Exhibit 10.1

 
 
CHESAPEAKE FUNDING LLC,
as Issuer
 
 
and
 
 
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
 
______________________________
 
 
BASE INDENTURE
 
Dated as of March 7, 2006
 
 
______________________________

 
 
Asset Backed Notes
 
(Issuable in Series)
 
 

--------------------------------------------------------------------------------

 
TABLE OF CONTENTS
 
 

   Page
 
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE
 
1
Section 1.1.   Definitions
1
Section 1.2.   Cross-References
1
Section 1.3.   Accounting and Financial Determinations; No Duplication
1
Section 1.4.   Rules of Construction.
2
 
ARTICLE 2. THE INVESTOR NOTES
 
 
2
 
Section 2.1.   Designation and Terms of Investor Notes
2
Section 2.2.   Investor Notes Issuable in Series
3
Section 2.3.   Execution and Authentication
5
Section 2.4.   Registration of Transfer and Exchange of Notes
6
Section 2.5.   Mutilated, Destroyed, Lost or Stolen Notes
8
Section 2.6.   Appointment of Paying Agent
9
Section 2.7.   Persons Deemed Owners
10
Section 2.8.   Investor Noteholder List
11
Section 2.9.   Treasury Notes
11
Section 2.10.   Book-Entry Notes
12
Section 2.11.   Definitive Notes
12
Section 2.12.   Global Note
13
Section 2.13.   Principal and Interest
13
Section 2.14.   Tax Treatment
14
 
ARTICLE 3. SECURITY
 
 
14
 
Section 3.1.   Grant of Security Interest
14
Section 3.2.   Transaction Documents
16
Section 3.3.   Release of Issuer Assets
17
Section 3.4.   Opinions of Counsel
18
Section 3.5.   Stamp, Other Similar Taxes and Filing Fees
18
 
ARTICLE 4. REPORTS
 
 
18
 
Section 4.1.   Servicer Reports
18
Section 4.2.   Communication to Investor Noteholders
19
Section 4.3.   Rule 144A Information
20
Section 4.4.   Reports by the Issuer
20
Section 4.5.   Reports by the Indenture Trustee
20
 
ARTICLE 5. ALLOCATION AND APPLICATION OF COLLECTIONS
 
 
21
 
Section 5.1.   Collection Account
21
Section 5.2.   Gain on Sale Account
22
Section 5.3.   Collection of Money
23

 
 
 

--------------------------------------------------------------------------------

 
Section 5.4.   Collections and Allocations
23
Section 5.5.   Joint Collection Account Disputes
24
 
ARTICLE 6. DISTRIBUTIONS
 
 
24
 
Section 6.1.   Distributions in General
24
Section 6.2.   Optional Repurchase of Investor Notes
25
 
ARTICLE 7. REPRESENTATIONS AND WARRANTIES
 
 
25
 
Section 7.1.   Existence and Power
25
Section 7.2.   Governmental Authorization
26
Section 7.3.   Binding Effect
26
Section 7.4.   Financial Information; Financial Condition
26
Section 7.5.   Litigation
26
Section 7.6.   No ERISA Plan
26
Section 7.7.   Tax Filings and Expenses
27
Section 7.8.   Disclosure
27
Section 7.9.   Investment Company Act
27
Section 7.10.   Regulations T, U and X
27
Section 7.11.   No Consent
27
Section 7.12.   Solvency
27
Section 7.13.   Security Interests
28
Section 7.14.   Binding Effect of Certain Agreements
28
Section 7.15.   Non-Existence of Other Agreements
28
Section 7.16.   Compliance with Contractual Obligations and Laws
29
Section 7.17.   Other Representations
29
Section 7.18.   Ownership of the Issuer.
29
 
ARTICLE 8. COVENANTS
 
 
29
 
Section 8.1.   Payment of Investor Notes
29
Section 8.2.   Maintenance of Office or Agency
29
Section 8.3.   Payment of Obligations
30
Section 8.4.   Conduct of Business and Maintenance of Existence
30
Section 8.5.   Compliance with Laws
30
Section 8.6.   Inspection of Property, Books and Records
30
Section 8.7.   Compliance with Transaction Documents; Issuer Assets
31
Section 8.8.   Notice of Defaults
31
Section 8.9.   Notice of Material Proceedings
31
Section 8.10.   Further Requests
32
Section 8.11.   Protection of Issuer Assets
32
Section 8.12.   Annual Opinion of Counsel
32
Section 8.13.   Liens
33
Section 8.14.   Other Indebtedness
33
Section 8.15.   Mergers
33
Section 8.16.   Sales of Issuer Assets
33
Section 8.17.   Acquisition of Assets
33
Section 8.18.   Distributions
33
Section 8.19.   Legal Name; Location Under Section 9-301
33
Section 8.20.   Organizational Documents
34
Section 8.21.   Investments
34
Section 8.22.   No Other Agreements
34

 
 

--------------------------------------------------------------------------------

 
Section 8.23.   Other Business
34
Section 8.24.   Maintenance of Separate Existence
34
Section 8.25.   Use of Proceeds of Investor Notes
36
Section 8.26.   No ERISA Plan
36
 
ARTICLE 9. REMEDIES
 
 
36
 
Section 9.1.   Events of Default
36
Section 9.2.   Acceleration of Maturity; Rescission and Annulment
37
Section 9.3.   Collection of Indebtedness and Suits for Enforcement by the
Indenture Trustee
38
Section 9.4.   Remedies; Priorities
40
Section 9.5.   Optional Preservation of the Issuer Assets
41
Section 9.6.   Limitation on Suits
41
Section 9.7.   Unconditional Rights of Investor Noteholders to Receive Principal
and Interest
42
Section 9.8.   Restoration of Rights and Remedies
42
Section 9.9.   Rights and Remedies Cumulative
42
Section 9.10.   Delay or Omission Not a Waiver
43
Section 9.11.   Control by Investor Noteholders
43
Section 9.12.   Waiver of Past Defaults
43
Section 9.13.   Undertaking for Costs
44
Section 9.14.   Waiver of Stay or Extension Laws
44
Section 9.15.   Action on Investor Notes
44
 
ARTICLE 10. THE INDENTURE TRUSTEE
 
 
45
 
Section 10.1.   Duties of the Indenture Trustee
45
Section 10.2.   Rights of the Indenture Trustee
46
Section 10.3.   Indenture Trustee’s Disclaimer
47
Section 10.4.   Indenture Trustee May Own Investor Notes
48
Section 10.5.   Notice of Defaults
48
Section 10.6.   Compensation
48
Section 10.7.   Eligibility Requirements for Indenture Trustee
48
Section 10.8.   Resignation or Removal of Indenture Trustee
49
Section 10.9.   Successor Indenture Trustee by Merger
50
Section 10.10.   Appointment of Co-Trustee or Separate Trustee
50
Section 10.11.   Representations and Warranties of Indenture Trustee
52
Section 10.12.   Preferential Collection of Claims Against the Issuer
52
 
ARTICLE 11. DISCHARGE OF INDENTURE
 
 
52
 
Section 11.1.   Termination of the Issuer’s Obligations
52
Section 11.2.   Application of Trust Money
53
Section 11.3.   Repayment to the Issuer
54
 
ARTICLE 12. AMENDMENTS
 
 
54
 
Section 12.1.   Without Consent of the Investor Noteholders
54
Section 12.2.   With Consent of the Investor Noteholders
55

 
 

--------------------------------------------------------------------------------

 
Section 12.3.   Supplements
56
Section 12.4.   Revocation and Effect of Consents
56
Section 12.5.   Notation on or Exchange of Investor Notes
56
Section 12.6.   The Indenture Trustee to Sign Amendments, etc
56
Section 12.7.   Conformity with Trust Indenture Act
57
 
ARTICLE 13. MISCELLANEOUS
 
 
57
 
Section 13.1.   Compliance Certificates and Opinions
57
Section 13.2.   Forms of Documents Delivered to Indenture Trustee
58
Section 13.3.   Actions of Noteholders
59
Section 13.4.   Notices
60
Section 13.5.   Conflict with TIA
61
Section 13.6.   Rules by the Indenture Trustee
61
Section 13.7.   Duplicate Originals
62
Section 13.8.   Benefits of Indenture
62
Section 13.9.   Payment on Business Day
62
Section 13.10.   Governing Law
62
Section 13.11.   Severability of Provisions
62
Section 13.12.   Counterparts
62
Section 13.13.   Successors
62
Section 13.14.   Table of Contents, Headings, etc.
63
Section 13.15.   Recording of Indenture
63
Section 13.16.   No Petition
63
Section 13.17.   SUBIs
63
Section 13.18.   Election of Overconcentration Option.
64

 

--------------------------------------------------------------------------------

 

BASE INDENTURE, dated as of March 7, 2006, between CHESAPEAKE FUNDING LLC, a
special purpose limited liability company established under the laws of
Delaware, as issuer (the “Issuer”), and JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, a national banking association, as trustee (in such capacity, the
“Indenture Trustee”).
 
W I T N E S S E T H:
 
WHEREAS, the Issuer has duly authorized the execution and delivery of this Base
Indenture to provide for the issuance from time to time of one or more series of
Investor Notes from time to time, issuable as provided in this Base Indenture;
and
 
WHEREAS, all things necessary to make this Base Indenture a legal, valid and
binding agreement of the Issuer, in accordance with its terms, have been done,
and the Issuer proposes to do all the things necessary to make the Investor
Notes, when executed by the Issuer and authenticated and delivered by the
Indenture Trustee hereunder and duly issued by the Issuer, the legal, valid and
binding obligations of the Issuer as hereinafter provided;
 
NOW, THEREFORE, for and in consideration of the premises and the receipt of the
Investor Notes by the Investor Noteholders, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Investor Noteholders, as
follows:
 
ARTICLE 1.  
 
 
DEFINITIONS AND INCORPORATION BY REFERENCE
 
Section 1.1.    Definitions
 
Certain capitalized terms used herein (including the preamble and the recitals
hereto) shall have the meanings assigned to such terms in the Definitions List
attached hereto as Schedule 1 (the “Definitions List”), as such Definitions List
may be amended or modified from time to time in accordance with the provisions
hereof.
 
Section 1.2.    Cross-References
 
Unless otherwise specified, references in this Base Indenture and in each other
Transaction Document to any Article or Section are references to such Article or
Section of this Base Indenture or such other Transaction Document, as the case
may be and, unless otherwise specified, references in any Article, Section or
definition to any clause are references to such clause of such Article, Section
or definition.
 
Section 1.3.    Accounting and Financial Determinations; No Duplication
 
Where the character or amount of any asset or liability or item of income or
expense is required to be determined, or any accounting computation is required
to be made, for the purpose of the Indenture, such determination or calculation
shall be made, to the extent applicable and except as otherwise specified in the
Indenture, in accordance with GAAP. When used herein, the term “financial
statement” shall include the notes and schedules thereto. All accounting
determinations and computations hereunder or under any other Transaction
Documents shall be made without duplication.
 
 

--------------------------------------------------------------------------------

 
Section 1.4.    Rules of Construction.
 
In the Indenture, unless the context otherwise requires:
 
(i)    the singular includes the plural and vice versa;
 
(ii)    reference to any Person includes such Person’s successors and assigns
but, if applicable, only if such successors and assigns are permitted by the
Indenture, and reference to any Person in a particular capacity only refers to
such Person in such capacity;
 
(iii)    reference to any gender includes the other gender;
 
(iv)    reference to any Requirement of Law means such Requirement of Law as
amended, modified, codified or reenacted, in whole or in part, and in effect
from time to time;
 
(v)    “including” (and with correlative meaning “include”) means including
without limiting the generality of any description preceding such term; and
 
(vi)    with respect to the determination of any period of time, “from” means
“from and including” and “to” means “to but excluding”.
 
ARTICLE 2.  
 
 
THE INVESTOR NOTES
 
Section 2.1.    Designation and Terms of Investor Notes
 
 
Each Series of Investor Notes and any Class thereof may be issued in bearer form
(the “Bearer Notes”) with attached interest coupons and a special coupon
(collectively, the “Coupons”) or in fully registered form (the “Registered
Notes”), and, in each case, substantially in the form specified in the
applicable Indenture Supplement, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted hereby or by the
related Indenture Supplement and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined to be appropriate by the Authorized Officer
executing such Investor Notes, as evidenced by his execution of the Investor
Notes. All Investor Notes of any Series shall, except as specified in the
related Indenture Supplement, be equally and ratably entitled as provided herein
to the benefits hereof without preference, priority or distinction on account of
the actual time or times of authentication and delivery, all in accordance with
the terms and provisions of this Base Indenture and the applicable Indenture
Supplement. The aggregate principal amount of Investor Notes which may be
authenticated and delivered under the Indenture is unlimited. The Investor Notes
shall be issued in the denominations set forth in the related Indenture
Supplement.
 
 
2

--------------------------------------------------------------------------------

 
Section 2.2.    Investor Notes Issuable in Series
 
 
(a)    The Investor Notes may be issued in one or more Series. Each Series of
Investor Notes shall be created by an Indenture Supplement.
 
(b)    Investor Notes of a new Series may from time to time be executed by the
Issuer and delivered to the Indenture Trustee for authentication and thereupon
the same shall be authenticated and delivered by the Indenture Trustee upon the
receipt by the Indenture Trustee of an Issuer Request at least three (3)
Business Days (or such shorter time as is acceptable to the Indenture Trustee)
in advance of the related Series Closing Date and upon delivery by the Issuer to
the Indenture Trustee, and receipt by the Indenture Trustee, of the following:
 
(i)    an Issuer Order authorizing and directing the authentication and delivery
of the Investor Notes of such new Series by the Indenture Trustee and specifying
the designation of such new Series, the Initial Invested Amount (or the method
for calculating such Initial Invested Amount) of such new Series and the Note
Rate (or the method for allocating interest payments or other cash flows to such
Series), if any, with respect to such Series;
 
(ii)    an Indenture Supplement satisfying the criteria set forth in Section
2.2(b) executed by the Issuer and specifying the Principal Terms of such new
Series;
 
(iii)    a Tax Opinion;
 
(iv)    written confirmation from each Rating Agency that the Rating Agency
Condition shall have been satisfied with respect to such issuance;
 
(v)    an Officer’s Certificate of the Issuer, that on the Series Closing Date
after giving effect to the issuance of such new Series, (i) neither an
Amortization Event nor a Potential Amortization Event with respect to any Series
of Investor Notes nor an Asset Deficiency is continuing or will occur, (ii) the
issuance of the new Series of Investor Notes will not result in any breach of
any of the terms, conditions or provisions of or constitute a default under any
indenture, mortgage, deed of trust or other agreement or instrument to which the
Issuer is a party or by which it or its property is bound or any order of any
court or administrative agency entered in any suit, action or other judicial or
administrative proceeding to which the Issuer is a party or by which it or its
property may be bound or to which it or its property may be subject and (iii)
all conditions precedent provided in this Base Indenture and the related
Indenture Supplement with respect to the authentication and delivery of the new
Series of Investor Notes have been complied with; and
 
(vi)    such other documents, instruments, certifications, agreements or other
items as the Indenture Trustee may reasonably require.
 
(c)    In conjunction with the issuance of a new Series of Investor Notes, the
parties hereto shall execute an Indenture Supplement, which shall specify the
relevant terms with respect to any newly issued Series of Investor Notes, which
may include without limitation:
 
(i)    its name or designation;
 
 
3

--------------------------------------------------------------------------------

(ii)    an Initial Invested Amount of such Series or the method of calculating
the Initial Invested Amount of such Series;
 
(iii)    the Note Rate (or formula for the determination thereof) with respect
to such Series;
 
(iv)    the Series Closing Date;
 
(v)    each Rating Agency rating such Series;
 
(vi)    the name of the Clearing Agency or Foreign Clearing Agency, if any;
 
(vii)    the interest payment date or dates and the date or dates from which
interest shall accrue;
 
(viii)    the method of allocating Collections with respect to such Series;
 
(ix)    the method by which the principal amount of Investor Notes of such
Series shall amortize or accrete;
 
(x)    the names of any Series Accounts to be used by such Series and the terms
governing the operation of any such accounts and the use of moneys therein;
 
(xi)    the Series Servicing Fee and the Series Servicing Fee Percentage;
 
(xii)    the terms on which the Investor Notes of such Series may be redeemed,
repurchased or remarketed to other investors;
 
(xiii)    any deposit of funds to be made into any Series Account on the Series
Closing Date;
 
(xiv)    the number of Classes of such Series, and if more than one Class, the
rights and priorities of each such Class;
 
(xv)    the priority of any Series with respect to any other Series;
 
(xvi)     the Lease Rate Caps required to be maintained with respect to such
Series; and
 
(xvii)    any other relevant terms of such Series (including whether or not such
Series will be pledged as collateral for an issuance of any other securities,
including commercial paper) (all such terms, the “Principal Terms” of such
Series).
 
The terms of such Indenture Supplement may modify or amend the terms of this
Base Indenture solely as applied to such new Series.
 
(d)    The Issuer may direct the Indenture Trustee to deposit all or a portion
of the net proceeds from the issuance of any new Series of Investor Notes into a
Series Account for another Series of Investor Notes and may specify that the
proceeds from the sale of such new Series of Investor Notes may be used to
reduce the Invested Amount of another Series of Investor Notes.
 
 
 
4

--------------------------------------------------------------------------------

 
Section 2.3.    Execution and Authentication
 
(a)    The Investor Notes shall, upon issue pursuant to Section 2.2, be executed
on behalf of the Issuer by an Authorized Officer and delivered by the Issuer to
the Indenture Trustee for authentication and redelivery as provided herein. If
an Authorized Officer whose signature is on an Investor Note no longer holds
that office at the time the Investor Note is authenticated, the Investor Note
shall nevertheless be valid.
 
(b)    At any time and from time to time after the execution and delivery of
this Base Indenture, the Issuer may deliver Investor Notes of any particular
Series executed by the Issuer to the Indenture Trustee for authentication,
together with one or more Issuer Orders for the authentication and delivery of
such Investor Notes, and the Indenture Trustee, in accordance with such Issuer
Order and this Base Indenture, shall authenticate and deliver such Investor
Notes. If specified in the related Indenture Supplement for any Series of
Investor Notes, the Indenture Trustee shall authenticate and deliver outside the
United States the Global Note that is issued upon original issuance thereof,
upon receipt of an Issuer Order, to the Depository against payment of the
purchase price therefor. If specified in the related Indenture Supplement for
any Series of Investor Notes, the Indenture Trustee shall authenticate
Book-Entry Notes that are issued upon original issuance thereof, upon receipt of
an Issuer Order, to a Clearing Agency, a Foreign Clearing Agency or its nominee
as provided in Section 2.10 against payment of the purchase price thereof.
 
(c)    No Investor Note shall be entitled to any benefit under the Indenture or
be valid for any purpose unless there appears on such Investor Note a
certificate of authentication substantially in the form provided for herein,
duly executed by the Indenture Trustee by the manual signature of a Responsible
Officer (and the Luxembourg agent (the “Luxembourg Agent”), if such Investor
Notes are listed on the Luxembourg Stock Exchange). Such signatures on such
certificate shall be conclusive evidence, and the only evidence, that the
Investor Note has been duly authenticated under the Indenture. The Indenture
Trustee may appoint an authenticating agent acceptable to the Issuer to
authenticate Investor Notes. Unless limited by the term of such appointment, an
authenticating agent may authenticate Investor Notes whenever the Indenture
Trustee may do so. Each reference in this Base Indenture to authentication by
the Indenture Trustee includes authentication by such agent. The Indenture
Trustee’s certificate of authentication shall be in substantially the following
form:
 
This is one of the Investor Notes of a series issued under the within mentioned
Indenture.
 
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, as Indenture Trustee

By:__________________________
Authorized Signatory

(d)    Each Investor Note shall be dated and issued as of the date of its
authentication by the Indenture Trustee, except Bearer Notes which shall be
dated the applicable Series Closing Date as provided in the related Indenture
Supplement..
 
(e)    Notwithstanding the foregoing, if any Investor Note shall have been
authenticated and delivered hereunder but never issued and sold by the Issuer,
and the Issuer shall deliver such Investor Note to the Indenture Trustee for
cancellation, together with a written statement (which need not comply with
Section 13.2 and need not be accompanied by an Opinion of Counsel) stating that
such Investor Note has never been issued and sold by the Issuer, for all
purposes of the Indenture such Investor Note shall be deemed never to have been
authenticated and delivered hereunder and shall not be entitled to the benefits
of the Indenture.
 
 
 
5

--------------------------------------------------------------------------------

 
Section 2.4.    Registration of Transfer and Exchange of Notes
 
(a)    The Issuer shall cause to be kept at the office or agency to be
maintained by a transfer agent and registrar (the “Transfer Agent and
Registrar”), a register (the “Note Register”) in which, subject to such
reasonable regulations as it may prescribe, the Transfer Agent and Registrar
shall provide for the registration of the Investor Notes of each Series (unless
otherwise provided in the related Indenture Supplement) and of transfers and
exchanges of the Investor Notes as herein provided. JPMorgan Chase is hereby
initially appointed Transfer Agent and Registrar for the purposes of registering
the Investor Notes and transfers and exchanges of the Investor Notes as herein
provided. If any form of Investor Note is issued as a Global Note, the Indenture
Trustee may, or if and so long as any Series of Investor Notes is listed on the
Luxembourg Stock Exchange and the rules of such exchange shall so require, the
Indenture Trustee shall appoint a co-transfer agent and co-registrar in
Luxembourg or another European city. Any reference in the Indenture to the
Transfer Agent and Registrar shall include any co-transfer agent and
co-registrar unless the context otherwise requires. JPMorgan Chase shall be
permitted to resign as Transfer Agent and Registrar upon 30 days’ written notice
to the Indenture Trustee; provided, however, that such resig-nation shall not be
effective and JPMorgan Chase shall contin-ue to perform its duties as Transfer
Agent and Registrar until the Indenture Trustee has appointed a succes-sor
Transfer Agent and Registrar with the consent of the Issuer.
 
If a Person other than the Indenture Trustee is appointed by the Issuer as the
Transfer Agent and Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Transfer Agent and Registrar and of
the location, and any change in the location, of the Transfer Agent and
Register, and the Indenture Trustee shall have the right to inspect the Note
Register at all reasonable times and to obtain copies thereof.
 
An institution succeeding to the corporate agency business of the Transfer Agent
and Registrar shall continue to be the Transfer Agent and Registrar without the
execution or filing of any paper or any further act on the part of the Indenture
Trustee or such Transfer Agent and Registrar.
 
The Transfer Agent and Registrar shall maintain in The City of New York (and, if
so specified in the related Indenture Supplement for any Series of Notes, any
other city designated in such Indenture Supplement) an office or offices or
agency or agencies where Investor Notes may be surrendered for registration of
transfer or exchange. The Transfer Agent and Registrar initially designates its
corporate trust office located at 4 New York Plaza, New York, New York 10004 as
its office for such purposes. The Transfer Agent and Registrar shall give prompt
written notice to the Indenture Trustee, the Issuer and to the Investor
Noteholders of any change in the location of such office or agency.
 
Upon surrender for registration of transfer of any Investor Note at the office
or agency of the Transfer Agent and Registrar, if the requirements of Section
2.4(b) and Section 8-401(a) of the UCC are met, the Issuer shall execute and
after the Issuer has executed, the Indenture Trustee shall authenticate and (if
the Transfer Agent and Registrar is different than the Indenture Trustee, then
the
 
 
6

--------------------------------------------------------------------------------

 
Transfer Agent and Registrar shall) deliver to the Investor Noteholder, in the
name of the designated transferee or transferees, one or more new Investor
Notes, in any authorized denominations, of the same Class and a like aggregate
principal amount; provided, however that the provisions of this paragraph shall
not apply to Bearer Notes.
 
At the option of any Holder of Registered Notes, Registered Notes may be
exchanged for other Registered Notes of the same Series in authorized
denominations of like aggregate principal amount, upon surrender of the
Registered Notes to be exchanged at any office or agency of the Transfer Agent
and Registrar maintained for such purpose. At the option of any holder of Bearer
Notes, subject to applicable laws and regulations (including without limitation,
the Bearer Rules), Bearer Notes may be exchanged for other Bearer Notes or
Registered Notes of the same Series in authorized denominations of like
aggregate principal amount, in the manner specified in the Indenture Supplement
for such Series, upon surrender of the Bearer Notes to be exchanged at an office
or agency of the Transfer Agent and Registrar located outside the United States.
Each Bearer Note surrendered pursuant to this Section 2.4 shall have attached
thereto (or be accompanied by) all unmatured Coupons, provided that any Bearer
Note so surrendered after the close of business on the Record Date preceding the
relevant Payment Date need not have attached the Coupons relating to such
Payment Date.
 
Whenever any Investor Notes of any Series are so surrendered for exchange, if
the requirements of Section 8-401(a) of the UCC are met, the Issuer shall
execute and after the Issuer has executed, the Indenture Trustee shall
authenticate and (if the Transfer Agent and Registrar is different than the
Indenture Trustee, then the Transfer Agent and Registrar shall) deliver to the
Investor Noteholder, the Investor Notes which the Investor Noteholder making the
exchange is entitled to receive.
 
All Investor Notes issued upon any registration of transfer or exchange of the
Investor Notes shall be the valid obligations of the Issuer, evidencing the same
debt, and entitled to the same benefits under the Indenture, as the Investor
Notes surrendered upon such registration of transfer or exchange.
 
Every Investor Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Holder thereof or such Holder’s attorney duly authorized in
writing, with a medallion signature guarantee, and (ii) accompanied by such
other documents as the Indenture Trustee may require.
 
The preceding provisions of this Section 2.4 notwithstanding, the Indenture
Trustee or the Transfer Agent and Registrar, as the case may be, shall not be
required to register the transfer of or exchange any Investor Note of any Series
for a period of 15 days preceding the due date for any payment in full of the
Investor Notes of such Series.
 
Unless otherwise provided in the related Indenture Supplement, no service charge
shall be made for any registration of transfer or exchange of Investor Notes,
but the Transfer Agent and Registrar may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Investor Notes.
 
All Investor Notes (together with any Coupons attached to Bearer Notes)
surrendered for registration of transfer and exchange shall be canceled by the
Transfer Agent and Registrar and disposed of in a manner satisfactory to the
Indenture Trustee. The Indenture
 
 
7

--------------------------------------------------------------------------------

 
Trustee shall cancel and destroy any Global Notes upon its exchange in full for
Definitive Notes and shall deliver a certificate of destruction to the Issuer.
Such certificate shall also state that a certificate or certificates of each
Foreign Clearing Agency was received with respect to each portion of such Global
Note exchanged for Definitive Notes in accordance with the related Indenture
Supplement.
 
The Issuer shall execute and deliver to the Indenture Trustee or the Transfer
Agent and Registrar, as applicable, Bearer Notes and Registered Notes in such
amounts and at such times as are necessary to enable the Indenture Trustee to
fulfill its responsibilities under the Indenture and the Investor Notes.
 
(b)    Unless otherwise provided in the related Indenture Supplement,
registration of transfer of Registered Notes containing a legend relating to the
restrictions on transfer of such Registered Notes (which legend shall be set
forth in the Indenture Supplement relating to such Investor Notes) shall be
effected only if the conditions set forth in such related Indenture Supplement
are satisfied.
 
Section 2.5.    Mutilated, Destroyed, Lost or Stolen Notes
 
If (a) any mutilated Investor Note (together, in the case of Bearer Notes, with
all unmatured Coupons, if any, appertaining thereto) is surrendered to the
Transfer Agent and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any Investor
Note and (b) there is delivered to the Transfer Agent and Registrar and the
Indenture Trustee such security or indemnity as may be reasonably required by
them to save each of them harmless, then provided that the requirements of
Section 8-405 of the UCC are met, the Issuer shall execute and after the Issuer
has executed, the Indenture Trustee shall authenticate and (unless the Transfer
Agent and Registrar is different from the Indenture Trustee, in which case the
Transfer Agent and Registrar shall) deliver (in compliance with applicable law),
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Investor Note, a new Investor Note of like tenor and aggregate principal amount;
provided, however, that if any such destroyed, lost or stolen Investor Note, but
not a mutilated Investor Note, shall have become or within seven days shall be
due and payable, instead of issuing a replacement Investor Note, the Issuer may
pay such destroyed, lost or stolen Investor Note when so due or payable without
surrender thereof. If, after the delivery of such replacement Investor Note or
payment of a destroyed, lost or stolen Investor Note pursuant to the proviso to
the preceding sentence, a protected purchaser (within the meaning of Section
8-303 of the UCC) of the original Investor Note in lieu of which such
replacement Investor Note was issued presents for payment such original Investor
Note, the Issuer, the Transfer Agent and Registrar and the Indenture Trustee
shall be entitled to recover such replacement Investor Note (or such payment)
from the Person to whom it was delivered or any Person taking such replacement
Investor Note from such Person to whom such replacement Investor Note was
delivered or any assignee of such Person, except a protected purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Issuer, the
Transfer Agent and Registrar or the Indenture Trustee in connection therewith.
 
In connection with the issuance of any new Investor Note under this Section 2.5,
the Indenture Trustee or the Transfer Agent and Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Indenture Trustee and the Transfer Agent and Registrar)
connected therewith. Any duplicate Investor Note issued pursuant to this Section
2.5 shall constitute an original contractual obligation of the Issuer whether or
not the lost, stolen or destroyed note shall be found at any time.
 
 
8

--------------------------------------------------------------------------------

 
Section 2.6.    Appointment of Paying Agent
 
(a)    The Indenture Trustee may appoint a Paying Agent with respect to the
Investor Notes. The Indenture Trustee hereby appoints JPMorgan Chase as the
initial Paying Agent. The Paying Agent shall have the revocable power to
withdraw funds and make distributions to Investor Noteholders from the
appropriate account or accounts maintained for the benefit of Noteholders as
specified in this Base Indenture or the related Indenture Supplement for any
Series pursuant to Article 5. The Indenture Trustee may revoke such power and
remove the Paying Agent, if the Indenture Trustee determines in its sole
discretion that the Paying Agent shall have failed to perform its obligations
under the Indenture in any material respect or for other good cause. The
Indenture Trustee shall notify the Rating Agency of the removal of any Paying
Agent. If any form of Investor Note is issued as a Global Note, or if and so
long as any Series of Investor Notes are listed on the Luxembourg Stock Exchange
and the rules of such exchange shall so require, the Indenture Trustee shall
appoint a co-paying agent in Luxembourg or another European city. The Paying
Agent shall be permitted to resign as Paying Agent upon 30 days’ written notice
to the Indenture Trustee. In the event that any Paying Agent shall no longer be
the Paying Agent, the Indenture Trustee shall appoint a successor to act as
Paying Agent (which shall be a bank or trust company and may be the Indenture
Trustee) with the consent of the Issuer. The provisions of Sections 10.01,
10.02, 10.03 and 10.06 shall apply to the Indenture Trustee also in the capacity
of Paying Agent, for so long as the Indenture Trustee shall act as Paying Agent.
Any reference in the Indenture to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
 
(b)    The Indenture Trustee shall cause each Paying Agent (other than itself)
to execute and deliver to the Indenture Trustee an instrument in which such
Paying Agent shall agree with the Indenture Trustee that such Paying Agent will:
 
(i)    hold all sums held by it for the payment of amounts due with respect to
the Investor 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 herein
provided and pay such sums to such Persons as herein provided;
 
(ii)    give the Indenture Trustee notice of any default by the Issuer of which
it has actual knowledge in the making of any payment required to be made with
respect to the Investor Notes;
 
(iii)    at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture Trustee
all sums so held in trust by such Paying Agent;
 
(iv)    immediately resign as a Paying Agent and forthwith pay to the Indenture
Trustee all sums held by it in trust for the payment of the Investor Notes if at
any time it ceases to meet the standards required to be met by the Paying Agent
at the time of its appointment; and
 
 
 
9

--------------------------------------------------------------------------------

 
(v)    comply with all requirements of the Code with respect to the withholding
from any payments made by it on any Investor Notes of any applicable withholding
taxes imposed thereon and with respect to any applicable reporting requirements
in connection therewith.
 
