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CHEVY CHASE BANK, F.S.B.
SPONSOR
AND
____________________________________
INDENTURE TRUSTEE
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INDENTURE
Dated as of _____________, 199__
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$___________ _____% AUTO RECEIVABLES-BACKED NOTES, [CLASS A]
$___________ _____% AUTO RECEIVABLES-BACKED NOTES, [CLASS B]
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION................................................... 3
SECTION 1.01. General Definitions............................. 3
SECTION 1.02. Compliance Certificates and
Opinions........................................ 21
SECTION 1.03. Form of Documents Delivered to
Indenture Trustee............................... 22
SECTION 1.04. Acts of Noteholders, etc........................ 23
SECTION 1.05. Notices, etc., to Trustee,
Servicer and Issuer............................. 24
SECTION 1.06. Notice to Noteholders; Waiver................... 25
SECTION 1.07. Effect of Headings and Table of
Contents........................................ 26
SECTION 1.08. Successors and Assigns.......................... 26
SECTION 1.09. Severability Clause............................. 26
SECTION 1.10. Benefits of Indenture........................... 26
SECTION 1.11. Governing Law................................... 26
SECTION 1.12. Legal Holidays.................................. 26
SECTION 1.13. Execution in Counterparts....................... 27
SECTION 1.14. Inspection...................................... 27
SECTION 1.15. Survival of Representations and
Warranties...................................... 27
ARTICLE II THE NOTES..................................................... 28
SECTION 2.01. General Provisions.............................. 28
SECTION 2.02. Execution, Authentication,
Delivery, and Dating............................ 30
SECTION 2.03. Registration, Transfer and
Exchange........................................ 30
SECTION 2.04. Mutilated, Destroyed, Lost and
Stolen Notes.................................... 32
SECTION 2.05. Delivery of [Class C] Notes..................... 33
SECTION 2.06. Payment of Interest and Principal;
Rights Preserved................................ 34
SECTION 2.07. Persons Deemed Owners........................... 35
SECTION 2.08. Cancellation.................................... 35
ARTICLE III ACCOUNTS; INVESTMENT OF MONEYS;
COLLECTION AND APPLICATION OF MONEYS;
REPORTS....................................................... 35
SECTION 3.01. Accounts; Investments by Indenture
Trustee......................................... 35
SECTION 3.02. Collection of Moneys; Lockbox
Facility; Lockbox Account....................... 39
SECTION 3.03. Collection of Moneys............................ 39
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SECTION 3.04. Collection Account............................. 39
SECTION 3.05. Reserve Account................................ 43
SECTION 3.06. Pre-Funding Account............................ 44
SECTION 3.07. Capitalized Interest Account................... 44
SECTION 3.08. Reserved....................................... 45
SECTION 3.09. Reports by Indenture Trustee;
Notices of Certain Payments.................... 45
SECTION 3.10. Indenture Trustee May Rely on
Certain Information from
Originator and Servicer........................ 46
ARTICLE IV RELEASE OF CONTRACTS AND VEHICLES............................ 46
SECTION 4.01. Release of Contracts and Vehicles
Upon Final Contract Payment.................... 46
SECTION 4.02. Release of Contracts and Vehicles
Following Substitution or
Repurchase..................................... 47
SECTION 4.03. Execution of Documents......................... 47
ARTICLE V SERVICER EVENTS OF DEFAULT; SUBSTITUTE
SERVICER..................................................... 47
SECTION 5.01. Servicer Events of Default..................... 47
SECTION 5.02. Substitute Servicer............................ 47
SECTION 5.03. Notification to Noteholders.................... 48
ARTICLE VI EVENTS OF DEFAULT; REMEDIES.................................. 48
SECTION 6.01. Events of Default.............................. 48
SECTION 6.02. Acceleration of Maturity;
Rescission and Annulment....................... 50
SECTION 6.03. Remedies....................................... 51
SECTION 6.04. Indenture Trustee May File Proofs
of Claim....................................... 51
SECTION 6.05. Indenture Trustee May Enforce
Claims Without Possession of
Notes.......................................... 52
SECTION 6.06. Application of Money Collected................. 53
SECTION 6.07. Limitation on Suits............................ 54
SECTION 6.08. Unconditional Right of Noteholders
to Receive Payment............................. 55
SECTION 6.09. Restoration of Rights and
Remedies....................................... 55
SECTION 6.10. Rights and Remedies Cumulative................. 55
SECTION 6.11. Delay or Omission Not Waiver................... 56
SECTION 6.12. Control by Noteholders......................... 56
SECTION 6.13. Waiver of Events of Default.................... 57
SECTION 6.14. Waiver of Stay or Extension Laws............... 57
SECTION 6.15. Sale of Trust Estate........................... 57
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ARTICLE VII THE INDENTURE TRUSTEE...................................... 59
SECTION 7.01. Certain Duties and
Responsibilities................................... 59
SECTION 7.02. Notice of Defaults or Events of
Default............................................ 60
SECTION 7.03. Certain Rights of Indenture
Trustee............................................ 61
SECTION 7.04. Not Responsible for Recitals or
Issuance of Notes.................................. 62
SECTION 7.05. Money Held in Trust................................ 62
SECTION 7.06. Compensation, Reimbursement, etc................... 62
SECTION 7.07. Corporate Indenture Trustee
Required; Eligibility.............................. 63
SECTION 7.08. Resignation and Removal;
Appointment of Successor........................... 63
SECTION 7.09. Acceptance of Appointment by
Successor.......................................... 64
SECTION 7.10. Merger, Conversion, Consolidation
or Succession to Business.......................... 65
SECTION 7.11. Co-trustees and Separate Indenture
Trustees........................................... 65
SECTION 7.12. Indenture Trustee to Hold
Contracts.......................................... 67
SECTION 7.13. Request for Opinion of Counsel..................... 67
SECTION 7.14. Financing Statements............................... 67
SECTION 7.15. Power of Attorney.................................. 67
ARTICLE VIII COVENANTS.................................................. 68
SECTION 8.01. Payment of Principal and
Interest........................................... 68
SECTION 8.02. Maintenance of Office or Agency;
Chief Executive Office............................. 68
SECTION 8.03. Money for Payments to Noteholders
to be Held in Trust................................ 68
SECTION 8.04. Corporate Existence; Merger;
Consolidation, etc................................. 69
SECTION 8.05. Protection of Trust Estate;
Further Assurances................................. 70
SECTION 8.06. Reserved........................................... 71
SECTION 8.07. Performance of Obligations;
Receivables Acquisition
Agreement.......................................... 71
SECTION 8.08. Negative Covenants................................. 72
SECTION 8.09. Information as to the Issuer....................... 73
SECTION 8.10. Taxes.............................................. 74
SECTION 8.11. Indemnification.................................... 75
SECTION 8.12. Certificates of Title.............................. 75
ARTICLE IX AMENDMENTS AND SUPPLEMENTAL INDENTURES..................... 76
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SECTION 9.01. Amendments and Supplemental
Indentures............................................ 76
SECTION 9.02. Execution of Amendments and
Supplemental Indentures............................... 76
SECTION 9.03. Effect of Amendments and
Supplemental Indentures............................... 77
SECTION 9.04. Reference in Notes to Amendments
and Supplemental Indentures........................... 77
ARTICLE X REDEMPTION OF NOTES........................................... 77
SECTION 10.01. Optional Redemption; Election to
Redeem................................................ 77
SECTION 10.02. Notice to Indenture Trustee........................... 78
SECTION 10.03. Notice of Redemption by the
Issuer................................................ 78
SECTION 10.04. Deposit of the Redemption Price....................... 78
SECTION 10.05. Notes Payable on Redemption Date...................... 79
ARTICLE XI SATISFACTION AND DISCHARGE.................................... 79
SECTION 11.01. Satisfaction and Discharge of
Indenture............................................. 79
SECTION 11.02. Application of Trust Money............................ 80
SCHEDULE 1 - Contract Schedule
SCHEDULE 2 - Amortization Schedule
EXHIBIT A - Form of [Class A] Notes
EXHIBIT B - Form of [Class B] Notes
EXHIBIT C - Form of Class C Notes
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INDENTURE
This INDENTURE dated as of _____________, 199__, is between CHEVY
CHASE BANK, F.S.B., a _____________ corporation (herein called the "Issuer"),
and ___________________________, a national banking association, as trustee
(herein called the "Indenture Trustee").
RECITALS OF THE ISSUER
The Issuer has duly authorized the issue of $_____________ in aggregate
principal amount of its _____% Auto Receivables Backed Notes, [Class A] (the
"[Class A] Notes") and $_____________ _____% Auto Receivables Backed Notes,
[Class B] (the "[Class B] Notes" and together with the [Class A] Notes, the
"Offered Notes") of substantially the tenor hereinafter set forth, and to
provide therefor the Issuer has duly authorized the execution and delivery of
this Indenture.
The Issuer may, from time to time, subject to certain conditions set forth
herein, enter into a Supplement directing the issuance of a third class of Notes
(the "[Class C] Notes" and together with the Offered Notes, the "Notes") which
will be subordinate to the [Class A] Notes and to the [Class B] Notes.
All things necessary to make the Notes, when executed by the Issuer and
authenticated and delivered hereunder, the valid obligations of the Issuer, and
to make this Indenture a valid agreement of the Issuer, in accordance with its
terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the holders thereof, it is mutually covenanted and agreed, for the benefit of
all Noteholders, as follows:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee, for the benefit and
security of the Noteholders, all of the Issuer's right, title and interest in
and to (a) the Initial Contracts and all Contract Payments, [Repurchase
Amounts,] Prepayment Amounts and other amounts now due or hereafter becoming due
with respect thereto (other than any prepayments of rent required pursuant to
the terms of any Initial Contract at or before the commencement of the Contract
and any payments due before the Cut-Off Date for such Initial Contract), (b) any
and all Additional Contracts or Substitute Contracts and
all Contract Payments, [Repurchase Amounts,] Prepayment Amounts and other
amounts now due or hereafter becoming due with respect thereto (other than any
prepayments of rent required pursuant to the terms of any Additional Contract or
Substitute Contract at or before the commencement of any such Additional
Contract or Substitute Contract and any payments due before the related Cut-Off
Date for such Additional Contract or Substitute Contract), (c) all rights of the
Issuer to or under any guarantees of or collateral for the Obligor's obligations
under any Contract, [(d) all Vehicles at any time subject to any Contract,] (e)
all moneys from time to time held by the Indenture Trustee pursuant to Section
3.01 hereof pending deposit in one of the accounts referred to therein, (f) all
moneys from time to time on deposit in the Collection Account, including all
investments and income from the investment of such moneys, (g) all moneys from
time to time on deposit in the Reserve Account, including all investments and
income from the investment of such moneys, (h) all moneys from time to time on
deposit in the Pre-Funding Account, including all investments and income from
the investment of such moneys, (i) all moneys from time to time on deposit in
the Capitalized Interest Account, including all investments and income from the
investment of such moneys, (j) all rights of the Issuer under the Receivables
Acquisition Agreement, (k) all rights of the Issuer under any program agreement,
purchase agreement, assignment agreement or other document pursuant to which the
Originator acquired an interest in any Contract and the Vehicles subject
thereto, and (l) all proceeds of any of the foregoing. Such Grant is made in
trust to secure (i) the payment of all amounts due on the Notes in accordance
with their terms, equally and ratably without prejudice, priority, or
distinction between any Note of the same class and any other Note of the same
class by reason of differences in time of issuance or otherwise, except as
otherwise may be provided in this Indenture or any Supplement, (ii) the payment
of all other sums payable under this Indenture with respect to the Notes and
(iii) compliance with the provisions of this Indenture and any Supplement with
respect to the Notes.
The Indenture Trustee acknowledges such Grant, accepts the trusts hereunder
in accordance with the provisions hereof, and agrees to perform the duties
herein required to the best of its ability and to the end that the interests of
the Noteholders may be adequately and effectively protected as hereinafter
provided.
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ARTICLE 1.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.0.1. General Definitions.
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Except as otherwise specified or as the context may otherwise require,
the following terms have the meanings set forth below for all purposes of this
Indenture and any Supplement, and the definitions of such terms 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.
Accrual Date: ____________, 199__
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Act: with respect to any Noteholder, as defined in Section 1.04.
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Additional Contract: each separate installment sale contract and each
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contract schedule acquired by the Issuer from the Originator out of funds on
deposit in the Pre-Funding Account pursuant to the related Additional Contract
Transfer Agreement.
Additional Contract Transfer Agreement: as provided in Section ____ of
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the Receivables Acquisition Agreement.
Additional Contract Transfer Date: the date specified in each
---------------------------------
Additional Contract Transfer Agreement.
Affiliate: of any specified Person, any other Person (i) which
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directly or indirectly controls, or whose directors or officers directly or
indirectly control, or is controlled by, or is under common control with, such
specified Person, (ii) which beneficially owns or holds, or whose directors or
officers beneficially own or hold, 25% or more of any class of the Voting Stock
(or, in the case of an entity that is not a corporation, 25% of the equity
interest) of such specified Person, or (iii) 25% or more of the Voting Stock
(or, in the case of an entity that is not a corporation, 25% of the equity
interest) of which is owned or held by such specified Person. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.
Aggregate Implicit Contract Balance: means, with respect to any
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Calculation Date, the sum of the Implicit Contract Balances of all Contracts.
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Authorized Officer: with respect to any matter, any officer of or
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other Person representing the Issuer, the Originator, the Servicer, the
Indenture Trustee or a Noteholder, as the case may be, who is authorized to act
for that party.
Available Funds: means, with respect to each Payment Date, the
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collections from the immediately preceding Collection Period on deposit in the
Collection Account.
Business Day: any day that is not a Saturday, Sunday or other day on
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which commercial banking institutions in the city in which the Corporate Trust
Office is located are authorized or obligated by law or executive order to
remain closed.
Calculation Date: the first day of any calendar month.
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Capitalized Interest Account: the account by that name established and
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maintained by the Indenture Trustee pursuant to Section 3.01.
Capitalized Interest Requirement: means, with respect to each Payment
--------------------------------
Date, the excess, if any, of (x) the interest due on the Notes on such Payment
Date over (y) the sum of (i) one-month's interest on the Implicit Contract
Balance of all Contracts as of the close of business on the last day of the
immediately preceding Collection Period, calculated at the Weighted Average Note
Rate and (ii) any Pre-Funding Earnings to be transferred to the Collection
Account on such Payment Date pursuant to Section 3.06(c) hereof.
Capital Stock: as defined in Section ____ of the Receivables
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Acquisition Agreement.
[Class A] Distribution Account: the account or accounts by that name
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established and maintained by the Indenture Trustee pursuant to Section 3.01.
[Class A] Monthly Interest: means, for the initial Payment Date, one-
--------------------------
twelfth of the product of the [Class A] Note Rate and the initial [Class A] Note
Balance, and for any subsequent Payment Date, one-twelfth of the product of (a)
the [Class A] Note Rate and (b) the sum of (i) the Outstanding [Class A] Note
Balance as of the immediately preceding Payment Date (after giving effect to all
payments of [Class A] Monthly Principal and [Class A] Overdue Principal made on
such immediately preceding Payment Date) and (ii) any [Class A] Overdue
Interest.
[Class A] Monthly Principal: with respect to all of the Contracts for
----------------------------
any Payment Date, the product of (x) the sum
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of (i) the Contract Payments due during the related Collection Period minus the
aggregate of the Monthly Contract Yield for all Contracts, (ii) for each
Contract that is a Defaulted Contract, the Implicit Contract Balance and (iii)
for each Contract that is the subject of a prepayment (provided that such
Prepayment Amount has actually been deposited in the Collection Account), an
amount equal to the Implicit Contract Balance immediately prior to prepayment
and (y) the [Class A] Percentage. To the extent that an amount is included in
any of clauses (i) through (iii) above, such amount shall not be included in any
other such clause for purposes of calculating the [Class A] Monthly Principal.
[Class A] Noteholder: at any time, any Person in whose name a [Class
--------------------
A] Note is registered in the Note Register.
[Class A] Note Balance: means, as of the Closing Date, $_____________
----------------------
and thereafter, as of each Payment Date, an amount equal to the initial [Class
A] Note Balance reduced by all payments on the [Class A] Notes pursuant to
Section 3.04(b)(vi) hereof.
[Class A] Note Rate: the rate at which interest accrues on the [Class
-------------------
A] Notes, which rate shall be ____% per annum.
[Class A] Notes: any [Class A] Notes described in Article II of, and
---------------
authorized by, and authenticated and delivered under, this Indenture.
[Class A] Overdue Interest: with respect to any Payment Date, the
--------------------------
excess, if any, of (a) the aggregate amount of [Class A] Monthly Interest due on
all prior Payment Dates over (b) the aggregate amount of [Class A] Monthly
Interest (from whatever source) actually paid to [Class A] Noteholders on all
prior Payment Dates.
[Class A] Overdue Principal: with respect to any Payment Date, the
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excess, if any, of (a) the aggregate amount of [Class A] Monthly Principal due
on all prior Payment Dates over (b) the aggregate amount of [Class A] Monthly
Principal (from whatever source) actually paid to [Class A] Noteholders on all
prior Payment Dates.
[Class A] Percentage: _____%.
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[Class B] Distribution Account: the account or accounts by that name
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established and maintained by the Indenture Trustee pursuant to Section 3.01.
[Class B] Monthly Interest: means, for the initial Payment Date, one-
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twelfth of the product of the [Class B] Note
5
Rate and the initial [Class B] Note Balance, and for any subsequent Payment
Date, one-twelfth of the product of (a) the [Class B] Note Rate and (b) the sum
of (i) the Outstanding [Class B] Note Balance as of the immediately preceding
Payment Date (after giving effect to all payments of [Class B] Monthly Principal
and [Class B] Overdue Principal made on such immediately preceding Payment Date)
and (ii) any [Class B] Overdue Interest.
[Class B] Monthly Principal: with respect to all of the Contracts for
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any Payment Date, the product of (x) the sum of (i) the Contract Payments due
during the related Collection Period minus the aggregate of the Monthly Contract
Yield for all Contracts, (ii) for each Contract that is a Defaulted Contract,
the Implicit Contract Balance and (iii) for each Contract that is the subject of
a prepayment (provided that such Prepayment Amount has actually been deposited
in the Collection Account), an amount equal to the Implicit Contract Balance
immediately prior to prepayment and (y) the [Class B] Percentage. To the extent
that an amount is included in any of clauses (i) through (iii) above, such
amount shall not be included in any other such clause for purposes of
calculating the [Class B] Monthly Principal.
[Class B] Noteholder: at any time, any Person in whose name a [Class
--------------------
B] Note is registered in the Note Register.
[Class B] Note Balance: means, as of the Closing Date, $_____________
----------------------
and thereafter, as of each Payment Date, an amount equal to the initial [Class
B] Note Balance reduced by all payments on the [Class B] Notes pursuant to
Section 3.04(b)(vii) hereof.
[Class B] Note Rate: the rate at which interest accrues on the [Class
-------------------
B] Notes, which rate shall be _____% per annum.
[Class B] Notes: any [Class B] Notes described in Article II of, and
---------------
authorized by, and authenticated and delivered under, this Indenture.
[Class B] Overdue Interest: with respect to any Payment Date, the
--------------------------
excess, if any, of (a) the aggregate amount of [Class B] Monthly Interest due on
all prior Payment Dates over (b) the aggregate amount of [Class B] Monthly
Interest (from whatever source) actually paid to [Class B] Noteholders on all
prior Payment Dates.
[Class B] Overdue Principal: with respect to any Payment Date, the
excess, if any, of (a) the aggregate amount of [Class B] Monthly Principal due
on all prior Payment Dates over (b) the aggregate amount of [Class B] Monthly
Principal
6
(from whatever source) actually paid to [Class B] Noteholders on all prior
Payment Dates.
[Class B] Percentage: _____%.
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[Class C] Distribution Account: the account or accounts by that name
------------------------------
established and maintained by the Indenture Trustee pursuant to Section 3.01.
[Class C] Monthly Interest: means, for the initial Payment Date of the
--------------------------
[Class C] Notes, if any, one-twelfth of the product of the [Class C] Note Rate
and the Initial [Class C] Note Balance, and for any subsequent Payment Date,
one-twelfth of the product of (a) the [Class C] Note Rate and (b) the sum of (i)
the Outstanding [Class C] Note Balance as of the immediately preceding Payment
Date (after giving effect to all payments of [Class C] Monthly Principal and
[Class C] Overdue Principal made on such immediately preceding Payment Date) and
(ii) any [Class C] Overdue Interest.
