================================================================================
TRUST AGREEMENT
among
CHEVY CHASE BANK, F.S.B.
_________________________,
not in its individual capacity but solely as Owner Trustee,
and
_________________________,
as Servicer
Dated as of __________, 199__
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS................................................... 2
SECTION 1.1 Capitalized Terms......................................... 2
SECTION 1.2 Other Definitional Provisions............................. 4
ARTICLE II ORGANIZATION.................................................. 5
SECTION 2.1 Name...................................................... 5
SECTION 2.2 Office.................................................... 5
SECTION 2.3 Purposes and Powers....................................... 5
SECTION 2.4 Appointment of Owner Trustee.............................. 6
SECTION 2.5 Organizational Expenses................................... 6
SECTION 2.6 Declaration of Trust...................................... 6
SECTION 2.7 Liability of the Securityholders.......................... 7
SECTION 2.8 Title to Trust Property................................... 7
SECTION 2.9 Situs of Trust............................................ 7
SECTION 2.10 Representations and Warranties of
the Sponsor............................................. 7
SECTION 2.11 Books and Records; Tax Returns........................... 8
SECTION 2.12 Authorized Representative................................ 9
ARTICLE III THE SECURITIES................................................ 9
SECTION 3.1 The Securities............................................ 9
SECTION 3.2 Registration of Transfer and Exchange
of Securities........................................... 10
SECTION 3.3 No Charge; Destruction of Void
Securities.............................................. 10
SECTION 3.4 Mutilated, Destroyed, Lost or Stolen...................... 10
SECTION 3.5 Persons Deemed Securityholders............................ 11
SECTION 3.6 Access to List of Securityholders'
Names and Addresses..................................... 11
SECTION 3.7 Acts of Securityholders................................... 12
SECTION 3.8 Limitation on Transfer and Exchange....................... 12
SECTION 3.9 Payments to Securityholders............................... 13
ARTICLE IV ACTIONS BY THE OWNER TRUSTEE.................................. 13
SECTION 4.1 Prior Notice to Securityholders with
Respect to Certain Matters.............................. 13
SECTION 4.2 Bankruptcy................................................ 14
SECTION 4.3 Rights of Securityholders to Direct
Owner Trustee........................................... 14
SECTION 4.4 Suits for Enforcement..................................... 14
SECTION 4.5 Owner Trustee May Enforce Claims
without Possession of Securities........................ 14
SECTION 4.6 Limitation on Rights of
Securityholders......................................... 15
i
Page
----
ARTICLE V AUTHORITY AND DUTIES OF THE OWNER
TRUSTEE....................................................... 16
SECTION 5.1 General Authority......................................... 16
SECTION 5.2 General Duties............................................ 16
SECTION 5.3 Action upon Instruction................................... 16
SECTION 5.4 No Duties Except as Specified in this
Agreement or in Instructions............................ 17
SECTION 5.5 No Action Except Under Specified
Documents or Instructions............................... 17
SECTION 5.6 Restrictions.............................................. 17
ARTICLE VI CONCERNING THE OWNER TRUSTEE.................................. 18
SECTION 6.1 Acceptance of Trusts and Duties........................... 18
SECTION 6.2 Furnishing of Documents................................... 19
SECTION 6.3 Representations and Warranties............................ 19
SECTION 6.4 Reliance; Advice of Counsel............................... 20
SECTION 6.5 Owner Trustee Not Liable for
Securities or Contracts................................. 21
SECTION 6.6 Not Acting in Individual Capacity......................... 21
SECTION 6.7 Interpretation of Trust Agreement......................... 22
ARTICLE VII COMPENSATION AND INDEMNIFICATION OF OWNER
TRUSTEE....................................................... 22
SECTION 7.1 Owner Trustee's Fees and Expenses......................... 22
SECTION 7.2 Indemnification........................................... 23
ARTICLE VIII SUCCESSOR OWNER TRUSTEES AND ADDITIONAL
OWNER TRUSTEES................................................ 23
SECTION 8.1 Eligibility Requirements for Owner
Trustee................................................. 23
SECTION 8.2 Resignation or Removal of Owner
Trustee................................................. 23
SECTION 8.3 Successor Owner Trustee................................... 24
SECTION 8.4 Merger or Consolidation of Owner
Trustee................................................. 25
SECTION 8.5 Appointment of Co-Owner Trustee or
Separate Owner Trustee.................................. 25
ARTICLE IX TERMINATION OF TRUST AGREEMENT................................ 27
SECTION 9.1 Termination of Trust Agreement............................ 27
SECTION 9.2 Dissolution upon Bankruptcy of the
Sponsor................................................. 28
ARTICLE X MISCELLANEOUS................................................. 29
SECTION 10.1 Supplements and Amendments............................... 29
ii
Page
----
SECTION 10.2 Notices.................................................. 30
SECTION 10.3 Merger and Integration................................... 31
SECTION 10.4 Headings................................................. 31
SECTION 10.5 Governing Law............................................ 31
SECTION 10.6 Counterparts............................................. 31
SECTION 10.7 No Legal Title to Trust Estate in
Securityholder......................................... 31
SECTION 10.8 Limitation on Rights of Others........................... 32
SECTION 10.9 Severability............................................. 32
SECTION 10.10 Successors and Assigns.................................. 32
SECTION 10.11 No Implied Waiver....................................... 32
SECTION 10.12 No Petition............................................. 32
SECTION 10.13 No Recourse............................................. 33
Exhibit A Form of Security.............................................. A-1
Exhibit B Investment Letter............................................. B-1
iii
THIS TRUST AGREEMENT, dated as of ____________, 199_ (the "Trust
Agreement"), among CHEVY CHASE BANK, F.S.B. Corporation, a ______ corporation
(the "Sponsor"), __________________, a _____________ banking corporation, not in
-------
its individual capacity but solely as trustee (together with its permitted
successors in the trusts hereunder, the "Owner Trustee") of the [Chevy Chase
-------------
Auto Receivables Trust 199__] (the "Trust"), ____________________, as Servicer
-----
(the "Servicer") and the holders (the "Securityholders") of undivided percentage
-------- ---------------
interests in the Trust.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements, covenants and undertakings herein contained, the parties
intending to be legally bound, hereby agree as follows:
PRELIMINARY STATEMENTS
----------------------
In the regular course of its business, ____________________, a
__________ corporation (the "Originator"), has acquired the Receivables. All
capitalized terms used in these Preliminary Statements which are not defined
shall have the meanings ascribed to such terms in Article I.
Pursuant to the Receivables Acquisition Agreement, dated ______,
199__, between the Originator and the Sponsor, the Originator assigned the
Contracts and the Vehicles to the Sponsor.
The Sponsor will immediately thereafter transfer and assign the
Contracts and grant a security interest in the related Vehicles to the Trust.
The Receivables will be serviced by the Servicer, pursuant to a Servicing
Agreement, dated as of the date hereof (the "Servicing Agreement"), among the
-------------------
Servicer, the Sponsor, ____________________, not in its individual capacity but
solely as Collateral Trustee (the "Collateral Trustee"), _______________, and
------------------
the Trust.
Each Securityholder by accepting its Security shall be deemed to have
agreed to the terms of this Agreement and to have authorized the Trust to
acquire the Contracts from the Sponsor and hold such Contracts and other assets
described in the Receivables Acquisition Agreement in trust for the use and
benefit of the Securityholders. Subject to the terms and conditions set forth
in this Agreement, the Owner Trustee will issue auto receivables backed
securities (the "Securities") to the Securityholders.
----------
1
ARTICLE I
DEFINITIONS
-----------
SECTION 1.1 Capitalized Terms. For all purposes of this Agreement,
-----------------
the following terms shall have the meanings set forth below:
"Agreement" means this Trust Agreement as originally executed and, if
---------
from time to time supplemented or amended by one or more amendments entered into
pursuant to the applicable provisions hereof, as so supplemented or amended.
