Document:

Exhibit 4.03

THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH DEBENTURE NOR
ANY INTEREST HEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT HERETO IS EFFECTIVE
UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (2) THE COMPANY
RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL
AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY
BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS. ANY EXERCISE OR CONVERSION OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE MAY BE SUBJECT TO CONDITIONS SET FORTH IN ARTICLE III OF THE
SECURITIES PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER
HEREOF.

No.  _                                                             $[000000.00]

        8% SENIOR SUBORDINATED CONVERTIBLE DEBENTURE DUE OCTOBER 31, 2004

THIS 8% SENIOR SUBORDINATED CONVERTIBLE DEBENTURE is one of a duly authorized
issue of Debentures of TrackPower, Inc. a corporation duly incorporated under
the laws of Wyoming and having its principal address at 67 Wall Street, Suite
2411, New York, NY 10005 (the "Company"), designated as its 8% Senior
Subordinated Convertible Debentures due October 31, 2004 in an aggregate
principal amount not exceeding Five Million U.S. Dollars (U.S. $5,000,000) (the
"Debentures").

      FOR VALUE RECEIVED, the Company promises to pay to the order of [NAME]
having an address at [ADDRESS], the holder hereof, or its registered assigns
(the "Holder"), the principal sum of [DOLLAR AMOUNT] United States Dollars (U.S.
$[00000000]) on October 31, 2004 (the "Maturity Date") and to pay interest on
the principal sum outstanding under this Debenture, at the rate of 8% per annum.
Interest shall be payable in arrears annually on October 31st of each year,
commencing on October 31, 2000 (each such date, an "Interest Payment Date") and
on the Maturity Date. Interest shall be calculated based on a 360 day year.
Interest shall accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from the date of original issuance and shall
continue until the following Interest Payment Date. The interest so payable will
be paid to the person in whose name this Debenture is registered on the records
of the Company regarding registration and transfers of the Debentures (the
"Debenture Register") at the close of business on the record date for interest
payable on such Interest Payment Date; provided, however, that the Company's
obligation to a permitted transferee of this Debenture arises only if the
transfer, sale or other disposition is made in accordance with the terms and
conditions of the Securities Purchase Agreement between the Company and the
original holder hereof, a copy of which is attached hereto (as amended from

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time to time and in effect, the "Securities Purchase Agreement"). The record
date for any interest payment is the close of business on the date fifteen days
prior to the Interest Payment Date, unless such date shall not be a business
day, in which case on the next preceding business day. The Company shall be
entitled to withhold from all payments of interest on this Debenture any amounts
required to be withheld under the applicable provisions of the United States or
Canadian income tax laws as evidenced by an opinion of counsel of the Company.

      The principal and interest of this Debenture are payable in United States
Dollars at the address last appearing on the Debenture Register of the Company
as designated in writing by the Holder hereof from time to time.

      This Debenture is subject to the following additional provisions:

      1. Subordination to Senior Indebtedness. The Company covenants and agrees,
and each holder of Debentures, by his acceptance thereof, likewise covenants and
agrees, that the indebtedness evidenced by the Debentures, including the
principal of and interest thereon, shall be subordinate and subject in right of
payment, to the extent and in the manner hereinafter set forth, to the prior
payment in full of all Senior Indebtedness of the Company, whether now
outstanding or hereinafter incurred, and each holder of Debentures, by his
acceptance thereof, agrees to and shall be bound by the provisions of this
Paragraph 1.

            (a) "Senior Indebtedness" shall mean the principal of and premium,
if any, on and interest on any indebtedness of the Company, and any indebtedness
of another entity for the payment of which the Company is at the time of
determination responsible or liable as guarantor or otherwise, which
indebtedness in either case is for money borrowed from a bank or other unrelated
lending institution.

            (b) Upon any distribution of the assets of the Company upon any
dissolution, winding up or total liquidation or reorganization relative to the
Company or to its property (whether in bankruptcy, insolvency or receivership
proceedings, or upon an assignment for the benefit of creditors, or any other
marshaling of the assets and liabilities of the Company or otherwise),

            (i) all principal of (premium, if any) and interest on all Senior
      Indebtedness (including interest thereon accruing after the commencement
      of any bankruptcy or insolvency proceedings) shall first be paid in full,
      or provision made for such payment in cash, before any payment is made on
      account of the principal of or interest on the Debentures;

            (ii) any payment or distribution of assets of the Company of any
      kind or character, whether in cash, property or securities (other than
      securities of the Company as reorganized or readjusted or securities of
      the Company or any other corporation provided for by a plan of
      reorganization or readjustment the payment of which is subordinate, at
      least to the extent provided in this Paragraph 1 with respect to the
      Debentures, to the payment of all Senior Indebtedness, provided that the
      rights of the holders of Senior Indebtedness at the time outstanding are
      not altered by such reorganization or readjustment) on account of the
      indebtedness evidenced by the Debentures to which the

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      holders of the Debentures would be entitled except for the provisions of
      this Paragraph 1, shall be paid or delivered by the trustee in bankruptcy,
      receiver, assignee for the benefit of creditors or other liquidating agent
      making such payment or distribution directly to the holders of Senior
      Indebtedness, or their representative or representatives or to the trustee
      or trustees under any indenture pursuant to which any instruments
      evidencing any of such Senior Indebtedness may have been issued, pro rata,
      as their respective interests may appear for application to the payment of
      all Senior Indebtedness remaining unpaid to the extent necessary to pay
      all Senior Indebtedness in full after giving effect to any concurrent
      payment or distribution, or provision therefor in cash, to the holders of
      such Senior Indebtedness.

          The Company shall give prompt written notice to the holders of the
Debentures of any dissolution, winding up, total liquidation or reorganization
of the Company within the meaning of this Paragraph 1(b). Upon any payment or
distribution of assets of the Company referred to in this Paragraph 1(b), the
holders of the Debentures shall be entitled to rely upon a certificate of the
trustee in bankruptcy, receiver, assignee for the benefit of creditors or other
liquidating agent making such payment or distribution, delivered to the holders
of the Debentures, for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Paragraph 1(b).

            (c) No direct or indirect payment (in cash, property, securities, by
set-off or otherwise) shall be made or agreed to be made on account of the
principal of the Debentures, or interest thereon, or in respect of any
redemption, retirement, purchase or other acquisition of any of the Debentures,
and no holder of any Debentures shall be entitled to demand or receive any such
payment (i) if, or to the extent, such payment is restricted by any Senior
Indebtedness or under any agreement or indenture pursuant to which any
instruments evidencing any such Senior Indebtedness may have been issued or (ii)
if at the time of such payment or after giving effect thereto there shall have
occurred and be continuing any event of default under any Senior Indebtedness or
under any agreement or indenture pursuant to which any instruments evidencing
any such Senior Indebtedness may have been issued and the maturity of such
Senior Indebtedness shall have been accelerated as a result of such default.

            (d) In the event that any direct or indirect payment or distribution
of assets of the Company of any kind or character, whether in cash, property or
securities (other than securities of the Company as reorganized or readjusted or
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in this Paragraph 1 with respect to the Debentures, to the
payment of all Senior Indebtedness, provided that the rights of the holders of
Senior Indebtedness at the time outstanding are not altered by such
reorganization or readjustment) on account of the indebtedness evidenced by the
Debentures shall be received by the holders of the Debentures in contravention
of Paragraphs 1(b) or 1(c) before all Senior Indebtedness is paid in full, such
payment or distribution shall be held in trust for the benefit of, and shall be
paid over or delivered to, the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any such Senior
Indebtedness may have been issued, pro rata, as their respective interests may

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<PAGE>

appear, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all such Senior Indebtedness after giving
effect to any concurrent payment or distribution, or provision therefor in cash,
to the holders of such Senior Indebtedness.

            (e) After all Senior Indebtedness is paid in full, the holders of
the Debentures shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the Company made
on the Senior Indebtedness until the Debentures and interest shall be paid in
full, and for purposes of such subrogation, no such payments or distributions to
the holders of Senior Indebtedness of cash, property or securities, which
otherwise would be payable or distributable to the holders of the Debentures,
shall, as between the Company, its creditors other than the holders of Senior
Indebtedness, and the holders of the Debentures, be deemed to be a payment by
the Company to or on account of Senior Indebtedness, it being understood that
the provisions of this Paragraph 1 are and are intended solely for the purpose
of defining the relative rights of the holders of the Debentures, on the one
hand, and the holders of Senior Indebtedness, on the other hand.

            (f) Nothing contained in this Paragraph 1 or elsewhere in this
Debenture or in the Purchase Agreement is intended to or shall impair, as
between the Company, its creditors other than the holders of Senior Indebtedness
and the holders of the Debentures, the obligation of the Company, which is
absolute and unconditional, to pay to the holders of the Debentures the
principal of the Debentures and interest thereon, as and when the same shall
become due and payable in accordance with their terms, or to affect the relative
rights of the holders of the Debentures and creditors of the Company other than
the holders of Senior Indebtedness, nor shall anything herein or therein prevent
the holder of any Debentures from exercising all remedies otherwise permitted by
applicable law upon default under this Debenture, subject to the rights, if any,
under this Paragraph 1 of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.

      2. Transfers. This Debenture has been issued subject to investment
representations of the original purchaser hereof and may be transferred or
exchanged in the United States only (a) in compliance with the Securities Act of
1933, as amended (the "Act") and applicable state securities laws, (b) as
expressly permitted by the Securities Purchase Agreement, and (c) in accordance
with other applicable provisions hereof. Prior to due presentment for transfer
of this Debenture, the Company may treat the person in whose name this Debenture
is duly registered on the Company's Debenture Register as the owner hereof for
the purpose of receiving payment as herein provided and all other purposes,
whether or not this Debenture is then overdue, and the Company shall not be
affected by notice to the contrary.

      3. Definitions. For purposes hereof, the following terms shall have the
following meanings:

            "Ceiling" shall mean an amount that is equal to 110% of the Market
Price for one share of Common Stock on the day immediately preceding the Closing
Date; provided, however, that the Ceiling shall increase by an additional $0.50
on each of the second and the third anniversaries of the Closing Date.

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            "Change of Control" shall mean (A) the merger or consolidation of
the Company into or with another corporation, partnership, joint venture, trust
or other entity or the merger or consolidation of any other corporation into or
with the Company (in either case, in which consolidation or merger the
stockholders of the Company receive distributions of cash or securities as a
result of such consolidation or merger in complete exchange for their shares of
capital stock of the Company), (B) the sale or other disposition of all or
substantially all the assets of the Company (unless, in either case, upon
consummation of such sale or other disposition of assets in exchange for equity
Securities (and specifically excluding sales or other dispositions for cash),
the holders of voting securities of the Company immediately prior to such
transaction continue to own directly or indirectly, by virtue of securities
issued solely with respect to their shares of capital stock of the Company, not
less than a majority of the voting power of the surviving corporation).

            "Closing Date" shall mean the date of original issuance of this
Debenture.

            "Common Stock" shall mean the common shares, par value $.0001, of
the Company.

            "Conversion Deficiency" shall have the meaning set forth in
Paragraph 8(b).

            "Conversion Notice" shall have the meaning set forth in Paragraph
4(c)

            "Conversion Rate" shall have the meaning set forth in Paragraph
4(b).

            "Equity Offerings" shall mean the issuance or sale by the Company of
any Common Stock or securities which are convertible into or exchangeable for
Common Stock, or any warrants or other rights to subscribe for or to purchase,
or any options for the purchase of, Common Stock or any such convertible or
exchangeable securities (other than shares or options issued or which may be
issued pursuant to the Company's employee or director option plans or shares
issued upon exercise of options, warrants or rights outstanding on the Closing
Date and listed in the Company's filings with the Securities and Exchange
Commission ("SEC")).

            "Event of Default" shall have the meaning set forth in Paragraph 15.

            "Forced Conversion Date" shall have the meaning set forth in
Paragraph 4(c)(ii).

            "Forced Conversion Notice" shall have the meaning set forth in
Paragraph 4(c)(ii).

            "Holder Conversion Date" shall have the meaning set forth in
Paragraph 4(c)(i).

            "Market Price" shall mean, as of any relevant date, the lowest sales
price of one share of Common Stock as quoted in the over-the-counter market on
the pink sheets or bulletin board, as reported by Bloomberg Financial Markets.

            "Minimum Number of Shares" shall mean, at any time, the sum of (i)
the number of shares of Common Stock issued prior to such time upon conversion
of all or any part of the Debentures, plus (ii) the number of shares (as may be
adjusted in accordance with the terms

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hereof) of Common Stock issuable at such time upon conversion of the Debentures
(without giving effect to any applicable conversion restrictions), minus (iii)
the number of shares of Common Stock described in clause (i) above that have
been sold prior to such time by the Holders pursuant to a registration statement
or Rule 144.

            "Outstanding Amount" shall mean the principal sum outstanding under
this Debenture and all accrued but unpaid interest thereon.

            "Person" shall mean an individual, partnership, venture,
unincorporated association, organization, syndicate, corporation, limited
liability company, or other entity, trust and trustee, executor, administrator
or other legal or personal representative or any government or any agency or
political subdivision thereof.

            "Redemption Date" shall have the meaning set forth in Paragraph
5(a).

            "Redemption Debentures" shall have the meaning set forth in
Paragraph 5(c).

            "Redemption Price" shall have the meaning set forth in Paragraph
5(b).

            "Warrants" shall have the meaning set forth in Paragraph 4(b).

            Other terms defined in the Securities Purchase Agreement and not
otherwise defined herein shall have the same meanings herein as are set forth
for such terms in the Securities Purchase Agreement.

      4. Conversion. This Debenture is subject to conversion as follows:

            (a) (i) Holder's Right to Convert. This Debenture shall be
convertible at any time and from time to time after the Closing Date, in whole
or in part, at the option of the Holder hereof, into fully paid, validly issued
and nonassessable shares of Common Stock and fully paid, validly issued and
nonassessable Warrants.