[Class C] Monthly Principal: with respect to all of the Contracts for
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any Payment Date, the product of (x) the sum of (i) the Contract Payments due
during the related Collection Period minus the aggregate of the Monthly Contract
Yield for all Contracts, (ii) for each Contract that is a Defaulted Contract,
the Implicit Contract Balance and (iii) for each Contract that is the subject of
a prepayment (provided that such Prepayment Amount has actually been deposited
in the Collection Account), an amount equal to the Implicit Contract Balance
immediately prior to prepayment and (y) the [Class C] Percentage. To the extent
that an amount is included in any of clauses (i) through (iii) above, such
amount shall not be included in any other such clause for purposes of
calculating the [Class C] Monthly Principal.
[Class C] Noteholder: at any time, any Person in whose name a [Class
--------------------
C] Note is registered in the Note Register.
[Class C] Note Balance: means an amount equal to the Initial [Class C]
----------------------
Note Balance reduced by all payments on the [Class C] Notes pursuant to Section
3.04(b)(viii) hereof.
[Class C] Note Rate: the rate at which interest accrues on the [Class
-------------------
C] Notes, which rate shall be established on the date of original issuance of
the [Class C] Notes in the related Supplement.
[Class C] Notes: any [Class C] Notes described in Article II of, and
---------------
authorized by, and authenticated and delivered under, this Indenture and the
related Supplement.
7
[Class C] Overdue Interest: with respect to any Payment Date, the
--------------------------
excess, if any, of (a) the aggregate amount of [Class C] Monthly Interest due on
all prior Payment Dates over (b) the aggregate amount of [Class C] Monthly
Interest (from whatever source) actually paid to [Class C] Noteholders on all
prior Payment Dates.
[Class C] Overdue Principal: with respect to any Payment Date, the
---------------------------
excess, if any, of (a) the aggregate amount of [Class C] Monthly Principal due
on all prior Payment Dates over (b) the aggregate amount of [Class C] Monthly
Principal (from whatever source) actually paid to [Class C] Noteholders on all
prior Payment Dates.
[Class C] Percentage: a specified percentage of the Initial Aggregate
--------------------
Balance, as determined on the date of issuance of the [Class C] Notes, not to
exceed _____%.
Closing Date: ______________, 199__.
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Collection Account: the account or accounts by that name established
------------------
and maintained by the Indenture Trustee pursuant to Section 3.01.
Collection Period: with respect to a Payment Date, the period from the
-----------------
first day of the calendar month immediately preceding the month in which such
Payment Date occurs through the last day of such calendar month.
Contract: at any time, each Initial Contract, Substitute Contract and
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Additional Contract subject to the lien of this Indenture; provided, that, for
--------
purposes of calculating the [Class A] Monthly Principal, the [Class B] Monthly
Principal or the [Class C] Monthly Principal with respect to any Payment Date,
(i) any Contract released from the lien of this Indenture pursuant to Sections
4.01 or 4.02 hereof following the Indenture Trustee's receipt of a Default
Payment shall, notwithstanding such release, be deemed to be a Contract
hereunder to and including the Payment Date next following the date on which
such Default Payment was received and (ii) any other Contract released from the
lien of this Indenture following the Indenture Trustee's receipt of the final
Contract Payment, or a Prepayment Amount shall, notwithstanding such release, be
deemed to be a Contract to and including the Payment Date next following the
Contract Payment Period during which such final Contract Payment was received.
Contract Payment: each periodic installment payable by a Obligor
----------------
under a Contract (excluding any Excess Contract Receivables). Prepayment
Amounts, prepayments required pursuant to the terms of a Contract at or before
the commencement of the Contract, payments becoming due before the
8
Cut-Off Date and supplemental or additional payments required by the terms of a
Contract with respect to taxes, insurance, maintenance, indemnities, or other
specific charges shall not be Contract Payments hereunder.
Contract Payment Period: with respect to any Payment Date and the
-----------------------
Determination Date with respect thereto, the calendar month prior to the month
in which such Payment Date and such Determination Date occur.
Corporate Trust Office: the principal corporate trust office of the
----------------------
Indenture Trustee located at ________________________________, or at such other
address as the Trustee may designate from time to time by notice to the
Noteholders and the Issuer.
Cut-Off Date: as defined in Section _____ of the Note Agreement.
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Default: any occurrence that is, or with notice or the lapse of time
-------
or both would become, an Indenture Event of Default.
Defaulted Contract: any Contract with respect to which either (i) four
------------------
Contract Payments are due and unpaid as of any Calculation Date or (ii) the
Servicer has declined to advance any delinquent Contract Payment in accordance
with Section _____ of the Receivables Acquisition Agreement on the grounds that
such advance would be a Nonrecoverable Advance or (iii) such Contract has been
rejected by or on behalf of the Obligor in a bankruptcy proceeding.
Default Payment: any payment made with respect to a Defaulted Contract
---------------
(i) by the Obligor under or with respect to such Contract (or by the application
of any security deposit or other monies owed or belonging to such Obligor) as
actual, liquidated or punitive damages resulting from the breach of such
Contract, (ii) by a transfer to the Collection Account pursuant to Section 3.04,
or (iii) by the Servicer or the Indenture Trustee from the proceeds of any
disposition of the Vehicle subject to such Contract. Contract Payments for any
Contract Payment Period prior to a Contract becoming a Defaulted Contract are
not Default Payments.
Default Pay-Through Amount: with respect to any Contract with respect
--------------------------
to which a Default Payment is made or due, an amount equal to the Implicit
Contract Balance of such Contract as of the Payment Date immediately following
the first Determination Date on which such Contract was a Defaulted Contract.
Delinquency Condition: the condition which exists on and as of any
----------------------
Payment Date or on and as of the related
9
Determination Date if (x) the aggregate of the Contract Payments due during the
related Contract Payment Period under all Contracts with respect to which any
Contract Payment or portion thereof was overdue as of each of the two
immediately preceding Payment Dates (after excluding any such Contract Payment
which was paid in full prior to the related Determination Date) exceeds (y) ____
percent of the aggregate of the Contract Payments due during the related
Contract Payment Period under all Contracts. If a Delinquency Condition exists
on any Payment Date, such Delinquency Condition shall be deemed to continue to
and include the day immediately preceding the next Payment Date.
Delinquency Payment: any payment made with respect to a Delinquent
-------------------
Contract in an amount equal to all or part of any specific Contract Payment due
with respect to such Contract (i) by the Servicer pursuant to Section ____ of
the Receivables Acquisition Agreement or (ii) by a transfer to the Collection
Account pursuant to Section 3.04.
Delinquent Contract: as of any Determination Date, any Contract (other
-------------------
than a Contract which became a Defaulted Contract prior to such Determination
Date) with respect to which the Obligor has not paid all Contract Payments then
due.
Determination Date: with respect to any Payment Date, the [_____]
------------------
Business Day immediately preceding such Payment Date.
Discount Rate: _____% per annum, which rate represents the Weighted
-------------
Average Note Rate plus the Servicing Fee Rate on an annualized basis.
Eligible Account: any one or more of the following accounts:
----------------
(i) an account maintained with a depository institution or trust
company whose long-term unsecured debt obligations are rated at least A by
the Rating Agency at the time of any deposit therein (or, if such
obligations are, at the time of such deposit, not rated by the Rating
Agency, its equivalent rating from one other nationally recognized rating
agency); or
(ii) a trust account or accounts maintained with a federal or
state chartered depository institution or trust company subject to
regulations regarding collateralized fiduciary funds on deposit
substantially similar to 12 C.F.R. Section 9.10(b).
Eligible Investments: any one or more of the following obligations or
--------------------
securities:
10
(i) direct obligations of, and obligations fully guaranteed by,
the United States of America, or any agency or instrumentality of the
United States of America the obligations of which are backed by the full
faith and credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by any commercial
bank, depository institution or trust company (including the Indenture
Trustee acting in its commercial capacity) incorporated under the laws of
the United States of America or any state thereof provided, that (x) such
--------
commercial bank, depository institution or trust company shall have a
combined capital and surplus of at least $500,000,000 and be subject to
supervision and examination by federal and/or state banking authorities and
(y) at the time of such investment or contractual commitment providing for
such investment such commercial bank, depository institution or trust
company has a long-term unsecured debt rating of at least AA issued by the
Rating Agency (or, if such obligations are, at the time of such deposit,
not rated by the Rating Agency, its equivalent rating from one other
nationally recognized agency) (or, in the case of a commercial bank or
depository institution which is the principal subsidiary of a holding
company, such holding company has a short-term credit rating of at least
_____ issued by the Rating Agency (or, if such obligations are, at the time
of such deposit, not rated by the Rating Agency, its equivalent rating from
one other nationally recognized rating agency) and (B) any other demand or
time deposit or certificate of deposit which is fully insured by the
Federal Deposit Insurance Corporation;
(iii) repurchase obligations with respect to and collateralized by
(A) any security described in clause (i) above or (B) any other security
issued or guaranteed by an agency or instrumentality of the United States
of America, in each case entered into with a depository institution or
trust company (acting as principal) of the type described in clause (ii)
above, provided that the Indenture Trustee has taken delivery of such
--------
security;
(iv) commercial paper (including both non-interest bearing discount
obligations and interest-bearing obligations) payable on demand or on a
specified date not more than 270 days after the date of issuance thereof
having a short-term credit rating of at least ____ from the Rating Agency
(or, if such obligations are, at the time of such deposit, not rated by the
Rating Agency, its equivalent rating from one other nationally recognized
rating agency) at the time of such investment; and
11
(v) shares with a constant net asset value in a mutual fund
investing solely in short-term securities of the United States government
and having the highest short-term credit rating of at least Duff-1 from the
Rating Agency (or, if such obligations are, at the time of such deposit,
not rated by the Rating Agency, its equivalent rating from one other
nationally recognized rating agency) which shares are freely transferable
by the holder on a daily basis.
Excess Collections: as of each Payment Date, the amount on deposit
------------------
in the Collection Account after payments to the Servicer, [Class A] Noteholders
and [Class B] Noteholders.
Excess Contract Receivables: with respect to any Excess Receivables
---------------------------
Contract and any Payment Date, the excess, if any, of (x) the Contract Payment
with respect to such Contract over (y) the amount which would have been received
with respect to such Contract during the Contract Payment Period with respect to
such Payment Date if the Implicit Contract Balance of such Contract or its
Predecessor Contract, in the case of a Substitute Contract, on the Closing Date
had equalled _____% of the Initial Aggregate Balance, which amount with respect
to each Initial Contract is set forth on Schedule 1 hereto.
Excess Receivables Contract: any Initial Contract which at the
---------------------------
Closing Date has an Implicit Contract Balance in excess of _____% of the Initial
Aggregate Balance, any Additional Contract which at the related Additional
Contract Transfer Date has an Implicit Contract Balance in excess of _____% of
the Initial Aggregate Balance and any Substitute Contract substituted pursuant
to Section ____ of the Receivables Acquisition Agreement for a Predecessor
Contract which is an Excess Receivables Contract.
Final Additional Closing Date: three months following the end of the
-----------------------------
month which includes the Closing Date.
Financing Statement: as defined in Section ____ of the Note
-------------------
Agreement.
Grant: grant, bargain, sell, convey, assign, transfer, mortgage,
-----
pledge, create and grant a security interest in and right of set-off against,
deposit, set over and confirm. The Grant of the Trust Estate effected by this
Indenture shall include all rights, powers, and options (but none of the
obligations) of the Issuer with respect thereto, including, without limitation,
the immediate and continuing right to claim for, collect, receive, and give
receipts for Contract Payments in respect of the Contracts and all other moneys
payable thereunder, to give and receive notices and
12
other communications, to make waivers, amendments or other agreements, to
exercise all rights and options, to bring judicial proceedings in the name of
the Issuer or otherwise, to terminate a contract pursuant to the terms thereof,
and generally to do and receive anything that the Issuer is or may be entitled
to do or receive thereunder or with respect thereto.
Implicit Contract Balance: means, with respect to a Contract, the
-------------------------
present value of all Contract Payments that become due thereon on or after the
immediately preceding Calculation Date, discounted monthly at the product of (i)
one-twelfth and (ii) the Discount Rate.
Indenture or this Indenture: this instrument as originally executed
---------------------------
and as from time to time supplemented or amended pursuant to the applicable
provisions hereof.
Indenture Event of Default: as defined in Section 6.01.
--------------------------
Indenture Trustee: The Person named as the "Indenture Trustee" in
-----------------
the first paragraph of this instrument until a successor Person shall have
become the Indenture Trustee pursuant to the applicable provisions of this
Indenture, and thereafter "Indenture Trustee" shall mean such successor;
provided, that the provisions of Section 7.06 and Section 8.11, as applicable to
--------
any Person at any time serving as Indenture Trustee hereunder, shall survive
(with respect to any period prior to the date of such termination) the
termination of such Person's status as Indenture Trustee hereunder and the
succession of any other Person to such status.
Initial Aggregate Balance: an amount equal to $_____________,
-------------------------
calculated as the sum of the Initial Aggregate Implicit Contract Balance and the
Original Pre-Funded Amount.
Initial Aggregate Implicit Contract Balance: an amount equal to
-------------------------------------------
$_______________.
Initial [Class C] Note Balance: an amount equal to the product of
------------------------------
(x) $_____________ minus all principal theretofore paid by the Trustee to the
-----
[Class A] Noteholders, the [Class B] Noteholders or the Issuer and (y) the
[Class C] Percentage.
Initial Contract: each separate installment sale contract and each
----------------
contract schedule described in Schedule 1 hereto, as the same may be amended or
modified from time to time in accordance with the provisions hereof and thereof.
13
Initial Deposit: the initial amount, equal to _____% of the Initial
---------------
Aggregate Balance, to be deposited by the Trustee in the Reserve Account.
Insurance Policy: any insurance policy required to be maintained by
----------------
the Obligor pursuant to the related Contract that covers physical damage to the
Vehicle or any liability arising out of the use of such Vehicle.
Insurance Proceeds: any proceeds of an Insurance Policy not applied
------------------
to repair or replacement of a Vehicle.
Issuer Order or Issuer Request: a written order or request delivered
------------ --------------
to the Indenture Trustee and signed in the name of the Issuer by an Authorized
Officer.
Lockbox Account: as defined in Section 3.02(a).
---------------
Lockbox Facility: as defined in Section 3.02(a).
----------------
Maturity Date: with respect to any installment of principal of or
-------------
interest on any Note, the date on which such installment is due and payable as
therein or herein provided, whether at the Stated Maturity Date, by declaration
of acceleration, or otherwise.
Maximum Reserve Amount: means, with respect to any Payment Date, an
----------------------
amount equal to the lesser of (i) _____% of the Initial Aggregate Balance or
(ii) the sum of (x) the Outstanding [Class A] Note Balance and (y) the
Outstanding [Class B] Note Balance less (z) the Outstanding [Class C] Note
----
Balance.
Monthly Contract Yield: with respect to each Contract, on any
----------------------
Payment Date, one-twelfth of the product of the Discount Rate and the Aggregate
Implicit Contract Balance on the immediately preceding Payment Date (or the Cut-
Off Date in the case of the initial Payment Date).
Monthly Servicer Report: the report attached as Exhibit ___ to the
-----------------------
Receivables Acquisition Agreement.
Nonrecoverable Advance: as defined in Section ____ of the
----------------------
Receivables Acquisition Agreement.
Note Agreement: the agreement dated as of the date hereof between
--------------
the Issuer and the initial purchasers of the Offered Notes with respect to the
purchase and sale of the Offered Notes as the same may be modified or amended
from time to time in accordance with its terms.
Noteholder: at any time, any Person in whose name a Note is
----------
registered in the Note Register.
14
Note Rate: the [Class A] Note Rate, the [Class B] Note Rate or the
---------
[Class C] Note Rate, as applicable.
Note Register: as defined in Section 2.03.
-------------
Notes: any notes described in Article II of, and authorized by, and
-----
authenticated and delivered under, this Indenture or any Supplement.
Obligor: the obligor under any Contract including the guarantor.
-------
Offered Notes: the [Class A] Notes and the [Class B] Notes.
-------------
[Officers' Certificate: a certificate delivered to the Indenture
---------------------
Trustee and signed by the Chairman, the President, or a Vice President of the
Issuer, and by another Vice President, the Treasurer, an Assistant Treasurer,
the Secretary, or an Assistant Secretary of the Issuer who is not the same
Person as the other officer signing such certificate.]
Opinion of Counsel: a written opinion, which shall be satisfactory
------------------
in form and substance to the Indenture Trustee, of counsel who may, except as
otherwise expressly provided in this Indenture, be inside or outside counsel for
the Issuer and who shall be satisfactory to the Indenture Trustee.
Optional Redemption: prepayment of the Offered Notes, in their
-------------------
entirety, by the Issuer, without premium, on any Payment Date when the
Outstanding [Class A] Note Balance is less than or equal to _____% of the
initial [Class A] Note Balance and the Outstanding [Class B] Note Balance is
less than or equal to _____% of the initial [Class B] Note Balance (after giving
effect to payments of principal on such Payment Date).
Original Capitalized Interest Amount: means the amount deposited in
------------------------------------
the Capitalized Interest Account on the Closing Date pursuant to Section 3.07(a)
of this Indenture.
Original Pre-Funded Amount: means the amount deposited in the Pre-
--------------------------
Funding Account on the Closing Date pursuant to Section 3.06(a) of this
Indenture.
Originator: _______________, a _____________ organized and existing
----------
under the laws of the State of ___________________, and its successors.
15
Outstanding: with respect to the Notes, as of any date of
determination, all Notes theretofore authenticated and delivered under this
Indenture or any Supplement except:
(i) Notes theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Notes or portions thereof for whose payment money in the
necessary amount has been theretofore irrevocably deposited with the
Indenture Trustee in trust for the holders such Notes; and
(iii) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture or any
Supplement unless proof satisfactory to the Indenture Trustee is presented
that any such Notes are held by a Person in whose hands the Note is a valid
obligation;
provided, however, that in determining whether the holders of Notes evidencing
-------- -------
the requisite percentage of Voting Rights have given any request, demand,
authorization, direction, notice, consent, or waiver hereunder, (i) Notes owned
by the Issuer or any Affiliate of the Issuer shall be disregarded and deemed not
to be Outstanding, except that, in determining whether the Indenture Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent, or waiver, only Notes that a Responsible Officer of
the Indenture Trustee actually knows to be so owned shall be so disregarded and
(ii) Notes owned by the Indenture Trustee or any Affiliate of the Indenture
Trustee shall be disregarded and deemed not to be Outstanding for purposes of
determining whether the requisite holders of the Notes have voted in favor of
any action or matter to be approved by them in accordance with Section 7.08
hereof.
Overfunded Interest Amount: means, with respect to each Payment
--------------------------
Date, the excess of (A) the amount on deposit in the Capitalized Interest
Account (after giving effect to any withdrawals on such Payment Date from the
Capitalized Interest Account pursuant to Section 3.07(b) of this Indenture) over
(B) the product of (i) one twelfth, (ii) the Weighted Average Note Rate, (iii)
the number of months remaining in the maximum Funding Period and (iv) the excess
of (x) the amount on deposit in the Pre-Funding Account as of the immediately
preceding Payment Date (excluding Pre-Funding Earnings) (or, in the case of the
initial Payment Date, the Original Pre-Funded Amount) over (y) the amount on
deposit in the Pre-Funding Account on such Payment Date (excluding Pre-Funding
Earnings).
Payment Date: the [_____________] day of each month (or if such
------------
date is not a Business Day, the next succeeding
16
Business Day), commencing ____________, 199__, and ending with the Stated
Maturity Date.
Person: any individual, corporation, partnership, joint venture,
------
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
Predecessor Contract: with respect to any Substitute Contract
--------------------
acquired by the Issuer by substitution pursuant to Section ____ of the
Receivables Acquisition Agreement, the Contract or Contracts for which such
Substitute Contract or any intervening Substitute Contract has been substituted.
Predecessor Notes: with respect to any particular Note, every
-----------------
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.04 in lieu of a lost, destroyed or
stolen Note (or a mutilated Note surrendered to the Indenture Trustee) shall be
deemed to evidence the same debt as the lost, destroyed or stolen Note (or a
mutilated Note surrendered to the Indenture Trustee).
Pre-Funded Amount: with respect to any Determination Date, the
-----------------
amount on deposit in the Pre-Funding Account.
Pre-Funding Account: the account or accounts by that name
-------------------
established and maintained by the Indenture Trustee pursuant to Section 3.01.
