest Advances made pursuant to Section
4.4 by the predecessor Servicer.

 

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Article IX
TERMINATION

 

9.1          Optional Purchase of All Receivables.

 

(a)          If, as of the last day of any Collection Period, the Pool Balance
shall be less than or equal to 10% of the Pool Balance as of the Cutoff Date,
the Servicer shall have the option to purchase on the following Distribution
Date the Owner Trust Estate, other than the Collection Account, the Note Payment
Account, the Certificate Payment Account or the Reserve Account. To exercise
such option, the Servicer shall notify the Depositor, the Owner Trustee, the
Indenture Trustee and the Rating Agencies no later than ten (10) days prior to
the Distribution Date on which such repurchase is to be effected and shall
deposit into the Collection Account on the Business Day preceding such
Distribution Date an amount equal to the aggregate Purchase Amount for the
Receivables, plus the appraised value of any other Trust Property, if necessary,
other than the Collection Account, the Note Payment Account, the Certificate
Payment Account or the Reserve Account, such value to be determined by an
appraiser mutually agreed upon by the Servicer, the Owner Trustee and the
Indenture Trustee; provided, however, that the Servicer shall not be permitted
to exercise such option unless the amount to be deposited in the Collection
Account pursuant to this Section (a) is at least equal to the sum of all amounts
due to the Servicer under this Agreement plus the Note Balance plus all accrued
but unpaid interest (including any overdue interest) on the Notes plus all
amounts due to the Servicer in any outstanding and unreimbursed Simple Interest
Advances and any outstanding and unreimbursed Unreimbursed Servicer Advances.
Upon such payment, the Servicer shall succeed to and own all interests in and to
the Trust. The aggregate Purchase Amount for such Distribution Date, plus, to
the extent necessary, all amounts in the Reserve Account shall be used to make
payments in full to the Noteholders in the manner set forth in Article IV.

 

(b)          [RESERVED].

 

(c)          Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders shall succeed to the rights of the Noteholders hereunder and
the Indenture Trustee shall continue to carry out its obligations hereunder with
respect to the Certificateholders, including making distributions from the
Collection Account in accordance with Section 4.6(d) and making withdrawals from
the Reserve Account in accordance with Sections 4.6(b) and 4.7.

 

Article X
MISCELLANEOUS PROVISIONS

 

10.1         Amendment.

 

(a)          This Agreement may be amended from time to time by the Depositor,
the Servicer and the Owner Trustee, on behalf of the Trust, with the consent of
the Indenture Trustee, but without the consent of any of the Noteholders, to
cure any ambiguity, to correct or supplement any provision in this Agreement
that may be inconsistent with any other provisions in this Agreement or any
offering document used in connection with the initial offer and sale of the
Notes or to add, change or eliminate any other provisions with respect to
matters or questions arising under this Agreement that are not inconsistent with
the provisions of this Agreement; provided, however, that (i) no such amendment
may materially adversely affect the interests of any Noteholder and (ii) no such
amendment will be permitted unless an Opinion of Counsel is delivered to the
Depositor, the Owner Trustee and the Indenture 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 any Noteholder.

 

58

 

 

(b)          This Agreement may also be amended from time to time by the
Depositor, the Servicer and the Owner Trustee, on behalf of the Trust, with the
consent of the Indenture Trustee and the consent of the Holders of Notes
evidencing at least 66 2/3% of the Note Balance of the Controlling Class, for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement, or of modifying in any manner the
rights of the Noteholders; provided, however, that (x) no such amendment will be
permitted unless an Opinion of Counsel is delivered to the Depositor, the Owner
Trustee and the Indenture 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 any Noteholder
and (y) that 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 change any Note Rate, without
the consent of all Noteholders adversely affected by such amendment;

 

(ii)         reduce the percentage of the Note Balance of the Controlling Class
the consent of the Holders of which is required for any amendment to this
Agreement without the consent of all the Noteholders adversely affected by such
amendment; or

 

(iii)        modify or alter the definition of the term “Required Reserve
Account Amount” without the consent of all the Noteholders adversely affected by
such amendment.

 

(c)          An amendment to this Agreement shall be deemed not to materially
adversely affect the interests of any Noteholder if (i) the Person requesting
such amendment obtains and delivers to the Indenture Trustee and the Owner
Trustee an Opinion of Counsel to that effect or (ii) the Rating Agency Condition
is satisfied.

 

(d)          Prior to the execution of any amendment or consent pursuant to
Section 10.1, the Servicer shall provide written notification of the substance
of such amendment or consent to each Rating Agency.

 

59

 

  

(e)          Promptly after the execution of any amendment or consent pursuant
to Section 10.1(b), the Owner Trustee shall furnish written notification of the
substance of such amendment or consent to each Certificateholder. It shall not
be necessary for the consent of the Noteholders pursuant to Section 10.1(b) 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 the Noteholders provided for
in this Agreement) and of evidencing the authorization of the execution thereof
by the Noteholders shall be subject to such reasonable requirements as the Owner
Trustee and the Indenture Trustee may prescribe.