An institution succeeding to the corporate agency business of the Paying Agent
shall continue to be the Paying Agent without the execution or filing of any
paper or any further act on the part of the Indenture Trustee or such Paying
Agent.
 
(c)    Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent or a Clearing Agency or a
Foreign Clearing Agency in trust for the payment of any amount due with respect
to any Investor Note and remaining unclaimed for two years after such amount has
become due and payable shall be discharged from such trust and be paid to the
Issuer on Issuer Request; and the Holder of such Investor Note shall thereafter,
as an unsecured general creditor, look only to the Issuer for payment thereof
(but only to the extent of the amounts so paid to the Issuer), and all liability
of the Indenture Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, that the Indenture Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Issuer cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in New York City, and in a newspaper customarily published on each
Business Day and of general circulation in London and Luxembourg (if the related
Series of Investor Notes has been listed on the Luxembourg Stock Exchange), if
applicable, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Issuer. The Indenture Trustee may also adopt and employ, at the expense
of the Issuer, any other reasonable means of notification of such repayment.
 
Section 2.7.    Persons Deemed Owners
 
Prior to due presentation of an Investor Note for registration of transfer, the
Indenture Trustee, the Paying Agent and the Transfer Agent and Registrar may
treat the Person in whose name any Investor Note is registered as the owner of
such Investor Note for the purpose of receiving distributions pursuant to
Article 5 (as described in any Indenture Supplement) and for all other purposes
whatsoever, and neither the Indenture Trustee, the Paying Agent nor the Transfer
Agent and Registrar shall be affected by any notice to the contrary.
 
In the case of a Bearer Note, the Indenture Trustee, the Paying Agent and the
Transfer Agent and Registrar may treat the holder of a Bearer Note or Coupon as
the owner of such Bearer Note or Coupon for the purpose of receiving
distributions pursuant to Article 5 and for all other purposes whatsoever, and
neither the Indenture Trustee, the Paying Agent nor the Transfer Agent and
Registrar shall be affected by any notice to the contrary.
 
Section 2.8.    Investor Noteholder List
 
The Indenture Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Issuer or the Paying Agent, within five Business Days
after receipt by the Indenture Trustee of a request therefor from the Issuer or
the Paying Agent, respectively, in writing, a list in such form as the Issuer or
the Paying Agent may reasonably require, of the names and addresses of the
Investor Noteholders of each Series as of the most recent Record
 
10

--------------------------------------------------------------------------------

 
Date for payments to such Investor Noteholders. Unless otherwise provided in the
related Indenture Supplement, holders of Investor Notes of any Series having an
aggregate principal amount aggregating not less than 10% of the Investor
Interest of such Series (the “Applicants”) may apply in writing to the Indenture
Trustee, and if such application states that the Applicants desire to
communicate with other Investor Noteholders of any Series with respect to their
rights under the Indenture or under the Investor Notes and is accompanied by a
copy of the communication which such Applicants propose to transmit, then the
Indenture Trustee, after having been adequately indemnified by such Applicants
for its costs and expenses, shall afford or shall cause the Transfer Agent and
Registrar to afford such Applicants access during normal business hours to the
most recent list of Investor Noteholders held by the Indenture Trustee and shall
give the Issuer notice that such request has been made, within five Business
Days after the receipt of such application. Such list shall be as of a date no
more than 45 days prior to the date of receipt of such Applicants’ request.
Every Investor Noteholder, by receiving and holding an Investor Note, agrees
with the Indenture Trustee that neither the Indenture Trustee nor the Transfer
Agent and Registrar shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Investor Noteholders
hereunder, regardless of the source from which such information was obtained.
 
The Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Investor Noteholders of each Series of Investor Notes. If the Indenture Trustee
is not the Transfer Agent and Registrar, the Issuer shall furnish to the
Indenture Trustee at least seven Business Days before each Payment Date and at
such other time as the Indenture Trustee may request in writing, a list in such
form and as of such date as the Indenture Trustee may reasonably require of the
names and addresses of Investor Noteholders of each Series of Investor Notes.
 
Section 2.9.    Treasury Notes
 
In determining whether the Investor Noteholders of the required principal amount
of Investor Notes have concurred in any direction, waiver or consent, Investor
Notes owned by the Issuer or any Affiliate of the Issuer (other than an
Affiliate Issuer) shall be considered as though they are not Outstanding, except
that for the purpose of determining whether the Indenture Trustee shall be
protected in relying on any such direction, waiver or consent, only Investor
Notes of which the Indenture Trustee has received written notice of such
ownership shall be so disregarded. Absent written notice to the Indenture
Trustee of such ownership, the Indenture Trustee shall not be deemed to have
knowledge of the identity of the individual beneficial owners of the Investor
Notes.
 
Section 2.10.    Book-Entry Notes
 
Unless otherwise provided in any related Indenture Supplement, the Investor
Notes, upon original issuance, shall be issued in the form of typewritten Notes
representing the Book-Entry Notes, to be delivered to the depository specified
in such Indenture Supplement (the “Depository”) which shall be the Clearing
Agency or the Foreign Clearing Agency, on behalf of such Series. The Investor
Notes of each Series shall, unless otherwise provided in the related Indenture
Supplement, initially be registered on the Note Register in the name of the
Clearing Agency, the Foreign Clearing Agency, the nominee of the Clearing Agency
or the nominee of the Foreign Clearing Agency. No Beneficial Owner will receive
a definitive note representing such Beneficial Owner’s interest in the related
Series of Investor Notes, except as provided in Section 2.11. Unless and until
definitive, fully registered Investor Notes of any Series (“Definitive Notes”)
have been issued to Beneficial Owners pursuant to Section 2.11:
 
 
11

--------------------------------------------------------------------------------

 
(a)    the provisions of this Section 2.10 shall be in full force and effect
with respect to each such Series;
 
(b)    the Issuer, the Paying Agent, the Transfer Agent and Registrar and the
Indenture Trustee may deal with the Clearing Agency or the Foreign Clearing
Agency and the applicable Clearing Agency Participants for all purposes
(including the payment of principal of and interest on the Investor Notes and
the giving of instructions or directions hereunder) as the sole Holder of the
Investor Notes, and shall have no obligation to the Beneficial Owners;
 
(c)    to the extent that the provisions of this Section 2.10 conflict with any
other provisions of the Indenture, the provisions of this Section 2.10 shall
control with respect to each such Series; and
 
(d)    the rights of Beneficial Owners of each such Series shall be exercised
only through the Clearing Agency or the Foreign Clearing Agency and the
applicable Clearing Agency Participants and shall be limited to those
established by law and agreements between such Beneficial Owners and the
Clearing Agency or the Foreign Clearing Agency and/or the Clearing Agency
Participants, and all references in the Indenture to ac-tions by the Investor
Not-e-holders shall refer to actions taken by the Clearing Agency or the Foreign
Clearing Agency upon in-struc-tions from the Clear-ing Agency Partici-pants, and
all refer-ences in the Indenture to dis-tribu-tions, no-tices, reports and
statements to the Note--holders shall refer to distributions, notices, reports
and statements to the Clearing Agency or the Foreign Clearing Agency, as
regis-tered holder of the Investor Notes of such Series for distribu-tion to the
Beneficial Owners in accor-dance with the proce-dures of the Clearing Agency.
Pursuant to the Depository Agreement applicable to a Series, unless and until
Definitive Notes of such Series are issued pursuant to Section 2.11, the initial
Clearing Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of principal and interest on
the Investor Notes to such Clearing Agency Participants.
 
Section 2.11.    Definitive Notes
 
If (i) (A) the Issuer advises the Indenture Trustee in writing that the Clearing
Agency or the Foreign Clearing Agency is no longer willing or able to discharge
properly its responsibilities under the applicable Depository Agreement, and (B)
the Indenture Trustee or the Issuer is unable to locate a qualified successor,
(ii) the Issuer, at its option, advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or the
Foreign Clearing Agency with respect to any Series or (iii) after the occurrence
of an Event of Default, Beneficial Owners of a Majority in Interest of a Series
of Investor Notes advise the Indenture Trustee and the applicable Clearing
Agency or the Foreign Clearing Agency through the applicable Clearing Agency
Participants in writing that the continuation of a book-entry system through the
applicable Clearing Agency or Foreign Clearing Agency is no longer in the best
interests of such Beneficial Owners, the Indenture Trustee shall notify all
Beneficial Owners of such Series, through the applicable Clearing Agency
Participants, of the occurrence of any such event and of the availability of
Definitive Notes to Beneficial Owners of such Series requesting the same. Upon
surrender to the Indenture Trustee of the Investor Notes of such Series by the
applicable Clearing Agency or the Foreign Clearing Agency, accompanied by
registration instructions from the applicable Clearing Agency or the applicable
Foreign Clearing Agency for registration, the Issuer shall execute and the
Indenture Trustee shall authenticate and (if the Transfer Agent and Registrar is
different than the Indenture Trustee, then the Transfer Agent and Registrar
shall) deliver the Definitive Notes in accordance with the instructions of the
Clearing Agency. Neither the Issuer nor the Indenture Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Notes of such Series all references herein to obligations imposed
upon or to be performed by the applicable Clearing Agency or Foreign Clearing
Agency shall be deemed to be imposed upon and performed by the Indenture
Trustee, to the extent applicable with respect to such Definitive Notes, and the
Indenture Trustee shall recognize the Holders of the Definitive Notes of such
Series as Noteholders of such Series hereunder.
 
 
12

--------------------------------------------------------------------------------

 
Section 2.12.    Global Note
 
If specified in the related Indenture Supplement for any Series, the Investor
Notes may be initially issued in the form of a single temporary Global Note (the
“Global Note”) in bearer form, without interest coupons, in the denomination of
the Initial Invested Amount and substantially in the form attached to the
related Indenture Supplement. Unless otherwise specified in the related
Indenture Supplement, the provisions of this Section 2.12 shall apply to such
Global Note. The Global Note will be authenticated by the Indenture Trustee upon
the same conditions, in substantially the same manner and with the same effect
as the Definitive Notes. The Global Note may be exchanged in the manner
described in the related Indenture Supplement for Registered or Bearer Notes in
definitive form.
 
Section 2.13.    Principal and Interest
 
(a)    The principal of each Series of Investor Notes shall be payable at the
times and in the amount set forth in the related Indenture Supplement and in
accordance with Section 6.1.
 
(b)    Each Series of Investor Notes shall accrue interest as provided in the
related Indenture Supplement and such interest shall be payable on each Payment
Date for such Series in accordance with Section 6.1 and the related Indenture
Supplement.
 
(c)    Except as provided in the following sentence, the Person in whose name
any Investor Note is registered at the close of business on any Record Date with
respect to a Payment Date for such Investor Note shall be entitled to receive
the principal and interest payable on such Payment Date notwithstanding the
cancellation of such Investor Note upon any registration of transfer, exchange
or substitution of such Investor Note subsequent to such Record Date. Any
interest payable at maturity shall be paid to the Person to whom the principal
of such Investor Note is payable.
 
(d)    If the Issuer defaults in the payment of interest on the Investor Notes
of any Series, such interest, to the extent paid on any date that is more than
five (5) Business Days after the applicable due date, shall, at the option of
the Issuer, cease to be payable to the Persons who were Investor Noteholders of
such Series on the applicable Record Date and the Issuer shall pay the defaulted
interest in any lawful manner, plus, to the extent lawful, interest payable on
the defaulted interest, to the Persons who are Investor Noteholders of such
Series on a subsequent special record date which date shall be at least five (5)
Business Days prior to the payment date, at the rate provided in the Indenture
and in the Investor Notes of such Series. The Issuer shall fix or cause to be
fixed each such special record date and payment date, and at least 15 days
before the special record date, the Issuer (or the Indenture Trustee, in the
name of and at the expense of the Issuer) shall mail to Investor Noteholders of
such Series a notice that states the special record date, the related payment
date and the amount of such interest to be paid.
 
 
13

--------------------------------------------------------------------------------

 
Section 2.14.    Tax Treatment
 
The Issuer has structured the Indenture and the Investor Notes have been (or
will be) issued with the intention that the Investor Notes will qualify under
applicable tax law as indebtedness of the Issuer and any entity acquiring any
direct or indirect interest in any Investor Note by acceptance of its Investor
Notes (or, in the case of a Beneficial Owner, by virtue of such Beneficial
Owner’s acquisition of a beneficial interest therein) agrees to treat the
Investor Notes (or beneficial interests therein) for purposes of Federal, state
and local and income or franchise taxes and any other tax imposed on or measured
by income, as indebtedness of the Issuer.
 
ARTICLE 3. 
 
SECURITY
 
Section 3.1.    Grant of Security Interest
 
 
(a)    To secure the Issuer Obligations, the Issuer hereby pledges, assigns,
conveys, delivers, transfers and sets over to the Indenture Trustee, for the
benefit of the Investor Noteholders, and hereby grants to the Indenture Trustee,
for the benefit of the Investor Noteholders, a security interest in, all of the
following property now owned or at any time hereafter acquired by the Issuer or
in which the Issuer now has or at any time in the future may acquire any right,
title or interest (collectively, the “Collateral”):
 
(i)    the Loans, the Loan Note and the Loan Agreement, including, without
limitation, all monies due and to become due to the Issuer from Holdings under
or in connection with the Loan Agreement or the Loan Note, whether payable as
principal, interest, fees, costs, indemnities, damages for the breach of the
Loan Agreement or otherwise, and all of the Issuer’s rights, remedies, powers,
interests and privileges under the Loan Agreement (whether arising pursuant to
the terms thereof or otherwise available to the Issuer at law or equity),
including, without limitation, the right to enforce the Loan Agreement and the
Loan Note and to give or withhold any and all consents, requests, notices,
directions, approvals or waivers under the Loan Agreement, and to collect and
foreclose upon the Loan Collateral and the DLPT Loan Collateral;
 
(ii)    the Origination Trust Guaranty, including, without limitation, all
monies due and to become due to the Issuer from the Origination Trust under or
in connection with the Origination Trust Guaranty, and all of the Issuer’s
rights, remedies, powers, interests and privileges under the Origination Trust
Guaranty (whether arising pursuant to the terms thereof or otherwise available
to the Issuer at law or equity), including, without limitation, the right to
enforce the Origination Trust Guaranty and to give or withhold any and all
consents, requests, notices, directions, approvals or waivers thereunder;
 
(iii)    the Origination Trust Security Agreement, including, without
limitation, all of the Issuer’s rights, remedies, powers, interests and
privileges under the Origination Trust Security Agreement (whether arising
pursuant to the terms thereof or otherwise available to the Issuer), including,
without limitation, the right to enforce the Origination Trust Security
Agreement, to collect and foreclose upon the collateral thereunder, to give or
withhold any and all consents, requests, notices, directions, approvals or
waivers thereunder and all amounts due and to become due thereunder;
 
 
14

--------------------------------------------------------------------------------

 
(iv)    the Nominee Lienholder Agreement, including, without limitation, all of
the Issuer’s rights, remedies, powers, interests and privileges under the
Nominee Lienholder Agreement (whether arising pursuant to the terms thereof or
otherwise available to the Issuer), including, without limitation, the right to
enforce the Nominee Lienholder Agreement, to give or withhold any and all
consents, requests, notices, directions, approvals or waivers thereunder and all
amounts due and to become due thereunder, whether payable as indemnities or
damages for breach thereof;
 
(v)    the Administration Agreement, including, without limitation, all of the
Issuer’s rights, remedies, powers, interests and privileges under the
Administration Agreement (whether arising pursuant to the terms thereof or
otherwise available to the Issuer), including, without limitation, the right to
enforce the Administration Agreement, to give or withhold any and all consents,
requests, notices, directions, approvals or waivers thereunder and all amounts
due and to become due thereunder, whether payable as indemnities or damages for
breach thereof;
 
(vi)    the Collection Account and the Gain on Sale Account, all monies on
deposit from time to time in the Collection Account and the Gain on Sale Account
and all Permitted Investments made at any time and from time to time with the
moneys in the Collection Account and the Gain on Sale Account (including any
investment earnings thereon);
 
(vii)    each Series Account, all monies on deposit from time to time in such
Series Account and all Permitted Investments made at any time and from time to
time with the moneys in such Series Account (including any investment earnings
thereon);
 
(viii)    all Lease Rate Caps and all additional property that may from time to
time hereafter (pursuant to the terms of any Indenture Supplement or otherwise)
be subjected to the grant and pledge hereof by the Issuer, including, without
limitation, any Hedging Instruments; and
 
(ix)    all proceeds of any and all of the foregoing including, without
limitation, all present and future claims, demands, causes of action and chooses
in action in respect of any or all of the foregoing and all payments on or under
and all proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing.
 
(b)    The foregoing grant is made in trust to secure the Issuer Obligations and
to secure compliance with the provisions of this Base Indenture and any
Indenture Supplement, all as provided in the Indenture. The Indenture Trustee,
as Indenture Trustee on behalf of the Investor Noteholders, acknowledges such
grant, accepts the trusts under the Indenture in accordance with the provisions
of the Indenture and subject to Section 10.1 and 10.2, agrees to perform its
duties required in the Indenture to the best of its abilities to the end that
the interests of the Investor Noteholders may be adequately and effectively
protected. The Collateral shall secure the Investor Notes equally and ratably
without prejudice, priority (except, with respect to any Series of Investor
Notes, as otherwise stated in the applicable Indenture Supplement) or
distinction.
 
 
15

--------------------------------------------------------------------------------

 
Section 3.2.    Transaction Documents
 
(a)    Promptly following a request from the Indenture Trustee to do so and at
the Administrator’s expense, the Issuer agrees to take all such lawful action as
the Indenture Trustee may request to compel or secure the performance and
observance by Holdings, SPV, the Origination Trust, the Intermediary, WBNA, the
Servicer, the Administrator, VMS, PHH or PHH Consumer Lease or any other party
to any of the Transaction Documents, as applicable, of each of their respective
obligations under the Transaction Documents, in each case in accordance with the
applicable terms thereof, and to exercise any and all rights, remedies, powers
and privileges lawfully available to the Issuer to the extent and in the manner
directed by the Indenture Trustee, including the transmission of notices of
default thereunder and the institution of legal or administrative actions or
proceedings to compel or secure performance by Holdings, SPV, the Origination
Trust, the Intermediary, WBNA, the Servicer, the Administrator, VMS, PHH or PHH
Consumer Lease or any other party to any of the Transaction Documents, as
applicable, of each of their respective obligations under the Transaction
Documents. If (i) the Issuer shall have failed, within 30 days of receiving the
direction of the Indenture Trustee, to take commercially reasonable action to
accomplish such directions of the Indenture Trustee, (ii) the Issuer refuses to
take any such action, or (iii) the Indenture Trustee reasonably determines that
such action must be taken immediately, the Indenture Trustee may take such
previously directed action and any related action permitted under the Indenture
which the Indenture Trustee thereafter determines is appropriate (without the
need under this provision or any other provision under the Indenture to direct
the Issuer to take such action), on behalf of the Issuer and the Investor
Noteholders.
 
(b)    If an Event of Default has occurred and is continuing with respect to any
Series of Outstanding Investor Notes, the Indenture Trustee may, and, at the
direction (which direction shall be in writing) of the Holders of a Majority in
Interest of such Series of Outstanding Investor Notes (or, if an Event of
Default with respect to more than one Series of Investor Notes has occurred, a
Majority in Interest of each Series of Investor Notes with respect to which an
Event of Default shall have occurred) shall exercise all rights, remedies,
powers, privileges and claims of the Issuer against Holdings, SPV, the
Origination Trust, the Intermediary, WBNA, the Servicer, the Administrator, VMS,
PHH or PHH Consumer Lease or any other party to any of the Transaction Documents
under or in connection with any of the Transaction Documents, including the
right or power to take any action to compel or secure performance or observance
by Holdings, SPV, the Origination Trust, the Intermediary, WBNA, the Servicer,
the Administrator, VMS, PHH, PHH Consumer Lease or any other party of each of
their respective obligations to the Issuer thereunder and to give any consent,
request, notice, direction, approval, extension or waiver under the Transaction
Documents, and any right of the Issuer to take such action shall be suspended;
provided that, if an Event of Default has occurred and is continuing with
respect to less than all Series of Outstanding Investor Notes, the Indenture
Trustee may not take any action hereunder that is detrimental to the rights of
the Holders of the Investor Notes with respect to which no Event of Default
shall have occurred.
 
 
 
16

--------------------------------------------------------------------------------

 
(c)    Without derogating from the absolute nature of the assignment granted to
the Indenture Trustee under this Base Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees that, unless such action is specifically
permitted hereunder or under the other Transaction Documents, it will not,
without the prior written consent of the Holders of a Majority in Interest of
each Series of Outstanding Notes, (i) amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of any of the Issuer Assets,
including any of the Transaction Documents; provided that no consent of Investor
Noteholders shall be required for any amendment, modification or waiver of or to
any Transaction Document if (A)(1) such amendment, modification or waiver does
not adversely affect in any material respect the Investor Noteholders of any
Series of Investor Notes (as substantiated by an Opinion of Counsel to such
effect) or (2) such amendment or modification is an amendment or modification to
the LLC Agreement relating to the issuance of a series of Preferred Membership
Interests and (B) the Rating Agency Condition is satisfied with respect to each
affected Series of Investor Notes; or (ii) waive timely performance or
observance by Holdings under the Loan Agreement, the Origination Trust under the
Origination Trust Guaranty or the Origination Trust Security Agreement, SPV
under the Nominee Lienholder Agreement, the Intermediary or WBNA under the
Master Exchange Agreement or the Master Trust Agreement or the Origination
Trust, VMS or the Servicer under the Origination Trust Documents. Upon the
occurrence of a Servicer Termination Event, the Issuer will not, without the
prior written consent of the Indenture Trustee or the Holders of a Majority in
Interest of each Series of Outstanding Notes, terminate the Servicer and appoint
a successor Servicer in accordance with the Servicing Agreement and will
terminate the Servicer and appoint a successor Servicer in accordance with the
Servicing Agreement if so directed by the Indenture Trustee or the Holders of a
Majority in Interest of each Series of Outstanding Notes.
 
Section 3.3.    Release of Issuer Assets
 
(a)    The Indenture Trustee shall when required by the provisions of the
Indenture execute instruments to release property from the lien of the Base
Indenture, or convey the Indenture Trustee’s interest in the same, in a manner
and under circumstances that are not inconsistent with the provisions of the
Indenture. No party relying upon an instrument executed by the Indenture Trustee
as provided in this Section 3.3 shall be bound to ascertain the Indenture
Trustee’s authority, inquire into the satisfaction of any conditions precedent
or see to the application of any moneys.
 
(b)    The Indenture Trustee shall, at such time as there are no Investor Notes
Outstanding, release any remaining portion of the Issuer Assets that secured the
Investor Notes from the lien of the Indenture and release to the Issuer any
funds then on deposit in the Issuer Accounts. The Indenture Trustee shall
release property from the lien of the Indenture pursuant to this Section 3.3(b)
only upon receipt of an Issuer Order accompanied by an Officer’s Certificate, an
Opinion of Counsel and (if the Indenture is qualified under the TIA and the TIA
so requires) Independent Certificates in accordance with TIA §§ 314(c) and
314(d)(1) meeting the applicable requirements of Section 13.1.
 
 
17

--------------------------------------------------------------------------------

 
Section 3.4.    Opinions of Counsel
 
 
The Indenture Trustee shall receive at least seven days’ notice when requested
by the Issuer to take any action pursuant to Section 3.3(a), accompanied by
copies of any instruments involved, and the Indenture Trustee may also require
as a condition of such action, an Opinion of Counsel, in form and substance
satisfactory to the Indenture Trustee, stating the legal effect of any such
action, outlining the steps required to complete the same, and concluding that
all such action will not materially and adversely impair the security for the
Investor Notes or the rights of the Investor Noteholders; provided, however that
such Opinion of Counsel shall not be required to express an opinion as to the
fair value of the Issuer Assets. Counsel rendering any such opinion may rely,
without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in connection
with any such action.
 
Section 3.5.    Stamp, Other Similar Taxes and Filing Fees
 
The Issuer shall indemnify and hold harmless the Indenture Trustee and each
Investor Noteholder from any present or future claim for liability for any stamp
or other similar tax and any penalties or interest with respect thereto, that
may be assessed, levied or collected by any jurisdiction in connection with the
Indenture or any Collateral. The Issuer shall pay, or reimburse the Indenture
Trustee for, any and all amounts in respect of, all search, filing, recording
and registration fees, taxes, excise taxes and other similar imposts that may be
payable or determined to be payable in respect of the execution, delivery,
performance and/or enforcement of the Indenture.
 
ARTICLE 4. 

 
REPORTS 
 
Section 4.1.    Servicer Reports
 
The Issuer will deliver or cause to be delivered to the Indenture Trustee:
 
(i)    prior to 1:00 p.m. (New York City time) on each Deposit Date, a copy of
the Deposit Report (a “Deposit Report”) prepared and delivered by the Servicer
to the Issuer pursuant to the Origination Trust Servicing Agreement, setting
forth the aggregate amount of Collections deposited in the Collection Account on
such Deposit Date. whether directly or as a result of transfers from a Joint
Collection Account;
 
(ii)    on each Determination Date, a copy of the Settlement Statement (a
“Settlement Statement”) prepared and delivered by the Servicer to the Issuer
pursuant to the Origination Trust Servicing Agreement, setting forth the
information required to be set forth therein under the Origination Trust
Servicing Agreement and each Indenture Supplement and such other information as
the Indenture Trustee may reasonably request;
 
(iii)    within ten Business Days of the last Business Day of each fiscal
quarter of the Issuer, a copy of the Quarterly Compliance Certificate (a
“Quarterly Compliance Certificate”) prepared and delivered by the Servicer
pursuant to the Origination Trust Servicing Agreement, setting forth the
information required to be set forth therein under the Origination Trust
Servicing Agreement;
 
 
18

--------------------------------------------------------------------------------

 
(iv)    on or before March 31 of each year, a copy of the Annual Servicing
Report (an “Annual Servicing Report”) prepared by the Servicer’s independent
auditors in accordance with the Origination Trust Servicing Agreement, setting
forth the information required to be set forth therein under the Origination
Trust Servicing Agreement;
 
(v)    within 45 days following the end of each fiscal quarter of the Servicer,
a copy of the certificate prepared and delivered by the Servicer pursuant
Section 8.3(b) of the Origination Trust Servicing Agreement;
 
(vi)    promptly upon the delivery by the Servicer to the Issuer, a copy of any
other information, reports or other materials required to be delivered by the
Servicer to the Issuer pursuant to the Origination Trust Servicing Agreement;
 
(vii)    from time to time such additional information regarding the financial
position, results of operations or business of the Origination Trust, VMS or PHH
as the Indenture Trustee may reasonably request to the extent that the Servicer
delivers such information to the Issuer pursuant to the Origination Trust
Servicing Agreement; and
 
(viii)    at the time of delivery of the item described in clause (iii) above, a
certificate of an officer of the Issuer that, except as provided in any
certificate delivered in accordance with Section 8.8, no Amortization Event,
Potential Amortization Event, Loan Event of Default, Default or Event of Default
under any of the Transaction Documents to which it is a party has occurred or is
continuing during such fiscal quarter.
 
Section 4.2.    Communication to Investor Noteholders
 
(a)    If the Indenture is qualified under the TIA, the Investor Noteholders may
communicate pursuant to TIA §312(b) with other Investor Noteholders with respect
to their rights under the Indenture or under the Investor Notes.
 
(b)    If the Indenture is qualified under the TIA, the Issuer, the Indenture
Trustee and the Transfer Agent and Registrar shall have the protection of TIA
§312(c).
 
Section 4.3.    Rule 144A Information
 
For so long as any of the Investor Notes are “restricted securities” within the
meaning of Rule 144(a)(3) under the Securities Act, the Issuer agrees to provide
to any Investor Noteholder or Beneficial Owner and to any prospective purchaser
of Investor Notes designated by such Investor Noteholder or Beneficial Owner
upon the request of such Investor Noteholder or Beneficial Owner or prospective
purchaser, any information required to be provided to such holder or prospective
purchaser to satisfy the conditions set forth in Rule 144A(d)(4) under the
Securities Act.
 
Section 4.4.    Reports by the Issuer
 
(a)    Unless otherwise specified in the related Indenture Supplement, on each
Settlement Date, the Issuer shall deliver to the Indenture Trustee or the Paying
Agent and the Indenture Trustee or the Paying Agent, as the case may be, shall
forward to each Investor Noteholder of each Outstanding Series the Monthly
Settlement Statement with respect to such Series, with a copy to the Rating
Agencies.
 
 
19

--------------------------------------------------------------------------------

 
(b)    As soon as available, but in any event within 90 days after the end of
each fiscal year of the Issuer, the Issuer shall deliver to the Indenture
Trustee or the Paying Agent and the Indenture Trustee or the Paying Agent, as
the case may be, shall forward to each Investor Noteholder of each Outstanding
Series a copy of the audited financial statements of the Issuer at the end of
such year, prepared by independent certified public accountants of nationally
recognized standing.
 
(c)    Unless otherwise specified in the related Indenture Supplement, on or
before January 31 of each calendar year, beginning with calendar year 2007, the
Indenture Trustee or the Paying Agent shall furnish to each Person who at any
time during the preceding calendar year was an Investor Noteholder of a Series
of Investor Notes a statement prepared by or on behalf of the Issuer containing
the information which is required to be contained in the Monthly Settlement
Statements with respect to such Series of Investor Notes aggregated for such
calendar year or the applicable portion thereof during which such Person was an
Investor Noteholder, together with such other customary information (consistent
with the treatment of the Investor Notes as debt) as the Issuer deems necessary
or desirable to enable the Investor Noteholders to prepare their tax returns
(each such statement, an “Annual Noteholders’ Tax Statement”). Such obligations
of the Issuer to prepare and the Indenture Trustee or the Paying Agent to
distribute the Annual Noteholders’ Tax Statement shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Indenture Trustee or the Paying Agent pursuant to any
requirements of the Code as from time to time in effect.
 
Section 4.5.    Reports by the Indenture Trustee
 
If the Indenture is qualified under the TIA, within 60 days after each March 31,
beginning on March 31 in the first year after the Indenture is qualified under
the TIA, if required by TIA § 313(a), the Indenture Trustee shall mail to each
Investor Noteholder as required by TIA § 313(c) a brief report dated as of such
date that complies with TIA § 313(a). The Indenture Trustee also shall comply
with TIA § 313(b). A copy of such each report at the time of its mailing to
Investor Noteholders shall be filed by the Indenture Trustee with the Securities
and Exchange Commission and each stock exchange, if any, on which the Investor
Notes are listed. The Issuer shall notify the Indenture Trustee if and when the
Investor Notes are listed on any stock exchange.
 
ARTICLE 5.
 
ALLOCATION AND APPLICATION OF COLLECTIONS
 
Section 5.1.    Collection Account
 
(a)    Establishment of Collection Account. On or prior to the date hereof, the
Issuer, the Collection Account Securities Intermediary and the Indenture Trustee
shall have entered into the Collection Account Control Agreement pursuant to
which the Collection Account shall be established and maintained for the benefit
of the Investor Noteholders. If at any time a Responsible Officer of the
Indenture Trustee obtains knowledge that the Collection Account is no longer an
Eligible Deposit Account, the Indenture Trustee shall, within 30 days of
obtaining such knowledge, cause the Collection Account to be moved to a
Qualified Trust Institution or Qualified Institution and cause the depositary
maintaining the new Collection Account to assume the obligations of the existing
Collection Account Securities Intermediary under the Collection Account Control
Agreement.
 