Pre-Funding Earnings: the actual investment earnings earned on the
--------------------
Pre-Funding Account during each Collection Period.
Prepayment Amount: means, with respect to any Contract, the sum of
-----------------
(1) the Implicit Contract Balance as of the first day of the Collection Period
preceding such prepayment, together with one month of interest thereon at the
Discount Rate, (2) any unreimbursed Servicer Advances with respect to such
Contract and (3) any Contract Payments due and outstanding under such Contract
that are not the subject of a Servicer Advance.
Prepayment Premium: means the greater of (i) zero and (ii) the
------------------
excess of (A) the product of (1) the present value of the remaining payments on
the Outstanding [Class A] Notes, the Outstanding [Class B] Notes or the
Outstanding [Class C] Notes, as applicable, discounted on a monthly basis
(assuming a calendar year consisting of twelve 30-day months)
17
at a discount rate equal to the sum of (x) the rate on U.S. Treasury securities
with a remaining maturity equal to the weighted average life of the prepaid
principal plus (y) _____%, and (2) a fraction, the numerator of which is the
prepaid principal and the denominator of which is the Outstanding [Class A] Note
Balance, the Outstanding [Class B] Note Balance or the Outstanding [Class C]
Note Balance, as applicable, over (B) the prepaid principal. A Prepayment
Premium shall be payable only pursuant to Section 2.01(c) and (d) hereof.
Purchaser: an initial purchaser of Offered Notes under the Note
---------
Agreement.
Rating Agency: _________________ and any successor thereto.
-------------
Receivables Acquisition Agreement: the Receivables Acquisition
---------------------------------
Agreement dated as of the date hereof between the Issuer and the Originator, as
the same may be amended or modified from time to time in accordance with the
provisions hereof and thereof.
Record Date: with respect to any Payment Date, the last Business Day
-----------
of the month immediately preceding such Payment Date.
Redemption Date: with respect to any redemption of Offered Notes, a
---------------
date fixed pursuant to Section 10.01.
Redemption Price: with respect to any Offered Note, and as of any
----------------
redemption date fixed by the Indenture Trustee, the Outstanding [Class A] Note
Balance or the Outstanding [Class B] Note Balance, as applicable, of such
Offered Note, together with interest accrued thereon to such redemption date at
the [Class A] Note Rate or the [Class B] Note Rate, as applicable (exclusive of
installments of interest and principal maturing on or prior to such date,
payment of which shall have been made to the holder of such Note on the
applicable Record Date or as otherwise provided herein).
Redemption Record Date: with respect to any redemption of Offered
----------------------
Notes, a date fixed pursuant to Section 10.01.
[Repurchase Amount: an amount equal to the sum of (1) the Implicit
-----------------
Contract Balance as of the first day of the Collection Period preceding such
repurchase, together with one month of interest thereon at the Discount Rate,
(2) any unreimbursed Servicer Advances with respect to such Contract and (3) any
Contract Payments due and outstanding under such Contract that are not the
subject of a Servicer Advance.]
18
Required Deposit Date: as defined in Section 3.02(b).
---------------------
Required Payments: the payments required pursuant to clauses (i),
-----------------
(ii) and (iii) of Section 3.04(b) hereof.
Reserve Account: the account or accounts by that name established
---------------
and maintained by the Indenture Trustee pursuant to Section 3.01.
Reserve Account Payment: as of any Payment Date, an amount equal to
-----------------------
the excess, if any, of Required Payments over the amount on deposit in the
Collection Account.
Responsible Officer: with respect to the Indenture Trustee, any
-------------------
officer regularly engaged in the administration or supervision of corporate
trust accounts and also, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
Restricting Event: as of any Payment Date or as of the related
-----------------
Determination Date, the occurrence and continuance of a Delinquency Condition on
(i) such Payment Date, (ii) such related Determination Date or (iii) any of the
five previous Payment Dates.
Servicer: the Originator and any Successor Servicer appointed
--------
pursuant to the terms hereof and of the Receivables Acquisition Agreement.
Servicer Advance: as defined in Section ____ of the Receivables
----------------
Acquisition Agreement.
Servicer Event of Default: as defined in Section ____ of the
-------------------------
Receivables Acquisition Agreement.
Servicer Order: a written order or request delivered to the
--------------
Indenture Trustee and signed in the name of the Servicer by an Authorized
Officer.
Servicing Fee: an amount equal to the sum of (a) the product of
-------------
(i) one-twelfth, (ii) the Servicing Fee Rate and (iii) the Aggregate Implicit
Contract Balance as of the beginning of the previous Collection Period, (b)
late payment fees and certain other fees paid by the Obligors during the
previous Collection Period and (c) any investment earnings on amounts held in
the Collection Account.
Servicing Fee Rate: _____%.
------------------
19
Sponsor: Chevy Chase Bank, F.S.B., a corporation organized and
-------
existing under the laws of the State of _______, and its successors.
Stated Maturity Date: the date on which the entire unpaid principal
--------------------
amount of the Notes is due and payable, which date is ________ __, 199__.
Substitute Contract: each separate installment sale contract and
-------------------
each contract schedule substituted for another Contract pursuant to the
provisions of Section ____ of the Receivables Acquisition Agreement, as the same
may be amended or modified from time to time in accordance with the provisions
hereof and thereof.
Successor Servicer: the Indenture Trustee or any successor to the
------------------
Servicer pursuant to the Receivables Acquisition Agreement.
Supplement: with respect to the [Class C] Notes, if any are issued,
----------
a supplement to this Indenture complying with the terms of Section 2.05 hereof.
Transaction Payment Amount: for each Required Deposit Date, the
--------------------------
amount of all Contract Payments, Excess Contract Receivables, Delinquency
Payments, Default Payments, Prepayment Amounts and other payments on or in
respect to a Contract received by the Trustee in the Lockbox Facility or
otherwise and deposited in the Lockbox Account pursuant to Section 3.02(a)
hereof and reported by the Servicer for such Required Deposit Date in accordance
with Section ____ of the Receivables Acquisition Agreement.
Trust Estate: all Contracts, Vehicles, money, instruments, accounts
------------
and other property subject to or intended to be subject to the lien of this
Indenture including all proceeds thereof.
Uniform Commercial Code or UCC: with respect to a particular
------------------------------
jurisdiction, the Uniform Commercial Code, as in effect from time to time in
such jurisdiction, or any successor statute thereto.
Vehicles: each item of property, together with any replacement
--------
parts, additions, and repairs thereto, any replacements thereof, any accessories
incorporated therein and/or affixed thereto, subject to a Contract or, following
expiration or termination of the Contract to which the same was previously
subject, remaining subject to the lien of this Indenture in accordance with the
provisions hereof.
Voting Rights: means, for so long as any [Class A] Notes remain
-------------
Outstanding, 100% of the Voting Rights shall be
20
exercised by the [Class A] Noteholders, with each [Class A] Noteholder having
its proportionate percentage interest in all Voting Rights. When no [Class A]
Note is Outstanding, 100% of the Voting Rights shall be exercised by the [Class
B] Noteholders, with each [Class B] Noteholder having its proportionate
percentage interest in all Voting Rights. When no [Class A] Notes and [Class B]
Notes are Outstanding, 100% of the Voting Rights shall be exercised by the
[Class C] Noteholders, if any, with each [Class C] Noteholder having its
proportionate percentage interest in all Voting Rights.
Voting Stock: capital stock of any class of a corporation having
------------
power to vote for the election of the members of the board of directors of such
corporation, or persons performing similar functions (whether or not at the time
stock of any class shall have or might have special voting powers or rights by
reason of the happening of any contingency).
Weighted Average Note Rate: the weighted average of the [Class A]
--------------------------
Note Rate, the [Class B] Note Rate and the [Class C] Note Rate, calculated as of
the Closing Date. For purposes of calculating the Weighted Average Note Rate,
the [Class C] Note Rate shall be equal to the [Class B] Note Rate and the
balance applicable thereto shall equal _____% of the Initial Aggregate Balance.
SECTION 1.02. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture or any
Supplement, other than any request that (i) the Indenture Trustee authenticate
the Notes specified in such request, (ii) the Indenture Trustee invest moneys in
the Collection Account, the Reserve Account, the Pre-Funding Account or the
Capitalized Interest Account pursuant to the written directions specified in
such request, or (iii) the Indenture Trustee pay moneys due and payable to the
Issuer hereunder to the Issuer's assignee specified in such request, the
Indenture Trustee may require the Issuer to furnish to the Indenture Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture or any Supplement relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such requested action as to which other evidence of
satisfaction of the conditions precedent thereto is specifically required by any
provision of this Indenture or any Supplement, no additional certificate or
opinion need be furnished.
21
SECTION 1.03. Form of Documents Delivered to Indenture Trustee.
-----------------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any Officer's Certificate or opinion and any Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an Authorized Officer or Authorized Officers of the
Issuer as to such factual matters unless such Authorized Officer or counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous. Any
Opinion of Counsel may be based on the written opinion of other counsel, in
which event such Opinion of Counsel shall be accompanied by a copy of such other
counsel's opinion, which shall include the Noteholders as addressees thereof,
and shall include a statement to the effect that such counsel believes that such
counsel, the Indenture Trustee and the Noteholders may reasonably rely upon the
opinion of such other counsel.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture or any Supplement, they may, but need not, be
consolidated and form one instrument.
Wherever in this Indenture or any Supplement, in connection with any
application or certificate or report to the Indenture Trustee, it is provided
that the Issuer shall deliver any document as a condition of the granting of
such application, or as evidence of compliance with any term hereof, it is
intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee's right to rely upon the
truth and accuracy of any statement or opinion contained in any such document as
provided in Section 7.01(a)(ii).
Whenever in this Indenture or any Supplement it is provided that the
absence of the occurrence and continuation
22
of a Default or an Indenture Event of Default or a Servicer Event of Default is
a condition precedent to the taking of any action by the Indenture Trustee at
the request or direction of the Issuer, then, notwithstanding that the
satisfaction of such condition is a condition precedent to the Issuer's right to
make such request or direction, the Indenture Trustee shall be protected in
acting in accordance with such request or direction if it does not have
knowledge of the occurrence and continuation of such Default or Indenture Event
of Default or Servicer Event of Default. For all purposes of this Indenture and
any Supplement, the Indenture Trustee shall not be deemed to have knowledge of
any Default or Indenture Event of Default (other than an Indenture Event of
Default of the kind described in clause (i) of Section 6.01) or Servicer Event
of Default unless a Responsible Officer of the Indenture Trustee shall have
actual knowledge thereof or shall have been notified in writing thereof by the
Issuer, the Servicer or any Noteholder.
SECTION 1.04. Acts of Noteholders, etc.
-------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture or any Supplement to be given
or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by agents duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee, with a copy (or if expressly
required an original) to the Issuer and the Servicer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
or any Supplement and (subject to Section 7.01) conclusive in favor of the
Indenture Trustee and the Issuer, if made in the manner provided in this Section
1.04.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person
23
executing the same, may also be proved in any other manner which the Indenture
Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the holder of any Note shall bind every future holder of
the same Note and the holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Indenture Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made upon
such Note.
(d) By accepting the Notes issued pursuant to this Indenture and any
Supplement, each Noteholder irrevocably appoints the Indenture Trustee hereunder
as the special attorney-in-fact for such Noteholder vested with full power on
behalf of such Noteholder to effect and enforce the rights of such Noteholder
pursuant hereto and the provisions hereof for the benefit of such Noteholder.
SECTION 1.05. Notices, etc., to Trustee, Servicer and Issuer
----------------------------------------------
Any request, demand, authorization, direction, notice, consent,
waiver, Act of Noteholders, or other document provided or permitted by this
Indenture or any Supplement to be made upon, given or furnished to, or filed
with, the Indenture Trustee, the Issuer or the Servicer shall be sufficient for
every purpose hereunder if in writing and telexed, telecopied (with a copy of
the telexed or telecopied material sent to the recipient by overnight courier on
the day of the telex or telecopy), mailed, first-class postage prepaid, or hand
delivered. Unless otherwise specifically provided herein, no such request,
demand, authorization, direction, notice, consent, waiver, Act of Noteholders or
other document shall be effective until received and any provision hereof
requiring the making, giving, furnishing, or filing of the same on any date
shall be interpreted as requiring the same to be sent or delivered in such
fashion that it will be received on such date. Any such request, demand,
authorization, direction, notice, consent, waiver, Act of Noteholders, or other
document shall be sent or delivered to the following addresses:
(i) if to the Indenture Trustee, at the [Corporate Trust Office],
Attention: ________________ (Number for telecopy: ______________;
(ii) if to the Issuer, at [______________________ (Number for
telecopy: ____________)], or at any other address previously furnished in
writing to the Indenture Trustee and the Servicer by the Issuer;
24
(iii) if to the Originator, at ________ ________________________
(Number for telecopy: (___) ________), or at any other address previously
furnished in writing to the Indenture Trustee, the Issuer and the Servicer by
the Originator; or
(iv) if to the Servicer, at ___________
___________________________________________________ (Number for telecopy:
_______________, or at any other address previously furnished in writing to the
Indenture Trustee, the Issuer and the Originator by the Servicer.
The Indenture Trustee will send to each Noteholder a copy of any
notice it receives hereunder by the Business Day following the receipt thereof
by the Indenture Trustee.
SECTION 1.06. Notice to Noteholders; Waiver.
-----------------------------
(a) Where this Indenture or any Supplement provides for notice to
Noteholders of any event, or the mailing of any report to Noteholders, such
notice or report shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, certified mail return-receipt requested, or
sent by private courier or confirmed telecopy (with a copy of the telecopied
material sent to the recipient by overnight courier on the day of the telecopy)
to each Noteholder affected by such event or to whom such report is required to
be mailed, at his address as it appears in the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice or the mailing of such report. In any case where a notice or
report to Noteholders is mailed, neither the failure to mail such notice or
report, nor any defect in any notice or report so mailed, to any particular
Noteholder shall affect the sufficiency of such notice or report with respect to
other Noteholders. Where this Indenture or any Supplement provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Noteholders shall be filed
with the Indenture Trustee, but such filing shall not be a condition precedent
to the validity of any action taken in reliance upon such waiver.
(b) In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to mail or send notice to
Noteholders, in accordance with Section 1.06(a), of any event or any report to
Noteholders when such notice or report is required to be delivered pursuant to
any provision of this Indenture or any Supplement, then such notification or
delivery as shall be made with the approval of the Indenture Trustee shall
25
constitute a sufficient notification for every purpose hereunder.
SECTION 1.07. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 1.08. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Issuer or the
Indenture Trustee shall bind its respective successors and permitted assigns,
whether so expressed or not.
SECTION 1.09. Severability Clause.
-------------------
In case any provision in this Indenture, any Supplement or in the
Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 1.10. Benefits of Indenture.
---------------------
Nothing in this Indenture, any Supplement or in the Notes, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, any separate trustee or co-trustee appointed under Section
7.11 hereof and the holders of Notes, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1.11. Governing Law.
-------------
This Indenture, any Supplement and the Notes shall be governed by, and
construed in accordance with, the laws of the State of [New York], without
regard to conflict of laws principles; provided that any provision of this
--------
Indenture which relates to, or provides for, the rights, duties and obligations
of the Indenture Trustee shall be governed by, and construed in accordance with,
the laws of the State of _____________. This Indenture is not subject to the
Trust Indenture Act of 1939 and shall not be governed thereby or construed in
accordance therewith.
SECTION 1.12. Legal Holidays.
--------------
In any case where any Payment Date or the Stated Maturity Date or any
other date on which principal of or interest on any Note is proposed to be paid
shall not be a Business Day, then (notwithstanding any other provision of
26
this Indenture or of the Notes) such payment shall be made on the immediately
succeeding Business Day.
SECTION 1.13. Execution in Counterparts.
-------------------------
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 1.14. Inspection.
----------
The Issuer agrees that it will permit the representatives of the
Indenture Trustee or any Noteholder, during the Issuer's normal business hours,
to examine all of the books of account, records, reports and other papers of the
Issuer, to make copies thereof and extracts therefrom, to cause such books to be
audited by independent accountants selected by the Issuer and reasonably
acceptable to the Indenture Trustee or such Noteholder, as the case may be, and
to discuss its affairs, finances and accounts with its officers, employees and
independent accountants (and by this provision the Issuer hereby authorizes its
accountants to discuss with such representatives such affairs, finances and
accounts), all at such times and as often as may be reasonably requested for the
purpose of reviewing or evaluating the financial condition or affairs of the
Issuer or the performance of and compliance with the covenants and undertakings
of the Issuer in this Indenture, the Note Agreement, the Receivables Acquisition
Agreement, or any of the other documents referred to herein or therein. Any
expense incident to the exercise by the Indenture Trustee or any Noteholder
during the continuance of any Default or Indenture Event of Default of any right
under this Section 1.14 shall be borne by the Issuer, but any expense due to the
exercise of a right by any such Person prior to the occurrence of a Default or
Indenture Event of Default shall be borne by such Person.
SECTION 1.15. Survival of Representations and Warranties.
------------------------------------------
The representations, warranties and certifications of the Issuer made
in this Indenture or in any certificate or other writing delivered by the Issuer
pursuant hereto shall survive the authentication and delivery of the Notes
hereunder, but unless explicitly provided to the contrary, they are made only as
of the Closing Date.
27
ARTICLE II
THE NOTES
SECTION 2.01. General Provisions.
------------------
(a) The Notes issuable hereunder shall be issued as registered
Notes in no more than [three classes] as from time to time shall be
authorized by the Issuer on or before __________, 199__. The Notes of all
classes shall be known and entitled generally as the "Chevy Chase Bank,
F.S.B. Auto Receivables Backed Notes." The Notes of each class shall have
further particular designation as the Issuer may adopt for each class, and
each Note issued hereunder shall bear upon the face thereof the designation
so adopted for the class to which it belongs. The Indenture Trustee is
hereby authorized and directed to authenticate and deliver Notes to be
issued hereunder in two classes entitled "_____% Auto Receivables Backed
Notes, [Class A]" and "_____% Auto Receivables Backed Notes, [Class B]",
respectively. The Issuer may, from time to time, subject to certain
conditions precedent set forth in this Article II, direct the issuance of
the [third class] of Notes which will be subordinate to the [Class A] Notes
and to the [Class B] Notes by entering into a Supplement. The form of each
class of Notes and of the Indenture Trustee's certificate of authentication
shall be in substantially the forms set forth in Exhibits A, B and C
hereto, with such appropriate insertions, omissions, substitutions, and
other variations as are required or permitted by this Indenture. The
aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $_____________ (of which the
aggregate principal amount of the [Class A] Notes and the [Class B] Notes
is $_____________) except for Notes authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of, other
Notes pursuant to Section 2.03, 2.04, or 9.04. The [Class A] Notes shall be
issuable only in registered form and only in denominations of at least
$_____________, provided that the foregoing shall not restrict or prevent
--------
the transfer or issuance in accordance with Sections 2.03 or 2.04 of any
[Class A] Note having a remaining outstanding principal amount of less than
$_____________. The [Class B] Notes shall be issuable only in registered
form and only in denominations of at least $_____________, provided that
--------
the foregoing shall not restrict or prevent the transfer or issuance in
accordance with Sections 2.03 or 2.04 of any [Class B] Note having a
remaining outstanding principal amount of less than $_____________. [Class
C] Notes, if any, shall be issued in the minimum denominations indicated
in the related Supplement.
(b) The aggregate amount of principal due and payable on
each class of Notes on each Payment Date shall be equal to the [Class A]
Monthly Principal, the [Class B]
28
Monthly Principal or the [Class C] Monthly Principal, as applicable, with
respect to such Payment Date. Except (i) for Optional Redemption pursuant to
Section 10.01, (ii) Prepayment Amounts, (iii) Repurchase Amounts, (iv)
prepayments from funds remaining in the Pre-Funding Account, or (v) as otherwise
provided in Section 6.02, no part of the principal of any Note shall be paid
prior to the Payment Date on which such principal is due in accordance with the
preceding provisions of this Section 2.01(b).
(c) If the [Class A] Monthly Principal, the [Class B] Monthly
Principal or the [Class C] Monthly Principal, as applicable, to be paid on the
Notes on any Payment Date includes any amount pursuant to clause (iii) of the
definition of the [Class A] Monthly Principal, the [Class B] Monthly Principal
or the [Class C] Monthly Principal, as applicable (other than any prepayment in
connection with casualty to Vehicles or a Defaulted Contract), there shall also
be paid to the Noteholders on such Payment Date a premium equal to the
Prepayment Premium with respect to such amount to be paid pursuant to such
clause (iii).