"Applicants" has the meaning ascribed to such term in Section 3.6.
----------
"Basic Documents" means this Agreement, the Servicing Agreement, the
---------------
Indenture, the Receivables Acquisition Agreement, and the other documents and
certificates delivered in connection therewith.
"Security" means a Security evidencing a Percentage Interest in the
--------
Trust, executed and delivered by the Owner Trustee to an investor substantially
in the form of Exhibit A.
"Securityholder" means the Person in whose name a Security is
--------------
registered in the Security Register, other than the Sponsor.
"Security Register" means the register maintained pursuant to
-----------------
Section 3.2.
"Security Registrar" or "Registrar" means the registrar appointed
------------------ ---------
pursuant to Section 3.2.
"Closing Date" means __________, 199___.
------------
"Code" means the Internal Revenue Code of /1986, as amended.
----
"Collateral Trustee" has the meaning ascribed to such term in the
------------------
Preliminary Statements.
"Contracts" means the installment sale contracts for new and used
---------
automobiles and light duty trucks described in the List of Contracts and
includes, without limitation: the originally, manually executed counterpart of
each Contract, including all amendments thereto, and all rights to receive the
Scheduled Payments which are due pursuant thereto; any and all security
interests and any and all rights to enforce the monetary and non-monetary
2
covenants of each Obligor thereunder; and all proceeds of the any of the
foregoing.
"Corporate Trust Office" means the office of the Owner Trustee located
----------------------
at ________________________________; or at such other address as the Owner
Trustee may designate by notice to the Securityholders and the Sponsor, or the
principal trust office of any successor Owner Trustee.
"Sponsor" means Chevy Chase Bank, F.S.B., a ________ corporation.
-------
"Eligible Bank" means [Trustee], so long as such bank continues to act
-------------
as Owner Trustee hereunder; thereafter, Eligible Bank means any depository
institution with trust powers organized under the laws of the United States or
any state having capital and surplus in excess of $50,000,000, the deposits of
which are insured to the full extent permitted by law by the Federal Deposit
Insurance Corporation and which is subject to supervision and examination by
federal or state authorities. If such depository institution publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
"Expenses" has the meaning ascribed to such term in Section 7.2.
--------
"Indenture" means the Indenture, dated as of the date hereof, between
---------
_____________, not in its individual capacity but solely as Indenture Trustee,
and the Trust, as such agreement may be further amended, modified or
supplemented from time to time.
"Note" means a debt instrument issued by the Trust pursuant to the
----
Indenture and secured by the assets of the Trust, executed and delivered by the
Owner Trustee to an investor.
"Noteholders" means any Person in whose name a Note is registered,
-----------
other than the Sponsor.
"Obligor" means the obligor under each Contract, its successors and
-------
assigns and any other person who owes or has guaranteed payment under a
Contract.
"Owner Trustee" means _____________, not in its individual capacity
-------------
but solely as trustee under this Agreement, until a successor Owner Trustee
shall have been
3
appointed pursuant to the applicable provisions of this Agreement, and
thereafter such successor Owner Trustee.
"Percentage" or "Percentage Interest", means the undivided interest in
---------- -------------------
the Trust expressed as a percentage owned by the holder of a particular
Security.
"Person" means any legal person, including any individual,
------
corporation, limited liability company, partnership, joint venture, association,
joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Receivables Acquisition Agreement" has the meaning ascribed to
---------------------------------
such term in the Preliminary Statements.
"Servicer" has the meaning ascribed to such term in the first
--------
paragraph hereof.
"Servicing Agreement" has the meaning ascribed to such term in the
-------------------
Preliminary Statements.
"Trust Estate" means all right, title and interest of the Trust in and
------------
to the property and rights assigned to the Trust pursuant to the Receivables
Acquisition Agreement, and all other property of the Trust from time to time,
including any rights of the Owner Trustee and the Trust pursuant to the
Servicing Agreement.
"Vehicles" means the new and used automobiles and light duty
--------
trucks sold to Obligors as described in the Contracts.
SECTION 1.2 Other Definitional Provisions. (a) Capitalized terms
-----------------------------
used herein and not otherwise defined have the meanings assigned to them in the
Servicing Agreement or, if not defined therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles in effect on the date
hereof. To the extent that the definitions of accounting terms in this
Agreement or in any such
4
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other documents shall control.
(d) The words "hereof", "herein", "hereunder", and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
ARTICLE II
ORGANIZATION
------------
SECTION 2.1 Name. The Trust created hereby shall be known as ["Chevy
----
Chase Auto Receivables Trust 199__-___"], in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and xxx and be sued.
SECTION 2.2 Office. The office of the Trust shall be in care of the
------
Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Securityholders and the
Sponsor.
SECTION 2.3 Purposes and Powers. (a) The purpose of the Trust is to
-------------------
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Securities pursuant to this Agreement and to sell the Notes and/or
Securities in one or more transactions;
(ii) with the proceeds of the sale of the Notes and the
Securities, to pay such proceeds to, or as directed in writing by, the
Sponsor;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the Indenture and to hold, manage and distribute
to the Securityholders pursuant to the terms of the Servicing
5
Agreement any portion of the Trust Estate released from the lien of, and
remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to engage
in such other activities as may be required in connection with conservation
of the Trust Estate and the making of distributions to the Securityholders
and the Noteholders.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the Basic Documents.
SECTION 2.4 Appointment of Owner Trustee. The Seller hereby appoints
----------------------------
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.
SECTION 2.5 Organizational Expenses. The Sponsor shall pay
-----------------------
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee.
SECTION 2.6 Declaration of Trust. The Owner Trustee hereby declares
--------------------
that it will hold the Trust Estate in trust upon and subject to the condition
set forth herein for the use and benefit of the Securityholders, subject to the
obligations of the Trust under the Basic Documents. It is the intention of the
parties hereto that the Trust constitute a trust and that this Agreement
constitute the governing instrument of such trust. It is the intention of the
parties hereto that, solely for income and franchise tax purposes, the Trust
shall be treated as a partnership, with the assets of the partnership being the
Receivables and other assets held by the Trust, the partners of the partnership
being the Securityholders and the Notes being the debt of the partnership. The
parties agree that, unless otherwise required by appropriate tax authorities,
the Trust will file or cause to be filed annual or other necessary returns,
reports and other forms consistent with the characterization of the Trust as a
partnership for such tax
6
purposes. Effective as of the date hereof, the Servicer and the Owner Trustee
(subject to the provisions hereof) shall have all rights, powers and duties set
forth herein with respect to accomplishing the purposes of the Trust.
SECTION 2.7 Liability of the Securityholders. (a) The Sponsor shall
--------------------------------
be liable directly to and will indemnify the Securityholders, Noteholders or any
other injured party for all losses, claims, damages, liabilities and expenses of
the Trust (including expenses, to the extent not paid out of the Trust Estate)
to the extent that the Sponsor would be liable if the Trust were a ___________
limited partnership in which the Sponsor were a general partner; provided,
--------
however, that the Sponsor shall not be liable (i) to any Securityholder or
-------
Noteholder for any losses incurred by such Securityholder in the capacity of an
investor in the Securities or such Noteholder in the capacity of an investor in
the Notes or (ii) to any Person for any losses incurred by such Person as a
result of the fraudulent actions, misrepresentations or willful misconduct of
such Person.
(b) No Securityholder (other than to the extent set forth in
paragraph (a) above) shall have any personal liability for any liability or
obligation of the Trust.
SECTION 2.8 Title to Trust Property. Legal title to all the Trust
-----------------------
Estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Trust Estate to be vested in a trustee or trustees, in which case title
shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
SECTION 2.9 Situs of Trust. The Trust will be located and
--------------
administered in the State of _________. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of
_____________. The Trust shall not have any employees in any state other than
_______; provided, however, that nothing herein shall restrict or prohibit the
-------- -------
Owner Trustee from having employees within or without the State of ________.