 
 
20

--------------------------------------------------------------------------------

 
(b)    Series Accounts. If so provided in the related Indenture Supplement, the
Indenture Trustee, for the benefit of the Investor Noteholders, shall cause to
be established and maintained, one or more Series Accounts and/or administrative
sub-accounts of the Collection Account to facilitate the proper allocation of
Collections in accordance with the terms of such Indenture Supplement. Each such
Series Account shall bear a designation clearly indicating that the funds
deposited therein are held for the benefit of the Investor Noteholders of such
Series. Each such Series Account will be an Eligible Deposit Account, if so
provided in the related Indenture Supplement and will have the other features
and be applied as set forth in the related Indenture Supplement.
 
(c)    Administration of the Collection Account. The Issuer shall instruct the
institution maintaining the Collection Account in writing to invest the funds on
deposit in the Collection Account in Permitted Investments. Any such investment
shall mature and such funds shall be available for withdrawal on or prior to the
Transfer Date related to the Monthly Period in which such funds were processed
for collection, or if so specified in the related Indenture Supplement, on the
immediately succeeding Payment Date. In the absence of written investment
instructions hereunder, funds on deposit in the Collection Account shall remain
uninvested. Neither the Issuer nor the Indenture Trustee shall dispose of (or
permit the disposal of) any Permitted Investments prior to the maturity thereof
to the extent such disposal would result in a loss of principal of such
Permitted Investment.
 
(d)    Establishment of Joint Collection Accounts. To facilitate the collection
of and to allow for the identification and separation of funds that are
Relinquished Property Proceeds from funds that are Non-Qualified Funds, the
Indenture Trustee shall establish and maintain, in the joint name of the
Indenture Trustee and the Intermediary, one or more Joint Collection Accounts
that shall each be an Eligible Deposit Account and administered and operated as
provided in this Base Indenture and the Master Exchange Agreement. If at any
time a Responsible Officer of the Indenture Trustee obtains knowledge that a
Joint Collection Account is no longer an Eligible Deposit Account, the Indenture
Trustee shall, within 30 days of obtaining such knowledge, establish in
conjunction with the Intermediary a new Joint Collection Account that is an
Eligible Deposit Account and transfer into the new Joint Collection Account all
cash and investments from the non-qualifying Joint Collection Account.
 
Section 5.2.    Gain on Sale Account
 
(a)    Establishment of Gain on Sale Account. On or prior to the date hereof,
the Issuer, the Gain on Sale Account Securities Intermediary and the Indenture
Trustee shall have entered into the Gain on Sale Account Control Agreement
pursuant to which the Gain on Sale Account shall be established and maintained
for the benefit of the Investor Noteholders. If at any time a Responsible
Officer of the Indenture Trustee obtains knowledge that the Gain on Sale Account
is no longer an Eligible Deposit Account, the Indenture Trustee shall, within 30
days of obtaining such knowledge, cause the Gain on Sale Account to be moved to
a Qualified Trust Institution or Qualified Institution and cause the depositary
maintaining the new Gain on Sale Account to assume the obligations of the
existing Gain on Sale Account Securities Intermediary under the Gain on Sale
Account Control Agreement.
 
 
 
21

--------------------------------------------------------------------------------

(b)    Investment of Funds in the Gain on Sale Account. The Issuer shall
instruct the institution maintaining the Gain on Sale Account in writing to
invest the funds on deposit in the Gain on Sale Account in Permitted
Investments. Any such investment shall mature and such funds shall be available
for withdrawal on or prior to each Transfer Date. In the absence of written
investment instructions hereunder, funds on deposit in the Gain on Sale Account
shall remain uninvested. Neither the Issuer nor the Indenture Trustee shall
dispose of (or permit the disposal of) any Permitted Investments prior to the
maturity thereof to the extent such disposal would result in a loss of principal
of such Permitted Investment.
 
(c)    Earnings from Gain on Sale Account. All interest and earnings (net of
losses and investment expenses) paid on funds on deposit in the Gain on Sale
Account shall be deemed to be available and on deposit for distribution.
 
(d)    Deposits to Gain on Sale Account. Amounts will be deposited in the Gain
on Sale Account in accordance with this Article 5, as modified by any Indenture
Supplement.
 
(e)    Withdrawals from Gain on Sale Account. No later than 2:00 p.m. (New York
City time) on each Transfer Date, the Issuer shall direct the Indenture Trustee
in writing to withdraw from the Gain on Sale Account an amount equal to the
lesser of (x) the Monthly Residual Value Loss for the immediately preceding
Monthly Period and (y) the amount then on deposit in the Gain on Sale Account
and deposit such amount into the Collection Account for allocation in accordance
with Article 5, as modified by any Indenture Supplement. On any Transfer Date on
which the amount on deposit in the Gain on Sale Account (after giving effect to
any withdrawals therefrom pursuant to the immediately preceding sentence) is
greater than an amount equal to the Applicable Gain on Sale Account Percentage
of the sum of the aggregate Lease Balance of each Eligible Lease that is a
Closed-End Lease allocated to the Lease SUBI as of last day of the Monthly
Period immediately preceding such Transfer Date and the Aggregate Residual Value
Amount as of such date, the Issuer shall direct the Indenture Trustee in writing
to withdraw such excess from the Gain on Sale Account and deposit it in the
Issuer General Account.
 
Section 5.3.    Collection of Money.
 
Except as otherwise provided herein, the Indenture Trustee may demand payment or
delivery of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to the
Indenture. The Indenture Trustee shall apply all such money received by it as
provided in the Indenture. Except as otherwise provided in the Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Issuer Assets, the Indenture Trustee may take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings. Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under the Indenture and any right to proceeds thereafter as provided in
Article 9.
 
Section 5.4.    Collections and Allocations.
 
(a)    Collections in General. Until the Indenture is terminated pursuant to
Section 11.1, the Issuer shall, and the Indenture Trustee is authorized to,
cause all Collections due and to become due to the Issuer or the Indenture
Trustee, as the case may be, under or in connection with the Collateral to be
paid directly to the Indenture Trustee for deposit into the Collection Account.
The Issuer agrees that if any Collections shall be received by the Issuer in an
account other than the Collection Account, such monies, instruments, cash and
other proceeds will not be commingled by the Issuer with any of its other funds
or property, if any, but will be held separate and apart therefrom and shall be
held in trust by the Issuer for, and immediately remitted to, the Indenture
Trustee, with any necessary endorsement. All monies, instruments, cash and other
proceeds received by the Indenture Trustee pursuant to this Base Indenture shall
be in immediately available funds and shall be immediately deposited in the
Collection Account and shall be applied as provided in this Article 5.
 
 
22

--------------------------------------------------------------------------------

 
(b)    Allocations for Investor Noteholders. On each Deposit Date, the Issuer
shall allocate Collections deposited into the Collection Account in accordance
with this Article 5 and shall instruct the Indenture Trustee to withdraw the
required amounts from the Collection Account and make the required deposits in
any Series Account in accordance with this Article 5, as modified by any
Indenture Supplement. The Issuer shall make such deposits or payments on the
date indicated therein in immediately available funds or as otherwise provided
in the Indenture Supplement for any Series with respect to such Series. The
Administrator, on behalf of the Issuer, has agreed to furnish to the Indenture
Trustee or the Paying Agent, as applicable, written instructions to make the
aforementioned withdrawals and payments from the Collection Account and any
Issuer Accounts specified herein or in an Indenture Supplement. The Indenture
Trustee and the Paying Agent shall promptly follow any such written
instructions.
 
(c)    Sharing Collections. In the manner described in the related Indenture
Supplement, to the extent that Collections that are allocated to any Series on a
Deposit Date are not needed to make payments to Investor Noteholders of such
Series or required to be deposited in a Series Account for such Series on such
Deposit Date, such Collections may, at the direction of the Issuer, be applied
to cover principal payments due to or for the benefit of Investor Noteholders of
another Series. Any such reallocation will not result in a reduction in the
Invested Amount of the Series to which such Collections were initially
allocated.
 
(d)    Allocations After Certain Events of Default. After each Outstanding
Series of Investor Notes shall have been declared to be immediately due and
payable pursuant to Section 9.2 as a result of the occurrence of an Event of
Default defined in clause (a) or (b) of Section 9.1, to the extent that
Collections that are allocated to any Series of Investor Notes on a Settlement
Date are not needed to make payments of principal of, or interest on, the
Investor Notes of such Series, such Collections shall be applied to cover
principal payments due on the Investor Notes of all other Series then
Outstanding on a pro rata basis based on the Invested Percentages of such other
Series of Investor Notes.
 
Section 5.5.    Joint Collection Account Disputes
 
. If the Indenture Trustee receives notice pursuant to Section 4.2(c) of the
Master Exchange Agreement that the Intermediary has disapproved of any proposed
transfer of funds from a Joint Collection Account to the Collection Account that
are required pursuant to the Master Exchange Agreement to be applied to repay
the Loans, the Indenture Trustee may, and upon written direction of the
Administrator or the Holders of a Majority in Interest of any Series shall,
deliver a certification to the Intermediary setting forth the amounts due and
owing in respect of the Loan Agreement.
 
[THE REMAINDER OF ARTICLE 5 IS RESERVED AND MAY BE SPECIFIED IN ANY INDENTURE
SUPPLEMENT WITH RESPECT TO ANY SERIES.]
 
 
23

--------------------------------------------------------------------------------

 
ARTICLE 6.

 
DISTRIBUTIONS 
 
Section 6.1.    Distributions in General
 
(a)    Unless otherwise specified in the applicable Indenture Supplement, on
each Payment Date, the Paying Agent shall pay to the Investor Noteholders of
each Series of record on the preceding Record Date the amounts payable thereto
hereunder by wire transfer or check mailed first-class postage prepaid to such
Investor Noteholder at the address for such Investor Noteholder appearing in the
Note Register except that with respect to Investor Notes registered in the name
of a Clearing Agency or its nominee, such amounts shall be payable by wire
transfer of immediately available funds released by the Indenture Trustee or the
Paying Agent from the applicable Series Account no later than Noon (New York
City time) on the Payment Date for credit to the account designated by such
Clearing Agency or its nominee, as applicable. The final payment of any
Definitive Note, however, will be made only upon presentation and surrender of
such Definitive Note at the offices or agencies specified in the notice of final
distribution with respect to such Definitive Note on a Payment Date which is a
business day in the place of presentation.
 
(b)    Unless otherwise specified in the applicable Indenture Supplement (i) all
distributions to Investor Noteholders of all Classes within a Series of Investor
Notes will have the same priority and (ii) in the event that on any date of
determination the amount available to make payments to the Investor Noteholders
of a Series is not sufficient to pay all sums required to be paid to such
Investor Noteholders on such date, then each Class of Investor Noteholders will
receive its ratable share (based upon the aggregate amount due to such Class of
Investor Noteholders) of the aggregate amount available to be distributed in
respect of the Investor Notes of such Series.
 
Section 6.2.    Optional Repurchase of Investor Notes
 
On any Payment Date occurring on or after the date on which the Invested Amount
of any Series or Class of such Series is equal to or less than the Repurchase
Amount (if any) for such Series or Class set forth in the Indenture Supplement
related to such Series, or at such other time otherwise provided for in the
Indenture Supplement relating to such Series, the Issuer shall have the option
to purchase all Outstanding Investor Notes of such Series, or Class of such
Series, at a purchase price (determined after giving effect to any payment of
principal and interest on such Payment Date) equal to (unless otherwise
specified in the related Indenture Supplement) the Invested Amount of such
Series, or Class of such Series, on such Payment Date, plus accrued and unpaid
interest on the unpaid principal balance of the Investor Notes of such Series,
or Class of such Series (calculated at the Investor Note Rate of such Series or
Class) through the day immediately prior to the date of such purchase plus, if
provided for in the related Indenture Supplement, any premium payable at such
time. The Issuer shall give the Indenture Trustee at least 10 Business Days’
prior written notice of the date on which the Issuer intends to exercise such
option to purchase. Not later than 12:00 Noon (New York City time) on such
Payment Date, an amount of the purchase price equal to the Invested Amount of
all Investor Notes of such Series or Class of such Series on such Payment Date
and the amount of accrued and unpaid interest with respect to such Investor
Notes and any applicable premium will be deposited into the applicable Series
Account for such Series in immediately available funds. The funds deposited into
such Series Account or distributed to the Paying Agent will be passed through in
full to the Investor Noteholders on such Payment Date.
 
 
24

--------------------------------------------------------------------------------

 
ARTICLE 7.
 
REPRESENTATIONS AND WARRANTIES
 
The Issuer hereby represents and warrants, for the benefit of the Indenture
Trustee and the Noteholders, as follows as of each Series Closing Date:
 
Section 7.1.    Existence and Power
 
The Issuer (a) is a limited liability company duly formed, validly existing and
in good standing under the laws of the State of Delaware, (b) is duly qualified
to do business as a foreign limited liability company and in good standing under
the laws of each jurisdiction where the character of its property, the nature of
its business or the performance of its obligations make such qualification
necessary, and (c) has all powers and all governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted and
for purposes of the transactions contemplated by this Base Indenture and the
other Transaction Documents.
 
Section 7.2.    Governmental Authorization
 
The execution, delivery and performance by the Issuer of this Base Indenture,
the related Indenture Supplement and the other Transaction Documents to which it
is a party (a) is within the Issuer’s power, has been duly authorized by all
necessary action, (b) requires no action by or in respect of, or filing with,
any governmental body, agency or official which has not been obtained and (c)
does not contravene, or constitute a default under, any Requirement of Law or
any provision of its certificate of formation or the LLC Agreement or result in
the creation or imposition of any Lien on any of the Issuer Assets, except for
Liens created by the Indenture or the other Transaction Documents. This Base
Indenture and each of the other Transaction Documents to which the Issuer is a
party has been executed and delivered by a duly authorized officer of the
Issuer.
 
Section 7.3.    Binding Effect
 
This Base Indenture and each other Transaction Document is a legal, valid and
binding obligation of the Issuer enforceable against the Issuer in accordance
with its terms (except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors’ rights generally or by general equitable principles,
whether considered in a proceeding at law or in equity and by an implied
covenant of good faith and fair dealing).
 
Section 7.4.    Financial Information; Financial Condition
 
 
All balance sheets, all statements of operations, of shareholders’ equity and of
cash flow, and other financial data (other than projections) which have been or
shall hereafter be furnished by the Issuer to the Indenture Trustee and the
Rating Agencies pursuant to Section 4.4 have been and will be prepared in
accordance with GAAP (to the extent applicable) and do and will present fairly
the financial condition of the Issuer as of the dates thereof and the results of
its operations for the periods covered thereby, subject, in the case of all
unaudited statements, to normal year-end adjustments and lack of footnotes and
presentation items.
 
 
 
25

--------------------------------------------------------------------------------

Section 7.5.    Litigation
 
There is no action, suit or proceeding pending against or, to the knowledge of
the Issuer, threatened against or affecting the Issuer before any court or
arbitrator or any Governmental Authority that could materially adversely affect
the financial position, results of operations, business, properties,
performance, prospects or condition (financial or otherwise) of the Issuer or
which in any manner draws into question the validity or enforceability of this
Base Indenture, any Indenture Supplement or any other Transaction Document or
the ability of the Issuer to perform its obligations hereunder or thereunder.
 
Section 7.6.    No ERISA Plan
 
The Issuer has not established and does not maintain or contribute to any
Pension Plan that is covered by Title IV of ERISA and will not do so, as long as
any Investor Notes are Outstanding.
 
Section 7.7.    Tax Filings and Expenses
 
The Issuer has filed all federal, state and local tax returns and all other tax
returns which, to the knowledge of the Issuer, are required to be filed (whether
informational returns or not), and has paid all taxes due, if any, pursuant to
said returns or pursuant to any assessment received by the Issuer, except such
taxes, if any, as are being contested in good faith and for which adequate
reserves have been set aside on its books. The Issuer has paid all fees and
expenses required to be paid by it in connection with the conduct of its
business, the maintenance of its existence and its qualification as a foreign
limited liability company authorized to do business in each State in which it is
required to so qualify.
 
Section 7.8.    Disclosure
 
All certificates, reports, statements, documents and other information furnished
to the Indenture Trustee by or on behalf of the Issuer pursuant to any provision
of this Base Indenture or any Transaction Document, or in connection with or
pursuant to any amendment or modification of, or waiver under, this Base
Indenture or any Transaction Document, shall, at the time the same are so
furnished, be complete and correct to the extent necessary to give the Indenture
Trustee true and accurate knowledge of the subject matter thereof in all
material respects, and the furnishing of the same to the Indenture Trustee shall
constitute a representation and warranty by the Issuer made on the date the same
are furnished to the Indenture Trustee to the effect specified herein.
 
Section 7.9.    Investment Company Act
 
The Issuer is not, and is not controlled by, an “investment company” within the
meaning of, and is not required to register as an “investment company” under,
the Investment Company Act of 1940.
 
 
 
26

--------------------------------------------------------------------------------

Section 7.10.    Regulations T, U and X
 
The proceeds of the Investor Notes will not be used to purchase or carry any
“margin stock” (as defined or used in the regulations of the Board of Governors
of the Federal Reserve System, including Regulations T, U and X thereof). The
Issuer is not engaged in the business of extending credit for the purpose of
purchasing or carrying any margin stock.
 
Section 7.11.    No Consent
 
No consent, action by or in respect of, approval or other authorization of, or
registration, declaration or filing with, any Governmental Authority or other
Person is required for the valid execution and delivery of this Base Indenture
or any Indenture Supplement or for the performance of any of the Issuer’s
obligations hereunder or thereunder or under any other Transaction Document
other than such consents, approvals, authorizations, registrations, declarations
or filings as shall have been obtained by the Issuer prior to the Initial
Closing Date or as contemplated in Section 7.13.
 
Section 7.12.    Solvency
 
Both before and after giving effect to the transactions contemplated by this
Base Indenture and the other Transaction Documents, the Issuer is solvent within
the meaning of the Bankruptcy Code and the Issuer is not the subject of any
voluntary or involuntary case or proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any bankruptcy or
insolvency law and no Insolvency Event has occurred with respect to the Issuer.
 
Section 7.13.    Security Interests
 
(a)    The Issuer owns and has good and marketable title to the Collateral, free
and clear of all Liens other than Permitted Liens. The Loan Note constitutes an
“instrument” under the applicable UCC, the Collection Account and the Gain on
Sale Account constitute “securities accounts” under the applicable UCC, and the
remaining Collateral constitutes “general intangibles” under the applicable UCC.
The Indenture constitutes a valid and continuing Lien on the Collateral in favor
of the Indenture Trustee on behalf of the Investor Noteholders, which Lien will
be prior to all other Liens (other than Permitted Liens), will be enforceable as
such as against creditors of and purchasers from the Issuer in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors’ rights generally or by general equitable principles,
whether considered in a proceeding at law or in equity and by an implied
covenant of good faith and fair dealing.
 
(b)    Other than the security interest granted to the Indenture Trustee under
the Indenture, the Issuer has not pledged, assigned, sold or granted a security
interest in the Collateral. Each of the SUBI Certificates has been duly
registered in the name of the Issuer, endorsed in blank, and delivered to the
Indenture Trustee, the Loan Note has been endorsed in blank and delivered to the
Indenture Trustee and all other action necessary (including the filing of UCC-1
financing statements) to protect and perfect the Indenture Trustee’s security
interest in the Collateral now in existence and hereafter acquired or created
has been duly and effectively taken.
 
 
 
27

--------------------------------------------------------------------------------

 
(c)    No security agreement, financing statement, equivalent security or lien
instrument or continuation statement listing the Issuer as debtor covering all
or any part of the Collateral is on file or of record in any jurisdiction,
except such as may have been filed, recorded or made by the Issuer in favor of
the Indenture Trustee on behalf of the Investor Noteholders in connection with
the Indenture.
 
(d)     The Issuer’s legal name is Chesapeake Funding LLC and its location
within the meaning of Section 9-307 of the applicable UCC is the State of
Delaware.
 
Section 7.14.    Binding Effect of Certain Agreements
 
Each of the Origination Trust Documents and the Loan Agreement is in full force
and effect and there are no outstanding events of default thereunder nor have
events occurred which, with the giving of notice, the passage of time or both,
would constitute such an event of default.
 
Section 7.15.    Non-Existence of Other Agreements
 
(a)    Other than as permitted by Section 8.23, (i) the Issuer is not a party to
any contract or agreement of any kind or nature and (ii) the Issuer is not
subject to any obligations or liabilities of any kind or nature in favor of any
third party, including, without limitation, Contingent Obligations.
 
(b)    The Issuer has not engaged in any activities since its formation (other
than those incidental to its formation and other appropriate actions including
the proposed Loans, the authorization and the issue of the initial Series of
Notes, the execution of the Transaction Documents to which it is a party and the
performance of the activities referred to in or contemplated by such
agreements).
 
Section 7.16.    Compliance with Contractual Obligations and Laws
 
The Issuer is not (i) in violation of the LLC Agreement, (ii) in violation of
any Requirement of Law to which it or its property or assets may be subject or
(iii) in violation of any Contractual Obligation with respect to the Issuer.
 
Section 7.17.    Other Representations
 
All representations and warranties of the Issuer made in each Transaction
Document to which it is a party are true and correct and are repeated herein as
though fully set forth herein.
 
Section 7.18.    Ownership of the Issuer

 
All of the issued and outstanding common membership interests in the Issuer are
owned by PHH Sub 2, all of which common membership interests have been validly
issued, are fully paid and non-assessable and are owned of record by PHH Sub 2,
free and clear of all Liens other than Permitted Liens. The Issuer has no
Subsidiaries and owns no capital stock of, or other equity interest in, any
other Person.
 
 
28

--------------------------------------------------------------------------------

 
ARTICLE 8.
 
COVENANTS
 
Section 8.1.    Payment of Investor Notes
 
The Issuer shall pay the principal of (and premium, if any) and interest on the
Investor Notes pursuant to the provisions of this Base Indenture and any
applicable Indenture Supplement. Principal and interest shall be considered paid
on the date due if the Paying Agent holds on that date money designated for and
sufficient to pay all principal and interest then due.
 
Section 8.2.    Maintenance of Office or Agency
 
The Issuer will maintain in The City of New York, an office or agency where
Investor Notes may be surrendered for registration of transfer or exchange. The
Issuer hereby initially appoints the Transfer Agent and Registrar to serve as
its agent for the foregoing purposes. In addition, Definitive Notes will be
transferable or exchangeable at the offices of any co-transfer agent and
co-registrar in Luxembourg appointed in accordance with the terms hereof. The
Issuer will give prompt written notice to the Indenture Trustee of the location,
and of any change in the location, of any such office or agency. If at any time
the Issuer shall fail to maintain any such office or agency or shall fail to
furnish the Indenture Trustee with the address thereof, such surrenders, notices
and demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.
 
The Issuer may also from time to time designate one or more other offices or
agencies where the Investor Notes may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations. The Issuer
will give prompt written notice to the Indenture Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
 
The Issuer hereby designates the Corporate Trust Office of the Indenture Trustee
as one such office or agency of the Issuer.
 
Section 8.3.    Payment of Obligations
 
The Issuer will pay and discharge, at or before maturity, all of its respective
material obligations and liabilities, including, without limitation, tax
liabilities and other governmental claims, except where the same may be
contested in good faith by appropriate proceedings, and will maintain, in
accordance with GAAP, reserves as appropriate for the accrual of any of the
same.
 
Section 8.4.    Conduct of Business and Maintenance of Existence
 
The Issuer will keep in full effect its existence, rights and franchises as a
limited liability company under the laws of the State of Delaware and will
obtain and preserve its qualification to do business in each jurisdiction in
which the failure to so qualify would have a material adverse effect on the
business and operations of the Issuer or which qualification shall be necessary
to protect the validity and enforceability of the Indenture, the Investor Notes
and any instrument or agreement included in the Issuer Assets.
 
 
29

--------------------------------------------------------------------------------

 
Section 8.5.    Compliance with Laws
 
The Issuer will comply in all respects with all Requirements of Law and all
applicable laws, ordinances, rules, regulations, and requirements of
Governmental Authorities (including, without limitation, ERISA and the rules and
regulations thereunder) except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings and where such noncompliance
would not materially and adversely affect the condition, financial or otherwise,
operations, performance, properties or prospects of the Issuer or its ability to
carry out the transactions contemplated in this Base Indenture and each other
Transaction Document; provided, however, such noncompliance will not result in a
Lien (other than a Permitted Lien) on any Issuer Asset.
 
Section 8.6.    Inspection of Property, Books and Records
 
The Issuer will keep proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
the Issuer Assets and its business activities in accordance with GAAP; and will
permit the Indenture Trustee to visit and inspect any of its properties, to
examine and make abstracts from any of its books and records and to discuss its
affairs, finances and accounts with its officers, directors, employees and
independent public accountants, all at such reasonable times upon reasonable
notice and as often as may reasonably be requested.
 
Section 8.7.    Compliance with Transaction Documents; Issuer Assets
 
(a)    The Issuer will not take any action and will use its best efforts not to
permit any action to be taken by others that would release any Person from any
of such Person’s covenants or obligations under any instrument or agreement
included in the Issuer Assets or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Base Indenture, any other Transaction Document or
such other instrument or agreement.
 
(b)    Promptly upon becoming aware of any default under any Transaction
Document, the Issuer shall give the Indenture Trustee and the Rating Agencies
notice thereof.
 
(c)    The Issuer will punctually perform and observe all of its obligations and
agreements contained in this Base Indenture, the other Transaction Documents and
in the instruments and agreements included in the Issuer Assets, including but
not limited to preparing (or causing to be prepared) and filing (or causing to
be filed) all UCC financing statements and continuation statements required to
be filed by the terms of the Indenture and the Loan Agreement in accordance with
and within the time periods provided for herein and therein.
 
(d)    The Issuer may contract with other Persons to assist it in performing its
duties under the Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer’s Certificate of the Issuer
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Administrator to assist the Issuer in performing its duties
under the Indenture.
 
 
30

--------------------------------------------------------------------------------

 
Section 8.8.    Notice of Defaults
 
Promptly upon becoming aware of any Potential Amortization Event, Amortization
Event, Potential Loan Event of Default, Loan Event of Default, Servicer
Termination Event, Event of Default or Default under any of the Transaction
Documents, the Issuer shall give the Indenture Trustee and the Rating Agencies
written notice thereof, together with an Officer’s Certificate, setting forth
the details thereof and any action with respect thereto taken or contemplated to
be taken by the Issuer.
 
Section 8.9.    Notice of Material Proceedings
 
Promptly upon becoming aware thereof, the Issuer shall give the Indenture
Trustee and the Rating Agencies written notice of the commencement or existence
of any proceeding by or before any Governmental Authority against or affecting
the Issuer which is reasonably likely to have a material adverse effect on the
business, condition (financial or otherwise), results of operations, properties
or performance of the Issuer or the ability of the Issuer to perform its
obligations under this Base Indenture or under any other Transaction Document to
which it is a party.
 
Section 8.10.    Further Requests
 
The Issuer will promptly furnish to the Indenture Trustee and the Rating
Agencies such other information as, and in such form as, the Indenture Trustee
or the Rating Agencies may reasonably request in connection with the
transactions contemplated by the Indenture.
 
Section 8.11.    Protection of Issuer Assets
 
The Issuer will from time to time prepare (or shall cause to be prepared),
execute and deliver all such supplements and amendments hereto and all such
financing statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action necessary or advisable
to:
 
(a)    maintain or preserve the lien and security interest (and the priority
thereof) of the Indenture or carry out more effectively the purposes thereof;
 
(b)    perfect, publish notice of or protect the validity of the lien and
security interest created by the Indenture;
 
(c)    enforce the rights of the Indenture Trustee and the Investor Noteholders
in any of the Issuer Assets; or
 
(d)    preserve and defend title to the Issuer Assets and the rights of the
Indenture Trustee and the Investor Noteholders in such Issuer Assets against the
claims of all persons and parties.
 
The Indenture Trustee is hereby authorized to execute and file any financing
statement, continuation statement or other instrument necessary or appropriate
to perfect or maintain the perfection of the Indenture Trustee’s security
interest in the Collateral. The Indenture Trustee shall have no obligation to
prepare or determine the necessity for the filing of any financing statement,
continuation statement or other instrument with respect to the perfection of the
Indenture Trustee’s security interest in the Collateral
 
 
31

--------------------------------------------------------------------------------

 
Section 8.12.    Annual Opinion of Counsel
 
On or before March 31 of each calendar year, commencing with March 31, 2007, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of the Base
Indenture, any Indenture Supplement and any Supplement and any other requisite
documents and with respect to the execution and filing of any financing
statements and continuation statements as are necessary to maintain the
perfection of the lien and security interest created by the Indenture and
reciting the details of such action or stating that in the opinion of such
counsel no such action is necessary to maintain the perfection of such lien and
security interest. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling of the Indenture, any Indenture Supplement and
any Supplement and any other requisite documents and the execution and filing of
any financing statements and continuation statements that will, in the opinion
of such counsel, be required to maintain the perfection of the lien and security
interest of the Indenture until March 31 in the following calendar year.
 
Section 8.13.    Liens
 
The Issuer will not create, incur, assume or permit to exist any Lien upon any
of the Issuer Assets (including the Collateral), other than Permitted Liens.
 
Section 8.14.    Other Indebtedness
 
The Issuer will not create, assume, incur, suffer to exist or otherwise become
or remain liable in respect of any Indebtedness other than (i) Indebtedness
hereunder and (ii) Indebtedness permitted under any other Transaction Document.
 
Section 8.15.    Mergers
 
The Issuer will not merge or consolidate with or into any other Person.
 
Section 8.16.    Sales of Issuer Assets
 
The Issuer will not sell, lease, transfer, liquidate or otherwise dispose of any
Issuer Assets, except as contemplated by the Transaction Documents unless
directed to do so by the Indenture Trustee.
 
Section 8.17.    Acquisition of Assets
 
The Issuer will not acquire, by long-term or operating lease or otherwise, any
assets except in accordance with the terms of the Transaction Documents.
 
Section 8.18.    Distributions
 
The Issuer will not declare any dividends on any of the Membership Interests or
make any purchase, redemption or other acquisition of, any of the Membership
Interests, other than as provided in the Transaction Documents. The Issuer will
not redeem any Preferred Membership Interests if any such redemption would
result in the occurrence of an Amortization Event with respect to any Series of
Investor Notes Outstanding. The Issuer will not issue any series of Preferred
Membership Interests unless, prior to such issuance, each Rating Agency confirms
that after such issuance the Rating Agency Condition will be met.
 
 
32

--------------------------------------------------------------------------------

 
Section 8.19.    Legal Name; Location Under Section 9-301
 
The Issuer will change neither its location (within the meaning of Section 9-301
of the applicable UCC) nor its legal name without sixty (60) days’ prior written
notice to the Indenture Trustee. In the event that the Issuer desires to so
change its location or legal name, the Issuer will make any required filings and
prior to actually changing its location or its legal name the Issuer will
deliver to the Indenture Trustee (i) an Officer’s Certificate and an Opinion of
Counsel confirming that all required filings have been made to continue the
perfected interest of the Indenture Trustee on behalf of the Investor
Noteholders in the Collateral in respect of the new location or new legal name
of the Issuer and (ii) copies of all such required filings with the filing
information duly noted thereon by the office in which such filings were made.
 
Section 8.20.    Organizational Documents
 
The Issuer will not amend the LLC Agreement unless, prior to such amendment,
each Rating Agency confirms that after such amendment the Rating Agency
Condition will be met.
 
Section 8.21.    Investments
 
The Issuer will not make, incur, or suffer to exist any loan, advance, extension
of credit or other investment in any Person other than in accordance with the
Transaction Documents and, in addition, without limiting the generality of the
foregoing, the Issuer will not cause the Indenture Trustee to make any Permitted
Investments on the Issuer’s behalf that would have the effect of causing the
Issuer to be an “investment company” within the meaning of the Investment
Company Act.
 
Section 8.22.    No Other Agreements
 
The Issuer will not enter into or be a party to any agreement or instrument
other than any Transaction Document or documents and agreements incidental
thereto.
 
