Exhibit 4.1
EXECUTION COPY
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CHEVY CHASE AUTO RECEIVABLES TRUST 2001-2
Class A-1 2.77313% Asset Backed Notes
Class A-2 2.97% Asset Backed Notes
Class A-3 3.80% Asset Backed Notes
Class A-4 4.44% Asset Backed Notes
Class B 5.16% Asset Backed Notes
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INDENTURE
Dated as of September 1, 2001
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U.S. BANK NATIONAL ASSOCIATION,
Indenture Trustee
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TABLE OF CONTENTS
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ARTICLE I Definitions and Incorporation by Reference......................................................... 2
SECTION 1.1 Definitions.......................................................................... 2
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.................................... 13
SECTION 1.3 Rules of Construction................................................................ 14
ARTICLE II The Notes......................................................................................... 14
SECTION 2.1 Form................................................................................. 14
SECTION 2.2 Execution, Authentication and Delivery............................................... 15
SECTION 2.3 Temporary Notes...................................................................... 15
SECTION 2.4 Registration; Registration of Transfer and Exchange.................................. 16
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes........................................... 17
SECTION 2.6 Persons Deemed Owner................................................................. 18
SECTION 2.7 Payment of Principal and Interest; Defaulted Interest................................ 18
SECTION 2.8 Cancellation......................................................................... 19
SECTION 2.9 Release of Collateral................................................................ 19
SECTION 2.10 Book-Entry Notes..................................................................... 20
SECTION 2.11 Notices to Clearing Agency........................................................... 20
SECTION 2.12 Definitive Notes..................................................................... 21
ARTICLE III Covenants........................................................................................ 21
SECTION 3.1 Payment of Principal and Interest.................................................... 21
SECTION 3.2 Maintenance of Office or Agency...................................................... 21
SECTION 3.3 Money for Payments to be Held in Trust............................................... 22
SECTION 3.4 Existence............................................................................ 23
SECTION 3.5 Protection of Trust Estate........................................................... 23
SECTION 3.6 Opinions as to Trust Estate.......................................................... 24
SECTION 3.7 Performance of Obligations; Servicing of Receivables................................. 25
SECTION 3.8 Negative Covenants................................................................... 25
SECTION 3.9 Annual Statement as to Compliance.................................................... 26
SECTION 3.10 Issuer May Consolidate, Etc. Only on Certain Terms................................... 26
SECTION 3.11 Successor or Transferee.............................................................. 28
SECTION 3.12 No Other Business.................................................................... 28
SECTION 3.13 No Borrowing......................................................................... 28
SECTION 3.14 Servicer's Obligations............................................................... 29
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities.................................... 29
SECTION 3.16 Capital Expenditures................................................................. 29
SECTION 3.17 Compliance with Laws................................................................. 29
SECTION 3.18 Restricted Payments.................................................................. 29
SECTION 3.19 Notice of Events of Default.......................................................... 29
SECTION 3.20 Further Instruments and Acts......................................................... 30
SECTION 3.21 Amendments of Sale and Servicing Agreement and Trust Agreement....................... 30
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SECTION 3.22 Income Tax Characterization.......................................................... 30
ARTICLE IV Satisfaction and Discharge........................................................................ 30
SECTION 4.1 Satisfaction and Discharge of Indenture.............................................. 30
SECTION 4.2 Application of Trust Money........................................................... 31
SECTION 4.3 Repayment of Moneys Held by Note Paying Agent........................................ 31
ARTICLE V Remedies........................................................................................... 32
SECTION 5.1 Events of Default.................................................................... 32
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment................................... 33
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee...................... 34
SECTION 5.4 Remedies............................................................................. 36
SECTION 5.5 Optional Preservation of the Receivables............................................. 37
SECTION 5.6 Priorities........................................................................... 37
SECTION 5.7 Limitation of Suits.................................................................. 37
SECTION 5.8 Unconditional Rights of Noteholders To Receive Principal and Interest................ 38
SECTION 5.9 Restoration of Rights and Remedies................................................... 38
SECTION 5.10 Rights and Remedies Cumulative....................................................... 39
SECTION 5.11 Delay or Omission Not a Waiver....................................................... 39
SECTION 5.12 Control by Noteholders............................................................... 39
SECTION 5.13 Waiver of Past Defaults.............................................................. 40
SECTION 5.14 Undertaking for Costs................................................................ 40
SECTION 5.15 Waiver of Stay or Extension Laws..................................................... 40
SECTION 5.16 Action on Notes...................................................................... 41
SECTION 5.17 Performance and Enforcement of Certain Obligations................................... 41
SECTION 5.18 Application of the Trust Indenture Act............................................... 41
ARTICLE VI The Indenture Trustee............................................................................. 42
SECTION 6.1 Duties of Indenture Trustee.......................................................... 42
SECTION 6.2 Rights of Indenture Trustee.......................................................... 44
SECTION 6.3 Individual Rights of Indenture Trustee............................................... 45
SECTION 6.4 Indenture Trustee's Disclaimer....................................................... 45
SECTION 6.5 Notice of Defaults................................................................... 45
SECTION 6.6 Reports by Trustee to Holders........................................................ 45
SECTION 6.7 Compensation and Indemnity........................................................... 46
SECTION 6.8 Replacement of Indenture Trustee..................................................... 46
SECTION 6.9 Successor Indenture Trustee by Merger................................................ 48
SECTION 6.10 Appointment of Co-Trustee or Separate Trustee........................................ 48
SECTION 6.11 Eligibility: Disqualification........................................................ 49
SECTION 6.12 Preferential Collection of Claims Against Issuer..................................... 49
SECTION 6.13 Appointment and Powers............................................................... 50
SECTION 6.14 Performance of Duties................................................................ 50
SECTION 6.15 Limitation on Liability.............................................................. 50
SECTION 6.16 Reliance Upon Documents.............................................................. 51
SECTION 6.17 Reserved............................................................................. 51
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SECTION 6.18 Representations and Warranties of the Indenture Trustee.............................. 51
SECTION 6.19 Waiver of Setoffs.................................................................... 52
SECTION 6.20 Control by the Declaring Noteholders................................................. 52
ARTICLE VII Noteholders' Lists and Reports................................................................... 52
SECTION 7.1 Issuer To Furnish To Indenture Trustee Names and Addresses of Noteholders............ 52
SECTION 7.2 Preservation of Information; Communications to Noteholders........................... 52
SECTION 7.3 Reports by Issuer.................................................................... 53
SECTION 7.4 Reports by Indenture Trustee......................................................... 53
ARTICLE VIII Accounts, Disbursements and Releases............................................................ 53
SECTION 8.1 Collection of Money.................................................................. 53
SECTION 8.2 Release of Trust Estate.............................................................. 53
SECTION 8.3 Opinion of Counsel................................................................... 54
ARTICLE IX Supplemental Indentures........................................................................... 54
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders............................... 54
SECTION 9.2 Supplemental Indentures with Consent of Noteholders.................................. 55
SECTION 9.3 Execution of Supplemental Indentures................................................. 57
SECTION 9.4 Effect of Supplemental Indenture..................................................... 57
SECTION 9.5 Conformity With Trust Indenture Act.................................................. 57
SECTION 9.6 Reference in Notes to Supplemental Indentures........................................ 57
ARTICLE X Redemption of Notes................................................................................ 58
SECTION 10.1 Redemption........................................................................... 58
SECTION 10.2 Form of Redemption Notice............................................................ 58
SECTION 10.3 Notes Payable on Redemption Date..................................................... 59
ARTICLE XI Miscellaneous..................................................................................... 59
SECTION 11.1 Compliance Certificates and Opinions, etc............................................ 59
SECTION 11.2 Form of Documents Delivered to Indenture Trustee..................................... 61
SECTION 11.3 Acts of Noteholders.................................................................. 61
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating Agencies...................... 62
SECTION 11.5 Notices to Noteholders; Waiver....................................................... 63
SECTION 11.6 Alternate Payment and Notice Provisions.............................................. 63
SECTION 11.7 Conflict with Trust Indenture Act.................................................... 63
SECTION 11.8 Effect of Headings and Table of Contents............................................. 64
SECTION 11.9 Successors and Assigns............................................................... 64
SECTION 11.10 Separability......................................................................... 64
SECTION 11.11 Benefits of Indenture................................................................ 64
SECTION 11.12 Legal Holidays....................................................................... 64
SECTION 11.13 GOVERNING LAW........................................................................ 64
SECTION 11.14 Counterparts......................................................................... 64
SECTION 11.15 Trust Obligation; Limitation of Liabilities.......................................... 65
SECTION 11.16 No Petition.......................................................................... 66
SECTION 11.17 Inspection........................................................................... 66
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Exhibit A-1 Form of Class A-1 Note
Exhibit A-2 Form of Class A-2 Note
Exhibit A-3 Form of Class A-3 Note
Exhibit A-4 Form of Class A-4 Note
Exhibit A-5 Form of Class B Note
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CROSS-REFERENCE TABLE
Cross-reference sheet showing the location in the Indenture of the
provisions inserted pursuant to Sections 310 through 318(a) inclusive of the
Trust Indenture Act of 1939./1/
Trust Indenture Act of 1939 Indenture Section
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Section 310
(a) (1)........................................... 6.11
(a) (2)........................................... 6.11
(a) (3)........................................... 6.10
(a) (4)........................................... Not Applicable
(a) (5)........................................... 6.11
(b)............................................... 6.11, 6.8
(c)............................................... Not Applicable
Section 311
(a)............................................... 6.12
(b)............................................... 6.12
(c)............................................... Not Applicable
Section 312
(a)............................................... 7.1, 7.2(a)
(b)............................................... 7.2(b)
(c)............................................... 7.2(c)
Section 313
(a)............................................... 7.4
(b)............................................... 7.4
(c)............................................... 11.5
(d)............................................... 7.4
Section 314
(a)(1)............................................ 7.3
(a)(2)............................................ 7.3
(a)(3)............................................ 7.3
(a)(4)............................................ 7.3
(b)(1)............................................ 3.6(a)
(b)(2)............................................ 3.6(b)
(c)(1)............................................ 4.1
8.2(e), 11.1
(c)(2)............................................ 2.11(c), 4.1,
8.2(b), 11.1
(c)(3)............................................ 8.2(b)
(d)(1)............................................ 8.2, 11.1(a)
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/1/ This Cross-Reference Table is not part of the Indenture.
(d)(2)............................................ 11.1(a)
(d)(3)............................................ 11.1(a)
(e)............................................... 11.1(b)
Section 315
(a)............................................... 6.1(a), 6.1(c)(i)
(b)............................................... 6.5, 11.5
(c)............................................... 6.1(a)
(d)(1)............................................ 6.1(b), 6.1(c)
(d)(2)............................................ 6.1(c)(ii)
(d)(3)............................................ 6.1(c)(iii)
(e)............................................... 5.14
Section 316
(a)............................................... 5.18
(b)............................................... 5.8
(c)............................................... 5.18
Section 317
(a)(1)............................................ 5.3
(a)(2)............................................ 5.5
(b)............................................... 3.1
Section 318
(a)............................................... 11.7
INDENTURE dated as of September 1, 2001, between CHEVY CHASE AUTO
RECEIVABLES TRUST 2001-2, a Delaware business trust (the "Issuer"), and U.S.
BANK NATIONAL ASSOCIATION, a national banking association, as indenture trustee
(the "Indenture Trustee")
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Issuer's Class A-1
2.77313% Asset Backed Notes (the "Class A-1 Notes"), Class A-2 2.97% Asset
Backed Notes (the "Class A-2 Notes"), Class A-3 3.80% Asset Backed Notes (the
"Class A-3 Notes"), Class A-4 4.44% Asset Backed Notes (the "Class A-4 Notes",
and collectively with the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes, the "Class A Notes") and Class B 5.16% Asset Backed Notes (the "Class B
Notes", and together with the Class A Notes, the "Notes"):
As security for the payment and performance by the Issuer of its
obligations under this Indenture and the Notes, the Issuer has agreed to assign
the Collateral (as defined below) as collateral to the Indenture Trustee for the
benefit of the Noteholders.
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
for the benefit of the Holders of the Notes, all of the Issuer's right, title
and interest in and to (a) the Receivables listed in the Schedule of
Receivables, including all monies due or received thereunder on or after the
Cut-Off Date and all property (including the right to receive future Liquidation
Proceeds) that secures a Receivable; (b) an assignment of the security interests
in the Financed Vehicles granted by Obligors pursuant to the Receivables and any
other interest of the Issuer in the Financed Vehicles; (c) the Note Account, the
Reserve Account and the Collection Account and funds deposited therein and all
investments of such funds; (d) all items contained in the Receivable Files and
any and all other documents that Chevy Chase Bank, F.S.B. keeps on file in
accordance with its customary procedures relating to the Receivables, the
Obligors or the Financed Vehicles; (e) any Liquidation Proceeds and any proceeds
from claims on any physical damage, theft, vendor's single interest, credit
life, disability or hospitalization insurance policies covering Financed
Vehicles or Obligors; (f) the Issuer's other rights and benefits, but none of
its obligations or burdens, under the Sale and Servicing Agreement; and (g) all
present and future claims, demands, causes 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, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to the Indenture Trustee, for the
benefit of the Noteholders. The Indenture Trustee hereby acknowledges such
Grant, accepts the trusts under this Indenture in accordance with the provisions
of this Indenture and agrees to perform its duties required in this Indenture to
the end that the interests of such parties, recognizing the priorities of their
respective interests, may be adequately and effectively protected.
ARTICLE I
Definitions and Incorporation by Reference
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SECTION 1.1 Definitions. Except as otherwise specified herein, the
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following terms have the respective meanings set forth below for all purposes of
this Indenture.
"Account" means any of the Collection Account, the Note Account and the
Reserve Account.
"Affiliate" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means 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; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. A Person shall not be
deemed to be an Affiliate of any person solely because such other Person has the
contractual right or obligation to manage such Person unless such other Person
controls such Person through equity ownership or otherwise.
"Authorized Officer" means, with respect to the Issuer and the Servicer,
any officer or agent acting pursuant to a power of attorney of the Owner Trustee
or the Servicer, as applicable, who is authorized to act for the Owner Trustee
or the Servicer, as applicable, in matters relating to the Issuer or the
Servicer, as applicable, and who is identified on the list of Authorized
Officers delivered by each of the Owner Trustee and the Servicer to the
Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"Basic Documents" means this Indenture, the Certificate of Trust, the Trust
Agreement, the Sale and Servicing Agreement and other documents and certificates
delivered in connection therewith.
"Benefit Plan Entity" has the meaning specified in Section 2.4.
"Book Entry Notes" means a beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.10.
"Business Day" means, unless otherwise specified in this Agreement, any day
other than a Saturday, a Sunday, or a day on which banking institutions in New
York, New York, Chevy Chase, Maryland or the city in which the Corporate Trust
Office of the Indenture Trustee is located shall be authorized or obligated by
law, executive order, or governmental decree to be closed.
"Certificate" means a trust certificate evidencing the beneficial interest
of a Certificateholder in the Trust.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
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"Certificateholder" means the Person in whose name a Certificate is
registered on the Certificate Register.
"Class" means the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes or the Class B Notes, as the context requires.
"Class A Notes" means the Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes and the Class A-4 Notes.
"Class A-1 Final Scheduled Payment Date" means September 16, 2002, or if
such day is not a Business Day, the immediately following Business Day.
"Class A-1 Interest Rate" means 2.77313% per annum (computed on the basis
of the actual number of days elapsed in a 360-day year).
"Class A-1 Notes" means the Class A-1 2.77313% Asset Backed Notes,
substantially in the form of Exhibit A-1.
"Class A-2 Final Scheduled Payment Date" means May 17, 2004, or if such day
is not a Business Day, the immediately following Business Day.
"Class A-2 Interest Rate" means 2.97% per annum (calculated on the basis of
a 360-day year consisting of twelve 30-day months (or with respect to the
initial Payment Date, calculated on the basis of an interest accrual period from
the Closing Date to the initial Payment Date)).
"Class A-2 Notes" means the Class A-2 2.97% Asset Backed Notes,
substantially in the form of Exhibit A-2.
"Class A-3 Final Scheduled Payment Date" means November 15, 2005, or if
such day is not a Business Day, the immediately following Business Day.
"Class A-3 Interest Rate" means 3.80% per annum (calculated on the basis of
a 360-day year consisting of twelve 30-day months (or with respect to the
initial Payment Date, calculated on the basis of an interest accrual period from
the Closing Date to the initial Payment Date)).
"Class A-3 Notes" means the Class A-3 3.80% Asset Backed Notes,
substantially in the form of Exhibit A-3."