(d) Any amounts on deposit in the Pre-Funding Account after the Final
Additional Closing Date will be applied as a prepayment of the Notes to the
Noteholders on the next succeeding Payment Date in accordance with their
respective Class Percentages. If such prepayment is of an amount greater than
$_____________, a Prepayment Premium shall also be paid to the [Class A]
Noteholders and [Class B] Noteholders.
(e) Interest on the unpaid principal amount of each Outstanding Note
shall be payable on each Payment Date at the [Class A] Note Rate, the [Class B]
Note Rate or the [Class C] Note Rate, as applicable, for the period from the
Accrual Date, in the case of the [Class A] Notes and the [Class B] Notes, and
from and including the closing date thereof in the case of [Class C] Notes or,
in either case, such later date to which interest has been paid or duly provided
for, to such Payment Date. Interest on the Notes shall be computed on the basis
of a 360-day year of twelve 30-day months.
(f) All payments made with respect to any Note shall be made in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts and shall be applied first
to the interest then due and payable on such Notes, then to Prepayment Premium,
if any, and finally the principal thereof.
(g) All Notes of the same class issued under this Indenture or any
Supplement shall be in all respects equally and ratably entitled to the benefits
hereof and thereof without preference, priority or distinction on account of the
29
actual time or times of authentication and delivery, all in accordance with the
terms and provisions of this Indenture or any Supplement. Payments of principal,
the Prepayment Premium, if any, and interest on Notes of the same class shall be
made pro rata among all Outstanding Notes of such class, without preference or
priority of any kind.
SECTION 2.02. Execution, Authentication, Delivery, and Dating.
-----------------------------------------------
(a) The Notes shall be manually executed on behalf of the
Issuer by an Authorized Officer.
(b) Any Note bearing the signature of an individual who was at the
time of execution thereof a proper officer of the Issuer shall bind the Issuer,
notwithstanding that such individual ceases to hold such office prior to the
authentication and delivery of such Note or did not hold such office at the date
of such Note.
(c) No Note shall be entitled to any benefit under this Indenture or
any Supplement or be valid or obligatory for any purpose unless there appears on
such Note a certificate of authentication substantially in the form provided for
herein, executed by the Indenture Trustee by manual signature, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder. Each Note
shall be dated the date of its authentication.
(d) The Notes may from time to time be executed by the Issuer and
delivered to the Indenture Trustee for authentication together with an Issuer
Request to the Indenture Trustee directing the authentication and delivery of
such Notes and thereupon the same shall be authenticated and delivered by the
Indenture Trustee in accordance with such Issuer Request.
SECTION 2.03. Registration, Transfer and Exchange.
-----------------------------------
(a) The Issuer shall cause to be kept at the Corporate Trust Office a
register (the "Note Register") in which, subject to such reasonable regulations
as the Indenture Trustee may prescribe, the Issuer shall provide for the
registration of Notes and of transfers of Notes. The Indenture Trustee is hereby
appointed "Note Registrar" for the purpose of registering Notes and transfers of
Notes as herein provided.
(b) Upon surrender for registration of transfer of any Note at the
office of the Issuer designated pursuant to Section 8.02 for such purpose, the
Issuer shall execute and the Indenture Trustee upon request shall authenticate
and
30
deliver, in the name of the designated transferee or transferees, one or
more new Notes of the same class, of any authorized denominations and of a like
aggregate original principal amount. The Indenture Trustee shall make a notation
on any such new Note of the amount of principal, if any, that has been paid on
such Note and shall make the appropriate entries in the Note Register.
(c) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture and any Supplement, as
the Notes surrendered upon such registration of transfer or exchange.
(d) Every Note presented or surrendered for registration of transfer
or for exchange shall (if so required by the Issuer or the Indenture Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Indenture Trustee duly executed, by the
holder thereof or his attorney duly authorized in writing.
(e) No service charge shall be made for any registration of transfer
or exchange of Notes, but the Issuer or the Indenture Trustee may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Notes, other than exchanges pursuant to Section 9.04 not involving any transfer.
(f) Each prospective initial Noteholder acquiring a Note, each
prospective transferee acquiring a Note and each prospective owner of a
beneficial interest in Notes acquiring such beneficial interest (the prospective
initial Noteholder, the prospective transferee and the prospective beneficial
owner, each, a "Prospective Owner"), shall either (i) represent and warrant, in
writing, to the Issuer, the Trustee, the Servicer and any Successor Servicer
that the Prospective Owner is not an "employee benefit plan" within the meaning
of Section 3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of
the Code (any such plan or employee benefit plan, a "Plan") and the Prospective
Owner is not directly or indirectly acquiring the Note on behalf of, as
investment manager of, as named fiduciary of, as trustee of, or with assets of a
Plan, or (ii) furnish to the Issuer, the Indenture Trustee, the Servicer and any
Successor Servicer an opinion of counsel acceptable to the Issuer, the Indenture
Trustee, the Servicer and any Successor Servicer that (a) the proposed
acquisition or transfer will not cause any of the assets of the Issuer to be
deemed to be assets of a Plan, or (b) the proposed acquisition or transfer will
not cause the Issuer, the Indenture Trustee, the Servicer or any Successor
31
Servicer to be a fiduciary of a Plan within the meaning of Section 3(21) of
ERISA and will not give rise to a transaction described in Section 406 of ERISA
or Section 4975(e)(1) of the Code for which a statutory or administrative
exemption is unavailable.
SECTION 2.04. Mutilated, Destroyed, Lost and Stolen Notes.
-------------------------------------------
(a) If any mutilated Note is surrendered to the Indenture Trustee, the
Issuer shall execute and the Indenture Trustee shall authenticate and deliver in
exchange therefor a replacement Note of the same class, of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
(b) If there shall be delivered to the Issuer and the Indenture
Trustee (i) evidence to their satisfaction of the destruction, loss or theft of
any Note (provided, that any Noteholder's affidavit shall be sufficient evidence
--------
for these purposes) and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless (provided,
that any institutional Noteholder's own unsecured agreement of indemnity shall
be sufficient for these purposes), then, in the absence of actual notice to the
Issuer or the Indenture Trustee that such Note has been acquired by a bona fide
purchaser, the Issuer shall execute and upon its request the Indenture Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Note, a replacement Note of the same class, of like tenor and principal amount
and bearing a number not contemporaneously outstanding.
(c) In case the final installment of principal on any such mutilated,
destroyed, lost or stolen Note has become or will at the next Payment Date
become due and payable, the Issuer in its discretion may, instead of issuing a
replacement Note, pay such Note.
(d) Upon the issuance of any replacement Note under this Section, the
Issuer or the Indenture Trustee may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed as a result of
the issuance of such replacement Note.
(e) Every replacement Note issued pursuant to this Section in lieu of
any destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture and any Supplement equally and
proportionately with any and all other Notes of the same class, duly issued
hereunder.
32
(f) The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.05. Delivery of [Class C] Notes.
---------------------------
(a) Upon delivery to the Indenture Trustee of an Officers'
Certificate of the Issuer (a) requesting the authentication of the [Class C]
Notes and (b) stating the date upon which such [Class C] Notes are to be issued
(such date, the "Issuance Date" and such notice, the "Issuance Notice") and
certifying the satisfaction of the conditions stated in this Section and Section
2.01, the Indenture Trustee shall, subject to Section 2.05(b), authenticate
pursuant to Section 2.02 and deliver to or upon the order of the Issuer on such
Issuance Date such [Class C] Notes. Any such [Class C] Note shall be
substantially in the form of Exhibit C hereto and shall bear, upon its face, the
designation for such class to which it belongs so selected by the Issuer and set
forth in the related Supplement. All [Class C] Notes shall be identical in all
respects except for the denominations thereof and shall be equally and ratably
entitled among themselves to the benefits of this Agreement and any Supplement
thereof without preference, priority or distinction on account of the actual
title or times of authentication and delivery, all in accordance with the terms
and provisions of this Agreement and such Supplement. Notwithstanding anything
contained in any Supplement, no [Class C] Notes issued pursuant to the
provisions of this Section shall adversely affect the method of allocating
Available Funds to [Class A] Notes or [Class B] Notes for any period over which
such [Class C] Notes shall be outstanding.
(b) On the Issuance Date, the Indenture Trustee shall authenticate
and deliver any such [Class C] Notes upon delivery to it of the following: (i) a
Supplement substantially in the form of ____________ and in form reasonably
satisfactory to the Indenture Trustee executed by the Issuer and the Indenture
Trustee and specifying the items provided in Section 2.05(c) and any other terms
(the "Principal Terms"), (ii) an Opinion of Counsel delivered by outside counsel
to the Issuer reasonably acceptable to the Indenture Trustee, to the effect that
(A) the newly issued [Class C] Notes would be treated as debt for Federal income
tax purposes under existing law, (B) immediately following the issuance of the
[Class C] Notes, the Outstanding [Class A] Notes and the Outstanding [Class B]
Notes will continue to be treated as debt for Federal income tax purposes under
existing law and (C) such issuance of the [Class C] Notes will not have a
material adverse tax effect on any Outstanding [Class A] Notes or Outstanding
[Class B] Notes, (iii) written confirmation from the Rating Agency that the
issuance of such
33
[Class C] Notes will not result in the Rating Agency's reducing or withdrawing
its rating on the Outstanding [Class A] Notes or Outstanding [Class B] Notes,
(iv) such other closing documents, certificates and opinions of counsel as may
be required by the applicable Supplement. Notwithstanding the foregoing, the
Indenture Trustee shall not authenticate and deliver any [Class C] Notes
hereunder unless it also received on or prior to the Issuance Date, an Officers'
Certificate of the Issuer stating: (A) the [Class C] Percentage, which
percentage shall not exceed _____%, (B) the Initial [Class C] Note Balance, and
(C) the [Class C] Note Rate.
(c) Any Supplement relating to [Class C] Notes shall define or make
provision with respect to the [Class C] Notes to be issued pursuant thereto
including, but not limited to, the following Principal Terms: (i) the name or
designation of the [Class C] Notes, (ii) the Initial [Class C] Note Balance
thereof, (iii) the [Class C] Note Rate (or the formula for the determination
thereof, which may provide that such rate is a floating rate), (iv) the [Class
C] Percentage, (v) the Stated Maturity Date and (vi) the Redemption Price, if
any.
SECTION 2.06. Payment of Interest and Principal; Rights Preserved.
---------------------------------------------------
(a) Any installment of interest or principal and Prepayment
Premium, if any, payable on any Note that is paid or duly provided for by the
Issuer on the applicable Payment Date shall be paid to the Person in whose name
such Note was registered at the close of business on the Record Date for such
Payment Date by wire transfer of federal funds to the account and number
specified in the Note Register on such Record Date for such Person (which shall
be, as to each original purchaser of the Notes, the account and number specified
on Exhibit A to the Note Agreement until such time as such purchaser notifies
the Indenture Trustee in writing of a change therein) or, if no such account or
number is so specified, then by check mailed to such Person's address as it
appears in the Note Register on such Record Date.
(b) All reductions in the principal amount of a Note effected by
payments of installments of principal made on any Payment Date shall be binding
upon all holders of such Note and of any Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, whether or not such
payment is noted on such Note. All payments on the Notes shall be paid without
any requirement of presentment but each holder of any Note shall be deemed to
agree, by its acceptance of the same, to surrender such Note at the Corporate
Trust Office within ten Business Days following payment of the final installment
of principal of such Note.
34
SECTION 2.07. Persons Deemed Owners. Prior to due presentment of
---------------------
a Note for registration or transfer, the Issuer, the Indenture Trustee, and any
agent of the Issuer or the Indenture Trustee may treat the Noteholder as the
owner of such Note for the purpose of receiving payment of principal of and
interest on such Note and for all other purposes whatsoever, whether or not such
Note be overdue, and neither the Issuer, the Indenture Trustee, nor any agent of
the Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.08. Cancellation. All Notes surrendered for registration of
------------
transfer or exchange or following final payment shall, if surrendered to any
Person other than the Trustee, be delivered to the Indenture Trustee and shall
be promptly cancelled by it. The Issuer may at any time deliver to the Indenture
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Issuer may have acquired in any manner whatsoever, and all
Notes so delivered shall be promptly cancelled by the Indenture Trustee. No
Notes shall be authenticated in lieu of or in exchange for any Notes cancelled
as provided in this Section, except as expressly permitted by this Indenture.
All cancelled Notes held by the Indenture Trustee may be disposed of in the
normal course of its business or as directed by an Issuer Order.
ARTICLE III
ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION
AND APPLICATION OF MONEYS; REPORTS6.
SECTION 3.01. Accounts; Investments by Indenture Trustee.
------------------------------------------
(a) On or before the Closing Date, the Indenture Trustee shall
establish in the name of the Indenture Trustee for the benefit of the
Noteholders and the Issuer to the extent of their interests therein as provided
in this Indenture and in the Receivables Acquisition Agreement, the following
accounts, which accounts shall be trust accounts maintained at the Corporate
Trust Office:
(i) Collection Account;
(ii) [Class A] Distribution Account;
(iii) [Class B] Distribution Account;
(iv) [Class C] Distribution Account;
(v) Reserve Account;
35
(vi) Pre-Funding Account;
(vii) Capitalized Interest Account; and
(viii) Lockbox Account.
Each of such accounts shall be established and maintained as an Eligible
Account. Subject to the further provisions of this Section 3.01(a), the
Indenture Trustee shall, upon receipt or upon transfer from another account, as
the case may be, deposit into such accounts all amounts received by it which are
required to be deposited therein in accordance with the provisions of this
Indenture. All such amounts and all investments made with such amounts,
including all income and other gain from such investments, shall be held by the
Indenture Trustee in such accounts as part of the Trust Estate as herein
provided, subject to withdrawal by the Indenture Trustee in accordance with, and
for the purposes specified in the provisions of, this Indenture.
(b) Subject to Section 3.02, the Indenture Trustee shall hold in trust
but shall not be required to deposit in any account specified in Section 3.01(a)
any payment received by it until such time as the Indenture Trustee shall have
identified to its reasonable satisfaction the nature of such payment and, on the
basis thereof, the proper account or accounts into which such payment is to be
deposited. In determining into which of the accounts, if any, referred to above
any amount received by the Indenture Trustee is to be deposited, the Indenture
Trustee may conclusively rely (in the absence of bad faith on the part of the
Indenture Trustee) on the written instructions of the Servicer. Subject to
Section 3.02, unless otherwise advised in writing by the Obligor making the
payment or by the Servicer, the Indenture Trustee shall assume that any amount
remitted to it by such Obligor is to be deposited into the Collection Account
pursuant to Section 3.03. The Indenture Trustee may establish from time to time
such deadline or deadlines as it shall determine are reasonable or necessary in
the administration of the Trust Estate after which all amounts received or
collected by the Indenture Trustee on any day shall not be deemed to have been
received or collected until the next succeeding Business Day.
(c) The Indenture Trustee shall have no right of set-off with respect
to the Lockbox Account, the Collection Account, the [Class A] Distribution
Account, the [Class B] Distribution Account, the [Class C] Distribution Account,
the Reserve Account, the Pre-Funding Account, the Capitalized Interest Account
or any investment therein, whether or not commingled.
36
(d) So long as no Default or Indenture Event of Default shall have
occurred and be continuing, the amounts in the Collection Account, the Reserve
Account, the Pre-Funding Account and the Capitalized Interest Account shall be
invested and reinvested by the Indenture Trustee pursuant to an Issuer's Order
or Servicer Order in one or more Eligible Investments. Subject to the
restrictions on the maturity of investments set forth in Section 3.01(f), each
such Issuer Order or Servicer Order may authorize the Indenture Trustee to make
the specific Eligible Investments set forth therein, to make Eligible
Investments from time to time consistent with the general instructions set forth
therein, or to make specific Eligible Investments pursuant to instructions
received in writing or by telegraph or facsimile transmission from the employees
or agents of the Issuer or the Servicer, as the case may be, identified therein,
in each case in such amounts as such Issuer Order or Servicer Order shall
specify. The Issuer agrees to report as income for financial reporting and tax
purposes (to the extent reportable) all investment earnings on amounts in the
Collection Account, the Reserve Account, the Pre-Funding Account, and the
Capitalized Interest Account.
(e) In the event that either (i) the Issuer or the Servicer, as
applicable, shall have failed to give investment directions to the Indenture
Trustee by ________________ on any Business Day on which there may be uninvested
cash or (ii) a Default or Indenture Event of Default shall have occurred and be
continuing, then the Indenture Trustee shall promptly notify each Noteholder of
such fact and indicate that the Indenture Trustee is prepared to invest such
funds in one or more Eligible Investments in accordance with the instructions of
the holders of Notes evidencing more than [50%] of Voting Rights. In the absence
of such instructions, the Indenture Trustee shall invest and reinvest the funds
then in the Collection Account, the Reserve Account, the Pre-Funding Account, or
the Capitalized Interest Account, as the case may be, to the fullest extent
practicable in one or more Eligible Investments. All investments made by the
Indenture Trustee shall mature no later than the maturity date therefor
permitted by Section 3.01(f).
(f) No investment of any amount held in the Collection Account, the
Reserve Account, the Pre-Funding Account, or the Capitalized Interest Account
shall mature later than the Business Day immediately preceding the Payment Date
which is scheduled to occur immediately following the date of investment. All
income or other gains from the investment of moneys deposited in the Collection
Account, the Reserve Account, the Pre-Funding Account, or the Capitalized
Interest Account shall be deposited by the Indenture Trustee in such account
immediately upon receipt. Any net loss of principal (determined on a month by
month basis) resulting
37
from such investment of amounts in the Collection Account, the Reserve Account,
the Pre-Funding Account, or the Capitalized Interest Account shall be charged to
the Issuer, and upon notice thereof by the Indenture Trustee, the Issuer shall
reimburse such account for such loss within [three] Business Days.
(g) Any investment of any funds in the Collection Account, the
Reserve Account, the Pre-Funding Account, or the Capitalized Interest Account,
and any sale of any investment held in such accounts, shall be made under the
following terms and conditions:
(i) each such investment shall be made in the name of the
Indenture Trustee (in its capacity as such) or in the name of a nominee of
the Indenture Trustee;
(ii) the investment earnings of any investment shall be credited to
the account for which such investment was made;
(iii) any certificate or other instrument evidencing such investment
shall be delivered directly to the Indenture Trustee or its agent and the
Indenture Trustee shall have sole possession of such instrument, and all
income on such investment; and
(iv) the proceeds of any sale of an investment shall be remitted by
the purchaser thereof directly to the Indenture Trustee for deposit in the
account in which such investment was held.
(h) If any amounts are needed for disbursement from the Collection
Account, the Reserve Account, the Pre-Funding Account, or the Capitalized
Interest Account, and sufficient uninvested funds are not collected and
available therein to make such disbursement, in the absence of an Issuer Order
or Servicer Order for the liquidation of investments held therein in an amount
sufficient to provide the required funds, the Indenture Trustee shall cause to
be sold or otherwise converted to cash a sufficient amount of the investments in
such account selected by it in its absolute discretion and shall not be liable
for any loss resulting therefrom.
(i) The Indenture Trustee shall not in any way be held liable by
reason of any insufficiency in the Collection Account, the Reserve Account, the
Pre-Funding Account, or the Capitalized Interest Account, resulting from losses
on investments made in accordance with the provisions of this Section 3.01 (but
the institution serving as Indenture Trustee shall at all times remain liable
for its own debt obligations, if any, constituting part of such investments).
The Indenture Trustee shall not be liable for any investment made by it in
38
accordance with this Section 3.01 on the grounds that it could have made a more
favorable investment.
SECTION 3.02. Collection of Moneys; Lockbox Facility; Lockbox
-----------------------------------------------
Account.
-------
(a) On or before the Closing Date, the Indenture Trustee shall
establish, in the name of the Indenture Trustee, a post office box (the "Lockbox
Facility") for the receipt directly from Obligors of all Contract Payments,
Excess Contract Receivables and Prepayment Amounts on or in respect of each
Contract. No Person other than the Indenture Trustee shall be permitted to have
access to such Lockbox Facility. On each Business Day, the Indenture Trustee
shall cause all items received in the Lockbox Facility since the preceding
Business Day to be deposited into an account maintained with the Indenture
Trustee in the name of (and under the sole control of) the Indenture Trustee
(the "Lockbox Account"). All Contract Payments, [Repurchase Amounts,] Prepayment
Amounts and other payments relating to a Contract received in the Lockbox
Facility and so deposited in the Lockbox Account shall constitute part of the
Trust Estate.