                  (ii) Company's Right to Force Conversion. (A) The Company may
require conversion of all or any part of the Outstanding Amount of this
Debenture from time to time into fully paid, validly issued and nonassessable
shares of Common Stock and fully paid, validly issued and nonassessable
Warrants; provided, that

                        (1) the average closing price per share of Common Stock
for the five (5) trading days immediately preceding the delivery of the Forced
Conversion Notice shall have been greater than or equal to 120% of the Ceiling;

                        (2) (A) no Event of Default as specified in Section
15(b), (c), (d), (e), or (f) shall have occurred and be continuing prior to the
Forced Conversion Date and (B) no Event of Default as specified in Section 15(a)
shall have occurred and be continuing as of the Forced Conversion Date;

                        (3) no Conversion Deficiency shall have occurred prior
to the Forced Conversion Date; and

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                        (4) any such required conversion shall be made from each
Holder, pro rata according to the portion of the total Outstanding Amount of all
Debentures held by each Holder.

            (B) Notwithstanding clause (A) of this Paragraph 4(a)(ii), after the
second anniversary of the Closing Date, the Company may require conversion of
all or any part of this Debenture from time to time into fully paid, validly
issued and nonassessable shares of Common Stock and fully paid, validly issued
and nonassessable Warrants; provided, that

                        (1) (A) no Event of Default as specified in Section
15(b), (c), (d), (e), or (f) shall have occurred and be continuing prior to the
Forced Conversion Date and (B) no Event of Default as specified in Section 15(a)
shall have occurred and be continuing as of the Forced Conversion Date;

                        (2) no Conversion Deficiency shall have occurred prior
to the Forced Conversion Date; and

                        (3) any such required conversion shall be made from each
Holder, pro rata according to the portion of the total Outstanding Amount of all
Debentures held by each Holder.

            (C) The Company may require conversion of all or any part of this
Debenture from time to time into fully paid, validly issued and nonassessable
shares of Common Stock and fully paid, validly issued and nonassessable
Warrants; provided, that there is a Change of Control.

                  (iii) Automatic Conversion. At the Maturity Date, the
Outstanding Amount of this Debenture plus any unpaid charges or amounts shall
automatically be converted into fully paid, validly issued and nonassessable
shares of Common Stock and fully paid, validly issued and nonassessable
Warrants, and, except for the Holder's right to receive the Common Stock into
which this Debenture is automatically so converted, and except for any portion
of this Debenture which cannot be converted because of the limitations contained
in Paragraph 8(b), this Debenture shall be deemed to have been canceled whether
or not surrendered upon such automatic conversion.

                  (iv) Accrued But Unpaid Interest. Notwithstanding anything in
this Debenture to the contrary, the Outstanding Amount of this Debenture on any
Holder Conversion Date or any Forced Conversion Date, as the case may be, shall
include, without limitation, all accrued but unpaid interest under this
Debenture through such date.

            (b) Conversion Price for Holder Converted Shares. The Outstanding
Amount of this Debenture shall be convertible into the number of validly issued,
fully paid and non-assessable shares of Common Stock determined by dividing the
aggregate amount of the Debenture being converted by $0.50, as adjusted pursuant
to Section 6. Upon conversion, each share of Common Stock will be accompanied by
one three-year warrant, substantially in the form of Exhibit C hereto, to
purchase a share of Common Stock for the purchase price of $0.75 per share, as
adjusted, before such conversion, pursuant to Section 6 (the "Warrants").

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      The number of shares of Common Stock, and number of Warrants to purchase
Common Stock, into which the Outstanding Amount of this Debenture may be
converted pursuant to this paragraph is herein referred to as the "Conversion
Rate."

            (c) (i) Mechanics of Conversion by Holder. In order to convert this
Debenture (in whole or in part) into shares of Common Stock and Warrants, the
Holder shall surrender this Debenture, duly endorsed, by overnight courier, to
the Company, and, in case of any conversion pursuant to Paragraph 4(a)(i), shall
give written notice in the form of Exhibit A hereto (the "Conversion Notice") by
facsimile (with the original of such notice forwarded with the foregoing
courier) to the Company that the Holder elects to convert all or the portion of
the Outstanding Amount of this Debenture specified therein, which notice and
election shall be irrevocable by the Holder unless the Company shall default in
or fail to fulfill any or all of its obligations arising hereunder or otherwise
by reason of such notice or election, in which case, in addition to and not in
lieu of any and all other rights and remedies to which the Holder may thereby be
and become entitled, such notice and election, by further notice to the Company
may be revoked and rescinded at the election of the Holder exercised in its sole
discretion; provided, however, that the Company shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon conversion
unless this Debenture with evidence of the principal amount hereof to be
converted is delivered to the Company as provided above; and provided, further,
that each Conversion Notice shall provide for the Holder's election to convert
either (A) at least $2,500 of the Outstanding Amount of this Debenture, or (B)
if such Outstanding Amount shall then be less than $7,500, the entire
Outstanding Amount. The date on which a Conversion Notice is given (the "Holder
Conversion Date") shall be deemed to be the date the Company received by
facsimile the Conversion Notice, as evidenced by a printed confirmation of
receipt received by the Holder and confirmed by telephone conference between the
Holder and the Company. Upon receipt of any Conversion Notice, the Company shall
immediately verify the Holder's calculation of the Conversion Rate. Unless the
Company objects, in writing, to the Holder's calculation within four (4)
business days after the Holder Conversion Date, the Company will be deemed to
have accepted such calculation.

                  (ii) Mechanics of Forced Conversion by Company. In order to
require conversion of this Debenture pursuant to Paragraph 4(a)(ii) or
4(a)(iii), the Company shall give written notice in the form of Exhibit B
hereto, appropriately completed (the "Forced Conversion Notice"), by facsimile
(with the original of such notice forwarded by overnight courier) to each Holder
of Debentures. Such Forced Conversion Notice shall state that the Company elects
to force conversion of all or a specified portion of the Outstanding Amount of
the Debentures of each Holder, which notice and election shall be irrevocable by
the Company and shall be delivered at least 10 trading days prior to the date of
conversion specified in the Forced Conversion Notice (the "Forced Conversion
Date"). Each Holder will, within two business days after the Forced Conversion
Date, to the extent the Debenture has not been converted by such Holder prior to
the Forced Conversion Date, deliver such Debenture evidencing the Outstanding
Amount of such Debenture to be converted to the Company, duly endorsed, by
overnight courier. Notwithstanding anything herein to the contrary, any Holder
may convert any portion of its Debentures prior to the Forced Conversion Date.

                  (iii) Issuance of Certificates. In the case of any Conversion
Notice given by the Holder or any Forced Conversion Notice given by the Company,
the Company shall

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use reasonable commercial efforts to cause the Company's transfer agent for the
Common Stock to issue and deliver as promptly as practicable to such Holder or
to its designee, a certificate or certificates for the number of shares of
Common Stock to which the Holder shall be entitled, together with a Debenture
for the principal amount not submitted for conversion or forced to convert, as
the case may be. The person or persons entitled to receive the shares of Common
Stock issuable upon conversion shall be treated for all purposes as the record
holder or holders of such shares of Common Stock on the Holder Conversion Date
or the Forced Conversion Date, as the case may be.

      5. Redemption.

            (a) Company Option To Redeem. Any portion of this Debenture may be
redeemed at the Company's option expressed by a written notice (a "Redemption
Notice") to the Holder; provided that

                  (i) the average closing price per share of Common Stock for
five (5) trading days immediately preceding the delivery of the Redemption
Notice shall have been less than $0.48 per share, such price to be
proportionately adjusted in the event of a subdivision, split-up, spin-off or
combination in accordance with Section 6;

                  (ii) the Redemption Notice delivered by the Company shall be
received by the Holder at least ten (10) trading days (but not more than forty
(40) trading days) prior to the date (the "Redemption Date") of redemption;

                  (iii) on the date of the Redemption Notice, the Company shall
not be prohibited under the terms of any financing or other agreements or
applicable law from redeeming the Debentures on the Redemption Date; and

                  (iv) no Conversion Deficiency, as defined in Paragraph 8(b),
shall have occurred prior to the Redemption Date; or

                  (v) notwithstanding clauses (i) - (iv) of this paragraph 5(a),
there is a Change of Control.

            (b) Redemption Price. The redemption price for the portion of this
Debenture being redeemed shall equal the Outstanding Amount of this Debenture
being so redeemed, plus all late payment charges and all other amounts accrued,
if any, under this Debenture and not previously paid (the "Redemption Price").
The Redemption Price shall be payable in cash in United States Dollars.

            (c) Mechanics of Redemption. If less than all of the Outstanding
Amount of Debentures are to be redeemed at any time, selection of Debentures for
redemption will be made by the Company on a pro rata basis. In the event the
Company shall be required or elects to redeem any part or all of the Outstanding
Amount of the Debentures, the Company shall send by facsimile (with the original
of such notice forwarded by overnight courier) confirmation of such
determination or obligation to the record Holders of the Debentures being
redeemed (the "Redemption Debentures"), which confirmation shall be included in
the Redemption Notice. Such confirmation shall specify the Redemption Date,
which shall be at least 20 trading days

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(but not more than 40 trading days) after receipt by the Holder of the
Redemption Notice, as applicable. On the Redemption Date, the Redemption
Debentures shall be redeemed automatically without any further action by the
Holders of such Debentures and whether or not the Debentures are surrendered to
the Company (but only to the extent that the Company complies with its
obligation to pay the Redemption Price therefor); provided, that the Company
shall be obligated to pay the cash consideration due to a Holder of such
Debentures upon redemption when such Debentures are delivered to the principal
office of the Company. Thereupon, there shall be promptly issued and delivered
to such Holder, within seven (7) business days after the Redemption Date and
delivery to the Company of such Debentures at the address of such Holder on the
books of the Company, payment in immediately available funds to the name as
shown on the books of the Company in the amount of the Redemption Price as
calculated as set forth in Paragraph 5(b). If the Company shall not have the
funds available to pay the aggregate Redemption Price of all Redemption
Debentures, then, without limiting the Company's obligation to redeem all
Redemption Debentures, such redemption shall be made from each Holder, pro rata
according to the portion of the total Outstanding Amount of all Redemption
Debentures then held by each Holder and the Company shall not be permitted to
require any further redemption in accordance with Paragraph 5(a).

      Notwithstanding anything to the contrary contained herein, the Holders'
rights of conversion pursuant to Paragraph 4 hereof shall not be limited in any
manner by the Company's rights of redemption pursuant to this Paragraph 5.

      6. Stock Splits, Dividends, Reorganizations.

            (a) Stock Splits. After the date hereof, in case the Company shall
at any time subdivide its outstanding shares of Common Stock into a greater
number of shares, whether by stock dividend, stock split or otherwise, the
Conversion Rate in effect immediately prior to such subdivision shall be
proportionately reduced and the number of shares of Common Stock and Warrants
convertible shall be proportionately increased. In case the outstanding shares
of Common Stock of the Company shall be combined into a smaller number of
shares, the Conversion Rate in effect immediately prior to such combination
shall be proportionately increased and the number of shares of Common Stock and
Warrants convertible hereunder shall be proportionately reduced.

            (b) Reclassifications. After the date hereof, in case of any
reclassification or change in the outstanding shares of Common Stock (except
under the circumstances contemplated in Paragraph 6(a)), or in case of any
consolidation or merger to which the Company is a party (except a merger in
which the Company is the surviving corporation and which does not result in any
reclassification or change in the outstanding shares of Common Stock), or in
case of any sale or conveyance to another person or entity of all or
substantially all of the property of the Company, effective provision shall be
made by the Company or by the successor or purchasing person or entity that the
Holder shall have the right, upon conversion of this Debenture, at a Conversion
Rate in effect immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance for the number of shares of Common
Stock and number of Warrants that but for such transaction would have been
received upon conversion hereunder, to receive the kind and amount of stock and
other securities and property receivable in such transaction by a holder of such
number of shares.

                                       10
<PAGE>

                  (c) No Other Antidilution Rights. Except as expressly set
forth herein, the Holder shall not be entitled to any anti-dilution rights with
respect to either (i) the number and kind of shares subject to this Debenture or
(ii) the Conversion Rate.

      7. Fractional Shares. No fractional shares of Common Stock or scrip
representing fractional shares of Common Stock shall be issuable hereunder. The
number of shares of Common Stock that are issuable upon any conversion shall be
rounded down to the nearest whole share.

      8. Reservation of Stock Issuable Upon Conversion.

            (a) Reservation Requirement. The Company has reserved and the
Company shall continue to reserve and keep available at all times, free of
preemptive rights, shares of Common Stock for the purpose of enabling the
Company to satisfy any obligation to issue shares of its Common Stock upon
conversion of the Debentures. The number of shares so reserved may be reduced by
the number of shares actually delivered pursuant to conversion of Debentures
(provided that in no event shall the number of shares so reserved be less than
the Minimum Number of Shares applicable to any Debenture) and the number of
shares so reserved shall be increased or decreased proportionally to reflect
stock splits, stock dividends and other distributions. In the event that the
number of shares so reserved (either in the aggregate or as to any Debenture)
shall be insufficient for issuance upon conversion of the Debentures (without
giving effect to an applicable conversion restrictions), or if the Holders of
the Debentures would at any time upon conversion thereof be entitled to the
issuance of shares of Common Stock in excess of the limitation in Paragraph 8(b)
herein, then in either case, upon receipt by the Company of notice from any
Holder, the Company shall use its best efforts and all due diligence to increase
the number of shares so reserved (without giving effect to any applicable
conversion restrictions) to cure all such deficiencies (either in the aggregate
or as to any Debenture) and, if necessary, to obtain the approval by its
shareholders therefor.