"Class A-4 Final Scheduled Payment Date" means April 16, 2007, or if such
day is not a Business Day, the immediately following Business Day.
"Class A-4 Interest Rate" means 4.44% per annum (calculated on the basis of
a 360-day year consisting of twelve 30-day months (or with respect to the
initial Payment Date, calculated on the basis of an interest accrual period from
the Closing Date to the initial Payment Date)).
"Class A-4 Notes" means the Class A-4 4.44% Asset Backed Notes,
substantially in the form of Exhibit A-4.
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"Class B Final Scheduled Payment Date" means March 17, 2008, or if such day
is not a Business Day, the immediately following Business Day.
"Class B Interest Rate" means 5.16% per annum (calculated on the basis of a
360-day year consisting of twelve 30-day months (or with respect to the initial
Payment Date, calculated on the basis of an interest accrual period from the
Closing Date to the initial Payment Date)).
"Class B Notes" means the Class B 5.16% Asset Backed Notes, substantially
in the form of Exhibit A-5.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The
initial Clearing Agency shall be The Depository Trust Company.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other person for whom from time to time a Clearing Agency effects
book-entry transfers of securities deposited with the Clearing Agency.
"Closing Date" means September 27, 2001.
"Code" means the Internal Revenue Code of 1986, as it may be amended from
time to time, or any successor statute thereto, and applicable temporary or
final regulations of the U.S. Department of the Treasury promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"Collection Account" means the account designated as such, established and
maintained pursuant to Section 5.1 of the Sale and Servicing Agreement.
"Collection Period" means (i) initially, the period from and including the
Cut-Off Date through and including the last day of the calendar month in which
the Cut-Off Date occurs and (ii) thereafter, each calendar month until the Trust
shall terminate pursuant to Article XI of the Sale and Servicing Agreement,
Section 10.1 hereof or Section 8.1 of the Trust Agreement.
"Controlling Class" means the Holders of Notes representing a majority of
the Outstanding Amount of the Class A Notes, or if the Class A Notes are not
Outstanding, the Outstanding Amount of the Class B Notes.
"Corporate Trust Office" at the date hereof, is located at 180 East 5th
Street, St. Paul, Minnesota, 55101, Attention: Structured Finance; the telecopy
number for the Corporate Trust Office on the date of the execution of this
Agreement is (651) 244-0089.
"Default" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"Declaring Noteholders" has the meaning set forth in Section 5.2(a) hereof.
"Definitive Notes" has the meaning specified in Section 2.10.
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"Delivery" when used with respect to any Eligible Investments means:
(a) with respect to bankers' acceptances, commercial paper,
certificates of deposit and other obligations, in each case that constitute
"instruments" within the meaning of Section 9-102(a)(47) of the UCC (or any
successor provision) and are susceptible of physical delivery, transfer thereof
by physical delivery to the Indenture Trustee endorsed to, or registered in the
name of, the Indenture Trustee or its nominee or endorsed in blank by an
effective endorsement, and, with respect to a certificated security (as defined
in Section 8-102(a)(4) of the UCC or any successor provision) (i) the
acquisition of possession by the Indenture Trustee of the "security certificate"
(as defined in 8-102(a)(16) of the UCC), or (ii) another person, other than a
"securities intermediary" (as defined in 8-102(a)(14) of the UCC), either
acquires possession of the security certificate on behalf of the Indenture
Trustee or, having previously acquired possession of the certificate,
acknowledges that it holds for the Indenture Trustee, or (iii) a securities
intermediary acting on behalf of the Indenture Trustee acquires possession of
the security certificate, only if the certificate is in "registered form" (as
defined in 8-102(a)(13) of the UCC) and is (A) registered in the name of the
Indenture Trustee, (B) payable to the order of the Indenture Trustee, or (C)
specially indorsed to the Indenture Trustee by an effective "indorsement" (as
defined in 8-102(a)(l1) of the UCC) and has not been endorsed to the securities
intermediary or in blank (all of the foregoing "Physical Property") and, in any
event, any such Physical Property in registered form shall be in the name of the
Indenture Trustee or its nominee or custodian, and such additional or
alternative procedures as may hereafter become appropriate to effect the
complete transfer of ownership of or a security interest in any such Eligible
Investment to the Indenture Trustee, consistent with changes in applicable law
or regulations or the interpretation thereof;
(b) with respect to any security that is a book-entry security held
through the Federal Reserve System pursuant to federal book-entry regulations,
the following procedures, all in accordance with applicable law, including
applicable federal regulations and Articles 8 and 9 of the UCC, book-entry
registration of such Eligible Investment to an appropriate Participant's
Securities Account (as defined in such applicable federal regulations)
maintained with a Federal Reserve Bank by a financial institution which is a
"Participant" pursuant to applicable federal regulations and issuance by such
Participant of a deposit advice or other written confirmation of such book-entry
registration to the Indenture Trustee; and the making by such financial
institution of entries in its books and records identifying such book-entry
security held through the Federal Reserve System pursuant to federal book-entry
regulations as belonging to the Indenture Trustee and as having been credited to
a securities account in the name of the Indenture Trustee and indicating that
such financial institution holds such Eligible Investment solely as agent for
the Indenture Trustee; and such additional or alternative procedures as may be
or hereafter become requisite or appropriate to effect complete transfer of
ownership of or a security interest in any such Eligible Investment to the
Indenture Trustee, consistent with changes in applicable law or regulations or
the interpretation thereof;
(c) with respect to any Eligible Investment that is an uncertificated
security under Article 8 of the UCC and that is not governed by clause (b)
above, (i) registration by the issuer of the Indenture Trustee as the registered
owner, upon original issue or registration or transfer, or (ii) another person,
other than a securities intermediary, either becomes the registered owner of the
uncertificated security on behalf of the Indenture Trustee or, having previously
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become the registered owner, acknowledges that it holds for the Indenture
Trustee; and such additional or alternative procedures as may be or hereafter
become requisite or appropriate to effect complete transfer of ownership of or a
security interest in any such Eligible Investment to the Indenture Trustee,
consistent with changes in applicable law or regulations or the interpretation
thereof; and
(d) with respect to any Eligible Investment that is not governed by
clauses (a) - (c) above, such procedures as may be appropriate to effect the
complete transfer of ownership of such Eligible Investment to the Indenture
Trustee free and clear of any adverse claims in accordance with applicable law
and regulations and the interpretation thereof.
"Determination Date" means the earlier of the eighth Business Day or the
eleventh calendar day of the month (or, if such eleventh calendar day is not a
Business Day, the Business Day preceding the eleventh calendar day of the
month).
"Eligible Account" means either (a) a segregated account with an Eligible
Bank or (b) a segregated trust account with the corporate trust department of a
depository institution with corporate trust powers organized under the laws of
the United States of America or any state thereof or the District of Columbia
(or any United States branch of a foreign bank) and whose deposits are insured
by the FDIC; provided that such institution must have a net worth in excess of
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$50,000,000 and must have a rating of Baa3 or higher from Moody's and a rating
of BBB- or higher from Standard & Poor's with respect to long-term deposit
obligations. The Indenture Trustee shall give notice to the Servicer of any
change in location of any Eligible Account.
"Eligible Bank" shall mean a depository institution organized under the
laws of the United States or any one of the states thereof, including the
District of Columbia (or any United States branch or agency of a foreign bank)
having corporate trust powers and acting as a trustee for funds deposited in
such account, which is subject to supervision and examination by federal or
state banking authorities, the deposits of which are insured by the Federal
Deposit Insurance Corporation ("FDIC") and which at all times (a) has a net
worth in excess of $50,000,000 and (b) has either (x) a long-term unsecured debt
rating of at least A2 by Moody's, AA by Standard & Poor's and, if rated by
Fitch, AA- or (y) a short-term certificate of deposit rating of P-1 by Moody's,
A-1+ by Standard & Poor's and, if rated by Fitch, F-1+.
"Eligible Investment" means any of the following:
(a) Direct obligations of the United States of America and securities
fully and unconditionally guaranteed as to the timely payment of principal and
interest by the United States of America; provided, that the full faith and
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credit of the United States of America must be pledged to any such direct
obligation or guarantee ("Direct Obligations");
(b) Direct obligations and fully guaranteed certificates of
beneficial interest of the Export-Import Bank of the United States; consolidated
debt obligations and letter of credit-backed issues of the Federal Home Loan
Banks; participation certificates and senior debt obligations of the Federal
Home Loan Mortgage Corporation ("FHLMCs"); debentures of the Federal Housing
Administration; mortgage-backed securities (except stripped mortgage-securities
which are valued greater than par on the portion of unpaid principal) and senior
debt
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obligations of the Federal National Mortgage Association ("FNMAs");
participation certificates of the General Services Administration; guaranteed
mortgage-backed securities and guaranteed participation certificates of the
Government National Mortgage Association ("GNMAs"); guaranteed participation
certificates and guaranteed pool certificates of the Small Business
Administration; debt obligations and letter of credit-backed issues of the
Student Loan Marketing Association; local authority bonds of the U.S. Department
of Housing & Urban Development; guaranteed Title XI financings of the U.S.
Maritime Administration; guaranteed transit bonds of the Washington Metropolitan
Area Transit Authority; and Resolution Funding Corporation securities; all of
the foregoing rated, at the time of purchase, "P-1" or "A2" or better by Moody's
and, if rated by Fitch, "F1" or better by Fitch;
(c) Direct obligations of any state of the United States of America
or any subdivision or agency thereof whose unsecured, uninsured and unguaranteed
general obligation debt is rated, at the time of purchase "A2" or better by
Moody's and "AA-" or better by Standard & Poor's and, if rated by Fitch, "A" or
better, or any obligation fully and unconditionally guaranteed by any state,
subdivision or agency whose unsecured, uninsured and unguaranteed general
obligation debt is rated, at the time of purchase, "A2" or better by Moody's and
"AA-" or better by Standard & Poor's and, if rated by Fitch, "A" or better by
Fitch;
(d) Commercial paper (having original maturities of not more than 270
days) rated, at the time of purchase, "P-1" by Moody's and "A-1+" or better by
Standard & Poor's and, if rated by Fitch, "F1" or better by Fitch;
(e) Federal funds, unsecured certificates of deposit, time deposits
or bankers acceptances (in each case having maturities of not more than 365
days) of any domestic bank including a branch office of a foreign bank which
branch office is located in the United States; provided legal opinions are
--------
received to the effect that full and timely payment of such deposit or similar
obligation is enforceable against the principal office or any branch of such
bank, which, at the time of purchase, has a short-term "Bank Deposit" rating of
"P-1" by Moody's and a "Short-Term CD" rating of "A-1+" or better by Standard &
Poor's and a short-term rating of "F1" by Fitch; and further provided that the
------- --------
bank is subject to the supervision and examination of federal and state banking
authorities;
(f) Deposits of any bank or savings and loan association which has
combined capital, surplus and undivided profits of not less than $3 million,
provided such deposits are continuously and fully insured by the Bank Insurance
Fund or the Savings Association Insurance Fund of the FDIC;
(g) Investments in money-market funds rated "AAAm" or "AAAm-G" by
Standard & Poor's, "Aaa" by Moody's and "AAA" by Fitch; and
(h) Repurchase agreements collateralized by Direct Obligations,
GNMAs, FNMAs or FHLMCs, as defined above, with any registered broker/dealer
subject to the Securities Investors' Protection Corporation jurisdiction or any
commercial bank insured by the FDIC, if such broker/dealer or bank has an
uninsured, unsecured and unguaranteed obligation rated "P-1" or "A2" or better
by Moody's, "A-1+" or "AA-" or better by Standard & Poor's and, if rated by
Fitch, "F1" or "A" or better by Fitch, provided:
7
(A) a master repurchase agreement or specific written repurchase
agreement governs the transaction; and
(B) the securities are held free and clear of any lien by the
Indenture Trustee or an independent third party acting solely as agent
("Agent") for the Indenture Trustee, and such third party is (i) a
Federal Reserve Bank or (ii) a bank which is a member of the FDIC and
which has combined capital, surplus and undivided profits of not less
than $50 million and, if a bank, it shall have issued a written
confirmation to the Indenture Trustee that it holds such securities,
free and clear of any lien, as agent for the Indenture Trustee; and
(C) a perfected first security interest under the Uniform
Commercial Code, or book entry procedures prescribed at applicable
federal book-entry regulations in such securities is created for the
benefit of the Indenture Trustee; and
(D) the repurchase agreement has a term of 180 days or less, and
the Indenture Trustee will value the collateral securities no less
frequently than weekly and will liquidate the collateral securities if
any deficiency in the required collateral percentage is not restored
within two Business Days of such valuation; and
(E) the fair market value of the securities in relation to the
amount of the repurchase obligation, including principal and interest,
is equal to at least 103%; and
(F) the securities have a rating, at the time of purchase of
"P-1" or "A2" or better by Moody's, "A-1+" or "AA-" or better by
Standard & Poor's, and "F1" or "A" or better by Fitch.
Notwithstanding the foregoing, Eligible Investments shall not include (i)
"stripped securities" and investments which contractually may return less than
the purchase price therefor, (ii) instruments with a purchase price greater than
par if such instrument may be prepaid or called at a price less than its
purchase price prior to its stated maturity, (iii) instruments denominated in
currencies other than U.S. dollars, and (iv) with respect to investments rated
by Standard & Poor's, any investment having a Standard & Poor's rating with the
symbol "r" attached.
"ERISA" has the meaning specified in Section 2.4.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Final Scheduled Payment Date" means the Class A-1 Final Scheduled Payment
Date, Class A-2 Final Scheduled Payment Date, the Class A-3 Final Scheduled
Payment Date, the Class A-4 Final Scheduled Payment Date or the Class B Final
Scheduled Payment Date, as applicable.
8
"Fitch" means Fitch, Inc. and any successor thereto.
"Grant" means mortgage, pledge, bargain, warrant, alienate, remise,
release, convey, assign, transfer, create, grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Indebtedness" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of such Person
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; or (h) obligations of such Person
under any interest rate or currency exchange agreement.
"Indenture" means this Indenture as amended and supplemented from time to
time.
"Indenture Trustee" means, initially, U.S. Bank National Association, in
its capacity as indenture trustee on behalf of the Noteholders, including its
successors-in-interest, until and unless a successor Person shall have become
the Indenture Trustee pursuant to Section 6.8 or 6.9 hereof, and thereafter
"Indenture Trustee" shall mean such successor Person.
"Independent" means, when used with respect to any specified Person, that
the person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the Seller and any Affiliate of any of the foregoing persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
9
"Independent Certificate" means a certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1, prepared by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.
"Interest Rate" means, with respect to (i) the Class A-1 Notes, 2.77313%
per annum (computed on the basis of the actual number of days elapsed in a 360-
day year), (ii) the Class A-2 Notes, 2.97% (calculated on the basis of a 360-day
year consisting of twelve 30-day months), (iii) the Class A-3 Notes, 3.80%
(calculated on the basis of a 360-day year consisting of twelve 30-day months),
(iv) the Class A-4 Notes, 4.44% (calculated on the basis of a 360-day year
consisting of twelve 30-day months) and (v) the Class B Notes, 5.16% (calculated
on the basis of a 360-day year consisting of twelve 30-day months).
"Issuer" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
Notes.
"Issuer Order" and "Issuer Request" means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
"Majority Noteholders" means, as of any date of determination, (i) with
respect to the Notes as a whole, Holders of Notes representing a majority of the
Note Principal Balance of all Classes as of such date and (ii) with respect to a
particular Class, the Holders of Notes representing a majority of the Note
Principal Balance of such Class as of such date.
"Moody's" means Moody's Investors Service.
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note, a Class
A-4 Note or a Class B Note.
"Noteholder" or "Holder", in relation to a Note, means the Person in whose
name the respective Note shall be registered in the Note Register.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is
the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a direct or indirect Clearing Agency Participant.
"Note Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 and is authorized by the Issuer to make the payments to and distributions
from the Collection Account and the Note Account, including payment of principal
of or interest on the Notes on behalf of the Issuer.
"Note Register" and "Note Registrar" mean the register maintained and the
registrar appointed pursuant to Section 2.4.
10
"Obligor" on a Receivable means the purchaser or the co-purchasers of, or
any guarantor with respect to, the Financed Vehicle or any other Person who owes
payments under the Receivable.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Owner Trustee, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 and TIA
(S) 314, and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in this Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.
"Opinion of Counsel" means a written opinion of counsel, who may be in-
house counsel to the Seller or Servicer, which counsel shall be acceptable to
the Indenture Trustee and which shall comply with any applicable requirements of
Section 11.1 hereof.