The only office of the Trust will be at the Corporate Trust Office in ________.
SECTION 2.10 Representations and Warranties of the Sponsor. The
---------------------------------------------
Sponsor hereby represents and warrants to the Owner Trustee that:
(a) The Sponsor is duly organized and validly existing as a
corporation in good standing
7
under the laws of the State of ______, with corporate power and authority
to own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted.
(b) The Sponsor is duly qualified to do business as a foreign limited
liability company in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business shall require such qualifications.
(c) The Sponsor has the corporate power and authority to execute and
deliver this Agreement and to carry out its terms; the Sponsor has full
power and authority to sell and assign the property to be sold and assigned
to and deposited with the Trust and the Sponsor shall have duly authorized
such sale and assignment and deposit to the Trust by all necessary
corporate action; and the execution, delivery and performance of this
Agreement has been duly authorized by the Sponsor by all necessary
corporate action.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under, the Articles of
Incorporation of the Sponsor, or any indenture, agreement or other
instrument to which the Sponsor is a party or by which it is bound; nor
result in the creation or imposition of any lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than pursuant to the Basic Documents); nor violate any law or, to
the best of the Sponsor's knowledge, any order, rule or regulation
applicable to the Sponsor of any court or of any federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Sponsor or its properties.
SECTION 2.11 Books and Records; Tax Returns. Except as otherwise
------------------------------
expressly provided in this Agreement, the Owner Trustee shall be responsible for
the keeping of all appropriate books and records relating to the receipt and
disbursement by the Owner Trustee of all monies under this Agreement or any
agreement contemplated hereby. The Owner Trustee agrees to file an application
prepared by the Servicer with the Internal Revenue Service for a taxpayer
identification number with respect to the trust created hereby. The Sponsor
shall cause to be timely prepared and the Sponsor shall cause to be timely filed
at the expense of
8
the Sponsor the federal fiduciary tax return for the Trust created hereby and,
upon the request of the Sponsor, such other tax returns as are required to be
executed by the Owner Trustee. The Owner Trustee and the Sponsor, upon request,
will furnish each other with all such information as may reasonably be requested
and shall otherwise cooperate with each other in connection with the preparation
of such income tax returns. The Owner Trustee shall keep copies of all returns
delivered to or filed by it. The Owner Trustee will give to the Sponsor, upon
request, periodic information concerning receipts and disbursements by it with
respect to the Trust created by this Agreement.
SECTION 2.12 Authorized Representative. Any officer of the Servicer
-------------------------
will be authorized to act as an authorized representative ("Authorized
----------
Representative") for the Trust in matters relating to the Trust and must be
--------------
identified on a list of Authorized Representatives delivered by the Servicer to
the Indenture Trustee on the Closing Date and such list may be modified or
supplemented from time to time thereafter. The Servicer agrees to cause its
Authorized Representatives to execute and deliver all documents and to perform
all acts required by the Basic Documents to be executed, delivered and performed
by such Authorized Representatives.
ARTICLE III
THE SECURITIES
--------------
SECTION 3.1 The Securities. The Securities shall be substantially
--------------
in the form of Exhibit A. The Securities shall be issuable only as registered
Securities representing undivided interests in the Trust. The rights to receive
payments with respect to the Securities are subordinated to the prior payment in
full of all amounts of principal and interest on the Notes. The Securities
shall be executed by the Owner Trustee on behalf of the Trust by the manual
signature of a duly authorized officer of the Owner Trustee under the seal of
and attested by the manual signature of the Secretary or an Assistant Secretary
or other authorized officer of the Owner Trustee. Securities bearing the
signatures of individuals who were at the time the proper officers or authorized
signatories of the Owner Trustee shall bind the Owner Trustee, notwithstanding
that such individuals or any of them have ceased to hold such offices or
positions prior to the delivery of such Securities or did not hold such offices
or positions at the date of such Securities. All Securities shall be dated the
date of their execution.
9
SECTION 3.2 Registration of Transfer and Exchange of Securities.
---------------------------------------------------
(a) The Owner Trustee shall maintain, or cause to be maintained, at the
Corporate Trust Office a Security Register in which the Owner Trustee shall
provide or cause to be provided the registration of Securities and transfers and
exchanges of Securities as herein provided. The Owner Trustee is hereby
initially appointed the "Security Registrar" and transfer agent for the purpose
------------------
of registering Securities and transfers and exchanges of Securities as provided
herein.
(b) Subject to Section 3.3 and subject to the conditions set forth in
Section 3.8 hereof, upon surrender for registration or transfer of any Security
at such office, the Owner Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Securities of a like
aggregate Percentage Interest and dated the date of execution by the Owner
Trustee.
(c) At the option of a Securityholder, Securities may be exchanged for
other Securities representing undivided interests in the Trust and of a like
aggregate Percentage Interest, upon surrender of the Securities to be exchanged
at such office. Whenever any Securities are so surrendered for exchange, the
Owner Trustee shall execute and deliver the Securities which the Securityholder
making the exchange is entitled to receive. Every Security presented or
surrendered for transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer in form satisfactory to the
Owner Trustee and the Security Registrar, duly executed by the holder thereof or
his or her attorney duly authorized in writing.
SECTION 3.3 No Charge; Destruction of Void Securities. No service
-----------------------------------------
charge shall be made to the Securityholder for any transfer or exchange of
Securities, but the Owner Trustee or Security Registrar may require payment or a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Securities. All Securities
surrendered for transfer and exchange shall be disposed of in a manner approved
by the Owner Trustee. All Securities surrendered to the Paying Agent for
payment, shall be delivered by the Paying Agent to the Owner Trustee for
disposition as aforesaid.
SECTION 3.4 Mutilated, Destroyed, Lost or Stolen Securities. If (a)
-----------------------------------------------
any mutilated Security is surrendered to the Security Registrar, or the Security
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Security, and (b) there is delivered to the Security Registrar and
the Owner Trustee
10
such security or indemnity as may be required by each to save it harmless, then
in the absence of notice to the Security Registrar or the Owner Trustee that
such Security has been acquired by a bona fide purchaser, the Owner Trustee
shall execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Security, a new Security of like tenor and Percentage.
Upon the issuance of any new Security under this Section 3.4, the Owner Trustee
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. Any duplicate Security issued pursuant to this
Section 3.4 shall constitute complete and indefeasible evidence of ownership of
the Percentage Interest evidenced thereby, as if originally issued, whether or
not the mutilated, destroyed, lost or stolen Security shall be found at any
time.
SECTION 3.5 Persons Deemed Securityholders. Prior to due
------------------------------
presentation of a Security for registration of transfer, the Owner Trustee and
the Security Registrar may treat the person in whose name any Security is
registered as the owner of such Security for the purpose of receiving
remittances pursuant to Section 3.3(e) of the Servicing Agreement and for all
other purposes whatsoever, and neither the Owner Trustee, the Security Registrar
nor any agent of the Owner Trustee or the Security Registrar shall be affected
by notice to the contrary.
SECTION 3.6 Access to List of Securityholders' Names and Addresses.
------------------------------------------------------
The Security Registrar will furnish to the Sponsor and the Servicer, within five
days after receipt by the Security Registrar of a request therefor from the
Sponsor or the Servicer in writing, a list, in such form as the Owner Trustee
may reasonably require, of the names and addresses of the Securityholders as of
the most recent Record Date. If Securityholders with an aggregate Percentage of
25% or more (hereinafter referred to as "Applicants") apply in writing to the
----------
Owner Trustee, and such application states that the Applicants desire to
communicate with other Securityholders with respect to their rights under this
Agreement or under the Securities and is accompanied by a copy of the
communication which such Applicants propose to transmit, then the Owner Trustee
shall, within five Business Days after the receipt of such application, afford
such Applicants access during normal business hours to the most recent list of
Securityholders held by the Owner Trustee. If such list is as of a date more
than 90 days prior to the date of receipt of such Applicants' request, the Owner
Trustee shall promptly request from the Security Registrar a current list as
provided above, and shall afford such Applicants access to such list promptly
upon receipt. Every
11
Securityholder, by receiving and holding a Security, agrees with the Security
Registrar and the Owner Trustee that neither the Sponsor, the Servicer, the
Security Registrar nor the Owner Trustee shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Securityholders hereunder, regardless of the source from which such information
was derived.