            (b) Conversion Deficiency. If, upon receipt of a Conversion Notice,
the Company does not have a sufficient number of shares of Common Stock
available to satisfy the Company's obligations to issue Common Stock upon
conversion of all or any of the Debentures to be so converted (a "Conversion
Deficiency"), any Holder of the Debentures shall have the right to demand from
the Company immediate redemption of any portion of the Debentures with respect
to which the Company does not have a sufficient number of shares available to
satisfy such conversion obligations, in cash at the Redemption Price pursuant to
Paragraph 6 hereof, without regard to Paragraph 5(c) hereof. Within three
business days of the occurrence of any Conversion Deficiency, the Company shall
notify each Holder in writing of such occurrence.

      Within three business days of the receipt of written demand for redemption
from any Holder pursuant to this Paragraph 8(b), the Company shall notify each
such Holder whether such redemption is prohibited under the terms of any
financing or other agreements or applicable law.

      9. Other Covenants of the Company.

            The Company shall not redeem (other than pursuant to Paragraph 5),
retire, purchase or otherwise acquire, directly or indirectly, Debentures held
by any holder unless the

                                       11
<PAGE>

Company shall have offered to redeem, retire, purchase or otherwise acquire, as
the case may be, the same proportion of the aggregate principal amount of
Debentures held by each other holder of Debentures at the time outstanding upon
the same terms and conditions and such offer shall remain open for a period of
at least twenty (20) business days.

      10. Holder's Acknowledgements. Holder acknowledges and agrees to the
following:

            (a) This Debenture will not be registered under the Securities Act,
or any state securities laws, and will be issued in reliance upon available
exemptions from registration. This Debenture may not be sold, transferred or
assigned by the Holder, in whole or in part, without the consent of the Company
except in accordance with the terms described herein. The Common Stock and
Warrants receivable upon conversion hereof may not be sold, transferred,
assigned or otherwise disposed of without an effective registration statement
covering the Common Stock and/or Warrants under the Securities Act and any
applicable state securities laws, or an opinion of counsel satisfactory to the
Company that registration is not required under the Securities Act and
applicable state securities laws.

            (b) There are restrictions imposed by law upon the transfer of and
resale of such Common Stock and Warrants and the Holder may be required to hold
such shares of Common Stock and such Warrants for a long period of time unless
such shares and/or Warrants are subsequently registered under the Act and
applicable state securities laws, or an exemption from such registration is
available.

            (c) A legend in substantially the following form shall be placed on
the certificates for shares of Common Stock and for Warrants purchased upon
exercise of this Debenture:

                        The securities represented by this certificate have not
            been registered under the Securities Act of 1933, as amended (the
            "Act"), or any state securities laws and neither such securities nor
            any interest therein may be offered, sold, pledged, assigned or
            otherwise transferred unless (1) a registration statement with
            respect thereto is effective under the Act and any applicable state
            securities laws or (2) the Company receives an opinion of counsel to
            the holder of such securities, which counsel and opinion are
            reasonably satisfactory to the Company, that such securities may be
            offered, sold, pledged, assigned or transferred in the manner
            contemplated without an effective registration statement under the
            Act or applicable state securities laws. Hedging transactions
            involving the securities represented by this certificate may not be
            conducted unless in compliance with the Act.

            (d) The Holder shall have no rights as a stockholder with respect to
any shares of Common Stock receivable upon conversion of this Debenture until
the date of issuance of a certificate for the Common Stock so received in
accordance with the terms hereof. Except as expressly set forth herein, no
adjustment shall be made for dividends or other rights for which the record date
occurs prior to the date of such issuance.

                                       12
<PAGE>

            11. Representations of the Holder. (a) Each Holder (as to itself
only) represents and warrants to the Company that:

                  (i) this Debenture, the Warrants and the shares of Common
      Stock receivable upon conversion hereunder are being acquired for its own
      account, not as a nominee or agent for any other Person, and without a
      view to the distribution or resale of such shares or any interest therein
      in violation of the Securities Act; and

                  (ii) such Holder is an "accredited investor" within the
      meaning of Rule 501(a) under Regulation D, as presently in effect, and has
      such knowledge and experience in financial and business matters so as to
      be capable of evaluating the merits and risks of an investment in the
      Common Stock and Warrants, and such Holder is capable of bearing the
      economic risks of such investment and is able to bear the complete loss of
      an investment in the Common Stock and Warrants.

            (b) Each Holder further represents that the execution, delivery, and
performance of this Debenture is within such Holder's powers (corporate or
otherwise) and has been duly authorized by all requisite action (corporate or
otherwise) and that this Debenture constitutes the legal, valid and binding
obligation of such Holder, enforceable against such Holder in accordance with
its terms subject, as to enforceability, to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other laws of general applicability
affecting the rights of creditors and to general principles of equity.

            (c) If such Holder is an individual, such Holder's principal place
of residence is in the state or other jurisdiction so designated in Section 20
herein, and if such Holder is not an individual, such Holder's principal place
of business is in the state or other jurisdiction so designated in Section 20
herein.

            (d) Each Holder acknowledges that he has received all documents and
information relating to an investment in the Debenture, the Warrants and the
Common Stock requested by or on behalf of such Holder, including such
information relating to the Company as such Holder has deemed appropriate in
making a decision to invest in the Debenture, the Warrants and the Common Stock.

      12. Obligations Absolute. No provision of this Debenture, other than those
provisions relating to the conversion of the Debentures shall alter or impair
the obligation of the Company, which is absolute and unconditional, to pay the
principal of, and interest on, this Debenture at the time, place and rate, and
in the manner, herein prescribed.

      13. Waivers of Demand, Etc. The Company hereby expressly waives demand and
presentment for payment, notice of nonpayment, protest, notice of protest,
notice of dishonor, notice of intent to accelerate, prior notice of bringing of
suit and diligence in taking any action to collect amounts called for hereunder
and will be directly and primarily liable for the payments of all sums owing and
to be owing hereon, regardless of and without any notice (except as required by
law), diligence, act or omission as or with respect to the collection of any
amount called for hereunder.

                                       13
<PAGE>

      14. Replacement Debentures. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Debenture, and, in the case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
this Debenture, if mutilated, the Company will make and deliver a replacement
Debenture of like tenor, in lieu of this Debenture. Further, if the Holder of
this Debenture exercises the conversion rights granted hereunder in part but not
in whole, the Company agrees that it will deliver to the Holder a replacement
Debenture which will entitle the Holder thereof to convert this Debenture into
the number of shares of Common Stock that remain as yet unconverted under this
Debenture on the terms and conditions set forth herein.

      15. Defaults. If one or more of the following events hereinafter called
"Events of Default") shall occur:

            (a)   The Company shall fail to perform or observe any material
                  covenant or agreement in the Securities Purchase Agreement or
                  any other covenant, term, provision, condition, agreement or
                  obligation of the Company under this Debenture, and such
                  failure shall continue uncured for a period of twenty (20)
                  business days after notice from the Holder of such failure; or

            (b)   The Company shall fail to make any payments of principal or
                  interest when due under this Debenture or upon redemption of
                  this Debenture when due or fail to issue shares of Common
                  Stock upon conversion of this Debenture (other than in
                  accordance with the terms of this Debenture), and such failure
                  shall continue uncured for a period of five (5) business days
                  after notice from the Holder of such failure; or

            (c)   The Company shall (i) become insolvent; (ii) admit in writing
                  its inability to pay its debts generally as they mature; (iii)
                  make a general assignment for the benefit of creditors or
                  commence proceedings for its dissolution; or (iv) apply for or
                  consent to the appointment of a trustee, liquidator or
                  receiver for it or for a substantial part of its property or
                  business; or

            (d)   A trustee, liquidator or receiver shall be appointed for the
                  Company or for a substantial part of its property or business
                  without its consent and shall not be discharged within sixty
                  (60) days after such appointment; or

            (e)   Any governmental agency or any court of competent jurisdiction
                  shall assume custody or control of the whole or any
                  substantial portion of the properties or assets of the Company
                  and shall not be dismissed within sixty (60) days thereafter;
                  or

            (f)   Bankruptcy, reorganization, insolvency or liquidation
                  proceedings or other proceedings, or relief under any
                  bankruptcy law or any law for the relief of debt, shall be
                  instituted by or against the Company and, if instituted
                  against the Company, shall not be dismissed within sixty (60)
                  days after such institution, or the Company shall by any
                  action or answer approve of,

                                       14
<PAGE>

                  consent to, or acquiesce in any such proceedings or admit to
                  any material allegations of, or default in answering a
                  petition filed in, any such proceeding;

then, or at any time thereafter prior to the date on which all continuing Events
of Default have been cured, and in each and every such case, unless such Event
of Default shall have been waived in writing by the Holder (which waiver shall
not be deemed to be a waiver of any subsequent default) at the option of the
Holder and in the Holder's sole discretion, the Holder may, by notice to the
Company declare this Debenture immediately due and payable, and the Holder may
immediately, and without expiration of any period of grace, enforce any and all
of the Holder's rights and remedies provided herein or any other rights or
remedies afforded by law. In such event, the Debenture shall be redeemed at a
redemption price per Debenture equal to the redemption price provided in
Paragraph 5(b).

      16. Savings Clause. In case any provision of this Debenture is held by a
court of competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, and the validity and
enforceability of the remaining provisions of this Debenture will not in any way
be affected or impaired thereby.

      17. Entire Agreement. This Debenture and the agreements referred to in
this Debenture constitute the full and entire understanding and agreement
between the Company and the Holder with respect to the subject hereof. Neither
this Debenture nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the Company and
two-thirds-in-interest of the Holders.

      18. Assignment Etc. The Holder may, subject to compliance with the
Securities Purchase Agreement, without notice, transfer or assign this Debenture
or any interest herein (but in no event in an amount less than $2,500 in
Outstanding Amount or, if less than $7,500 the total Outstanding Amount hereof);
provided, however, that the Holder will furnish the Company with an opinion of
counsel to the effect that such assignment or transfer is exempt from the
registration requirements under the Securities Act. Each such assignee or
transferee shall have all of the rights and obligations of, the Holder under
this Debenture. The Company agrees that, subject to compliance with the
Securities Purchase Agreement, after receipt by the Company of written notice of
assignment from the Holder or from the Holders' assignee, all principal,
interest, and other amounts which are then due and thereafter become due under
this Debenture shall be paid to such assignee at the place of payment designated
in such notice. This Debenture shall be binding upon the Company and its
successors and shall inure to the benefit of the Holder and its successors and
assigns.

      19. No Waiver. No failure on the part of the Holder to exercise, and no
delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Holder of any
right, remedy or power hereunder preclude any other or future exercise of any
other right, remedy or power. Each and every right, remedy or power hereby
granted to the Holder or allowed it by law or other agreement shall be
cumulative and not exclusive of any other, and may be exercised by the Holder
from time to time.

                                       15

<PAGE>

      20. Miscellaneous. Unless otherwise provided herein, any notice or other
communication to a party hereunder shall be deemed to have been duly given if
personally delivered or sent by registered or certified mail, return receipt
requested, postage prepaid with a copy in each case sent on the same day to the
party by facsimile, Federal Express or other overnight delivery service to said
party at its address set forth herein or such other address as either may
designate for itself in such notice to the other and communications shall be
deemed to have been received when delivered personally or, if sent by mail, when
actually received by the party to whom it is addressed. Copies of all notices to
the Company shall be sent to TrackPower, Inc., 67 Wall Street, Suite 2411, New
York, NY 10005, and to the Holder at the address last appearing on the Debenture
Register of the Company as designated in writing by the Holder hereof from time
to time. Whenever the sense of this Debenture requires, words in the singular
shall be deemed to include the plural and words in the plural shall be deemed to
include the singular. Paragraph headings are for convenience only and shall not
affect the meaning of this document.

      21. Choice of Law and Venue: Waiver of Jury Trial. THIS DEBENTURE SHALL BE
CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW OR CHOICE OF LAW THEREOF. The Company hereby (i) irrevocably
submits to the exclusive jurisdiction of the United States District Court for
the Southern District of New York for the purposes of any suit, action or
proceeding arising out of or relating to this Debenture and (ii) waives, and
agrees not to assert in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. The Company consents to process
being served in any such suit, action or proceeding by mailing a copy thereof to
the Company at the address in effect for notices to it under this Debenture and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing in this paragraph shall affect or limit any right to
serve process in any other manner permitted by law.

                                       16
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.

                                          Dated as of [DATE]

                                          TRACKPOWER, INC.

                                          By: ________________________________
                                          Name: ______________________________
                                          Title: _____________________________

ATTEST:

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

                                       17

<PAGE>

                                    EXHIBIT A

                      (To Be Executed by Registered Holder
                         in order to Convert Debenture)

                                CONVERSION NOTICE
                                       FOR
                 8% CONVERTIBLE DEBENTURES DUE OCTOBER 31, 2004

The undersigned, as Holder of the 8% Convertible Debenture Due October 31, 2004
of Trackpower (the "Company"), No. [NUMBER], in the outstanding principal amount
of U.S.$[000000000] (the "Debenture"), hereby irrevocably elects to convert
U.S.$___________ of the outstanding principal amount of the Debenture and
U.S.$___________ of interest accrued but unpaid under the Debenture into shares
of the common stock, par value $.0001 (the "Common Stock"), of the Company, and
an equal number of Warrants to purchase Common Stock of the Company, according
to the conditions of the Debenture, as of the date written below. The
undersigned hereby requests that share certificates for the Common Stock and
Warrants to purchase Common Stock to be issued to the undersigned pursuant to
this Conversion Notice, be issued in the name of, and delivered to, the
undersigned or its designee as indicated below. If shares or Warrants are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto. No fee will be charged to
the Holder for any conversion, except for transfer taxes, if any.

      The undersigned (as to itself only) represents and warrants to the Company
that:

            (i) the shares of Common Stock and Warrants received upon Conversion
      hereby are being acquired for its own account, not as a nominee or agent
      for any other Person, and without a view to the distribution or resale of
      such shares or any interest therein in violation of the Securities Act;
      and

            (ii) the undersigned is an "accredited investor" within the meaning
      of Rule 501(a) under Regulation D, as presently in effect, and has such
      knowledge and experience in financial and business matters so as to be
      capable of evaluating the merits and risks of an investment in the Common
      Stock and Warrants, and such Holder is capable of bearing the economic
      risks of such investment and is able to bear the complete loss of an
      investment in the Common Stock and Warrants.