Section 8.23.    Other Business
 
The Issuer will not engage in any business or enterprise or enter into any
transaction other than making the Loans pursuant to the Loan Agreement, funding
the Loans through the issuance and sale of Investor Notes, issuing Membership
Interests pursuant to the LLC Agreement, incurring and paying ordinary course
operating expenses and other activities related to or incidental to any of the
foregoing.
 
Section 8.24.    Maintenance of Separate Existence
 
The Issuer will do all things necessary to continue to be readily
distinguishable from VMS, PHH Sub 2, PHH and the Affiliates of each of the
foregoing and maintain its existence separate and apart from that of VMS, PHH
Sub 2, PHH and the Affiliates of each of the foregoing including, without
limitation:
 
 
33

--------------------------------------------------------------------------------

 
(i)    practicing and adhering to organizational formalities, such as
maintaining appropriate books and records;
 
(ii)    observing all organizational formalities in connection with all dealings
between itself and VMS, PHH Sub 2, PHH and the Affiliates of each of the
foregoing or any other unaffiliated entity;
 
(iii)    observing all procedures required by its certificate of formation and
the LLC Agreement and the laws of the State of Delaware;
 
(iv)    acting solely in its name and through its duly authorized officers or
agents in the conduct of its businesses;
 
(v)    managing its business and affairs by or under the direction of the
Managers;
 
(vi)    ensuring that its Authorized Officers duly authorize all of its actions;
 
(vii)    ensuring the receipt of proper authorization, when necessary, in
accordance with the terms of the LLC Agreement for its actions;
 
(viii)    owning or leasing (including through shared arrangements with
Affiliates) all office furniture and equipment necessary to operate its
business;
 
(ix)    maintaining at least one Manager who is an Independent Manager;
 
(x)    not (A) having or incurring any indebtedness to VMS, PHH Sub 2, PHH or
any Affiliates of VMS, PHH Sub 2 or PHH; (B) guaranteeing or otherwise becoming
liable for any obligations of VMS, PHH Sub 2, PHH or any Affiliates of VMS, PHH
Sub 2 or PHH; (C) having obligations guaranteed by VMS, PHH Sub 2 or PHH or any
Affiliates of VMS, PHH Sub 2 or PHH; (D) holding itself out as responsible for
debts of VMS, PHH Sub 2, PHH or any Affiliates of VMS, PHH Sub 2 or PHH or for
decisions or actions with respect to the affairs of VMS, PHH Sub 2, PHH or any
Affiliates of VMS, PHH Sub 2 or PHH; (E) operating or purporting to operate as
an integrated, single economic unit with respect to VMS, PHH Sub 2 or PHH or any
Affiliates of VMS, PHH Sub 2 or PHH or any other unaffiliated entity; (F)
seeking to obtain credit or incur any obligation to any third party based upon
the assets of VMS, PHH Sub 2 or PHH or any Affiliates of VMS, PHH Sub 2 or PHH
or any other unaffiliated entity; (G) induce any such third party to reasonably
rely on the creditworthiness of VMS, PHH Sub 2 or PHH or any Affiliates of VMS,
PHH Sub 2 or PHH or any other unaffiliated entity; and (H) being directly or
indirectly named as a direct or contingent beneficiary or loss payee on any
insurance policy of VMS, PHH Sub 2, PHH or any Affiliates of VMS, PHH Sub 2 or
PHH other than as required by the Transaction Documents with respect to
insurance on the Leased Vehicles;
 
(xi)    other than as provided in the Transaction Documents, maintaining its
deposit and other bank accounts and all of its assets separate from those of any
other Person;
 
 
34

--------------------------------------------------------------------------------

 
(xii)    maintaining its financial records separate and apart from those of any
other Person;
 
(xiii)    not suggesting in any way, within its financial statements, that its
assets are available to pay the claims of creditors of VMS, PHH Sub 2, PHH, any
Affiliates of VMS, PHH Sub 2 or PHH or any other affiliated or unaffiliated
entity;
 
(xiv)    compensating all its employees, officers, consultants and agents for
services provided to it by such Persons out of its own funds or reimbursing any
of its Affiliates in respect of amounts paid by such Affiliates for such
services;
 
(xv)    maintaining office space separate and apart from that of VMS, PHH Sub 2
or PHH or any Affiliates of VMS, PHH Sub 2 or PHH (even if such office space is
subleased from or is on or near premises occupied by VMS, PHH Sub 2, PHH or any
Affiliates of VMS, PHH Sub 2 or PHH) and a telephone number separate and apart
from that of VMS, PHH Sub 2 or PHH or any Affiliates of VMS, PHH Sub 2 or PHH;
 
(xvi)    conducting all oral and written communications, including, without
limitation, letters, invoices, purchase orders, contracts, statements, and
applications solely in its own name;
 
(xvii)    having separate stationery from VMS, PHH Sub 2, PHH, any Affiliates of
VMS, PHH Sub 2 or PHH or any other unaffiliated entity;
 
(xviii)    accounting for and managing all of its liabilities separately from
those of VMS, PHH Sub 2, PHH or any Affiliates of VMS, PHH Sub 2 or PHH;
 
(xix)    allocating, on an arm’s length basis, all shared corporate operating
services, leases and expenses, including, without limitation, those associated
with the services of shared consultants and agents and shared computer and other
office equipment and software; and otherwise maintaining an arm’s-length
relationship with each of VMS, PHH Sub 2, PHH, any Affiliates of VMS, PHH Sub 2
or PHH or any other unaffiliated entity;
 
(xx)    refraining from filing or otherwise initiating or supporting the filing
of a motion in any bankruptcy or other insolvency proceeding involving VMS, PHH
Sub 2, PHH or any Affiliate of VMS, PHH Sub 2 or PHH to substantively
consolidate VMS, PHH Sub 2, PHH or any Affiliate of VMS, PHH Sub 2 or PHH with
the Issuer;
 
(xxi)    remaining solvent; and
 
(xxii)    conducting all of its business (whether written or oral) solely in its
own name so as not to mislead others as to the identity of each of the Issuer,
Holdings, VMS, PHH Sub 2, PHH Sub 1, PHH and any Affiliates of the Issuer,
Holdings, VMS, PHH Sub 2, PHH Sub 1 or PHH.
 
Section 8.25.    Use of Proceeds of Investor Notes
 
The Issuer shall use the net proceeds of each Series of Investor Notes in
accordance with the provisions of the related Indenture Supplement.
 
 
35

--------------------------------------------------------------------------------

 
Section 8.26.    No ERISA Plan
 
The Issuer will not establish or maintain or contribute to any Pension Plan that
is covered by Title IV of ERISA.
 
ARTICLE 9.

 
REMEDIES
 
Section 9.1.    Events of Default
 
“Event of Default”, wherever used herein, with respect to any Series of Investor
Notes, means any one of the following events (whatever the reason for such Event
of Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
 
(a)    default in the payment of any interest on any Investor Note of any Series
when the same becomes due and payable, and such default shall continue for a
period of five Business Days;
 
(b)    default in the payment of the principal of any Investor Note of any
Series when the same becomes due and payable;
 
(c)    default in the observance or performance of any covenant or agreement of
the Issuer made in the Indenture (other than a covenant or agreement, a default
in the observance or performance of which is elsewhere in this Section
specifically dealt with) which default materially and adversely affects the
rights of the Investor Noteholders of such Series, and which default shall
continue or not be cured for a period of 30 days (or for such longer period, not
in excess of 60 days, as may be reasonably necessary to remedy such default;
provided that such default is capable of remedy within 60 days or less and the
Issuer delivers an Officer’s Certificate to the Indenture Trustee to the effect
that the Issuer has commenced, or will promptly commence and diligently pursue,
all reasonable efforts to remedy such default) after there shall have been
given, by registered or certified mail, to the Issuer by the Indenture Trustee
or to the Issuer and the Indenture Trustee by Investor Noteholders of such
Series holding Investor Notes evidencing at least 25% of the Invested Amount of
each Class of Investor Notes of such Series, a written notice specifying such
default and requiring it to be remedied and stating that such notice is a
“Notice of Default” hereunder;
 
(d)    the Issuer at any time receives a final determination that it will be
treated as an association taxable as a corporation for federal income tax
purposes;
 
(e)    the Securities and Exchange Commission or other regulatory body having
jurisdiction reaches a final determination that the Issuer is an “investment
company” within the meaning of the Investment Company Act; or
 
(f)    an Insolvency Event shall have occurred with respect to the Issuer.
 
 
36

--------------------------------------------------------------------------------

 
Section 9.2.    Acceleration of Maturity; Rescission and Annulment
 
If an Event of Default referred to in clause (f) of Section 9.2 has occurred,
the unpaid principal amount of all Series of Investor Notes, together with
interest accrued but unpaid thereon, and all other amounts due to the Investor
Noteholders under the Indenture, shall immediately and without further act
become due and payable. If an Event of Default referred to in clause (a), (b),
(d) or (e) of Section 9.1 has occurred, then the Indenture Trustee or the
Holders of a Majority in Interest of each Series of Outstanding Investor Notes
may declare all of the Investor Notes to be immediately due and payable, by a
notice in writing to the Issuer (and to the Indenture Trustee if given by the
Investor Noteholders), and upon any such declaration the unpaid principal amount
of the Investor Notes, together with accrued and unpaid interest thereon through
the date of acceleration, shall become immediately due and payable. If an Event
of Default referred to in clause (c) of Section 9.1 shall occur and be
continuing with respect to any Series of Investor Notes, then and in every such
case the Indenture Trustee or Holders of a Majority in Interest of such Series
of Investor Notes may declare all the Investor Notes of such Series to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by the Investor Noteholders), and upon any such
declaration the unpaid principal amount of such Investor Notes, together with
accrued and unpaid interest thereon through the date of acceleration, shall
become immediately due and payable.
 
At any time after such declaration of acceleration of maturity has been made
with respect to the Investor Notes (or a particular Series of Investor Notes)
and before a judgment or decree for payment of the money due has been obtained
by the Indenture Trustee as hereinafter in this Article 9, provided, the Holders
of a Majority in Interest of each Series of Outstanding Investor Notes (or, in
the case of the acceleration of a particular Series of Investor Notes, the
Holders of a Majority in Interest of the Investor Notes of such Series), by
written notice to the Issuer and the Indenture Trustee, may rescind and annul
such declaration and its consequences; provided, that, no such rescission shall
affect any subsequent default or impair any right consequent thereto.
 
Section 9.3.    Collection of Indebtedness and Suits for Enforcement by the
Indenture Trustee
 
(a)    The Issuer covenants that if (i) default is made in the payment of any
interest on any Investor Note when the same becomes due and payable, and such
default continues for a period of five Business Days or (ii) default is made in
the payment of the principal of any Investor Note when the same becomes due and
payable, by acceleration or at stated maturity, the Issuer will, upon demand of
the Indenture Trustee, pay to it, for the benefit of the Holders of such
Investor Notes, the whole amount then due and payable on such Investor Notes for
principal and interest, with interest upon the overdue principal, and, to the
extent payment at such rate of interest shall be legally enforceable, upon
overdue installments of interest, at the Note Rate borne by the Investor Notes,
and in addition thereto such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents and
counsel.
 
(b)    In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Investor Notes
and collect in the manner provided by law out of the property of the Issuer or
other obligor upon such Investor Notes, wherever situated, the moneys adjudged
or decreed to be payable.
 
 
37

--------------------------------------------------------------------------------

 
(c)    If an Event of Default occurs and is continuing, the Indenture Trustee
may, as more particularly provided in Section 9.4, in its discretion, proceed to
protect and enforce its rights and the rights of the Investor Noteholders, by
such appropriate proceedings as the Indenture Trustee shall deem most effective
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in the Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by the Indenture or by law.
 
(d)    In case there shall be pending, relative to the Issuer, any other obligor
upon the Investor Notes, Holdings or any Person having or claiming an ownership
interest in the Issuer Assets, proceedings under the Bankruptcy Code or any
other applicable Federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor, Holdings
or such Person or the property of such other obligor, Holdings or such Person,
or in the case of any other comparable judicial proceedings relative to the
Issuer, other obligor upon the Investor Notes, Holdings or such Person or to the
creditors or property of the Issuer, such other obligor, Holdings or such
Person, the Indenture Trustee, irrespective of whether the principal of any
Investor Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
 
(i)    to file and prove a claim or claims for the whole amount of principal and
interest owing and unpaid in respect of the Investor Notes and to file such
other papers or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee (including any claim for reasonable compensation
to the Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all expenses
and liabilities incurred, and all advances made, by the Indenture Trustee and
each predecessor Indenture Trustee, except as a result of negligence, bad faith
or willful misconduct) and of the Investor Noteholders allowed in such
proceedings;
 
(ii)    unless prohibited by applicable law and regulations, to vote on behalf
of the Holders of the Investor Notes in any election of a trustee, a standby
trustee or person performing similar functions in any such proceedings;
 
(iii)    to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Investor Noteholders and of the Indenture Trustee
on their behalf; and
 
(iv)    to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee or
the Holders of the Investor Notes allowed in any judicial proceedings relative
to the Issuer, such other obligor upon the Investor Notes, Holdings, any Person
claiming an ownership interest in the Issuer Assets, their respective creditors
and their property;
 
 
 
38

--------------------------------------------------------------------------------

 
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Investor Noteholders to
make payments to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Investor
Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of negligence
or bad faith.
 
(e)    Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Investor Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Investor Notes or the rights of any Holder thereof or
to authorize the Indenture Trustee to vote in respect of the claim of any
Investor Noteholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar person.
 
(f)    All rights of action and of asserting claims under the Indenture, or
under any of the Investor Notes, may be enforced by the Indenture Trustee
without the possession of any of the Investor Notes or the production thereof in
any trial or other proceedings relative thereto, and any such action or
proceedings instituted by the Indenture Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders of the Investor
Notes.
 
(g)    In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of the Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Investor Notes, and it shall not be
necessary to make any Investor Noteholder a party to any such proceedings.
 
Section 9.4.    Remedies; Priorities
 
(a)    If an Event of Default shall have occurred and be continuing with respect
to any Series of Outstanding Investor Notes and such Series of Investor Notes
has been accelerated under Section 9.4, the Indenture Trustee may institute
proceedings to enforce the obligations of the Issuer hereunder in its own name
and as trustee of an express trust for the collection of all amounts then
payable on the Investor Notes of such Series or under the Indenture with respect
thereto, whether by declaration or otherwise, enforce any judgment obtained, and
collect from the Issuer and any other obligor upon such Investor Notes moneys
adjudged due.
 
(b)    If an Event of Default shall have occurred and be continuing with respect
to all Series of Outstanding Investor Notes and all Series of Outstanding
Investor Notes have been accelerated under Section 9.2, the Indenture Trustee
(subject to Section 9.5) may do one or more of the following:
 
(i)    institute proceedings from time to time for the complete or partial
foreclosure of the Indenture with respect to the Issuer Assets;
 
 
39

--------------------------------------------------------------------------------

 
(ii)    exercise any remedies of a secured party under the UCC and take any
other appropriate action to protect and enforce the rights and remedies of the
Indenture Trustee and the Holders of the Investor Notes; and
 
(iii)    in the case of an Event of Default referred to in clause (a) or (b) of
Section 9.1, sell the Issuer Assets or any portion thereof or rights or interest
therein, at one or more public or private sales called and conducted in any
manner permitted by law;
 
provided that the Indenture Trustee may not sell or otherwise liquidate the
Issuer Assets following an Event of Default referred to in clause (a) or (b) of
Section 9.1, unless (A) the Holders of Investor Notes representing 100% of the
Aggregate Invested Amount consent thereto, (B) the proceeds of such sale or
liquidation distributable to the Investor Noteholders are sufficient to
discharge in full all amounts then due and unpaid upon the Investor Notes for
principal and interest, or (C) (1) the Indenture Trustee determines that the
Issuer Assets will not continue to provide sufficient funds for the payment of
principal of and interest on the Investor Notes as they would have become due if
the Investor Notes had not been declared due and payable and (2) the Indenture
Trustee obtains the consent of a Majority in Interest of the Holders of each
Series of Outstanding Investor Notes. In determining such sufficiency or
insufficiency with respect to clause (B) and (C), the Indenture Trustee may, but
need not, obtain and rely upon an opinion of an Independent investment banking
or accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Issuer Assets for such purpose.
 
(c)    If the Indenture Trustee collects any money or property pursuant to this
Article 9, such money or property shall be held by the Indenture Trustee as
additional collateral hereunder and the Indenture Trustee shall pay out such
money or property in the following order:
 
FIRST: to the Indenture Trustee for amounts due under Section 10.6; and
 
SECOND: to the Collection Account for distribution in accordance with the
provisions of Article 5.
 
Section 9.5.    Optional Preservation of the Issuer Assets
 
If the Investor Notes of each Series Outstanding have been declared to be due
and payable under Section 9.2 following an Event of Default and such declaration
and its consequences have not been rescinded and annulled, the Indenture Trustee
may, but need not, elect to maintain possession of the Issuer Assets. It is the
desire of the parties hereto and the Investor Noteholders that there be at all
times sufficient funds for the payment of principal of and interest on the
Investor Notes, and the Indenture Trustee shall take such desire into account
when determining whether to maintain possession of the Issuer Assets. In
determining whether to maintain possession of the Issuer Assets, the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Issuer
Assets for such purpose. Nothing contained in this Section 9.5 shall be
construed to require the Indenture Trustee to preserve the Issuer Assets
securing the Issuer Obligations if prohibited by applicable law or if the
Indenture Trustee is authorized, directed or permitted to liquidate the Issuer
Assets pursuant to Section 9.4(b).
 
 
 
40

--------------------------------------------------------------------------------

Section 9.6.    Limitation on Suits
 
No Holder of any Investor Note shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Indenture, or for the appointment of
a receiver or trustee, or for any other remedy thereunder, unless:
 
(a)    such Holder has previously given written notice to the Indenture Trustee
of a continuing Event of Default;
 
(b)    Holders of each Series of Outstanding Investor Notes holding Investor
Notes evidencing at least 25% of each Class of Investor Notes of such Series
have made written request to the Indenture Trustee to institute such proceeding
in respect of such Event of Default in its own name as the Indenture Trustee
hereunder;
 
(c)    such Holder or Holders have offered to the Indenture Trustee indemnity
reasonably satisfactory to it against the costs, expenses and liabilities to be
incurred in complying with such request;
 
(d)    the Indenture Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such proceedings; and
 
(e)    no direction inconsistent with such written request has been given to the
Indenture Trustee during such 60-day period by the Holders of a Majority in
Interest of each Series of Outstanding Investor Notes;
 
it being understood and intended that no one or more Holders of the Investor
Notes shall have any right in any manner whatever by virtue of, or by availing
of, any provision of the Indenture to affect, disturb or prejudice the rights of
any other Holders of the Investor Notes or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under the
Indenture, except in the manner herein provided.
 
In the event the Indenture Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Investor Notes,
each representing less than a Majority in Interest of each Series of Outstanding
Investor Notes, the Indenture Trustee shall act at the direction of the group of
Holders of Investor Notes with the greater amount of Investor Notes, however,
should the Indenture Trustee receive conflicting or inconsistent requests on
indemnity from two or more groups of Holders with an equal amount of Investor
Notes the Indenture Trustee in its sole discretion may determine what action, if
any, shall be taken, notwithstanding any other provisions of the Indenture.
 
Section 9.7.    Unconditional Rights of Investor Noteholders to Receive
Principal and Interest
 
Notwithstanding any other provisions in the Indenture, the Holder of any
Investor Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Investor Note
on or after the respective due dates thereof expressed in such Investor Note or
in the Indenture and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder.
 
 
41

--------------------------------------------------------------------------------

 
Section 9.8.    Restoration of Rights and Remedies
 
If the Indenture Trustee or any Investor Noteholder has instituted any
Proceeding to enforce any right or remedy under the Indenture and such
Proceeding has been discontinued or abandoned for any reason or has been
determined adversely to the Indenture Trustee or to such Investor Noteholder,
then and in every such case the Issuer, the Indenture Trustee and the Investor
Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Indenture Trustee and the Investor Noteholders
shall continue as though no such Proceeding had been instituted.
 
Section 9.9.    Rights and Remedies Cumulative
 
No right or remedy herein conferred upon or reserved to the Indenture Trustee or
to the Investor Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
 
Section 9.10.    Delay or Omission Not a Waiver
 
No delay or omission of the Indenture Trustee or any Holder of any Investor Note
to exercise any right or remedy accruing upon any Default or Event of Default
shall impair any such right or remedy or constitute a waiver of any such Default
or Event of Default or an acquiescence therein. Every right and remedy given by
this Article 9 or by law to the Indenture Trustee or to the Investor Noteholders
may be exercised from time to time, and as often as may be deemed expedient, by
the Indenture Trustee or by the Investor Noteholders, as the case may be.
 
Section 9.11.    Control by Investor Noteholders
 
 
The Holders of a Majority in Interest of each Series of Outstanding Investor
Notes shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Indenture Trustee with respect to
the Investor Notes or exercising any trust or power conferred on the Indenture
Trustee; provided that
 
(a)    such direction shall not be in conflict with any rule of law or with the
Indenture;
 
(b)    if an Event of Default is with respect to less than all Series of
Outstanding Investor Notes, then the Indenture Trustee’s rights and remedies
shall be limited to the rights and remedies pertaining only to those Series of
Investor Notes with respect to which such Event of Default has occurred and the
Indenture Trustee shall exercise such rights and remedies at the direction of
the Holders of a Majority in Interest of all such Series of Investor Notes;
 
(c)    subject to the express terms of Section 9.4, any direction to the
Indenture Trustee to sell or liquidate the Issuer Assets shall be by the Holders
of Investor Notes representing not less than 100% of the Aggregate Invested
Amount;
 
 
42

--------------------------------------------------------------------------------

 
(d)    if the conditions set forth in Section 9.5 have been satisfied and the
Indenture Trustee elects to retain the Issuer Assets pursuant to such Section,
then any direction to the Indenture Trustee by Holders of Investor Notes
representing less than 100% of the Aggregate Invested Amount to sell or
liquidate the Issuer Assets shall be of no force and effect;
 
(e)    the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction; and
 
(f)    such direction shall be in writing;
 
provided, further, that, subject to Section 10.1, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Investor Noteholders not
consenting to such action.
 
Section 9.12.    Waiver of Past Defaults
 
Prior to the declaration of the acceleration of the maturity of the Investor
Notes of any Series as provided in Section 9.2, the Holders of the Investor
Notes of not less than a Majority in Interest of such Series of Outstanding
Investor Notes may, on behalf of all such Holders, waive any past Default or
Event of Default and its consequences except a Default (a) in payment of
principal of or interest on any of the Investor Notes or (b) in respect of a
covenant or provision hereof which cannot be modified or amended without the
consent of the Holder of each Investor Note. In the case of any such waiver, the
Issuer, the Indenture Trustee and the Holders of the Investor Notes of such
Outstanding Series shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto.
 
Upon any such waiver, such Default shall cease to exist and be deemed to have
been cured and not to have occurred, and any Event of Default arising therefrom
shall be deemed to have been cured and not to have occurred, for every purpose
of the Indenture; but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereto. The Issuer
shall give prompt written notice of any waiver to the Rating Agencies.
 
Section 9.13.    Undertaking for Costs
 
All parties to the Indenture agree, and each Holder of any Investor Note by such
Holder’s acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under the Indenture, or in any suit against the Indenture Trustee for any
action taken, suffered or omitted by it as the Indenture Trustee, the filing by
any party litigant in such Proceeding of an undertaking to pay the costs of such
Proceeding, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys’ fees, against any party litigant in such
Proceeding, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section shall
not apply to (a) any suit instituted by the Indenture Trustee, (b) any suit
instituted by any Investor Noteholder or group of Investor Noteholders, in each
case holding in the aggregate more than 10% of the Invested Amount of any Series
of Investor Notes, or (c) any suit instituted by any Investor Noteholder for the
enforcement of the payment of principal of or interest on any Investor Note on
or after the respective due dates expressed in such Investor Note and in the
Indenture.
 
 
43

--------------------------------------------------------------------------------

 
Section 9.14.    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, that may affect the covenants or the performance of
the 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 9.15.    Action on Investor Notes
 
The Indenture Trustee’s right to seek and recover judgment on the Investor Notes
or under the Indenture shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to the Indenture. Neither
the lien of the Indenture nor any rights or remedies of the Indenture Trustee or
the Investor Noteholders shall be impaired by the recovery of any judgment by
the Indenture Trustee against the Issuer or by the levy of any execution under
such judgment upon any portion of the Issuer Assets or upon any of the assets of
the Issuer.
 
ARTICLE 10.

 
THE INDENTURE TRUSTEE
 
Section 10.1.    Duties of the Indenture Trustee
 
(a)    If an Amortization Event or Event of Default has occurred and is
continuing, the Indenture Trustee shall exercise such of the rights and powers
vested in it by the Indenture, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
 
(b)    The Indenture Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Indenture Trustee which are specifically required to be furnished
pursuant to any provision of this Base Indenture or any of the other Transaction
Documents, shall examine them to determine whether they substantially conform to
the requirements of this Base Indenture or such other Transaction Document, as
the case may be; provided, however, that the Indenture Trustee shall not be
responsible for the content of any resolution, certificate, statement, opinion,
report, document, order or other instrument furnished by the Servicer, the
Administrator or the Issuer hereunder.
 
(c)    Subject to subsection 10.1(a), no provision of the Indenture shall be
construed to relieve the Indenture Trustee from liability for its own negligent
action, its own negligent failure to act or its own bad faith or willful
misconduct; provided, however, that:
 
(i)    the Indenture Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer of the Indenture Trustee, unless it shall
be proved that the Indenture Trustee was negligent in ascertaining the pertinent
facts nor shall the Indenture Trustee be liable with respect to any action it
takes or omits to take in good faith in accordance with the Indenture or in
accordance with a direction received by it pursuant to Section 9.11;
 
 
44

--------------------------------------------------------------------------------

 
(ii)    the Indenture Trustee shall not be charged with knowledge of any Event
of Default unless a Responsible Officer of the Indenture Trustee obtains actual
knowledge thereof or receives written notice thereof;
 
(iii)    the Indenture Trustee shall not be charged with knowledge of any
failure by any Person to comply with its obligations under the Transaction
Documents unless a Responsible Officer of the Indenture Trustee obtains actual
knowledge of such failure or receives written notice thereof;
 
(iv)    prior to the occurrence of an Amortization Event or an Event of Default,
and after the curing of all such Amortization Events or Events of Default which
may have occurred, the duties and obligations of the Indenture Trustee shall be
determined solely by the express provisions of the Indenture, the Indenture
Trustee shall be obligated to perform only such duties and obligations as are
specifically set forth in the Indenture and no implied covenants or obligations
shall be read into the Indenture against the Indenture Trustee;
 
(v)    anything in the Indenture to the contrary notwithstanding, in no event
shall the Indenture Trustee be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Indenture Trustee has been advised of the likelihood of
such loss or damage and regardless of the form of action; and
 
(vi)    subject to the other provisions of the Indenture and without limiting
the generality of this Section 10.01, the Indenture Trustee shall have no duty
(A) to record, file, or deposit this Base Indenture, the Transaction Documents
or any agreement referred to herein or therein or any financing statement or
continuation statement evidencing a security interest, or to maintain any such
recording or filing or depositing or to rerecord, refile, or redeposit any
thereof, (B) to insure the Issuer Assets and (C) to pay or discharge any tax,
assessment, or other governmental charge or any lien or encumbrance of any kind
owing with respect to assessed or levied against, any part of the Collateral
other than from funds available in the Collection Account.
 
(d)    The Indenture Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in the Indenture shall in any event require the
Indenture Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of any Person under any of the Transaction Documents.
 
(e)    Except for actions expressly authorized by the Indenture, the Indenture
Trustee shall take no action reasonably likely to impair the security interests
created hereunder in any of the Issuer Assets now existing or hereafter created
or to impair the value of any of the Issuer Assets now existing or hereafter
created.
 
 
45

--------------------------------------------------------------------------------

 
(f)    In the event that the Paying Agent or the Transfer Agent and Registrar
shall fail to perform any obligation, duty or agreement in the manner or on the
day required to be performed by the Paying Agent or the Transfer Agent and
Registrar, as the case may be, under the Indenture, the Indenture Trustee shall
be obligated promptly to perform such obligation, duty or agreement in the
manner so required.
 
Section 10.2.    Rights of the Indenture Trustee
 
Except as otherwise provided by Section 10.1:
 
(a)    The Indenture Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting based upon any document believed by it to be
genuine and to have been signed by or presented by the proper person.
 
(b)    The Indenture Trustee may consult with counsel of its selection and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection from liability in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
 
(c)    The Indenture Trustee may act through agents, custodians and nominees and
shall not be liable for any misconduct or negligence on the part of, or for the
supervision of, any such agent, custodian or nominee so long as such agent,
custodian or nominee is appointed with due care.
 
(d)    The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers conferred upon it by the Indenture; provided, that the
Indenture Trustee’s conduct does not constitute willful misconduct, negligence
or bad faith.
 
(e)    Prior to the occurrence of an Event of Default and after the curing of
all Events of Default that may have occurred, the Indenture Trustee shall be
under no obligation to institute, conduct or defend any litigation hereunder or
in relation hereto and shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, or other paper
or document, unless requested in writing to do so by Holders of the Investor
Notes evidencing not less than 25% of the Invested Amount of any Series of
Investor Notes; provided, however, that if the payment within a reasonable time
to the Indenture Trustee of the costs, expenses, or liabilities likely to be
incurred by it in instituting, conducting or defending any litigation hereunder
or in relation hereto or in the making of such investigation shall be, in the
opinion of the Indenture Trustee, not reasonably assured to the Indenture
Trustee by the security afforded to it by the terms of the Indenture, the
Indenture Trustee may require reasonable indemnity against such cost, expense,
or liability or payment of such expenses as a condition precedent to so
proceeding. The reasonable expense of every such examination shall be paid by
the Issuer or by the Administrator at the direction of the Issuer or, if paid by
the Indenture Trustee, shall be reimbursed by the Issuer or by the Administrator
at the direction of the Issuer upon demand.
 
(f)    The Indenture Trustee shall not be liable for any losses or liquidation
penalties in connection with Permitted Investments, unless such losses or
liquidation penalties were incurred through the Indenture Trustee’s own willful
misconduct, negligence or bad faith.
 
 
46

--------------------------------------------------------------------------------

 
(g)    The Indenture Trustee shall not be liable for the acts or omissions of
any successor to the Indenture Trustee so long as such acts or omissions were
not the result of the negligence, bad faith or willful misconduct of JPMorgan
Chase.
 
(h)    The right of the Indenture Trustee to perform any discretionary act
enumerated in the Indenture shall not be construed as a duty, and the Indenture
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.
 
(i)    The Indenture Trustee shall not be required to give any bond or surety in
respect of the execution of the trust created hereby or the powers granted
hereunder.
 
Section 10.3.    Indenture Trustee’s Disclaimer
 
The Indenture Trustee assumes no responsibility for the correctness of the
recitals contained herein and in the Investor Notes (other than the certificate
of authentication on the Investor Notes). Except as set forth in Section 10.11,
the Indenture Trustee makes no representations as to the validity or sufficiency
of the Indenture or of the Investor Notes (other than the certificate of
authentication on the Investor Notes) or of any of the Issuer Assets. The
Indenture Trustee shall not be accountable for the use or application by the
Issuer of any of the Investor Notes or of the proceeds of such Investor Notes,
or for the use or application of any funds paid to the Issuer in respect of the
Issuer Assets.
 
Section 10.4.    -Indenture Trustee May Own Investor Notes
 
The Indenture Trustee in its individual or any other capacity may become the
owner or pledgee of Investor Notes with the same rights as it would have if it
were not the Indenture Trustee.
 