(b) The Indenture Trustee shall, on each Business Day on which the
Indenture Trustee receives a report from the Servicer pursuant to Section _____
of the Receivables Acquisition Agreement (each such day, a "Required Deposit
Date"), in accordance with the information provided therein, withdraw from the
Lockbox Account and deposit in the Collection Account the Transaction Payment
Amount.
SECTION 3.03. Collection of Moneys. If at any time the Issuer
--------------------
shall receive any payment on or in respect of any Contract or Vehicle, it shall
hold such payment in trust for the benefit of the Indenture Trustee and the
holders of the Notes, shall segregate such payment from the other property of
the Issuer, and shall, within one day of receipt, deliver such payment in the
form received (with any necessary endorsement) by it to the Indenture Trustee.
SECTION 3.04. Collection Account.
------------------
(a) The Indenture Trustee shall deposit the following into the
Collection Account:
(i) each Contract Payment received by the Indenture Trustee in
the Lockbox Facility or otherwise received by the Indenture Trustee,
including all Contract Payments deposited with the Indenture Trustee by the
Originator on the Closing Date pursuant to Section ________ of the Note
Agreement;
39
(ii) the amount of each Delinquency Payment or portion thereof
received by the Indenture Trustee (whether from the Servicer as a Servicer
Advance pursuant to Section ____ of the Receivables Acquisition Agreement,
from transfers from the Reserve Account, or from a combination thereof);
(iii) the amount of each Default Payment or portion thereof
received by the Indenture Trustee (whether from transfers from the Reserve
Account or otherwise); and the proceeds of any repurchase of Contracts and
Vehicles pursuant to Section ________ of the Receivables Acquisition
Agreement;
(iv) each Prepayment Amount received in the Lockbox Facility or
otherwise received by the Indenture Trustee;
[(v) each Repurchase Amount received in the Lockbox Facility or
otherwise received by the Indenture Trustee;]
(vi) each Excess Contract Receivable received in the Lockbox
Facility or otherwise received by the Indenture Trustee;
(vii) any Insurance Proceeds received in the Lockbox Facility or
otherwise received by the Indenture Trustee;
(viii) the Pre-Funding Earnings, if any, on each Payment Date; and
(ix) the Capitalized Interest Requirement, if any, on each Payment
Date from amounts on deposit in the Capitalized Interest Account.
(b) Unless the Notes have been declared due and payable pursuant to
Section 6.02 and moneys collected by the Indenture Trustee are being applied in
accordance with Section 6.06, the Indenture Trustee shall on each Payment Date
withdraw and pay or cause to be paid all Available Funds and any Reserve Account
Payment deposited in the Collection Account (including any investment income
with respect to monies on deposit in the Collection Account) the amounts
required, for application in the following order of priority:
(i) to the Servicer, the Servicing Fee due to the Servicer on
such Payment Date and any unreimbursed Nonrecoverable Advances or Servicer
Advances, with respect to Defaulted Contracts;
40
(ii) to the [Class A] Distribution Account, in the following
order of priority, the sum of:
(a) the [Class A] Overdue Interest, if any;
(b) the [Class A] Monthly interest;
(c) the Prepayment Premium due to [Class A] Noteholders on
such Payment Date, if any;
(d) if such Payment Date follows the Final Additional
Closing Date, the product of (x) the amount, if any,
remaining in the Pre-Funding Account on such Payment
Date and (y) the [Class A] Percentage;
(e) the [Class A] Overdue Principal, if any; and
(f) the [Class A] Monthly Principal.
(iii) to the [Class B] Distribution Account, in the following
order of priority, the sum of:
(a) the [Class B] Overdue Interest, if any;
(b) the [Class B] Monthly Interest;
(c) the Prepayment Premium due to [Class B] Noteholders on
such Payment Date, if any;
(d) if such Payment Date follows the Final Additional
Closing Date, the product of (x) the amount, if any,
remaining in the Pre-Funding Account on such Payment
Date and (y) the [Class B] Percentage;
(e) the [Class B] Overdue Principal, if any; and
(f) the [Class B] Monthly Principal.
(iv) to the Reserve Account, an amount equal to the excess, if
any, of the Maximum Reserve Amount for the next succeeding Payment Date
over the amount on deposit in the Reserve Account (after giving effect to
any withdrawals from the Reserve Account on such Payment Date);
(v) to the [Class C] Distribution Account, in the following
order of priority, the sum of:
(a) the [Class C] Overdue Interest, if any;
41
(b) the [Class C] Monthly Interest;
(c) the Prepayment Premium due to [Class C] Noteholders on such
Payment Date, if any;
(d) if such Payment Date follows the Final Additional Closing
Date, the product of (x) the amount, if any, remaining in
the Pre-Funding Account on such Payment Date and (y) the
[Class C] Percentage;
(e) the [Class C] Overdue Principal, if any; and
(f) the [Class C] Monthly Principal;
provided, however, that if a Restricting Event shall have occurred and be
-------- -------
continuing on such Payment Date, any such amounts otherwise payable under
this clause (v) shall be deposited in the Reserve Account;
(vi) to the [Class A Noteholders], pro rata, the amount then on
--------
deposit in the [Class A] Distribution Account;
(vii) to the [Class B Noteholders], pro rata, the amount then on
--------
deposit in the [Class B] Distribution Account;
(viii) to the [Class C Noteholders], pro rata, the amount then on
--------
deposit in the [Class C] Distribution Account; and
(ix) all remaining amounts in the Collection Account shall be paid
to the Issuer; provided, however, that if a Restricting Event shall have
-------- -------
occurred and be continuing on such Payment Date, any such amounts otherwise
payable under this clause (ix) shall be deposited in the Reserve Account.
If at any time any amount or portion thereof previously distributed pursuant to
this Section 3.04(b) shall have been recovered, or shall be subject to recovery,
in any proceeding with respect to the Issuer or otherwise, then for purposes of
determining future distributions pursuant to this Section 3.04(b) such amount or
portion thereof shall be deemed not to have been previously so distributed. The
Indenture Trustee shall make no disbursal pursuant to any clause of this Section
3.04 on any Payment Date if funds are not available after all prior payments are
made on such Payment Date.
42
SECTION 3.05. Reserve Account.
---------------
(a) On the Closing Date, the Issuer shall direct the
Indenture Trustee to deposit in the Reserve Account an amount equal to
_______ % of the Initial Aggregate Balance from proceeds of the sale of the
Offered Notes. On each Payment Date, the Excess Collections shall be
deposited in the Reserve Account to the extent necessary, if any, to bring
the balance in the Reserve Account to the Maximum Reserve Amount.
(b) If by [_________________________], on the Business
Day preceding any Payment Date, Available Funds are insufficient to permit,
on such Payment Date, the distribution of all Required Payments under this
Indenture, then the Indenture Trustee shall transfer, not later than the
end of such Business Day, from the Reserve Account to the Collection
Account such amount as shall be necessary to make all Required Payments on
such Payment Date.
(c) If at the time of any required transfer from the
Reserve Account to the Collection Account pursuant to Section 3.05(b) or
any addition or substitution of one or more Additional Contracts or
Substitute Contracts pursuant to Section_________ of the Receivables
Acquisition Agreement, the Indenture Trustee has been advised in writing by
the Servicer that the Servicer has made one or more Servicer Advances
pursuant to Section_________ of the Receivables Acquisition Agreement with
respect to any Contract which has become a Defaulted Contract for which the
Servicer has not otherwise been reimbursed, before transferring any funds
from the Reserve Account to the Collection Account, the Indenture Trustee
shall first transfer from the amounts available in the Reserve Account to
the Servicer the amount of such advance or advances.
(d) On each Payment Date, funds on deposit in the
Reserve Account (after withdrawal of any Reserve Account Payment) in excess
of the Maximum Reserve Amount will be distributed to the [Class C]
Distribution Account to the extent of [Class C] Overdue Interest and [Class
C] Overdue Principal and any remainder shall be distributed to the Issuer
in accordance with this Indenture; provided, however, that if a Restricting
-------- -------
Event exists on such Payment Date, all funds on deposit in the Reserve
Account (after withdrawal of any Reserve Account Payment) shall remain in
the Reserve Account, subject to use as otherwise provided in this Section.
If the amount on deposit in the Reserve Account is insufficient to pay the
Required Payments, no other assets will be available on the related Payment
Date for the payment of the deficiency. Upon discharge of this Indenture,
after all obligations to the Noteholders have been fully and irrevocably
satisfied, any balance remaining in the Reserve Account shall be paid to
the Issuer.
43
SECTION 3.06. Pre-Funding Account.
-------------------
(a) On the Closing Date, the Indenture Trustee shall
deposit, on behalf of the Noteholders, in the Pre-Funding Account the
Original Pre-Funded Amount in an amount equal to $_________ from the
proceeds of the sale of the Offered Notes.
(b) On any Additional Contract Transfer Date, the Issuer
shall instruct the Indenture Trustee to withdraw from the Pre-Funding
Account an amount equal to ___% of the Implicit Contract Balance of the
Additional Contracts sold to the Issuer on such Additional Contract
Transfer Date and pay such amount to the Originator upon an Issuer Order
detailing satisfaction of the conditions set forth in Section_________ of
the Receivables Acquisition Agreement with respect to such transfer.
(c) On each Payment Date through and including the
Payment Date immediately following the Final Additional Closing Date (or,
if the Final Additional Closing Date is also a Payment Date, then on the
Final Additional Closing Date), the Indenture Trustee shall transfer from
the Pre-Funding Account to the Collection Account the Pre-Funding Earnings,
if any, applicable to each such Payment Date.
(d) If the Pre-Funding Account has not been reduced to
zero on the Final Additional Closing Date, the Indenture Trustee, upon a
Servicer Order, shall withdraw from the Pre-Funding Account on such Final
Additional Closing Date the remaining Pre-Funded Amount on deposit in the
Pre-Funding Account and shall distribute such amounts on such Final
Additional Closing Date to the Noteholders, in accordance with their
respective Class Percentages, as a prepayment on the Notes. To the extent
that such prepayment is of an amount greater than $___________, a
Prepayment Premium shall also be paid to the [Class A Noteholders] and
[Class B Noteholders] pursuant to Section 2.01(d) of this Indenture.
SECTION 3.07. Capitalized Interest Account.
----------------------------
(a) On the Closing Date, the Indenture Trustee shall
deposit in the Capitalized Interest Account the Original Capitalized
Interest Amount in an amount equal to $_________ from the proceeds of the
sale of the Offered Notes.
(b) On each Payment Date through and including the
Payment Date immediately following the Final Additional Closing Date (or,
if the Final Additional Closing Date is also a Payment Date, then on the
Final Additional Closing Date), the Indenture Trustee shall transfer from
the Capitalized Interest Account to the Collection Account the Capitalized
Interest Requirement for such Payment Date.
44
(c) On each Payment Date prior to the Final Additional
Closing Date, the Indenture Trustee, upon an Issuer Order, shall withdraw
from the Capitalized Interest Account and pay on such Payment Date to the
Issuer the Overfunded Interest Amount for such Payment Date.
(d) On the Payment Date following the Final Additional
Closing Date (or, if the Final Additional Closing Date is also a Payment
Date, then on the Final Additional Closing Date), any amounts remaining in
the Capitalized Interest Account, after taking into account the transfers
on such Payment Date described in clause (c) above, shall be paid to the
Issuer on such Payment Date and the Capitalized Interest Account shall be
closed.
SECTION 3.08. Reserved.
--------
SECTION 3.09. Reports by Indenture Trustee; Notices of
----------------------------------------
Certain Payments.
----------------
(a) The Indenture Trustee shall on each Business Day
report to the Originator and the Servicer the name of each Obligor from
which any payment has been received by the Indenture Trustee (in the
Lockbox Facility or otherwise) since the preceding report of the Indenture
Trustee pursuant to this Section 3.09(a), the amount of such payment, and
(if such payment was accompanied by information identifying the Contract or
Contracts to which it relates), the Contract or Contracts to which such
payment relate.
(b) Concurrently with each payment to the Noteholders,
the Indenture Trustee shall mail to the Issuer, the Originator, the
Servicer and each Noteholder the following information:
(i) the Monthly Servicer Report furnished by the Servicer to the
Indenture Trustee following such Payment Date pursuant to Section
________ of the Receivables Acquisition Agreement (or if such report
has not been received, a written statement to such effect); and
(ii) the amount on deposit as of such Payment Date in the
Collection Account, the Reserve Account, the Pre-Funding Account and
the Capitalized Interest Account, in each case after giving effect to
all of the withdrawals and applications or transfers required on such
Payment Date pursuant to Article III.
(c) The Indenture Trustee shall within [____] Business
Days after the request of the Issuer or the Servicer, deliver to the Issuer
and the Servicer a written report setting forth the amounts on deposit in
the Collection Account, the Reserve Account, Pre-Funding Account and the
45
Capitalized Interest Account, and identifying the investments included
therein.
SECTION 3.10. Indenture Trustee May Rely on Certain
-------------------------------------
Information from Originator and Servicer.
----------------------------------------
Pursuant to Sections_________, _________and ________ through
of the Receivables Acquisition Agreement, the Originator and the
--------
Servicer are required to furnish to the Indenture Trustee from time to time
certain information and make various calculations which are relevant to the
performance of the Indenture Trustee's duties in this Article Three and in
Article Four of this Indenture. The Indenture Trustee shall be entitled to
rely in good faith on any such information and calculations in the
performance of its duties hereunder, (i) unless and until a Responsible
Officer of the Indenture Trustee has actual knowledge, or is advised by any
Noteholder (either in writing or orally with prompt written or telecopied
confirmation), that such information or calculations is or are incorrect,
or (ii) unless there is a manifest error in any such information; provided
--------
that the Indenture Trustee shall verify, using all available information,
the [Class A] Monthly Principal, the [Class B] Monthly Principal, the
[Class C] Monthly Principal, the [Class A] Monthly Interest, the [Class B]
Monthly Interest, the [Class C] Monthly Interest and the Prepayment
Premium, if any, to be paid on each Payment Date.
ARTICLE IV
RELEASE OF CONTRACTS AND VEHICLES.
SECTION 4.01. Release of Contracts and Vehicles Upon Final
--------------------------------------------
Contract Payment. In the event that the Indenture Trustee shall have
----------------
received written certification from an Authorized Officer of the Servicer
that the Indenture Trustee has received from amounts paid by the Obligor or
from the proceeds of the Vehicle subject to any Contract (i) the final
Contract Payment due and payable under any Contract, or (ii) a Prepayment
Amount in respect of any Contract and, following such final Contract
Payment or Prepayment Amount, no further payments on or in respect of such
Contract are or will be due and payable, or (iii) the full amount of any
Contract Default Pay-Through Amount with respect to any Contract, such
Contract and the Vehicle subject thereto shall be released from the lien of
this Indenture.
46
SECTION 4.02. Release of Contracts and Vehicles Following
-------------------------------------------
Substitution or Repurchase.
--------------------------
In the event that (i) the Originator shall have substituted a
Substitute Contract and the Vehicle subject thereto for a Predecessor Contract
and the Vehicle subject thereto in accordance with Section of the
--------
Receivables Acquisition Agreement, or (ii) the Originator shall have repurchased
a Contract and the related Vehicle in accordance with Section of the
--------
Receivables Acquisition Agreement, the Predecessor Contract, or the repurchased
Contract, and the Vehicle subject thereto shall be released from the lien of
this Indenture when the Indenture Trustee shall have received written
certification from an Authorized Officer of the Servicer that there are no
unreimbursed amounts drawn on the Reserve Account with respect to such Contract.
If there are such unreimbursed amounts any proceeds received with respect to
such Predecessor Contract and the related Vehicle shall be applied hereunder
only to the extent necessary to reimburse the Reserve Account for such amounts
drawn thereon and the balance of such proceeds, if any, shall be paid to, or as
directed by, the Originator.
SECTION 4.03. Execution of Documents.
----------------------
The Indenture Trustee shall promptly execute and deliver such
documents (which shall be furnished to the Indenture Trustee by the Issuer) and
take such other actions as the Issuer, by Issuer Request, may reasonably request
to fully effectuate the release from this Indenture of any Contract and Vehicle
required to be so released pursuant to Sections 4.01 and 4.02.
ARTICLE V
SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER
SECTION 5.01. Servicer Events of Default.
--------------------------
If a Servicer Event of Default shall have occurred and be continuing,
the Indenture Trustee shall, upon the request of the holders of Notes evidencing
more than [ %] of Voting Rights, give notice in writing to the Servicer of its
--
termination as Servicer and shall act as substitute Servicer in accordance with
Section of the Receivables Acquisition Agreement.
--------
SECTION 5.02. Substitute Servicer.
-------------------
Notwithstanding the provisions of Section 5.01, the Indenture Trustee
may, if it shall be unwilling to continue to act as the Successor Servicer in
accordance with Section 5.01
47
or if it is unable to continue to so act, appoint a Successor Servicer in
accordance with the provisions of Section of the Receivables
--------
Acquisition Agreement.
SECTION 5.03. Notification to Noteholders.
---------------------------
Upon any termination of the Servicer or appointment of a Successor
Servicer, the Indenture Trustee shall give prompt notice of such termination or
appointment to each Noteholder in the manner provided herein.
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
SECTION 6.01. Events of Default.
-----------------
"Indenture Event of Default," wherever used herein, means any one of
the following (whatever the reason for such Indenture Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) default in the payment of any principal of or interest and
premium, if any, upon any Outstanding Note when it becomes due and payable;
(ii) default in the performance, or breach, of any covenant set
forth in Section 8.07(b), 8.07(e) and Section 8.08;
(iii) default in the performance, or breach, of any covenant of the
Issuer in this Indenture (other than a covenant default the performance of
which or breach of which is elsewhere in this Section 6.01 specifically
dealt with), the Note Agreement or the Receivables Acquisition Agreement
and continuance of such default or breach for a period of [ ] days after
--
the earliest of (A) any officer of the Issuer first acquiring knowledge
thereof, (B) the Indenture Trustee's giving written notice thereof to the
Issuer or (C) the holder of any Note giving written notice thereof to the
Issuer;
(iv) if any representation or warranty of the Issuer or the
Originator made in this Indenture, the Note Agreement or the Receivables
Acquisition Agreement or any other writing provided to the Noteholders in
connection with the foregoing documents shall prove to be incorrect in any
material respect as of the time when the same shall have been made;
provided, however, that the breach
-------- -------
48
of any representation or warranty made by the Originator in Section
or of the Receivables Acquisition Agreement with respect
-------- --------
to any of the Contracts or the Vehicle subject thereto shall not constitute
an Indenture Event of Default if the Originator substitutes one or more
Substitute Contracts and the Vehicle subject thereto for such Contract and
Vehicle in accordance with Section of the Receivables Acquisition
--------
Agreement or repurchases a Contract and the related Vehicle in accordance
with Section of the Receivables Acquisition Agreement;
--------
(v) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of the Issuer in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law or (B) a decree or order
adjudging the Issuer a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment, or
composition of or in respect of the Issuer under any applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator, or other similar official of the Issuer or of any
substantial part of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree or order for relief
or any such other decree or order unstayed and in effect for a period of 60
consecutive days;
(vi) the commencement by the Issuer of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Issuer in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator, or
similar official of the Issuer or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
Issuer's failure to pay its debts generally as they become due, or the
taking of corporate action by the Issuer in furtherance of any such action;
or
49
(vii) the rendering against the Issuer of a final judgment, decree or
order for the payment of money in excess of [$ ] and the continuance
------
of such judgment, decree or order unsatisfied for any period of [ ]
--
consecutive days without a stay of execution.
SECTION 6.02. Acceleration of Maturity; Rescission and
----------------------------------------
Annulment.
---------
(a) If an Indenture Event of Default of the kind
specified in clauses (v) or (vi) of Section 6.01 occurs, the unpaid
principal amount of the Notes shall automatically become due and payable at
par together with all accrued and unpaid interest thereon, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Issuer. If an Indenture Event of Default (other than an
Indenture Event of Default of the kind described in clauses (v) or (vi) of
Section 6.01) occurs and is continuing, then and in every such case the
Indenture Trustee or the holders of Notes evidencing not less than
[ %] of Voting Rights may declare the unpaid principal amount of all
------
the Notes to be due and payable immediately, by a notice in writing to the
Issuer (and to the Indenture Trustee if given by the Noteholders), and upon
any such declaration such principal amount shall become immediately due and
payable together with all accrued and unpaid interest thereon, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Issuer.