SECTION 3.7 Acts of Securityholders. (a) Any request, demand,
-----------------------
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Securityholders or Noteholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Securityholders or Noteholders in person or by agent 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 Owner Trustee. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Agreement
and conclusive in favor of the Owner Trustee, the Sponsor and the Servicer, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Securityholder or
Noteholder of any such instrument or writing may be proved in any reasonable
manner which the Owner Trustee deems sufficient.
(c) The ownership of Securities and Notes shall be proved by the
Security Register and the Note Register, respectively.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Securityholder or a Noteholder shall bind every holder
of every Security or Note issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, or omitted to
be done by the Owner Trustee or the Servicer in reliance thereon, whether or not
notation of such action is made upon such Security or Note.
(e) The Owner Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 3.8 Limitation on Transfer and Exchange. (a) No
-----------------------------------
Securityholder may sell or transfer any Security (whether voluntarily,
involuntarily or by operation of law) except with the prior written consent of
the other Securityholders, which consent shall not be unreasonably withheld or
delayed. Any sale or transfer without the prior
12
written consent of the Securityholders shall be null and void and confer no
rights on the purchaser or transferee with respect to the Trust, this Agreement
or the Owner Trustee.
(b) No Security may be transferred to the Owner Trustee, the
Collateral Trustee or the Indenture Trustee.
(c) The Owner Trustee shall have no liability to the Trust Estate or
any Securityholder arising from a transfer of any such Security in reliance upon
a certification described in this Section 3.8. No transfer or exchange of a
Security shall be made unless the transferee delivers to the Owner Trustee the
Investment Letter required by this Section 3.8.
SECTION 3.9 Payments to Securityholders. The Owner Trustee, by
---------------------------
executing this Agreement, is deemed to have instructed the Collateral Trustee to
distribute to the Securityholders on each applicable Payment Date, in accordance
with their respective Percentage Interests, amounts due and payable to the
Securityholders on deposit in the Security Account pursuant to Section 3.3(e) of
the Servicing Agreement.
ARTICLE IV
ACTIONS BY THE OWNER TRUSTEE
----------------------------
SECTION 4.1 Prior Notice to Securityholders with Respect to Certain
-------------------------------------------------------
Matters. With respect to the following matters, the Owner Trustee shall not
-------
take action unless, at least 30 days before the taking of such action, the Owner
Trustee shall have notified the Securityholders in writing of the proposed
action and the Securityholders shall not have notified the Owner Trustee in
writing prior to the 30th day after such notice is given that such
Securityholders have withheld consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except claims
or lawsuits brought in connection with the collection of the Contracts) and
the compromise of any action, claim or lawsuit brought by or against the
Trust (except with respect to the aforementioned claims or lawsuits for
collection of Receivables);
(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required; and
13
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Securityholders.
SECTION 4.2 Bankruptcy. The Owner Trustee shall not have the power
----------
to commence a voluntary proceeding in bankruptcy relating to the Trust without
the unanimous prior approval of all Securityholders and the delivery to the
Owner Trustee by each such Securityholder of a certificate certifying that such
Securityholder reasonably believes that the Trust is insolvent.
SECTION 4.3 Rights of Securityholders to Direct Owner Trustee.
-------------------------------------------------
Securityholders with aggregate Percentage Interests representing [__%] or more
shall have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Owner Trustee, or exercising any
trust or power conferred on the Owner Trustee; provided, however, that, the
-------- -------
Owner Trustee shall have the right to decline to follow any such direction if
the Owner Trustee, being advised by counsel, determines that the action so
directed may not lawfully be taken, or if the Owner Trustee in good faith
determines that the action so directed would be illegal or involve it in
personal liability or be unduly prejudicial to the rights of Securityholders not
parties to such direction; and provided, further that nothing in this Agreement
-------- -------
shall impair the right of the Owner Trustee to take any action deemed proper by
the Owner Trustee and which is not inconsistent with such direction by the
Securityholders.
SECTION 4.4 Suits for Enforcement. The Owner Trustee, in its
---------------------
discretion may, subject to the provisions of this Article IV, proceed to protect
and enforce its rights and the rights of the Securityholders under this
Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power granted in this Agreement
or for the enforcement of any other legal, equitable or other remedy, as the
Owner Trustee, being advised by counsel, shall deem most effectual to protect
and enforce any of the rights of the Owner Trustee or the Securityholders.
SECTION 4.5 Owner Trustee May Enforce Claims without Possession of
------------------------------------------------------
Securities. All rights of action and claims under this Agreement or the
----------
Securities may be prosecuted and enforced by the Owner Trustee without the
possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceedings instituted by the Owner Trustee shall
be brought
14
in its own name or in its capacity as Owner Trustee. Any recovery of judgment
shall, after provision of or the payment of the reasonable compensation,
expenses, disbursements and advances of the Owner Trustee, its agents and
counsel, be for the ratable benefit of the Securityholders in respect of which
such judgment has been recovered.
SECTION 4.6 Limitation on Rights of Securityholders. (a) The
---------------------------------------
Securityholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the Basic
Documents or would be contrary to Section 2.3, nor shall the Owner Trustee be
obligated to follow any such direction, if given.
(b) Except as provided herein, no Securityholder shall have any right
to vote or in any manner otherwise control the operation and management of the
Securityholders' interest or the obligations of the parties hereto.
(c) No Securityholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Securityholder previously shall have given to the Owner Trustee a
written notice of default and of the continuance thereof as hereinbefore
provided, and unless also the holders of Securities evidencing a Percentage of
__% or more shall have made written request upon the Owner Trustee to institute
such action, suit or proceeding in its own name as Owner Trustee hereunder and
shall have offered to the Owner Trustee such reasonable indemnity as it may
require against the costs, expenses, and liabilities to be incurred therein or
thereby, and the Owner Trustee, for 30 days after its receipt of such notice,
request, and offer of indemnity, shall have neglected or refused to institute
any such actions, suit, or proceeding; it being understood and intended, and
being expressly covenanted by each Securityholder with every other
Securityholder and the Owner Trustee, that no one or more Securityholders shall
have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb, or prejudice
the rights of any other Securityholders, or to obtain or seek to obtain priority
over or preference to any other such Securityholder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable, and common benefit of all Securityholders. For the protection and
enforcement of the provisions of this Section, each and every Securityholder
15
and the Owner Trustee shall be entitled to such relief as can be given either at
law or in equity.
ARTICLE V
AUTHORITY AND DUTIES OF THE OWNER TRUSTEE
-----------------------------------------
SECTION 5.1 General Authority. The Owner Trustee is authorized and
-----------------
directed to execute and deliver the Basic Documents to which the Trust is to be
a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party, in each
case, in such form as the Sponsor shall have approved as evidenced conclusively
by the Owner Trustee's execution thereof. In addition to the foregoing, the
Owner Trustee is authorized, but shall not be obligated, to take all actions
required of the Trust pursuant to the Basic Documents.
SECTION 5.2 General Duties. It shall be the duty of the Owner
--------------
Trustee to discharge (or cause to be discharged) all of its responsibilities
pursuant to the terms of this Agreement and the Basic Documents to which the
Trust is a party and to administer the Trust in the interest of the
Securityholders, subject to the Basic Documents and in accordance with the
provisions of this Agreement.
SECTION 5.3 Action upon Instruction. (a) Subject to Article IV, the
-----------------------
Securityholders may by written instruction direct the Owner Trustee in the
management of the Trust (except with respect to any actions to be taken by the
Servicer pursuant to the terms of the Servicing Agreement or under any other
Basic Document). Such direction may be exercised at any time by written
instruction of the Securityholders pursuant to Article IV.