"Optional Purchase Price" means the amount specified as such in Section
11.1. of the Sale and Servicing Agreement.
"Outstanding" means, as of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to the
Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee or
any Note Paying Agent in trust for the Noteholders (provided, however, that if
such Notes are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor, satisfactory to the Indenture
Trustee has been made); and
(iii) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to this Indenture unless proof satisfactory
to the Indenture Trustee is presented that any such Notes are held by a
protected purchaser;
provided, further, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Basic Document,
Notes owned by the Issuer, any other obligor upon the Notes, the Seller or any
Affiliate of any of the foregoing Persons shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Indenture Trustee shall
be protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that a Responsible Officer of the
Indenture Trustee either actually knows to be so owned or has received written
notice thereof shall be so disregarded. Notes so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgees right so to act with respect
to such Notes and that the pledgee is not the Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes, or
class of Notes, as applicable, Outstanding at the date of determination.
11
"Payment Date" means, with respect to each Collection Period, the fifteenth
day of the following month, or if the fifteenth day shall not be a Business Day,
the next following Business Day, commencing October 15, 2001.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.5 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Rating Agency" means each of Moody's, Standard & Poor's and Fitch.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer, the Indenture
Trustee, the Owner Trustee and the Issuer in writing that such action will not
result in a reduction or withdrawal of the then current rating of the Notes.
"Record Date" means, as to any Payment Date, the close of business, if
applicable, on the day (whether or not a Business Day) immediately preceding
such Payment Date or, if Definitive Notes are issued pursuant to Section 2.12,
the last day of the calendar month immediately preceding the month in which such
Payment Date occurs.
"Redemption Date" means, with reference to a redemption of the Notes
pursuant to Section 10.1(a), the Payment Date specified by the Servicer pursuant
to Section 10.1(a) as applicable.
"Responsible Officer" means, when used with respect to the Indenture
Trustee, any officer within the Corporate Trust Department (or any successor
group of the Indenture Trustee), including any senior vice president, vice
president, assistant vice president, assistant secretary, assistant treasurer or
any other officer or assistant officer of the Indenture Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred at the Corporate Trust Department because of his knowledge of and
familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement dated
as of September 1, 2001, among the Issuer, the Seller, the Servicer and the
Indenture Trustee, as the same may be amended or supplemented from time to time.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means Chevy Chase Bank, F.S.B. in its capacity as the seller of
the Receivables under the Sale and Servicing Agreement, and each successor to
Chevy Chase Bank, F.S.B. (in the same capacity) pursuant to Section 6.3 of the
Sale and Servicing Agreement.
12
"Servicer" means Chevy Chase Bank, F.S.B. in its capacity as the servicer
of the Receivables, and each successor to Chevy Chase Bank, F.S.B. (in the same
capacity) pursuant to Sections 7.3 and 8.2 of the Sale and Servicing Agreement.
"Servicer Default" means an event specified in Section 8.1 of the Sale and
Servicing Agreement.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division of
The McGraw Hill Companies, Inc.
"State" means (i) any state of the United States of America or (ii) the
District of Columbia.
"Trust" means the Issuer.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated as
of September 27, 2001 between the Owner Trustee and Chevy Chase Bank, F.S.B.
"Trust Estate" means all money, instruments, rights and other property that
are subject or intended to be subject to the lien and security interest of this
Indenture for the benefit of the Noteholders (including all property and
interests Granted to the Indenture Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and as in force on the date hereof, unless otherwise specifically
provided.
"UCC" means the Uniform Commercial Code, in the State of New York or the
State of Delaware, as applicable, as it may be in effect from time to time.
"Verification Report" has the meaning set forth in Section 5.4 hereof.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Sale and Servicing Agreement or the
Trust Agreement.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
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Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
13
"obligor" on the indenture securities means the Issuer.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
SECTION 1.3 Rules of Construction. Unless the context otherwise
---------------------
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation; and
(v) words in the singular include the plural and words in the
plural include the singular.
ARTICLE II
The Notes
---------
SECTION 2.1 Form. The Class A-1 Notes, the Class A-2 Notes, the Class
----
A-3 Notes, the Class A-4 Notes and the Class B Notes, in each case together with
the Indenture Trustee's certificate of authentication, shall be in substantially
the form set forth in Exhibit A-1, A-2, A-3, A-4 and A-5, respectively, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution of the Notes. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibits A-1, A-2, A-3, A-4 and A-5 are part of the terms
of this Indenture.
SECTION 2.2 Execution, Authentication and Delivery. The Notes shall
--------------------------------------
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals
14
or any of them have ceased to hold such offices prior to the authentication and
delivery of such Notes or did not hold such offices at the date of such Notes.
The Indenture Trustee shall, upon receipt of the Issuer Order,
authenticate and deliver Class A-1 Notes for original issue in an aggregate
principal amount of $85,000,000, Class A-2 Notes for original issue in the
aggregate principal amount of $90,000,000, Class A-3 Notes for original issue in
an aggregate principal amount of $120,000,000, Class A-4 Notes for original
issue in an aggregate principal amount of $96,000,000 and Class B Notes for
original issue in an aggregate principal amount of $12,332,000. The Class A-1
Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes
outstanding at any time may not exceed such amounts.
The Notes shall be issuable as registered Notes in the minimum
denomination of $1,000 and in integral multiples of $1.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.3 Temporary Notes. Pending the preparation of Definitive
---------------
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.2, without charge to the Noteholder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.4 Registration; Registration of Transfer and Exchange. The
---------------------------------------------------
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee shall be "Note Registrar" for the purpose of registering Notes
and transfers of Notes as herein provided.
If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of
15
such Note Registrar and of the location, and any change in the location, of the
Note Register, and the Indenture Trustee shall have the right to inspect the
Note Register at all reasonable times and to obtain copies thereof, and the
Indenture Trustee shall have the right to conclusively rely upon a certificate
executed on behalf of the Note Registrar by an Responsible Officer thereof as to
the names and addresses of the Noteholders of the Notes and the principal
amounts and number of such Notes.
Subject to Sections 2.10 and 2.12 hereof, upon surrender for
registration of transfer of any Note at the office or agency of the Issuer to be
maintained as provided in Section 3.2, if the requirements of Section 8-401(a)
of the UCC are met the Issuer shall execute and upon its request the Indenture
Trustee shall authenticate and the Noteholder shall obtain from the Indenture
Trustee, in the name of the designated transferee or transferees, one or more
new Notes, in any authorized denominations, of the same class and a like
aggregate principal amount.
At the option of the Noteholder, Notes may be exchanged for other
Notes in any authorized denominations, of the same class and a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, subject to Sections
2.10 and 2.12 hereof, if the requirements of Section 8-401(a) of the UCC are met
the Issuer shall execute and upon its request the Indenture Trustee shall
authenticate and the Noteholder shall obtain from the Indenture Trustee, the
Notes which the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or be accompanied by a written
instrument of transfer in the form attached to Exhibit A-1, A-2, A-3, A-4 and A-
5, as the case may be, duly executed by the Holder thereof or such Holder's
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note Registrar
which requirements include membership or participation in Securities Transfer
Agents Medallion Program ("Stamp") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, Stamp, all in accordance with the Exchange Act, and (ii) accompanied by
such other documents as the Indenture Trustee may require.
Notwithstanding the foregoing, in the case of any sale or other
transfer of a Definitive Note, the transferor of such Definitive Note shall be
required to represent and warrant in writing that the prospective transferee
either (a) is not (i) an employee benefit plan (as defined in section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
which is subject to the provisions of Title I of ERISA, (ii) a plan (as defined
in section 4975(e)(1) of the Code), which is subject to Section 4975 of the
Code, or (iii) an entity whose underlying assets are deemed to be assets of a
plan described in (i) or (ii) above by reason of such plan's investment in the
entity (any such entity described in clauses (i) through (iii), a "Benefit Plan
Entity") or (b) is a Benefit Plan Entity and the acquisition and holding of the
Definitive Note by such prospective transferee is covered by a Department of
Labor Prohibited
16
Transaction Class Exemption. Each transferee of a Book Entry Note that is a
Benefit Plan Entity shall be deemed to represent that its acquisition and
holding of the Book Entry Note is covered by a Department of Labor Prohibited
Transaction Class Exemption.
No service charge shall be made to a Noteholder for any registration
of transfer or exchange of Notes, but the Note Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes,
other than exchanges pursuant to Section 2.3 or 9.6 not involving any transfer.
The preceding provisions of this section notwithstanding, the Issuer
shall not be required to make and the Note Registrar shall not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
------------------------------------------
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a protected purchaser,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note; provided, however, that if
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any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within seven days shall be due and payable, or shall have been called
for redemption, instead of issuing a replacement Note, the Issuer may direct the
Indenture Trustee, in writing, to pay such destroyed, lost or stolen Note when
so due or payable or upon the Redemption Date without surrender thereof. If,
after the delivery of such replacement Note or payment of a destroyed, lost or
stolen Note pursuant to the proviso to the preceding sentence, a protected
purchaser of the original Note in lieu of which such replacement Note was issued
presents for payment such original Note, the Issuer and the Indenture Trustee
shall be entitled to recover such replacement Note (or such payment) from the
Person to whom it was delivered or any Person taking such replacement Note from
such Person to whom such replacement Note was delivered or any assignee of such
Person, except a protected purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at
17
any time enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Notes duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 Persons Deemed Owner. Prior to due presentment for
--------------------
registration of transfer of any Note, the Issuer or the Indenture Trustee and
any agent of the Issuer, the Indenture Trustee may treat the Person in whose
name any Note is registered (as of the Record Date) as the owner of such Note
for the purpose of receiving payments of principal of and interest, if any on
such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.7 Payment of Principal and Interest; Defaulted Interest.
-----------------------------------------------------
(a) The Notes shall accrue interest as provided in the forms of the
Class A-1 Note, the Class A-2 Note, the Class A-3 Note, the Class A-4 Note and
the Class B Note set forth in Exhibits A-1, A-2, A-3, A-4 and A-5, respectively,
and such interest shall be due and payable on each Payment Date, as specified
therein. Any installment of interest or principal, if any, payable on any Note
which is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the Record Date, by check mailed first-
class, postage prepaid, to such Person's address as it appears on the Note
Register on such Record Date, except that, unless Definitive Notes have been
issued pursuant to Section 2.12, with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payment will be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a Payment
Date or on the Final Scheduled Payment Date (and except for the Optional
Purchase Price for any Note called for redemption pursuant to Section 10.1(a))
which shall be payable as provided below. The funds represented by any such
checks returned undelivered shall be held in accordance with Section 3.3.
(b) The principal of each Note shall be payable in installments on
each Payment Date, as provided in the forms of the Class A-1 Note, the Class A-2
Note, the Class A-3 Note, the Class A-4 Note and the Class B Note set forth in
Exhibits A-1, A-2, A-3, A-4 and A-5, respectively. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable, if not previously paid, on the date on which an Event of Default shall
have occurred and be continuing, if the Indenture Trustee, as directed by the
Declaring Noteholders, has declared the Notes to be immediately due and payable
in the manner provided in Section 5.2. All principal payments on each class of
Notes shall be made pro rata to the Noteholders of such class entitled thereto.
Upon written notice from the Issuer, the Indenture Trustee shall notify the
Person in whose name a Note is registered at the close of business on the Record
Date preceding the Payment Date on which the Issuer expects that the final
installment of principal of and interest on such Note will be paid. Such notice
shall be mailed or transmitted by facsimile prior to such final Payment Date and
shall specify that such final installment will be
18
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable Interest Rate in any lawful manner. The
Issuer shall pay such defaulted interest to the Persons who are Noteholders on
the immediately following Payment Date.
SECTION 2.8 Cancellation. All Notes surrendered for payment,
------------
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly canceled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly canceled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as provided in this Section, except as expressly permitted by
this Indenture. All canceled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall timely direct by an Issuer Order that
they be destroyed or returned to it; provided that such Issuer Order is timely
and the Notes have not been previously disposed of by the Indenture Trustee.
SECTION 2.9 Release of Collateral. The Indenture Trustee shall, on or
---------------------
after the termination of the Trust pursuant to Section 8.1 of the Trust
Agreement, release any remaining portion of the Trust Estate from the lien
created by this Indenture and deposit in the Collection Account any funds then
on deposit in any other Account. The Indenture Trustee shall release property
from the lien created by this Indenture pursuant to this Section 2.9 only upon
receipt of an Issuer Request accompanied by an Officer's Certificate, an Opinion
of Counsel and (if required by the TIA) Independent Certificates in accordance
with TIA (S)(S) 314(c) and 314(d)(1) meeting the applicable requirements of
Section 11.1.
SECTION 2.10 Book-Entry Notes. The Notes, upon original issuance,
----------------
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. Such Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner will receive a Definitive Note
representing such Note Owner's interest in such Note, except as provided in
Section 2.12. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to Note Owners pursuant to Section 2.12:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled
to deal with the Clearing Agency for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and the
giving of instructions or directions
19
hereunder) as the sole Holder of the Notes, and shall have no obligation to
the Note Owners;
(iii) to the extent that the provisions of this Section conflict with
any other provisions of this Indenture, the provisions of this Section
shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants. Unless and until Definitive Notes are issued
pursuant to Section 2.12, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and transmit
payments of principal of and interest on the Notes to such Clearing Agency
Participants;
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Noteholders evidencing a specified
percentage of the Outstanding Amount of the Notes, the Clearing Agency
shall be deemed to represent such percentage only to the extent that it has
received instructions to such effect from Note Owners and/or Clearing
Agency Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Notes and has delivered such
instructions to the Indenture Trustee; and
(vi) Note Owners may receive copies of any reports sent to
Noteholders pursuant to this Indenture, upon written request, together with
a certification that they are Note Owners and payment of reproduction and
postage expenses associated with the distribution of such reports, from the
Indenture Trustee at the Corporate Trust Office.
SECTION 2.11 Notices to Clearing Agency. Whenever a notice or other
--------------------------
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to the Noteholders to the Clearing Agency, and
shall have no obligation to the Note Owners.
SECTION 2.12 Definitive Notes. If (i) the Servicer advises the
----------------
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Notes, and
the Servicer is unable to locate a qualified successor, (ii) the Servicer at its
option advises the Indenture Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence of
an Event of Default, Note Owners representing beneficial interests aggregating
at least a majority of the Outstanding Amount of the Notes advise the Indenture
Trustee through the Clearing Agency in writing that the continuation of a book
entry system through the Clearing Agency is no longer in the best interests of
the Note Owners, then the Clearing Agency shall notify all Note Owners and the
Indenture Trustee of the occurrence of any such event and of the availability of
Definitive Notes to Note Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Note or Notes representing the Book-Entry
Notes by the Clearing Agency, accompanied by registration instructions, the
Issuer shall execute and the Indenture Trustee shall authenticate the Definitive
Notes in accordance with the instructions of the Clearing Agency.
20
None of the Issuer, the Note Registrar or the Indenture Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be fully protected in relying on, such instructions. Upon the issuance of
Definitive Notes, the Indenture Trustee shall recognize the Holders of the
Definitive Notes as Noteholders.
ARTICLE III
Covenants
---------
SECTION 3.1 Payment of Principal and Interest. The Issuer will duly
---------------------------------
and punctually pay the principal of and interest on the Notes in accordance with
the terms of the Notes and this Indenture. Without limiting the foregoing, the
Issuer will cause to be distributed all amounts on deposit in the Note Account
on a Payment Date deposited therein pursuant to the Sale and Servicing Agreement
(i) for the benefit of the Class A-l Notes, to Class A-1 Noteholders, (ii) for
the benefit of the Class A-2 Notes, to Class A-2 Noteholders, (iii) for the
benefit of the Class A-3 Notes, to Class A-3 Noteholders, (iv) for the benefit
of the Class A-4 Notes, to Class A-4 Noteholders and (v) for the benefit of the
Class B Notes, to Class B Noteholders. Amounts properly withheld under the Code
by any Person from a payment to any Noteholder of interest and/or principal
shall be considered as having been paid by the Issuer to such Noteholder for all
purposes of this Indenture.
SECTION 3.2 Maintenance of Office or Agency. The Issuer will maintain
-------------------------------
in Wilmington, Delaware, an office or agency where Notes may be surrendered for
registration of transfer or exchange, and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Indenture Trustee to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the Indenture
Trustee of the location, and of any change in the location, of any such office
or agency. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.
SECTION 3.3 Money for Payments to be Held in Trust. On or before each
--------------------------------------
Payment Date and Redemption Date, the Issuer shall deposit or cause to be
deposited in the Note Account from the Collection Account an aggregate sum
sufficient to pay the amounts then becoming due under the Notes, such sum to be
held in trust for the benefit of the Persons entitled thereto and (unless the
Note Paying Agent is the Indenture Trustee) shall promptly notify the Indenture
Trustee of its action or failure so to act.
