EX-10.76






Exhibit 10.76




CHESAPEAKE FUNDING LLC,

as Issuer




and




THE BANK OF NEW YORK MELLON,

as Indenture Trustee




 






AMENDED AND RESTATED BASE INDENTURE




Dated as of December 17, 2008




 






Asset Backed Notes

(Issuable in Series)





 





[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.





 









 








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
	 	 	2	 
	Section 1.4. Rules of Construction
	 	 	2	 
	Section 1.5. Ratification and Confirmation
	 	 	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	 






i









 






	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	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
	 	 	25	 
	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
	 	 	26	 
	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
	 	 	27	 
	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
	 	 	30	 
	Section 8.8. Notice of Defaults
	 	 	31	 
	Section 8.9. Notice of Material Proceedings
	 	 	31	 
	Section 8.10. Further Requests
	 	 	31	 
	Section 8.11. Protection of Issuer Assets
	 	 	31	 
	Section 8.12. Annual Opinion of Counsel
	 	 	32	 
	Section 8.13. Liens
	 	 	32	 
	Section 8.14. Other Indebtedness
	 	 	32	 
	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
	 	 	33	 
	Section 8.21. Investments
	 	 	33	 
	Section 8.22. No Other Agreements
	 	 	34	 






ii









 






	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	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
	 	 	42	 
	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
	 	 	44	 
	 
	 	 	 	 
	Section 10.1. Duties of the Indenture Trustee
	 	 	44	 
	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
	 	 	47	 
	Section 10.5. Notice of Defaults
	 	 	47	 
	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
	 	 	53	 
	 
	 	 	 	 
	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
	 	 	55	 
	Section 12.4. Revocation and Effect of Consents
	 	 	56	 






iii









 






	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	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
	 	 	56	 
	 
	 	 	 	 
	ARTICLE 13. MISCELLANEOUS
	 	 	56	 
	 
	 	 	 	 
	Section 13.1. Compliance Certificates and Opinions
	 	 	56	 
	Section 13.2. Forms of Documents Delivered to Indenture Trustee
	 	 	58	 
	Section 13.3. Actions of Noteholders
	 	 	59	 
	Section 13.4. Notices
	 	 	59	 
	Section 13.5. Conflict with TIA
	 	 	61	 
	Section 13.6. Rules by the Indenture Trustee
	 	 	61	 
	Section 13.7. Duplicate Originals
	 	 	61	 
	Section 13.8. Benefits of Indenture
	 	 	61	 
	Section 13.9. Payment on Business Day
	 	 	61	 
	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.
	 	 	62	 
	Section 13.15. Recording of Indenture
	 	 	62	 
	Section 13.16. No Petition
	 	 	62	 
	Section 13.17. SUBIs
	 	 	63	 







iv











 





          AMENDED AND RESTATED BASE INDENTURE, dated as of December 17, 2008, between CHESAPEAKE FUNDING
LLC, a special purpose limited liability company established under the laws of Delaware, as issuer
(the “Issuer”), and THE BANK OF NEW YORK MELLON, a national banking association, as trustee
(in such capacity, the “Indenture Trustee”).




WITNESSETH:




          WHEREAS, the Issuer and the Indenture Trustee entered into the Base Indenture, dated as of
March 7, 2006 (the “Original Base Indenture”), which provided for the issuance from time to time of
one or more series of Investor Notes;




          WHEREAS, pursuant to Section 12.2 of the Original Base Indenture, the Original Base Indenture
may be amended with the consent of the Issuer, the Indenture Trustee and the Holders of a Majority
in Interest of each Series of Outstanding Investor Notes;




          WHEREAS, the Issuer desires to amend and restate the Original Base Indenture in its entirety
as set forth herein and the Indenture Trustee hereby consents thereto; 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, that the Original Base Indenture be amended and restated in
its entirety 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.










 



2




          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”.



          Section 1.5. Ratification and Confirmation. On the date hereof, the Issuer hereby ratifies and
confirms all of the Series of Outstanding Investor Notes issued under the Original Base Indenture
and ratifies and confirms the grant of the lien in the Collateral for the benefit of the Investor
Noteholders pursuant to the Original Base Indenture.




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










 



3



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.




          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 this 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









 



4



     (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;




     (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).









 



5

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.




          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.










 



6



	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON, 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.