      The undersigned further represents that the execution, delivery, and
performance of this Conversion Notice is within its powers (corporate or
otherwise) and has been duly authorized by all requisite action (corporate or
otherwise) and that this Conversion Notice constitutes the legal, valid and
binding obligation of the undersigned, enforceable against it in accordance with
its terms subject, as to enforceability, to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other laws of general applicability
affecting the rights of creditors and to general principles of equity.

      If the undersigned is an individual, the undersigned's principal place of
residence is in the state or other jurisdiction so designated below his name,
and if the undersigned is not an

                                       18

<PAGE>

individual, the undersigned's principal place of business is in the state or
other jurisdiction so designated below its name.

      The undersigned acknowledges that it has received all documents and
information relating to an investment in the Common Stock and Warrants requested
by or on behalf of the undersigned, including such information relating to the
Company as the undersigned has deemed appropriate in making a decision to invest
in the Common Stock and Warrants.

      Accompanying this Conversion Notice is a Conversion Rate Computation
Schedule setting forth the determination by the undersigned of the number of
shares of Common Stock issuable pursuant to this Conversion Notice.

Conversion Information:       ________________________________
Print Name of Holder

                              Print Title:

                            Print Address of Holder:

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

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

                              Issue Common Stock and Warrants to:

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

                              at:________________________________

                              --------------------------------
                               Date of Conversion

                                       19

<PAGE>

                      CONVERSION RATE COMPUTATION SCHEDULE

Outstanding Amount To Be Converted:                   $_________

Divided by $0.50, adjusted pursuant to
Section 6 of the Debenture per above:                 $_________

Shares of Common Stock to be
  issued on conversion                           _________

Warrants to be issued on Conversion              _________

                                       20

<PAGE>

                                    EXHIBIT B

                            FORCED CONVERSION NOTICE
                                       FOR
                 8% CONVERTIBLE DEBENTURES DUE OCTOBER _31, 2004

The undersigned, an authorized officer of TrackPower, Inc. (the "Company"),
issuer of the 8% Convertible Debenture Due October 31, 2004 of the Company, No.
[NUMBER], held by [NAME] (the "Holder") in the outstanding principal amount of
U.S.$______________ and accrued but unpaid interest thereon in the amount of
U.S.$_____________ (the "Debenture"), hereby irrevocably elects to require
conversion of U.S. $____________ of the outstanding principal amount of the
Debenture and U.S. $____________ of interest, fees and other amounts accrued but
unpaid under the Debenture into shares of the common stock, par value $.0001
(the "Common Stock"), of the Company, and an equal number of Warrants to
purchase Common Stock of the Company, according to the terms and conditions of
the Debenture, on the Forced Conversion Date written below.1 Capitalized terms
used in this Forced Conversion Notice and not otherwise defined shall have the
meanings ascribed thereto in or by reference in the Debenture.

The undersigned (as to itself only) represents and warrants to the Company that:

      (i) the shares of Common Stock and Warrants received upon Conversion
hereby are being acquired for its own account, not as a nominee or agent for any
other Person, and without a view to the distribution or resale of such shares or
any interest therein in violation of the Securities Act; and

      (ii) the undersigned is an "accredited investor" within the meaning of
Rule 501(a) under Regulation D, as presently in effect, and has such knowledge
and experience in financial and business matters so as to be capable of
evaluating the merits and risks of an investment in the Common Stock and
Warrants, and such Holder is capable of bearing the economic risks of such
investment and is able to bear the complete loss of an investment in the Common
Stock and Warrants.

The undersigned further represents that the execution, delivery, and performance
of this Conversion Notice is within its powers (corporate or otherwise) and has
been duly authorized by all requisite action (corporate or otherwise) and that
this Conversion Notice constitutes the legal, valid and binding obligation of
the undersigned, enforceable against it in accordance with its terms subject, as
to enforceability, to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws of general applicability affecting the
rights of creditors and to general principles of equity.

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

(1) The Forced Conversion Date shall be at least 10 trading days from the date
of delivery of this Forced Conversion Notice.

                                       21

<PAGE>

If the undersigned is an individual, the undersigned's principal place of
residence is in the state or other jurisdiction so designated below his name,
and if the undersigned is not an individual, the undersigned's principal place
of business is in the state or other jurisdiction so designated below its name.

The undersigned acknowledges that it has received all documents and information
relating to an investment in the Common Stock and Warrants requested by or on
behalf of the undersigned, including such information relating to the Company as
the undersigned has deemed appropriate in making a decision to invest in the
Common Stock and Warrants.

The undersigned hereby certifies on behalf and in the name of and the Company
that all of the relevant conditions set forth in Paragraph 4(a)(ii) of the
Debenture have been satisfied.

Accompanying this Forced Conversion Notice is a Computation Schedule completed
by the Company setting forth the determination by the Company of the Outstanding
Amount of such Debenture, plus fees and other charges and amounts, to be
converted. The calculation of the number of shares of Common Stock and Warrants
issuable pursuant to this Forced Conversion Notice shall be made in accordance
with the terms of the Debenture.

The Company shall issue and deliver to the Holder share certificates and
Warrants for the Common Stock issuable pursuant to this Forced Conversion
Notice. If the Holder desires the shares certificates or Warrants to be issued
in the name of, and delivered to a person other than the Holder, the Holder
should so indicate below and deliver a copy of this Forced Conversion Notice to
the Company, 580 Granite Court, Pickering Ontario L1W 3Z4, Attention: Gary
Hokkanen, at least two business days prior to the Forced Conversion Date. No fee
will be charged to the Holder for this conversion, except for transfer taxes, if
any.

                             -----------------------------------
                             Forced Conversion Date

                             TRACKPOWER, INC.

                             By:________________________________
                                Name:
                                Title:

                             Issue Common Stock and Warrants to:

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

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

                             At:________________________________

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

                                       22
<PAGE>

                      CONVERSION RATE COMPUTATION SCHEDULE

Outstanding Amount To Be Converted:                  $_________

Divided by $0.50, as adjusted pursuant
  to Section 6 of the Debenture:                     $_________

Shares of Common Stock to be
  issued on conversion                          _________

Warrants to be issued on Conversion             _________

                                       23

<PAGE>

                                    Exhibit C

                                TRACKPOWER, INC.
                             (a Wyoming corporation)

                  THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY
STATE SECURITIES LAW, AND NEITHER THEY NOR ANY INTEREST THEREIN MAY BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION
STATEMENT, OR (ii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY
SATISFACTORY TO COUNSEL FOR THIS CORPORATION, THAT AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS,
IS AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR OTHER TRANSFER.

                          COMMON STOCK PURCHASE WARRANT

                  THIS COMMON STOCK PURCHASE WARRANT (this "Warrant") certifies
that, for value received [NAME] (the "Holder") is entitled, on the terms and
subject to the conditions set forth herein, to purchase up to [NUMBER] Thousand
(000,000) shares of the Common Stock, $.0001 par value ("Common Stock"), of
TrackPower, Inc., a Wyoming corporation (the "Company"), at an exercise price
per share equal to $0.75 (the "Purchase Price"), in lawful funds of the United
States of America payable in cash or by certified or official bank check, such
Purchase Price and the number of shares purchasable hereunder (the "Subject
Stock") being subject to adjustment as set forth in this Common Stock Purchase
Warrant (the "Warrant").

                  This Warrant is subject to the following further terms and
conditions:

                  Section 1. EXERCISE. The purchase rights represented by this
Warrant shall be exercisable, at the option of the Holder (as herein defined),
for all or part of the Subject Stock, subject to adjustment as hereinafter set
forth, commencing on the date hereof and (as hereinafter defined) and
terminating on the second anniversary of the Event Date. As used herein, the
term "Event Date" means the earlier of (a) the date upon which the Common Stock
has been accepted for listing on the Nasdaq Stock Market, Inc., or (b) the date
upon which the Company has entered into a firm-commitment underwriting agreement
with one or more underwriters pursuant to which Common Stock will be offered to
the public in an offering registered under the Securities Act. Upon presentation
and surrender of this Warrant, with written notice in the form of Exhibit A from
the Holder of its exercise, together with payment of the Purchase Price then in
effect for the shares of Common Stock thereby purchased, at the principal office
of the Company, the Holder shall be entitled to receive a certificate or
certificates representing the shares of Common Stock so purchased. The term
"Holder" shall include any person to whom this Warrant has been transferred as
permitted by the terms of this Warrant. All shares which may be issued upon the
exercise of this Warrant will, upon issuance, be fully paid and nonassessable
and free from all taxes, liens and charges with respect thereto.

                  Section 2. CONSIDERATION. This Warrant has been issued to the
Holder for good and valuable consideration, receipt of which is hereby
acknowledged.

<PAGE>

                  Section 3. ADJUSTMENTS.

                  (a) Stock Splits. After the date hereof, in case the Company
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares, whether by stock dividend, stock split or otherwise,
the Purchase Price in effect immediately prior to such subdivision shall be
proportionately reduced and the number of shares of Common Stock purchasable
shall be proportionately increased. In case the outstanding shares of Common
Stock of the Company shall be combined into a smaller number of shares, the
Purchase Price in effect immediately prior to such combination shall be
proportionately increased and the number of shares of Common Stock purchasable
hereunder shall be proportionately reduced.

                  (b) Reclassifications. After the date hereof, in case of any
reclassification or change in the outstanding shares of Common Stock (except
under the circumstances contemplated in Section 3(a), or in case of any
consolidation or merger to which the Company is a party (except a merger in
which the Company is the surviving corporation and which does not result in any
reclassification or change in the outstanding shares of Common Stock), or in
case of any sale or conveyance to another person or entity of all or
substantially all of the property of the Company, effective provision shall be
made by the Company or by the successor or purchasing person or entity that the
Holder shall have the right, upon presentation and surrender of this Warrant,
with written notice from the Holder of its exercise, together with payment of
the Purchase Price in effect immediately prior to such reclassification, change,
consolidation, merger, sale or conveyances for the number of shares that but for
such transaction would have been purchased hereunder, to receive the kind and
amount of stock and other securities and property receivable in such transaction
by a holder of such number of shares.

                  (c) No Other Antidilution Rights. Except as expressly set
forth herein, the Holder shall not be entitled to any anti-dilution rights with
respect to either (i) the number and kind of shares subject to this Warrant or
(ii) the Purchase Price.

                  Section 4. REPLACEMENT. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and, in the case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it, and reimbursement to the
Company of all reasonable expenses incidental thereto, and upon surrender and
cancellation of this Warrant, if mutilated, the Company will make and deliver a
replacement warrant of like tenor, in lieu of this Warrant. Further, if the
Holder of this Warrant exercises the purchase rights granted hereunder in part
but not in whole, the Company agrees that it will deliver to the Holder a
replacement warrant which will entitle the Holder thereof to purchase the number
of shares of Common Stock that remain as yet unpurchased under this Warrant on
the terms and conditions set forth herein.

                  Section 5. NO FRACTIONAL SHARES. The Company shall not be
required to issue stock certificates representing fractions of shares of Common
Stock, but may, at its option, in respect of any fraction of a share make a
payment in cash based on the Purchase Price.

                  Section 6. RESERVATION OF SHARES. The Company shall reserve
and keep available a sufficient number of shares of Common Stock to satisfy the
requirements of this Warrant.

                  Section 7. NOTICES. All notices, requests, consents or other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered or mailed first-class postage prepaid as follows:

                  (a) If to the Holder, to

                      [NAME]
                      [ADDRESS]
                      [ADDRESS]

<PAGE>

or at such other address as may have been furnished to the Company in writing by
the Holder; and

                  (b) If to the Company, to

                      TrackPower, Inc.
                      67 Wall Street, Suite 2411
                      New York, NY 10005

                  or at such other address as may have been furnished to the
Holder in writing by the Company.

                  Section 8. TAX CONSEQUENCES. Holder acknowledges that the
issuance of this Warrant and its exercise may have tax consequences to Holder,
and agrees that the Company has no responsibility for advising Holder with
respect to such taxes or for payment of any such taxes. Holders shall rely
solely on its own tax advisor and shall be solely responsible for payment of any
resulting taxes.

                  Section 9. HOLDER'S ACKNOWLEDGEMENTS. Holder acknowledges and
agrees to the following:

                  (a) This Warrant and such Common Stock will not be registered
under the Securities Act, or any state securities laws, and will be issued in
reliance upon available exemptions from registration. This Warrant may not be
sold, transferred or assigned by the Holder, in whole or in part, without the
consent of the Company. The Common Stock may not be sold, transferred, assigned
or otherwise disposed of without an effective registration statement covering
the Common Stock under the Securities Act and any applicable state securities
laws, or an opinion of counsel satisfactory to the Company that registration is
not required under the Securities Act and applicable state securities laws.

                  (b) There are restrictions imposed by law upon the transfer of
and resale of such Common Stock and the Holder may be required to hold such
shares of Common Stock for a long period of time unless such shares are
subsequently registered under the Securities Act and applicable state securities
laws, or an exemption from such registration is available.

                  (c) The following legend shall be placed on the certificates
for shares of Common Stock purchased upon exercise of this Warrant:

            The securities represented by this certificate have not been
     registered under the Securities Act of 1933, as amended (the "Act"), or any
     state securities laws and neither such securities nor any interest therein
     may be offered, sold, pledged, assigned or otherwise transferred unless (1)
     a registration statement with respect thereto is effective under the Act
     and any applicable state securities laws or (2) the Company receives an
     opinion of counsel to the holder of such securities, which counsel and
     opinion are reasonably satisfactory to the Company, that such securities
     may be offered, sold, pledged, assigned or otherwise transferred in the
     manner contemplated without an effective registration statement under the
     Act or applicable state securities laws.