 

(f)          Prior to the execution of any amendment pursuant to Section 10.1,
the Depositor, the Owner Trustee and the Indenture Trustee shall be entitled to
receive and rely upon (i) an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Agreement and (ii) an
Officer’s Certificate of the Servicer that all conditions precedent provided for
in this Agreement to the execution of such amendment have been complied with.
The Owner Trustee or the Indenture Trustee may, but shall not be obligated to,
enter into any such amendment which affects such Owner Trustee’s or Indenture
Trustee’s own rights, duties or immunities under this Agreement or otherwise.

 

(g)          The representations and warranties set forth in Sections 2.3(m),
2.3(n) and Section 7.1(g) may not be amended or waived.

 

10.2        Protection of Title to Trust.

 

(a)          The Depositor or the Servicer, or both, shall authorize and file
such financing statements and cause to be authorized and filed such continuation
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the interest of the Trust and the
Indenture Trustee for the benefit of the Noteholders in the Receivables and the
proceeds thereof. The Depositor or the Servicer, or both, shall deliver (or
cause to be delivered) to the Owner Trustee and the Indenture Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above as soon as available following such filing.

 

(b)          Neither the Depositor nor the Servicer shall change its name,
identity or organizational structure in any manner that would make any financing
statement or continuation statement filed by the Depositor or the Servicer in
accordance with Section (a) seriously misleading within the meaning of Section
9-506 of the Relevant UCC, unless it shall have given the Owner Trustee and the
Indenture Trustee at least sixty (60) days’ prior written notice thereof and
shall have promptly filed such amendments to previously filed financing
statements or continuation statements or such new financing statements as may be
necessary to continue the perfection of the interest of the Trust and the
Indenture Trustee for the benefit of the Noteholders in the Receivables and the
proceeds thereof.

 

(c)          Each of the Depositor and the Servicer shall give the Owner Trustee
and the Indenture Trustee at least sixty (60) days’ prior written notice of any
change in its name, identity, organizational structure or jurisdiction of
organization or any relocation of its principal place of business or chief
executive office if, as a result of such change or relocation, the applicable
provisions of the Relevant UCC would require the filing of any amendment to any
previously filed financing statement or continuation statement or of any new
financing statement and shall promptly file any such amendment, continuation
statement or new financing statement. The Depositor shall at all times maintain
its jurisdiction of organization, its principal place of business and its chief
executive office within the United States. The Servicer shall at all times
maintain each office from which it shall service Receivables and each office at
which the Receivable Files are located within the United States.

 

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(d)          The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and
(ii) reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
and the Reserve Account in respect of such Receivable.

 

(e)          The Servicer shall maintain its computer systems so that, from and
after the time of the transfer of the Receivables to the Trust pursuant to this
Agreement, the Servicer’s master computer records (including any back-up
archives) that refer to a Receivable shall indicate clearly and unambiguously
the interest of the Trust and the Indenture Trustee in such Receivable and that
such Receivable is owned by the Trust and has been pledged to the Indenture
Trustee pursuant to the Indenture. Indication of the Trust’s and the Indenture
Trustee’s interest in a Receivable shall be deleted from or modified on the
Servicer’s computer systems when, and only when, such Receivable shall have been
paid in full or repurchased by the Depositor or purchased by the Servicer.

 

(f)          If at any time the Depositor or the Servicer shall propose to sell,
grant a security interest in or otherwise transfer any interest in any motor
vehicle retail installment sale contract to any prospective purchaser, lender or
other transferee, the Servicer shall give to such prospective purchaser, lender
or other transferee computer tapes, compact disks, records or print-outs
(including any restored from back-up archives) that, if they shall refer in any
manner whatsoever to any Receivable, shall indicate clearly and unambiguously
that such Receivable has been sold and is owned by the Trust and has been
pledged to the Indenture Trustee (unless such Receivable has been paid in full
or repurchased by the Depositor or purchased by the Servicer).

 

(g)          The Servicer shall permit the Owner Trustee, the Indenture Trustee
and their respective agents at any time during normal business hours to inspect,
audit and make copies of and abstracts from the Servicer’s records regarding any
Receivable.

 

(h)          If the Depositor has repurchased one or more Receivables from the
Trust pursuant to Section 2.4 or the Servicer has purchased one or more
Receivables from the Trust pursuant to Section 3.7, the Servicer shall, upon
request, furnish to the Owner Trustee and the Indenture Trustee, within ten (10)
Business Days, a list of all Receivables (by contract number and name of
Obligor) then held as part of the Trust, together with a reconciliation of such
list to the Receivable Schedule and to each of the Servicer’s Certificates
furnished before such request indicating removal of Receivables from the Trust.