(b) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or under any Basic Document, the Owner Trustee shall promptly give
notice (in such form as shall be appropriate under the circumstances) to the
Securityholders requesting instruction as to the course of action to be adopted,
and to the extent the Owner Trustee acts in good faith in accordance with any
written instruction of the Securityholders with aggregate Percentage Interests
of __% or more received, the Owner Trustee shall not be liable on account of
such action to any Person. If the Owner Trustee shall not have received
appropriate instruction from the Securityholders with aggregate Percentage
Interests of __% or more within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under
16
the circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, not inconsistent with this Agreement or the Basic Documents,
as it shall deem to be in the best interests of the Securityholders, and shall
have no liability to any Person for such action or inaction.
SECTION 5.4 No Duties Except as Specified in this Agreement or in
-----------------------------------------------------
Instructions. The Owner Trustee shall not have any duty or obligations to
------------
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 5.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to record this Agreement or any Basic Document. The
Owner Trustee nevertheless agrees that it will, at its own cost and expense,
promptly take all action as may be necessary to discharge any liens on any part
of the Owner Trustee Estate that result from actions by, or claims against, the
Owner Trustee that are not related to the ownership or the administration of the
Trust Estate.
SECTION 5.5 No Action Except Under Specified Documents or
---------------------------------------------
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose
------------
of or otherwise deal with any part of the Trust Estate except (i) in accordance
with the powers granted to and the authority conferred upon the Owner Trustee
pursuant to this Agreement, (ii) in accordance with the Basic Documents and
(iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 5.3.
SECTION 5.6 Restrictions. The Owner Trustee shall not take any
------------
action that is inconsistent with the purposes of the Trust set forth in Section
2.3.
17
ARTICLE VI
CONCERNING THE OWNER TRUSTEE
----------------------------
SECTION 6.1 Acceptance of Trusts and Duties. The Owner Trustee
-------------------------------
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the express terms of this Agreement.
The Owner Trustee also agrees to disburse all moneys actually received by it
constituting part of the Trust Estate upon the terms of the Basic Documents and
this Agreement. The Owner Trustee shall not be answerable or accountable
hereunder or under any Basic Document under any circumstances, except (i) for
its own willful misconduct or gross negligence or (ii) in the case of the
inaccuracy of any representation or warranty contained in Section 6.3 expressly
made by the Owner Trustee. In particular, but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of judgment
made by an officer of the Owner Trustee absent willful misconduct or gross
negligence by such officer;
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of
the Servicer or any Securityholder;
(c) no provision of this Agreement or any Basic Document shall require
the Owner Trustee to expend or risk funds or otherwise incur any financial
liability in the performance of any of its rights or powers hereunder or
under any Basic Document, if the Owner Trustee shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes, or for any amounts
due with respect to the Securities;
(e) the Owner Trustee shall not be responsible for or in respect of
the validity or sufficiently of this Agreement or for the due execution
hereof by the Sponsor or for the form, character, genuineness, sufficiency,
value or validity of any of the Trust Estate or for or in respect of the
validity or sufficiency of the Basic Documents, other than the
18
certificate of authentication on the Securities, and the Owner Trustee
shall in no event assume or incur any liability, duty, or obligation to any
Noteholder or to any Securityholder, other than is expressly provided for
herein and in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Sponsor, the Indenture Trustee, the Collateral Trustee or
the Servicer under any of the Basic Documents or otherwise; and
(g) the Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document, at the request, order or
direction of the Securityholders with aggregate Percentage Interests of
[___%] or more, unless such Securityholders have offered to the Owner
Trustee security or indemnity satisfactory to it against the costs,
expenses and liabilities that may be incurred by the Owner Trustee therein
or thereby. The right of the Owner Trustee to perform any discretionary act
enumerated in this Agreement or in any Basic Document shall not be
construed as a duty, and the Owner Trustee shall not be answerable for
other than its negligence or willful misconduct in the performance of any
such act.
SECTION 6.2 Furnishing of Documents. The Owner Trustee shall furnish
-----------------------
to the Securityholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 6.3 Representations and Warranties. The Owner Trustee hereby
------------------------------
represents and warrants to the Sponsor, for the benefit of the Securityholders,
that:
(a) It is a banking corporation duly organized and validly existing in
good standing under the laws of the State of _____________. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the other Basic Documents to which it
is a party.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement and such other Basic
Documents to which it is a party, and this Agreement and such other
19
documents will be executed and delivered by one of its officers who is
duly authorized to execute and deliver this Agreement and such other
documents on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement and the other Basic Documents to which it is a party, nor the
consummation by it of the transactions contemplated hereby or thereby nor
compliance by it with any of the terms or provisions hereof or thereof will
contravene any federal or _______ law, governmental rule or regulation
governing the banking or trust powers of the Owner Trustee or any judgment
or order binding on it, or constitute any default under its charter
documents or by-laws.
SECTION 6.4 Reliance; Advice of Counsel. (a) The Owner Trustee
---------------------------
shall incur no liability to anyone in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion, bond,
or other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a certified
copy of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of the determination of which is not specifically
prescribed herein, the Owner Trustee may, for all purposes hereof, rely on a
certificate, signed by the President or any Vice President or by the Treasurer
or other authorized officer of the relevant party, as to such fact of matter and
such certificate shall constitute full protection to the Owner Trustee for any
action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and
in the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons and not contrary to this Agreement or
any Basic Document.
20
SECTION 6.5 Owner Trustee Not Liable for Securities or Contracts.
----------------------------------------------------
(a) Without limiting the representations and warranties of the Owner Trustee
set forth in Section 6.3, the Owner Trustee makes no representations as to the
validity or sufficiency of this Agreement, any other Basic Document or of the
Securities (other than its execution thereof) or of any Contract or related
document.
(b) The Owner Trustee shall have no responsibility for or with
respect to the validity of any security interest in any Contract or Vehicle, the
perfection of any such security interest (whether as of the date hereof or at
any future time), the maintenance of or the taking of any action to maintain
such perfection, the existence or validity of any Contract, the validity of the
assignment of any Contract to the Trust or of any intervening assignment, the
review of any Contract, the completeness of any Contract, the receipt by it or
the Collateral Trustee of any Contract, the performance or enforcement of any
Contract, the existence, condition and ownership of any Vehicle, the existence
and enforceability of any insurance thereon, the compliance by the Servicer, the
Sponsor, the Indenture Trustee or the Collateral Trustee with any covenant,
warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation, the acts or
omissions of the Servicer, the Sponsor, the Collateral Trustee, the Indenture
Trustee or any Obligor, any action of the Servicer or the Collateral Trustee
taken in the name of the Owner Trustee or the Trust, any action by the Owner
Trustee taken at the instruction of the Servicer or the preparation and filing
of tax returns for the Trust. No recourse shall be had for any claim based on
any provision of this Agreement, the Basic Documents, the Securities or any
Contract or assignment thereof against [Trustee] in its individual capacity, and
[Trustee] shall not have any personal obligation, liability or duty whatsoever
to any Securityholder or any other Person with respect to any such claim, and
any such claim shall be asserted solely against the Trust or any indemnitor who
shall furnish indemnity as provided herein, except for such liability as is
finally determined to have resulted from its own gross negligence or willful
misconduct.
SECTION 6.6 Not Acting in Individual Capacity. In accepting the
---------------------------------
trusts hereby created, the Owner Trustee acts in its individual capacity, but in
the performance of its duties as Owner Trustee hereunder and under any document
authorized hereby, the Owner Trustee acts solely as trustee hereunder and not in
its individual capacity, except to the extent expressly agreed otherwise, and
all Persons, other than the Securityholders as provided herein, having any claim
against the Owner Trustee by reason
21
of the transactions contemplated hereby shall look only to the Trust Estate for
payment or satisfaction thereof, except to the extent the Owner Trustee shall
expressly agree otherwise in any Basic Document to which it is a party.