The Issuer will cause each Note Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Note Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Note Paying Agent, it hereby so agrees), subject to
the provisions of this Section, that such Note Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid
21
to such Persons or otherwise disposed of as herein provided and pay such
sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer
of which it has actual knowledge in the making of any payment required to
be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Note Paying Agent;
(iv) immediately resign as a Note Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of Notes
if at any time it ceases to meet the standards required to be met by a Note
Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Note Paying Agent to pay to the Indenture Trustee all sums held
in trust by such Note Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such Note
Paying Agent; and upon such a payment by any Note Paying Agent to the Indenture
Trustee, such Note Paying Agent shall be released from all further liability
with respect to such money.
Subject to applicable laws with respect to the escheat of funds, any
money held by the Indenture Trustee or any Note Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
two years after such amount has become due and payable shall be discharged from
such trust and be paid to the Certificateholder on Issuer Request; and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Cerificateholder for payment thereof (but only to the extent of the
amounts so paid to the Certificateholder), and all liability of the Indenture
Trustee or such Note Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that the Indenture Trustee or such Note
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Paying Agent, before being required to make any such repayment, shall at the
expense and request of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Certificateholder. The Indenture Trustee
shall also adopt and employ, at the expense and request of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Notes have been called but
have not been surrendered for redemption or whose right to or interest in moneys
due and payable but not claimed is
22
determinable from the records of the Indenture Trustee or of any Note Paying
Agent, at the last address of record for each such Holder).
SECTION 3.4 Existence. Except as otherwise permitted by the
---------
provisions of Section 3.10, the Issuer will keep in full effect its existence,
rights and franchises as a business trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.5 Protection of Trust Estate. The Indenture Trustee hereby
--------------------------
authorizes the Issuer to take all actions necessary to create and maintain a
first lien on and a first priority, perfected security interest in the Trust
Estate. The Issuer intends the security interest Granted pursuant to this
Indenture in favor of the Holders of the Notes, to be prior to all other liens
in respect of the Trust Estate, and the Issuer shall take all actions necessary
to obtain and maintain, in favor of the Indenture Trustee, for the benefit of
the Holders of the Notes, a first lien on and a first priority, perfected
security interest in the Trust Estate. The Issuer will from time to time prepare
(or shall cause to be prepared), execute and deliver all such supplements and
amendments hereto and all such financing statements, continuation statements,
instruments of further assurance and other instruments, and will take such other
action necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust Estate;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) in favor of the Indenture Trustee for the benefit of the
Holders of the Notes, created by this Indenture or carry out more
effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee in such Trust Estate against the claims of all
persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon the Trust
Estate when due.
The Issuer hereby designates the Indenture Trustee its agent and attorney-in-
fact to execute any financing statement, continuation statement or other
instrument required by the Indenture Trustee pursuant to this Section.
23
SECTION 3.6 Opinions as to Trust Estate.
---------------------------
(a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee, an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording and
filing of this Indenture, any indentures supplemental hereto, and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, as are necessary to
perfect and make effective the first priority lien and security interest in
favor of the Indenture Trustee, for the benefit of the Holders of the
Notes, created by this Indenture and reciting the details of such action,
or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective.
(b) Within 120 days after the beginning of each calendar year,
beginning with the first calendar year beginning more than six months after
the Closing Date, the Issuer shall furnish to the Indenture Trustee an
Opinion of Counsel either stating that, in the opinion of such counsel,
such action has been taken with respect to the recording, filing, re-
recording and refiling of this Indenture, any indentures supplemental
hereto and any other requisite documents and with respect to the execution
and filing of any financing statements and continuation statements as are
necessary to maintain the lien and security interest created by this
Indenture and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain such lien
and security interest. Such Opinion of Counsel shall also describe the
recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation
statements that will, in the opinion of such counsel, be required to
maintain the lien and security interest of this Indenture until January 30
in the following calendar year.
SECTION 3.7 Performance of Obligations; Servicing of Receivables.
----------------------------------------------------
(a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under
any instrument or agreement included in the Trust Estate or that would
result in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any such
instrument or agreement, except as ordered by any bankruptcy or other court
or as expressly provided in this Indenture, the Basic Documents or such
other instrument or agreement.
(b) The Issuer may contract with other Persons acceptable to the
Indenture Trustee to assist it in performing its duties under this
Indenture, and any performance of such duties by a Person identified to the
Indenture Trustee in an Officer's Certificate of the Issuer shall be deemed
to be action taken by the Issuer. Initially, the Issuer has contracted with
the Servicer to assist the Issuer in performing its duties under this
Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents
and in the instruments and agreements included in the Trust Estate,
including, but not limited to, preparing (or causing to prepared) and
filing (or causing to be filed) all Uniform Commercial Code financing
statements and continuation statements required to be filed by the terms of
this Indenture and the Sale and
24
Servicing Agreement in accordance with and within the time periods provided for
herein and therein. Except as otherwise expressly provided therein, the Issuer
shall not waive, amend, modify, supplement or terminate any Basic Document or
any provision thereof without the consent of the Indenture Trustee or the
Majority Noteholders and the Issuer shall notify each Rating Agency prior to any
such waiver, amendment, modification, supplement or termination, and, to the
extent practicable, such notice shall be given not less than 10 days prior to
the date on which such waiver, amendment, modification, supplement or
termination is executed.
(d) If a responsible officer of the Issuer shall have actual
knowledge of the occurrence of a Servicer Default under the Sale and Servicing
Agreement, the Issuer shall promptly notify the Indenture Trustee and the Rating
Agencies thereof in accordance with Section 11.4, and shall specify in such
notice the action, if any, the Issuer is taking in respect of such default. If a
Servicer Default shall arise from the failure of the Servicer to perform any of
its duties or obligations under the Sale and Servicing Agreement with respect to
the Receivables, the Issuer shall take all reasonable steps available to it to
remedy such failure.
(e) The Issuer agrees that it will not waive timely performance or
observance by the Servicer or the Seller of their respective duties under the
Basic Documents if the effect thereof would adversely affect the Holders of the
Notes.
SECTION 3.8 Negative Covenants. So long as any Notes are Outstanding,
------------------
the Issuer shall not:
(i) except as expressly permitted by this Indenture or the Basic
Documents, sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, including those included in the Trust
Estate, unless directed to do so by the Controlling Class;
(ii) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code) or assert any claim against any
present or former Noteholder by reason of the payment of the taxes levied
or assessed upon any part of the Trust Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien in favor of the Indenture Trustee created by
this Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture except as may be
expressly permitted hereby, (B) permit any lien, charge, excise, claim,
security interest, mortgage or other encumbrance (other than the lien of
this Indenture) to be created on or extend to or otherwise arise upon or
burden the Trust Estate or any part thereof or any interest therein or the
proceeds thereof (other than tax liens, mechanics' liens and other liens
that arise by operation of law, in each case on a Financed Vehicle and
arising solely as a result of an action or omission of the related
Obligor), (C) permit the lien of this Indenture not to constitute a valid
first priority (other than with respect to any such tax, mechanics' or
other lien) security interest in the Trust Estate or (D), except as
expressly permitted in the Basic Documents, amend, modify or fail to comply
with the
25
provisions of the Basic Documents without the prior written consent of the
Controlling Class.
SECTION 3.9 Annual Statement as to Compliance. The Issuer will
---------------------------------
deliver to the Indenture Trustee, within 120 days after the end of each fiscal
year of the Issuer (commencing with the fiscal year ended December 31, 2002),
and otherwise in compliance with the requirements of TIA Section 314(a)(4) an
Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that
(i) a review of the activities of the Issuer during such year and of
performance under this Indenture has been made under such Authorized
Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year or longer period, or, if there
has been a default in the compliance of any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
SECTION 3.10 Issuer May Consolidate, Etc. Only on Certain Terms.
--------------------------------------------------
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing under
the laws of the United States of America or any state and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee, the due
and punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this Indenture
on the part of the Issuer to be performed or observed, all as provided
herein;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Trust, any Noteholder or the Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this
Article III and that all conditions precedent
26
herein provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer all or substantially all
of its properties or assets, including those included in the Trust Estate, to
any Person, unless
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which is
hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any state, (B) expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee, the due and punctual payment of the principal of and
interest on all Notes and the performance or observance of every agreement
and covenant of this Indenture and each of the Basic Documents on the part
of the Issuer to be performed or observed, all as provided herein, (C)
expressly agree by means of such supplemental indenture that all right,
title and interest so conveyed or transferred shall be subject and
subordinate to the rights of Holders of the Notes, (D) unless otherwise
provided in such supplemental indenture, expressly agree to indemnify,
defend and hold harmless the Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes and (E)
expressly agree by means of such supplemental indenture that such Person
(or if a group of persons, then one specified Person) shall prepare (or
cause to be prepared) and make all filings with the Commission (and any
other appropriate Person) required by the Exchange Act in connection with
the Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Trust, any Noteholder or the Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
SECTION 3.11 Successor or Transferee.
-----------------------
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or
merger (if other than the Issuer)
27
shall succeed to, and be substituted for, and may exercise every right and power
of, the Issuer under this Indenture with the same effect as if such Person had
been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10 (b), Chevy Chase Auto Receivables Trust
2001-2 will be released from every covenant and agreement of this Indenture to
be observed or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery of written notice to the Indenture Trustee stating
that Chevy Chase Auto Receivables Trust 2001-2 is to be so released.
SECTION 3.12 No Other Business. The Issuer shall not engage in any
-----------------
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the Basic Documents
and activities incidental thereto.
SECTION 3.13 No Borrowing. The Issuer shall not issue, incur, assume,
------------
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes and (ii) any other Indebtedness permitted
by or arising under the Basic Documents. The proceeds of the Notes shall be used
exclusively to fund the Issuer's purchase of the Receivables and the other
assets specified in the Sale and Servicing Agreement, to pay the Issuer's
organizational, transactional and start-up expenses.
SECTION 3.14 Servicer's Obligations. The Issuer shall cause the
----------------------
Servicer to comply with Sections 4.9, 4.10, 4.11 and 5.6 of the Sale and
Servicing Agreement.
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities.
-------------------------------------------------
Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16 Capital Expenditures. The Issuer shall not make any
--------------------
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17 Compliance with Laws. The Issuer shall comply with the
--------------------
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
Basic Document.
SECTION 3.18 Restricted Payments. The Issuer shall not, directly or
-------------------
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise
28
segregate any amounts for any such purpose; provided, however, that the Issuer
-------- -------
may make, or cause to be made, distributions to the Servicer, the Owner Trustee,
the Indenture Trustee and the Certificateholders as permitted by, and to the
extent funds are available for such purpose under, the Sale and Servicing
Agreement or Trust Agreement. The Issuer will not, directly or indirectly, make
payments to or distributions from the Collection Account except in accordance
with this Indenture and the Basic Documents.
SECTION 3.19 Notice of Events of Default.
---------------------------
Upon a Responsible Officer of the Owner Trustee having actual
knowledge or receipt of written notice thereof, the Issuer agrees to give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and each default on the part of the Servicer or the Seller of
its obligations under the Sale and Servicing Agreement.
SECTION 3.20 Further Instruments and Acts. Upon request of the
----------------------------
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
SECTION 3.21 Amendments of Sale and Servicing Agreement and Trust
----------------------------------------------------
Agreement. The Issuer shall not agree to any amendment to Section 12.1 of the
---------
Sale and Servicing Agreement or Section 13.1 of the Trust Agreement to eliminate
the requirements thereunder that the Indenture Trustee or the Holders of the
Notes consent to amendments thereto as provided therein.
SECTION 3.22 Income Tax Characterization. For purposes of federal
---------------------------
income, state and local income and franchise and any other income taxes, the
Issuer will treat the Notes as indebtedness and hereby instructs the Indenture
Trustee to treat the Notes as indebtedness for all applicable tax reporting
purposes.
ARTICLE IV
Satisfaction and Discharge
--------------------------
SECTION 4.1 Satisfaction and Discharge of Indenture. This Indenture
---------------------------------------
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8,
3.10, 3.12, 3.13, 3.20, 3.21 and 3.22, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.7 and the obligations of the Indenture Trustee
under Section 4.2) and (vi) the rights of Noteholders as beneficiaries hereof
with respect to the property so deposited with the Indenture Trustee payable to
all or any of them, and the Indenture Trustee, on demand of and at the expense
of the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, when
(A) either
29
(1) all Notes theretofore authenticated and delivered (other than (i)
Notes that have been destroyed, lost or stolen and that have been replaced
or paid as provided in Section 2.5 and (ii) Notes for whose payment money
has theretofore been deposited in trust or segregated and held in trust by
the Issuer and thereafter repaid to the Issuer or discharged from such
trust, as provided in Section 3.3) have been delivered to the Indenture
Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation
(i) have become due and payable,
(ii) will become due and payable at their respective Final Scheduled
Payment Dates within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving of notice
of redemption by the Indenture Trustee in the name, and at the expense, of
the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture Trustee
cash or direct obligations of or obligations guaranteed by the United
States of America (which will mature prior to the date such amounts are
payable), in trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore delivered
to the Indenture Trustee for cancellation when due to the Final Scheduled
Payment Date or Redemption Date (if Notes shall have been called for
redemption pursuant to Section 10.1(a)), as the case may be;
(B) the Issuer has paid or caused to be paid all amounts and
obligations which the Issuer owes to the Indenture Trustee under this
Indenture or any other Basic Document; and
(C) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and if required by the TIA or the
Indenture Trustee, an Independent Certificate from a firm of certified
public accountants, each meeting the applicable requirements of Section
11.1(a) and each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been
complied with.
SECTION 4.2 Application of Trust Money. All moneys deposited with the
--------------------------
Indenture Trustee pursuant to Section 4.1 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Note Paying Agent, as
the Indenture Trustee may determine, to the Holders of the particular Notes for
the payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such moneys need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
30
SECTION 4.3 Repayment of Moneys Held by Note Paying Agent. In
---------------------------------------------
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all moneys then held by any Note Paying Agent other than the
Indenture Trustee under the provisions of this Indenture with respect to such
Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be
held and applied according to Section 3.3 and thereupon such Note Paying Agent
shall be released from all further liability with respect to such moneys.
ARTICLE V
Remedies
--------
SECTION 5.1 Events of Default. "Event of Default", wherever used
-----------------
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest on any Note when the
same becomes due and payable, and such default shall continue for a period
of five days; or
(ii) default in the payment of the Outstanding Amount of any Note on
the applicable Final Scheduled Payment Date, and such default shall
continue for a period of five days; or
(iii) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere
in this Section specifically dealt with), or any representation or warranty
of the Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have
been made, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such misrepresentation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days (or for such longer period, not in excess of 90
days, as may be reasonably necessary to remedy such default; provided that
such default is capable of remedy within 90 days or less and the Servicer
on behalf of the Owner Trustee delivers an Officer's Certificate to the
Indenture Trustee to the effect that the Issuer has commenced, or will
promptly commence and diligently pursue, all reasonable efforts to remedy
such default) after there shall have been given, by registered or certified
mail, to the Issuer by the Indenture Trustee or to the Issuer and the
Indenture Trustee by the Holders of at least 25% of the Outstanding Amount
of the Notes, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate in an involuntary case under any applicable
federal or State bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
31
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under any
applicable federal or State bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Trust Estate, or the
making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of action by the Issuer in furtherance of
any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five days
after the occurrence thereof, written notice in the form of an Officer's
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (iii), its status and what action
the Issuer is taking or proposes to take with respect thereto.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
(a) If an Event of Default of the type described in clauses (i),
(ii), (iv) or (v) of Section 5.1 shall have occurred and be continuing, the
Notes may become immediately due and payable at par, together with accrued
interest thereon, and the Indenture Trustee may exercise any of the remedies
specified in Section 5.4(a), but only if so requested in writing by the
Controlling Class. If an Event of Default of the type described in Section
5.1(iii) shall have occurred and be continuing, the Notes shall become
immediately due and payable at par, together with accrued interest thereon, and
the Indenture Trustee may exercise any of the remedies specified in Section
5.4(a), if so requested in writing by the Majority Noteholders, voting on a
Class-by-Class basis (with respect to a particular Event of Default, the
Controlling Class or the Majority Noteholders voting on a Class-by-Class basis,
as appropriate, the "Declaring Noteholders").
(b) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall, if so requested by the Declaring Noteholders, declare
all the Notes to be immediately due and payable by a written notice to the
Issuer that the Notes become, whereupon the Notes shall become immediately due
and payable at par, together with accrued and unpaid interest thereon.