 

(i)          The Servicer shall deliver to the Depositor and the Depositor shall
deliver to the Owner Trustee and the Indenture Trustee:

 

61

 

  

(1)         promptly after the authorization and delivery of each amendment to
any financing statement, an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation statements
have been authorized and filed that are necessary fully to preserve and protect
the interest of the Depositor (in the case of an opinion delivered by the
Servicer) or the Trust and the Indenture Trustee (in the case of an opinion
delivered by the Depositor) in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such counsel, no such action shall
be necessary to preserve and protect such interest; and

 

(2)         within ninety (90) days after the beginning of each calendar year
(beginning with the year 2016), an Opinion of Counsel, dated as of a date during
such 90-day period, either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been authorized and filed
that are necessary fully to preserve and protect the interest of the Depositor
(in the case of an opinion delivered by the Servicer) or the Trust and the
Indenture Trustee (in the case of an opinion delivered by the Depositor) in the
Receivables, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (B) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interest.

 

Each Opinion of Counsel referred to in clause (i)(1) or (i)(2) above shall
specify any action necessary (as of the date of such opinion) to be taken on or
before March 31 of the following year to preserve and protect such interest.

 

(j)          The Depositor shall, to the extent required by applicable law,
cause the Notes to be registered with the Commission pursuant to Section 12(b)
or Section 12(g) of the Exchange Act within the time periods specified in such
sections.

 

10.3         GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PROVISIONS THEREOF WHICH MAY
REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION (OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

10.4         Notices. All demands, notices and other communications under this
Agreement shall be in writing, personally delivered, sent by telecopier, email,
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
Depositor, at the following address: 12800 Tuckahoe Creek Parkway, Suite 400,
Richmond, Virginia 23238, Attention: Treasurer, (ii) in the case of the Seller,
the Servicer or the Administrator, at the following address: 12800 Tuckahoe
Creek Parkway, Richmond, Virginia 23238, Attention: Treasury Department,
(iii) in the case of the Trust or the Owner Trustee, at the related Corporate
Trust Office, (iv) in the case of the Indenture Trustee, at the related
Corporate Trust Office, (v) in the case of Fitch, at the following address:
Fitch Ratings, Inc., 33 Whitehall Street, New York, New York 10004, Attention:
Auto Asset Backed Securities Group, and via email to
notifications.abs@fitchratings.com and (vi) in the case of Moody’s, at the
following address: Moody’s Investors Service, Inc., ABS Monitoring Department,
25th Floor, 7 World Trade Center, 250 Greenwich Street, New York, New York
10007.

 

62

 

  

10.5       Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement, or of the Notes or the
Certificates, or the rights of the Holders thereof.

 

10.6       Assignment. Notwithstanding anything to the contrary contained
herein, except as provided in Sections 7.2 and 8.2 and as provided in the
provisions of this Agreement concerning the resignation of the Servicer, this
Agreement may not be assigned by the Depositor or the Servicer without the prior
written consent of the Owner Trustee, the Indenture Trustee and the Holders of
Notes evidencing not less than 66 2/3% of the Note Balance of the Controlling
Class.

 

10.7       Further Assurances. The Depositor, the Servicer and the Trust agree
to do and perform, from time to time, any and all acts and to authorize and/or
execute any and all further instruments required or reasonably requested by the
Owner Trustee or the Indenture Trustee more fully to effect the purposes of this
Agreement, including the authorization of any financing statements or
continuation statements relating to the Receivables for filing under the
provisions of the Relevant UCC of any applicable jurisdiction.

 

10.8       No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Depositor, the Servicer, the Owner Trustee,
the Indenture Trustee, the Noteholders or the Certificateholders, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges provided in this Agreement are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.

 

10.9       Third-Party Beneficiaries. This Agreement shall inure to the benefit
of and be binding upon the parties hereto, the Owner Trustee, the Noteholders,
the Certificateholders and their respective successors and permitted assigns.
Except as otherwise provided in this Article X, no other Person shall have any
right or obligation hereunder. The parties hereto hereby acknowledge and consent
to the pledge of this Agreement by the Trust to the Indenture Trustee for the
benefit of the Noteholders pursuant to the Indenture.

 

10.10     Actions by Noteholder or Certificateholders.

 

(a)          Wherever in this Agreement a provision is made that an action may
be taken or a notice, demand or instruction given by the Noteholders or the
Certificateholders, such action, notice or instruction may be taken or given by
any Noteholder or any Certificateholder, as applicable, unless such provision
requires a specific percentage of the Noteholders or the Certificateholders.

 

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(b)         Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Noteholder or a Certificateholder shall bind such
Noteholder or Certificateholder and every subsequent Holder of such Note or
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done or omitted to be done by
the Owner Trustee, the Indenture Trustee or the Servicer in reliance thereon,
whether or not notation of such action is made upon such Note or Certificate.

 

10.11      Counterparts. For the purpose of facilitating the execution of this
Agreement and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.

 

10.12      No Bankruptcy Petition. The Owner Trustee, the Indenture Trustee, the
Trust and the Servicer each covenants and agrees that it will not at any time
institute against, or join any other Person in instituting against, the
Depositor or the Trust any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings or other proceedings under any federal or state
bankruptcy or similar law. This Section 10.12 shall survive the resignation or
removal of the Owner Trustee under the Trust Agreement and the Indenture Trustee
under the Indenture and shall survive the termination of the Trust Agreement and
the Indenture.