Section 10.5.    Notice of Defaults
 
If a Default or an Event of Default or a Potential Amortization Event or an
Amortization Event occurs and is continuing and if it is either actually known
or written notice of the existence thereof has been delivered to a Responsible
Officer of the Indenture Trustee, the Indenture Trustee shall mail to each
Investor Noteholder notice thereof within 45 days after such knowledge or notice
occurs. Except in the case of a Default in accordance with the provisions of
Section 313(c) of the TIA in payment of principal of or interest on any Investor
Note (including payments pursuant to the mandatory redemption provisions of such
Investor Note), the Indenture Trustee may withhold the notice if and so long as
a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interest of the Investor Noteholders.
 
Section 10.6.    Compensation
 
The Issuer shall cause the Administrator pursuant to the Administration
Agreement to pay to the Indenture Trustee from time to time reasonable
compensation for its services. The Indenture Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall cause the Administrator pursuant to the Administration Agreement to
reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Indenture Trustee’s
agents, counsel, accountants and experts. The Issuer shall cause the
Administrator pursuant to the Administration Agreement to indemnify the
Indenture Trustee against any and all loss, liability or expense (including the
reasonable fees of counsel) incurred by it in connection with the administration
of this trust and the performance of its duties hereunder. The Indenture Trustee
shall notify the Issuer and the Administrator promptly of any claim for which it
may seek indemnity; provided, however, a failure by the Indenture Trustee to
promptly notify the Issuer and the Administrator of a claim for which it may
seek indemnity shall not relieve the Administrator from its obligation to
indemnify the Indenture Trustee.
 
 
47

--------------------------------------------------------------------------------

 
The Administrator’s payment obligations to the Indenture Trustee pursuant to
this Section 10.06 shall survive the resignation or termination of the Indenture
Trustee and the discharge of the Indenture. When the Indenture Trustee incurs
expenses after the occurrence of a Default specified in Section 8.1(f) with
respect to the Issuer, the expenses are intended to constitute expenses of
administration under the Bankruptcy Code or any other applicable federal or
state bankruptcy, insolvency or similar law.
 
Section 10.7.    Eligibility Requirements for Indenture Trustee
 
 
The Indenture Trustee hereunder shall at all times be a corporation organized
and doing business under the laws of the United States or any state thereof
authorized under such laws to exercise corporate trust powers, having a
long-term unsecured debt rating of at least “Baa3” by Moody’s and “BBB-“ by
Standard & Poor’s having, in the case of an entity that is subject to risk-based
capital adequacy requirements, risk-based capital of at least $50,000,000 or, in
the case of an entity that is not subject to risk-based capital adequacy
requirements, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority, and shall
satisfy the requirements for a trustee set forth in paragraph (a)(4)(i) of Rule
3a-7 under the Investment Company Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section 10.7, the risk-based capital or the combined capital and surplus of such
corporation, as the case may be, shall be deemed to be its risk-based capital or
combined capital and surplus as set forth in the most recent report of condition
so published.
 
If the Indenture is qualified under the TIA, the Indenture Trustee shall at all
times satisfy the requirements of TIA §310(a) and the Indenture Trustee shall
comply with TIA §310(b), including the optional provision permitted by the
second sentence of TIA §310(b)(9); provided that there shall be excluded from
the operation of TIA §310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such exclusion
set forth in the TIA §310(b)(1) are met.
 
If at any time the Indenture Trustee ceases to be eligible in accordance with
the provisions of this Section 10.7, the Indenture Trustee shall resign
immediately in the manner and with the effect specified in Section 10.8.
 
Section 10.8.    Resignation or Removal of Indenture Trustee
 
(a)    The Indenture Trustee may give notice of its intent to resign at any time
by so notifying the Issuer. The Holders of a Majority in Interest of each Series
of Outstanding Investor Notes may remove the Indenture Trustee by so notifying
the Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer
shall remove the Indenture Trustee if:
 
 
48

--------------------------------------------------------------------------------

 
(i)    the Indenture Trustee fails to comply with Section 10.7;
 
(ii)    the Indenture Trustee is adjudged bankrupt or insolvent;
 
(iii)    a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
 
(iv)    the Indenture Trustee otherwise becomes incapable of acting.
 
(b)    If the Indenture Trustee gives notice of its intent to resign or is
removed or if a vacancy exists in the office of the Indenture Trustee for any
reason (the Indenture Trustee in such event being referred to herein as the
retiring Indenture Trustee), the Issuer shall promptly appoint a successor
Indenture Trustee.
 
(c)    A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer and thereupon
the resignation or removal of the Indenture Trustee shall become effective, and
the successor Indenture Trustee, without any further act, deed or conveyance
shall have all the rights, powers and duties of the Indenture Trustee under the
Indenture. The successor Indenture Trustee shall mail a notice of its succession
to Noteholders. The retiring Indenture Trustee shall promptly transfer all
property held by it as the Indenture Trustee to the successor Indenture Trustee.
 
(d)    If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee gives notice of its intent to resign or is
removed, the retiring Indenture Trustee, the Issuer or the Holders of a Majority
in Interest of each Series of Outstanding Investor Notes may petition any court
of competent jurisdiction for the appointment of a successor Indenture Trustee.
 
(e)    If the Indenture Trustee fails to comply with Section 10.7, any Investor
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
 
(f)    Any resignation or removal of the Indenture Trustee and appointment of a
successor Indenture Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Indenture Trustee pursuant to Section 10.8(c) and payment of all fees and
expenses owed to the outgoing Indenture Trustee.
 
(g)    Notwithstanding the resignation or removal of the Indenture Trustee
pursuant to this Section, the Issuer’s and the Administrator’s obligations under
Section 10.6 shall continue for the benefit of the retiring Indenture Trustee.
The Indenture Trustee shall not be liable for the acts or omissions of any
successor Indenture Trustee.
 
Section 10.9.    Successor Indenture Trustee by Merger.
 
If the Indenture Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation without any further act shall be the successor Indenture
Trustee. The Indenture Trustee shall provide the Issuer and the Rating Agencies
written notice of any such transaction.
 
 
49

--------------------------------------------------------------------------------

 
In case at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
the Indenture, any of the Investor Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor Indenture Trustee, and deliver such
Investor Notes so authenticated; and in case at that time any of the Investor
Notes shall not have been authenticated, any successor Indenture Trustee may
authenticate such Investor Notes either in the name of any predecessor Indenture
Trustee hereunder or in the name of the successor Indenture Trustee; and in all
such cases such certificate of authentication shall have the same full force as
is provided anywhere in the Investor Notes or in the Indenture with respect to
the certificate of authentication of the Indenture Trustee.
 
Section 10.10.    Appointment of Co-Trustee or Separate Trustee
 
(a)    Notwithstanding any other provisions of this Base Indenture or any
Indenture Supplement, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Collateral may at the
time be located, the Indenture Trustee shall have the power and may execute and
deliver all instruments to appoint one or more persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of the
Collateral, and to vest in such Person or Persons, in such capacity and for the
benefit of the Investor Noteholders, such title to the Collateral, or any part
thereof, and, subject to the other provisions of this Section 10.10, such
powers, duties, obligations, rights and trusts as the Indenture Trustee may
consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor Indenture
Trustee under Section 10.7 and no notice to Investor Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 10.8. No co-trustee shall be appointed without the consent of the Issuer
unless such appointment is required as a matter of state law or to enable the
Indenture Trustee to perform its functions hereunder.
 
(b)    Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
 
(i)    The Investor Notes of each Series shall be authenticated and delivered
solely by the Indenture Trustee or an authenticating agent appointed by the
Indenture Trustee;
 
(ii)    All rights, powers, duties and obligations conferred or imposed upon the
Indenture Trustee shall be conferred or imposed upon and exercised or performed
by the Indenture Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized to
act separately without the Indenture Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed, the Indenture Trustee shall be incompetent or
unqualified to perform, such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Issuer Assets or
any portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Indenture Trustee;
 
(iii)    No trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder;
 
(iv)    The Indenture Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
 
 
50

--------------------------------------------------------------------------------

 
(v)    The Indenture Trustee shall remain primarily liable for the actions of
any co-trustee.
 
(c)    Any notice, request or other writing given to the Indenture Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Base Indenture
and the conditions of this Article 9. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Base Indenture and any Indenture Supplement, specifically
including every provision of this Base Indenture or any Indenture Supplement
relating to the conduct of, affecting the liability of, or affording protection
to, the Indenture Trustee. Every such instrument shall be filed with the
Indenture Trustee and a copy thereof given to the Issuer.
 
(d)    Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect to
this Base Indenture or any Indenture Supplement on its behalf and in its name.
If any separate trustee or co-trustee shall die, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Indenture Trustee, to the extent
permitted by law, without the appointment of a new or successor Indenture
Trustee.
 
(e)    In connection with the appointment of a co-trustee, the Indenture Trustee
may, at any time, at the Indenture Trustee’s sole cost and expense, without
notice to the Investor Noteholders, delegate its duties under this Base
Indenture and any Indenture Supplement to any Person who agrees to conduct such
duties in accordance with the terms hereof; provided, however, that no such
delegation shall relieve the Indenture Trustee of its obligations and
responsibilities hereunder with respect to any such delegated duties.
 
Section 10.11.    Representations and Warranties of Indenture Trustee
 
The Indenture Trustee represents and warrants to the Issuer and the Investor
Noteholders that:
 
(i)    The Indenture Trustee is a national banking association organized,
existing and in good standing under the laws of the United States of America;
 
(ii)    The Indenture Trustee has full power, authority and right to execute,
deliver and perform this Base Indenture and any Indenture Supplement issued
concurrently with this Base Indenture and to authenticate the Investor Notes,
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Base Indenture and any Indenture Supplement issued
concurrently with this Base Indenture and to authenticate the Investor Notes;
 
(iii)    This Base Indenture has been duly executed and delivered by the
Indenture Trustee; and
 
(iv)    The Indenture Trustee meets the requirements of eligibility as an
Indenture Trustee hereunder set forth in Section 10.7.
 
 
 
51

--------------------------------------------------------------------------------

 
Section 10.12.    Preferential Collection of Claims Against the Issuer
 
 
If the Indenture is qualified under the TIA, the Indenture Trustee shall comply
with TIA §311(a), excluding any creditor relationship listed in TIA §311(b) and
an Indenture Trustee who has resigned or been removed shall be subject to TIA
§311(a) to the extent indicated therein.
 
ARTICLE 11
 
DISCHARGE OF INDENTURE
 
Section 11.1.    Termination of the Issuer’s Obligations
 
(a)    The Indenture shall cease to be of further effect (except that (i) the
Issuer’s obligations under Section 10.6, (ii) the Indenture Trustee’s and Paying
Agent’s obligations under Section 11.3 and the Indenture Trustee’s and the
Investor Noteholders’ obligations under Section 13.16 shall survive) when all
Outstanding Investor Notes theretofore authenticated and issued have been
delivered (other than destroyed, lost or stolen Investor Notes which have been
replaced or paid) to the Indenture Trustee for cancellation and the Issuer has
paid all sums payable hereunder.
 
(b)    In addition, except as may be provided to the contrary in any Indenture
Supplement, the Issuer may terminate all of its obligations under the Indenture
if:
 
(i)    The Issuer irrevocably deposits in trust with the Indenture Trustee or at
the option of the Indenture Trustee, with a trustee reasonably satisfactory to
the Indenture Trustee and the Issuer under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Indenture Trustee, money or
U.S. Government Obligations in an amount sufficient, in the opinion of a
nationally recognized firm of independent certified public accountants expressed
in a written certification thereof delivered to the Indenture Trustee, to pay,
when due, principal and interest on the Investor Notes to maturity or
redemption, as the case may be, and to pay all other sums payable by it
hereunder; provided, however, that (1) the trustee of the irrevocable trust
shall have been irrevocably instructed to pay such money or the proceeds of such
U.S. Government Obligations to the Indenture Trustee and (2) the trustee shall
have been irrevocably instructed to apply such money or the proceeds of such
U.S. Government Obligations to the payment of said principal and interest with
respect to the Investor Notes;
 
(ii)    The Issuer delivers to the Indenture Trustee an Officer’s Certificate
stating that all conditions precedent to satisfaction and discharge of the
Indenture have been complied with, and an Opinion of Counsel to the same effect;
and
 
(iii)    the Rating Agency Condition is satisfied with respect to each Series of
Outstanding Investor Notes.
 
Then, the Indenture shall cease to be of further effect (except as provided in
this Section 11.1), and the Indenture Trustee, on demand of the Issuer, shall
execute proper instruments acknowledging confirmation of and discharge under the
Indenture.
 
 
52

--------------------------------------------------------------------------------

 
(c)    After such irrevocable deposit made pursuant to Section 11.1(b) and
satisfaction of the other conditions set forth herein, the Indenture Trustee
upon request shall acknowledge in writing the discharge of the Issuer’s
obligations under the Indenture except for those surviving obligations specified
above.
 
In order to have money available on a payment date to pay principal or interest
on the Investor Notes, the U.S. Government Obligations shall be payable as to
principal or interest at least one Business Day before such payment date in such
amounts as will provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer’s option.
 
Section 11.2.    Application of Trust Money
 
The Indenture Trustee or a trustee satisfactory to the Indenture Trustee and the
Issuer shall hold in trust money or U.S. Government Obligations deposited with
it pursuant to Section 11.1. The Indenture Trustee shall apply the deposited
money and the money from U.S. Government Obligations through the Paying Agent in
accordance with the Indenture to the payment of principal and interest on the
Investor Notes.
 
The provisions of this Section 11.2 shall survive the expiration or earlier
termination of the Indenture.
 
Section 11.3.    Repayment to the Issuer
 
The Indenture Trustee and the Paying Agent shall promptly pay to the Issuer upon
written request any excess money or, pursuant to Section 2.4, return any
Investor Notes held by them at any time.
 
The provisions of this Section 11.3 shall survive the expiration or earlier
termination of the Indenture.
 
ARTICLE 12.

 
AMENDMENTS
 
Section 12.1.    Without Consent of the Investor Noteholders
 
Without the consent of any Investor Noteholder, the Issuer and the Indenture
Trustee, at any time and from time to time, may enter into one or more
Supplements, in form satisfactory to the Indenture Trustee, for any of the
following purposes, provided that the Rating Agency Condition is met:
 
(a)    to create a new Series of Investor Notes;
 
(b)    to add to the covenants of the Issuer for the benefit of any Investor
Noteholders (and if such covenants are to be for the benefit of less than all
Series of Investor Notes, stating that such covenants are expressly being
included solely for the benefit of such Series) or to surrender any right or
power herein conferred upon the Issuer (provided, however, that the Issuer will
not pursuant to this Section 12.1(b) surrender any right or power it has under
the Transaction Documents);
 
 
53

--------------------------------------------------------------------------------

 
(c)    to mortgage, pledge, convey, assign and transfer to the Indenture Trustee
any property or assets as security for the Investor Notes and to specify the
terms and conditions upon which such property or assets are to be held and dealt
with by the Indenture Trustee and to set forth such other provisions in respect
thereof as may be required by the Indenture or as may, consistent with the
provisions of the Indenture, be deemed appropriate by the Issuer and the
Indenture Trustee, or to correct or amplify the description of any such property
or assets at any time so mortgaged, pledged, conveyed and transferred to the
Indenture Trustee on behalf of the Investor Noteholders;
 
(d)    to cure any ambiguity, defect, or inconsistency or to correct or
supplement any provision contained herein or in any Indenture Supplement or in
any Investor Notes issued hereunder;
 
(e)    to evidence and provide for the acceptance of appointment hereunder by a
successor Indenture Trustee with respect to the Investor Notes of one or more
Series and to add to or change any of the provisions of the Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one trustee;
 
(f)    to correct or supplement any provision herein or in any Indenture
Supplement which may be inconsistent with any other provision herein or therein
or to make any other provisions with respect to matters or questions arising
under this Base Indenture or in any Indenture Supplement; or
 
(g)    if the Indenture is required to be qualified under the TIA, to modify,
eliminate or add to the provisions of the Indenture to such extent as shall be
necessary to effect the qualification of the Indenture under the TIA or under
any similar federal statute hereafter enacted and to add to the Indenture such
other provisions as may be expressly required by the TIA;
 
provided, however, that, as evidenced by an Opinion of Counsel delivered to the
Indenture Trustee (at the Issuer’s expense), such action shall not adversely
affect in any material respect the interests of any Investor Noteholder. Upon
the request of the Issuer, the Indenture Trustee shall join with the Issuer in
the execution of any Supplement authorized or permitted by the terms of the
Indenture and shall make any further appropriate agreements and stipulations
which may be therein contained, but the Indenture Trustee shall not be obligated
to enter into such Supplement which affects its own rights, duties or immunities
under the Indenture or otherwise.
 
Section 12.2.    With Consent of the Investor Noteholders
 
 
Except as provided in Section 12.1, the provisions of this Base Indenture and
any Indenture Supplement (unless otherwise provided in such Indenture
Supplement) may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to in writing by
the Issuer, the Indenture Trustee and the Holders of a Majority in Interest of
each Series of Outstanding Investor Notes; provided that, if such amendment,
modification or waiver of or to this Base Indenture or the Indenture Supplement
with respect to a Series of Investor Notes does not affect the Investor
Noteholders of a particular Series of Investor Notes (as substantiated by an
Opinion of Counsel to such effect), then the consent of the Investor Noteholders
of such Series shall not be required to such amendment, modification or waiver;
provided further that the Rating Agency Condition is satisfied with respect to
any such amendment, modification or waiver. Notwithstanding the foregoing:
 
 
54

--------------------------------------------------------------------------------

 
(i)    any modification of this Section 12.2, any requirement hereunder that any
particular action be taken by Investor Noteholders holding the relevant
percentage in principal amount of the Investor Notes or any change in the
definition of the terms “Adjusted Aggregate Unit Balance” or “Asset Deficiency”,
“Invested Amount”, “Invested Percentage” or any defined term used for the
purpose of any such definitions shall require the consent of each affected
Investor Noteholder; and
 
(ii)    any amendment, waiver or other modification that would (a) extend the
due date for, or reduce the amount of any scheduled repayment or prepayment of
principal of or interest on any Investor Note (or reduce the principal amount of
or rate of interest on any Investor Note) shall require the consent of each
affected Investor Noteholder; (b) approve the assignment or transfer by the
Issuer of any of its rights or obligations hereunder or under any other
Transaction Document to which it is a party except pursuant to the express terms
hereof or thereof shall require the consent of each Investor Noteholder; (c)
release any obligor under any Transaction Document to which it is a party except
pursuant to the express terms of such Transaction Document shall require the
consent of each Investor Noteholder; (d) affect adversely the interests, rights
or obligations of any Investor Noteholder individually in comparison to any
other Investor Noteholder shall require the consent of such Investor Noteholder;
or (e) amend or otherwise modify any Amortization Event shall require the
consent of each affected Investor Noteholder.
 
Section 12.3.    Supplements
 
Each amendment or other modification to the Indenture or the Investor Notes
shall be set forth in a Supplement. The initial effectiveness of each Supplement
shall be subject to the satisfaction of the Rating Agency Condition. In addition
to the manner provided in Sections 12.1 and 12.2, each Indenture Supplement may
be amended as provided in such Indenture Supplement.
 
Section 12.4.    Revocation and Effect of Consents
 
Until an amendment or waiver becomes effective, a consent to it by an Investor
Noteholder of an Investor Note is a continuing consent by the Investor
Noteholder and every subsequent Investor Noteholder of an Investor Note or
portion of an Investor Note that evidences the same debt as the consenting
Investor Noteholder’s Investor Note, even if notation of the consent is not made
on any Investor Note. However, any such Investor Noteholder or subsequent
Investor Noteholder may revoke the consent as to his Investor Note or portion of
an Investor Note if the Indenture Trustee receives written notice of revocation
before the date the amendment or waiver becomes effective. An amendment or
waiver becomes effective in accordance with its terms and thereafter binds every
Investor Noteholder. The Issuer may fix a record date for determining which
Investor Noteholders must consent to such amendment or waiver.
 
Section 12.5.    Notation on or Exchange of Investor Notes
 
The Indenture Trustee may place an appropriate notation about an amendment or
waiver on any Investor Note thereafter authenticated. The Issuer in exchange for
all Investor Notes may issue and the Indenture Trustee shall authenticate new
Investor Notes that reflect the amendment or waiver. Failure to make the
appropriate notation or issue a new Investor Note shall not affect the validity
and effect of-such amendment or waiver.
 
 
55

--------------------------------------------------------------------------------

 
Section 12.6.    The Indenture Trustee to Sign Amendments, etc
 
The Indenture Trustee shall sign any Supplement authorized pursuant to this
Article 12 if the Supplement does not adversely affect the rights, duties,
liabilities or immunities of the Indenture Trustee. If it does, the Indenture
Trustee may, but need not, sign it. In signing such Supplement, the Indenture
Trustee shall be entitled to receive, if requested, an indemnity reasonably
satisfactory to it and to receive and, subject to Section 10.1, shall be fully
protected in relying upon, an Officer’s Certificate and an Opinion of Counsel as
conclusive evidence that such Supplement is authorized or permitted by the
Indenture and that it will be valid and binding upon the Issuer in accordance
with its terms
 
Section 12.7.    Conformity with Trust Indenture Act
 
If the Indenture is qualified under the TIA, every amendment of the Indenture
and every Supplement executed pursuant to this Article 12 shall comply in all
respects with the TIA.
 
ARTICLE 13.

 
MISCELLANEOUS
 
Section 13.1.    Compliance Certificates and Opinions
 
(a)    Upon any application or request by the Issuer to the Indenture Trustee to
take any action under any provision of the Indenture, the Issuer shall furnish
to the Indenture Trustee (i) an Officer’s Certificate stating that all
conditions precedent, if any, provided for in the Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, and (iii) if the Indenture is qualified under the TIA and the TIA
so requires, an Independent Certificate from a firm of certified public
accountants or other experts meeting the applicable requirements of this Section
13.1, except that, in the case of any such application or request as to which
the furnishing of such documents is specifically required by any provision of
the Indenture, no additional certificate or opinion need be furnished.
 
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in the Indenture shall include:
 
(i)    a statement that each signatory of such certificate or opinion has read
or has caused to be read such covenant or condition and the definitions herein
relating thereto;
 
(ii)    a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
 
(iii)    a statement that, in the opinion of each such signatory, such signatory
has made such examination or investigation as is necessary to enable such
signatory to express an informed opinion as to whether such covenant or
condition has been complied with; and
 
 
56

--------------------------------------------------------------------------------

 
(iv)    a statement as to whether, in the opinion of each such signatory such
condition or covenant has been complied with.
 
(v)    If the Indenture is qualified under the TIA and the TIA so requires,
prior to the deposit of any property or securities with the Indenture Trustee
that is to be made the basis for the release of any property or securities
subject to the Lien of the Indenture, the Issuer shall, in addition to any
obligation imposed in Section 13.1(a) or elsewhere in the Indenture, furnish to
the Indenture Trustee an Officer’s Certificate certifying or stating the opinion
of each person signing such certificate as to the fair value (within 90 days of
such deposit) to the Issuer of the property or securities to be so deposited.
 
(vi)    Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer’s Certificate certifying or stating the opinion of any signer thereof as
to the matters described in clause (i), the Issuer shall also deliver to the
Indenture Trustee an Independent Certificate as to the same matters, if the fair
value to the Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) and this clause (ii), is 10% or
more of the Aggregate Invested Amount, but such a certificate need not be
furnished with respect to any securities so deposited, if the fair value thereof
to the Issuer as set forth in the related Officer’s Certificate is less than
$25,000 or less than one percent of the Aggregate Invested Amount.
 
(vii)    If the Indenture is qualified under the TIA and the TIA so requires,
whenever any property or securities are to be released from the Lien of the
Indenture, the Issuer shall also furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such release) of the
property or securities proposed to be released and stating that in the opinion
of such person the proposed release will not impair the security under the
Indenture in contravention of the provisions hereof.
 
(viii)    Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer’s Certificate certifying or stating the opinion of any signer thereof as
to the matters described in clause (iii), the Issuer shall also furnish to the
Indenture Trustee an Independent Certificate as to the same matters if the fair
value of the property or securities and of all other property, or securities
released from the Lien of the Indenture since the commencement of the then
current calendar year, as set forth in the certificates required by clause (iii)
and this clause (iv), equals 10% or more of the Aggregate Invested Amount, but
such certificate need not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the related Officer’s
Certificate is less than $25,000 or less than one percent of the then Aggregate
Invested Amount.
 
(ix)    Notwithstanding any provision of this Section 13.1, the Issuer may (A)
collect, liquidate, sell or otherwise dispose of the Issuer Assets as and to the
extent permitted or required by the Transaction Documents and (B) make cash
payments out of the Issuer Accounts as and to the extent permitted or required
by the Transaction Documents.
 
 
57

--------------------------------------------------------------------------------

 
Section 13.2.    Forms 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 my certify or give an
opinion as to such matters in one or several documents.
 
Any certificate or opinion of an Authorized Officer of the Issuer may be based,
insofar as it relates to legal matters, upon a certificate to legal matters,
upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon which
his or her certificate or opinion is based are erroneous. Any such certificate
of an Authorized Officer or Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or representations
by, an officer or officers of the Servicer, Holdings or the Issuer, stating that
the information with respect to such factual matters is in the possession of the
Servicer, Holdings or the Issuer, unless such counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
 
Where any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under the Indenture, they may, but need not, be consolidated and form one
instrument.
 
Whenever in the Indenture, in connection with any application, certificate or
report to the Indenture Trustee, it is provided that the Issuer shall deliver
any document (x) as a condition of the granting of such application, or (y) as
evidence of the Issuer’s compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in each case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee’s right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article 10.
 
Section 13.3.    Actions of Noteholders
 
(a)    Any request, demand, authoriza-tion, direc-tion, notice, consent, waiver
or other action pro-vided by the Indenture to be given or taken by the Investor
Note--holders may be embodied in and evidenced by one or more instru-ments of
substantially similar tenor signed by such Investor Noteholders in person or by
an agent duly ap-pointed in writing; and except as herein otherwise ex-pressly
provid-ed, such action shall become effective when such instru-ment or
instruments are delivered to the Indenture Trustee and, when required, to the
Issuer. Proof of execution of any such instrument or of a writing appointing any
such agent shall be sufficient for any purpose of the Indenture and conclusive
in favor of the Indenture Trustee and the Issuer, if made in the manner provided
in this Section 13.3.
 
 
58

--------------------------------------------------------------------------------

 
(b)    The fact and date of the execu-tion by any Investor Note-holder of any
such instrument or writ-ing may be proved in any reasonable manner which the
Indenture Trustee deems sufficient.
 
(c)    Any request, demand, authoriza-tion, direc-tion, notice, consent, waiver
or other act by an Investor Note--holder shall bind every Holder of every
Investor Note issued upon the registration of transfer there-of or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be done,
by the Indenture Trustee or the Issuer in reliance thereon, regardless of
whether notation of such action is made upon such Investor Note-.
 
(d)    The Indenture Trustee may require such addi-tional proof of any matter
referred to in this Sec-tion 13.3 as it shall deem necessary.
 
Section 13.4.    Notices
 
(a)    Any notice or communication by the Issuer or the Indenture Trustee to the
other shall be in writing and delivered in person or mailed by first-class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the other’s address:
 
If to the Issuer:
 
Chesapeake Funding LLC
[c/o Global Securitization Services, LLC
25 West 43rd Street, Suite 704
New York, NY 10036]
Attention: President
Telecopier No.:
 
with a copy to the Administrator:
 
PHH Vehicle Management Services, LLC
940 Ridgebrook Road
Sparks, MD 21152
Telecopier: (410) 771-[ ]
Attention: General Counsel
 
If to the Indenture Trustee:
 
JPMorgan Chase Bank, National Association,
4 New York Plaza, 6th Floor
New York, New York 10004
Attn: Worldwide Securities Services/Structured Finance Services - Chesapeake
Funding LLC
Phone: (212) 623-5600
Fax: (212) 623-5930
 
The Issuer or the Indenture Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications;
provided, however, the Issuer may not at any time designate more than a total of
three (3) addresses to which notices must be sent in order to be effective.
 
 
 
59

--------------------------------------------------------------------------------

 
Any notice (i) given in person shall be deemed delivered on the date of delivery
of such notice, (ii) given by first class mail shall be deemed given five (5)
days after the date that such notice is mailed, (iii) delivered by telex or
telecopier shall be deemed given on the date of delivery of such notice, and
(iv) delivered by overnight air courier shall be deemed delivered one Business
Day after the date that such notice is delivered to such overnight courier.
 
Notwithstanding any provisions of the Indenture to the contrary, the Indenture
Trustee shall have no liability based upon or arising from the failure to
receive any notice required by or relating to the Indenture or the Investor
Notes.
 
If the Issuer mails a notice or communication to Investor Noteholders, it shall
mail a copy to the Indenture Trustee at the same time.
 
Notices required to be given to the Rating Agencies by the Issuer or the
Indenture Trustee shall be in writing, personally delivered or mailed certified
mail, return receipt requested to (i) in the case of Moody’s, at the following
address: Moody’s Investors Service, 99 Church Street, 4th Floor, New York, New
York 10007, Attention ABS Monitoring Dept. and (ii) in the case of Standard &
Poor’s, at the following address: Standard & Poor’s Ratings Service, 55 Water
Street (41st Floor), New York, New York 10041-0003, Attention: Asset Backed
Surveillance Group.
 
(b)    Where the Indenture provides for notice to Investor Noteholders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if sent in writing and mailed, first-class postage prepaid,
to each Investor Noteholder affected by such event, at its address as it appears
in the Note Register, not later than the latest date, and not earlier than the
earliest date, prescribed (if any) for the giving of such notice. In any case
where notice to Investor Noteholder is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Investor Noteholder shall affect the sufficiency of such notice with respect to
other Investor Noteholders, and any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given. Where the
Indenture provides for notice in any manner, such notice may be waived in
writing by any Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Investor 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.
 
In the case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made that is satisfactory to the Indenture Trustee
shall constitute a sufficient notification for every purpose hereunder.
 
Section 13.5.    Conflict with TIA
 
If the Indenture is qualified under the TIA and any provision hereof limits,
qualifies or conflicts with another provision hereof that is required to be
included in the Indenture by any of the provisions of the TIA, such required
provision shall control.
 
 
60

--------------------------------------------------------------------------------

 
If the Indenture is qualified under the TIA, the provisions of TIA §§ 310
through 317 that impose duties on any person (including the provisions
automatically deemed included herein unless expressly excluded by the Indenture)
are a part of and govern the Indenture, whether or not physically contained
herein.
 
Section 13.6.    Rules by the Indenture Trustee
 
The Indenture Trustee may make reasonable rules for action by or at a meeting of
Investor Noteholders.
 
Section 13.7.    Duplicate Originals
 
The parties may sign any number of copies of this Base Indenture. One signed
copy is enough to prove this Base Indenture.
 
Section 13.8.    Benefits of Indenture
 
Except as set forth in an Indenture Supplement, nothing in the Indenture or in
the Investor Notes, expressed or implied, shall give to any Person, other than
the parties hereto and their successors hereunder and the Holders, any benefit
or any legal or equitable right, remedy or claim under the Indenture.
 
Section 13.9.    Payment on Business Day
 
In any case where any Payment Date, redemption date or maturity date of any
Investor Note shall not be a Business Day, then (notwithstanding any other
provision of the Indenture) payment of interest or principal (and premium, if
any), as the case may be, need not be made on such date but may be made on the
next succeeding Business Day with the same force and effect as if made on the
Payment Date, redemption date, or maturity date; provided, however. that no
interest shall accrue for the period from and after such Payment Date,
redemption date, or maturity date, as the case may be.
 
Section 13.10.    Governing Law
 
 
THIS BASE INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
Section 13.11.    Severability of Provisions
 
If any one or more of the covenants, agreements, provisions or terms of the
Indenture shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of the Indenture and shall in no way
affect the validity of enforceability of the other provisions of the Indenture
or of the Investor Notes or rights of the Investor Noteholders thereof.
 
 
61

--------------------------------------------------------------------------------

 
Section 13.12.    Counterparts
 
This Base Indenture may be executed in two or more counterparts (and by
different parties on separate counterparts), each of which shall be an original,
but all of which together shall constitute one and the same instrument.
 