                  (d) The Holder shall have no rights as a stockholder with
respect to any shares of Common Stock purchasable under this Warrant until the
date of issuance of a certificate for the Common Stock so purchased in
accordance with the terms hereof. Except as expressly set forth herein,

<PAGE>

no adjustment shall be made for dividends or other rights for which the record
date occurs prior to the date of such issuance.

                  Section 10. REPRESENTATIONS OF THE HOLDER. (a) Each Holder (as
to itself only) represents and warrants to the Company that:

                  (i)   this Warrant and the shares of Common Stock purchasable
                        hereunder are being acquired for its own account, not as
                        a nominee or agent for any other Person, and without a
                        view to the distribution or resale of such shares or any
                        interest therein in violation of the Securities Act; and

                  (ii)  such Holder is an "accredited investor" within the
                        meaning of Rule 501(a) under Regulation D, as presently
                        in effect, and has such knowledge and experience in
                        financial and business matters so as to be capable of
                        evaluating the merits and risks of an investment in the
                        Common Stock, and such Holder is capable of bearing the
                        economic risks of such investment and is able to bear
                        the complete loss of an investment in the Warrants and
                        the Common Stock.

                  (b) Each Holder further represents that the execution,
delivery, and performance of this Agreement is within such Holder's powers
(corporate or otherwise) and has been duly authorized by all requisite action
(corporate or otherwise) and that this Agreement constitutes the legal, valid
and binding obligation of such Holder, enforceable against such Holder in
accordance with its terms subject, as to enforceability, to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws of
general applicability affecting the rights of creditors and to general
principles of equity.

                  (c) If such Holder is an individual, such Holder's principal
place of residence is in the state or other jurisdiction so designated in
Section 7 herein, and if such Holder is not an individual, such Holder's
principal place of business is in the state or other jurisdiction so designated
in Section 7 herein.

                  (d) Each Holder acknowledges that he has received all
documents and information relating to an investment in the Warrants and the
Common Stock requested by or on behalf of such Holder, including such
information relating to the Company as such Holder has deemed appropriate in
making a decision to invest in the Warrants and the Common Stock.

                  Section 11. REPRESENTATION OF THE COMPANY. The Company
represents and warrants that this Warrant has been duly authorized, executed and
delivered and constitutes the binding and enforceable obligation of the Company.

                  Section 12. GOVERNING LAW. This Warrant shall be construed and
enforced in accordance with and governed by the laws of the State of New York
without regard to the choice of law principles thereof. In the event of any
controversy or claim arising out of or relating to this Warrant or the breach or
alleged breach hereof, each of the parties hereto irrevocably (i) submits to the
non-exclusive jurisdiction of the courts of the State of New York, located in
New York City or the United States District Court for the Southern District of
New York, (ii) waives any objection which it may have at any time to the laying
of venue of any action or proceeding brought in any such court, (iii) waives any
claim that such action or proceeding has been brought in an inconvenient forum,
and (iv) agrees that service of process or of any other papers upon such party
by registered mail at the address to which notices are required to be sent to
such party under Section 7 shall be deemed good, proper and effective service
upon such party.

<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its duly authorized officer and attested to by its Secretary as of
the date set forth below.

DATED:  As of December 31, 1999

                                    TRACKPOWER, INC.

                                    By:  ________________________________
                                         Name:
                                         Title:

      Attest:

      -------------------------------
      Name:  Carrie J. Weiler
      Title: Secretary

<PAGE>

                                    Exhibit A

                           FORM OF NOTICE OF EXERCISE

TO: TrackPower, Inc.

                  The undersigned, the holder of warrants to purchase shares of
common stock of TrackPower, Inc. (the "Company") pursuant to a warrant dated as
of December 31, 1999, hereby irrevocably elects to exercise the purchase right
represented by such warrants for, and to purchase thereunder, [NUMBER] shares of
common stock of the Company and herewith tenders payment of $_________ in full
payment of the purchase price for such shares, and requests that the
certificates for such shares be issued in the name of, and be delivered to, the
undersigned at the address indicated.

                  The undersigned (as to itself only) represents and warrants to
the Company that:

            (i) the shares of Common Stock being purchased hereby are being
      acquired for its own account, not as a nominee or agent for any other
      Person, and without a view to the distribution or resale of such shares or
      any interest therein in violation of the Securities Act; and

            (ii) the undersigned is an "accredited investor" within the meaning
      of Rule 501(a) under Regulation D, as presently in effect, and has such
      knowledge and experience in financial and business matters so as to be
      capable of evaluating the merits and risks of an investment in the Common
      Stock, and such Holder is capable of bearing the economic risks of such
      investment and is able to bear the complete loss of an investment in the
      Common Stock.

                  The undersigned further represents that the execution,
delivery, and performance of this Notice of Exercise is within its powers
(corporate or otherwise) and has been duly authorized by all requisite action
(corporate or otherwise) and that this Notice of Exercise constitutes the legal,
valid and binding obligation of the undersigned, enforceable against it in
accordance with its terms subject, as to enforceability, to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws of
general applicability affecting the rights of creditors and to general
principles of equity.

                  If the undersigned is an individual, the undersigned's
principal place of residence is in the state or other jurisdiction so designated
below his name, and if the undersigned is not an individual, the undersigned's
principal place of business is in the state or other jurisdiction so designated
below its name.

<PAGE>

                  The undersigned acknowledges that it has received all
documents and information relating to an investment in the Common Stock
requested by or on behalf of the undersigned, including such information
relating to the Company as the undersigned has deemed appropriate in making a
decision to invest in the Common Stock.

Dated:  _____________________

                                    By:      __________________________________

                                    Name:    __________________________________

                                    Address: __________________________________

<PAGE>

      Item 13.  Exhibits and Reports on Form 8-K

      (a)   Exhibits.

Exhibit    Document
-------    --------
*27        Financial Data Schedule.
           -----------------------

*     Filed herewith.

     (b) Reports on Form 8-K

            None

<PAGE>

                                   SIGNATURES

      In accordance with sections 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant caused this Report to be signed on its behalf by the
undersigned, thereto duly authorized individual.

   Date:  June 27, 2000
                                TRACKPOWER, INC.

                                 By:

                                     /s/ John G. Simmonds
                                     -----------------------------
                                     Name: John G. Simmonds
                                     Title: Chief Executive
                                     Officer

<PAGE>

      In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.

           Name                        Title                  Date
           ----                        -----                  ----

/s/ John G. Simmonds
---------------------------
     John G. Simmonds           Chairman/President/CEO/Director    June 27, 2000
                                 (principal executive officer)

/s/ Gary N. Hokkanen
---------------------------
     Gary N. Hokkanen            Chief Financial Officer           June 27, 2000
                              (principal financial officer)

/s/ Charles Cernansky
--------------------------
     Charles J. Cernansky             Director                     June 27, 2000

/s/ Ken Adelberg
---------------------------
     Ken Adelberg                     Director                     June 27, 2000

/s/ Arnold Smolen
---------------------------
     Arnold Smolen                    Director                     June 27, 2000

/s/ Lawrence Aziz
---------------------------
     Lawrence Aziz                    Director                     June 27, 2000<PAGE>

                                                                  Execution Copy
================================================================================

                   CHEVY CHASE AUTO RECEIVABLES TRUST 2000-1

                      Class A-1 6.87% Asset Backed Notes
                      Class A-2 7.25% Asset Backed Notes
                      Class A-3 7.39% Asset Backed Notes
                      Class A-4 7.47% Asset Backed Notes
                       Class B 7.76% Asset Backed Notes
                       Class C 8.15% Asset Backed Notes

                            ______________________

                                   INDENTURE

                           Dated as of June 1, 2000

                            ______________________

                        U.S. BANK NATIONAL ASSOCIATION,

                               Indenture Trustee

================================================================================
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                         Page
                                                                                         ----
<S>                                                                                      <C>
ARTICLE I Definitions and Incorporation by Reference..................................     2

     SECTION 1.1    Definitions.......................................................     2
     SECTION 1.2    Incorporation by Reference of Trust Indenture Act.................    13
     SECTION 1.3    Rules of Construction.............................................    14

ARTICLE II The Notes..................................................................    14

     SECTION 2.1    Form..............................................................    14
     SECTION 2.2    Execution, Authentication and Delivery............................    15
     SECTION 2.3    Temporary Notes...................................................    15
     SECTION 2.4    Registration; Registration of Transfer and Exchange...............    16
     SECTION 2.5    Mutilated, Destroyed, Lost or Stolen Notes........................    17
     SECTION 2.6    Persons Deemed Owner..............................................    18
     SECTION 2.7    Payment of Principal and Interest; Defaulted Interest.............    18
     SECTION 2.8    Cancellation......................................................    19
     SECTION 2.9    Release of Collateral.............................................    19
     SECTION 2.10   Book-Entry Notes..................................................    19
     SECTION 2.11   Notices to Clearing Agency........................................    20
     SECTION 2.12   Definitive Notes..................................................    20

ARTICLE III Covenants.................................................................    21

     SECTION 3.1    Payment of Principal and Interest.................................    21
     SECTION 3.2    Maintenance of Office or Agency...................................    21
     SECTION 3.3    Money for Payments to be Held in Trust............................    21
     SECTION 3.4    Existence.........................................................    23
     SECTION 3.5    Protection of Trust Estate........................................    23
     SECTION 3.6    Opinions as to Trust Estate.......................................    24
     SECTION 3.7    Performance of Obligations; Servicing of Receivables..............    24
     SECTION 3.8    Negative Covenants................................................    25
     SECTION 3.9    Annual Statement as to Compliance.................................    26
     SECTION 3.10   Issuer May Consolidate, Etc. Only on Certain Terms................    26
     SECTION 3.11   Successor or Transferee...........................................    28
     SECTION 3.12   No Other Business.................................................    28
     SECTION 3.13   No Borrowing......................................................    28
     SECTION 3.14   Servicer's Obligations............................................    28
     SECTION 3.15   Guarantees, Loans, Advances and Other Liabilities.................    28
     SECTION 3.16   Capital Expenditures..............................................    28
     SECTION 3.17   Compliance with Laws..............................................    29
     SECTION 3.18   Restricted Payments...............................................    29
     SECTION 3.19   Notice of Events of Default.......................................    29
     SECTION 3.20   Further Instruments and Acts......................................    29
     SECTION 3.21   Amendments of Sale and Servicing Agreement and Trust Agreement....    29
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>
                                                                                             Page
                                                                                             ----
<S>                                                                                          <C>
     SECTION 3.22   Income Tax Characterization..............................................  29

ARTICLE IV Satisfaction and Discharge........................................................  29

     SECTION 4.1    Satisfaction and Discharge of Indenture..................................  29
     SECTION 4.2    Application of Trust Money...............................................  30
     SECTION 4.3    Repayment of Moneys Held by Note Paying Agent............................  31

ARTICLE V Remedies...........................................................................  31

     SECTION 5.1    Events of Default........................................................  31
     SECTION 5.2    Acceleration of Maturity; Rescission and Annulment.......................  32
     SECTION 5.3    Collection of Indebtedness and Suits for Enforcement by Trustee..........  33
     SECTION 5.4    Remedies.................................................................  35
     SECTION 5.5    Optional Preservation of the Receivables.................................  36
     SECTION 5.6    Priorities...............................................................  36
     SECTION 5.7    Limitation of Suits......................................................  37
     SECTION 5.8    Unconditional Rights of Noteholders To Receive Principal and Interest....  37
     SECTION 5.9    Restoration of Rights and Remedies.......................................  38
     SECTION 5.10   Rights and Remedies Cumulative...........................................  38
     SECTION 5.11   Delay or Omission Not a Waiver...........................................  38
     SECTION 5.12   Control by Noteholders...................................................  38
     SECTION 5.13   Waiver of Past Defaults..................................................  39
     SECTION 5.14   Undertaking for Costs....................................................  39
     SECTION 5.15   Waiver of Stay or Extension Laws.........................................  39
     SECTION 5.16   Action on Notes..........................................................  39
     SECTION 5.17   Performance and Enforcement of Certain Obligations.......................  40
     SECTION 5.18   Application of the Trust Indenture Act...................................  40

ARTICLE VI The Indenture Trustee.............................................................  40

     SECTION 6.1    Duties of Indenture Trustee..............................................  40
     SECTION 6.2    Rights of Indenture Trustee..............................................  42
     SECTION 6.3    Individual Rights of Indenture Trustee...................................  44
     SECTION 6.4    Indenture Trustee's Disclaimer...........................................  44
     SECTION 6.5    Notice of Defaults.......................................................  44
     SECTION 6.6    Reports by Trustee to Holders............................................  44
     SECTION 6.7    Compensation and Indemnity...............................................  44
     SECTION 6.8    Replacement of Indenture Trustee.........................................  45
     SECTION 6.9    Successor Indenture Trustee by Merger....................................  46
     SECTION 6.10   Appointment of Co-Trustee or Separate Trustee............................  47
     SECTION 6.11   Eligibility: Disqualification............................................  48
     SECTION 6.12   Preferential Collection of Claims Against Issuer.........................  48
     SECTION 6.13   Appointment and Powers...................................................  48
     SECTION 6.14   Performance of Duties....................................................  49
     SECTION 6.15   Limitation on Liability..................................................  49
     SECTION 6.16   Reliance Upon Documents..................................................  49
     SECTION 6.17   Reserved.................................................................  50
</TABLE>

                                      ii
<PAGE>

<TABLE>
<CAPTION>
                                                                                                  Page
                                                                                                  ----
<S>                                                                                               <C>
     SECTION 6.18   Representations and Warranties of the Indenture Trustee......................   50
     SECTION 6.19   Waiver of Setoffs............................................................   50
     SECTION 6.20   Control by the Declaring Noteholders.........................................   50

ARTICLE VII Noteholders' Lists and Reports.......................................................   50