(c) At any time after such declaration of acceleration of maturity
has been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as hereinafter in this Article V
provided, the Declaring Noteholders, by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its consequences
if:
32
(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(A) all payments of principal of and interest on all Notes
and all other amounts that would then be due hereunder or upon
such Notes if the Event of Default giving rise to such
acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its
agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
(a) The Issuer covenants that if (i) default is made in the payment
of any interest on any Note when the same becomes due and payable, and such
default continues for a period of five days, or (ii) default is made in the
payment of the Outstanding Amount of any Note on the applicable Final Scheduled
Payment Date and such default continues for a period of five days, the Issuer
will pay to the Indenture Trustee, for the benefit of the Holders of the Notes,
the whole amount then due and payable on such Notes for principal and interest,
with interest upon the overdue principal, and, to the extent payment at such
rate of interest shall be legally enforceable, upon overdue installments of
interest, at the applicable Interest Rate and in addition thereto such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee and its agents and counsel.
(b) If an Event of Default occurs and is continuing, the Indenture
Trustee may in its discretion but with the consent of the Declaring Noteholders,
and shall, at the direction of the Declaring Noteholders, proceed to protect and
enforce its rights and the rights of the Noteholders by such appropriate
Proceedings as the Indenture Trustee or the Declaring Noteholders, as
applicable, shall deem most effective to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy or legal or equitable right vested in the Indenture
Trustee by this Indenture or by law.
(c) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, proceedings under Title 11 of the United States
Code or any other applicable federal or State bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or
33
in case of any other comparable judicial proceedings relative to the Issuer or
other obligor upon the Notes, or to the creditors or property of the Issuer or
such other obligor, the Indenture Trustee, irrespective of whether the principal
of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances
made, by the Indenture Trustee and each predecessor Trustee, except as a
result of negligence, bad faith or willful misconduct) and of the
Noteholders allowed in such proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Noteholders in any election of a trustee, a standby trustee
or person performing similar functions in any such proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee or the Noteholders allowed in any judicial proceedings relative to
the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor
Trustee except as a result of negligence, bad faith or wilful misconduct.
(d) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar person.
(e) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the
34
Notes or the production thereof in any trial or other proceedings relative
thereto, and any such action or proceedings instituted by the Indenture Trustee
shall be brought in its own name as Indenture Trustee of an express trust, and
any recovery of judgment, subject to the payment of the expenses, disbursements
and compensation of the Indenture Trustee, each predecessor Trustee and their
respective agents and attorneys, shall be for the ratable benefit of the Holders
of the Notes.
(f) In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture),
the Indenture Trustee shall be held to represent all the Holders of the Notes,
and it shall not be necessary to make any Noteholder a party to any such
proceedings.
SECTION 5.4 Remedies.
--------
(a) If an Event of Default shall have occurred and be continuing, the
Declaring Noteholders may do one or more of the following (subject to Section
5.5):
(i) direct the Indenture Trustee to institute Proceedings in its
own name and as trustee of an express trust for the collection of all
amounts then payable on the Notes or under this Indenture with respect
thereto, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon such Notes
moneys adjudged due;
(ii) direct the Indenture Trustee to institute Proceedings from time
to time for the complete or partial foreclosure of this Indenture with
respect to the Trust Estate;
(iii) direct the Indenture Trustee to exercise any remedies of a
secured party under the UCC and take any other appropriate action to
protect and enforce the rights and remedies of the Indenture Trustee and
the Holders of the Notes; and
(iv) direct the Indenture Trustee to sell the Trust Estate or any
portion thereof or rights or interest therein, at one or more public or
private sales called and conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or, otherwise
-------- -------
liquidate the Trust Estate following an Event of Default unless
(I) such Event of Default is of the type described in
Section 5.1(i) or (ii), or
(II) either
(x) the Holders of 66-2/3% of the Outstanding
Amount of the Notes consent thereto, or
(y) the proceeds of such sale or liquidation
distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid upon
such Notes for principal and interest, or
35
(z) the Indenture Trustee determines that the
Trust Estate will not continue to provide sufficient
funds for the payment of principal of and interest on
the Notes as they would have become due if the Notes
had not been declared due and payable, and the
Indenture Trustee provides prior written notice to the
Rating Agencies and obtains the consent of Holders of
66-2/3% of the Outstanding Amount of the Notes.
In determining such sufficiency or insufficiency with respect to
clause (y) and (z), the Indenture Trustee may, but need not, obtain and
conclusively rely upon a report of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose (a
"Verification Report"). The Declaring Noteholders may direct the Indenture to
commission such a report, or may themselves commission such a report.
SECTION 5.5 Optional Preservation of the Receivables. If the Notes
----------------------------------------
have been declared to be due and payable under Section 5.2 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, if so directed by the Declaring
Noteholders, or if the conditions to a sale of the Trust Estate pursuant to
Section 5.4 have not been satisfied, maintain possession of the Trust Estate.
SECTION 5.6 Priorities.
----------
(a) Following the acceleration of the Notes pursuant to Section 5.2
or the occurrence of an Event of Default, any money or property collected
pursuant to Section 5.4, but net of any amounts applied to the costs of the
Indenture Trustee or of the Noteholders relating to the Event of Default and the
remedies in connection therewith, shall be applied by the Indenture Trustee on
the related Payment Date in the following order of priority:
First: amounts due and owing and required to be distributed to the
-----
Servicer (provided there is no Servicer Default), the Owner Trustee and the
Indenture Trustee, respectively, and not previously distributed without
preference or priority of any kind within such priority;
Second: to accrued and unpaid interest on, and to the reduction of,
-------
the aggregate Note Principal Balance of the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes and the Class A-4 Notes, concurrently and in
proportion to their then outstanding Note Principal Balances, rather than
sequentially as provided in Section 5.4(b)(i) through (iv) of the Sale and
Servicing Agreement. Once the aggregate Note Principal Balance of all
Class A Notes has been reduced to zero, the amount on deposit in the Note
Account shall be applied to the payment of accrued and unpaid interest on,
and the payment of the Note Principal Balance of the Class B Notes as
provided in Section 5.4(b)(v) of the Sale and Servicing Agreement; and
Third: to the Certificateholders, any remainder.
-----
(b) The Indenture Trustee may fix a record date and payment date for
any payment to Noteholders pursuant to this Section 5.6. At least 15 days before
such record date
36
the Issuer shall mail to each Noteholder and the Indenture Trustee a notice that
states the record date, the payment date and the amount to be paid.
SECTION 5.7 Limitation of Suits. No Holder of any Note shall have any
-------------------
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount of
the Notes have made written request to the Indenture Trustee to institute
such proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
proceedings; and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders of
a majority of the Outstanding Amount of the Notes;
it being understood and intended that no one or more Noteholders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other
Noteholders or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the manner
herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders, each
representing less than a majority of the Outstanding Amount of the Notes, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.8 Unconditional Rights of Noteholders To Receive Principal
--------------------------------------------------------
and Interest. Notwithstanding any other provisions in this Indenture, the Holder
------------
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
SECTION 5.9 Restoration of Rights and Remedies. If any Noteholder has
----------------------------------
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason or has
been determined adversely
37
to the Indenture Trustee or to such Noteholder, then and in every such case the
Issuer, the Indenture Trustee and the Noteholders shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the Noteholders shall continue as though no such
proceeding had been instituted.
SECTION 5.10 Rights and Remedies Cumulative. No right or remedy
------------------------------
herein conferred upon or reserved to the Noteholders is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 5.11 Delay or Omission Not a Waiver. No delay or omission of
------------------------------
the Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or by
the Noteholders, as the case may be.
SECTION 5.12 Control by Noteholders. Declaring Noteholders, with
----------------------
respect to the related Events of Default, shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 5.4, any direction to
the Indenture Trustee to sell or liquidate the Trust Estate shall be by the
Noteholders representing not less than 66-2/3% of the Outstanding Amount of
the Notes;
(iii) if the conditions set forth in Section 5.5 have been satisfied
and the Indenture Trustee elects to retain the Trust Estate pursuant to
such Section, then any direction to the Indenture Trustee by Noteholders
representing less than 66-2/3% of the Outstanding Amount of the Notes to
sell or liquidate the Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee that is not inconsistent with such direction;
provided, however, that, subject to Article VI, the Indenture Trustee need not
-------- -------
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to such
action. The Noteholders may, but need not, base their directions to the
Indenture Trustee on a Verification Report commissioned pursuant to Section 5.5.
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SECTION 5.13 Waiver of Past Defaults. Prior to the declaration of the
-----------------------
acceleration of the maturity of the Notes as provided in Section 5.2, Declaring
Noteholders may waive any past Default or Event of Default and its consequences
except a Default (a) in payment of principal of or interest on any of the Notes
or (b) in respect of a covenant or provision hereof which cannot be modified or
amended without the consent of the Holder of each Note. In the case of any such
waiver, the Issuer, the Indenture Trustee and the Holders of the Notes shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.14 Undertaking for Costs. All parties to this Indenture
---------------------
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for
the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
SECTION 5.15 Waiver of Stay or Extension Laws. The Issuer covenants
--------------------------------
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 5.16 Action on Notes. The Indenture Trustee's right to seek
---------------
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Trust Estate
or upon any of the assets of the Issuer.
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SECTION 5.17 Performance and Enforcement of Certain Obligations.
--------------------------------------------------
(a) Promptly following a request from the Indenture Trustee to do so
and at the Servicer's expense, the Issuer agrees to take all such lawful action
as the Indenture Trustee may request to compel or secure the performance and
observance by the Seller and the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Sale and Servicing
Agreement in accordance with the terms thereof, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Sale and Servicing Agreement to the extent and in the
manner directed by the Indenture Trustee, including the transmission of notices
of default on the part of the Seller or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller or the Servicer of each of their obligations
under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the written direction of the Holders of 66-2/3%
of the Outstanding Amount of the Notes shall, subject to Article VI, exercise
all rights, remedies, powers, privileges and claims of the Issuer against the
Seller or the Servicer under or in connection with the Sale and Servicing
Agreement, including the right or power to take any action to compel or secure
performance or observance by the Seller or the Servicer of each of their
obligations to the Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Sale and Servicing Agreement,
and any right of the Issuer to take such action shall be suspended.
SECTION 5.18 Application of the Trust Indenture Act. Pursuant to
--------------------------------------
Section 316(a) and Section 316(b) of the TIA, all provisions automatically
provided for in Section 316(a) and Section 316(b) are hereby expressly excluded.
ARTICLE VI
The Indenture Trustee
---------------------
SECTION 6.1 Duties of Indenture Trustee.
---------------------------
(a) The Indenture Trustee, both prior to and after the occurrence of
an Event of Default, shall undertake to perform such duties as are specifically
set forth in this Indenture. If an Event of Default shall have occurred and
shall not have been cured, the Indenture Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and shall use the same degree
of care and skill in their exercise, as a prudent man or woman would exercise or
use under the circumstances in the conduct of his or her own affairs.
(b) The Indenture Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Indenture Trustee that shall be specifically
required to be furnished pursuant to any provision of this Indenture, shall
examine them to determine whether they conform as to form to the requirements of
this Indenture.
40
(c) No provision of this Indenture shall be construed to relieve
the Indenture Trustee from liability for its own negligent action, its own
negligent failure to act, or its own bad faith; provided, however, that:
(i) prior to the occurrence of an Event of Default, and after
the curing of all such Event of Defaults that may have occurred, the duties
and obligations of the Indenture Trustee shall be determined solely by the
express provisions of this Indenture, the Indenture Trustee shall not be
liable except for the performance of such duties and obligations as shall
be specifically set forth in this Indenture, no implied covenants or
obligations shall be read into this Indenture against the Indenture Trustee
and, in the absence of bad faith on the part of the Indenture Trustee, or
manifest error, the Indenture Trustee may conclusively rely on the truth of
the statements and the correctness of the opinions expressed in any
certificates or opinions furnished to the Indenture Trustee and conforming
to the requirements of this Indenture;
(ii) the Indenture Trustee shall not be liable for an error of
judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Indenture Trustee shall have been negligent in ascertaining
the pertinent facts;
(iii) the Indenture Trustee shall not be liable with respect to
any action taken, suffered, or omitted to be taken in good faith in
accordance with this Indenture or at the direction of the Declaring
Noteholders relating to the time, method, and place of conducting any
proceeding for any remedy available to the Indenture Trustee, or exercising
any trust or power conferred upon the Indenture Trustee, under this
Indenture;
(iv) the Indenture Trustee shall not be charged with knowledge
of any failure by the Servicer to comply with the obligations of the
Servicer referred to in clause (i) or (ii) of Section 8.1(a) of the Sale
and Servicing Agreement, unless a Responsible Officer of the Indenture
Trustee has actual knowledge or receives written notice of such failure (it
being understood that knowledge of the Servicer or the Servicer as
custodian, in its capacity as agent for the Indenture Trustee, is not
attributable to the Indenture Trustee) from the Servicer or the Holders of
Notes evidencing not less than 25% of the Note Principal Balance; and
(v) without limiting the generality of this Section or Section
6.2, the Indenture Trustee shall have no duty (i) to see to any recording,
filing, or depositing of this Indenture or any agreement referred to herein
or any financing statement evidencing a security interest in the
Receivables or the Financed Vehicles, or to see to the maintenance of any
such recording or filing or depositing or to any rerecording, refiling or
redepositing of any thereof, (ii) to see to any insurance of the Financed
Vehicles or Obligors or to effect or maintain any such insurance, (iii) to
see to the payment or discharge of any tax, assessment, or other
governmental charge or any Lien or encumbrance of any kind owing with
respect to, or assessed or levied against, any part of the Trust, (iv) to
confirm or verify the contents of any reports or certificates of the
Servicer delivered to the Indenture Trustee pursuant to this Indenture
believed by the Indenture Trustee to be genuine and to have been signed or
presented by the proper party or parties, or (v) to inspect the Financed
Vehicles at any time or ascertain or inquire as to
41
the performance or observance of any of the Seller's or the Servicer's
representations, warranties or covenants or the Servicer's duties and
obligations as Servicer and as custodian of the Receivable Files under this
Indenture.
(d) The Indenture Trustee shall not be required to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers,
if there shall be reasonable ground for believing that the repayment of such
funds or adequate indemnity against such risk or liability shall not be
reasonably assured to it, and none of the provisions contained in this Indenture
shall in any event require the Indenture Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer under
this Indenture except during such time, if any, as the Indenture Trustee shall
be the successor to, and be vested with the rights, duties, powers, and
privileges of, the Servicer in accordance with the terms of this Indenture.
(e) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture.
(f) The Indenture Trustee shall, and hereby agrees that it will,
perform all of the obligations and duties required of it under this Indenture.
In no event shall U.S. Bank National Association, in any of its capacities
hereunder, be deemed to have assumed any duties of the Owner Trustee under the
Delaware Business Trust Statute, common law, or the Trust Agreement.
(g) U.S. Bank National Association by its execution hereof
accepts its appointment as Indenture Trustee under this Indenture. The Indenture
Trustee shall act upon and in compliance with the written instructions of the
Noteholders delivered pursuant to the Indenture promptly following receipt of
such written instructions; provided that the Indenture Trustee shall not act in
accordance with any instructions (i) which are not authorized by, or in
violation of the provisions of this Indenture, (ii) which are in violation of
any applicable law, rule or regulation or (iii) for which the Indenture Trustee
has not received indemnity reasonably satisfactory to it. Receipt of such
instructions shall not be a condition to the exercise by the Indenture Trustee
of its express duties hereunder, except where this Indenture provides that the
Indenture Trustee is permitted to act only following and in accordance with such
instructions.
SECTION 6.2 Rights of Indenture Trustee.
---------------------------
(a) The Indenture Trustee may conclusively rely on any document
believed by it to be genuine and to have been signed or presented by the proper
person. The Indenture Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Indenture Trustee acts or refrains from acting,
it may require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on the Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian or nominee, and the Indenture Trustee
shall not be responsible for any misconduct or negligence
42
on the part of, or for the supervision of, Chevy Chase Bank, F.S.B., or any
other such agent, attorney, custodian or nominee appointed with due care by it
hereunder.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that the Indenture Trustee's
-------- -------
conduct does not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Indenture Trustee shall be under no obligation to
institute, conduct or defend any litigation under this Indenture or in relation
to this Indenture, at the request, order or direction of any of the Noteholders,
pursuant to the provisions of this Indenture, unless such Noteholders shall have
offered to the Indenture Trustee reasonable security or indemnity against the
costs, expenses and liabilities that may be incurred therein or thereby;
provided, however, that the Indenture Trustee shall, upon the occurrence of an
-------- -------
Event of Default (that has not been cured), exercise the rights and powers
vested in it by this Indenture with reasonable care and skill and shall remain
subject to the provisions of Section 6.1(d).