 

10.13      Limitation of Liability of Owner Trustee and Indenture Trustee.

 

(a)          Notwithstanding anything to the contrary contained herein, this
Agreement has been countersigned by the Owner Trustee not in its individual
capacity but solely in its capacity as Owner Trustee of the Trust, and in no
event shall the Owner Trustee in its individual capacity have any liability for
the representations, warranties, covenants, agreements or other obligations of
the Trust hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely to
the assets of the Trust. For all purposes of this Agreement, in the performance
of its duties or obligations hereunder or in the performance of any duties or
obligations of the Trust hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI, VII and
VIII of the Trust Agreement.

 

(b)          Notwithstanding anything to the contrary contained herein, this
Agreement has been accepted by the Indenture Trustee not in its individual
capacity but solely as Indenture Trustee, and in no event shall the Indenture
Trustee in its individual capacity have any liability for the representations,
warranties, covenants, agreements or other obligations of the Trust hereunder or
in any of the certificates, notices or agreements delivered pursuant hereto, as
to all of which recourse shall be had solely to the assets of the Trust.

 

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10.14      Regulation AB. The Servicer and the Indenture Trustee shall cooperate
in good faith with the Depositor to ensure compliance by the Depositor with the
provisions of Regulation AB and related rules and regulations of the Commission.
The Servicer and the Indenture Trustee acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel or otherwise. The
Servicer shall deliver to the Depositor (including any of its assignees or
designees) upon request any and all reports, statements, certifications, records
or other information necessary in the good faith determination of the Depositor
to permit the Depositor to comply with the provisions of Regulation AB, together
with such disclosures relating to the Servicer and the Receivables, or the
servicing of the Receivables, reasonably believed by the Depositor to be
necessary in order to effect such compliance. The Indenture Trustee shall
deliver to the Depositor (including any of its assignees or designees) (i) any
information required under Items 1109(a), 1109(b), 1117 and 1119 of Regulation
AB  to enable the Depositor to comply with the provisions of Regulation AB, the
Securities Act and the Exchange Act and the rules and regulations thereunder and
(ii) within 60 days of the end of each fiscal year of the Depositor, a report
regarding the Indenture Trustee’s assessment of compliance with Regulation AB
during the Depositor’s immediately preceding fiscal year, as required under Item
1122 of Regulation AB and Rule 15d-18 and Rule 13a-18 of the Exchange Act, which
report shall address each of the specified criteria in Exhibit D or such other
criteria as mutually agreed upon by the Depositor and the Indenture Trustee,
together with such disclosures relating to the Indenture Trustee and the
Receivables, or the servicing of the Receivables, reasonably believed by the
Depositor to be necessary in order to effect such compliance. The Depositor
shall not request information or disclosures pursuant to this Section 10.14
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act or the rules and regulations of the Commission
under the Securities Act or the Exchange Act.

 

10.15      Communications Regarding Demands to Repurchase Receivables.. The
Servicer (if CarMax is no longer the Servicer) agrees to cooperate in good faith
with any reasonable request by the Depositor for information regarding the
Servicer which is required in order to enable the Depositor to comply with the
provisions of Items 1104(e) and 1121(c) of Regulation AB and Rule 15Ga-1 under
the Exchange Act as it relates to the Servicer or to the Servicer’s obligations
under this Agreement. The Servicer (if CarMax is no longer the Servicer) shall
provide the Depositor with notification, as soon as practicable and in any event
within five Business Days, of all demands communicated to the Servicer for the
repurchase or replacement of any Receivable.

 

[SIGNATURE PAGES FOLLOW]

 

65

 

  

IN WITNESS WHEREOF, the Trust, the Depositor and the Servicer have caused this
Agreement to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.

 

  CARMAX AUTO OWNER TRUST 2015-2       By: U.S. BANK TRUST NATIONAL ASSOCIATION,
  not in its individual capacity but solely   as Owner Trustee       By: /s/
Christopher J. Nuxoll   Name: Christopher J. Nuxoll   Title: Vice President    
  CARMAX AUTO FUNDING LLC,   as Depositor       By: /s/ Andrew J. McMonigle  
Name: Andrew J. McMonigle   Title: Vice President and Treasurer       CARMAX
BUSINESS SERVICES, LLC,       as Servicer       By: /s/ Thomas W. Reedy   Name:
Thomas W. Reedy   Title: Executive Vice President and   Chief Financial Officer

 

Sale and Servicing Agreement (CAOT 2015-2)

 

 

 

  

Accepted and agreed:       WELLS FARGO BANK,   NATIONAL ASSOCIATION,   not in
its individual capacity   but solely as Indenture Trustee       By: /s/ Tara H.
Anderson   Name: Tara H. Anderson   Title: Vice President  

 

Sale and Servicing Agreement (CAOT 2015-2)

 

 

 

  

Schedule 1

 

Receivable Schedule

 

On file with the Servicer at:

 

CarMax Business Services, LLC
12800 Tuckahoe Creek Parkway
Richmond, Virginia 23238