(b) At any time after such a declaration of acceleration
has been made and before a judgment or decree for payment of the money due
has been obtained by the Indenture Trustee as hereinafter in this Article
provided, the holders of Notes evidencing not less than [______%] of Voting
Rights, by written notice to the Issuer and the Indenture Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(A) all principal of and premium, if any, of any Notes which have
become due otherwise than by such declaration of acceleration and
interest thereon from the date when the same first became due at the
applicable Note Rate plus basis points,
-----
(B) all interest which has became due with respect to the Notes
and, to the extent that payment of such interest is lawful, interest
upon overdue interest from the date when the same first became due at
a rate per annum equal to the applicable Note Rate plus basis
-----
points, and
50
(C) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements, and advances
of the Indenture Trustee, its agents and counsel; and
(ii) all Indenture Events of Default, other than the non-payment of
the aggregate principal amount of the Notes which has become due solely by
such declaration of acceleration, have been cured or waived as provided in
Section 6.13.
No such rescission shall affect any subsequent Indenture Event of Default or
impair any right consequent thereon.
SECTION 6.03. Remedies.
--------
(a) If an Indenture Event of Default occurs and is continuing of which
a Responsible Officer has actual knowledge, the Indenture Trustee shall give
notice to each Noteholder as set forth in Section 7.02 and shall solicit the
Noteholders for advice. The Indenture Trustee shall then take such action, if
any, as may be directed by the holders of Notes evidencing not less than
[ %] of Voting Rights.
------
(b) Following any acceleration of the Notes, the Indenture Trustee
shall have all of the rights, powers and remedies with respect to the Trust
Estate as are available to secured parties under the Uniform Commercial Code or
other applicable law. Such rights, powers and remedies may be exercised by the
Indenture Trustee in its own name as trustee of an express trust.
SECTION 6.04. Indenture Trustee May File Proofs of Claim.
------------------------------------------
(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition,
or other judicial proceeding relative to the Issuer, the Originator, the
Servicer or any other obligor upon the Notes or the other obligations secured
hereby or relating to the property of the Issuer, the Originator, the Servicer
or of such other obligor or their creditors, the Indenture Trustee (irrespective
of whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Indenture Trustee shall have made any demand on the Issuer, the Originator or
the Servicer for the payment of overdue principal or overdue interest or any
such other obligation) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
51
(i) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Notes and any other obligation
secured hereby and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and
counsel) and of the Noteholders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or
other similar official in any such judicial proceeding is hereby authorized by
each Noteholder to make such payments to the Indenture Trustee and, in the event
that the Indenture Trustee shall consent to the making of such payments directly
to the Noteholders to pay to the Indenture Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee, its agents and counsel, and any other amounts due the Indenture Trustee
under Section 7.06.
(b) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any holder thereof or to authorize the
Indenture Trustee to vote in respect of the claim of any Noteholder in any such
proceeding.
SECTION 6.05. Indenture Trustee May Enforce Claims Without
--------------------------------------------
Possession of Notes.
-------------------
All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Indenture Trustee without the possession of any
of the Notes or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Indenture Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel, be
for the ratable benefit of the holders of the Notes in respect of which such
judgment has been recovered.
52
SECTION 6.06. Application of Money Collected.
------------------------------
Any money collected by the Indenture Trustee pursuant to this Article,
and any moneys that may then be held or thereafter received by the Indenture
Trustee, shall be applied in the following order, at the date or dates fixed by
the Indenture Trustee and, in case of the distribution of the entire amount due
on account of principal or interest, upon presentation of the Notes and
surrender thereof:
first, to the payment of all costs and expenses of collection incurred
-----
by the Indenture Trustee (including the reasonable fees and expenses of any
counsel to the Indenture Trustee) and all other amounts due the Indenture
Trustee under Section 7.06 and, after such costs and expenses incurred by
the Indenture Trustee have been paid, then to the payment of any such costs
and expenses incurred by the Noteholders;
second, to the payment of all unreimbursed Servicer Advances and
------
Servicing Fees then due to such Person;
third, to the payment of all accrued and unpaid interest on the
-----
Outstanding [Class A] Note Balance to the date of payment thereof,
including (to the extent permitted by applicable law) interest on any
overdue installment of interest and principal from the date such
installment was due to the date of payment thereof at the rate per annum
equal to the [Class A] Note Rate plus ________ basis points, all such
amounts to be paid ratably among the [Class A] Notes, without preference or
priority of any kind;
fourth, to the payment of the Outstanding [Class A] Note Balance and
------
any other amounts due to the [Class A] Noteholders ratably, without
preference or priority of any kind;
fifth, to the payment of all accrued and unpaid interest on the
-----
Outstanding [Class B] Note Balance to the date of payment thereof,
including (to the extent permitted by applicable law) interest on any
overdue installment of interest and principal from the date such
installment was due to the date of payment thereof at the rate per annum
equal to the [Class B] Note Rate plus ________ basis points, all such
amounts to be paid ratably among the [Class B] Notes, without preference or
priority of any kind;
sixth, to the payment of the Outstanding [Class B] Note Balance and
-----
any other amounts due to the [Class B] Noteholders ratably, without
preference or priority of any kind;
53
seventh, to the payment of all accrued and unpaid interest on the
-------
Outstanding [Class C] Note Balance to the date of payment thereof,
including (to the extent permitted by applicable law) interest on any
overdue installment of interest and principal from the date such
installment was due to the date of payment thereof at the rate per annum
equal to the [Class C] Note Rate plus ________ basis points, all such
amounts to be paid ratably among the [Class C] Notes, without preference or
priority of any kind;
eighth, to the payment of the Outstanding [Class C] Note Balance and
------
any other amounts due to the [Class C] Noteholders ratably, without
preference or priority of any kind; and
ninth, to the payment of the remainder, if any, to or at the order of
-----
the Issuer.
SECTION 6.07. Limitation on Suits.
-------------------
The holder of any Note shall not have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(i) such Noteholder has previously given written notice to the
Indenture Trustee of a continuing Indenture Event of Default;
(ii) the holders of Notes evidencing not less than ________% of
Voting Rights shall have made written request to the Indenture Trustee to
institute proceedings in respect of such Indenture Event of Default in its
own name as Indenture Trustee hereunder;
(iii) such Noteholder or Noteholders have offered to the Indenture
Trustee adequate indemnity (which the Indenture Trustee agrees, in the case
of each of the original purchasers of the Notes, need only be the written
promise of such Person) against the costs, expenses and liabilities to be
incurred in compliance with such request;
(iv) the Indenture Trustee for [__] days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and
(v) so long as any of the Notes remain Outstanding, no direction
inconsistent with such written request has been given to the Indenture
Trustee during such [__-day] period by the holders of Notes evidencing more
than [__%] of Voting Rights;
54
it being understood and intended that no one or more Noteholder shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb, or prejudice the rights of any other
Noteholder, or to obtain or to seek to obtain priority or preference over any
other Noteholder or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Noteholders.
SECTION 6.08. Unconditional Right of Noteholders to Receive
---------------------------------------------
Payment.
-------
Notwithstanding any other provision in this Indenture, other than the
provisions hereof establishing priorities of payment or limiting the right to
recover amounts due on the Notes to recoveries from the property of the Trust
Estate, the holder of any Note shall have the absolute and unconditional right
to receive payment of the principal of and interest on such Note on the Payment
Dates for such payments, including the Stated Maturity Date, and to institute
suit for the enforcement of any such payment, and such rights shall not be
impaired without the consent of such Noteholder.
SECTION 6.09. Restoration of Rights and Remedies.
----------------------------------
If the Indenture Trustee or any Noteholder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Indenture Trustee or to such Noteholder, then and in
every such case, subject to any determination in such proceeding, the Issuer,
the Indenture Trustee and the Noteholders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Indenture Trustee and the Noteholders shall continue as though
no such proceeding had been instituted.
SECTION 6.10. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost, or stolen Notes in the last paragraph of
Section 2.04, no right or remedy herein conferred upon or reserved to the
Indenture Trustee or to the Noteholders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
55
SECTION 6.11. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Indenture Trustee or of any holder of any
Note to exercise any right or remedy accruing upon any Indenture Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Indenture Event of Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Indenture Trustee or to the Noteholders
may be exercised from time to time, and as often as may be deemed expedient, by
the Indenture Trustee or by the Noteholders, as the case may be.
SECTION 6.12. Control by Noteholders.
----------------------
Except as provided in Sections 4.01 and 5.01, until such time as the
conditions specified in Sections 11.01(a)(i) and (ii) have been satisfied in
full, the holders of Notes evidencing not less than [________%] of Voting Rights
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Indenture Trustee or exercising any
trust or power conferred on the Indenture Trustee. Notwithstanding the
foregoing:
(i) no such direction shall be in conflict with any rule of law or
with this Indenture;
(ii) any direction to the Indenture Trustee by the Noteholders to
undertake a private sale of the Trust Estate shall be by the holders of
Notes evidencing ________% of the Voting Rights, unless the condition set
forth in Section 6.15(b)(ii) is met;
(iii) the Indenture Trustee shall not be required to follow any such
direction which the Indenture Trustee reasonably believes may be
prejudicial to any Noteholder not joining in such direction or which the
Indenture Trustee reasonably believes might result in any personal
liability on the part of the Indenture Trustee for which the Indenture
Trustee is not adequately indemnified;
(iv) the Indenture Trustee shall not undertake a private sale of the
Trust Estate unless the conditions set forth in Section 6.15(b) are met;
and
(v) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee which is not inconsistent with any such direction;
provided, that the Indenture Trustee shall give notice of any such action
--------
to each Noteholder.
56
SECTION 6.13. Waiver of Events of Default.
---------------------------
(a) The holders of Notes evidencing not less than [66-2/3%]
of Voting Rights may, by one or more instruments in writing, waive any Indenture
Event of Default hereunder and its consequences, except a continuing Indenture
Event of Default:
(i) in respect of the payment of the principal of or premium or
interest on any Outstanding Note (which may only be waived by the holder of
such Note), or
(ii) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
holder of each Outstanding Note affected (which only may be waived by the
holders of all Outstanding Notes affected).
(b) A copy of each waiver pursuant to Section 6.13(a) shall be
furnished by the Issuer to the Indenture Trustee. Upon any such waiver, such
Indenture Event of Default shall cease to exist and shall be deemed to have been
cured, for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Indenture Event of Default or impair any right
consequent thereon.
SECTION 6.14. Waiver of Stay or Extension Laws.
--------------------------------
The Issuer covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 6.15. Sale of Trust Estate.
--------------------
(a) The power to effect any sale of any portion of the Trust Estate
pursuant to Section 6.03 shall not be exhausted by any one or more sales as to
any portion of the Trust Estate remaining unsold, but shall continue unimpaired
until the entire Trust Estate shall have been sold or all amounts payable on the
Notes shall have been paid. The Indenture Trustee may from time to time postpone
any public sale by public announcement made at the time and place of such sale.
57
(b) To the extent permitted by applicable law, the Indenture Trustee
shall not in any private sale sell to a third party the Trust Estate, or any
portion thereof unless either (i) the holders of Notes evidencing 100% of the
Voting Rights consent to or direct the Indenture Trustee to make such sale; or
(ii) the proceeds of such sale would be not less than the sum of all amounts due
to the Indenture Trustee hereunder and the entire unpaid principal amount of the
Notes and the Prepayment Premium, if any, and interest due or to become due
thereon in accordance with Section 6.06 on the Payment Date next succeeding the
date of such sale.
The Indenture Trustee may not purchase all or any portion of the Trust
Estate at a private sale.
(c) In connection with a sale of all or any portion of the Trust
Estate:
(i) any one or more Noteholders may bid for and purchase the
property offered for sale, and upon compliance with the terms of sale may
hold, retain, and possess and dispose of such property, without further
accountability, and any Noteholder may, in paying the purchase money
therefor, deliver in lieu of cash any Outstanding Notes or claims for
interest thereon for credit in the amount that shall, upon distribution of
the net proceeds of such sale, be payable thereon, and such Notes, in case
the amounts so payable thereon shall be less than the amount due thereon,
shall be returned to the Noteholders after being appropriately stamped to
show such partial payment;
(ii) the Indenture Trustee may not bid for and acquire the property
offered for sale in connection with any public sale thereof;
(iii) the Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the
Trust Estate in connection with a sale thereof;
(iv) the Indenture Trustee is hereby irrevocably appointed the agent
and attorney-in-fact of the Issuer to transfer and convey its interest in
any portion of the Trust Estate in connection with a sale thereof, and to
take all action necessary to effect such sale; and
(v) no purchaser or transferee at such a sale shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction
of any conditions precedent or see to the application of any moneys.
58
(d) The method, manner, time, place and terms of any sale of all or
any portion of the Trust Estate shall be commercially reasonable.
(e) The provisions of this Section 6.15 shall not be construed to
restrict the ability of the Indenture Trustee to exercise any rights and powers
against the Issuer or the Trust Estate that are vested in the Indenture Trustee
by this Indenture, including, without limitation, the power of the Indenture
Trustee to proceed against the collateral subject to the lien of this Indenture
and to institute judicial proceedings for the collection of any deficiency
remaining thereafter.
ARTICLE VII
THE INDENTURE TRUSTEE
SECTION 7.01. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Indenture Event of Default
known to the Indenture Trustee,
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture against
the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Indenture Trustee, the Indenture Trustee shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Indenture Event of Default has occurred and is
continuing to the actual knowledge of a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Indenture Trustee from liability for
59
its own negligent action, its own negligent failure to act, or its own wilful
misconduct, except that:
------
(i) this subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Indenture Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Noteholders in accordance with Section 6.12 relating
to the time, method, and place of conducting any proceeding for any remedy
available to the Indenture Trustee, or exercising any trust or power
conferred upon the Indenture Trustee, under this Indenture; and
(iv) no provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Indenture Trustee (solely in its role as Indenture
Trustee and not in its role as substitute Servicer) shall be subject to the
provisions of this Section.
SECTION 7.02. Notice of Defaults or Events of Default.
---------------------------------------
Within two Business Days after a Responsible Officer obtains knowledge of
the occurrence of any Default or Indenture Event of Default hereunder or
Servicer Event of Default under the Receivables Acquisition Agreement, the
Indenture Trustee shall transmit by facsimile (if a facsimile number is
reasonably obtainable by the Indenture Trustee), with a copy by registered mail,
to all Noteholders, as their names, addresses and facsimile numbers appear in
the Note Register, the Issuer, the Servicer and the Originator notice of such
Default, Indenture Event of Default or Servicer Event of Default hereunder known
to the Indenture Trustee, unless such Default, Indenture Event of Default or
Servicer Event of Default shall have been cured or waived.
60
SECTION 7.03. Certain Rights of Indenture Trustee.
-----------------------------------
Subject to the provisions of Section 7.01:
(i) the Indenture Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
note, debenture, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii) any request or direction of the Issuer mentioned herein shall
be sufficiently evidenced by an Issuer Request or Issuer Order and any
action of the Issuer may be sufficiently evidenced by an Issuer Order;
(iii) whenever in the administration of this Indenture the Indenture
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Indenture
Trustee (unless other evidence be herein specifically prescribed) may, in
the absence of bad faith on its part, rely upon an Officers' Certificate;
(iv) the Indenture Trustee may consult with counsel as to legal
matters and the written advice of any such counsel selected and supervised
by the Indenture Trustee with due care shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(v) the Indenture Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request
or direction of any of the Noteholders pursuant to this Indenture, unless
such Noteholders shall have offered to the Indenture Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
(vi) the Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, note, debenture, other evidence of indebtedness,
or other paper or document, but the Indenture Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Indenture Trustee shall determine to make
such further inquiry or investigation, it shall be
61
entitled to examine the books, records and premises of the Issuer,
personally or by agent or attorney; and
(vii) the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Indenture Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
and supervised with due care by it hereunder.
SECTION 7.04. Not Responsible for Recitals or Issuance of Notes.
-------------------------------------------------
The recitals contained herein and in the Notes, except the Indenture
Trustee's certificates of authentication, shall be taken as the statements of
the Issuer, and the Indenture Trustee assumes no responsibility for their
correctness. The Indenture Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Notes. The Indenture Trustee shall
not be accountable for the use or application by the Issuer of the proceeds of
the Notes.
SECTION 7.05. Money Held in Trust.
-------------------
Money and investments held by the Indenture Trustee shall be held in
trust in one or more trust accounts as required hereunder.
SECTION 7.06. Compensation, Reimbursement, etc.
---------------------------------
The Issuer agrees:
(i) to pay to the Indenture Trustee from time to time such
compensation for all services rendered by it hereunder as the Issuer and
the Indenture Trustee have agreed in writing prior to the Closing Date
(which compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust), such payment to be
made independent of the other payment obligations of the Issuer hereunder;
and
(ii) except as otherwise expressly provided herein, to reimburse the
Indenture Trustee upon its request for all reasonable expenses,
disbursements, and advances incurred or made by the Indenture Trustee in
accordance with any provision of this Indenture (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.
62
SECTION 7.07. Corporate Indenture Trustee Required; Eligibility.
--------------------------------------------------
There shall at all times be an Indenture Trustee hereunder which (i)
shall be a corporation organized and doing business under the laws of the United
States of America, any state thereof or the District of Columbia, authorized
under such laws to exercise corporate trust powers; (ii) shall have a combined
capital and surplus of at least [$___________] or be a wholly owned subsidiary
of a bank holding company having such a capital and surplus; (iii) shall be
subject to supervision or examination by federal or state authority; (iv) at the
time of appointment, shall have commercial paper or other short-term debt
obligations (or, if the Indenture Trustee does not have outstanding commercial
paper or other short-term obligations and is a subsidiary of a holding company,
which holding company shall have commercial paper or other short term
obligations) having either of the two highest short-term credit ratings
available from the Rating Agency (or if the Rating Agency does not rate such
obligations, its equivalent from one other nationally recognized rating agency);
and (v) shall not be affiliated (as such term is defined in Rule 405 under the
Securities Act of 1933, as amended) with the Issuer or with any Person involved
in the organization or operation of the Issuer. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section, 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. If at any time the Indenture Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
SECTION 7.08. Resignation and Removal; Appointment of Successor.
--------------------------------------------------
(a) No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Indenture
Trustee under Section 7.09.
(b) The Indenture Trustee may resign for cause at any time by giving
written notice thereof to the Issuer and by mailing notice of resignation by
first-class mail, postage prepaid, to the Noteholders at their addresses
appearing on the Note Register.
(c) The Indenture Trustee may be removed at any time by Act of the
holders of Notes evidencing more than [50%]
63
of Voting Rights, delivered to the Indenture Trustee and the Issuer.
(d) If the Indenture Trustee shall resign, be removed, or become
incapable of acting, or if a vacancy shall occur in the office of Indenture
Trustee for any cause, the Issuer, with the consent of the holders of Notes
evidencing not less than [______%] of Voting Rights, by an act of the Issuer,
shall promptly appoint a successor Indenture Trustee.
(e) If no successor Indenture Trustee shall have been so appointed by
the Issuer as hereinbefore provided and accepted appointment in the manner
hereinafter provided within 30 days after any such resignation or removal,
existence of incapability, or occurrence of such vacancy, the Indenture Trustee
or any Noteholder may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
(f) The Issuer shall give notice of each resignation and each removal
of the Indenture Trustee and each appointment of a successor Indenture Trustee
by mailing written notice of such event by first-class mail, postage prepaid, to
all Noteholders, as their names and addresses appear in the Note Register. Each
notice shall include the name of the successor Indenture Trustee and the address
of its Corporate Trust Office.
SECTION 7.09. Acceptance of Appointment by Successor.
--------------------------------------
(a) Every successor Indenture Trustee appointed hereunder shall
execute, acknowledge and deliver to the Issuer and to the retiring Indenture
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Indenture Trustee shall become effective and such
successor Indenture Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Indenture Trustee; but, on request of the Issuer or the successor Indenture
Trustee, such retiring Indenture Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Indenture
Trustee all the rights, powers and trusts of the retiring Indenture Trustee and
shall duly assign, transfer and deliver to such successor Indenture Trustee all
property and money held by such retiring Indenture Trustee hereunder. Upon
request of any such successor Indenture Trustee, the Issuer shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Indenture Trustee all such rights, powers and trusts.
64
(b) No successor Indenture Trustee shall accept its appointment unless at
the time of such acceptance such successor Indenture Trustee shall be qualified
and eligible under this Article.
SECTION 7.10. Merger, Conversion, Consolidation or Succession to Business.