SECTION 6.7 Interpretation of Trust Agreement. In the event that
---------------------------------
the Owner Trustee is uncertain as to the application of any provision of this
Agreement or any other agreement relating to the transactions contemplated
hereby, or such provision is ambiguous as to its application or is, or appears
to be, in conflict with any other applicable provision hereof or any other
agreement relating to the transactions contemplated hereby, or in the event that
this Agreement or any other agreement relating to the transactions contemplated
hereby permits any determination by the Owner Trustee or is silent or incomplete
as to the course of action which the Owner Trustee is required to take with
respect to a particular set of facts, the Owner Trustee may seek instructions
from the Securityholders and shall not be liable to any person to the extent
that it acts in good faith in accordance with the instructions of the
Securityholders.
ARTICLE VII
COMPENSATION AND INDEMNIFICATION OF OWNER TRUSTEE
-------------------------------------------------
SECTION 7.1 Owner Trustee's Fees and Expenses. Until the Trust has
---------------------------------
been terminated in accordance with Section 9.1, as compensation for its services
hereunder, the Owner Trustee shall be entitled to receive the Owner Trustee's
Fee pursuant to Section ____ of the Servicing Agreement, payable in advance on
the Closing Date and on each [__________] Payment Date. The following fees and
expenses of the Owner Trustee (in addition to the Owner Trustee's Fee) shall be
payable from the Trust Estate:
(a) except as otherwise expressly provided herein, all reasonable
expenses, disbursements and advances incurred or made by the Owner Trustee
in accordance with any provision of this Agreement (including the
reasonable compensation and the expenses and disbursements of its agents
and counsel) except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(b) any loss, liability or expense incurred by the Owner Trustee
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this Trust and its
duties hereunder and under any Basic Documents, including the costs and
expenses of defending itself
22
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
SECTION 7.2 Indemnification. The Servicer shall be liable as
---------------
primary obligor for, and shall indemnify the Owner Trustee and its successors,
assigns, agents and servants (collectively, the "Indemnified Parties") from and
-------------------
against any and all liabilities, obligations, losses, damages, taxes, claims,
actions and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively "Expenses") which may at any time be imposed on, incurred by, or
--------
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this Agreement, the Basic Documents, the Trust Estate, the
administration of the Trust Estate or the action or inaction of the Owner
Trustee hereunder, except only that the Servicer shall not be liable for or
required to indemnify an Indemnified Party from and against Expenses arising or
resulting from (i) its own willful misconduct or gross negligence or (ii) with
respect to the Owner Trustee, the inaccuracy of any representation or warranty
contained in Section 6.3 expressly made by the Owner Trustee. The indemnities
contained in this Section shall survive the resignation or termination of the
Owner Trustee or the termination of this Agreement. In the event of any claim,
action or proceeding for which indemnity will be sought pursuant to this
Section, the Owner Trustee's choice of legal counsel shall be subject to the
approval of the Servicer, which approval shall not be unreasonably withheld.
ARTICLE VIII
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
------------------------------------------------------
SECTION 8.1 Eligibility Requirements for Owner Trustee. The Owner
------------------------------------------
Trustee hereunder shall at all times be an Eligible Bank. In case at any time
the Owner Trustee shall cease to be eligible in accordance with the provisions
of this Section 8.1, the Owner Trustee shall resign immediately in the manner
and with the effect specified in Section 8.2.
SECTION 8.2 Resignation or Removal of Owner Trustee. The Owner
---------------------------------------
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Sponsor. Upon receiving such notice of
resignation, the Sponsor shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the Sponsor and one copy to the successor Owner Trustee. If no
23
successor Owner Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Owner Trustee may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 8.1 and shall fail to resign after
written request therefor by the Sponsor, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
a receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Sponsor or any Securityholder on behalf of itself and all
others similarly situated may petition any court of competent jurisdiction for
the removal of the Owner Trustee and the appointment of a successor Owner
Trustee.
Any resignation or removal of the Owner Trustee and appointment of
a successor trustee pursuant to any of the provisions of this Section 8.2 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 8.3.
SECTION 8.3 Successor Owner Trustee. Any successor Owner Trustee
-----------------------
appointed as provided in Section 8.2 shall execute, acknowledge and deliver to
the Sponsor, and to its predecessor Owner Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Owner Trustee. The
predecessor Owner Trustee shall, upon payment of its charges, deliver or cause
to be delivered to the successor Owner Trustee the Contracts and any related
documents and statements held by it hereunder; and the Sponsor and the
predecessor Owner Trustee shall execute and deliver such instruments and do such
other things as may reasonably be requested by the successor Owner Trustee for
fully and certain vesting and confirming in the successor Owner Trustee all such
rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section 8.3 unless, at the time of such acceptance, such successor Owner
Trustee shall be eligible under the provisions of Section 8.1.
24
Upon acceptance of appointment by a successor Owner Trustee as
provided in this Section 8.3, the successor Owner Trustee shall mail notice of
such succession to each Securityholder at their addresses as shown in the
Security Register.
SECTION 8.4 Merger or Consolidation of Owner Trustee. Any
----------------------------------------
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the Owner Trustee,
shall be the successor for the Owner Trustee hereunder, provided such
corporation shall be eligible under the provisions of Section 8.1 without the
execution or filing of any paper or any further act on the party of any of the
parties hereto, anything herein to the contrary notwithstanding.
SECTION 8.5 Appointment of Co-Owner Trustee or Separate Owner
-------------------------------------------------
Trustee. Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust may at the time be located, the Sponsor and the Owner
Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Owner Trustee to act
as co-trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Trust Estate, and to vest in such Person, in
such capacity, such title to the Trust Estate, or any part thereof, and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Sponsor and the Owner Trustee may consider necessary or
desirable. If the Sponsor shall not have joined in such appointment within [__]
days after receipt by it of a request so to do, the Owner Trustee alone shall
have the power to make such appointment. No co-trustee or separate trustee
under this Agreement shall be required to meet the terms of eligibility as a
successor trustee pursuant to Section 8.1 and no notice of the appointment of
any co-trustee or separate trustee shall be required pursuant to Section 8.3.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate
25
trustee or co-trustee is not authorized to act separately without the Owner
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed,
the Owner Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties, and obligations
(including the holding of title to the Trust or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable
by reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Sponsor and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or co-
trustee.
Any notice, request or other writing given to the Owner Trustee
shall be deemed to have been given to each of the then separate trustees and co-
trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Sponsor.
Any separate trustee or co-trustee may at any time appoint the
Owner Trustee as 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, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law, without the appointment of
a new or successor trustee.
26
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
------------------------------
SECTION 9.1 Termination of Trust Agreement. (a) This Agreement
------------------------------
(other than Article VII) and the Trust shall terminate and be of no further
force or effect, (i) upon the final distribution by the Paying Agent or the
Servicer, as the case may be, of all moneys or other property or proceeds of the
Trust Estate in accordance with Section ____ of the Servicing Agreement or (ii)
at the time provided in Section ____. The bankruptcy, liquidation, dissolution,
death or incapacity of any Securityholder, other than the Sponsor as described
in Section ______, shall not (i) operate to terminate this Agreement or the
Trust, nor (ii) entitle such Securityholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or Trust Estate nor
(iii) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Except as provided in Section 9.1(a), neither the Sponsor nor
any Securityholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Payment
Date upon which the Securityholders shall surrender their Securities to the
Paying Agent for payment of the final distribution and cancellation, shall be
given promptly by the Owner Trustee by letter to Securityholders mailed within
five Business Days of receipt of notice of termination of the Servicing
Agreement from the Servicer given pursuant to Section _____ of the Servicing
Agreement stating (i) the Payment Date upon which final payment of the
Securities shall be made upon presentation and surrender of the Securities at
the office of the Paying Agent therein designated, (ii) the amount of any such
final payment and (iii) that the Record Date otherwise applicable to such
Payment Date is not applicable, payments being made only upon presentation and
surrender of the Securities at the office of the Paying Agent therein specified.