  

Sch. 1

 

  

Schedule 2

 

Location of Receivable Files

 

225 Chastain Meadows Court

Kennesaw, GA 30144

 

650 Distribution Drive

Atlanta, GA 30336

(original executed copies of Receivables only)

 

680 Distribution Drive

Atlanta, GA 30336

(original executed copies of Receivables only)

 

600 Distribution Drive

Atlanta, GA 30336

(original executed copies of Receivables only)

 

575 Great SW Pkwy

Atlanta, GA 30336

(original executed copies of Receivables only)

 

7575 Ponce Deleon Circle

Norcross, GA 30340

(original executed copies of Receivables only)

 

Sch. 2

 

  

Exhibit A

 

Form of Servicer’s Certificate

 

SEE ATTACHED

 

Ex. A

 

   

MONTHLY SERVICER'S CERTIFICATE

CARMAX BUSINESS SERVICES, LLC

 

CARMAX AUTO OWNER TRUST

SERIES 2015-2

 

Collection Period   05/01/15-05/31/15 Determination Date   6/9/2015 Distribution
Date   6/15/2015                             Pool Balance                      
  1. Pool Balance on the close of the last day of the preceding Collection
Period       $   2. Collections allocable to Principal       $   3. Purchase
Amount allocable to Principal       $   4. Defaulted Receivables       $   5.
Pool Balance on the close of the last day of the related Collection Period      
$     (Ln1 - Ln2 - Ln3 - Ln4)                         6. Total number of
Receivables outstanding on the close of the last day of the related Collection
Period                         7. Initial Pool Balance       $ 1,165,000,011.50
                    Beginning     End 8. Note Balances   of Period     of Period
                a. Class A-1 Note Balance $     $     b. Class A-2a Note Balance
$     $     c. Class A-2b Floating Rate Note Balance $     $     d. Class A-3
Note Balance $     $     e. Class A-4 Note Balance $     $     f. Class B Note
Balance $     $     g. Class C Note Balance $     $     h. Class D Note Balance
$     $     i. Note Balance (sum a - h) $     $                 9. Pool Factors
                          a. Class A-1 Note Pool Factor   1.0000000         b.
Class A-2a Note Pool Factor   1.0000000         c. Class A-2b Floating Rate Note
Pool Factor   1.0000000         d. Class A-3 Note Pool Factor   1.0000000      
  e. Class A-4 Note Pool Factor   1.0000000         f. Class B Note Pool Factor
  1.0000000         g. Class C Note Pool Factor   1.0000000         h. Class D
Note Pool Factor   1.0000000         i. Note Pool Factor   1.0000000            
        10. Overcollateralization Target Amount       $   11. Current
overcollateralization amount (Pool Balance - Note Balance)       $              
  12. Weighted Average Coupon       %   13. Weighted Average Original Term      
months   14. Weighted Average Remaining Term       months                 15. 1-
Month LIBOR for the accrual period ending 06/15/15           16. Note Rate
applicable to the Class A-2b notes for the accrual period ending 06/15/15      
                  Collections                         17. Finance Charges:      
      a. Collections allocable to Finance Charge       $     b. Liquidation
Proceeds allocable to Finance Charge       $     c. Purchase Amount allocable to
Finance Charge       $     d. Available Finance Charge Collections (sum a - c)  
    $                 18. Principal:             a. Collections allocable to
Principal       $     b. Liquidation Proceeds allocable to Principal       $    
c. Purchase Amount allocable to Principal       $     d. Available Principal
Collections (sum a - c)       $                 19. Total Finance Charge and
Principal Collections (17d+18d)       $   20. Interest Income from Collection
Account       $   21. Simple Interest Advances       $   22. Available
Collections (Ln19+20+21)       $  

 

 

 

 