Section 13.13.    Successors
 
All agreements of the Issuer in the Indenture and the Investor Notes shall bind
its successor; provided, however, the Issuer may not assign its obligations or
rights under the Indenture or any Transaction Document. All agreements of the
Indenture Trustee in the Indenture shall bind its successor.
 
Section 13.14.    Table of Contents, Headings, etc.

 
The Table of Contents, Cross-Reference Table, and headings of the Articles and
Sections of this Base Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
 
Section 13.15.    Recording of Indenture
 
If the Indenture is subject to recording in any appropriate public recording
offices, such recording is to be effected by the Issuer and at its expense
accompanied by an Opinion of Counsel (which may be counsel to the Indenture
Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to
the effect that such recording is necessary either for the protection of the
Investor Noteholders or any other person secured hereunder or for the
enforcement of any right or remedy granted to the Indenture Trustee under the
Indenture or to satisfy any provision of the TIA (if the Indenture is qualified
thereunder).
 
Section 13.16.    No Petition
 
The Indenture Trustee, by entering into the Indenture, and each Investor
Noteholder, by accepting an Investor Note, hereby covenant and agree that they
will not at any time (i) institute against the Issuer or join in any institution
against the Issuer of, any involuntary bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Investor Notes, this Base Indenture or any of the
other Transaction Documents or (ii) institute against, or join any other Person
in instituting against, the Origination Trust, Holdings, the Intermediary, any
other Special Purpose Entity, or any general partner or single member of any
Special Purpose Entity that is a partnership or limited liability company,
respectively, any involuntary bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding or other proceedings under any federal or
state bankruptcy or similar law.
 
Section 13.17.    SUBIs
 
The Indenture Trustee, by entering into the Indenture, and each Investor
Noteholder, by accepting an Investor Note, represents, warrants and covenants
that (a) each of the Lease SUBI and the Fleet Receivable SUBI is a separate
series of the Origination Trust as provided in Section 3806(b)(2) of Chapter 38
of Title 12 of the Delaware Code, 12 Del.C. § 3801
 
 
62

--------------------------------------------------------------------------------

 
et seq., (b)(i) the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to the Lease SUBI, the Lease
SUBI Portfolio or the Fleet Receivable SUBI shall be enforceable against the
Lease SUBI Portfolio or the Fleet Receivable SUBI only, as applicable, and not
against any other SUBI Portfolio (used in this Section as defined in the
Origination Trust Agreement) or the UTI Portfolio and (ii) the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to any other SUBI (used in this Section as defined in the
Origination Trust Agreement), any other SUBI Portfolio, the UTI or the UTI
Portfolio shall be enforceable against such other SUBI Portfolio or the UTI
Portfolio only, as applicable, and not against any other SUBI Assets, (c) except
to the extent required by law, UTI Assets or SUBI Assets with respect to any
SUBI (other than the Lease SUBI and the Fleet Receivable SUBI) shall not be
subject to the claims, debts, liabilities, expenses or obligations arising from
or with respect to the Lease SUBI or Fleet Receivable SUBI, respectively, in
respect of such claim, (d)(i) no creditor or holder of a claim relating to the
Lease SUBI, the Fleet Receivable SUBI or the Lease Receivable SUBI Portfolio
shall be entitled to maintain any action against or recover any assets allocated
to the UTI or the UTI Portfolio or any other SUBI or the assets allocated
thereto, and (ii) no creditor or holder of a claim relating to the UTI, the UTI
Portfolio or any SUBI other than the Lease SUBI or the Fleet Receivable SUBI or
any SUBI Assets other than the Lease SUBI Portfolio or the Fleet Receivables
shall be entitled to maintain any action against or recover any assets allocated
to the Lease SUBI or the Fleet Receivable SUBI, and (e) any purchaser, assignee
or pledgee of an interest in the Lease SUBI, the Lease SUBI Certificate, the
Fleet Receivable SUBI, the Lease SUBI Certificate, the Fleet Receivable SUBI
Certificate, any other SUBI, any other SUBI Certificate (used in this Section as
defined in the Origination Trust Agreement), the UTI or the UTI Certificate
must, prior to or contemporaneously with the grant of any such assignment,
pledge or security interest, (i) give to the Origination Trust a non-petition
covenant substantially similar to that set forth in Section 6.9 of the
Origination Trust Agreement, and (ii) execute an agreement for the benefit of
each holder, assignee or pledgee from time to time of the UTI or UTI Certificate
and any other SUBI or SUBI Certificate to release all claims to the assets of
the Origination Trust allocated to the UTI and each other SUBI Portfolio and in
the event that such release is not given effect, to fully subordinate all claims
it may be deemed to have against the assets of the Origination Trust allocated
to the UTI Portfolio and each other SUBI Portfolio.
 
Section 13.18.    Election of Overconcentration Option. 
 
Overconcentration Option [_] shall remain in effect until a different
Overconcentration Option shall become effective upon satisfaction of the
following terms and conditions:
 
(a) the Issuer shall have given prior written notice to the Indenture Trustee of
its selection of a different Overconcentration Option specifying in such notice
the proposed effective date of such selection which date shall be no less than
sixty (60) days after the date of such notice;
 
(b) the Issuer shall have given prior written notice to the Ratings Agencies
with respect to each Outstanding Series of Investor Notes of its selection of a
different Overconcentration Option specifying in such notice the proposed
effective date of such selection which date shall be no less than sixty (60)
days after the date of such notice;
 
 
63

--------------------------------------------------------------------------------

 
(c) the proposed effective date of such selection shall be at least twelve (12)
months from the date hereof, in the case of the first such selection, or, in any
other case, from the effective date of the Overconcentration Option then in
effect;
 
(d) on the proposed effective date of such selection, both before and after
giving effect to such selection, (i) no Asset Deficiency would exist and (ii)
the amount on deposit in the Series Reserve Account with respect to each
Outstanding Series of Investor Notes would be at least equal to the amount
required to be on deposit therein in accordance with the terms of the applicable
Indenture Supplement;
 
(e) no Amortization Event shall have occurred and is continuing with respect to
any Outstanding Series of Investor Notes;
 
(f) the Indenture Trustee shall have provided a copy of such notice to each
Investor Noteholder it has been instructed would be affected by the selection;
and
 
(g) the Indenture Trustee shall have been provided with an Opinion of Counsel
that each condition to the effectiveness of such Overconcentration Option set
forth in any Indenture Supplement relating to any Outstanding Series of Investor
Notes shall have been satisfied.
 

 

 

64

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Indenture Trustee and the Issuer have caused, this Base
Indenture to be duly executed by their respective duly authorized officers as of
the day and year first written above.
 
CHESAPEAKE FUNDING LLC,
as Issuer

By: /s/: Mark E. Johnson 
Name: Mark E. Johnson
Title: Vice President and Treasurer

 
65

--------------------------------------------------------------------------------

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Indenture Trustee

By: /s/: James P. Bowden 
Name: James P. Bowden
Title: Assistant Treasurer

 
66

--------------------------------------------------------------------------------

 

SCHEDULE 1
 
TO THE
 
BASE INDENTURE
 
DEFINITIONS LIST
 
“Accrual Period” means the period from and including a Settlement Date (or, in
the case of the initial Accrual Period, March 7, 2006) to but excluding the
succeeding Settlement Date.
 
“Additional Equipment Assets” means the Master Lease Agreements, the Leases
arising thereunder and the Leased Vehicles subject to such Leases and the
Related Rights associated therewith transferred to the Origination Trust
pursuant to the Additional Equipment Assets Contribution Agreement and allocated
to the Lease SUBI.
 
“Additional Equipment Assets Contribution Agreement” means that certain
Additional Equipment Assets Contribution Agreement dated as of October 28, 1999,
between SPV and the Origination Trust.
 
“Additional Equipment Assets Sale Agreement” means that certain Additional
Equipment Assets Sale Agreement dated as of October 28, 1999, between VMS and
SPV.
 
“Additional Units” means any Unit allocated to the Lease SUBI Portfolio after
June 30, 1999.
 
“Adjusted Aggregate Unit Balance” means, as of any date of determination, an
amount equal to the sum of (a) the excess of (i) the Aggregate Lease Balance
over (ii) the Aggregate Lease Adjustment Amount as of such date, (b) 90% of the
excess of (i) the Aggregate Residual Value Amount over (ii) the Excess Residual
Value Amount as of such date and (c) 90% of the excess of (i) the Aggregate
Paid-In Advance Balance over (ii) the Excess Paid-In Advance Amount as of such
date.
 
“Administration Agreement” means the Administration Agreement, dated as of the
Initial Closing Date, by and among the Administrator, the Issuer, Holdings, the
Origination Trust and the Indenture Trustee, as amended, modified or
supplemented from time to time in accordance with its terms.
 
“Administrator” means VMS or a successor Administrator under the Administration
Agreement.
 
“Administrator Fee” is defined in the Administration Agreement.
 
“Affiliate” means, with respect to any specified Person, another Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Person specified. For purposes
of this definition, “control” means the power to direct the management and
policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and “controlled” and “controlling”
have meanings correlative to the foregoing.
 
“Affiliate Issuer” means any special purpose entity that is an Affiliate of PHH
that has entered into financing arrangements secured by one or more Series of
Investor Notes.
 
 

--------------------------------------------------------------------------------

 
“Aggregate Invested Amount” means the sum of the Invested Amounts with respect
to all Series of Outstanding Investor Notes.
 
“Aggregate Invested Percentage” means, with respect to Collections for any
Monthly Period, the sum of the Invested Percentages for all Series of
Outstanding Notes for such Monthly Period.
 
“Aggregate Lease Adjustment Amount” means, as of any date of determination, an
amount equal to the sum of (a) the Overconcentration Amount as of such date, (b)
the Excess Longer-Term Lease Amount as of such date, (c) the Excess State
Obligor Risk Amount as of such date, (d) the Excess Consumer Lease Amount as of
such date and (e) the Excess High Lease Balance Amount as of such date.
 
“Aggregate Lease Balance” means, as of any date of determination during an
Accrual Period, an amount equal to the sum of the Lease Balances of each
Eligible Lease allocated to the Lease SUBI Portfolio as of the last day of the
Monthly Period immediately preceding the first day of such Accrual Period.
 
“Aggregate Net Lease Losses” means, for any Monthly Period, an amount equal to
the excess of the aggregate Lease Balances of all Unit Leases that became
Charged-Off Leases during such Monthly Period over the aggregate amount of
Recoveries received during such Monthly Period.
 
“Aggregate Paid-In Advance Balance” means, as of any date of determination
during an Accrual Period, an amount equal to the Cost of each Eligible Paid-In
Advance Vehicle allocated to the Lease SUBI Portfolio as of the last day of the
Monthly Period immediately preceding the first day of such Accrual Period (or,
if any such Eligible Paid-In Advance Vehicle was allocated to the Lease SUBI
Portfolio after the last day of such Monthly Period, the Cost thereof as of the
date such Eligible Paid-In Advance Vehicle was allocated to the Lease SUBI
Portfolio).
 
“Aggregate Residual Value Amount” means, as of any date of determination during
an Accrual Period, an amount equal to the aggregate for each Unit Vehicle
subject to a Closed-End Lease allocated to the Lease SUBI Portfolio as of the
last day of the Monthly Period immediately preceding the first day of such
Accrual Period of the lesser of (a) the Stated Residual Value of such Unit
Vehicle and (b) the Net Book Value of such Unit Vehicle as of such day.
 
“Aggregate Unit Balance” means, as of any date of determination, an amount equal
to the sum of (a) the Aggregate Lease Balance, (b) the Aggregate Paid-In Advance
Balance and (c) the Aggregate Residual Value Amount as of such date.
 
“ALG Residual Value” means, with respect to a Leased Vehicle subject to a
Closed-End Lease, an amount equal to the residual percentage of the
manufacturer’s suggested retail price of such Leased Vehicle specified in the
ALG Residual Percentage Guide published by Automotive Lease Guide for the make
and model of such Leased Vehicle and the lease term of such Closed-End Lease.
 
“Amortization Commencement Date” means, with respect to a Series of Investor
Notes, the date on which an Amortization Event with respect to such Series is
deemed to have occurred pursuant to the related Indenture Supplement.
 
 

--------------------------------------------------------------------------------

 
“Amortization Event” with respect to each Series of Investor Notes, is defined
in the related Indenture Supplement.
 
“Amortization Period” means, with respect to any Series of Investor Notes or any
Class within a Series of Investor Notes, the period following the Revolving
Period during which principal is distributed to Investor Noteholders, which
shall be the controlled amortization period, the principal amortization period,
the rapid amortization period, or other amortization period, in each case as
defined with respect to such Series in the related Indenture Supplement.
 
“Annual Noteholders’ Tax Statement” is defined in Section 4.4(c) of the Base
Indenture.
 
“Annual Servicing Report” is defined in Section 4.1(a) of the Base Indenture.
 
“Applicable Gain on Sale Account Percentage” means, on any date of
determination, the highest Series Gain on Sale Account Percentage with respect
to any Series of Investor Notes Outstanding.
 
“Applicable Law” means all applicable laws, statutes, treaties, rules, codes,
ordinances, regulations, certificates, orders, interpretations, licenses and
permits of any Governmental Authority from time to time in effect, and
judgments, decrees, injunctions, writs, orders or like action of any court,
arbitrator or other administrative, judicial or quasi-judicial tribunal or
agency of competent jurisdiction (including laws specifically mandating
compliance by property owners).
 
“Applicants” is defined in Section 2.8 of the Base Indenture.
 
“Asset Deficiency” means, as of any date of determination, the amount, if any,
by which the Required Aggregate Asset Amount as of such date exceeds the
Adjusted Aggregate Unit Balance as of such date.
 
“Asset Purchase Agreement” means the Asset Sale Agreement, dated as of June 30,
1999, among VMS, PHH Consumer Lease and SPV, as amended, modified or
supplemented from time to time in accordance with its terms.
 
“Assignment and Assumption Agreement” means the Assignment and Assumption
Agreement, dated as of the Initial Closing Date, between SPV, Holdings, and
acknowledged and consented to by PHH, the Delaware Trustee, VMS, the Origination
Trust, Holdings and the Indenture Trustee.
 
“Authorized Officer” means (a) as to the Administrator, the Servicer or PHH, any
of the President, any Executive Vice President, any Senior Vice President, any
Vice President or the Assistant Treasurer of the Administrator, the Servicer or
PHH, as the case may be, (b) as to the Issuer, any officer (or agent acting
pursuant to a power of attorney) of the Issuer or any Manager acting on behalf
of the Issuer and who is identified on the list of Authorized Officers delivered
by the Manager to the Indenture Trustee on the Initial Closing Date (as such
list may be modified or supplemented from time to time thereafter), (c) as to
Holdings, any officer (or agent acting pursuant to a power of attorney) of
Holdings or any manager of Holdings acting on behalf of Holdings and who is
identified on the list of Authorized Officers delivered by Holdings to the
Indenture Trustee on the Initial Closing Date (as such list may be modified or
supplemented from time to time thereafter), (d) as to the Origination Trust,
Wilmington Trust Company, in its capacity as Delaware Trustee of the Origination
Trust and (e) as to SPV, any officer of SPV or any manager of SPV acting on
behalf of SPV and who is identified on the list of Authorized Officers delivered
by SPV to the Indenture Trustee on the Initial Closing Date (as such list may be
modified or supplemented from time to time thereafter).
 
 

--------------------------------------------------------------------------------

 
“Bankruptcy Code” means The Bankruptcy Reform Act of 1978, as amended from time
to time, and as codified as 11 U.S.C. Section 101 et seq.
 
“Base Indenture” means the Base Indenture, dated as of the Initial Closing Date,
between the Issuer and the Indenture Trustee, as amended, modified or
supplemented from time to time, exclusive of Indenture Supplements creating new
Series of Investor Notes.
 
“Bearer Notes” is defined in Section 2.1 of the Base Indenture.
 
“Bearer Rules” means the provisions of the Internal Revenue Code, in effect from
time to time, governing the treatment of bearer obligations, including sections
163(f), 871, 881, 1441, 1442 and 4701, and any regulations thereunder including,
to the extent applicable to any Series of Notes, Proposed or Temporary
Regulations.
 
“Beneficial Owner” means, with respect to a Book-Entry Note, the Person who is
the beneficial owner of such Book-Entry Note, as may be reflected on the books
of the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).
 
“Book-Entry Notes” means beneficial interests in the Investor Notes, ownership
and transfers of which shall be evidenced or made through book entries by a
Clearing Agency as described in Section 2.10 of the Base Indenture; provided
that after the occurrence of a condition whereupon book-entry registration and
transfer are no longer permitted and Definitive Notes are issued to the
Beneficial Owners, such Definitive Notes shall replace Book-Entry Notes.
 
“Borrower” means Holdings in its capacity as borrower under the Loan Agreement.
 
“Borrowing Date” is defined in Section 1.2 of the Loan Agreement.
 
“Business Day” means any day other than a Saturday, Sunday or other day on which
banks are authorized or required by law to be closed in New York, Maryland or
Delaware.
 
“Capitalized Cost” means, with respect to any Leased Vehicle, the amount
identified by the Servicer as the “Capitalized Cost” of such Leased Vehicle,
including, to the extent provided therein, delivery charges, taxes and any
registration or titling fees.
 
“Certificate of Title” means, with respect to any Leased Vehicle, the
certificate of title or other evidence of ownership of such Leased Vehicle duly
issued by the government department or agency in the jurisdiction in which such
Leased Vehicle is registered in accordance with the certificate of title act or
statute of the jurisdiction applicable to such Leased Vehicle or, to the extent
that a certificate of title or other evidence of ownership has not been issued,
the application (or copy thereof) for the foregoing.
 
“Charged-Off Lease” means a Lease or Consumer Lease that was or should have been
charged off by the Servicer as uncollectible in accordance with the Policies or
as to which a scheduled lease payment thereon is 270 or more days past due.
 
 

--------------------------------------------------------------------------------

 
“Charged-Off Receivable” means a Fleet Receivable that was or should have been
charged off by the Servicer as uncollectible in accordance with the Policies or
which is 270 or more days past due..
 
“Charge-Off Ratio” means, for any specified Settlement Date, twelve times the
quotient, expressed as a percentage, of (a) Aggregate Net Lease Losses for the
preceding Monthly Period, divided by (b) the Aggregate Lease Balance as of the
last day of the second preceding Monthly Period.
 
“Class” means, with respect to any Series of Notes, any one of the classes of
Notes of that Series as specified in the related Indenture Supplement.
 
“Class X 1999-1B Invested Amount” is defined in the Fleet Receivable SUBI
Supplement.
 
“Clearing Agency” means an organization registered as a “clearing agency”
pursuant to Section 17A of the Exchange Act.
 
“Clearing Agency Participant” means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency or a
Foreign Clearing Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency or the Foreign Clearing Agency.
 
“Clearstream” means Clearstream Banking, société anonyme.
 
“Closed-End Lease” means a lease obligation in respect of a single vehicle which
may arise pursuant to a master lease agreement providing for the lease of a
fleet of vehicles or pursuant to a lease agreement providing for the lease of a
single vehicle that, in each case, allows the lessee thereunder to return the
vehicle subject thereto to the lessor at or prior to lease termination and
obligates the lessee thereunder to pay to the lessor at lease termination only
Incidental Lease Termination Charges.
 
“Closing Date” means the Initial Closing Date or any Series Closing Date.
 
“Code” means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any successor statute of similar
import, in each case as in effect from time to time. References to sections of
the Code also refer to any successor sections.
 
“Collateral” is defined in Section 3.1 of the Base Indenture.
 
“Collection Account” means securities account no. _____ entitled “Chesapeake
Funding Collection Account” maintained by the Collection Account Securities
Intermediary pursuant to the Collection Account Control Agreement or any
successor securities account maintained pursuant to the Collection Account
Control Agreement.
 
“Collection Account Control Agreement” means the agreement among the Issuer,
JPMorgan Chase, as securities intermediary, and the Indenture Trustee, dated as
of the Initial Closing Date, relating to the Collection Account, as the same may
be amended and supplemented from time to time.
 
 

--------------------------------------------------------------------------------

 
“Collection Account Securities Intermediary” means JPMorgan Chase or any other
securities intermediary that maintains the Collection Account pursuant to the
Collection Account Control Agreement.
 
“Collections” means (a) all payments by or on behalf of Holdings under the Loan
Agreement or the Loan Note, (b) all other payments on the Collateral, including,
without limitation, (i) all monthly lease payments and other lease payments on
the Unit Leases, (ii) all proceeds from the sale or other disposition of Unit
Vehicles, including Recoveries, (iii) all insurance proceeds and warranty
payments with respect to Unit Vehicles, (iv) all termination payments and
Incidental Lease Termination Payments received in respect of the Unit Leases,
(v) all other payments in respect of the Unit Leases, (vi) all payments in
respect of the Fleet Receivables and payments by VMS under the Receivables
Purchase Agreement, (vii) all payments by VMS or PHH Consumer Lease under the
Asset Purchase Agreement, (viii) all payments by the Origination Trust under the
Origination Trust Guaranty, (ix) all payments by the Intermediary to the
Indenture Trustee or the Issuer of funds transferred from a Joint Collection
Account pursuant to the Master Exchange Agreement in accordance with the terms
thereof, (x) all payments made by the Intermediary to the Indenture Trustee or
the Issuer of funds transferred from a Joint Disbursement Account or the
Reservoir Account pursuant to the terms of the Master Trust Agreement in
accordance with the terms thereof and (xi) all payments in respect of any
Hedging Instruments in the Collateral, whether such payments are in the form of
cash, checks, wire transfers or other forms of payment and (c) all amounts
earned on Permitted Investments of funds in the Collection Account and, to the
extent so specified in an Indenture Supplement, in a Series Account.
 
“Common Member” means PHH Sub 2, as the holder of the Common Membership
Interest.
 
“Common Membership Interest” means the Common Membership Interest issued
pursuant to the LLC Agreement.
 
“Consumer Lease” means an Open-End Lease or a Closed-End Lease originated by PHH
Consumer Lease, individually or on behalf of the Origination Trust, that is in
all material respects in a form attached to the Series 1999-1 SUBI Servicing
Supplement.
 
“Contingent Obligation” as applied to any Person, means any direct or indirect
liability, contingent or otherwise, of that Person (a) with respect to any
indebtedness, lease, dividend, letter of credit or other obligation of another
if the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof or (b) under any letter of credit issued for the account of that Person
or for which that Person is otherwise liable for reimbursement thereof.
Contingent Obligation shall include (a) the direct or indirect guarantee,
endorsement (otherwise than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another and (b) any liability of such Person for the
obligations of another through any agreement (contingent or otherwise) (i) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), (ii) to maintain the solvency of any balance sheet item, level of
income or financial condition of another or (iii) to make take-or-pay or similar
payments if required regardless of non-performance by any other party or parties
to an agreement, if in the case of any agreement described under subclause (i)
or (ii) of this sentence the primary purpose or intent thereof is as described
in the preceding sentence. The amount of any Contingent Obligation shall be
equal to the amount of the obligation so guaranteed or otherwise supported.
 
 

--------------------------------------------------------------------------------

 
“Contractual Obligation” means, with respect to any Person, any provision of any
security issued by that Person or of any indenture, mortgage, deed of trust,
contract, undertaking, agreement or other instrument to which that Person is a
party or by which it or any of its properties is bound or to which it or any of
its properties is subject.
 
“Contribution Agreement” means the Contribution Agreement, dated as of the
Initial Closing Date, between Holdings and the Origination Trust, as amended,
modified or supplemented from time to time in accordance with its terms.
 
“Controlled Group” means, with respect to any Person, such Person, whether or
not incorporated, and any corporation, trade or business that is, along with
such Person, a member of a controlled group of corporations or a controlled
group of trades or businesses, as described in Sections 414(b) and (c),
respectively of the Code.
 
“Corporate Trust Office” means the principal office of the Indenture Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of the execution of the Base Indenture is located at
(i) soley for purposes of the transfer, exchange or surrender of Investor Notes,
2001 Bryan Street, 10th Floor, Dallas, Texas 75201, Attention: Worldwide
Securities Services/Structured Finance Services - Chesapeake Funding LLC and
(ii) for all other purposes, 4 New York Plaza 6th Floor, New York, New York
10004, Att: Worldwide Securities Services/Structured Finance Services -
Chesapeake Funding LLC.
 
“Cost” means, with respect to any Paid-In Advance Vehicle, the price paid for
such Vehicle to the dealer, the manufacturer or a vendor, plus delivery charges
and taxes and any registration or titling fees.
 
“Coupon” is defined in Section 2.1 of the Base Indenture.
 
“CP Rate” means the rate on commercial paper for each day set forth in
Statistical Release H.15(519), “Selected Interest Rates” published by the Board
Of Governors of the Federal Reserve System.
 
“Credit Enhancement” means, with respect to any Series of Investor Notes, the
subordination, cash collateral account, collateral interest, letter of credit,
surety bond, insurance policy, spread account, reserve account, cross-support
feature, interest rate swap, currency swap or any other contract or agreement
for the benefit of the holder of the Investor Notes of such Series as designated
in the related Indenture Supplement.
 
“Custodian Agreement” means the Custodian Agreement, dated as of June 30, 1999,
by and among the Custodian, the Servicer and the Origination Trust, as amended,
modified or supplemented from time to time in accordance with its terms, and any
other Custodian Agreement entered into in accordance with the terms and
conditions of the Origination Trust Servicing Agreement.
 
“Custodian” means the party named as such in the Custodian Agreement until a
successor replaces it in accordance with the applicable provisions of the
Custodian Agreement and thereafter means the successor serving thereunder.
 
 

--------------------------------------------------------------------------------

 
“Default” means any occurrence that is, or with notice or the lapse of time or
both would become, an Event of Default.
 
“Definitions List” means this Definitions List, as amended or modified from time
to time.
 
“Definitive Notes” is defined in Section 2.10 of the Base Indenture.
 
“Delaware Trustee” means Wilmington Trust Company, in its capacity as Delaware
Trustee of the Origination Trust.
 
“Delinquency Ratio” means, for any specified Settlement Date, the quotient,
expressed as a percentage, of (a) the aggregate billings with respect to all
Leases and all Fleet Receivables which were unpaid for 60 days or more from the
original due date thereof as of the last day of the immediately preceding
Monthly Period divided by (b) the sum of (i) the aggregate billings with respect
to all Leases and all Fleet Receivables which were unpaid as of the last day of
the second preceding Monthly Period and (ii) the aggregate amount billed with
respect to all Leases and all Fleet Receivables during the immediately preceding
Monthly Period.
 
“Depository” is defined in Section 2.10 of the Base Indenture.
 
“Depository Agreement” means, with respect to a Series having Book-Entry Notes,
the agreement among the Issuer, the Indenture Trustee and the Clearing Agency or
the Foreign Clearing Agency, or as otherwise provided in the related Indenture
Supplement.
 
“Deposit Date” means each Business Day on which Collections are deposited into
the Collection Account.
 
“Deposit Report” is defined in Section 4.1 of the Base Indenture.
 
“Determination Date” means the second Business Day prior to each Settlement
Date.
 
“Dividend Rate” means, with respect to each series of Preferred Membership
Interests, the rate at which distributions of interest with respect to such
Preferred Membership Interests are made.
 
“DLPT Loan Collateral” is defined in Section 7.1(c) of the Loan Agreement.
 
“Dollar” and the symbol “$” mean the lawful currency of the United States.
 
“Eligible Consumer Lease” means a Consumer Lease that as of the date allocated
to the Lease SUBI Portfolio satisfied the following eligibility criteria:
 
(i) it was not a Charged-Off Lease;
 
(ii) it was not an Ineligible Delinquent Lease;
 
(iii) it was an obligation of an Eligible Obligor;
 
(iv) it had an initial term of 60 months or less;
 
(v) it was denominated and payable only in Dollars in the United States;
 
 
 

--------------------------------------------------------------------------------

(vi) it was originated and has been administered since origination in accordance
with Applicable Law;
 
(vii) it was originated in accordance with the Policies;
 
(viii) it did not contravene in any material respect any Applicable Law and VMS
or PHH Consumer Lease is not in violation in any material respect of any
Applicable Law in connection with it;
 
(ix) it was not subject to any dispute in whole or in part or to any offset,
counterclaim, defense, rescission, recoupment or subordination;
 
(x) it was the legal, valid and binding obligation of the Obligor thereunder,
enforceable against such Obligor to pay the full amount thereof in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or law);
 
(xi) the Origination Trust has only one “original” counterpart of such Consumer
Lease and such original is held by the Custodian;
 
(xii) it is either an Open-End Lease or a Closed-End Lease;
 
(xiii) it is a “hell or high water” net lease under which the Obligor’s payment
obligations thereunder are absolute, unconditional and noncancellable and not
subject to abatement or adjustment;
 
(xiv) the Obligor thereunder is required to maintain casualty insurance with
respect to the related Leased Vehicle in accordance with the Policies;
 
(xv) it was originated by the Origination Trust;
 
(xvi) the Obligor of which has accepted the related Leased Vehicle;
 
(xvii) it provides for equal monthly depreciation payments and accrues a finance
or other lease charge on the Net Book Value of the related Leased Vehicle at a
floating rate at least equal to the CP Rate from time to time or at a fixed
rate;
 
(xviii) if a Closed-End Lease, the Stated Residual Value of the related Leased
Vehicle was no greater than the ALG Residual Value thereof at origination;
 
(xix) if a Fixed Rate Lease, on or before the date on which such Fixed Rate
Lease was allocated to the Lease SUBI Portfolio, the Issuer held any Lease Rate
Cap with respect to such Fixed Rate Lease required to be held by the Issuer by
the terms of any Indenture Supplement;
 
(xx) if a Floating Rate Lease, the Obligor thereunder has no right to convert
the floating rate at which the finance charges accrue thereunder to a fixed
rate;
 
(xxi) the Leased Vehicle leased thereunder (x) is free and clear of all Liens
(other than Permitted Liens) and (y) the Certificate of Title for such Leased
Vehicle is registered in the name of the Origination Trust; and
 
 
 

--------------------------------------------------------------------------------

(xxii) the Certificate of Title for the Leased Vehicle leased thereunder
indicates only a Lien in the name of (1) SPV or the Issuer, in the case of a
Consumer Lease originated by the Origination Trust prior to June 30, 2006 or (2)
the Issuer, in the case of all other Consumer Leases (or, such a Certificate of
Title has been applied for).
 
“Eligible Deposit Account” means (a) a segregated identifiable trust account
established in the trust department of a Qualified Trust Institution or (b) a
separately identifiable deposit account established in the deposit taking
department of a Qualified Institution.
 