(g) The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do so
by Noteholders evidencing not less than 25% of the Outstanding Amount thereof;
provided, however, that if the payment within a reasonable time to the Indenture
-------- -------
Trustee of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Indenture Trustee, not
reasonably assured to the Indenture Trustee by the security afforded to it by
the terms of this Indenture or the Sale and Servicing Agreement, the Indenture
Trustee may require reasonable indemnity against such cost, expense or liability
as a condition to so proceeding; the reasonable expense of every such
examination shall be paid by the Person making such request, or, if paid by the
Indenture Trustee, shall be reimbursed by the Person making such request upon
demand.
(h) The Indenture Trustee shall not be liable for any losses on
investments except for losses resulting from the failure of the Indenture
Trustee to make an investment in accordance with instructions given in
accordance hereunder. If the Indenture Trustee acts as the Note Paying Agent or
Note Registrar, the rights and protections afforded to the Indenture Trustee
shall be afforded to the Note Paying Agent and Note Registrar.
(i) Subject to the provisions of Section 11.17 hereof, the
Indenture Trustee hereby agrees that it shall not disclose any information with
respect to Obligors to any Person unless directed to do so in writing by the
Servicer.
43
SECTION 6.3 Individual Rights of Indenture Trustee. The
--------------------------------------
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not Indenture Trustee. Any Note
Paying Agent, Note Registrar, co-registrar or co-Note Paying Agent may do the
same with like rights. However, the Indenture Trustee must comply with Sections
6.11 and 6.12.
SECTION 6.4 Indenture Trustee's Disclaimer. The Indenture
------------------------------
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture, the Trust Estate or the Notes, it shall
not be accountable for the Issuer's use of the proceeds from the Notes, and it
shall not be responsible for any statement of the Issuer in the Indenture or in
any document issued in connection with the sale of the Notes or in the Notes
other than the Indenture Trustee's certificate of authentication.
SECTION 6.5 Notice of Defaults. If an Event of Default occurs
------------------
and is continuing and if it is either known by, or written notice of the
existence thereof has been delivered to, a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail to each Noteholder notice of the Event
of Default within 90 days after such knowledge or notice occurs. Except in the
case of an Event of Default in payment of principal of or interest on any Note
(including payments pursuant to the mandatory redemption provisions of such
Note), the Indenture Trustee may withhold the notice if and so long as a
committee of two or more of its Responsible Officers in good faith determines
that withholding the notice is in the interests of Noteholders.
SECTION 6.6 Reports by Trustee to Holders. The Indenture Trust
-----------------------------
shall deliver to each Noteholder such information as may be reasonably required
to enable such Holder to prepare its federal and state income tax returns.
SECTION 6.7 Compensation and Indemnity.
--------------------------
(a) Pursuant to Section 5.4(a) of the Sale and Servicing
Agreement, the Issuer shall, or shall cause the Servicer to, pay to the
Indenture Trustee from time to time compensation for its services. The Indenture
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall cause the Servicer to reimburse
the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall cause the Servicer to indemnify the
Indenture Trustee and its officers, directors, employees and agents against any
and all loss, liability or expense (including attorneys' fees and expenses)
incurred by each of them in connection with the acceptance or the administration
of this trust and the performance of its duties hereunder. The Indenture Trustee
shall notify the Issuer and the Servicer promptly of any claim for which it may
seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and the
Servicer shall not relieve the Issuer of its obligations hereunder or the
Servicer of its obligations under Article X of the Sale and Servicing Agreement.
The Issuer shall cause the Servicer to defend the claim. The Indenture Trustee
may have separate counsel and the Issuer shall cause the Servicer to pay the
fees and expenses of such counsel. Neither the Issuer nor the
44
Servicer need reimburse any expense or indemnify against any loss, liability or
expense incurred by the Indenture Trustee through the Indenture Trustee's own
willful misconduct, negligence or bad faith.
(b) The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section shall survive the discharge of this Indenture or the
earlier resignation or removal of the Indenture Trustee. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.1(iv) or (v) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or State bankruptcy, insolvency or similar law.
Notwithstanding anything else set forth in this Indenture or the Basic
Documents, the Indenture Trustee agrees that the obligations of the Issuer (but
not the Servicer) to the Indenture Trustee hereunder and under the Basic
Documents shall be recourse to the Trust Estate only and specifically shall not
be recourse to the assets of the Certificateholder or any Noteholder. In
addition, the Indenture Trustee agrees that its recourse to the Issuer, the
Trust Estate and the Seller shall be limited to the right to receive the
distributions referred to in Section 5.4(a) of the Sale and Servicing Agreement.
SECTION 6.8 Replacement of Indenture Trustee. The Indenture
--------------------------------
Trustee may resign at any time by so notifying the Issuer and the Servicer. The
Issuer or the Servicer may remove the Indenture Trustee, if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) a court having jurisdiction in the premises in respect of
the Indenture Trustee in an involuntary case or proceeding under federal or
state banking or bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar
law, shall have entered a decree or order granting relief or appointing a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or similar official) for the Indenture Trustee or for any
substantial part of the Indenture Trustee's property, or ordering the
winding-up or liquidation of the Indenture Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy laws, as
now or hereafter in effect, or another present or future federal or state
bankruptcy, insolvency or similar law is commenced with respect to the
Indenture Trustee and such case is not dismissed within 60 days;
(iv) the Indenture Trustee commences a voluntary case under any
federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or other similar official) for the Indenture
Trustee or for any substantial part of the Indenture Trustee's property, or
makes any assignment for the benefit of creditors or fails generally to pay
its debts as such debts become due or takes any corporate action in
furtherance of any of the foregoing; or
(v) the Indenture Trustee otherwise becomes incapable of
acting.
45
If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), the
Servicer shall promptly appoint a successor Indenture Trustee.
(b) A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee, to the Issuer
and the Servicer. Thereupon the resignation or removal of the retiring Indenture
Trustee shall become effective, and the successor Indenture Trustee shall have
all the rights, powers and duties of the retiring Indenture Trustee under this
Indenture subject to satisfaction of the Rating Agency Condition. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
(c) If a successor Indenture Trustee does not take office within
60 days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority in Outstanding Amount
of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
(d) If the Indenture Trustee fails to comply with Section 6.11,
any Noteholder may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture Trustee.
(e) Any resignation or removal of the Indenture Trustee and
appointment of a successor Indenture Trustee pursuant to any of the provisions
of this Section shall not become effective until acceptance of appointment by
the successor Indenture Trustee pursuant to Section 6.8(b) and payment of all
fees and expenses owed to the outgoing Indenture Trustee.
(f) Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section, the Issuer's and the Servicer's obligations under
Section 6.7 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9 Successor Indenture Trustee by Merger. If the
-------------------------------------
Indenture Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee.
The Indenture Trustee shall provide the Servicer and the Rating Agencies prior
written notice of any such transaction.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and
46
in all such cases such certificates shall have the full force which it is
anywhere in the Notes or in this Indenture provided that the certificate of the
Indenture Trustee shall have.
SECTION 6.10 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
(a) Notwithstanding any other provisions of this Indenture, at
any time, for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Trust may at the time be located, the Indenture Trustee
shall have the power and may execute and deliver all instruments to appoint one
or more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such Person
or Persons, in such capacity and for the benefit of the Noteholders, such title
to the Trust, or any part hereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Indenture
Trustee may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
Indenture Trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Indenture
Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder, including acts or
omissions of predecessor or successor Indenture Trustees; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
47
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-fact with full power
and authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, dissolve, become insolvent, become incapable of
acting, resign or be removed, all of its estates, properties, rights, remedies
and trusts shall vest in and be exercised by the Indenture Trustee, to the
extent permitted by law, without the appointment of a new or successor Indenture
Trustee.
(e) Any and all amounts relating to the fees and expenses of the
co-trustee or separate trustee will be borne by the Trust Estate.
SECTION 6.11 Eligibility: Disqualification. The Indenture
-----------------------------
Trustee shall at all times satisfy the requirements of TIA (S) 310(a). The
Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of condition
and it shall have a long term debt rating of BBB- or better by the Rating
Agencies. The Indenture Trustee shall comply with TIA (S) 310(b), including the
optional provision permitted by the second sentence of TIA (S)310(b)(9);
provided, however, that there shall be excluded from the operation of TIA (S)
-------- -------
310(b)(1) any indenture or indentures under which other securities of the Issuer
are outstanding if the requirements for such exclusion set forth in TIA (S)
310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against Issuer.
------------------------------------------------
The Indenture Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA (S) 311(a) to the extent indicated.
SECTION 6.13 Appointment and Powers. Subject to the terms and
----------------------
conditions hereof, each of the Holders of the Notes hereby appoints U.S. Bank
National Association as the Indenture Trustee with respect to the Collateral,
and U.S. Bank National Association hereby accepts such appointment and agrees to
act as Indenture Trustee with respect to the Collateral for the Holders of the
Notes, to maintain custody and possession of such Collateral (except as
otherwise provided hereunder) and to perform the other duties of the Indenture
Trustee in accordance with the provisions of this Indenture and the other Basic
Documents. The Indenture Trustee shall act upon and in compliance with the
written instructions of the Declaring Noteholders delivered pursuant to this
Indenture promptly following receipt of such written instructions; provided that
--------
the Indenture Trustee shall not act in accordance with any instructions (i)
which are not authorized by, or in violation of the provisions of, this
Indenture and the other Basic Documents, (ii) which are in violation of any
applicable law, rule or regulation or (iii) for which the Indenture Trustee has
not received reasonable indemnity. Receipt of such instructions shall not be a
condition to the exercise by the Indenture Trustee of its express duties
hereunder, except where this Indenture provides that the Indenture Trustee is
permitted to act only following and in accordance with such instructions.
48
SECTION 6.14 Performance of Duties. The Indenture Trustee shall
---------------------
have no duties or responsibilities except those expressly set forth in this
Indenture and the other Basic Documents to which the Indenture Trustee is a
party in accordance with this Indenture. Except as expressly provided herein,
Indenture Trustee shall not be required to take any discretionary actions
hereunder except at the written direction and with the indemnification of the
Declaring Noteholders. The Indenture Trustee shall, and hereby agrees that it
will, subject to this Article, perform all of the duties and obligations
required of it under the Sale and Servicing Agreement.
SECTION 6.15 Limitation on Liability. Neither the Indenture
-----------------------
Trustee nor any of its directors, officers or employees shall be liable for any
action taken or omitted to be taken by it or them hereunder, or in connection
herewith, except that the Indenture Trustee shall be liable for its negligence,
bad faith or willful misconduct; nor shall the Indenture Trustee be responsible
for the validity, effectiveness, value, sufficiency or enforceability against
the Issuer of this Indenture or any of the Collateral (or any part thereof).
Notwithstanding any term or provision of this Indenture, the Indenture Trustee
shall incur no liability to the Issuer or the Holders of the Notes for any
action taken or omitted by the Indenture Trustee in connection with the
Collateral, except for the negligence, bad faith or willful misconduct on the
part of the Indenture Trustee, and, further, shall incur no liability to the
Holders of the Notes except for negligence, bad faith or willful misconduct in
carrying out its duties to the Holders of the Notes. The Indenture Trustee shall
be protected and shall incur no liability to any such party in relying upon the
accuracy, acting in reliance upon the contents, and assuming the genuineness of
any notice, demand, certificate, signature, instrument or other document
reasonably believed by the Indenture Trustee to be genuine and to have been duly
executed by the appropriate signatory, and (absent actual knowledge to the
contrary by a Responsible Officer of the Indenture Trustee) the Indenture
Trustee shall not be required to make any independent investigation with respect
thereto. The Indenture Trustee shall at all times be free independently to
establish to its reasonable satisfaction, but shall have no duty to
independently verify, the existence or nonexistence of facts that are a
condition to the exercise or enforcement of any right or remedy hereunder or
under any of the Basic Documents. The Indenture Trustee may consult with
counsel, and shall not be liable for any action taken or omitted to be taken by
it hereunder in good faith and in accordance with the advice of such counsel.
The Indenture Trustee shall not be under any obligation to exercise any of the
remedial rights or powers vested in it by this Indenture or to follow any
direction from the Declaring Noteholders or risk its own funds or otherwise
incur financial liability in the performance of any of its duties hereunder
unless it shall have received reasonable security or indemnity satisfactory to
the Indenture Trustee against the costs, expenses and liabilities which might be
incurred by it.
SECTION 6.16 Reliance Upon Documents. In the absence of
-----------------------
negligence, bad faith or willful misconduct on its part, the Indenture Trustee
shall be entitled to conclusively rely on any communication, instrument, paper
or other document reasonably believed by it to be genuine and correct and to
have been signed or sent by the proper Person or Persons and shall have no
liability in acting, or omitting to act, where such action or omission to act is
in reasonable reliance upon any statement or opinion contained in any such
document or instrument.
SECTION 6.17 Reserved.
--------
49
SECTION 6.18 Representations and Warranties of the Indenture
-----------------------------------------------
Trustee. The Indenture Trustee represents and warrants to the Issuer as follows:
(a) Due Organization. The Indenture Trustee is a national
----------------
banking association and is duly authorized and licensed under applicable law to
conduct its business as presently conducted.
(b) Corporate Power. The Indenture Trustee has all requisite
---------------
right, power and authority to execute and deliver this Indenture and to perform
all of its duties as Indenture Trustee hereunder.
(c) Due Authorization. The execution and delivery by the
-----------------
Indenture Trustee of this Indenture and the other Basic Documents to which it is
a party, and the performance by the Indenture Trustee of its duties hereunder
and thereunder, have been duly authorized by all necessary corporate proceedings
and no further approvals or filings, including any governmental approvals, are
required for the valid execution and delivery by the Indenture Trustee, or the
performance by the Indenture Trustee, of this Indenture and such other Basic
Documents.
(d) Valid and Binding Indenture. The Indenture Trustee has
---------------------------
duly executed and delivered this Indenture and each other Basic Document to
which it is a party, and each of this Indenture and each such other Basic
Document constitutes the legal, valid and binding obligation of the Indenture
Trustee, enforceable against the Indenture Trustee in accordance with its terms,
except as (i) such enforceability may be limited by bankruptcy, insolvency,
reorganization and similar laws relating to or affecting the enforcement of
creditors' rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability.
SECTION 6.19 Waiver of Setoffs. The Indenture Trustee hereby
-----------------
expressly waives any and all rights of setoff that the Indenture Trustee may
otherwise at any time have under applicable law with respect to any Account and
agrees that amounts in the Accounts shall at all times be held and applied
solely in accordance with the provisions hereof.
SECTION 6.20 Control by the Declaring Noteholders. The
------------------------------------
Indenture Trustee shall comply with notices and instructions given by the Issuer
only if accompanied by the written consent of the Declaring Noteholders, except
that if any Event of Default shall have occurred and be continuing, the
Indenture Trustee shall act upon and comply with notices and instructions given
by the Declaring Noteholders alone in the place and stead of the Issuer.
ARTICLE VII
Noteholders' Lists and Reports
------------------------------
SECTION 7.1 Issuer To Furnish To Indenture Trustee Names and
------------------------------------------------
Addresses of Noteholders. The Issuer will furnish or cause to be furnished to
------------------------
the Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and addresses
of the Holders as of such Record Date, (b) at such other times as the Indenture
Trustee may request in writing, within 30 days after receipt by the Issuer of
any such request, a list of similar form and content as of a date not more than
10 days prior to the time such list is
50
furnished; provided, however, that so long as the Indenture Trustee is the Note
-------- -------
Registrar, no such list shall be required to be furnished.
SECTION 7.2 Preservation of Information; Communications to
----------------------------------------------
Noteholders.
-----------
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.1
and the names and addresses of Holders received by the Indenture Trustee in its
capacity as Note Registrar. The Indenture Trustee may destroy any list furnished
to it as provided in such Section 7.1 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA (S) 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA (S) 312(c).
SECTION 7.3 Reports by Issuer. The Issuer (a) shall deliver to the
-----------------
Indenture Trustee within 15 days after the Issuer is required to file the same
with the Commission copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe) that the Issuer is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, and (b) shall also comply with the
other provisions of TIA Section 314(a).