Available Funds                         23. Available Collections       $   24.
Reserve Account Draw Amount       $   25. Available Funds       $              
  Application of Available Funds                         26. Servicing Fee      
      a. Monthly Servicing Fee       $     b. Amount Unpaid from Prior Months  
    $     c. Amount Paid       $     d. Shortfall Amount (a + b - c)       $    
            27. Unreimbursed Servicer Advances       $                 28.
Successor Servicer Unpaid Transition Expenses and Indemnity Amounts (Capped at
$175,000)             a. Unpaid Transition Expenses and Indemnity Amounts
(Capped at $175,000)       $     b. Amount Paid       $     c. Shortfall Amount
(a - b)       $                 29. Class A Noteholder Interest Amounts        
    a. Class A-1 Monthly Interest       $     b. Additional Note Interest
related to Class A-1 Monthly Interest       $     c. Interest Due on Additional
Note Interest related to Class A-1 Monthly Interest       $     d. Total Class
A-1 Note Interest (sum a - c)       $                   e. Class A-2a Monthly
Interest       $     f. Additional Note Interest related to Class A-2a Monthly
Interest       $     g. Interest Due on Additional Note Interest related to
Class A-2a Monthly Interest       $     h. Total Class A-2a Note Interest (sum e
- g)       $                   i. Class A-2b Monthly Interest       $     j.
Additional Note Interest related to Class A-2b Monthly Interest       $     k.
Interest Due on Additional Note Interest related to Class A-2b Monthly Interest
      $     l. Total Class A-2b Note Interest (sum i - k)       $              
    m. Class A-3 Monthly Interest       $     n. Additional Note Interest
related to Class A-3 Monthly Interest       $     o. Interest Due on Additional
Note Interest related to Class A-3 Monthly Interest       $     p. Total Class
A-3 Note Interest (sum m - o)       $                   q. Class A-4 Monthly
Interest       $     r. Additional Note Interest related to Class A-4 Monthly
Interest       $     s. Interest Due on Additional Note Interest related to
Class A-4 Monthly Interest       $     t. Total Class A-4 Note Interest (sum q -
s)       $                 30. Priority Principal Distributable Amount       $  
              31. Class B Noteholder Interest Amount             a. Class B
Monthly Interest       $     b. Additional Note Interest related to Class B
Monthly Interest       $     c. Interest Due on Additional Note Interest related
to Class B Monthly Interest       $     d. Total Class B Note Interest (sum a -
c)       $                 32. Secondary Principal Distributable Amount       $
                33. Class C Noteholder Interest Amount             a. Class C
Monthly Interest       $     b. Additional Note Interest related to Class C
Monthly Interest       $     c. Interest Due on Additional Note Interest related
to Class C Monthly Interest       $     d. Total Class C Note Interest (sum a -
c)       $                 34. Tertiary Principal Distributable Amount       $  
              35. Class D Noteholder Interest Amount             a. Class D
Monthly Interest       $     b. Additional Note Interest related to Class D
Monthly Interest       $     c. Interest Due on Additional Note Interest related
to Class D Monthly Interest       $     d. Total Class D Note Interest (sum a -
c)       $                 36. Quaternary Principal Distributable Amount       $
                37. Required Payment Amount (Ln 26 + Ln 28 + (sum of Ln 29
through Ln 36))       $                 38. Reserve Account Deficiency       $  

 

 

 

 

39. Regular Principal Distributable Amount       $                 40. Remaining
Unpaid Servicer Transition Expenses, if any       $                 41.
Additional Servicing Fees, if any       $                 42. Remaining Unpaid
Successor Servicer Indemnity Amounts and Transition Expenses, if any       $    
            Collection Account Activity                         43. Deposits    
        a. Total Daily Deposits of Finance Charge Collections       $     b.
Total Daily Deposits of Principal Collections       $     c. Withdrawal from
Reserve Account       $     d. Interest Income       $     e. Total Deposits to
Collection Account (sum a - d)       $                 44. Withdrawals          
  a. Servicing Fee and Unreimbursed Servicer Advances       $     b. Successor
Servicer Transition Expenses and Indemnity Amounts       $     c. Deposit to
Note Payment Account for Monthly Note Interest/Principal       $     d. Deposit
to Reserve Account       $     e. Excess Collections (Deposit to Certificate
Payment Account for payment to Certificateholder)       $     f. Total
Withdrawals from Collection Account (sum a - e)       $                 Note
Payment Account Activity                         45. Deposits             a.
Class A-1 Interest Distribution       $     b. Class A-2a Interest Distribution
      $     c. Class A-2b Interest Distribution       $     d. Class A-3
Interest Distribution       $     e. Class A-4 Interest Distribution       $    
f. Class B Interest Distribution       $     g. Class C Interest Distribution  
    $     h. Class D Interest Distribution       $                   i. Class
A-1 Principal Distribution       $     j. Class A-2a Principal Distribution    
  $     k. Class A-2b Principal Distribution       $     l. Class A-3 Principal
Distribution       $     m. Class A-4 Principal Distribution       $     n.
Class B Principal Distribution       $     o. Class C Principal Distribution    
  $     p. Class D Principal Distribution       $     q. Total Deposits to Note
Payment Account (sum a - p)       $                 46. Withdrawals            
a. Class A-1 Distribution       $     b. Class A-2a Distribution       $     c.
Class A-2b Distribution       $     d. Class A-3 Distribution       $     e.
Class A-4 Distribution       $     f. Class B Distribution       $     g. Class
C Distribution       $     h. Class D Distribution       $     i. Total
Withdrawals from Note Payment Account (sum a - h)       $                
Certificate Payment Account Activity                         47. Deposits      
      a. Excess Collections       $     b. Reserve Account surplus (Ln 57)      
$     c. Total Deposits to Certificate Payment Account (sum a - b)       $      
          48. Withdrawals             a. Certificateholder Distribution       $
    b. Total Withdrawals from Certificate Payment Account       $              
  Required Reserve Account Amount                         49. Lesser of: (a or
b)             a. $2,912,500.03       $     b. Note Balance       $            
    50. Required Reserve Account Amount       $  

 

 

 

 