“Eligible Lease” means either (a) a Lease that as of the date allocated to the
Lease SUBI Portfolio was an Eligible Consumer Lease or (b) a Lease that as of
the date allocated to the Lease SUBI Portfolio was under an Eligible Master
Lease and satisfied the following eligibility criteria:
 
(a) it had an initial term of 144 months or less and a remaining term of 120
months or less;
 
(b) the Obligor of which has accepted the related Leased Vehicle;
 
(c) except for any Lease that is an Additional Equipment Asset, if an Open-End
Lease, it provides for equal monthly depreciation payments and, if a Closed-End
Lease, it provides for monthly depreciation payments that over the term of the
Lease reduce the Capitalized Cost of the related Leased Vehicle to the Stated
Residual Value thereof;
 
(d) if an Open-End Lease that is an Additional Equipment Asset, it provides for
at least quarterly depreciation payments and, if a Closed-End Lease that is an
Additional Equipment Asset, it provides for at least quarterly depreciation
payments that over the term of the Lease reduce the Capitalized Cost of the
related Leased Vehicle to the Stated Residual Value thereof;
 
(e) it accrues a finance or other lease charge on the Net Book Value of the
related Leased Vehicle at a floating rate at least equal to the CP Rate from
time to time or at a fixed rate;
 
(f) if a Closed-End Lease, the Stated Residual Value of the related Leased
Vehicle was no greater than the ALG Residual Value thereof at origination or, in
the case of any Leased Vehicle the residual value of which is not specified in
the ALG Residual Percentage Guide published by the Automotive Lease Guide, the
estimated residual value of the related Leased Vehicle contained in a comparable
industry source of equipment residual values or if such a source is not
available, contained in a source VMS believes is reasonable;
 
(g) on or before the date on which such Lease was allocated to the Lease SUBI
Portfolio, the Issuer held any Lease Rate Cap with respect to such Lease
required to be held by the terms of the Base Indenture or any Indenture
Supplement;
 
(h) if a Floating Rate Lease and the Obligor thereunder has the right to convert
the floating rate at which the finance charges accrue thereunder to a fixed
rate, upon conversion the fixed rate will be at least equal to the sum of the
PHH Treasury Note Rate on the conversion date and 0.50%;
 
 

--------------------------------------------------------------------------------

 
(i) the Leased Vehicle leased thereunder (x) is free and clear of all Liens
(other than Permitted Liens) and (y) if such Leased Vehicle is subject to a
certificate of title act or statute, the Certificate of Title for such Leased
Vehicle is registered in the name of the Origination Trust; and
 
(j) (x) if the Leased Vehicle leased thereunder is subject to a certificate of
title act or statute, the Certificate of Title for such Leased Vehicle indicates
only a Lien in the name of (1) VMS, in the case of a Lease originated by VMS and
assigned to the Origination Trust, (2) SPV or the Issuer, in the case of a Lease
originated by the Origination Trust prior to June 30, 2006 or (3) the Issuer, in
the case of all other Leases (or, such a Certificate of Title has been applied
for) or (y) if such Leased Vehicle is not subject to a certificate of title act
or statute, all filings necessary to evidence the security interest of (1) VMS,
in the case of a Lease originated by VMS and assigned to the Origination Trust,
(2) SPV or the Issuer, in the case of a Lease originated prior to June 30, 2006
or (3) the Issuer, in the case of all other Leases, in such Leased Vehicle have
been made in all appropriate jurisdictions.
 
“Eligible Master Lease” will mean each Master Lease Agreement that as of the
date a Lease thereunder or Paid-In Advance Vehicle relating thereto is allocated
to the Lease SUBI satisfied the following eligibility criteria:
 
(a) it was not a Charged-Off Lease;
 
(b) it was not an Ineligible Delinquent Lease;
 
(c) it was an obligation of an Eligible Obligor;
 
(d) it was denominated and payable only in Dollars in the United States;
 
(e) it was originated and has been administered since origination in accordance
with Applicable Law;
 
(f) it was originated in accordance with the Policies;
 
(g) it did not contravene in any material respect any Applicable Law and VMS is
not in violation in any material respect of any Applicable Law in connection
with it;
 
(h) it was not subject to any dispute in whole or in part or to any offset,
counterclaim, defense, rescission, recoupment or subordination;
 
(i) it was the legal, valid and binding obligation of the Obligor thereunder,
enforceable against such Obligor to pay the full amount thereof in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or law);
 
(j) the Origination Trust has only one “original” counterpart of such Master
Lease Agreement and such original is held by the Custodian;
 
(k) it is either an Open-End Lease or a Closed-End Lease;
 
 

--------------------------------------------------------------------------------

 
(l) it is a “hell or high water” net lease under which the Obligor’s payment
obligations thereunder are absolute, unconditional and noncancellable and not
subject to abatement or adjustment;
 
(m) the Obligor thereunder is required to maintain casualty insurance or to
self-insure with respect to the related Leased Vehicles in accordance with the
Policies;
 
(n) if not originated by the Origination Trust, all right, title and interest in
it has been (i) validly sold to the Origination Trust by VMS pursuant to that
certain Assignment and Assumption Agreement dated December 17, 1998, (ii)
validly assigned to the Origination Trust by SPV pursuant to the Old
Contribution Agreement or (iii), in the case of any Master Lease Agreement that
is an Additional Equipment Asset, validly assigned to the Origination Trust by
SPV pursuant to the Additional Equipment Assets Contribution Agreement and, if
assigned by SPV to the Origination Trust, was validly sold by VMS to SPV
pursuant to the Asset Purchase Agreement or, in the case of any Master Lease
Agreement that is an Additional Equipment Asset, validly sold by VMS to SPV
pursuant to the Additional Equipment Assets Sale Agreement; and
 
(o) any consents, approvals or authorizations necessary for the assignment and
sale thereof by VMS to the Origination Trust have been obtained.
 
“Eligible Obligor” means each Obligor in respect of a Master Lease Agreement, a
Consumer Lease or a Fleet Receivable that satisfies the following eligibility
criteria:
 
(a) its billing address is located in the United States;
 
(b) it is not the United States federal government, or any subdivision thereof,
or any agency, department or instrumentality thereof;
 
(c) it is not an Affiliate of PHH; and
 
(d) it is not the subject of any voluntary or involuntary bankruptcy proceeding,
unless, in the case of a Master Lease Agreement, a bankruptcy court shall have
entered an order reaffirming such Obligor’s obligations under such Master Lease
Agreement.
 
 

--------------------------------------------------------------------------------

 
“Eligible Paid-In Advance Vehicle” means a Unit Paid-In Advance Vehicle acquired
at the request of an Obligor who as of the date such Paid-In Advance Vehicle is
allocated to the Lease SUBI Portfolio is party to an Eligible Master Lease or
has agreed to be bound by a Master Lease Agreement.
 
“Eligible Receivable” means, as of any date of determination, each Fleet
Receivable that satisfies the following eligibility criteria:
 
(a) it is an obligation of an Eligible Obligor;
 
(b) it is not a Charged-Off Receivable;
 
(c) it is denominated and payable only in Dollars in the United States;
 
(d) it and the related Fleet Service Contract do not contravene in any material
respect any Applicable Law and VMS is not in violation in any material respect
of any Applicable Law in connection with it or the related Fleet Service
Contract;
 
(e) the related Fleet Service Contract was originated in accordance with the
Policies;
 
(f) it has been billed, the goods or services giving rise to it have been
provided and it is payable within 45 days of the billing date;
 
(g) it is an “eligible asset” within the meaning of Rule 3a-7 promulgated under
the Investment Company Act;
 
(h) if contributed to the Origination Trust prior to the Initial Closing Date,
(i) it is not subject to the laws of any jurisdiction whose laws would prohibit
the assignment and sale thereof by VMS to SPV pursuant to the Old Receivables
Purchase Agreement and the contribution thereof by SPV to the Origination Trust
pursuant to the Old Contribution Agreement, (ii) any consents, approvals or
authorizations necessary for the assignment and sale thereof by VMS to SPV
pursuant to the Old Receivables Purchase Agreement and the contribution thereof
by SPV to the Origination Trust pursuant to the Old Contribution Agreement have
been obtained with respect to such Fleet Receivable, and (iii) all right, title
and interest in it has been validly sold by VMS to SPV pursuant to the Old
Receivables Purchase Agreement and validly assigned by SPV to the Origination
Trust pursuant to the Old Contribution Agreement;
 
(i) if contributed to the Origination Trust on or after the Initial Closing
Date, (i) it is not subject to the laws of any jurisdiction whose laws would
prohibit the assignment and sale thereof by VMS to Holdings pursuant to the
Receivables Purchase Agreement and the contribution thereof by Holdings to the
Origination Trust pursuant to the Contribution Agreement, (ii) any consents,
approvals or authorizations necessary for the assignment and sale thereof by VMS
to Holdings pursuant to the Receivables Purchase Agreement and the contribution
thereof by Holdings to the Origination Trust pursuant to the Contribution
Agreement have been obtained with respect to such Fleet Receivable, and (iii)
all right, title and interest in it has been validly sold by VMS to Holdings
pursuant to the Receivables Purchase Agreement and validly assigned by Holdings
to the Origination Trust pursuant to the Contribution Agreement;
 
(j) the Origination Trust has legal and beneficial ownership therein free and
clear of all Liens other than Permitted Liens;
 
(k) it is not subject to any dispute in whole or in part or to any offset,
counterclaim, defense, rescission, recoupment or subordination;
 
(l) it is at all times the legal, valid and binding obligation of the Obligor
thereon, enforceable against such Obligor to pay the full amount thereof in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or law); and
 
(m) it constitutes an “account” or a “general intangible” under the applicable
UCC.
 
“Enhancement Provider” means, with respect to any Series, the Person, if any,
designated as such in the related Indenture Supplement.
 
 

--------------------------------------------------------------------------------

 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute of similar import, in each case as in effect from time
to time. References to sections of ERISA also refer to any successor sections.
 
“Euroclear” means Euroclear System.
 
“Event of Default” is defined in Section 9.1 of the Base Indenture.
 
“Excess Consumer Lease Amount” means, as of any date of determination during an
Accrual Period, an amount equal to the excess, if any, of (a) the aggregate
Lease Balance of all Eligible Leases that are Consumer Leases allocated to the
Lease SUBI Portfolio as of the last day of the Monthly Period immediately
preceding the first day of such Accrual Period over (b) an amount equal to 1.0%
of the Aggregate Lease Balance as of such date.
 
“Excess Damage Charges” means the charges under a Lease due to damage to the
related Leased Vehicle over a prescribed limit.
 
“Excess Fleet Receivable Amount” means, with respect to any Settlement Date, an
amount equal to the excess, if any, of (a) the aggregate amount of Collections
in respect of the Fleet Receivables received by Holdings and deposited into the
Collection Account during the immediately preceding Monthly Period over (b) the
Class X 1999-1B Invested Amount as of the immediately preceding Settlement Date.
 
“Excess High Lease Balance Amount” means, as of any date of determination during
an Accrual Period, an amount equal to the excess, if any, of (a) the aggregate
Lease Balance of all Eligible Leases having a Lease Balance in excess of
$1,000,000 allocated to the Lease SUBI Portfolio as of the last day of the
Monthly Period immediately preceding the first day of such Accrual Period over
(b) an amount equal to 0.50% of the Aggregate Lease Balance as of such date.
 
“Excess Longer-Term Lease Amount” means, as of any date of determination during
an Accrual Period, an amount equal to the greater of (a) the excess, if any, of
(i) the aggregate Lease Balance of all Eligible Leases having remaining terms of
longer than five years allocated to the Lease SUBI Portfolio as of the last day
of the Monthly Period immediately preceding the first day of such Accrual Period
over (ii) an amount equal to 20% of the Aggregate Lease Balance as of such date
and (b) the excess, if any, of (i) the aggregate Lease Balance of all Eligible
Leases having remaining terms of longer than seven years allocated to the Lease
SUBI Portfolio as of the last day of the Monthly Period immediately preceding
the first day of such Accrual Period over (ii) an amount equal to 7.5% of the
Aggregate Lease Balance as of such date.
 
“Excess Mileage Charges” means the charges under a Lease due to mileage on the
related Leased Vehicle over a prescribed limit.
 
“Excess Paid-In Advance Amount” means, as of any date of determination during an
Accrual Period, an amount equal to the greatest of (a) the excess, if any, of
(i) the aggregate Cost of each Eligible Paid-In Advance Vehicle allocated to the
Lease SUBI Portfolio as of the last day of the Monthly Period immediately
preceding the first day of such Accrual Period (or, if any such Eligible Paid-In
Advance Vehicle was allocated to the Lease SUBI after the last day of such
Monthly Period, the Cost thereof as of the date such Eligible Paid-In Advance
Vehicle was allocated to the Lease SUBI Portfolio) over (ii) an amount equal to
10% of the Aggregate Unit Balance as of such date, (b) the excess, if any, of
(i) the aggregate Cost of each Eligible Paid-In Advance Vehicle allocated to the
Lease SUBI Portfolio for more than 60 days as of the last day of the Monthly
Period immediately preceding the first day of such Accrual Period over (ii) an
amount equal to 2.5% of the Aggregate Unit Balance as of such date and (c) the
aggregate Cost of each Eligible Paid-In Advance Vehicle allocated to the Lease
SUBI Portfolio for more than 120 days as of the last day of the Monthly Period
immediately preceding the first day of such Accrual Period.
 
 

--------------------------------------------------------------------------------

 
“Excess Residual Value Amount” means, as of any date of determination during an
Accrual Period, an amount equal to the excess, if any, of (i) the Aggregate
Residual Value Amount as of such date over (ii) an amount equal to 7.5% of the
Aggregate Unit Balance as of such date.
 
“Excess State Obligor Risk Amount” means, as of any date of determination during
an Accrual Period, an amount equal to the excess, if any, of (a) the aggregate
Lease Balance of all Eligible Leases the Obligor of which is a state or local
government or any subdivision thereof, or any agency, department or
instrumentality thereof allocated to the Lease SUBI Portfolio as of the last day
of the Monthly Period immediately preceding the first day of such Accrual Period
over (b) an amount equal to 3.0% of the Aggregate Lease Balance as of such date.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Expected Final Distribution Date” means, with respect to any applicable Series
of Investor Notes, the date, if any, stated in the related Indenture Supplement
as the date on which such Series of Investor Notes is expected to be paid in
full.
 
“FDIC” means the Federal Deposit Insurance Corporation.
 
“Fixed Rate Lease” means a Lease accruing finance charges at a fixed rate per
annum.
 
“Fleet Receivables” means all amounts payable under the Fleet Service Contracts,
a beneficial interest in a portion of which is represented by the Fleet
Receivable SUBI Certificate.
 
“Fleet Receivable SUBI” means that special unit of beneficial interest in the
Origination Trust created by the Fleet Receivable SUBI Supplement in a pool of
Fleet Receivables either (i) acquired by SPV from VMS pursuant to the Old
Receivables Purchase Agreement and contributed by SPV to the Origination Trust
pursuant to the Old Contribution Agreement prior to the Initial Closing Date or
(ii) acquired by Holdings from VMS pursuant to the Receivables Purchase
Agreement and contributed by Holdings to the Origination Trust pursuant to the
Contribution Agreement on or after the Initial Closing Date and all Origination
Trust Assets associated with the Fleet Receivables, including all right, title
and interest of Holdings under the Receivables Purchase Agreement.
 
“Fleet Receivable SUBI Certificate” means the Class X 1999-1B Sold SUBI
Certificate, a certificate of beneficial ownership, representing a portion of
the Fleet Receivable SUBI issued pursuant to the Fleet Receivable SUBI
Supplement.
 
“Fleet Receivable SUBI Supplement” means the Amended and Restated Sold SUBI
Supplement 1999-1B to the Origination Trust Agreement, dated as of the Initial
Closing Date, among Holdings, as settlor and initial beneficiary, VMS, as UTI
Trustee and Servicer, and Wilmington Trust Company, as Delaware Trustee and SUBI
Trustee.
 
 

--------------------------------------------------------------------------------

 
“Fleet Service Contract” means a fleet maintenance contract, fleet management
contract, fuel card contract or any other service contract the fees for which
are billed or would be billed by VMS, together with the Leases.
 
“Floating Rate Lease” means a Lease accruing finance charges at a floating rate
per annum.
 
“Foreign Clearing Agency” means Clearstream and Euroclear.
 
“GAAP” means the generally accepted accounting principles promulgated or adopted
by the Financial Accounting Standards Board and its predecessors and successors
from time to time.
 
“Gain on Sale Account” means securities account no. _____ entitled “Chesapeake
Funding Gain on Sale Account” maintained by the Gain on Sale Securities
Intermediary pursuant to the Gain on Sale Account Control Agreement or any
successor securities account maintained pursuant to the Gain on Sale Account
Control Agreement.
 
“Gain on Sale Account Control Agreement” means the agreement among the Issuer,
JPMorgan Chase, as securities intermediary, and the Indenture Trustee, dated as
of the Initial Closing Date, relating to the Gain on Sale Account, as the same
may be amended and supplemented from time to time.
 
“Gain on Sale Account Securities Intermediary” means JPMorgan Chase or any other
securities intermediary that maintains the Gain on Sale Account pursuant to the
Gain on Sale Account Control Agreement.
 
“Global Note” is defined in Section 2.12 of the Base Indenture.
 
“Governmental Authority” means the United States of America, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
 
“Hedging Instrument” means one or more Lease Rate Caps or other interest rate
swap contracts or similar contracts entered into by, or assigned to, the Issuer,
as specified in the Base Indenture or any Indenture Supplement, providing
limited protection against interest rate risks.
 
“Holdings” means Chesapeake Finance Holdings LLC, a Delaware limited liability
company (formerly known as Chesapeake Funding LLC), and its permitted
successors.
 
“Incidental Lease Termination Charges” means all Excess Damage Charges, Excess
Mileage Charges and any charges imposed upon the early termination of a Lease.
 
“Indebtedness”, as applied to any Person, means, without duplication, (a) all
indebtedness for borrowed money, (b) that portion of obligations with respect to
any lease of any property (whether real, personal or mixed) that is properly
classified as a liability on a balance sheet in conformity with GAAP, (c) notes
payable and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money, (d) any obligation owed for all or
any part of the deferred purchase price for property or services, which purchase
price is (i) due more than six months from the date of the incurrence of the
obligation in respect thereof or (ii) evidenced by a note or similar written
instrument, (e) all indebtedness secured by any Lien on any property or asset
owned by that Person regardless of whether the indebtedness secured thereby
shall have been assumed by that Person or is nonrecourse to the credit of that
Person, and (f) without duplicating any of the foregoing, all Contingent
Obligations of such Person in respect of any of the foregoing.
 
 

--------------------------------------------------------------------------------

 
“Indenture” means the Base Indenture and all Supplements thereto, including any
Indenture Supplement.
 
“Indenture Supplement” means, with respect to any Series of Investor Notes, a
supplement to the Base Indenture complying with the terms of Section 2.2 of the
Base Indenture, executed in conjunction with any issuance of any Series of
Investor Notes (or, in the case of the issuance of Investor Notes on the Initial
Closing Date, the supplement executed in connection with the issuance of such
Investor Notes).
 
“Indenture Trustee” means the party named as such in the Indenture until a
successor replaces it in accordance with the applicable provisions of the
Indenture and thereafter means the successor serving thereunder.
 
“Independent” means, when used with respect to any specified Person, that the
person (a) is in fact independent of the Issuer, any other obligor upon the
Investor Notes, VMS and any Affiliate of any of the foregoing persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, VMS or any Affiliate of any of
the foregoing Persons and (c) is not connected with the Issuer, any such other
obligor, VMS or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions.
 
“Independent Certificate” means a certificate or opinion to be delivered to the
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 13.1, of the Base Indenture made by
an Independent engineer, appraiser or other expert appointed by the Issuer and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
“Independent” herein and that the signer is Independent within the meaning
thereof.
 
“Independent Manager” is defined in the LLC Agreement.
 
“Ineligible Delinquent Lease” means (a) a Master Lease Agreement as to which 50%
or greater of the billings to the Obligor thereof remain unpaid for more than 60
days from the original due date or which has been declared in default under the
Policies or (b) a Consumer Lease as to which any amounts remain unpaid for more
than 60 days from the original due date or which has been declared in default
under the Policies.
 
“Initial Closing Date” means March 7, 2006.
 
“Initial Invested Amount” means, with respect to any Series of Investor Notes,
the aggregate initial principal amount specified in the related Indenture
Supplement.
 
“Initial Units” means, as of June 30, 1999, all Units allocated to the Lease
SUBI Portfolio as of June 30, 1999.
 
“Insolvency Event” means, as to any Person:
 
 

--------------------------------------------------------------------------------

 
(a)(i) a court having jurisdiction in the premises shall enter a decree or order
for relief in respect of such Person in an involuntary case under the Bankruptcy
Code or any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, which decree or order is not stayed, or any other similar
relief shall be granted under any applicable federal or state law, (ii) an
involuntary case is commenced against such Person under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect which
remains undismissed, undischarged or unbonded for a period of 60 days or (iii)
such Person shall have a decree or an order for relief entered with respect to
it or commence a voluntary case under the Bankruptcy Code or any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect;
 
(b)  such Person shall consent to the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to all or substantially all of
its property, or a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against such Person; or such
Person shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations.
 
“Interest Period” means, with respect to any Series of Investor Notes, the
period specified in the related Indenture Supplement.
 
“Intermediary” means the Person acting in the capacity of Qualified Intermediary
pursuant to the Master Exchange Agreement, which initially shall be PHH Funding,
LLC, a Delaware limited liability company.
 
“Invested Amount” means, with respect to each Series of Investor Notes, the
amount specified in the related Indenture Supplement.
 
“Invested Percentage” means, with respect to any Series of Investor Notes, the
percentage specified in the related Indenture Supplement.
 
“Investment Company Act” means the Investment Company Act of 1940, as amended.
 
“Investor Noteholder” and “Holder” means the Person in whose name an Investor
Note is registered in the Note Register.
 
“Investor Notes” means any one of the promissory notes (including, without
limitation, the Bearer Notes, the Registered Notes or the Global Notes) issued
by the Issuer, executed by the Issuer and authenticated by the Indenture Trustee
substantially in the form (or forms in the case of a Series of Notes with
multiple Classes) of the investor note attached to the related Indenture
Supplement.
 
“Issuer” means Chesapeake Funding LLC, a Delaware limited liability company.
 
“Issuer Accounts” means the Collection Account and each Series Account.
 
 

--------------------------------------------------------------------------------

 
“Issuer Assets” means all assets of the Issuer, including, among other things,
the Loans, the Loan Note, the Loan Collateral, the Loan Agreement, the Issuer
Accounts, any Hedging Instruments, the Origination Trust Guaranty, the
Origination Trust Security Agreement, the Nominee Lienholder Agreement, the
Administration Agreement, the Management Agreement and all proceeds of the
foregoing.
 
“Issuer General Account” is defined in the LLC Agreement.
 
“Issuer Obligations” means all principal and interest, at any time and from time
to time, owing by the Issuer on the Investor Notes and all costs, fees and
expenses payable by, or obligations of, the Issuer under the Indenture.
 
“Issuer Order” and “Issuer Request” means a written order or request signed in
the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
 
“Joint Collection Account(s)” is defined in Appendix A to the Master Exchange
Agreement.
 
“Joint Disbursement Account” is defined in Appendix A to the Master Exchange
Agreement.
 
“JPMorgan Chase” means JPMorgan Chase Bank, National Association, a national
banking association.
 
“Junior Preferred Member” means a Person in whose name a Junior Preferred
Membership Interest is registered in the Register.
 
“Junior Preferred Membership Interests” means the Junior Preferred Membership
Interests issued pursuant to the LLC Agreement.
 
“Lease” means an Open-End Lease or a Closed-End Lease originated by or on behalf
of VMS, PHH Financial Services or the Origination Trust pursuant to a Master
Lease Agreement or a Consumer Lease originated by or on behalf of the
Origination Trust.
 
“Lease Balance” means, as of any date of determination, with respect to (a) any
Open-End Lease, an amount equal to the Net Book Value of the Leased Vehicle
subject to such Lease and (b) any Closed-End Lease, an amount equal to the sum
of all remaining monthly lease payments (other than payments of finance charges
and other incidental fees) due in respect of such Leased Vehicle on or after
such date; provided, however that the Lease Balance of a Charged-Off Lease shall
be zero.
 
“Lease Balance Decline” means, for any Lease for any Settlement Date, an amount
equal to the sum of (a) the Lease Balance of such Lease as of the last day of
the Monthly Period preceding the Monthly Period immediately preceding such
Settlement Date less the Lease Balance of such Lease as of the last day of the
Monthly Period immediately preceding such Settlement Date plus (b), in the case
of a Closed-End Lease, the Net Book Value of the related Unit Vehicle if such
Unit Vehicle shall have become a Residual Value Vehicle during the Monthly
Period immediately preceding such Settlement Date.
 
“Leased Vehicle” means the Vehicle subject to a Lease.
 
 

--------------------------------------------------------------------------------

 
“Lease Rate Cap” means any interest rate caps that are required to be maintained
by the Issuer pursuant to the Base Indenture or any Indenture Supplement.
 
“Lease SUBI” means that special unit of beneficial interest in the Origination
Trust created by the Lease SUBI Supplement.
 
“Lease SUBI Certificate” means the certificate of beneficial ownership,
representing beneficial ownership in the Sold Units allocated to the Lease SUBI
Portfolio issued pursuant to the Lease SUBI Supplement.
 
“Lease SUBI Portfolio” or “1999-1A Sold SUBI Portfolio” means the Origination
Trust Assets that are from time to time allocated to the Lease SUBI in
accordance with the terms of the Origination Trust Documents.
 
“Lease SUBI Supplement” means the Amended and Restated Sold SUBI Supplement
1999-1A to the Origination Trust Agreement, dated as of the Initial Closing
Date, among Holdings, as settlor and initial beneficiary, VMS, as UTI Trustee
and Servicer, and Wilmington Trust Company, as Delaware Trustee and SUBI
Trustee.
 
“Lender” means Chesapeake Funding LLC in its capacity as lender under the Loan
Agreement.
 
“Lien” means, when used with respect to any Person, any interest in any real or
personal property, asset or other right held, owned or being purchased or
acquired by such Person which secures payment or performance of any obligation,
and shall include any mortgage, lien, pledge, encumbrance, charge, retained
security title of a conditional vendor or lessor, or other security interest of
any kind, whether arising under a security agreement, mortgage, lease, deed of
trust, chattel mortgage, assignment, pledge, retention or security title,
financing or similar statement, or notice or arising as a matter of law,
judicial process or otherwise.
 
“LKE Program” is defined in Appendix A to the Master Exchange Agreement.
 
“LLC Agreement” means the Limited Liability Agreement of the Issuer, dated as of
March 7, 2006, as amended, modified or supplemented from time to time in
accordance with its terms.
 
“Loans” is defined in Section 2.1 of the Loan Agreement.
 
“Loan Agreement” means the Loan Agreement, dated as of the Initial Closing Date,
among the Borrower, the Origination Trust and the Lender, as amended, modified
or supplemented from time to time in accordance with its terms.
 
“Loan Collateral” is defined in Section 7.1(a) of the Loan Agreement.
 
“Loan Event of Default” is defined in Section 12.1 of the Loan Agreement.
 
“Loan Note” is defined in Section 3.1 of the Loan Agreement.
 
“Loan Principal Amount” is defined in Section 1.2 of the Loan Agreement.
 
“Lockout Period” means the period from and including the date on which each
Outstanding Series of Investor Notes shall have been declared to be immediately
due and payable as a result of the occurrence of an Event of Default defined in
clause (a) or (b) of Section 9.1 of the Base Indenture to and including the date
on which the principal of and interest on all Series of Investor Notes shall
have been paid in full.
 
 

--------------------------------------------------------------------------------

 
“Luxembourg Agent” is defined in Section 2.3(c) of the Base Indenture.
 
“Majority in Interest” of each Series of Investor Notes means Noteholders of
such Series holding Investor Notes evidencing more than 50% by outstanding
principal amount of each Class of Investor Notes of such Series.
 
“Management Agreement” means the Management Agreement, dated as of the Initial
Closing Date, by and among the Managing Agent, the Issuer and the Administrator,
as amended, modified or supplemented from time to time in accordance with its
terms.
 
“Manager” is defined in the LLC Agreement.
 
“Managing Agent” means Global Securitization Services LLC or a successor
Managing Agent under the Management Agreement.
 
“Master Exchange Agreement” means the Master Exchange Agreement, dated as of the
Initial Closing Date, among the Intermediary, Holdings and the Origination
Trust, as amended, modified or supplemented from time to time in accordance with
its terms.
 
“Master Lease Agreement” means each master lease agreement between an Obligor
and (a) VMS and assigned by VMS to the Origination Trust or assigned by VMS to
SPV and by SPV to the Origination Trust, (b) PHH Financial Services and assigned
by PHH Financial Services to VMS, by VMS to SPV and by SPV to the Origination
Trust or (c) the Origination Trust, in each case, in all material respects in a
form attached to the Series 1999-1 SUBI Servicing Supplement.
 
“Master Trust Agreement” is defined in Appendix A to the Master Exchange
Agreement.
 
“Material Adverse Effect” means, with respect to any occurrence, event or
condition:
 
(i) a material adverse effect on the Issuer’s interest in the Collateral,
including, without limitation, the Loans, the Loan Note, the Loan Collateral or
the Loan Agreement;
 
(ii) a material adverse effect on the validity, status, perfection or priority
of the Lien of the Indenture Trustee in the Collateral;
 
(iii) a material adverse effect on the business, properties, financial condition
or results of operations of the Issuer or the ability of the Issuer to perform
its obligations under the Indenture;
 
(iv) a material adverse effect on the business, properties, financial condition
or results of operations of PHH and its subsidiaries as a whole; or
 
(v) a material adverse effect on the validity or enforceability of the Indenture
or any of the other Transaction Documents.
 
 

--------------------------------------------------------------------------------

 
“Maximum Invested Amount” means, with respect to each Series of Investor Notes,
the amount, if any, specified in the related Indenture Supplement.
 
“Member” means a Preferred Member or the Common Member.
 
“Membership Interest” means a Preferred Membership Interest or the Common
Membership Interest.
 
“Minimum Adjusted Aggregate Unit Balance” means the sum of the numerators used
on such date to calculate the Invested Percentage with respect to Collections
for all Series of Outstanding Investor Notes on such date.
 
“Monthly Period” means, unless otherwise defined in any Indenture Supplement,
the period from and including a Period End Date (or, in the case of the initial
Monthly Period, from the Initial Cutoff Date) to but excluding the succeeding
Period End Date.
 
“Monthly Residual Value Gain” means, for any Settlement Date, an amount equal to
the excess, if any, of (a) all Termination Proceeds for the immediately
preceding Monthly Period for all Unit Vehicles that became Residual Value
Vehicles during such Monthly Period and all prior Monthly Periods over (b) the
aggregate Net Book Values of all Unit Vehicles that became Residual Value
Vehicles during such Monthly Period.
 
“Monthly Residual Value Loss” means, for any Monthly Period, an amount equal to
the excess, if any, of (a) the aggregate Net Book Values of all Unit Vehicles
that became Residual Value Vehicles during such Monthly Period over (b) all
Termination Proceeds for such Monthly Period for all Unit Vehicles that became
Residual Value Vehicles during such Monthly Period and all prior Monthly
Periods.
 
“Monthly Servicer Advance” means the aggregate amount of funds advanced by the
Servicer to Holdings on any Settlement Date for deposit in the Collection
Account in respect of monthly lease payments due but not received during the
immediately preceding Monthly Period on the Sold Units and in respect of Fleet
Receivables due but not received during the immediately preceding Monthly Period
in accordance with the Series 1999-1 SUBI Servicing Supplement.
 
“Monthly Servicer Advance Reimbursement Amount” means, for any Settlement Date,
the aggregate amount payable to the Servicer in reimbursement of amounts
previously advanced by the Servicer in respect of delinquent monthly lease
payments and delinquent Fleet Receivables pursuant to Section 7.4 of the Series
1999-1 SUBI Servicing Supplement on such Settlement Date.
 
“Monthly Settlement Statement” means, with respect to each Series of Outstanding
Investor Notes, the settlement statement in the form attached to the related
Indenture Supplement delivered by the Issuer to the Indenture Trustee pursuant
to Section 4.4(a) of the Base Indenture.
 
“Moody’s” means Moody’s Investors Service, Inc.
 
“Net Book Value” means, as of any date of determination during an Accrual Period
with respect to each Leased Vehicle, such Leased Vehicle’s Capitalized Cost
minus the sum of (a) all monthly lease payments billed thereunder (other than
payments of finance charges and other incidental fees) in respect of such Leased
Vehicle through such date and (b) in the case of a Leased Vehicle subject to an
Open-End Lease, all proceeds from the sale or disposition of such Leased Vehicle
received during the Monthly Period immediately preceding the first day of such
Accrual Period.
 
 

--------------------------------------------------------------------------------

 
“1999-1B Sold SUBI Portfolio” means the Origination Trust Assets that are from
time to time allocated to the Fleet Receivable SUBI in accordance with the terms
of the Origination Trust Documents.
 