The Owner Trustee shall give such notice to the Security Registrar (if other
than the Owner Trustee) and the Paying Agent at the time such notice is given to
Securityholders.
In the event that all of the Securityholders shall not surrender
their Securities for cancellation within six months after the date specified in
the above mentioned written notice, the Owner Trustee shall give a second
written notice to the remaining Securityholders to surrender their Securities
for cancellation and receive the final distribution with respect thereto. If
within one year after
27
the second notice all the Securities shall not have been surrendered for
cancellation, the Owner Trustee may take appropriate steps, or may appoint an
agent to take appropriate steps, to contact the remaining Securityholders
concerning surrender of their Securities, and the cost thereof shall be paid out
of the funds and other assets that shall remain subject to this Agreement. Any
funds remaining in the Trust after exhaustion of such remedies shall be
distributed by the Owner Trustee to the Sponsor.
(d) In no event shall the Trust established pursuant to this
Agreement remain in existence for more than __ years from ____________, 199__.
SECTION 9.2 Dissolution upon Bankruptcy of the Sponsor. In the
------------------------------------------
event that any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding or other proceeding, voluntary or involuntary, under any
federal or state bankruptcy or similar law (each, an "Insolvency Event") shall
----------------
occur with respect to the Sponsor, this Agreement shall be terminated in
accordance with Section 9.1 60 days after the date of such Insolvency Event,
unless, before the end of such 60-day period the Owner Trustee shall have
received written instructions from each of the Securityholders (other than the
Sponsor) and each of the Noteholders, to the effect that each such party
disapproves of the liquidation of the Contracts and termination of the Trust.
Promptly after the occurrence of any Insolvency Event with respect to the
Sponsor, (i) the Sponsor shall give the Indenture Trustee and the Owner Trustee
written notice of such Insolvency Event, (ii) the Owner Trustee shall, upon the
receipt of such written notice from the Sponsor, give prompt written notice to
the Securityholders of the occurrence of such event and (iii) the Indenture
Trustee shall, upon receipt of written notice of such Insolvency Event from the
Owner Trustee or the Sponsor, give prompt written notice to the Noteholders of
the occurrence of such event; provided, however, that any failure to give a
-------- -------
notice required by this sentence shall not prevent or delay, in any manner, a
termination of the Trust pursuant to the first sentence of this Section 9.2.
Upon a termination pursuant to this Section, the Owner Trustee shall direct the
Collateral Trustee promptly to sell the assets of the Trust in a commercially
reasonable manner and on commercially reasonable terms. The proceeds of such a
sale of the assets of the Trust shall be treated as collections under the
Servicing Agreement.
28
ARTICLE X
MISCELLANEOUS
-------------
SECTION 10.1 Supplements and Amendments. (a) This Agreement may be
--------------------------
amended from time to time by the Owner Trustee and the Sponsor, without the
consent of any of the Securityholders or Noteholders, to cure any ambiguity, to
correct or supplement any provisions herein or therein which may be inconsistent
with any other provisions herein or therein, as the case may be, or to add any
other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with the provisions of this Agreement;
provided, however, that such action shall not, as evidenced by an opinion of
-------- -------
counsel for the Sponsor or the Servicer, adversely affect in any material
respect the interests of any Securityholder or any Noteholder.
(b) This Agreement may also be amended from time to time by the
Sponsor and the Owner Trustee, with the consent of (x) Noteholders owning a
majority in principal amount of the Notes outstanding and (y) Securityholders
with an aggregate Percentage Interest of [__%] or more, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Securityholders; provided, however, that no such amendment shall (a) reduce in
-------- -------
any manner the amount of, or delay the timing of, collections of Receivables or
distributions which are required to be made on any Note or any Security or (b)
reduce the aforesaid percentage of Note principal balance or Security Percentage
Interest required to consent to any such amendment, without the unanimous
consent of the Noteholders and the Securityholders.
(c) Promptly after the execution of any amendment or consent
pursuant to this Section 10.1, the Owner Trustee shall furnish written
notification of the substance of such amendment to each Securityholder.
(d) It shall not be necessary for the consent of Securityholders or
Noteholders under this Section 10.1 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Securityholders or Noteholders shall
be subject to such reasonable requirements as the Owner Trustee may prescribe.
(e) The Owner Trustee may, but shall not be obligated to, enter into
any such amendment which affects
29
the Owner Trustee's own rights, duties or immunities under this Agreement or
otherwise.
(f) Upon the execution of any amendment to this Agreement, this
Agreement shall be modified in accordance therewith, and such amendment shall
form a part of this Agreement for all purposes; and every holder of a Security
theretofore or thereafter executed and delivered hereunder shall be bound
thereby.
(g) In connection with any amendment pursuant to this Section 10.1
the Owner Trustee shall be entitled to receive an opinion of counsel to the
Sponsor or the Servicer acceptable to the Owner Trustee to the effect that such
amendment is authorized or permitted by the Agreement.
SECTION 10.2 Notices. All communications and notices pursuant hereto
-------
to the Sponsor, the Servicer, the Owner Trustee or the Security Registrar or the
Indenture Trustee shall be in writing and delivered or mailed to it at the
following address:
If to the Sponsor:
Chevy Chase Bank, F.S.B.
------------------------
------------------------
Attention:
Telecopy Number:
If to the Servicer:
----------------
----------------
----------------
Attention:
Telecopy Number:
If to the Owner Trustee:
----------------
----------------
----------------
Attention:
Telecopy Number:
If to the Security Registrar:
----------------
----------------
----------------
Attention:
30
Telecopy Number:
If to the Indenture Trustee or to the Noteholders:
----------------
----------------
----------------
Attention:
Telecopy Number:
or at such other address as the party may designate by notice to the other
parties hereto, which shall be effective when received.
All communications and notices pursuant hereto to a Securityholder
shall be in writing and delivered or mailed at the address shown in the Security
Register.
SECTION 10.3 Merger and Integration. Except as specifically stated
----------------------
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived, or supplemented except as provided herein.
SECTION 10.4 Headings. The headings of the various Articles and
--------
Sections herein and the Table of Contents are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.
SECTION 10.5 Governing Law. This Agreement shall be governed by, and
-------------
construed and enforced in accordance with, the laws of the State of ___________.
SECTION 10.6 Counterparts. This Agreement may be executed in two or
------------
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
SECTION 10.7 No Legal Title to Trust Estate in Securityholder. The
------------------------------------------------
Securityholders shall not have legal title to any part of the Trust Estate. The
Securityholders shall be entitled to receive distributions with respect to their
undivided ownership interest only in accordance with Section 3.9 and Article IX.
No transfer, by operation of law or otherwise, of any right, title or interest
of the Securityholders to and in their ownership interest in the Trust Estate
shall operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or
31
to the transfer to it of legal title to any part of the Trust Estate.
SECTION 10.8 Limitation on Rights of Others. Except for the terms of
------------------------------
Section 2.7, nothing in this Agreement, whether express or implied, shall be
construed to give to any Person other than the Owner Trustee and the Sponsor any
legal or equitable right, remedy or claim under or in respect of this Trust
Agreement or any covenants, conditions or provisions contained herein. Such
covenants, conditions and provisions are, and shall be held to be, for the sole
and exclusive benefit of the Owner Trustee and the Sponsor.
SECTION 10.9 Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or of any provision in any other
Basic Document, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. The provisions of this Agreement shall remain valid and
enforceable notwithstanding the invalidity, unenforceability, impossibility or
illegality of performance of any Basic Document.