          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. The Bank of New York Mellon 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. The Bank of New York Mellon shall be
permitted to resign as Transfer Agent and Registrar upon 30 days’ written notice to the Indenture
Trustee; provided, however, that such resignation shall not be effective and The Bank of New York
Mellon shall continue to perform its duties as Transfer Agent and Registrar until the Indenture
Trustee has appointed a successor 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










 



7



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 101 Barclay Street,
Floor 4W, New York, New York 10286 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 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.










 



8




          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 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










 



9



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.




          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 The Bank of New York Mellon 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;









 



10



     (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




     (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.










 



11




          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 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










 



12



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:




          (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 actions by the Investor Noteholders shall refer to actions taken by
the Clearing Agency or the Foreign Clearing Agency upon instructions from the Clearing Agency
Participants, and all references in the Indenture to distributions, notices, reports and statements
to the Noteholders shall refer to distributions, notices, reports and statements to the Clearing
Agency or the Foreign Clearing Agency, as registered holder of the Investor Notes of such Series
for distribution to the Beneficial Owners in accordance with the procedures 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









 



13


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.




          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.










 



14




          (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.




          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









 



15



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;




     (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









 



16



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.




          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 or PHH 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 or PHH 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.










 



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          (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 or PHH 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 or PHH 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.




          (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









 



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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.




          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









 



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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;




     (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).










 



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          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.




          (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.





 











 





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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.




          (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










 



22



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.




          (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.










 



23




          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.




          (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.










 



24




          (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.]




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 12:00 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.










 



25




          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
ten (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.




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










 



26



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.




          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.










 



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          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.




          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










 



28



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.




          (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).










 



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          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.




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.










 



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          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.




          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










 



31



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.




          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:










 



32




          (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.




          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.










 



33




          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.




          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










 



34



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:





     (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









 



35




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;




     (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









 



36



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.




          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, other than
any Contingent Monthly Funding Costs with respect thereto, 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










 



37



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.




          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.










 



38




          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.




          (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









 



39



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;


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










 



40



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;




     (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





 











 




41

          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).




          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.




 









 





42



          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.




          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.




 









 





43



          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;




          (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




 









 






44


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.




          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.




 









 






45


          (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;




     (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



 









 





46

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.




          (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





 









 





47


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.




          (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 The Bank of New York Mellon.




          (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




 









 






48

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.




          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.




 









 





49



          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:





     (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.





 









 





50



          (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.




          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:




 









 





51




     (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




     (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.




 









 





52



          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.



          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



 









 





53


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.




          (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.



 









 







54



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);




          (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;






 









 





55


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:





     (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





 









 




56


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.






          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




 









 





57

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




     (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





 









 




58


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.



          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






 









 





59


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, authorization, direction, notice, consent, waiver or other action
provided by the Indenture to be given or taken by the Investor Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by such Investor
Noteholders in person or by an agent duly appointed in writing; and except as




herein otherwise expressly provided, such action shall become effective when such instrument
or instruments are delivered to the 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.




          (b) The fact and date of the execution by any Investor Noteholder of any such instrument or
writing may be proved in any reasonable manner which the Indenture Trustee deems sufficient.




          (c) Any request, demand, authorization, direction, notice, consent, waiver or other act by
an Investor Noteholder shall bind every Holder of every Investor Note issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done, or
omitted to be done, by the 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 additional proof of any matter referred to in
this Section 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

940 Ridgebrook Road

Sparks, MD 21152

Attention: President

Telecopier No.: (410) 771-2530

with a copy to the Administrator:



 









 





60


PHH Vehicle Management Services, LLC

940 Ridgebrook Road

Sparks, MD 21152

Telecopier: (410) 771-2530

Attention: General Counsel




If to the Indenture Trustee:




The Bank of New York Mellon

101 Barclay Street, Floor 4W

New York, New York 10286

Attention: Structured Finance Services — Chesapeake Funding

Phone:

Fax:



          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.




          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





 












 





61



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.




          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.










 



62




          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.




          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










 



63



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 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.