------------------------------------------------------------
Any Person into which the Indenture Trustee may be merged or converted or
with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Indenture Trustee shall be a party, or
any Person succeeding to all or substantially all the corporate trust business
of the Indenture Trustee, shall be the successor of the Indenture Trustee
hereunder, provided such Person shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Indenture Trustee then in office, any
successor by merger, conversion, or consolidation to such authenticating
Indenture Trustee may adopt such authentication and deliver the Notes so
authenticated with the same effect as if such successor Indenture Trustee had
itself authenticated such Notes.
SECTION 7.11. Co-trustees and Separate Indenture Trustees.
--------------------------------------------
(a) At any time or times, for the purpose of meeting the legal requirements
of any jurisdiction in which any of the Trust Estate may at the time be located,
the Issuer and the Indenture Trustee shall have power to appoint, and, upon the
written request of the Indenture Trustee, the holders of Notes evidencing more
than [__%] of Voting Rights, the Issuer shall for such purpose join with the
Indenture Trustee in the execution, delivery, and performance of all instruments
and agreements necessary or proper to appoint one or more Persons approved by
the Indenture Trustee either to act as co-trustee, jointly with the Indenture
Trustee, of all or any part of such Trust Estate, or to act as separate trustee
of any such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Issuer does not join in
such appointment within [__] days after the receipt by it of a request so to do,
or in case an Indenture Event of Default has occurred and is continuing, the
Indenture Trustee alone shall have power to make such appointment.
(b) Should any written instrument from the Issuer be required by any co-
trustee or separate trustee so appointed for more fully confirming to such co-
trustee or separate
65
trustee such property, title, right, or power, any and all such instruments
shall, on request, be executed, acknowledged and delivered by the Issuer.
(c) Every co-trustee or separate trustee shall, to the extent permitted
by law, but to such extent only, be appointed subject to the following terms:
(i) The Notes shall be authenticated and delivered and all rights,
powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Indenture Trustee hereunder, shall be
exercised solely by the Indenture Trustee.
(ii) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Indenture Trustee in respect of any property covered by
such appointment shall be conferred or imposed upon and exercised or
performed by the Indenture Trustee or by the Indenture Trustee and such co-
trustee or separate trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the extent that,
under any law of any jurisdiction in which any particular act is to be
performed, the Indenture Trustee shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate
trustee.
(iii) The Indenture Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Issuer evidenced by an Issuer
Order, may accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section, and, in case an Indenture Event of
Default has occurred and is continuing, the Indenture Trustee shall have
power to accept the resignation of, or remove, any such co-trustee or
separate trustee without the concurrence of the Issuer. Upon the written
request of the Indenture Trustee, the Issuer shall join with the Trustee in
the execution, delivery and performance of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A successor
to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section.
(iv) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Indenture Trustee or any
other such trustee hereunder and the Indenture Trustee shall not be
personally liable by reason of any act or omission of any co-trustee or
other such separate trustee hereunder
66
selected and supervised by the Indenture Trustee with due care or appointed
in accordance with directions to the Indenture Trustee pursuant to Section
6.12.
(v) Any Act of Noteholders delivered to the Indenture Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
SECTION 7.12. Indenture Trustee to Hold Contracts.
-----------------------------------
The Indenture Trustee shall hold the sole original, manually executed
counterpart of each Contract that constitutes chattel paper, together with any
documents relating thereto that may from time to time be delivered to the
Indenture Trustee, until such time as such Contract is released from the lien of
this Indenture pursuant to the provisions hereof.
SECTION 7.13. Request for Opinion of Counsel.
------------------------------
By its execution of this Indenture, the Indenture Trustee specifically
requests [counsel], the Indenture Trustee's special counsel in connection with
the transactions contemplated hereby, to prepare and deliver to each initial
purchaser of the Offered Notes the closing opinion contemplated by Section ____
of the Note Agreement.
SECTION 7.14. Financing Statements.
--------------------
The Indenture Trustee shall execute such Financing Statements and
continuation statements as shall be necessary and shall furnish the Servicer
with any powers of attorney or other documents necessary or appropriate to
enable the Servicer to fulfill its obligations under Section ______ of the
Receivables Acquisition Agreement and to carry out its servicing and
administration duties under the Receivables Acquisition Agreement.
SECTION 7.15. Power of Attorney.
-----------------
The Issuer hereby grants to the Indenture Trustee the power as its
attorney-in-fact to file Financing Statements in the appropriate offices
evidencing the conveyance of the Contracts and related Vehicles, and proceeds
thereof, to the Indenture Trustee for the benefit of the Noteholders, and to do
any and all other acts as may be necessary or appropriate to effect the
transaction contemplated herein and in the Receivables Acquisition Agreement and
the Note Agreement. The Issuer will execute any document or instrument deemed
necessary by the Indenture Trustee to effect or to evidence this power of
attorney. All costs associated with such filing or instructions shall be paid
by the Issuer.
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ARTICLE VIII
COVENANTS
SECTION 8.01. Payment of Principal and Interest.
---------------------------------
The Issuer will duly and punctually pay the principal of and interest and
premium, if any, on the Notes in accordance with the terms of the Notes and this
Indenture.
SECTION 8.02. Maintenance of Office or Agency; Chief Executive Office.
-------------------------------------------------------
(a) The Issuer will maintain in the State of _________________ an
office or agency where notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served.
(b) The chief executive office of the Issuer, and the office at which
the Issuer maintains its records with respect to the Contracts, the Vehicles,
and the transactions contemplated hereby, is located in [__________________].
The Issuer will not change the location of such office without giving the
Indenture Trustee and each Noteholder at least 60 days' prior written notice
thereof.
SECTION 8.03. Money for Payments to Noteholders to be Held in Trust.
-----------------------------------------------------
(a) All payments of amounts due and payable with respect to any Notes
that are to be made from amounts withdrawn from the Collection Account, the
Reserve Account, the Pre-Funding Account or the Capitalized Interest Account
pursuant to Section 3.04(b) or Section 6.06 shall be made on behalf of the
Issuer by the Indenture Trustee, and no amounts so withdrawn from the Collection
Account, the Reserve Account, the Pre-Funding Account or the Capitalized
Interest Account for payments of Notes shall be paid over to the Issuer under
any circumstances except as provided in this Section 8.03 or in Sections 3.04,
3.05, 3.06, 3.07 or 6.06.
(b) In making payments hereunder, the Indenture Trustee will:
(i) allocate all sums received for payment to the Noteholders on
each Payment Date among such Noteholders in accordance with Section 3.04(b)
hereof;
(ii) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as
68
herein provided and pay such sums to such Persons as herein provided; and
(iii) comply with all requirements of the Internal Revenue Code of
1986, as amended (or any successor statutes), and all regulations
thereunder, with respect to the withholding from any payments made by it on
any Notes of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith.
(c) Except as required by applicable law, any money held by the
Indenture Trustee in trust for the payment of any amount due with respect to any
Note and remaining unclaimed for three years after such amount has become due
and payable to the Noteholder shall be discharged from such trust and, subject
to applicable escheat laws, paid to the Issuer upon request; and such Noteholder
shall thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof, and all liability of the Indenture Trustee with respect to such
trust money shall thereupon cease.
SECTION 8.04. Corporate Existence; Merger; Consolidation, etc.
-----------------------------------------------
(a) The Issuer will keep in full effect its existence, rights, and
franchises as a corporation under the laws of the State of [______], and will
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of the Indenture, the Notes, or any of
the Contracts.
(b) The Issuer shall at all times observe and comply in all material
respects with (i) all laws, regulations and court orders applicable to it, (ii)
all requirements of law in the declaration and payment of dividends on its
Capital Stock, and (iii) all requisite and appropriate corporate and other
formalities (including, without limitation, annual and all other appropriate
meetings of the Issuer's board of directors and, if required by law, its charter
or otherwise, meetings and votes of shareholders to authorize corporate action)
in the management of its business and affairs and the conduct of the
transactions contemplated hereby and by the Note Agreement and the Receivables
Acquisition Agreement.
(c) The Issuer shall not issue or register the transfer of any of its
Capital Stock to any Person other than the Originator.
(d) The Issuer shall not (i) consolidate or merge with or into any
other Person or convey or transfer its properties and assets substantially as an
entirety to any
69
other Person except under or in compliance with this Indenture or (ii) commingle
any of its funds or other assets with those of any other Person.
(e) The Issuer will, at all times, (i) maintain (A) corporate and
financial books and records separate from those of any other Person and (B)
minutes of the meetings and other proceedings of its shareholders and board of
directors; (ii) continuously maintain the resolutions, agreements and other
instruments underlying the transactions contemplated hereby and by the Note
Agreement and the Receivables Acquisition Agreement as official records of the
Issuer; (iii) act solely in its corporate name and through its duly authorized
officers or agents to maintain an arm's-length relationship with the Originator
and its Affiliates; (iv) pay all of its operating expenses and liabilities from
its own funds; (v) maintain an office separate from that of the Originator on
the premises currently rented by the Originator; and (vi) transact the majority
of its business with entities that are not Affiliates of the Originator.
(f) The Issuer shall conduct its business solely in its own name so as
to not mislead others as to the identity of the corporation with which those
others are concerned, and particularly will avoid the appearance of conducting
business on behalf of the Originator or any of its Affiliates or that the assets
of the Issuer are available to pay the creditors of the Originator or any of its
Affiliates. Without limiting the generality of the foregoing, all oral and
written communications, including without limitation, letters, invoices,
purchase orders, contracts, statements and loan applications, will be made
solely in the name of the Issuer.
(g) The Issuer will be operated so as not to be substantively
consolidated with the Originator.
SECTION 8.05. Protection of Trust Estate; Further Assurances.
----------------------------------------------
The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such Financing Statements,
continuation statements, instruments of further assurance, and other
instruments, and will take such other action as may be necessary or advisable
to:
(i) Grant more effectively all or any portion of the Trust Estate;
(ii) maintain or preserve the lien of this Indenture or carry out
more effectively the purposes hereof;
70
(iii) publish notice of, or protect the validity of, any Grant made or
to be made by this Indenture and perfect the security interest contemplated
hereby in favor of the Indenture Trustee in the Trust Estate; provided,
--------
that the Issuer shall not be required to file Financing Statements with
respect to the Vehicles in addition to those contemplated by Section _____
of the Note Agreement and Section _____ of the Receivables Acquisition
Agreement;
(iv) enforce or cause the Servicer to enforce any of the Contracts;
or
(v) preserve and defend title to any Contract (including the right
to receive all payments due or to become due thereunder), Vehicles, or
other property included in the Trust Estate and preserve and defend the
rights of the Indenture Trustee and the Noteholders in such Contract
(including the right to receive all payments due or to become due
thereunder), Vehicles and other property against the claims of all persons
and parties.
The Issuer, upon the Issuer's failure to do so, hereby designates the Indenture
Trustee its agent and attorney-in-fact to execute any Financing Statement or
continuation statement required pursuant to this Section 8.05; provided,
--------
however, that such designation shall not be deemed to create a duty in the
-------
Indenture Trustee to monitor the compliance of the Issuer with the foregoing
covenants, and provided, further, that the duty of the Indenture Trustee to
-------- -------
execute any instrument required pursuant to this Section 8.05 shall arise only
if a Responsible Officer of the Indenture Trustee has actual knowledge of any
failure of the Issuer to comply with the provisions of this Section 8.05.
SECTION 8.06. Reserved.
--------
SECTION 8.07. Performance of Obligations; Receivables Acquisition
---------------------------------------------------
Agreement.
---------
(a) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, any Supplement, the
Notes, the Note Agreement and the Receivables Acquisition Agreement.
(b) The Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any Contract or any other instrument included in
the Trust Estate other than any such release occasioned by the early termination
of a Contract after receipt of the
71
Prepayment Amount, or which would result in the amendment, hypothecation,
subordination, termination, or discharge of, or impair the validity or
effectiveness of, any Contract or such other instrument, except as expressly
provided in this Indenture or the Receivables Acquisition Agreement.
(c) The Issuer will clearly xxxx its books and records to reflect each
assignment and transfer of a Contract and the Vehicle subject thereto from the
Originator.
(d) The Issuer will reply to all inquiries by third parties with
respect to the transactions contemplated by the Receivables Acquisition
Agreement by indicating that the Originator has assigned and transferred to it
the Contracts and the Originator's right, title and interest in and to the
related Vehicles.
(e) If any Authorized Officer shall have knowledge of the occurrence
of a default under the Receivables Acquisition Agreement, the Issuer shall
promptly notify the Indenture Trustee and the Noteholders thereof, and shall
specify in such notice the action, if any, the Issuer is taking in respect of
such default. Unless consented to by the Indenture Trustee, the Issuer may not
waive any default under or amend the Receivables Acquisition Agreement.
SECTION 8.08. Negative Covenants.
------------------
The Issuer will not:
(i) sell, transfer, exchange or otherwise dispose of any portion of
the Trust Estate except as expressly permitted by this Indenture or any
Supplement;
(ii) claim any credit on, or make any deduction from, the principal
of, or interest on, any of the Notes by reason of the payment of any taxes
levied or assessed upon any portion of the Trust Estate;
(iii) engage in any business or activity other than in connection
with, or relating to the ownership of, the Contracts and the Vehicles, the
issuance of the Notes, and the specific transactions contemplated hereby;
(iv) become liable for, issue, incur, assume, or allow to remain
outstanding any indebtedness, or guaranty any indebtedness of any Person,
other than the Notes, except as contemplated by this Indenture, any
Supplement, the Receivables Acquisition Agreement and the Note Agreement;
(v) seek dissolution or liquidation in whole or in part or
reorganization of its business or affairs;
72
(vi) (A) permit the validity or effectiveness of this Indenture or
any Grant hereby to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or permit
any Person to be released from any covenants or obligations under this
Indenture, except as may be expressly permitted hereby, (B) permit any
lien, charge, security interest, mortgage or other encumbrance to be
created on or to extend to or otherwise arise upon or burden the Trust
Estate or any part thereof or any interest therein or the proceeds thereof
other than the lien of this Indenture and the rights of Obligors, or (C)
permit the lien of this Indenture not to constitute a valid first priority
security interest in the Trust Estate; or
(vii) conduct its business or engage in any activity in violation of
the provisions contained in its Articles of Incorporation.
SECTION 8.09. Information as to the Issuer.
----------------------------
The Issuer shall deliver to the Indenture Trustee and each
institutional holder of Outstanding Notes (and, upon the request of any
Noteholder, to any prospective transferee of any Notes):
(a) Annual Statements - within [__] days after the end of
-----------------
each fiscal year of the Issuer, three copies of:
(i) a balance sheet of the Issuer, at the end of that year,
and
(ii) statements of income, retained earnings and cash flows of
the Issuer for that year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and accompanied by an opinion of a
firm of independent certified public accountants of recognized national
standing stating that such financial statements present fairly the
financial condition of the Issuer and have been prepared in accordance with
generally accepted accounting principles consistently applied (except for
changes in application in which such accountants concur and footnote), and
that the examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards, and accordingly included such tests of the accounting records
and such other auditing procedures as were considered necessary in the
circumstances;
73
(b) Officers' Certificate - with each set of financial statements
---------------------
delivered pursuant to Section 8.09(a), the Issuer will deliver a
certificate from an Authorized Officer stating that such Authorized Officer
has reviewed the relevant terms of this Indenture, any Supplement, the Note
Agreement and the Receivables Acquisition Agreement (including, without
limitation, Section 8.04 hereof) and has made, or caused to be made, under
such officer's supervision, a review of the transactions and conditions of
the Issuer during the period covered by the income statements then being
furnished and that the review has not disclosed the existence of any
Indenture Event of Default or, if an Indenture Event of Default exists,
describing its nature;
(c) Notice of Indenture Event of Default - immediately upon
------------------------------------
becoming aware of the existence of any condition or event which constitutes
a Default or an Indenture Event of Default, a written notice describing its
nature and period of existence and what action the Issuer is taking or
proposes to take with respect thereto;
(d) Report on Proceedings - promptly upon the Issuer's becoming
---------------------
aware of:
(i) any proposed or pending investigation
of it by any governmental authority or agency, or
(ii) any pending or proposed court or administrative
proceeding which involves or may involve the possibility,
individually or in the aggregate, of materially and adversely
affecting the properties, business, prospects, profits or
condition (financial or otherwise) of the Issuer, a written notice
specifying the nature of such investigation or proceeding and what
action the Issuer is taking or proposes to take with respect
thereto and evaluating its merits; and
(e) Requested Information - with reasonable promptness, any other
---------------------
data and information which may be reasonably requested from time to time.
SECTION 8.10. Taxes.
-----
The Issuer shall pay all taxes when due and payable or levied
against its assets, properties or income, including any property that is part of
the Trust Estate, except to the extent the Issuer is contesting the same in good
faith and has set aside adequate reserves in accordance with generally accepted
accounting principles for the payment thereof. The
74
Issuer shall be included as a consolidated entity in the federal tax returns
filed by the Originator.
SECTION 8.11. Indemnification.
---------------
The Issuer agrees to indemnify and hold harmless the Indenture
Trustee and each Noteholder (each an "Indemnified Party") against any and all
liabilities, losses, damages, penalties, costs and expenses (including costs of
defense and legal fees and expenses) which may be incurred or suffered by such
Indemnified Party without negligence or willful misconduct on its part as a
result of claims, actions, suits or judgments asserted or imposed against it and
arising out of the transactions contemplated hereby or by the Note Agreement or
the Receivables Acquisition Agreement, including, without limitation, any claims
resulting from any use, operation, maintenance, repair, storage or
transportation of any Vehicle, whether or not in the Issuer's possession or
under its control, and any tort claims and any fines or penalties arising from
any violation of the laws or regulations of the United States or any state or
local government or governmental authority; provided that, all amounts payable
--------
pursuant to this Section 8.11 shall be fully subordinated to amounts payable
under the Notes, shall be without recourse to the Issuer except to the extent
that all amounts otherwise due and payable under the terms of this Indenture
have been fully paid and shall not, to the extent that such amounts are unpaid,
constitute a claim against the Issuer except to the extent that all amounts
otherwise due and payable under the terms of this Indenture have been fully
paid. The provisions of this Section 8.11 shall survive the termination of this
Indenture.
SECTION 8.12. Certificates of Title.
---------------------
For any Vehicle for which a certificate of title is pending or
for which the Issuer has requested, but has not yet received, an application to
change its certificate of title, the Issuer shall apply to have the Indenture
Trustee named as a lienholder on such Vehicle immediately upon receiving such
certificate of title or application, respectively. The Issuer shall furnish to
the Indenture Trustee copies of all applications for changes to certificates of
title prepared by it and all changed certificates of title received by it.
75
ARTICLE IX
AMENDMENTS AND SUPPLEMENTAL INDENTURES
SECTION 9.01. Amendments and Supplemental Indentures.
--------------------------------------
With the consent of the holders of Notes evidencing not less
than [______%] of Voting Rights, by Act of said Noteholders delivered to the
Issuer and the Indenture Trustee, and with the consent of the Issuer, by an
Issuer Order, and the Indenture Trustee may enter into an amendment to this
Indenture or an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Noteholders under this Indenture. Without the consent of Noteholders, amendments
may be made by the Issuer and the Indenture Trustee to cure any ambiguity, to
correct or supplement any provision that is inconsistent with another provision
or to add or amend any provision with respect to matters or questions arising
under this Indenture; provided, however, that no amendment to this Indenture or
-------- -------
any supplemental indenture may modify the amount of, or the timing of payment
of, any amount due any Noteholder without the consent of such Noteholder, or any
other rights of the holders of a class of Notes, without the consent of
[______%] of the Outstanding Note Balance of the Notes of such class; and
provided, further, that no supplemental indenture may (i) modify any provision
-------- -------
of this Indenture requiring the consent of all Noteholders or (ii) release any
of the Trust Estate from the lien hereof or modify Sections 2.05 or 6.06 hereof
without the consent of all Noteholders.
SECTION 9.02. Execution of Amendments and Supplemental Indentures.
---------------------------------------------------
In executing any amendment to this Indenture or any supplemental
indenture pursuant to Section 9.01 of this Indenture, the Indenture Trustee
shall be entitled to receive, and (subject to Section 7.01) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such amendment to this Indenture or any supplemental indenture is authorized or
permitted by this Indenture. The Indenture Trustee may, but shall not be
obligated to, enter into any supplemental indenture which affects the Indenture
Trustee's own rights, duties, protections, or immunities under this Indenture or
otherwise.