SECTION 7.4 Reports by Indenture Trustee. If required by TIA (S)
----------------------------
313(a), within 60 days after each May 31, beginning with May 31, 2002, the
Indenture Trustee shall mail to each Noteholder as required by TIA (S) 313(c) a
brief report dated as of such date that complies with TIA (S) 313(a). The
Indenture Trustee also shall comply with TIA (S) 313(b).
ARTICLE VIII
Accounts, Disbursements and Releases
------------------------------------
SECTION 8.1 Collection of Money. Except as otherwise expressly
-------------------
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture and the Sale
and Servicing Agreement. The Indenture Trustee shall apply all such money
received by it as provided in this Indenture and the Sale and Servicing
Agreement. Except as otherwise expressly provided in this Indenture or in the
Sale and Servicing Agreement, if any default occurs in the making of any payment
or performance under any agreement or instrument that is part of the Trust
Estate, the Indenture Trustee may take such action as may be appropriate to
enforce such payment or performance, including the institution and prosecution
of appropriate proceedings. Any such action shall be without prejudice to any
right to claim a Default or Event of Default under this Indenture and any right
to proceed thereafter as provided in Article V.
51
SECTION 8.2 Release of Trust Estate.
-----------------------
(a) Subject to the payment of its fees and expenses and other amounts
pursuant to Section 6.7, the Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture. No party relying upon an
instrument executed by the Indenture Trustee as provided in this Article VIII
shall be bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
outstanding and all sums due the Indenture Trustee pursuant to Section 6.7 have
been paid, release any remaining portion of the Trust Estate that secured the
Notes from the lien of this Indenture and release to the Issuer or any other
Person entitled thereto any funds then on deposit in the Accounts. The Indenture
Trustee shall release property from the lien of this Indenture pursuant to this
Section 8.2(b) only upon receipt of an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel and (if required by the TIA)
Independent Certificates in accordance with TIA (S)(S) 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.1.
SECTION 8.3 Opinion of Counsel. The Indenture Trustee shall receive
------------------
at least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.2(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require as a condition to such action, an
Opinion of Counsel in form and substance satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with and such action will not materially and
adversely impair the security for the Notes or the rights of the Noteholders in
contravention of the provisions of this Indenture; provided, however, that such
-------- -------
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Trust Estate. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate or
other instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.
------------------------------------------------------
(a) Without the consent of the Holders of any Notes and with prior
notice to the Rating Agencies by the Issuer, as evidenced to the Indenture
Trustee, the Issuer and the Indenture Trustee, when authorized by an Issuer
Order, at any time and from time to time, may enter into one or more indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
52
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided that such action shall
--------
not adversely affect the interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor Indenture Trustee with respect to the Notes and to
add to or change any of the provisions of this Indenture as shall be
necessary to facilitate the administration of the trusts hereunder by more
than one trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Holders of the Notes
but with prior notice to the Rating Agencies by the Issuer, as evidenced to the
Indenture Trustee, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
--------
however, that such action shall not, as evidenced by an Opinion of Counsel,
-------
adversely affect in any material respect the interests of any Noteholder.
SECTION 9.2 Supplemental Indentures with Consent of Noteholders.
---------------------------------------------------
The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
may, with prior notice to the Rating Agencies, with the consent of Majority
Noteholders of each Class of Notes then Outstanding, by act of such Holders
delivered to the Issuer and the Indenture Trustee, enter into
53
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; provided, however, that no such supplemental
-------- -------
indenture shall, without the consent of the Holder of each Outstanding Note
affected thereby:
(i) change the date of payment of any installment of principal of
or interest on any Note, or reduce the principal amount thereof, the
interest rate thereon or the Optional Purchase Price with respect thereto,
change the provision of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Trust Estate to payment
of principal of or interest on the Notes, or change any place of payment
where, or the coin or currency in which, any Note or the interest thereon
is payable;
(ii) impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds available
therefor, as provided in Article V, to the payment of any such amount due
on the Notes on or after the respective due dates thereof (or, in the case
of redemption, on or after the Redemption Date);
(iii) reduce the percentage of the Outstanding Amount of the Notes,
the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(iv) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.4;
(vi) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified or
waived without the consent of the Holder of each Outstanding Note affected
thereby;
(vii) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation of
any of the individual components of such calculation) or to affect the
rights of the Noteholders to the benefit of any provisions for the
mandatory redemption of the Notes contained herein; or
(viii) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Trust Estate or,
except as otherwise permitted or contemplated herein or in any of the Basic
Documents, terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security provided by the
lien of this Indenture.
54
The Indenture Trustee may determine whether or not any Notes would be
affected by any supplemental indenture and any such determination shall be
conclusive upon the Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee shall not be liable
for any such determination made in good faith.
It shall not be necessary for any act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.3 Execution of Supplemental Indentures. In executing, or
------------------------------------
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the amendments or modifications thereby of the
trusts created by this Indenture, the Indenture Trustee shall be entitled to
receive, shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Indenture Trustee may, but shall not be obligated to, enter
into any such supplemental indenture that affects the Indenture Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indenture. Upon the execution of
--------------------------------
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.5 Conformity With Trust Indenture Act. Every amendment of
-----------------------------------
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.6 Reference in Notes to Supplemental Indentures. Notes
---------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be
55
prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
Redemption of Notes
-------------------
SECTION 10.1 Redemption.
----------
(a) The Notes are subject to redemption in whole, but not in part, at
the direction of the Servicer pursuant to Section 11.1(a) of the Sale and
Servicing Agreement, on any Payment Date on which the Servicer exercises its
option to purchase the Trust Estate pursuant to said Section 11.1(a), for a
purchase price equal to the Optional Purchase Price. If the Notes are to be
redeemed pursuant to this Section 10.1(a), the Issuer shall deposit with the
Indenture Trustee in the Note Account the Optional Purchase Price in immediately
available funds by 12:00 noon, New York City time, on such Payment Date and,
upon notice to the Indenture Trustee of such deposit, the Indenture Trustee
shall release the Receivables and the Receivable Files and all other property of
the Trust to the Servicer, whereupon all such Notes shall be due and payable on
the Redemption Date upon the furnishing of a notice complying with Section 10.2
to each Holder of Notes.
(b) In the event that the Trust is terminated pursuant to Section
10.1(a), all amounts on deposit in the Note Account shall be paid to the
Noteholders up to the Outstanding Amount of the Notes and all accrued and unpaid
interest thereon. If amounts are to be paid to Noteholders pursuant to this
Section 10.1(b), the Servicer or the Issuer shall, to the extent practicable,
furnish notice of such event to the Indenture Trustee not later than 10 days
prior to the Redemption Date whereupon all such amounts shall be payable on the
Redemption Date.
SECTION 10.2 Form of Redemption Notice.
-------------------------
(a) Notice of redemption under Section 10.1(a) shall be given by the
Indenture Trustee by facsimile or by first-class mail, postage prepaid,
transmitted or mailed prior to the applicable Redemption Date to each Holder of
Notes, as of the close of business on the Record Date preceding the applicable
Redemption Date, at such Holder's address appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Optional Purchase Price;
(iii) that the Record Date otherwise applicable to such Redemption
Date is not applicable and that payments shall be made only upon
presentation and surrender of such Notes and the place where such Notes are
to be surrendered for payment of the Optional Purchase Price (which shall
be the office or agency of the Issuer to be maintained as provided in
Section 3.2); and
56
(iv) that interest on the Notes shall cease to accrue on the
Redemption Date.
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.
SECTION 10.3 Notes Payable on Redemption Date. The Notes to be
--------------------------------
redeemed shall, following notice of redemption as required by Section 10.2 (in
the case of redemption pursuant to Section 10.1(a)), on the Redemption Date
become due and payable at the Optional Purchase Price and (unless the Issuer
shall default in the payment of the Optional Purchase Price) no interest shall
accrue on the Optional Purchase Price for any period after the date to which
accrued interest is calculated for purposes of calculating the Optional Purchase
Price.
ARTICLE XI
Miscellaneous
-------------
SECTION 11.1 Compliance Certificates and Opinions, etc.
-----------------------------------------
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee (i) an Officer's Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
57
(iv) a statement as to whether, in the opinion of each such
signatory such condition or covenant has been complied with.
(b) Other than with respect to the release of any Purchased
Receivables or Liquidated Receivables, prior to the deposit of any Collateral or
other property or securities with the Indenture Trustee that is to be made the
basis for the release of any property or securities subject to the lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in Section
11.1(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of each person signing
such certificate as to the fair value (within 90 days of such deposit) to the
Issuer of the Collateral or other property or securities to be so deposited.
(i) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (b) above, the Issuer
shall also deliver to the Indenture Trustee an Independent Certificate as
to the same matters, if the fair value to the Issuer of the securities to
be so deposited and of all other such securities made the basis of any such
withdrawal or release since the commencement of the then-current fiscal
year of the Issuer, as set forth in the certificates delivered pursuant to
clause (b) above and this clause (i), is 10% or more of the Outstanding
Amount of the Notes, but such a certificate need not be furnished with
respect to any securities so deposited, if the fair value thereof to the
Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than 1 percent of the Outstanding Amount of the Notes.
(ii) Other than with respect to the release of any Purchased
Receivables or Liquidated Receivables, whenever any property or securities
are to be released from the lien of this Indenture, the Issuer shall also
furnish to the Indenture Trustee an Officer's Certificate certifying or
stating the opinion of each person signing such certificate as to the fair
value (within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (ii) above, the Issuer
shall also furnish to the Indenture Trustee an Independent Certificate as
to the same matters if the fair value of the property or securities and of
all other property other than Purchased Receivables and Defaulted
Receivables, or securities released from the lien of this Indenture since
the commencement of the then current calendar year, as set forth in the
certificates required by clause (ii) above and this clause (iii), equals
10% or more of the Outstanding Amount of the Notes, but such certificate
need not be furnished in the case of any release of property or securities
if the fair value thereof as set forth in the related Officer's Certificate
is less than $25,000 or less than 1 percent of the then Outstanding Amount
of the Notes.
(iv) Notwithstanding Section 2.9 or any other provision of this
Section, the Issuer may (A) collect, liquidate, sell or otherwise dispose
of Receivables as and to the
58
extent permitted or required by the Basic Documents and (B) make cash
payments out of the Accounts as and to the extent permitted or required by
the Basic Documents.
SECTION 11.2 Form of Documents Delivered to Indenture Trustee. In
------------------------------------------------
any case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
SECTION 11.3 Acts of Noteholders.
-------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein
59
sometimes referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.1) conclusive in favor of the Indenture Trustee and
the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any customary manner of the Indenture
Trustee.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating
------------------------------------------------------
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
--------
or act of Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to or filed with:
(a) The Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if personally delivered, delivered by
overnight courier or mailed certified mail, return receipt requested and shall
be deemed to have been duly given upon receipt to the Indenture Trustee at its
Corporate Trust Office, or
(b) The Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if personally delivered, delivered by
overnight courier or mailed certified mail, return receipt requested and shall
deemed to have been duly given upon receipt to the Issuer addressed to: Chevy
Chase Auto Receivables Trust 2001-2, in care of Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration, with a copy to the Indenture Trustee
at its Corporate Trust Office, Attention: Structured Finance, or at any other
address previously furnished in writing to the Indenture Trustee by Issuer. The
Issuer shall promptly transmit any notice received by it from the Noteholders to
the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered, delivered by overnight courier or mailed certified mail, return
receipt requested to (i) in the case of Moody's, at the following address:
Moody's Investors Service, Inc., 99 Church Street, Attention: ABS Monitoring
Group, (4th Floor), New York, New York 10007, (ii) in the case of S&P, at the
following address: Standard & Poor's Ratings Services, 55 Water Street, New
York, New York 10041, Attention of Asset Backed Surveillance Department, and
(iii) in the case of Fitch at the following address: One State Street Plaza, New
York, NY 10004; or as to each of the foregoing, at such other address as shall
be designated by written notice to the other parties.
SECTION 11.5 Notices to Noteholders; Waiver. Where this Indenture
------------------------------
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless
60
otherwise herein expressly provided) if in writing and mailed, first-class,
postage prepaid to each Noteholder affected by such event, at his address as it
appears on the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. In any case
where notice to Noteholders is given by mail, neither the failure to mail such
notice nor any defect in any notice so mailed to any particular Noteholder shall
affect the sufficiency of such notice with respect to other Noteholders, and any
notice that is mailed in the manner here in provided shall conclusively be
presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default or
Event of Default.
SECTION 11.6 Alternate Payment and Notice Provisions. Notwithstanding
---------------------------------------
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee or any Paying Agent to such Holder,
that is different from the methods provided for in this Indenture for such
payments or notices, provided that such methods are reasonable and consented to
by the Indenture Trustee (which consent shall not be unreasonably withheld). The
Issuer will furnish to the Indenture Trustee a copy of each such agreement and
the Indenture Trustee will cause payments to be made and notices to be given in
accordance with such agreements..
SECTION 11.7 Conflict with Trust Indenture Act. If any provision
---------------------------------
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA (S)(S) 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents. The Article
----------------------------------------
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
61
SECTION 11.9 Successors and Assigns. All covenants and agreements in
----------------------
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors.
SECTION 11.10 Separability. In case any provision in this Indenture
------------
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.11 Benefits of Indenture. Nothing in this Indenture or in
---------------------
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other person with an ownership interest in any part
of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 11.12 Legal Holidays. In any case where the date on which any
--------------
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date an which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13 GOVERNING LAW. THE PARTIES AGREE THAT IN ACCORDANCE
-------------
WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK,
THIS INDENTURE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 Counterparts. This Indenture may be executed in any
------------
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15 Trust Obligation; Limitation of Liabilities. (a) No
-------------------------------------------
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Servicer, the Indenture Trustee, or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of the
Seller, the Servicer, the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Seller, the Servicer, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Seller, the Servicer, the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacity) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for
62
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity. For all purposes of this
Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Indenture has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the Trust and
in no event shall Wilmington Trust Company in its individual capacity or, except
as expressly provided in the Trust Agreement, as Owner Trustee 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 Indenture, 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 V, VI
and VII of the Trust Agreement.
(c) Notwithstanding anything contained herein to the contrary, this
Agreement has been executed and delivered by U.S. Bank National Association, not
in its individual capacity but solely as Indenture Trustee and in no event shall
U.S. Bank National Association, 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.
(d) In no event shall U.S. Bank National Association, in any of its
capacities hereunder, be deemed to have assumed any duties of the Owner Trustee
under the Delaware Business Trust Statute, common law, or the Trust Agreement.
SECTION 11.16 No Petition. The Indenture Trustee by entering into
-----------
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Seller, or the
Issuer, or join in any institution against the Seller, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or State bankruptcy or
similar law in connection with any obligations relating to the Notes, this
Indenture or any of the Basic Documents.
SECTION 11.17 Inspection. The Issuer agrees that, on reasonable prior
----------
notice, it will permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports, and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. Subject to the
provisions of the immediately following sentence, the Indenture Trustee agrees
that it shall keep all information obtained in the course of such examination
confidential. Notwithstanding anything herein to the contrary, the foregoing
shall not be construed to prohibit (i) disclosure of any and all information
that is or becomes publicly known, (ii) disclosure of any and all information
(A) if required to do so by
63
any applicable statute, law, rule or regulation, (B) to any government agency or
regulatory body having or claiming authority to regulate or oversee any respects
of the Indenture Trustee's business or that of its affiliates, (C) pursuant to
any subpoena, civil investigative demand or similar demand or request of any
court, regulatory authority, arbitrator or arbitration to which the Indenture
Trustee or an affiliate or an officer, director, employer or shareholder thereof
is a party, (D) in any preliminary or final offering circular, registration
statement or contract or other document pertaining to the transactions
contemplated by the Indenture approved in advance by the Servicer or the Issuer
or (E) to any independent or internal auditor, agent, employee or attorney of
the Indenture Trustee having a need to know the same, provided that the
Indenture Trustee advises such recipient of the confidential nature of the
information being disclosed, or (iii) any other disclosure authorized by the
Servicer or the Issuer.
[THIS SPACE LEFT INTENTIONALLY BLANK]
64
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, hereunto duly
authorized, all as of the day and year first above written.