Reserve Account Reconciliation                         51. Beginning Balance (as
of end of preceding Distribution Date)       $   52. Investment Earnings       $
  53. Reserve Account Draw Amount       $   54. Reserve Account Amount (Ln 51 +
Ln 52 - Ln 53)       $   55. Deposit from Available Funds (Ln 44d)       $   56.
If Reserve Account Balance exceeds Required Reserve Account Amount, payment to  
          a. the Note Payment Account for the payment of principal to the extent
of any unfunded Regular Principal Distribution Amount; and       $     b. any
Successor Servicer for the payment of any unfunded Transition Costs and
Additional Servicing Fee       $   57. Payment to Certificateholder if Reserve
Account Balance exceeds Required Reserve Account Amount and to the extent no
unfunded amounts described in Ln 56 exist       $   58. Ending Balance (Ln54 +
Ln55 - Ln56 - Ln57)       $   59. Reserve Account Deficiency (Ln50 - Ln58)      
$                 Instructions to the Trustee                         60. Amount
to be deposited from the Reserve Account into the Collection Account       $  
61. Amount to be paid to Servicer from the Collection Account       $   62.
Amount to be deposited from the Collection Account into the Note Payment Account
      $   63. Amount to be deposited from the Collection Account into the
Certificate Payment Account       $   64. Amount to be deposited from the
Collection Account into the Reserve Account       $   65. Amount to be deposited
from the Reserve Account, if Reserve Account Balance exceeds            
Required Reserve Account Amount, into             a. the Note Payment Account
for any unfunded Regular Principal Distributable Amount       $     b. the
Certificate Payment Account for payment to the Certificateholder,             if
no unfunded Regular Principal distributable amount exists       $   66. Amount
to be paid to Class A-1 Noteholders from the Note Payment Account       $   67.
Amount to be paid to Class A-2a Noteholders from the Note Payment Account      
$   68. Amount to be paid to Class A-2b Noteholders from the Note Payment
Account       $   69. Amount to be paid to Class A-3 Noteholders from the Note
Payment Account       $   70. Amount to be paid to Class A-4 Noteholders from
the Note Payment Account       $   71. Amount to be paid to Class B Noteholders
from the Note Payment Account       $   72. Amount to be paid to Class C
Noteholders from the Note Payment Account       $   73. Amount to be paid to
Class D Noteholders from the Note Payment Account       $   74. Amount to be
paid to Certificateholders from the Certificate Payment Account with respect to
Excess             Collections and Reserve Account surplus       $              
  Net Loss and Delinquency Activity                         75. Net Losses with
respect to preceding Collection Period       $   76. Cumulative Net Losses      
$   77. Cumulative Net Loss Percentage                         78. Delinquency
Analysis   Number of     Principal       Loans     Balance                 a. 31
to 60 days past due       $ 0.00   b. 61 to 90 days past due       $ 0.00   c.
91 or more days past due       $ 0.00   d. Total Past Due (sum a-c)   0     0.00
              Servicer Covenant                         79. CarMax, Inc
Consolidated Tangible Net Worth as of the end of the Related Fiscal Quarter    
  $   80. Is CarMax, Inc Consolidated Tangible Net Worth greater than
$1,000,000,000?         Yes

 

 

 

 

IN WITNESS WHEREOF, the undersigned has duly executed this certificate on June
09, 2015.

  

CARMAX BUSINESS SERVICES, LLC   As Servicer          By:           Name: Andrew
J. McMonigle         Title: Treasurer  

 

 

 

 

 

Exhibit B

 

Form of Statement to Noteholders

 

SEE EXHIBIT A

 

Ex. B

 

  

Exhibit C

 

Form of Statement to Certificateholders

 

SEE EXHIBIT A

 

Ex. C

 

  

Exhibit D

 

SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE

 

The assessment of compliance to be delivered by the Indenture Trustee shall
address, at a minimum, the criteria identified as below as “Applicable Servicing
Criteria”:

  

Servicing Criteria  

Applicable

Servicing
Criteria

Reference   Criteria       General Servicing Considerations              
1122(d)(1)(i)   Policies and procedures are instituted to monitor any
performance or other triggers and events of default in accordance with the
transaction agreements.               1122(d)(1)(ii)   If any material servicing
activities are outsourced to third parties, policies and procedures are
instituted to monitor the third party’s performance and compliance with such
servicing activities.   X           1122(d)(1)(iii)   Any requirements in the
transaction agreements to maintain a back-up servicer for the receivables are
maintained.               1122(d)(1)(iv)   A fidelity bond and errors and
omissions policy is in effect on the party participating in the servicing
function throughout the reporting period in the amount of coverage required by
and otherwise in accordance with the terms of the transaction agreements.      
            Cash Collection and Administration               1122(d)(2)(i)  
Payments on receivables are deposited into the appropriate custodial bank
accounts and related bank clearing accounts no more than two business days
following receipt, or such other number of days specified in the transaction
agreements.               1122(d)(2)(ii)   Disbursements made via wire transfer
on behalf of an obligor or to an investor are made only by authorized personnel.
  X           1122(d)(2)(iii)   Advances of funds or guarantees regarding
collections, cash flows or distributions, and any interest or other fees charged
for such advances, are made, reviewed and approved as specified in the
transaction agreements.    