 



 




          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 	 
	 
	 	THE BANK OF NEW YORK MELLON, as Indenture Trustee

 	 
	 	By:  	/s/ Jared Fischer
 	 
	 	 	Name:  	Jared Fischer 	 
	 	 	Title:  	Assistant Treasurer 	 
	 












 



 






SCHEDULE 1

TO THE

AMENDED AND RESTATED BASE INDENTURE




DEFINITIONS LIST




          “Accrual Period” means the period from and including a Settlement Date 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 Aggregate Lease Balance as of such date, (b) [***]% of the excess of
(i) the Aggregate Residual Value Amount over (ii) the Excess Residual Value Amount as of such date
and (c) [***]% 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.






 




			
	[***]	 	INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.










 



2






          “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 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.










 



3




          “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 PersonaLease Corporation, a Maryland corporation, 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










 



4



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 Amended and Restated Base Indenture, dated as of December
17, 2008, 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










 



5



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 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.




          “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






 




			
	[***]	 	INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.











 



6





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, The Bank
of New York Mellon, 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 The Bank of New York Mellon 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 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.




          “Contingent Monthly Funding Costs” means, with respect to an Investor Note of any
Series, the amount specified in the related Indenture 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










 



7



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) solely for purposes of the transfer,
exchange or surrender of Investor Notes, The Bank of New York Mellon, 101 Barclay Street, Floor 4W,
New York, New York 10286, Attention: 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.




          “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










 



8



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.




          “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.










 



9




          “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 Floating Rate Index” means one of the following:




          (a) the rate on 30-day AA asset-backed commercial paper for each day published by the Board
Of Governors of the Federal Reserve System on its world wide web site;




          (b) the rate on one-month nonfinancial 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;




          (c) the London interbank offered rate for one-month dollar deposits published in the Money
Rates section of The Wall Street Journal; or




          (d) a rate based on the all-inclusive cost of funds attributable to the Outstanding Investor
Notes from time to time, calculated on a monthly basis.




          “Eligible Lease” means 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 based on an Eligible Floating Rate Index 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









 



10



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 [***]%;




     (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;





 




			
	[***]	 	INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.











 



11



     (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 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









 



12



     (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) (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;




     (i) the Origination Trust has legal and beneficial ownership therein free and clear of
all Liens other than Permitted Liens;




     (j) it is not subject to any dispute in whole or in part or to any offset,
counterclaim, defense, rescission, recoupment or subordination;









 



13



     (k) 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




     (l) 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 Damage Charges” means the charges under a Lease due to damage to the related
Leased Vehicle over a prescribed limit.




          “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 [***]% 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 [***]% of the Aggregate Unit Balance as of such date.




          “Exchange Act” means the Securities Exchange Act of 1934, as amended.






 




			
	[***]	 	INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.










 



14






          “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
acquired by Holdings from VMS pursuant to the Receivables Purchase Agreement and contributed by
Holdings to the Origination Trust pursuant to the Contribution Agreement 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 Second Amended and Restated Sold SUBI
Supplement 1999-1B to the Origination Trust Agreement, dated as of December 17, 2008, 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. [***], FBO# [***] 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.






 




			
	[***]	 	INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.










 



15






          “Gain on Sale Account Control Agreement” means the agreement among the Issuer, The
Bank of New York Mellon, 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 The Bank of New York Mellon 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).










 



16




          “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 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.




          “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





 











 




17


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.










 



18


          “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.




          “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.




          “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.










 



19


          “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, as
amended by Amendment No. 1 thereto, dated as of December 17, 2008, among the Borrower, the
Origination Trust and the Lender, as further 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.




          “Luxembourg Agent” is defined in Section 2.3(c) of the Base Indenture.










 



20


          “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.










 



21




          “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










 



22

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 the SPV and the Origination Trust, 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 [***]% 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




 






[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.











 



23



Issuer, Holdings, VMS, PHH, the Origination Trust, the Administrator or the Servicer, as the case
may be.




          “Original Base Indenture” is defined in the recitals to the Base Indenture.




          “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 Contribution Agreement, the Receivables Purchase
Agreement, the Asset Purchase 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.




          “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










 



24

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”;









 



25



     (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 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.










 



26


          “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(c) 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.










 



27


          “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.










 



28


          “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 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










 



29

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, as amended by
Amendment No. 1 thereto, dated as of March 6, 2007, and Amendment No. 2 thereto, dated as of
December 17, 2008, among the Origination Trust, Wilmington Trust Company, as SUBI Trustee, Holdings
and the Servicer, as further 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.










 



30


          “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.




          “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.




          “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.










 



31


          “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.




          “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.




          “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.










 



32


          “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.