CHEVY CHASE AUTO RECEIVABLES TRUST 2001-2,
By: Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee
By:_________________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION, not in its individual
capacity but solely as Indenture Trustee
By:_________________________________________
Name: Eve d. Kaplan
Title: Vice President
[Indenture]
EXHIBIT A-1
REGISTERED $85,000,000
No. RB-1-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 166778 BD 1
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CHEVY CHASE AUTO RECEIVABLES TRUST 2001-2
CLASS A-1 2.77313% ASSET BACKED NOTES
Chevy Chase Auto Receivables Trust 2001-2, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of EIGHTY-FIVE MILLION DOLLARS payable on
each Payment Date in an amount equal to the aggregate amount, if any, payable
from the Note Account in respect of principal on the Class A-1 Notes pursuant to
the Indenture; provided, however, that the entire unpaid principal amount of
-------- -------
this Note shall be due and payable on September 16, 2002 (the "Final Scheduled
Payment Date"). The Issuer will pay interest on this Note at the rate per annum
shown above on each Payment Date until the principal of this Note is paid or
made available for payment. Interest on this Note will accrue for each Payment
Date from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from September
27, 2001. Interest will be computed on the basis of the actual number of days
elapsed in a 360-day year. Such principal of and interest on this Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to
A-1-1
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-1-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
CHEVY CHASE AUTO RECEIVABLES TRUST 2001-2
by
Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee under the
Trust Agreement
by_______________________
Name:
Title:
A-1-3
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
Date: [________], 2001 U.S. BANK NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Indenture Trustee
by__________________________
Authorized Signer
A-1-4
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 2.77313% Asset Backed Notes (herein called the
"Class A-1 Notes"), all issued under an Indenture dated as of September 1, 2001
(such indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and U.S. Bank National Association, as Indenture Trustee
(the "Indenture Trustee", which term includes any successor Indenture Trustee
under the Indenture) to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class B Notes (together, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing October 15, 2001. The term "Payment Date,"
shall be deemed to include the Final Scheduled Payment Date.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Payment Date and
the Redemption Date, if any, pursuant to the Indenture. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee, at the direction of the Declaring
Noteholders, has declared the Notes to be immediately due and payable in the
manner provided in the Indenture. All principal payments on the Class A-1 Notes
shall be made pro rata to the Class A-1 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining
A-1-5
unpaid principal amount of this Note on a Payment Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Holder hereof as of the Record Date preceding such Payment Date by
notice mailed prior to such Payment Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in St. Paul,
Minnesota.
The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Servicer, on any Payment Date on or after the
date on which the aggregate Note Principal Balance is less than or equal to 5%
of the aggregate Initial Note Principal Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("Stamp") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, Stamp,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Servicer, the Owner Trustee, the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the Seller,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Seller, the Servicer, the Indenture Trustee or the Owner Trustee
in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity).
A-1-6
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees to treat
such Note as indebtedness for all applicable federal income, state and local
income and franchise and any other income tax reporting purposes.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer, the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Noteholders representing a majority
of the Outstanding Amount of all Notes at the time Outstanding. The Indenture
also contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
A-1-7
ASSIGNMENT
Name, Address, Social Security or taxpayer I.D. or other identifying number of
assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, ____________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated _________________________ Signature by or on behalf of assignee:
_______________________________________/1/
Signature Guaranteed:
_______________________________________
______________________________
/1/ NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-1-8
EXHIBIT A-2
REGISTERED $90,000,000
No. RB-2-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 166778 BE 9
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CHEVY CHASE AUTO RECEIVABLES TRUST 2001-2
CLASS A-2 2.97% ASSET BACKED NOTES
Chevy Chase Auto Receivables Trust 2001-2, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of NINETY MILLION DOLLARS payable on each
Payment Date in an amount equal to the aggregate amount, if any, payable from
the Note Account in respect of principal on the Class A-2 Notes pursuant to the
Indenture; provided, however, that the entire unpaid principal amount of this
-------- -------
Note shall be due and payable on the May 17, 2004 Payment Date (the "Final
Scheduled Payment Date"). The Issuer will pay interest on this Note at the rate
per annum shown above on each Payment Date until the principal of this Note is
paid or made available for payment. Interest on this Note will accrue for each
Payment Date from the most recent Payment Date on which interest has been paid
to but excluding such Payment Date or, if no interest has yet been paid, from
September 27, 2001. Interest will be computed on the basis of a 360-day year
assumed to consist of twelve 30-day months. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to
A-2-1
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-2-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
CHEVY CHASE AUTO RECEIVABLES TRUST 2001-2
by: Wilmington Trust Company,
not in its individual capacity but solely as Owner
Trustee under the Trust Agreement
by ____________________________________
Name:
Title:
A-2-3
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: [________], 2001 U.S. BANK NATIONAL ASSOCIATION, not in its individual
capacity but solely as Indenture Trustee
by______________________________________
Authorized Signer
A-2-4
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-2 2.97% Asset Backed Notes (herein called the
"Class A-2 Notes"), all issued under an Indenture dated as of September 1, 2001
(such indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and U.S. Bank National Association, as Indenture Trustee (the
"Indenture Trustee", which term includes any successor Indenture Trustee under
the Indenture) to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class B Notes (together, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing October 15, 2001. The term "Payment Date,"
shall be deemed to include the Final Scheduled Payment Date.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Payment Date and
the Redemption Date, if any, pursuant to the Indenture. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee, at the direction of the Declaring
Noteholders, has declared the Notes to be immediately due and payable in the
manner provided in the Indenture. All principal payments on the Class A-2 Notes
shall be made pro rata to the Class A-2 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining
A-2-5
unpaid principal amount of this Note on a Payment Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Holder hereof as of the Record Date preceding such Payment Date by
notice mailed prior to such Payment Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in St. Paul,
Minnesota.
The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Servicer, on any Payment Date on or after the
date on which the aggregate Note Principal Balance is less than or equal to 5%
of the aggregate Initial Note Principal Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("Stamp") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, Stamp,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the Seller,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Seller, the Servicer, the Indenture Trustee or the Owner Trustee
in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity).
A-2-6
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees to treat
such Note as indebtedness for all applicable federal income, state and local
income and franchise and any other income tax reporting purposes.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer, the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Noteholders representing a majority
of the Outstanding Amount of all Notes at the time Outstanding. The Indenture
also contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
A-2-7
ASSIGNMENT
Name, Address, Social Security or taxpayer I.D. or other identifying number of
assignee:
____________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto__________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, ______________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated______________________________ Signature by or on behalf of assignee:
____________________________________/1/
Signature Guaranteed:
______________________________________
___________________________________
/1/ NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-2-8
EXHIBIT A-3
REGISTERED $120,000,000
No. RB-3-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 166778 BF 6
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CHEVY CHASE AUTO RECEIVABLES TRUST 2001-2
CLASS A-3 3.80% ASSET BACKED NOTES
Chevy Chase Auto Receivables Trust 2001-2, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of ONE HUNDRED TWENTY MILLION DOLLARS
payable on each Payment Date in an amount equal to the aggregate amount, if any,
payable from the Note Account in respect of principal on the Class A-3 Notes
pursuant to the Indenture; provided, however, that the entire unpaid principal
-------- -------
amount of this Note shall be due and payable on the November 15, 2005 Payment
Date (the "Final Scheduled Payment Date"). The Issuer will pay interest on this
Note at the rate per annum shown above on each Payment Date until the principal
of this Note is paid or made available for payment. Interest on this Note will
accrue for each Payment Date from the most recent Payment Date on which interest
has been paid to but excluding such Payment Date or, if no interest has yet been
paid, from September 27, 2001. Interest will be computed on the basis of a 360-
day year assumed to consist of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to
A-3-1
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-3-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
CHEVY CHASE AUTO RECEIVABLES TRUST 2001-2
by: Wilmington Trust Company,
not in its individual capacity but solely as Owner
Trustee under the Trust Agreement
by_____________________________________
Name:
Title:
A-3-3
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: [________], 2001 U.S. BANK NATIONAL ASSOCIATION, not in its
individual capacity but solely as Indenture
Trustee
by___________________________________________
Authorized Signer
A-3-4
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-3 3.80% Asset Backed Notes (herein called the "Class
A-3 Notes"), all issued under an Indenture dated as of September 1, 2001 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and U.S. Bank National Association, as Indenture Trustee (the
"Indenture Trustee", which term includes any successor Indenture Trustee under
the Indenture) to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class B Notes (together, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class A-3 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing October 15, 2001. The term "Payment Date,"
shall be deemed to include the Final Scheduled Payment Date.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Payment Date and
the Redemption Date, if any, pursuant to the Indenture. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee, at the direction of the Declaring
Noteholders, has declared the Notes to be immediately due and payable in the
manner provided in the Indenture. All principal payments on the Class A-3 Notes
shall be made pro rata to the Class A-3 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining
A-3-5
unpaid principal amount of this Note on a Payment Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Holder hereof as of the Record Date preceding such Payment Date by
notice mailed prior to such Payment Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in St. Paul,
Minnesota.
The Issuer shall pay interest on overdue installments of interest at
the Class A-3 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Servicer, on any Payment Date on or after the
date on which the aggregate Note Principal Balance is less than or equal to 5%
of the aggregate Initial Note Principal Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("Stamp") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, Stamp,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the Seller,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Seller, the Servicer, the Indenture Trustee or the Owner Trustee
in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity).
A-3-6
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees to treat
such Note as indebtedness for all applicable federal income, state and local
income and franchise and any other income tax reporting purposes.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer, the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Noteholders representing a majority
of the Outstanding Amount of all Notes at the time Outstanding. The Indenture
also contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
A-3-7
ASSIGNMENT
Name, Address, Social Security or taxpayer I.D. or other identifying number of
assignee:
____________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto__________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, _________________, attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated_________________________ Signature by or on behalf of assignee:
________________________________________/1/
Signature Guaranteed:
____________________________________________
_____________________________
/1/ NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-3-8
EXHIBIT A-4
REGISTERED $96,000,000
No. RB-4-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 166778 BG 4
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CHEVY CHASE AUTO RECEIVABLES TRUST 2001-2
CLASS A-4 4.44% ASSET BACKED NOTES
Chevy Chase Auto Receivables Trust 2001-2, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of NINETY-SIX MILLION DOLLARS payable on
each Payment Date in an amount equal to the aggregate amount, if any, payable
from the Note Account in respect of principal on the Class A-4 Notes pursuant to
the Indenture; provided, however, that the entire unpaid principal amount of
-------- -------
this Note shall be due and payable on the April 16, 2007 Payment Date (the
"Final Scheduled Payment Date"). The Issuer will pay interest on this Note at
the rate per annum shown above on each Payment Date until the principal of this
Note is paid or made available for payment. Interest on this Note will accrue
for each Payment Date from the most recent Payment Date on which interest has
been paid to but excluding such Payment Date or, if no interest has yet been
paid, from September 27, 2001. Interest will be computed on the basis of a 360-
day year assumed to consist of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to
A-4-1
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-4-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
CHEVY CHASE AUTO RECEIVABLES TRUST 2001-2
by: Wilmington Trust Company,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
by_________________________________________
Name:
Title:
A-4-3
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: [________], 2001 U.S. BANK NATIONAL ASSOCIATION, not in its
individual capacity but solely as Indenture
Trustee
by____________________________________
Authorized Signer
A-4-4
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-4 4.44% Asset Backed Notes (herein called the "Class
A-4 Notes"), all issued under an Indenture dated as of September 1, 2001 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and U.S. Bank National Association, as Indenture Trustee (the
"Indenture Trustee", which term includes any successor Indenture Trustee under
the Indenture) to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class B Notes (together, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class A-4 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing October 15, 2001. The term "Payment Date,"
shall be deemed to include the Final Scheduled Payment Date.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Payment Date and
the Redemption Date, if any, pursuant to the Indenture. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee, at the direction of the Declaring
Noteholders, has declared the Notes to be immediately due and payable in the
manner provided in the Indenture. All principal payments on the Class A-4 Notes
shall be made pro rata to the Class A-4 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining
A-4-5
unpaid principal amount of this Note on a Payment Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Holder hereof as of the Record Date preceding such Payment Date by
notice mailed prior to such Payment Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in St. Paul,
Minnesota.
The Issuer shall pay interest on overdue installments of interest at
the Class A-4 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Servicer, on any Payment Date on or after the
date on which the aggregate Note Principal Balance is less than or equal to 5%
of the aggregate Initial Note Principal Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("Stamp") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, Stamp,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the Seller,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Seller, the Servicer, the Indenture Trustee or the Owner Trustee
in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity).
A-4-6
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees to treat
such Note as indebtedness for all applicable federal income, state and local
income and franchise and any other income tax reporting purposes.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer, the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Noteholders representing a majority
of the Outstanding Amount of all Notes at the time Outstanding. The Indenture
also contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
A-4-7
ASSIGNMENT
Name, Address, Social Security or taxpayer I.D. or other identifying number of
assignee:
____________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ____________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, __________________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated________________________ Signature by or on behalf of assignee:
______________________________________/1/
Signature Guaranteed:
________________
_____________________________________
/1/ NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-4-8
EXHIBIT A-5
REGISTERED $12,332,000
No. RB-5-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 166778 BH 2
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CHEVY CHASE AUTO RECEIVABLES TRUST 2001-2
CLASS B 5.16% ASSET BACKED NOTES
Chevy Chase Auto Receivables Trust 2001-2, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of TWELVE MILLION THREE HUNDRED THIRTY-TWO
THOUSAND DOLLARS payable on each Payment Date in an amount equal to the
aggregate amount, if any, payable from the Note Account in respect of principal
on the Class B Notes pursuant to the Indenture; provided, however, that the
-------- -------
entire unpaid principal amount of this Note shall be due and payable on the
March 17, 2008 Payment Date (the "Final Scheduled Payment Date"). The Issuer
will pay interest on this Note at the rate per annum shown above on each Payment
Date until the principal of this Note is paid or made available for payment.
Interest on this Note will accrue for each Payment Date from the most recent
Payment Date on which interest has been paid to but excluding such Payment Date
or, if no interest has yet been paid, from September 27, 2001. Interest will be
computed on the basis of a 360-day year assumed to consist of twelve 30-day
months. Payments on the Class B Notes will be subordinated in priority of
payments of interest and principal due on the Class A Notes. Such principal of
and interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and
A-5-1
private debts. All payments made by the Issuer with respect to this Note shall
be applied first to interest due and payable on this Note as provided above and
then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-5-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
CHEVY CHASE AUTO RECEIVABLES TRUST 2001-2
by: Wilmington Trust Company,
not in its individual capacity but solely as Owner
Trustee under the Trust Agreement
by ______________________________
Name:
Title:
A-5-3
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: [________], 2001 U.S. BANK NATIONAL ASSOCIATION, not in its
individual capacity but solely as Indenture
Trustee
by_______________________________
Authorized Signer
A-5-4
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class B 5.16% Asset Backed Notes (herein called the "Class B
Notes"), all issued under an Indenture dated as of September 1, 2001 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and U.S. Bank National Association, as Indenture Trustee (the
"Indenture Trustee", which term includes any successor Indenture Trustee under
the Indenture) to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class B Notes (together, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class B Notes will be payable on each Payment Date in
an amount described on the face hereof. "Payment Date" means the fifteenth day
of each month, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing October 15, 2001. The term "Payment Date," shall be
deemed to include the Final Scheduled Payment Date.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Payment Date and
the Redemption Date, if any, pursuant to the Indenture. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee, at the direction of the Declaring
Noteholders, has declared the Notes to be immediately due and payable in the
manner provided in the Indenture. The Controlling Class will have the right
under most circumstances to accelerate the Notes, or waive an Event of Default,
as well as direct remedies following an Event of Default. All principal
payments on the Class B Notes shall be made pro rata to the Class B Noteholders
entitled thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are
A-5-5
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Payment Date, then
the Indenture Trustee, in the name of and on behalf of the Issuer, will notify
the Person who was the Holder hereof as of the Record Date preceding such
Payment Date by notice mailed prior to such Payment Date and the amount then due
and payable shall be payable only upon presentation and surrender of this Note
at the Indenture Trustee's principal Corporate Trust Office or at the office of
the Indenture Trustee's agent appointed for such purposes located in St. Paul,
Minnesota.
The Issuer shall pay interest on overdue installments of interest at
the Class B Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Servicer, on any Payment Date on or after the
date on which the aggregate Note Principal Balance is less than or equal to 5%
of the aggregate Initial Note Principal Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("Stamp") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, Stamp,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the Seller,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Seller, the Servicer, the Indenture Trustee or the Owner Trustee
in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity).
A-5-6
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees to treat
such Note as indebtedness for all applicable federal income, state and local
income and franchise and any other income tax reporting purposes.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer, the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Noteholders representing a majority
of the Outstanding Amount of all Notes at the time Outstanding. The Indenture
also contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
A-5-7
ASSIGNMENT
Name, Address, Social Security or taxpayer I.D. or other identifying number of
assignee:
____________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints,_____________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated___________________ Signature by or on behalf of assignee:
_________________________________/1/
Signature Guaranteed: __________
____________________________________
/1/ NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-5-8