SECTION 10.10 Successors and Assigns. All covenants and agreements
----------------------
contained herein shall be binding upon, and inure to the benefit of, the Owner
Trustee, the Sponsor and each Securityholder and their respective successors and
assigns. Any request, notice, direction, consent, waiver or other instrument or
action by a Securityholder shall bind its successors and assigns.
SECTION 10.11 No Implied Waiver. No term or provision of this
-----------------
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing entered into as provided in Section 10.1 hereof; and
any such waiver of the terms hereof shall be effective only in the specific
instance and for the specific purpose given.
SECTION 10.12 No Petition. The Owner Trustee (not in its individual
-----------
capacity but solely as Owner Trustee), by entering into this Agreement, each
Securityholder, by accepting a Security, and the Indenture Trustee and each
Noteholder by accepting the benefits of this Agreement, hereby covenant and
agree that they will not at any time institute against the Sponsor or the Trust,
or join in any institution against the Sponsor or the Trust of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy or similar law in connection
with any obligations
32
relating to the Securities, the Notes, this Agreement or any of the Basic
Documents.
SECTION 10.13 No Recourse. Each Securityholder by accepting a
-----------
Security acknowledges that such Securityholder's Securities represent beneficial
interests in the Trust only and do not represent interests in or obligations of
the Sponsor, the Servicer, the Owner Trustee, the Indenture Trustee, the
Collateral Trustee or any Affiliate thereof and no recourse may be had against
such parties or their assets, except as may be expressly set forth or
contemplated in this Agreement, the Securities or the Basic Documents.
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized this ____ day
of ____________, 199_.
CHEVY CHASE BANK, F.S.B.
By:
-------------------------------------
Name:
Title:
,
---------------------
not in its individual capacity
but solely as Owner Trustee of
[CHEVY CHASE RECEIVABLES TRUST
199__-___]
By:
------------------------------------------
Name:
Title:
,
--------------------------------------------
as Servicer
By:
------------------------------------------
Name:
Title:
34
EXHIBIT A
---------
[Form of Face Security]
FORM OF SECURITY
----------------
[CHEVY CHASE AUTO RECEIVABLES TRUST 199__-__]
THIS SECURITY DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CHEVY CHASE BANK, F.S.B. [TRUSTEE] OR ANY AFFILIATES THEREOF, AND NEITHER THIS
SECURITY NOR THE CONTRACTS NOR THE RECEIVABLES ARE INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
No. R _________ ____% Percentage Interest
This certifies that ___________________________ is the registered
owner of an undivided _____ Percentage Interest in the [Chevy Chase Auto
Receivables Trust 199__-__] (the "Trust"). The Trust Estate held by the Trust
-----
includes among its assets a pool of installment sale contracts for new and used
automobiles and light duty trucks (the "Contracts") [and a security interest in
---------
the related vehicles (the "Vehicles")], including, without limitation, and any
--------
and all rights to receive payments thereunder after the close of business on
____________, 199__. The Trust has been created pursuant to a Trust Agreement
dated as of _____________, 199_ among Chevy Chase Bank, F.S.A., a ________
corporation (the "Sponsor"), _______________, a __________ banking corporation,
not in its individual capacity but solely as Owner Trustee (herein, together
with its permitted successors in the trusts hereunder, called the "Owner
-----
Trustee") of the Trust, ____________________, a __________ corporation, as
-------
servicer (the "Servicer") and the holders (the "Securityholders") of undivided
---------------
percentage interests in the Trust, as amended and restated as of ______, 199_
(the "Agreement").
This Security is one of the Securities described in the Agreement and
is issued pursuant and subject to the Agreement. By acceptance of this
Security, the holder assents to and becomes bound by the Agreement. To the
extent not defined herein, all capitalized terms have the meanings assigned to
them in the Agreement.
THE RIGHTS TO RECEIVE PAYMENTS WITH RESPECT TO THIS SECURITY ARE
SUBORDINATED TO THE PRIOR PAYMENT IN FULL OF ALL AMOUNTS OF PRINCIPAL AND
INTEREST ON THE NOTES.
A-1
Distributions on this Security will be made in accordance with the
terms of the Servicing Agreement by wire transfer to a bank account previously
identified by each Securityholder of record and appearing on the Security
Register, without the presentation or surrender of this Security or the making
of any notation hereon. Except as otherwise provided in the Agreement and
notwithstanding the above, the final distribution on this Security will be made
after due notice by the Owner Trustee of the pendency of such distribution and
only upon presentation and surrender of this Security at the office of the
Collateral Trustee maintained for that purpose at ____________________________.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall have the same
effect as if set forth at this place.
The holder hereof, by its acceptance of this Security, agrees that it
will look solely to the funds in the Trust Estate to the extent available for
distribution to the holder hereof as provided in the Servicing Agreement for
payment hereunder and that the Owner Trustee in its individual capacity is not
personally liable to the holder hereof for any amounts payable under this
Security, the Agreement or the Servicing Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement or any
Basic Document.
This Security does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Owner Trustee. Copies of the
Agreement and all amendments thereto will be provided to any Securityholder free
of charge upon a written request to the Owner Trustee.
A-2
IN WITNESS WHEREOF, [Chevy Chase Auto Receivables Trust 199_-_] has
caused this Security to be duly executed by an authorized officer of the Owner
Trustee and attested by one of the Owner Trustee's authorized officers and has
caused the Owner Trustee's corporate seal to be impressed thereon.
Date: [CHEVY CHASE AUTO RECEIVABLES TRUST
-------------
199_-_]
By: [Trustee], not in its individual capacity but
solely as Owner Trustee
[Seal] By:
---------------------------------------
Authorized Officer
Attest:
------------------------
Authorized Officer
A-3
[Form of Reverse of Security]
This Security represents a fractional undivided interest in the Trust.
This Security is limited in right of payment to certain collections respecting
the Contracts, all as more specifically set forth herein and in the Agreement.
This Security is not insured or guaranteed by any person or governmental agency.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Securityholders under the Agreement at any time by the Sponsor and the Owner
Trustee with the consent of the holders of Security evidencing [___%] of the
aggregate Percentage Interests and Noteholders owning a majority in principal
amount of the Notes outstanding. Any such consent by the holder of this
Security shall be conclusive and binding on such holder and upon all future
holders of this Security and of any Security issued upon the transfer hereof or
in exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Security. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of any of the Securityholders
or Noteholders.
As provided in the Agreement and subject to the limitations set forth
in the following paragraph, the transfer of this Security is registerable in the
Security Register of the Security Registrar upon surrender of this Security for
registration of transfer at the offices or agencies maintained by the Owner
Trustee at ___________________________________, accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Security Registrar duly executed by the holder thereof or his or her attorney
duly authorized in writing, and thereupon one or more new Securities evidencing
the same aggregate Percentage Interest will be issued to the designated
transferee or transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, Securities are exchangeable for new Securities of authorized
denominations evidencing the same Percentage Interest as requested by the holder
surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Security Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Owner Trustee and the Security Registrar and any agent of the
Owner Trustee or the Security Registrar may treat the person in whose name this
Security is registered as
A-4
the owner hereof for all purposes, and neither the Owner Trustee, the Security
Registrar nor any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement (other
than Article VII) and the Trust created thereby shall terminate on the Payment
Date next succeeding the Due Period during which the last Contract shall have
been liquidated (but not later than six months after completion of all
collection efforts).
ASSIGNMENT
For value received, the undersigned, subject to the provisions of
Sections 3.2 and 3.8 of the Agreement, sells, assigns and transfers unto (name
and address, including zip code and taxpayer I.D. or social security number of
assignee) _____________________________________ the within Security and does
hereby irrevocably constitute and appoint _______________________ attorney to
transfer the said Security on the books kept for registration thereof with full
power of subscription on the premises.
Dated:
----------------------
Signature Guaranteed:
NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Security in every
particular, without alteration, enlargement or any change whatsoever. Such
signature must be guaranteed by a member of the New York Stock Exchange or a
commercial bank or trust company.
A-5