76
SECTION 9.03. Effect of Amendments and Supplemental Indentures.
------------------------------------------------
Upon the execution of any amendment to this Indenture or any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such amendment or supplemental indenture shall form a
part of this Indenture for all purposes, and every Noteholder of Notes
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 9.04. Reference in Notes to Amendments and Supplemental
-------------------------------------------------
Indentures.
----------
Notes authenticated and delivered after the execution of any
amendment to this Indenture or any supplemental indenture pursuant to this
Article may, and shall if required by the Indenture Trustee, bear a notation in
form approved by the Indenture Trustee as to any matter provided for in such
amendment or supplemental indenture. If the Issuer shall so determine, new Notes
so modified as to conform, in the opinion of the Indenture Trustee and the
Issuer, to any such amendment or supplemental indenture may be prepared and
executed by the Issuer and authenticated and delivered by the Indenture Trustee
in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Optional Redemption; Election to Redeem.
---------------------------------------
The Notes may be redeemed by the Issuer, in whole but not in
part, as to the then Outstanding Offered Notes, on any Payment Date when (i) the
Outstanding [Class A] Note Balance is less than or equal to ___% of the initial
[Class A] Note Balance and (ii) the Outstanding [Class B] Note Balance is less
than or equal to ___% of the initial [Class B] Note Balance, at the Redemption
Price.
The Issuer, by an Authorized Officer, shall set the Redemption
Date and the Redemption Record Date and give notice thereof to the Indenture
Trustee pursuant to Section 10.02.
Installments of interest and principal due on or prior to a
Redemption Date shall continue to be payable to the Holders of Offered Notes
called for redemption as of the relevant Record Dates according to their terms
and the provisions of Section 2.06. The election of the Issuer to redeem any
Offered Notes pursuant to this Section shall be
77
evidenced in writing by an Authorized Officer directing the Indenture Trustee to
make the payment of the Redemption Price on all of the Offered Notes to be
redeemed from monies deposited with the Indenture Trustee pursuant to Section
10.04.
SECTION 10.02. Notice to Indenture Trustee.
---------------------------
In the case of any redemption pursuant to Section 10.01, the
Issuer shall, at least [__] days prior to the Redemption Date (unless a shorter
notice shall be satisfactory to the Indenture Trustee), notify the Indenture
Trustee of such Redemption Date.
SECTION 10.03. Notice of Redemption by the Issuer.
----------------------------------
Notice of redemption pursuant to Section 10.01 shall be given
by first class mail, postage prepaid, mailed not less than [__] days prior to
the applicable Redemption Date, to each Noteholder, at his address in the Note
Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price; and
(3) that on the Redemption Date, the Redemption Price will
become due and payable upon each such Note, and that
interest thereon shall cease to accrue on such date.
Notice of redemption of Offered Notes shall be given by the
Issuer, by an Authorized Officer, or, at the request of such Authorized Officer,
by the Indenture Trustee in the name and at the expense of the Issuer. Failure
to give notice of redemption, or any defect therein, to any Noteholder selected
for redemption shall not impair or affect the validity of the redemption of any
other Note.
SECTION 10.04. Deposit of the Redemption Price.
-------------------------------
On or before the Business Day next preceding any Redemption
Date, the Issuer shall deposit with the Indenture Trustee an amount of monies
sufficient to pay the Redemption Price of all Offered Notes Outstanding on such
Redemption Date (less any portion of such payment to be made from monies in the
Collection Account).
78
SECTION 10.05. Notes Payable on Redemption Date.
--------------------------------
Notice of redemption having been given as provided in Section
10.03, the Note shall, on the applicable Redemption Date, become due and payable
at the Redemption Price and on such Redemption Date (unless the Issuer shall
default in the payment of the Redemption Price) such Notes shall cease to bear
interest. The Noteholders shall be paid the Redemption Price by the Indenture
Trustee on behalf of the Issuer; provided, however, that installments of
-------- -------
principal and interest which are due on or prior to the Redemption Date shall be
payable to the Noteholders registered as such on the relevant Record Dates
according to their terms and the provisions of Section 2.06.
If the Holders of any Offered Note called for redemption shall
not be so paid, the principal and premium, if any, shall, until paid, bear
interest from the Redemption Date at the related Note Rate.
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01. Satisfaction and Discharge of
-----------------------------
Indenture.
---------
(a) This Indenture shall cease to be of further effect (except
as to any surviving rights herein expressly provided for), and the Indenture
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when:
(i) either:
(A) all Notes theretofore authenticated and delivered
(other than (x) Notes which have been destroyed, lost, or
stolen and which have been replaced or paid as provided in
Section 2.04 and (y) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 8.03(c))
have been irrevocably paid and delivered to the Indenture
Trustee for cancellation; or
(B) the final installments of principal on all such
Notes not theretofore delivered to the Indenture Trustee for
cancellation:
79
(1) have become due and payable, or
(2) will become due and payable at their Stated
Maturity Date within one year,
and the Issuer has deposited or caused to be deposited with the
Indenture Trustee as trust funds in trust for the purpose an
amount sufficient to pay and discharge the entire indebtedness
on such Notes not theretofore delivered to the Indenture
Trustee for cancellation, for principal and interest to the
date of such deposit (in the case of Notes which have become
due and payable) or to the Stated Maturity Date thereof;
(ii) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer for the benefit of the Noteholders; and
(iii) the Issuer has delivered to the Indenture Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
At such time, the Indenture Trustee shall deliver to the Issuer or, upon Issuer
Order, its assignee, all cash, securities and other property held by it as part
of the Trust Estate other than funds deposited with the Indenture Trustee
pursuant to Section 11.01(a)(i)(B) for the payment and discharge of the Notes.
(b) Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Issuer under Sections 7.06 and 8.11, and, if
money shall have been deposited with the Indenture Trustee pursuant to Section
11.01(a)(i)(B), the obligations of the Indenture Trustee under Section 11.02 and
Section 8.03(c) shall survive.
SECTION 11.02. Application of Trust Money. Subject to the
--------------------------
provisions of Section 8.03(c), all money deposited with the Indenture
Trustee pursuant to Sections 11.01 and 8.03 shall be held in trust and applied
by it, in accordance with the provisions of the Notes and this Indenture, to the
payment to the Persons entitled thereto of the principal and interest for whose
payment such money has been deposited with the Indenture Trustee.
80
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and witnessed, all as of the day and year first above written.
Attest: CHEVY CHASE BANK, F.S.B.
By:
------------------------------ -----------------------------------
Name: Name:
Title: Title:
Attest:
---------------------------------------,
, as Indenture
------------------------
Trustee
By:
-------------------------------- -----------------------------------
Name: Name:
Title: Title:
81
EXHIBIT A
TO INDENTURE
------------
[FORM OF [CLASS A] NOTES]
_____% AUTO RECEIVABLES BACKED NOTE, [CLASS A]
No. [A-__________] $______________
CHEVY CHASE BANK, F.S.B., a ____________ corporation (the
"Issuer"), for value received, hereby promises to pay to ___________________ or
registered assigns, the principal sum of _____________________ Dollars
($____________) in monthly installments equal to the [Class A] Monthly
Principal, if any, on the [twentieth] day of each month commencing ________,
199_ and ending not later than _________ __, 199__, when all remaining principal
and interest are due and payable in their entirety (each, a "Payment Date"); to
pay interest (computed on the basis of a 360-day year of twelve 30-day months)
on each Payment Date on the unpaid principal amount of this [Class A Note] from
the Accrual Date or such later date to which interest has been paid or duly
provided for, to such Payment Date, at the rate of _____% per annum; to the
extent provided in the Indenture referred to below, to pay the Prepayment
Premium with respect to the [Class A Notes]; and (to the extent permitted by
applicable law) to pay interest on any overdue installments of interest,
premium, if any, and principal at the rate of _____% per annum. Capitalized
terms not otherwise defined herein shall have the meanings set forth in the
Indenture.
Payments of principal, premium, if any, and interest on this
Note shall be made on each Payment Date in such coin or currency of the United
States of America as at such time is legal tender for payment of public and
private debts to the Person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on the Record Date for such
Payment Date, which shall be the [_____] Business Day preceding such Payment
Date, by wire transfer of federal funds to the account and number specified in
the Note Register on such Record Date for such Person or, if no such account or
number is so specified, then by check mailed to such Person's address as it
appears in the Note Register on such Record Date. Within 10 Business Days
following receipt of the final installment of principal of this Note, the holder
hereof shall surrender this Note at the principal Corporate Trust Office of the
Indenture Trustee.
This Note is one of a duly authorized issue of [Class A Notes]
of the Issuer designated as its ____% Auto Receivables Backed Notes, [Class A]
with aggregate principal
A-1
amount of $____________ and to be issued under an Indenture dated as of
__________, 199_ (herein called the "Indenture"), between the Issuer and
______________________, as trustee (herein called the "Indenture Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties, and immunities thereunder
of the Issuer, the Indenture Trustee, and the holders of the Notes and of the
terms upon which the Notes are, and are to be, authenticated and delivered. The
Trust Estate secures the Notes equally and ratably without prejudice, priority,
or distinction between any Note of the same class and any other Note of the same
class by reason of difference in time of issuance or otherwise, and also secures
the payment of certain other amounts and certain other obligations as set forth
in the Indenture.
As provided in the Indenture, the aggregate amount of
principal due and payable on the [Class A Notes] on each Payment Date is equal
to the [Class A] Monthly Principal with respect to such Payment Date. All such
payments shall be made pro rata among the Outstanding [Class A Notes], without
preference or priority of any kind.
If an Indenture Event of Default as defined in the Indenture
shall occur and be continuing, the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
As provided in the Indenture and subject to the limitations
set forth therein and above, the transfer of this Note is registrable in the
Note Register, upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Indenture Trustee duly executed by, the
holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes, of authorized denominations and for the same original aggregate
principal amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons
in denominations as provided in the Indenture and subject to certain limitations
therein set forth. No service charge shall be made for any such registration of
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Indenture Trustee
A-2
and any agent of the Issuer or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Issuer, the Indenture Trustee nor any such
agent shall be affected by notice to the contrary.
By accepting this Note, the holder hereof irrevocably appoints
the Indenture Trustee under the Indenture as the special attorney-in-fact for
the holder vested with full power on behalf of the holder to effect and enforce
the rights of such holder and the provisions of the Indenture for the benefit of
the holder. The preceding provision in no way shall limit the right of the
holder hereof to demand payment hereunder or bring an action to enforce payment
hereof.
All terms used in this Note which are defined in the Indenture
and not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
As provided in the Indenture, this Note and the Indenture
shall be governed by, and construed in accordance with, the laws of the State of
[________], except that any provision of the Indenture which relates to, or
provides for, the rights, duties and obligations of the Indenture Trustee shall
be governed by, and construed in accordance with, the laws of the State of
____________.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee by manual signature, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed in its name by the manual signature of its President or one of
its Vice Presidents.
CHEVY CHASE BANK, F.S.B.
By:
--------------------------
Name:
Title:
A-3
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
, as Indenture
---------------
Trustee
Dated: ________ __, 19__ By:
--------------------------
Authorized Signatory
A-4
EXHIBIT B
TO INDENTURE
------------
[FORM OF [CLASS B] NOTES]
_____% AUTO RECEIVABLES BACKED NOTE, [CLASS B]
No. [B-__________] $______________
CHEVY CHASE BANK, F.S.B., a ________ corporation (the
"Issuer"), for value received, hereby promises to pay to ___________________ or
registered assigns, the principal sum of _____________________ Dollars
($____________) in monthly installments equal to the [Class B] Monthly
Principal, if any, on the [_________] day of each month commencing ________,
199_ and ending not later than _________ __, 199__, when all remaining principal
and interest are due and payable in their entirety (each, a "Payment Date"); to
pay interest (computed on the basis of a 360-day year of twelve 30-day months)
on each Payment Date on the unpaid principal amount of this [Class B Note] from
the Accrual Date or such later date to which interest has been paid or duly
provided for, to such Payment Date, at the rate of _____% per annum; to the
extent provided in the Indenture referred to below, to pay the Prepayment
Premium with respect to the [Class B Notes]; and (to the extent permitted by
applicable law) to pay interest on any overdue installments of interest,
premium, if any, and principal at the rate of _____% per annum. Capitalized
terms not otherwise defined herein shall have the meanings set forth in the
Indenture.
THE RIGHTS TO RECEIVE PAYMENTS WITH RESPECT TO THIS [CLASS B]
NOTE ARE SUBORDINATE TO THE PRIOR PAYMENT IN FULL OF ALL AMOUNTS OF PRINCIPAL
AND INTEREST DUE AND PAYABLE ON THE [CLASS A] NOTES ON EACH PAYMENT DATE.
Payments of principal, premium, if any, and interest on this
Note shall be made on each Payment Date in such coin or currency of the United
States of America as at such time is legal tender for payment of public and
private debts to the Person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on the Record Date for such
Payment Date, which shall be the [_____] Business Day preceding such Payment
Date, by wire transfer of federal funds to the account and number specified in
the Note Register on such Record Date for such Person or, if no such account or
number is so specified, then by check mailed to such Person's address as it
appears in the Note Register on such Record Date. Within 10 Business Days
following receipt of the final installment of principal of this Note, the holder
B-1
hereof shall surrender this Note at the principal Corporate Trust Office of the
Indenture Trustee.
This Note is one of a duly authorized issue of [Class B Notes]
of the Issuer designated as its ____% Auto Receivables Backed Notes, [Class B]
with aggregate principal amount of $____________ and to be issued under an
Indenture dated as of __________, 199_ (herein called the "Indenture"), between
the Issuer and ______________________, as trustee (herein called the "Indenture
Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties, and
immunities thereunder of the Issuer, the Indenture Trustee, and the holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Estate secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
class and any other Note of the same class by reason of difference in time of
issuance or otherwise, and also secures the payment of certain other amounts and
certain other obligations as set forth in the Indenture.
As provided in the Indenture, the aggregate amount of
principal due and payable on the [Class B Notes] on each Payment Date is equal
to the [Class B] Monthly Principal with respect to such Payment Date. All such
payments shall be made pro rata among the Outstanding [Class B Notes], without
preference or priority of any kind.
If an Indenture Event of Default as defined in the Indenture
shall occur and be continuing, the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
As provided in the Indenture and subject to the limitations
set forth therein and above, the transfer of this Note is registrable in the
Note Register, upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Indenture Trustee duly executed by, the
holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes, of authorized denominations and for the same original aggregate
principal amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons
in denominations as provided in the Indenture and subject to certain limitations
therein set forth. No service charge shall be made for any such registration of
B-2
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Trustee may treat the Person in whose name this Note is registered as the owner
hereof for all purposes, whether or not this Note be overdue, and neither the
Issuer, the Indenture Trustee nor any such agent shall be affected by notice to
the contrary.
By accepting this Note, the holder hereof irrevocably appoints
the Indenture Trustee under the Indenture as the special attorney-in-fact for
the holder vested with full power on behalf of the holder to effect and enforce
the rights of such holder and the provisions of the Indenture for the benefit of
the holder. The preceding provision in no way shall limit the right of the
holder hereof to demand payment hereunder or bring an action to enforce payment
hereof.
All terms used in this Note which are defined in the Indenture
and not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
As provided in the Indenture, this Note and the Indenture
shall be governed by, and construed in accordance with, the laws of the State of
[________], except that any provision of the Indenture which relates to, or
provides for, the rights, duties and obligations of the Indenture Trustee shall
be governed by, and construed in accordance with, the laws of the State of
____________.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee by manual signature, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed in its name by the manual signature of its President or one of
its Vice Presidents.
CHEVY CHASE BANK, F.S.B.
By:_______________________________
Name:
Title:
B-3
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
______________________, as Indenture
Trustee
Dated: ________ __, 19__ By:_______________________________________
Authorized Signatory
B-4
EXHIBIT C
TO INDENTURE
------------
[FORM OF [CLASS C] NOTES]
_____% AUTO RECEIVABLES BACKED NOTE, [CLASS C]
No. [C-__________] $______________
CHEVY CHASE BANK, F.S.B., a Nevada corporation (the "Issuer"),
for value received, hereby promises to pay to ___________________ or registered
assigns, the principal sum of _____________________ Dollars ($____________) in
monthly installments equal to the [Class C] Monthly Principal, if any, on the
[_________] day of each month commencing ________, 199_ and ending not later
than _________ __, 199__, when all remaining principal and interest are due and
payable in their entirety (each, a "Payment Date"); to pay interest (computed on
the basis of a 360-day year of twelve 30-day months) on each Payment Date on the
unpaid principal amount of this [Class C Note] from the Accrual Date or such
later date to which interest has been paid or duly provided for, to such Payment
Date, at the rate of _____% per annum; to the extent provided in the Indenture
referred to below, to pay the Prepayment Premium with respect to the [Class C
Notes]; and (to the extent permitted by applicable law) to pay interest on any
overdue installments of interest, premium, if any, and principal at the rate of
_____% per annum. Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Indenture.
THE RIGHTS TO RECEIVE PAYMENTS WITH RESPECT TO THIS [CLASS C]
NOTE ARE SUBORDINATE TO THE PRIOR PAYMENT IN FULL OF ALL AMOUNTS OF PRINCIPAL
AND INTEREST DUE AND PAYABLE ON THE [CLASS A] AND THE [CLASS B] NOTES ON EACH
PAYMENT DATE.
Payments of principal, premium, if any, and interest on this
Note shall be made on each Payment Date in such coin or currency of the United
States of America as at such time is legal tender for payment of public and
private debts to the Person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on the Record Date for such
Payment Date, which shall be the [_____] Business Day preceding such Payment
Date, by wire transfer of federal funds to the account and number specified in
the Note Register on such Record Date for such Person or, if no such account or
number is so specified, then by check mailed to such Person's address as it
appears in the Note Register on such Record Date. Within 10 Business Days
following receipt of the final installment of principal of this Note, the holder
C-1
hereof shall surrender this Note at the principal Corporate Trust Office of the
Indenture Trustee.
This Note is one of a duly authorized issue of [Class C Notes]
of the Issuer designated as its ____% Auto Receivables Backed Notes, [Class C]
with aggregate principal amount of $____________ and to be issued under an
Indenture dated as of __________, 199_ (herein called the "Indenture"), between
the Issuer and ______________________, as trustee (herein called the "Indenture
Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties, and
immunities thereunder of the Issuer, the Indenture Trustee, and the holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Estate secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
class and any other Note of the same class by reason of difference in time of
issuance or otherwise, and also secures the payment of certain other amounts and
certain other obligations as set forth in the Indenture.
As provided in the Indenture, the aggregate amount of
principal due and payable on the [Class C Notes] on each Payment Date is equal
to the [Class C] Monthly Principal with respect to such Payment Date. All such
payments shall be made pro rata among the Outstanding [Class C Notes], without
preference or priority of any kind.
If an Indenture Event of Default as defined in the Indenture
shall occur and be continuing, the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
As provided in the Indenture and subject to the limitations
set forth therein and above, the transfer of this Note is registrable in the
Note Register, upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Indenture Trustee duly executed by, the
holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes, of authorized denominations and for the same original aggregate
principal amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons
in denominations as provided in the Indenture and subject to certain limitations
therein set forth. No service charge shall be made for any such registration of
C-2
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Trustee may treat the Person in whose name this Note is registered as the owner
hereof for all purposes, whether or not this Note be overdue, and neither the
Issuer, the Indenture Trustee nor any such agent shall be affected by notice to
the contrary.
By accepting this Note, the holder hereof irrevocably appoints
the Indenture Trustee under the Indenture as the special attorney-in-fact for
the holder vested with full power on behalf of the holder to effect and enforce
the rights of such holder and the provisions of the Indenture for the benefit of
the holder. The preceding provision in no way shall limit the right of the
holder hereof to demand payment hereunder or bring an action to enforce payment
hereof.
All terms used in this Note which are defined in the Indenture
and not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
As provided in the Indenture, this Note and the Indenture
shall be governed by, and construed in accordance with, the laws of the State of
[________], except that any provision of the Indenture which relates to, or
provides for, the rights, duties and obligations of the Indenture Trustee shall
be governed by, and construed in accordance with, the laws of the State of
____________.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee by manual signature, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed in its name by the manual signature of [the Trustee] [its
President or one of its Vice Presidents].
CHEVY CHASE BANK, F.S.B.
By:_______________________________
Name:
Title:
C-3
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
___________________________, as Indenture
Trustee
Dated: ________ __, 19__ By:____________________________________
Authorized Signatory
C-4