     SECTION 7.1    Issuer To Furnish To Indenture Trustee Names and Addresses of Noteholders....   50
     SECTION 7.2    Preservation of Information; Communications to Noteholders...................   51
     SECTION 7.3    Reports by Issuer............................................................   51
     SECTION 7.4    Reports by Indenture Trustee.................................................   51

ARTICLE VIII Accounts, Disbursements and Releases................................................   51

     SECTION 8.1    Collection of Money..........................................................   51
     SECTION 8.2    Release of Trust Estate......................................................   52
     SECTION 8.3    Opinion of Counsel...........................................................   52

ARTICLE IX Supplemental Indentures...............................................................   53

     SECTION 9.1    Supplemental Indentures Without Consent of Noteholders.......................   53
     SECTION 9.2    Supplemental Indentures with Consent of Noteholders..........................   54
     SECTION 9.3    Execution of Supplemental Indentures.........................................   55
     SECTION 9.4    Effect of Supplemental Indenture.............................................   55
     SECTION 9.5    Conformity With Trust Indenture Act..........................................   56
     SECTION 9.6    Reference in Notes to Supplemental Indentures................................   56

ARTICLE X Redemption of Notes...................................................................    56

     SECTION 10.1   Redemption..................................................................    56
     SECTION 10.2   Form of Redemption Notice...................................................    56
     SECTION 10.3   Notes Payable on Redemption Date............................................    57

ARTICLE XI Miscellaneous........................................................................    57

     SECTION 11.1   Compliance Certificates and Opinions, etc...................................    57
     SECTION 11.2   Form of Documents Delivered to Indenture Trustee............................    59
     SECTION 11.3   Acts of Noteholders.........................................................    60
     SECTION 11.4   Notices, etc., to Indenture Trustee, Issuer and Rating Agencies.............    60
     SECTION 11.5   Notices to Noteholders; Waiver..............................................    61
     SECTION 11.6   Alternate Payment and Notice Provisions.....................................    61
     SECTION 11.7   Conflict with Trust Indenture Act...........................................    62
     SECTION 11.8   Effect of Headings and Table of Contents....................................    62
     SECTION 11.9   Successors and Assigns......................................................    62
     SECTION 11.10  Separability................................................................    62
     SECTION 11.11  Benefits of Indenture.......................................................    62
     SECTION 11.12  Legal Holidays..............................................................    62
     SECTION 11.13  GOVERNING LAW...............................................................    62
     SECTION 11.14  Counterparts................................................................    62
     SECTION 11.15  Trust Obligation; Limitation of Liabilities.................................    63
     SECTION 11.16  No Petition.................................................................    63
     SECTION 11.17  Inspection..................................................................    64
</TABLE>

                                      iii
<PAGE>

                                           Page
                                           ----

Exhibit A-1              Form of Class A-1 Note

Exhibit A-2              Form of Class A-2 Note

Exhibit A-3              Form of Class A-3 Note

Exhibit A-4              Form of Class A-4 Note

Exhibit A-5              Form of Class B Note

Exhibit A-6              Form of Class C Note

                                      iv
<PAGE>

                             CROSS-REFERENCE TABLE

          Cross-reference sheet showing the location in the Indenture of the
provisions inserted pursuant to Sections 310 through 318(a) inclusive of the
Trust Indenture Act of 1939./1/

         Trust Indenture Act of 1939                Indenture Section
         ---------------------------                -----------------

Section 310
       (a) (1)..................................           6.11
       (a) (2)..................................           6.11
       (a) (3)..................................           6.10
       (a) (4)..................................      Not Applicable
       (a) (5)..................................           6.11
       (b)......................................         6.11, 6.8
       (c)......................................      Not Applicable
Section 311
       (a)......................................           6.12
       (b)......................................           6.12
       (c)......................................      Not Applicable
Section 312
       (a)......................................        7.1, 7.2(a)
       (b)......................................          7.2(b)
       (c)......................................          7.2(c)
Section 313
       (a)......................................            7.4
       (b)......................................            7.4
       (c)......................................           11.5
       (d)......................................            7.4
Section 314
       (a)(1)...................................            7.3
       (a)(2)...................................            7.3
       (a)(3)...................................            7.3
       (a)(4)...................................            7.3
       (b)(1)...................................          3.6(a)
       (b)(2)...................................          3.6(b)
       (c)(1)...................................            4.1
                                                         8.2(e), 11.1
       (c)(2)...................................       2.11(c), 4.1,
                                                         8.2(b), 11.1
       (c)(3)...................................          8.2(b)
       (d)(1)...................................       8.2, 11.1(a)

______________________

/1/  This Cross-Reference Table is not part of the Indenture.
<PAGE>

       (d)(2)...................................          11.1(a)
       (d)(3)...................................          11.1(a)
       (e)......................................          11.1(b)
Section 315
       (a)......................................     6.1(a), 6.1(c)(i)
       (b)......................................         6.5, 11.5
       (c)......................................          6.1(a)
       (d)(1)...................................      6.1(b), 6.1(c)
       (d)(2)...................................        6.1(c)(ii)
       (d)(3)...................................        6.1(c)(iii)
       (e)......................................           5.14
Section 316
       (a)......................................           5.18
       (b)......................................            5.8
       (c)......................................           5.18
Section 317
       (a)(1)...................................            5.3
       (a)(2)...................................            5.5
       (b)......................................            3.1
Section 318
       (a)......................................           11.7
<PAGE>

          INDENTURE dated as of June 1, 2000, between CHEVY CHASE AUTO
RECEIVABLES TRUST 2000-1, a Delaware business trust (the "Issuer"), and U.S.
BANK NATIONAL ASSOCIATION, a national banking association, as indenture trustee
(the "Indenture Trustee")

          Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Issuer's Class A-1 6.87%
Asset Backed Notes (the "Class A-1 Notes"), Class A-2 7.25% Asset Backed Notes
(the "Class A-2 Notes"), Class A-3 7.39% Asset Backed Notes (the "Class A-3
Notes"), Class A-4 7.47% Asset Backed Notes (the "Class A-4 Notes", and
collectively with the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes, the "Class A Notes"), Class B 7.76% Asset Backed Notes (the "Class B
Notes") and Class C 8.15 % Asset Backed Notes (the "Class C Notes" and together
with the Class A Notes and the Class B, the "Notes"):

          As security for the payment and performance by the Issuer of its
obligations under this Indenture and the Notes, the Issuer has agreed to assign
the Collateral (as defined below) as collateral to the Indenture Trustee for the
benefit of the Noteholders.

                                GRANTING CLAUSE

          The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
for the benefit of the Holders of the Notes, all of the Issuer's right, title
and interest in and to (a) the Receivables listed in the Schedule of
Receivables, including all monies due or received thereunder on or after the
Cut-Off Date and all property (including the right to receive future Liquidation
Proceeds) that secures a Receivable; (b) an assignment of the security interests
in the Financed Vehicles granted by Obligors pursuant to the Receivables and any
other interest of the Issuer in the Financed Vehicles; (c) the Note Account, the
Reserve Account and the Collection Account and funds deposited therein and all
investments of such funds; (d) all items contained in the Receivable Files and
any and all other documents that Chevy Chase Bank, F.S.B. keeps on file in
accordance with its customary procedures relating to the Receivables, the
Obligors or the Financed Vehicles; (e) any Liquidation Proceeds and any proceeds
from claims on any physical damage, theft, vendor's single interest, credit
life, disability or hospitalization insurance policies covering Financed
Vehicles or Obligors; (f) the Issuer's other rights and benefits, but none of
its obligations or burdens, under the Sale and Servicing Agreement; and (g) all
present and future claims, demands, causes and choses in action in respect of
any or all of the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Collateral").

          The foregoing Grant is made in trust to the Indenture Trustee, for the
benefit of the Noteholders.  The Indenture Trustee hereby acknowledges such
Grant, accepts the trusts under this Indenture in accordance with the provisions
of this Indenture and agrees to perform its
<PAGE>

duties required in this Indenture to the end that the interests of such parties,
recognizing the priorities of their respective interests, may be adequately and
effectively protected.

                                   ARTICLE I

                  Definitions and Incorporation by Reference
                  ------------------------------------------

          SECTION 1.1  Definitions. Except as otherwise specified herein, the
                       -----------
following terms have the respective meanings set forth below for all purposes of
this Indenture.

     "Account" means any of the Collection Account, the Note Account and the
Reserve Account.

     "Affiliate" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.  A Person shall not be
deemed to be an Affiliate of any person solely because such other Person has the
contractual right or obligation to manage such Person unless such other Person
controls such Person through equity ownership or otherwise.

     "Authorized Officer" means, with respect to the Issuer and the Servicer,
any officer or agent acting pursuant to a power of attorney of the Owner Trustee
or the Servicer, as applicable, who is authorized to act for the Owner Trustee
or the Servicer, as applicable, in matters relating to the Issuer or the
Servicer, as applicable, and who is identified on the list of Authorized
Officers delivered by each of the Owner Trustee and the Servicer to the
Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).

     "Basic Documents" means this Indenture, the Certificate of Trust, the Trust
Agreement, the Sale and Servicing Agreement and other documents and certificates
delivered in connection therewith.

     "Book Entry Notes" means a beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.10.

     "Business Day" means, unless otherwise specified in this Agreement, any day
other than a Saturday, a Sunday, or a day on which banking institutions in New
York, New York, Chevy Chase, Maryland or the city in which the Corporate Trust
Office of the Indenture Trustee is located shall be authorized or obligated by
law, executive order, or governmental decree to be closed.

     "Certificate" means a trust certificate evidencing the beneficial interest
of a Certificateholder in the Trust.

     "Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.

                                       2
<PAGE>

     "Certificateholder" means the Person in whose name a Certificate is
registered on the Certificate Register.

     "Class" means the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes, the Class B Notes or the Class C Notes, as the
context requires.

     "Class A Notes" means the Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes and the Class A-4 Notes.

     "Class A-1 Final Scheduled Payment Date" means July 12, 2001, (the "Special
Class A-1 Payment Date").

     "Class A-1 Interest Rate" means 6.87% per annum (computed on the basis of
the actual number of days elapsed in a 360-day year).

     "Class A-1 Notes" means the Class A-1 6.87% Asset Backed Notes,
substantially in the form of Exhibit A-1.

     "Class A-2 Final Scheduled Payment Date" means December 15, 2002, or if
such day is not a business day, the immediately following Business Day.

     "Class A-2 Interest Rate" means 7.25% per annum (calculated on the basis of
a 360-day year consisting of twelve 30-day months (or with respect to the
initial Payment Date, calculated on the basis of an interest accrual period from
the Closing Date to the initial Payment Date)).

     "Class A-2 Notes" means the Class A-2 7.25% Asset Backed Notes,
substantially in the form of Exhibit A-2.

     "Class A-3 Final Scheduled Payment Date" means June 15, 2004, or if such
day is not a business day, the immediately following Business Day.

     "Class A-3 Interest Rate" means 7.39% per annum (calculated on the basis of
a 360-day year consisting of twelve 30-day months (or with respect to the
initial Payment Date, calculated on the basis of an interest accrual period from
the Closing Date to the initial Payment Date)).

     "Class A-3 Notes" means the Class A-3 7.39% Asset Backed Notes,
substantially in the form of Exhibit A-3."

     "Class A-4 Final Scheduled Payment Date" means July 15, 2005, or if such
day is not a business day, the immediately following Business Day.

     "Class A-4 Interest Rate" means 7.47% per annum (calculated on the basis of
a 360-day year consisting of twelve 30-day months (or with respect to the
initial Payment Date, calculated on the basis of an interest accrual period from
the Closing Date to the initial Payment Date)).

     "Class A-4 Notes" means the Class A-4 7.47% Asset Backed Notes,
substantially in the form of Exhibit A-4.

                                       3
<PAGE>

     "Class B Final Scheduled Payment Date" means November 15, 2005, or if such
day is not a business day, the immediately following Business Day.

     "Class B Interest Rate" means 7.76% per annum (calculated on the basis of a
360-day year consisting of twelve 30-day months (or with respect to the initial
Payment Date, calculated on the basis of an interest accrual period from the
Closing Date to the initial Payment Date)).

     "Class B Notes" means the Class B 7.76% Asset Backed Notes, substantially
in the form of Exhibit A-5.

     "Class C Final Scheduled Payment Date" means December 15, 2006, or if such
day is not a business day, the immediately following Business Day.

     "Class C Interest Rate" means 8.15% per annum (calculated on the basis of a
360-day year consisting of twelve 30-day months (or with respect to the initial
Payment Date, calculated on the basis of an interest accrual period from the
Closing Date to the initial Payment Date)).

     "Class C Notes" means the Class C 8.15% Asset Backed Notes, substantially
in the form of Exhibit A-6.

     "Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended.  The
initial Clearing Agency shall be The Depository Trust Company.

     "Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other person for whom from time to time a Clearing Agency effects
book-entry transfers of securities deposited with the Clearing Agency.

     "Closing Date" means June 21, 2000.

     "Code" means the Internal Revenue Code of 1986, as it may be amended from
time to time, or any successor statute thereto, and applicable temporary or
final regulations of the U.S. Department of the Treasury promulgated thereunder.

     "Collateral" has the meaning specified in the Granting Clause of this
Indenture.

     "Collection Account" means the account designated as such, established and
maintained pursuant to Section 5.1 of the Sale and Servicing Agreement.

     "Collection Period" means (i) initially, the period from and including the
Cut-Off Date through and including the last day of the calendar month in which
the Cut-Off Date occurs and (ii) thereafter, each calendar month until the Trust
shall terminate pursuant to Article XI of the Sale and Servicing Agreement,
Section 10.1 hereof or Section 8.1 of the Trust Agreement.

     "Controlling Class" means the Holders of Notes representing a majority of
the Outstanding Amount of the Class A Notes, or if the Class A Notes are not
Outstanding, the Outstanding Amount of the Class B Notes, or if neither the
Class A Notes nor the Class B Notes are Outstanding, the Outstanding Amount of
the Class C Notes.