“Nominee Lienholder Agreement” means the Nominee Lienholder Agreement, dated as
of the Initial Closing Date, between SPV and the Issuer pursuant to which SPV
agrees to act as the nominee lienholder of the Issuer in respect of those
Vehicles the Certificates of Title for which note SPV as the lienholder, as
amended, supplemented and modified from time to time.
 
“Non-Qualified Funds” is defined in Appendix A to the Master Exchange Agreement.
 
“Note Rate” means, with respect to any Series of Investor Notes, the annual rate
at which interest accrues on the Investor Notes of such Series of Investor Notes
(or formula on the basis of which such rate shall be determined) as stated in
the related Indenture Supplement.
 
“Note Register” means the register maintained pursuant to Section 2.4(a) of the
Base Indenture, providing for the registration of the Investor Notes and
transfers and exchanges thereof.
 
“Obligor” means, with respect to any Lease or Fleet Receivable, the Person or
Persons obligated to make payment with respect to such Lease or Fleet
Receivable, including any guarantor thereof.
 
“Officer’s Certificate” means a certificate signed by an Authorized Officer of
the Issuer, SPV, Holdings, the Origination Trust, the Servicer or the
Administrator, as the case may be.
 
“Old Contribution Agreement” means the Contribution Agreement, dated as of June
30, 1999, between SPV and the Origination Trust, as amended, modified or
supplemented from time to time in accordance with its terms.
 
“Old Receivables Purchase Agreement” means the Receivables Purchase Agreement,
dated as of June 30, 1999, by and between SPV and VMS, as amended, modified or
supplemented from time to time in accordance with its terms.
 
“Open-End Lease” means a lease obligation in respect of a single vehicle which
may arise pursuant to a master lease agreement providing for the lease of a
fleet of vehicles or pursuant to a lease agreement providing for the lease of a
single vehicle that, in each case, obligates the lessee thereunder to pay the
lessor at lease termination any deficit between the sales proceeds from the sale
of the vehicle subject thereto and the book value thereof (other than the
portion of any deficit resulting from the sales proceeds being less than 16% of
the fair market value thereof determined in accordance with such lease).
 
“Opinion of Counsel” means a written opinion from legal counsel who is
acceptable to the Indenture Trustee. The counsel may be an employee of or
counsel to the Issuer, Holdings, VMS, PHH, the Origination Trust, the
Administrator or the Servicer, as the case may be.
 
 

--------------------------------------------------------------------------------

 
“Origination Trust” means D.L. Peterson Trust, a statutory business trust
organized under the laws of the State of Delaware.
 
“Origination Trust Agreement” means the Second Amended and Restated Origination
Trust Agreement, dated as of the Initial Closing Date, among Holdings, as
successor settlor and initial beneficiary, SPV, as existing settlor and
predecessor beneficiary, VMS, as UTI Trustee and Servicer, and Wilmington Trust
Company, as Delaware Trustee, as amended, supplemented and modified by the Lease
SUBI Supplement and the Fleet Receivable SUBI Supplement and as the same may be
further amended, supplemented or modified from time to time.
 
“Origination Trust Assets” means all assets, at any time, owned by the
Origination Trust at such time.
 
“Origination Trust Documents” means the Origination Trust Agreement, including
the Lease SUBI Supplement and the Fleet Receivable SUBI Supplement, the
Origination Trust Servicing Agreement, including the Series 1999-1 SUBI
Servicing Supplement, the PHH Guarantee, the Custodian Agreement, the SUBI
Certificates, the Old Receivables Purchase Agreement, the Receivables Purchase
Agreement, the Asset Purchase Agreement, the Old Contribution Agreement, the
Contribution Agreement, the Additional Equipment Assets Sale Agreement and the
Additional Equipment Assets Contribution Agreement.
 
“Origination Trust Guaranty” means the Guaranty, dated as of the Initial Closing
Date, from the Origination Trust to the Issuer pursuant to which the Origination
Trust has guaranteed the obligations of Holdings under the Loan Agreement and
the Loan Note, as the same may be amended, supplemented or modified from time to
time.
 
“Origination Trust Security Agreement” means the Security Agreement, dated as of
the Initial Closing Date, between the Origination Trust and the Issuer pursuant
to which the obligations of the Origination Trust to the Issuer under the
Origination Trust Guaranty are secured, as amended, supplemented or modified
from time to time.
 
“Origination Trust Servicing Agreement” means the Amended and Restated Servicing
Agreement, dated as of the Initial Closing Date, among the Origination Trust,
Holdings and the Servicer, as amended, supplemented and modified by the Series
1999-1 SUBI Servicing Supplement and as the same may be further amended,
supplemented or modified from time to time.
 
“Outstanding” has the meaning, with respect to any Series of Investor Notes, set
forth in the related Indenture Supplement.
 
“Overconcentration Amount” means, as of any date of determination during an
Accrual Period, an amount equal to the greatest of (a) (i) the aggregate Lease
Balance of the Eligible Leases to which the Obligors having the five largest
aggregate Lease Balances of Eligible Leases allocated to the Lease SUBI
Portfolio are a party as of the last day of the Monthly Period immediately
preceding the first day of such Accrual Period over (ii) an amount equal to the
Specified Top Five Obligors Maximum Percentage as of such date of the Aggregate
Lease Balance as of such date, (b) (i) the aggregate Lease Balance of the
Eligible Leases to which the Obligors having the ten largest aggregate Lease
Balances of Eligible Leases allocated to the Lease SUBI Portfolio are a party as
of the last day of the Monthly Period immediately preceding the first day of
such Accrual Period over (ii) an amount equal to the Specified Top Ten Obligors
Maximum Percentage as of such date of the Aggregate Lease Balance as of such
date and (c) the excess, if any, of (i) the aggregate Lease Balance of the
Eligible Leases to which the Obligor having the largest aggregate Lease Balance
of Eligible Leases allocated to the Lease SUBI Portfolio is a party as of the
last day of the Monthly Period immediately preceding the first day of such
Accrual Period over (ii) an amount equal to the Specified Top Obligor Maximum
Percentage as of such date of the Aggregate Lease Balance as of such date;
provided, however that if the long-term debt obligations of such Obligor are not
rated at least “Baa3” by Moody’s as of such date, the amount in this clause (ii)
shall equal the Specified Top Obligor Maximum Percentage as of that date minus
1% of the Aggregate Lease Balance as of such date.
 
 

--------------------------------------------------------------------------------

 
“Overconcentration Option” means Overconcentration Option 1, Overconcentration
Option 2 or Overconcentration Option 3.
 
“Overconcentration Option 1” means the percentages used in clauses (a)(ii),
(b)(ii) and (c)(ii) of the definition of the Overconcentration Amount are
15.00%, 25.00% and 4.00%, respectively.
 
“Overconcentration Option 2” means the percentages used in clauses (a)(ii),
(b)(ii) and (c)(ii) of the definition of the Overconcentration Amount are
17.50%, 28.00% and 4.50%, respectively.
 
“Overconcentration Option 3” means the percentages used in clauses (a)(ii),
(b)(ii) and (c)(ii) of the definition of the Overconcentration Amount are
18.75%, 30.00% and 4.75%, respectively.
 
“Paid-In Advance Loss Ratio” means, for any specified Settlement Date, the
quotient, expressed as a percentage, of (a) the excess, if any, of (i) the
aggregate Cost of all Unit Paid-In Advance Vehicles that became Rejected Paid-In
Advance Vehicles during the immediately preceding Monthly Period over (ii) all
Paid-In Advance Proceeds received by the Servicer during the preceding Monthly
Period for all Unit Paid-In Advance Vehicles that became Rejected Paid-In
Advance Vehicles during such Monthly Period and all prior Monthly Periods
divided by (b) the aggregate Cost of all Unit Paid-In Advance Vehicles that
became Rejected Paid-In Advance Vehicles during the immediately preceding
Monthly Period.
 
“Paid-In Advance Proceeds” means for any Rejected Paid-In Advance Vehicle the
sum of all amounts received by the Servicer upon, after or in connection with
the sale or other disposition of such Rejected Paid-In Advance Vehicle, net of
any and all out-of-pocket costs and expenses incurred by the Servicer in
connection with such sale or other disposition, and any and all amounts received
from the related Obligor in connection with such Rejected Paid-In Advance
Vehicle.
 
“Paid-In Advance Vehicle” means a Vehicle acquired at the request of an Obligor
who is either a party to a Master Lease Agreement or who has agreed to be bound
by a Master Lease Agreement but not yet accepted by such Obligor.
 
“Parent Downgrade Event” is defined in Appendix A to the Master Exchange
Agreement.
 
 

--------------------------------------------------------------------------------

 
“Paying Agent” means any paying agent appointed pursuant to Section 2.6 of the
Base Indenture.
 
“Payment Date” means, with respect to each Series of Investor Notes, the dates
set forth in the related Indenture Supplement.
 
“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA.
 
“Pension Plan” means any “employee pension benefit plan”, as such term is
defined in ERISA, which is subject to Title IV of ERISA (other than a
“multiemployer plan”, as defined in Section 4001 of ERISA) and to which any
company in the Controlled Group has liability, including any liability by reason
of having been a substantial employer within the meaning of Section 4063 of
ERISA for any time within the preceding five years or by reason of being deemed
to be a contributing sponsor under Section 4069 of ERISA.
 
“Period End Date” means each date set forth in Schedule X to the Series 1999-1
SUBI Servicing Supplement, as such schedule is amended and supplemented from
time to time in accordance with the terms of the Series 1999-1 SUBI Servicing
Supplement.
 
“Permitted Investments” means negotiable instruments or securities, payable in
Dollars, issued by an entity organized under the laws of the United States of
America and represented by instruments in bearer or registered or in book-entry
form which evidence (excluding any security with the “r” symbol attached to its
rating):
 
(i) obligations the full and timely payment of which are to be made by or is
fully guaranteed by the United States of America other than financial contracts
whose value depends on the values or indices of asset values;
 
(ii) demand deposits of, time deposits in, or certificates of deposit issued by,
any depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof whose short-term debt is rated P-1
or higher by Moody’s and “A-1+” or higher by Standard & Poor’s and subject to
supervision and examination by Federal or state banking or depositary
institution authorities; provided, however, that at the earlier of (x) the time
of the investment and (y) the time of the contractual commitment to invest
therein, the long-term unsecured debt obligations (other than such obligation
whose rating is based on collateral or on the credit of a Person other than such
institution or trust company) of such depositary institution or trust company
shall have a credit rating from Standard & Poor’s of not lower than “AA”;
 
(iii) commercial paper having, at the earlier of (x) the time of the investment
and (y) the time of the contractual commitment to invest therein, a rating from
Moody’s of “P-1” and Standard & Poor’s of “A-1+”;
 
(iv) bankers’ acceptances issued by any depositary institution or trust company
described in clause (ii) above;
 
(v) investments in money market funds rated “AAAm” by Standard & Poor’s and
“Aaa” by Moody’s or otherwise approved in writing by the Rating Agencies;
 
(vi) Eurodollar time deposits having a credit rating from Moody’s of “P-1” and
Standard & Poor’s of “A-1+”;
 
 

--------------------------------------------------------------------------------

 
(vii) repurchase agreements involving any of the Permitted Investments described
in clauses (i) and (vi) above and the certificates of deposit described in
clause (ii) above which are entered into with a depository institution or trust
company, having a commercial paper or short-term certificate of deposit rating
of “A-1+” by Standard & Poor’s and P-1 by Moody’s or which otherwise is approved
as to collateralization by the Rating Agencies; and
 
(viii) any other instruments or securities, if the Rating Agencies confirm in
writing that the investment in such instruments or securities will not adversely
affect any ratings with respect to any Series of Investor Notes.
 
“Permitted Liens” means (i) Liens for current taxes not delinquent or for taxes
being contested in good faith and by appropriate proceedings, and with respect
to which adequate reserves have been established, and are being maintained, in
accordance with GAAP, (ii) mechanics’, materialmen’s, landlords’, warehousemen’s
and carrier’s Liens, and other Liens imposed by law, securing obligations
arising in the ordinary course of business that are not more than thirty days
past due or are being contested in good faith and by appropriate proceedings and
with respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP, (iii) Liens in favor of SPV or the Issuer
in the Leased Vehicles, (iv) Liens in favor of the Issuer pursuant to the Loan
Agreement or the Origination Trust Security Agreement, (v) Liens in favor of the
Indenture Trustee pursuant to the Indenture, and (vi) Liens in favor of an
Enhancement Provider, provided, however, that such Liens are subordinate to the
Liens in favor of the Indenture Trustee and have been consented to by the
Indenture Trustee.
 
“Person” means any natural person, corporation, business trust, joint venture,
association, limited liability company, partnership, joint stock company,
corporation, trust, unincorporated organization or Government Authority.
 
“PHH” means PHH Corporation, a Maryland corporation.
 
“PHH Consumer Lease” means PHH PersonaLease Corporation, a Maryland corporation.
 
“PHH Financial Services” means PHH Financial Services Corporation, a Maryland
corporation.
 
“PHH Guarantee” means the Guarantee, dated October 25, 2001, from PHH pursuant
to which PHH has guaranteed certain of VMS’ obligations under the Origination
Trust Servicing Agreement, as the same may be amended, supplemented or modified
from time to time.
 
“PHH Sub 1” means PHH Sub 1 Inc., a Delaware corporation.
 
“PHH Sub 2” means PHH Sub 2 Inc., a Delaware corporation.
 
“PHH Treasury Note Rate” means, on any day between the 16th day of the month
through the 15th day of the following month, the interest rate that is quoted in
the Federal Reserve Statistical Release (H.15 Report) for two year treasury
constant maturities on the fifteenth day of that month, or the first business
day thereafter if the fifteenth day of the month falls on a non-business day.
 
 

--------------------------------------------------------------------------------

 
“Policies” means the standards, policies and procedures, including but not
limited to the credit and residual accrual policies applied by the Servicer in
originating Leases and those applied by the Servicer in its collection and
repossession activities.
 
“Pool Factor” means, except with respect to any Series of Notes issued in more
than one Class, a number carried out to seven decimals representing the ratio of
the applicable Invested Amount as of such Record Date (determined after taking
into account any reduction in the Invested Amount which will occur on the
following Payment Date) to the applicable Initial Invested Amount, and with
respect to a Series of Notes having more than one Class, as specified in the
Indenture Supplement relating to such Series.
 
“Potential Amortization Event” means any occurrence or event which, with the
giving of notice, the passage of time or both, would constitute an Amortization
Event.
 
“Potential Loan Event of Default” means any occurrence or event which, with the
giving of notice, the passage of time or both, would constitute a Loan Event of
Default.
 
“Preferred Member” means a Person in whose name a Junior Preferred Membership
Interest or a Senior Preferred Membership Interest is registered in the
Register.
 
“Preferred Membership Interests” means the Junior Preferred Membership Interests
or the Senior Preferred Membership Interests.
 
“Principal Payment Amount” means, for any Settlement Date, the sum of (a) the
Lease Balance Declines for each Unit Lease for such Settlement Date, (b) the
aggregate Cost of all Eligible Paid-In Advance Vehicles that became Rejected
Paid-In Advance Vehicles during the immediately preceding Monthly Period and (c)
the Unit Repurchase Payments for such Settlement Date.
 
“Principal Terms” is defined in Section 2.2 of the Base Indenture.
 
“Proceeding” means any suit in equity, action or law or other judicial or
administrative proceeding.
 
“Qualified Institution” means a depository institution organized under the laws
of the United States of America or any State thereof or incorporated under the
laws of a foreign jurisdiction with a branch or agency located in the United
States of America or any State thereof and subject to supervision and
examination by federal or state banking authorities which at all times has the
Required Rating and, in the case of any such institution organized under the
laws of the United States of America, whose deposits are insured by the FDIC.
 
“Qualified Trust Institution” means an institution organized under the laws of
the United States of America or any State thereof or incorporated under the laws
of a foreign jurisdiction with a branch or agency located in the United States
of America or any State thereof and subject to supervision and examination by
federal or state banking authorities which at all times (i) is authorized under
such laws to act as a trustee or in any other fiduciary capacity, (ii) has not
less than one billion dollars in assets under fiduciary management, and (iii)
has a long term deposits rating of not less than “BBB-” by Standard & Poor’s and
Baa3 by Moody’s.
 
“Quarterly Compliance Certificate” is defined in Section 4.1(a) of the Base
Indenture.
 
 

--------------------------------------------------------------------------------

 
“Rating Agency” means, with respect to each Series of Notes, the rating agency
or agencies, if any, specified in the related Indenture Supplement.
 
“Rating Agency Condition” means, the notification in writing by the Rating
Agencies that a proposed action will not result in a reduction or withdrawal by
each such Rating Agency of the rating or credit risk assessment of any Class of
any Series of Outstanding Investor Notes rated or evaluated by such Rating
Agency or the rating or credit risk assessment of any series of Preferred
Membership Interests rated or evaluated by such Rating Agency.
 
“Receivables Purchase Agreement” means the Amended and Restated Receivables
Purchase Agreement, dated as of the Initial Closing Date, by and between
Holdings and VMS, as amended, modified or supplemented from time to time in
accordance with its terms.
 
“Receivables Purchase Termination Event” is defined in the Receivables Purchase
Agreement.
 
“Record Date” means, with respect to each Series of Notes, the dates specified
in the related Indenture Supplement.
 
“Recoveries” means any amounts received by the Servicer with respect to
Charged-Off Leases, including Collections received from Obligors and liquidation
proceeds of the related Leased Vehicles, net of (i) any applicable rental
receipts tax, sales and use tax, personal property tax, ad valorem tax or any
other tax or any governmental fees or charges, (ii) any and all out-of-pocket
costs and expenses incurred by the Servicer in connection with such recovery and
(iii) any amounts remitted to the related Obligor as required by applicable law
or the related Lease.
 
“Register” means the register mentioned in Section 12.3 of the LLC Agreement.
 
“Registered Notes” is defined in Section 2.1 of the Base Indenture.
 
“Rejected Paid-In Advance Vehicles” means, for any Monthly Period, all Unit
Paid-In Advance Vehicles which were sold or otherwise disposed of after
rejection thereof by the related Obligor during such Monthly Period.
 
“Related Rights” means, with respect to any Unit, all Origination Trust Assets
to the extent such assets are associated with such Unit.
 
“Relinquished Property Proceeds” is defined in Appendix A to the Master Exchange
Agreement.
 
“Relinquished Vehicle” means a Vehicle that is “Relinquished Property” under and
as defined in Appendix A to the Master Exchange Agreement.
 
“Replacement Property” is defined in Appendix A to the Master Exchange
Agreement.
 
“Repurchase Amount” means, with respect to any Series of Investor Notes, the
amount specified in the related Indenture Supplement.
 
“Required Aggregate Asset Amount” means the sum of the Required Asset Amounts
with respect to all Series of Outstanding Investor Notes.
 
 

--------------------------------------------------------------------------------

 
“Required Asset Amount” means, with respect to any Series of Investor Notes, the
amount specified in the related Indenture Supplement.
 
“Required Overcollateralization Amount” means, with respect to any Series of
Investor Notes, the amount specified in the related Indenture Supplement.
 
“Required Rating” means a short-term certificate of deposit rating from Moody’s
of P-1 and from Standard & Poor’s of “A-1” and a long-term unsecured debt rating
of not less than Aa3 by Moody’s and “AA-” by Standard & Poor’s.
 
“Requirements of Law” means, with respect to any Person or any of its property,
the certificate of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person or any of its property, and
any law, treaty, rule or regulation, or determination of any arbitrator or
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject, whether Federal, state or local (including, without limitation, usury
laws, the Federal Truth in Lending Act and retail installment sales acts).
 
“Reservoir Account” is defined in Appendix A to the Master Exchange Agreement.
 
“Residual Value Loss” means, for any Unit Vehicle which became a Residual Value
Vehicle during a Monthly Period, an amount equal to (a) the Stated Residual
Value of such Unit Vehicle minus (b) all Termination Proceeds with respect to
such Unit Vehicle for such Monthly Period.
 
“Residual Value Loss Ratio” means, for any specified Settlement Date, the
quotient, expressed as a percentage, of (a) the sum of the Residual Value Losses
for all Unit Vehicles that became Residual Value Vehicles during the preceding
Monthly Period minus all Termination Proceeds included in clauses (i) and (ii)
of the definition thereof for the preceding Monthly Period for all Unit Vehicles
that became Residual Value Vehicles during prior Monthly Periods divided by (b)
the sum of the Stated Residual Values for all Unit Vehicles that became Residual
Value Vehicles during the preceding Monthly Period.
 
“Residual Value Vehicles” means, for any Monthly Period, all Unit Vehicles
subject to Closed-End Leases (other than Unit Vehicles subject to Charged-off
Leases) which were sold or otherwise disposed of after termination or expiration
of the related Closed-End Lease during such Monthly Period.
 
“Responsible Officer” means, with respect to the Indenture Trustee, any officer
within the Corporate Trust Office, including any Assistant Vice President, Vice
President, any Secretary or Assistant Secretary or any other officer of the
Indenture Trustee customarily performing functions similar to those performed by
any Person who at the time shall be an above designated officer and having
direct responsibility for administration of the Indenture and the applicable
Series Supplement and also any particular officer to whom any corporate trust
matter is referred because of such officer’s knowledge of and familiarity with
the particular subject, in each case who, at the time shall be an
above-designated officer and shall have direct responsibility for administration
of the Indenture and the applicable Series Supplement.
 
“Revolving Period” means, with respect to any Series of Investor Notes, the
period specified in the related Indenture Supplement.
 
 

--------------------------------------------------------------------------------

 
“S&P” or “Standard & Poor’s” means Standard & Poor’s Ratings Service, a division
of The McGraw-Hill Companies, Inc.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Securitization” is defined in the Origination Trust Agreement.
 
“Senior Preferred Member” means a Person in whose name a Senior Preferred
Membership Interest is registered in the Register.
 
“Senior Preferred Membership Interests” means the Senior Preferred Membership
Interests issued pursuant to the LLC Agreement.
 
“Series” means any Series of Investor Notes, which may include within any such
Series a Class or Classes of Investor Notes subordinate to another such Class or
Classes of Investor Notes.
 
“Series Account” means any account or accounts established pursuant to an
Indenture Supplement for the benefit of a Series of Notes.
 
“Series Administrator Fee,” with respect to any Series of Notes, that portion of
the Administrator Fee payable from Collections allocable to such Series pursuant
to the related Indenture Supplement.
 
“Series Closing Date” means, with respect to any Series of Investor Notes, the
date of issuance of such Series of Investor Notes, as specified in the related
Indenture Supplement.
 
“Series Gain on Sale Account Percentage” means, with respect to any Series of
Investor Notes, the percentage specified in the related Indenture Supplement.
 
“Series 1999-1 SUBI Servicing Supplement” means the Amended and Restated Sold
SUBI Supplement 1999-1 to the Servicing Agreement, dated as of the Initial
Closing Date, among the Origination Trust, Wilmington Trust Company, as SUBI
Trustee, Holdings and the Servicer, as amended from time to time.
 
“Series Note Termination Date” means, with respect to any Series of Investor
Notes, the date stated in the related Indenture Supplement.
 
“Series Reserve Account” means each account designated as a “Series [ ] Reserve
Account in an Indenture Supplement with respect to an Outstanding Series of
Investor Notes.
 
“Series Servicing Fee,” with respect to any Series of Notes, that portion of the
Servicing Fee payable from Collections allocable to such Series pursuant to the
related Indenture Supplement. 
 
“Series Servicing Fee Percentage” means, with respect to any Series of Notes,
the amount specified in the related Indenture Supplement.
 
“Series Termination Date” means, with respect to any Series of Investor Notes,
the date stated in the related Indenture Supplement as the termination date.
 
 

--------------------------------------------------------------------------------

 
“Servicer” means VMS in its capacity as servicer under the Origination Trust
Servicing Agreement.
 
“Servicer Termination Event” is defined in the Origination Trust Servicing
Agreement.
 
“Servicing Fee” is defined in the Origination Trust Servicing Agreement.
 
“Settlement Date” means the 7th day of each month, or if such date is not a
Business Day, the next succeeding Business Day, commencing April 7, 2006.
 
“Settlement Statement” is defined in Section 4.1 of the Base Indenture.
 
“Sold Units” means, collectively, the Initial Units and the Additional Units.
 
“Special Purpose Entity” is defined in the Origination Trust Agreement.
 
“Specified Top Five Obligors Maximum Percentage” means (a) 15.00% on any date
during any period when Overconcentration Option 1 is in effect, (b) 17.50% on
any date during any period when Overconcentration Option 2 is in effect or (c)
18.75% on any date during any period when Overconcentration Option 3 is in
effect.
 
“Specified Top Obligor Maximum Percentage” means (a) 4.00% on any date during
any period when Overconcentration Option 1 is in effect, (b) 4.50% on any date
during any period when Overconcentration Option 2 is in effect or (c) 4.75% on
any date during any period when Overconcentration Option 3 is in effect.
 
“Specified Top Ten Obligors Maximum Percentage” means (a) 25.00% on any date
during any period when Overconcentration Option 1 is in effect, (b) 28.00% on
any date during any period when Overconcentration Option 2 is in effect or (c)
30.00% on any date during any period when Overconcentration Option 3 is in
effect.
 
“SPV” means Raven Funding LLC, a Delaware limited liability company.
 
“Stated Residual Value” means, for any Unit Vehicle subject to a Closed-End
Lease, the lesser of (a) the stated residual value of such Unit Vehicle
established at the time of origination of such Closed-End Lease in accordance
with the Policies and (b) the Net Book Value of such Unit Vehicle as of such
day.
 
“SUBI Assets” is defined in the Origination Trust Agreement.
 
“SUBIs” means the Fleet Receivable SUBI and the Lease SUBI.
 
“SUBI Certificates” means the Fleet Receivable SUBI Certificate and the Lease
SUBI Certificate.
 
“SUBI Portfolio” is defined in the Origination Trust Agreement.
 
“Subsidiary” means, with respect to any Person (herein referred to as the
“parent”), any corporation, partnership, association or other business entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or more than 50% of
the general partnership interests are, at the time any determination is being
made, owned, controlled or held by the parent or (b) that is, at the time any
determination is being made, otherwise controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
 
 

--------------------------------------------------------------------------------

“Supplement” means a supplement to the Base Indenture complying (to the extent
applicable) with the terms of Article 12 of the Base Indenture.
 
“Tax Opinion” means an opinion of counsel to be delivered in connection with the
issuance of a new Series of Investor Notes to the effect that, for United States
federal income tax purposes, (i) the issuance of such new Series of Notes will
not affect adversely the United States federal income tax characterization of
any Series of Outstanding Investor Notes or Class thereof that was (based upon
an opinion of counsel) characterized as debt at the time of their issuance and
(ii) the Issuer will not be classified as an association or as a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes.
 
“Termination Date” is defined in Appendix A to the Master Exchange Agreement.
 
“Termination Event” means any of a Receivables Purchase Termination Event or a
Loan Event of Default.
 
“Termination Proceeds” means for any Residual Value Vehicle for any Monthly
Period (a) all amounts received by the Servicer during such Monthly Period upon,
after or in connection with the termination of the related Lease including,
without limitation, (i) sales proceeds with respect to such Residual Value
Vehicle, net of any and all out-of-pocket costs and expenses incurred by the
Servicer in connection with such sale or other disposition and any amounts
remitted to the related Obligor as required by applicable law or the related
Lease and (ii) any and all insurance proceeds received in connection with the
occurrence of a casualty event in respect of such Residual Value Vehicle and (b)
any and all amounts billed to the related Obligor in connection with the
termination of such Lease, including any Incidental Lease Termination Payments.
 
“Three Month Average Charge-Off Ratio” means, with respect to any Settlement
Date, the average of the Charge-Off Ratios for such Settlement Date and the two
immediately preceding Settlement Dates.
 
“Three Month Average Delinquency Ratio” means, with respect to any Settlement
Date, the average of the Delinquency Ratios for such Settlement Date and the two
immediately preceding Settlement Dates.
 
“Three Month Average Paid-In Advance Loss Ratio” means, with respect to any
Settlement Date, the average of the Paid-In Advance Loss Ratios for such
Settlement Date and the two immediately preceding Settlement Dates.
 
“Three Month Average Residual Value Loss Ratio” means, with respect to any
Settlement Date, the average of the Residual Value Loss Ratios for such
Settlement Date and the two immediately preceding Settlement Dates.
 
“TIA” means the Trust Indenture Act of 1939 as in force on the date hereof,
unless otherwise specifically provided.
 
“Transaction Documents” means, collectively, the Indenture, the Investor Notes,
any agreements relating to the issuance or the purchase of any of the Investor
Notes, any agreements relating to any Credit Enhancement for any Investor Notes,
the LLC Agreement, the Loan Agreement, the Loan Note, the Origination Trust
Guaranty, the Origination Trust Security Agreement, the Nominee Lienholder
Agreement, the Administration Agreement, the Assignment and Assumption
Agreement, the Management Agreement, the Origination Trust Documents, the Master
Exchange Agreement, the Master Trust Agreement, the Collection Account Control
Agreement and the Gain on Sale Account Control Agreement.
 
 

--------------------------------------------------------------------------------

 
“Transfer Agent and Registrar” is defined in Section 2.4 of the Base Indenture.
 
“Transfer Date” means, unless otherwise specified in the related Indenture
Supplement, with respect to any Series of Notes, the Business Day immediately
prior to each Payment Date.
 
“Twelve Month Average Charge-Off Ratio” means, with respect to any Settlement
Date, the average of the Charge-Off Ratios for such Settlement Date and the
eleven immediately preceding Settlement Dates.
 
“Twelve Month Average Paid-In Advance Loss Ratio” means, with respect to any
Settlement Date, the average of the Paid-In Advance Loss Ratios for such
Settlement Date and the eleven immediately preceding Settlement Dates.
 
“Twelve Month Average Residual Value Loss Ratio” means, with respect to any
Settlement Date, the average of the Residual Value Loss Ratios for such
Settlement Date and the eleven immediately preceding Settlement Dates.
 
“UCC” means the Uniform Commercial Code as in effect from time to time in the
applicable jurisdiction.
 
“Unit” means a Vehicle, the related Lease and the Related Rights associated
therewith or a Paid-In Advance Vehicle and the Related Rights associated
therewith.
 
“Unit Leases” means the Leases allocated to the Lease SUBI Portfolio.
 
“Unit Paid-In Advance Vehicles” means the Paid-In Advance Vehicles allocated to
the Lease SUBI Portfolio.
 
“Unit Repurchase Payments” means, for any Settlement Date, the aggregate amount
payable by the Servicer pursuant to Section 7.15 of the Series 1999-1 SUBI
Servicing Supplement on such Settlement Date.
 
“Unit Vehicle” means the Leased Vehicles and Paid-In Advance Vehicles allocated
to the Lease SUBI Portfolio.
 
“United States” or “U.S.” means the United States of America, its fifty States
and the District of Columbia.
 
“U.S. Government Obligations” means direct obligations of the United States of
America, or any agency or instrumentality thereof for the payment of which the
full faith and credit of the United States of America is pledged as to full and
timely payment of such obligations.
 
“UTI” is defined in the Origination Trust Agreement.
 
“UTI Assets” is defined in the Origination Trust Agreement.
 
 

--------------------------------------------------------------------------------

 
“Vehicle” means an automobile, a truck, a truck chassis, a truck body, a truck
tractor, a truck trailer or another type of motorized vehicle or equipment,
together with any and all accessories, additions and parts from time to time in
or to any of the foregoing and all accessions thereto.
 
“VMS” means PHH Vehicle Management Services LLC or any predecessor in interest
thereto (including, without limitation, PHH Fleet America Corporation and
Peterson, Howell & Heather, Inc.).
 
“WBNA” means Wachovia Bank, National Association.
 
“written” or “in writing” means any form of written communication, including,
without limitation, by means of telex, telecopier device, telegraph or cable.
 

--------------------------------------------------------------------------------