 

Ex. D-1

 

 

Servicing Criteria  

Applicable

Servicing
Criteria

Reference   Criteria   1122(d)(2)(iv)   The related accounts for the
transaction, such as cash reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with respect to
commingling of cash) as set forth in the transaction agreements.   X          
1122(d)(2)(v)   Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction agreements. For purposes
of this criterion, “federally insured depository institution” with respect to a
foreign financial institution means a foreign financial institution that meets
the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.   X        
  1122(d)(2)(vi)   Unissued checks are safeguarded so as to prevent unauthorized
access.               1122(d)(2)(vii)   Reconciliations are prepared on a
monthly basis for all asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These reconciliations are
(A) mathematically accurate; (B) prepared within 30 calendar days after the bank
statement cutoff date, or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than the person who
prepared the reconciliation; and (D) contain explanations for reconciling items.
These reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.                   Investor Remittances and Reporting              
1122(d)(3)(i)   Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction agreements and
applicable Commission requirements. Specifically, such reports (A) are prepared
in accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with investors’ or the
trustee’s records as to the total unpaid principal balance and number of
receivables serviced by the Servicer.    

 

Ex. D-2

 

  

Servicing Criteria  

Applicable

Servicing
Criteria

Reference   Criteria   1122(d)(3)(ii)   Amounts due to investors are allocated
and remitted in accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.   X           1122(d)(3)(iii)  
Disbursements made to an investor are posted within two business days to the
Servicer’s investor records, or such other number of days specified in the
transaction agreements.   X           1122(d)(3)(iv)   Amounts remitted to
investors per the investor reports agree with cancelled checks, or other form of
payment, or custodial bank statements.   X               Pool Asset
Administration               1122(d)(4)(i)   Collateral or security on
receivables is maintained as required by the transaction agreements or related
receivable loan documents.               1122(d)(4)(ii)   Receivable loan and
related documents are safeguarded as required by the transaction agreements.    
          1122(d)(4)(iii)   Any additions, removals or substitutions to the
asset pool are made, reviewed and approved in accordance with any conditions or
requirements in the transaction agreements.               1122(d)(4)(iv)  
Payments on receivables, including any payoffs, made in accordance with the
related receivable loan documents are posted to the Servicer’s obligor records
maintained no more than two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated to principal,
interest or other items (e.g., escrow) in accordance with the related receivable
loan documents.               1122(d)(4)(v)   The Servicer’s records regarding
the receivables agree with the Servicer’s records with respect to an obligor’s
unpaid principal balance.               1122(d)(4)(vi)   Changes with respect to
the terms or status of an obligor’s receivables (e.g., loan modifications or
re-agings) are made, reviewed and approved by authorized personnel in accordance
with the transaction agreements and related pool asset documents.              
1122(d)(4)(vii)   Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and repossessions,
as applicable) are initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the transaction agreements.    

 

Ex. D-3

 

  

Servicing Criteria   Applicable
Servicing
Criteria Reference   Criteria   1122(d)(4)(viii)   Records documenting
collection efforts are maintained during the period a receivable is delinquent
in accordance with the transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the transaction
agreements, and describe the entity’s activities in monitoring delinquent
receivables including, for example, phone calls, letters and payment
rescheduling plans in cases where delinquency is deemed temporary (e.g., illness
or unemployment).               1122(d)(4)(ix)   Adjustments to interest rates
or rates of return for receivable loans with variable rates are computed based
on the related receivable loan documents.               1122(d)(4)(x)  
Regarding any funds held in trust for an obligor (such as escrow accounts): (A)
such funds are analyzed, in accordance with the obligor’s receivable loan
documents, on at least an annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid, or credited, to
obligors in accordance with applicable receivable loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar days of full
repayment of the related receivable, or such other number of days specified in
the transaction agreements.               1122(d)(4)(xi)   Payments made on
behalf of an obligor (such as tax or insurance payments) are made on or before
the related penalty or expiration dates, as indicated on the appropriate bills
or notices for such payments, provided that such support has been received by
the servicer at least 30 calendar days prior to these dates, or such other
number of days specified in the transaction agreements.              
1122(d)(4)(xii)   Any late payment penalties in connection with any payment to
be made on behalf of an obligor are paid from the servicer’s funds and not
charged to the obligor, unless the late payment was due to the obligor’s error
or omission.               1122(d)(4)(xiii)   Disbursements made on behalf of an
obligor are posted within two business days to the obligor’s records maintained
by the servicer, or such other number of days specified in the transaction
agreements.    

 

Ex. D-4

 

  

Servicing Criteria  

Applicable

Servicing
Criteria

Reference   Criteria   1122(d)(4)(xiv)   Delinquencies, charge-offs and
uncollectible accounts are recognized and recorded in accordance with the
transaction agreements.               1122(d)(4)(xv)   Any external enhancement
or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of
Regulation AB, is maintained as set forth in the transaction agreements.    

 

Ex. D-5