                                       4
<PAGE>

     "Corporate Trust Office" at the date hereof, is located at 180 East 5th
Street, St. Paul, Minnesota, 55101, Attention:  Structured Finance; the telecopy
number for the Corporate Trust Office on the date of the execution of this
Agreement is (651) 244-0089.

     "Default" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.

     "Declaring Noteholders" has the meaning set forth in Section 5.2(a) hereof.

     "Definitive Notes" has the meaning specified in Section 2.10.

     "Delivery" when used with respect to any Eligible Investments means:

          (a)  with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations, in each case that
constitute "instruments" within the meaning of Section 9-105(l)(i) of the UCC
and are susceptible of physical delivery, transfer thereof by physical delivery
to the Indenture Trustee endorsed to, or registered in the name of, the
Indenture Trustee or its nominee or endorsed in blank by an effective
endorsement, and, with respect to a certificated security (as defined in Section
8-102(4) of the UCC) (i) the acquisition of possession by the Indenture Trustee
of the "security certificate" (as defined in 8-102(16) of the UCC), or (ii)
another person, other than a "securities intermediary" (as defined in 8-102(14)
of the UCC), either acquires possession of the security certificate on behalf of
the Indenture Trustee or, having previously acquired possession of the
certificate, acknowledges that it holds for the Indenture Trustee, or (iii) a
securities intermediary acting on behalf of the Indenture Trustee acquires
possession of the security certificate, only if the certificate is in
"registered form" (as defined in 8-102(13) of the UCC) and has been specially
indorsed to the Indenture Trustee by an effective "indorsement" (as defined in
8-102(l1) of the UCC) (all of the foregoing "Physical Property") and, in any
event, any such Physical Property in registered form shall be in the name of the
Indenture Trustee or its nominee or custodian, and such additional or
alternative procedures as may hereafter become appropriate to effect the
complete transfer of ownership of or a security interest in any such Eligible
Investment to the Indenture Trustee, consistent with changes in applicable law
or regulations or the interpretation thereof;

          (b)  with respect to any security that is a book-entry security held
through the Federal Reserve System pursuant to federal book-entry regulations,
the following procedures, all in accordance with applicable law, including
applicable federal regulations and Articles 8 and 9 of the UCC, book-entry
registration of such Eligible Investment to an appropriate Participant's
Securities Account (as defined in such applicable federal regulations)
maintained with a Federal Reserve Bank by a financial institution which is a
"Participant" pursuant to applicable federal regulations and issuance by such
Participant of a deposit advice or other written confirmation of such book-entry
registration to the Indenture Trustee; and the making by such financial
institution of entries in its books and records identifying such book-entry
security held through the Federal Reserve System pursuant to federal book-entry
regulations as belonging to the Indenture Trustee and as having been credited to
a securities account in the name of the Indenture Trustee and indicating that
such financial institution holds such Eligible Investment solely as agent for
the Indenture Trustee; and such additional or alternative procedures as may be
or hereafter become requisite or appropriate to effect complete transfer of
ownership of or a

                                       5
<PAGE>

security interest in any such Eligible Investment to the Indenture Trustee,
consistent with changes in applicable law or regulations or the interpretation
thereof; and

          (c)  with respect to any Eligible Investment that is an uncertificated
security under Article 8 of the UCC and that is not governed by clause (b)
above, (i) registration by the issuer of the Indenture Trustee as the registered
owner, upon original issue or registration or transfer, or (ii) another person,
other than a securities intermediary, either becomes the registered owner of the
uncertificated security on behalf of the Indenture Trustee or, having previously
become the registered owner, acknowledges that it holds for the Indenture
Trustee; and such additional or alternative procedures as may be or hereafter
become requisite or appropriate to effect complete transfer of ownership of or a
security interest in any such Eligible Investment to the Indenture Trustee,
consistent with changes in applicable law or regulations or the interpretation
thereof.

     "Determination Date" means the earlier of the eighth Business Day or the
eleventh calendar day of the month (or, if such eleventh calendar day is not a
Business Day, the Business Day preceding the eleventh calendar day of the
month), and with respect to a payment to be made on the Special Class A-1
Payment Date, the Special Class A-1 Determination Date.

     "Eligible Account" means either (a) a segregated account with an Eligible
Bank or (b) a segregated trust account with the corporate trust department of a
depository institution with corporate trust powers organized under the laws of
the United States of America or any state thereof or the District of Columbia
(or any United States branch of a foreign bank) and whose deposits are insured
by the FDIC; provided that such institution must have a net worth in excess of
             --------
$50,000,000 and must have a rating of Baa3 or higher from Moody's and a rating
of BBB- or higher from Standard & Poor's  with respect to long-term deposit
obligations.  The Indenture Trustee shall give notice to the Servicer of any
change in location of any Eligible Account.

     "Eligible Bank" shall mean a depository institution organized under the
laws of the United States or any one of the states thereof, including the
District of Columbia (or any United States branch or agency of a foreign bank)
having corporate trust powers and acting as a trustee for funds deposited in
such account, which is subject to supervision and examination by federal or
state banking authorities, the deposits of which are insured by the Federal
Deposit Insurance Corporation ("FDIC") and which at all times (a) has a net
worth in excess of $50,000,000 and (b) has either (x) a long-term unsecured debt
rating of at least A2 by Moody's, AA by Standard & Poor's and, if rated by
Fitch, AA- or (y) a short-term certificate of deposit rating of P-1 by Moody's,
A-1+ by Standard & Poor's and, if rated by Fitch, F1+.

     "Eligible Investment" means any of the following:

          (a)  Direct obligations of the United States of America and securities
fully and unconditionally guaranteed as to the timely payment of principal and
interest by the United States of America; provided, that the full faith and
                                          --------
credit of the United States of America must be pledged to any such direct
obligation or guarantee ("Direct Obligations");

          (b)  Direct obligations and fully guaranteed certificates of
beneficial interest of the Export-Import Bank of the United States; consolidated
debt obligations and letter of credit-

                                       6
<PAGE>

backed issues of the Federal Home Loan Banks; participation certificates and
senior debt obligations of the Federal Home Loan Mortgage Corporation
("FHLMCs"); debentures of the Federal Housing Administration; mortgage-backed
securities (except stripped mortgage-securities which are valued greater than
par on the portion of unpaid principal) and senior debt obligations of the
Federal National Mortgage Association ("FNMAs"); participation certificates of
the General Services Administration; guaranteed mortgage-backed securities and
guaranteed participation certificates of the Government National Mortgage
Association ("GNMAs"); guaranteed participation certificates and guaranteed pool
certificates of the Small Business Administration; debt obligations and letter
of credit-backed issues of the Student Loan Marketing Association; local
authority bonds of the U.S. Department of Housing & Urban Development;
guaranteed Title XI financings of the U.S. Maritime Administration; guaranteed
transit bonds of the Washington Metropolitan Area Transit Authority; and
Resolution Funding Corporation securities; all of the foregoing rated, at the
time of purchase, "P-1" or "A2" or better by Moody's and, if rated by Fitch,
"F1" or better by Fitch;

          (c)  Direct obligations of any state of the United States of America
or any subdivision or agency thereof whose unsecured, uninsured and unguaranteed
general obligation debt is rated, at the time of purchase "A2" or better by
Moody's and "A" or better by Standard & Poor's and, if rated by Fitch, "A" or
better, or any obligation fully and unconditionally guaranteed by any state,
subdivision or agency whose unsecured, uninsured and unguaranteed general
obligation debt is rated, at the time of purchase, "A2" or better by Moody's and
"A" or better by Standard & Poor's and, if rated by Fitch, "A" or better by
Fitch;

          (d)  Commercial paper (having original maturities of not more than 270
days) rated, at the time of purchase, "P-1" by Moody's and "A-1" or better by
Standard & Poor's and, if rated by Fitch, "F1" or better by Fitch;

          (e)  Federal funds, unsecured certificates of deposit, time deposits
or bankers acceptances (in each case having maturities of not more than 365
days) of any domestic bank including a branch office of a foreign bank which
branch office is located in the United States; provided legal opinions are
                                               --------
received to the effect that full and timely payment of such deposit or similar
obligation is enforceable against the principal office or any branch of such
bank, which, at the time of purchase, has a short-term "Bank Deposit" rating of
"P-1" by Moody's and a "Short-Term CD" rating of "A-1" or better by Standard &
Poor's and a short-term rating of "F1" by Fitch; and further provided that the
                                                     ------- --------
bank is subject to the supervision and examination of federal and state banking
authorities;

          (f)  Deposits of any bank or savings and loan association which has
combined capital, surplus and undivided profits of not less than $3 million,
provided such deposits are continuously and fully insured by the Bank Insurance
Fund or the Savings Association Insurance Fund of the FDIC;

          (g)  Investments in money-market funds rated "AAAm" or "AAAm-G" by
Standard & Poor's, "Aaa" by Moody's and "AAA" by Fitch; and

          (h)  Repurchase agreements collateralized by Direct Obligations,
GNMAs, FNMAs or FHLMCs, as defined above, with any registered broker/dealer
subject to the

                                       7
<PAGE>

Securities Investors' Protection Corporation jurisdiction or any commercial bank
insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured
and unguaranteed obligation rated "P-1" or "A2" or better by Moody's, "A-1" or
"A" or better by Standard & Poor's and, if rated by Fitch, "F1" or "A" or better
by Fitch, provided:

               (A)  a master repurchase agreement or specific written repurchase
          agreement governs the transaction; and

               (B)  the securities are held free and clear of any lien by the
          Indenture Trustee or an independent third party acting solely as agent
          ("Agent") for the Indenture Trustee, and such third party is (i) a
          Federal Reserve Bank or (ii) a bank which is a member of the FDIC and
          which has combined capital, surplus and undivided profits of not less
          than $50 million and, if a bank, it shall have issued a written
          confirmation to the Indenture Trustee that it holds such securities,
          free and clear of any lien, as agent for the Indenture Trustee; and

               (C)  a perfected first security interest under the Uniform
          Commercial Code, or book entry procedures prescribed at applicable
          federal book-entry regulations in such securities is created for the
          benefit of the Indenture Trustee; and

               (D)  the repurchase agreement has a term of 180 days or less, and
          the Indenture Trustee will value the collateral securities  no less
          frequently than weekly and will liquidate the collateral securities if
          any deficiency in the required collateral percentage is not restored
          within two business days of such valuation; and

               (E)  the fair market value of the securities in relation to the
          amount of the repurchase obligation, including principal and interest,
          is equal to at least 103%; and

               (F)  the securities have a rating, at the time of purchase of "P-
          1" or "A2" or better by Moody's, "A-1" or "A" or better by Standard &
          Poor's, and "F1" or "A" or better by Fitch.

     Notwithstanding the foregoing, Eligible Investments shall not include (i)
"stripped securities" and investments which contractually may return less than
the purchase price therefor, (ii) instruments with a purchase price greater than
par if such instrument may be prepaid or called at a price less than its
purchase price prior to its stated maturity, (iii) instruments denominated in
currencies other than U.S. dollars, and (iv) with respect to investments rated
by Standard & Poor's, any investment having a Standard & Poor's rating with the
symbol "r" attached.

     "Event of Default" has the meaning specified in Section 5.1.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Final Scheduled Payment Date" means the Special Class A-1 Payment Date,
the Class A-2 Final Scheduled Payment Date, the Class A-3 Final Scheduled
Payment Date, the Class A-4

                                       8
<PAGE>

Final Scheduled Payment Date, the Class B Final Scheduled Payment Date or the
Class C Final Scheduled Payment Date, as applicable.

     "Fitch" means Fitch, Inc. and any successor thereto.

     "Grant" means mortgage, pledge, bargain, warrant, alienate, remise,
release, convey, assign, transfer, create, grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.

     "Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.

     "Indebtedness" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of such Person
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; or (h) obligations of such Person
under any interest rate or currency exchange agreement.

     "Indenture" means this Indenture as amended and supplemented from time to
time.

     "Indenture Trustee" means, initially, U.S. Bank National Association, in
its capacity as indenture trustee on behalf of the Noteholders, including its
successors-in-interest, until and unless a successor Person shall have become
the Indenture Trustee pursuant to Section 6.8 or 6.9 hereof, and thereafter
"Indenture Trustee" shall mean such successor Person.

     "Independent" means, when used with respect to any specified Person, that
the person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the Seller and any Affiliate of any of the foregoing persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the

                                       9
<PAGE>

Seller 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 11.1, prepared by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.

     "Interest Rate" means, with respect to (i) the Class A-1 Notes, 6.87% per
annum (computed on the basis of the actual number of days elapsed in a 360-day
year), (ii) the Class A-2 Notes, 7.25% (calculated on the basis of a 360-day
year consisting of twelve 30-day months), (iii) the Class A-3 Notes, 7.39%
(calculated on the basis of a 360-day year consisting of twelve 30-day months),
(iv) the Class A-4 Notes, 7.47% (calculated on the basis of a 360-day year
consisting of twelve 30-day months), (v) the Class B Notes, 7.76% (calculated on
the basis of a 360-day year consisting of twelve 30-day months) and (vi) the
Class C Notes, 8.15% (calculated on the basis of a 360-day year consisting of
twelve 30-day months).

     "Issuer" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
Notes.

     "Issuer Order" and "Issuer Request" means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.

     "Majority Noteholders" means, as of any date of determination, (i) with
respect to the Notes as a whole, Holders of Notes representing a majority of the
Note Principal Balance of all Classes as of such date and (ii) with respect to a
particular Class, the Holders of Notes representing a majority of the Note
Principal Balance of such Class as of such date.

     "Moody's" means Moody's Investors Service, Inc.

     "Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note, a Class
A-4 Note, a Class B Note or a Class C Note.

     "Noteholder" or "Holder", in relation to a Note, means the Person in whose
name the respective Note shall be registered in the Note Register.

     "Note Owner" means, with respect to a Book-Entry Note, the Person who is
the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a direct or indirect Clearing Agency Participant.

     "Note Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 and is authorized by the Issuer to make the payments to and distributions
from the Collection Account and the Note Account, including payment of principal
of or interest on the Notes on behalf of the Issuer.

                                      10
<PAGE>

     "Note Register" and "Note Registrar" mean the register maintained and the
registrar appointed pursuant to Section 2.4.

     "Obligor" on a Receivable means the purchaser or the co-purchasers of, or
any guarantor with respect to, the Financed Vehicle or any other Person who owes
payments under the Receivable.

     "Officer's Certificate" means a certificate signed by any Authorized
Officer of the Owner Trustee, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 and TIA
(S) 314, and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in this Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.

     "Opinion of Counsel" means a written opinion of counsel, who may be in-
house counsel to the Seller or Servicer, which counsel shall be acceptable to
the Indenture Trustee and which shall comply with any applicable requirements of
Section 11.1 hereof.

     "Optional Purchase Price" means the amount specified as such in Section
11.1. of the Sale and Servicing Agreement.

     "Outstanding" means, as of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:

     (i)   Notes theretofore canceled by the Note Registrar or delivered to the
Note Registrar for cancellation;

     (ii)  Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee or
any Note Paying Agent in trust for the Noteholders (provided, however, that if
such Notes are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor, satisfactory to the Indenture
Trustee has been made); and

     (iii) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to this Indenture unless proof satisfactory
to the Indenture Trustee is presented that any such Notes are held by a bona
fide purchaser;

provided, further, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Basic Document,
Notes owned by the Issuer, any other obligor upon the Notes, the Seller or any
Affiliate of any of the foregoing Persons shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Indenture Trustee shall
be protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that a Responsible Officer of the
Indenture Trustee either actually knows to be so owned or has received written
notice thereof shall be so disregarded.  Notes so owned that have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgees right so to act with respect
to such Notes and that the pledgee is not the Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the foregoing Persons.

                                      11
<PAGE>

     "Outstanding Amount" means the aggregate principal amount of all Notes, or
class of Notes, as applicable, Outstanding at the date of determination.

     "Payment Date" means, with respect to each Collection Period, the fifteenth
day of the following month, or if the fifteenth day shall not be a Business Day,
the next following Business Day, commencing July 17, 2000; and insofar as the
term "Payment Date" relates to the Class A-1 Notes, it shall be deemed to
include the Special Class A-1 Payment Date.

     "Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.5 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.

     "Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.

     "Rating Agency" means each of Moody's, Standard & Poor's and Fitch.

     "Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer, the Indenture
Trustee, the Owner Trustee and the Issuer in writing that such action will not
result in a reduction or withdrawal of the then current rating of the Notes.

     "Record Date" means, as to any Payment Date, the close of business, if
applicable, on the day (whether or not a Business Day) immediately preceding
such Payment Date or, if Definitive Notes are issued pursuant to Section 2.12,
the last day of the calendar month immediately preceding the month in which such
Payment Date occurs.

     "Redemption Date" means, with reference to a redemption of the Notes
pursuant to Section 10.1(a), the Payment Date specified by the Servicer pursuant
to Section 10.1(a) as applicable.

     "Responsible Officer" means, when used with respect to the Indenture
Trustee, any officer within the Corporate Trust Department (or any successor
group of the Indenture Trustee), including any senior vice president, vice
president, assistant vice president, assistant secretary, assistant treasurer or
any other officer or assistant officer of the Indenture Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred at the Corporate Trust Department because of his knowledge of and
familiarity with the particular subject.

     "Sale and Servicing Agreement" means the Sale and Servicing Agreement dated
as of June 1, 2000, among the Issuer, the Seller, the Servicer and the Indenture
Trustee, as the same may be amended or supplemented from time to time.

     "Securities Act" means the Securities Act of 1933, as amended.

                                      12
<PAGE>

     "Seller" means Chevy Chase Bank, F.S.B. in its capacity as the seller of
the Receivables under the Sale and Servicing Agreement, and each successor to
Chevy Chase Bank, F.S.B. (in the same capacity) pursuant to Section 6.3 of the
Sale and Servicing Agreement.

     "Servicer" means Chevy Chase Bank, F.S.B. in its capacity as the servicer
of the Receivables, and each successor to Chevy Chase Bank, F.S.B. (in the same
capacity) pursuant to Sections 7.3 and 8.2 of the Sale and Servicing Agreement.

     "Servicer Default" means an event specified in Section 8.1 of the Sale and
Servicing Agreement.

     "Special Class A-1 Payment Date" means with respect to the Class A-1 Notes,
the July 12, 2001 Payment Date (which shall be no more than 397 days after the
date on which the Notes are priced).

     "Standard & Poor's" means Standard & Poor's Ratings Services, a division of
The McGraw Hill Companies, Inc.

     "State" means (i) any state of the United States of America or (ii) the
District of Columbia.

     "Trust" means the Issuer.

     "Trust Agreement" means the Amended and Restated Trust Agreement, dated as
of June 21, 2000, between the Owner Trustee and Chevy Chase Bank, F.S.B.

     "Trust Estate" means all money, instruments, rights and other property that
are subject or intended to be subject to the lien and security interest of this
Indenture for the benefit of the Noteholders (including all property and
interests Granted to the Indenture Trustee), including all proceeds thereof.

     "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and as in force on the date hereof, unless otherwise specifically
provided.

     "UCC" means the Uniform Commercial Code, as it may be amended from time to
time, as in effect in the State of New York or the State of Delaware, as
applicable.

     "Verification Report" has the meaning set forth in Section 5.4 hereof.

          Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Sale and Servicing Agreement or the
Trust Agreement.

          SECTION 1.2  Incorporation by Reference of Trust Indenture Act.
                       -------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:

          "Commission" means the Securities and Exchange Commission.

                                      13
<PAGE>

          "indenture securities" means the Notes.

          "indenture security holder" means a Noteholder.

          "indenture to be qualified" means this Indenture.

          "indenture trustee" or "institutional trustee" means the Indenture
Trustee.

          "obligor" on the indenture securities means the Issuer.

          All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.

          SECTION 1.3  Rules of Construction. Unless the context otherwise
                       ---------------------
requires:

          (i)    a term has the meaning assigned to it;

          (ii)   an accounting term not otherwise defined has the meaning
     assigned to it in accordance with generally accepted accounting principles
     as in effect from time to time;

          (iii)  "or" is not exclusive;

          (iv)   "including" means including without limitation; and

          (v)    words in the singular include the plural and words in the
     plural include the singular.

                                  ARTICLE II

                                   The Notes
                                   ---------

          SECTION 2.1  Form.  The Class A-1 Notes, the Class A-2 Notes, the
                       ----
Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes,
in each case together with the Indenture Trustee's certificate of
authentication, shall be in substantially the form set forth in Exhibit A-1, A-
2, A-3, A-4, A-5 and A-6, respectively, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.

          The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.

                                      14
<PAGE>

          Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibits A-1, A-2, A-3, A-4, A-5 and A-6 are part of the
terms of this Indenture.

          SECTION 2.2  Execution, Authentication and Delivery. The Notes shall
                       --------------------------------------
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.

          Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.

          The Indenture Trustee shall, upon receipt of the Issuer Order,
authenticate and deliver Class A-1 Notes for original issue in an aggregate
principal amount of $79,000,000, Class A-2 Notes for original issue in the
aggregate principal amount of $70,000,000, Class A-3 Notes for original issue in
an aggregate principal amount of $111,000,000, Class A-4 Notes for original
issue in an aggregate principal amount of $73,508,000, Class B Notes for
original issue in an aggregate principal amount of $7,059,000 and Class C Notes
for original issue in an aggregate principal amount of $8,823,000.  The Class A-
1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class B Notes and
Class C Notes outstanding at any time may not exceed such amounts.

          The Notes shall be issuable as registered Notes in the minimum
denomination of $1,000 and in integral multiples of $1).

          No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.

          SECTION 2.3  Temporary Notes. Pending the preparation of Definitive
                       ---------------
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.

          If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.2, without charge to the Noteholder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the

                                      15
<PAGE>

temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as Definitive Notes.

          SECTION 2.4  Registration; Registration of Transfer and Exchange. The
                       ---------------------------------------------------
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee shall be "Note Registrar" for the purpose of registering Notes
and transfers of Notes as herein provided.

          If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to
conclusively rely upon a certificate executed on behalf of the Note Registrar by
an Responsible Officer thereof as to the names and addresses of the Noteholders
of the Notes and the principal amounts and number of such Notes.

          Subject to Sections 2.10 and 2.12 hereof, upon surrender for
registration of transfer of any Note at the office or agency of the Issuer to be
maintained as provided in Section 3.2, if the requirements of Section 8-401(a)
of the UCC are met the Issuer shall execute and upon its request the Indenture
Trustee shall authenticate and the Noteholder shall obtain from the Indenture
Trustee, in the name of the designated transferee or transferees, one or more
new Notes, in any authorized denominations, of the same class and a like
aggregate principal amount.

          At the option of the Noteholder, Notes may be exchanged for other
Notes in any authorized denominations, of the same class and a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency.  Whenever any Notes are so surrendered for exchange, subject to Sections
2.10 and 2.12 hereof, if the requirements of Section 8-401(a) of the UCC are met
the Issuer shall execute and upon its request the Indenture Trustee shall
authenticate and the Noteholder shall obtain from the Indenture Trustee, the
Notes which the Noteholder making the exchange is entitled to receive.

          All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.

          Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or be accompanied by a written
instrument of transfer in the form attached to Exhibit A-1, A-2, A-3, A-4, A-5
and A-6, as the case may be, duly executed by the Holder thereof or such
Holder's attorney duly authorized in writing, with such signature guaranteed by
an "eligible guarantor institution" meeting the requirements of the Note
Registrar which requirements include membership or participation in Securities
Transfer Agents Medallion Program ("Stamp") or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, Stamp, all in accordance with the Exchange Act, and (ii)
accompanied by such other documents as the Indenture Trustee may require.

                                      16
<PAGE>

          Notwithstanding the foregoing, in the case of any sale or other
transfer of a Definitive Note, the transferor of such Definitive Note shall be
required to represent and warrant in writing that the prospective transferee
either (a) is not (i) an employee benefit plan (as defined in section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
which is subject to the provisions of Title I of ERISA, (ii) a plan (as defined
in section 4975(e)(1) of the Code), which is subject to Section 4975 of the
Code, or (iii) an entity whose underlying assets are deemed to be assets of a
plan described in (i) or (ii) above by reason of such plan's investment in the
entity (any such entity described in clauses (i) through (iii), a "Benefit Plan
Entity") or (b) is a Benefit Plan Entity and the acquisition and holding of the
Definitive Note by such prospective transferee is covered by a Department of
Labor Prohibited Transaction Class Exemption.  Each transferee of a Book Entry
Note that is a Benefit Plan Entity shall be deemed to represent that its
acquisition and holding of the Book Entry Note is covered by a Department of
Labor Prohibited Transaction Class Exemption.

          No service charge shall be made to a Noteholder for any registration
of transfer or exchange of Notes, but the Note Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes,
other than exchanges pursuant to Section 2.3 or 9.6 not involving any transfer.

          The preceding provisions of this section notwithstanding, the Issuer
shall not be required to make and the Note Registrar shall not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.

          SECTION 2.5  Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
                       ------------------------------------------
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note; provided, however, that if
                                                    --------  -------
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within seven days shall be due and payable, or shall have been called
for redemption, instead of issuing a replacement Note, the Issuer may direct the
Indenture Trustee, in writing, to pay such destroyed, lost or stolen Note when
so due or payable or upon the Redemption Date without surrender thereof. If,
after the delivery of such replacement Note or payment of a destroyed, lost or
stolen Note pursuant to the proviso to the preceding sentence, a bona fide
purchaser of the original Note in lieu of which such replacement Note was issued
presents for payment such original Note, the Issuer and the Indenture Trustee
shall be entitled to recover such replacement Note (or such payment) from the
Person to whom it was delivered or any Person taking such replacement Note from
such Person to whom such replacement Note was delivered or any assignee of such
Person, except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.

                                      17
<PAGE>

          Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.

          Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

          The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.

          SECTION 2.6  Persons Deemed Owner. Prior to due presentment for
                       --------------------
registration of transfer of any Note, the Issuer or the Indenture Trustee and
any agent of the Issuer, the Indenture Trustee may treat the Person in whose
name any Note is registered (as of the Record Date) as the owner of such Note
for the purpose of receiving payments of principal of and interest, if any on
such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.

          SECTION 2.7  Payment of Principal and Interest; Defaulted Interest.
                       -----------------------------------------------------

          (a)  The Notes shall accrue interest as provided in the forms of the
Class A-1 Note, the Class A-2 Note, the Class A-3 Note, the Class A-4 Note, the
Class B Note and the Class C Note set forth in Exhibits A-1, A-2, A-3, A-4, A-5
and A-6, respectively, and such interest shall be due and payable on each
Payment Date, as specified therein. Any installment of interest or principal, if
any, payable on any Note which is punctually paid or duly provided for by the
Issuer on the applicable Payment Date shall be paid to the Person in whose name
such Note (or one or more Predecessor Notes) is registered on the Record Date,
by check mailed first-class, postage prepaid, to such Person's address as it
appears on the Note Register on such Record Date, except that, unless Definitive
Notes have been issued pursuant to Section 2.12, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payment will be made by wire
transfer in immediately available funds to the account designated by such
nominee and except for the final installment of principal payable with respect
to such Note on a Payment Date or on the Final Scheduled Payment Date (and
except for the Optional Purchase Price for any Note called for redemption
pursuant to Section 10.1(a)) which shall be payable as provided below. The funds
represented by any such checks returned undelivered shall be held in accordance
with Section 3.3.

          (b)  The principal of each Note shall be payable in installments on
each Payment Date, as provided in the forms of the Class A-1 Note, the Class A-2
Note, the Class A-3 Note, the Class A-4 Note, the Class B Note and the Class C
Note set forth in Exhibits A-1, A-2, A-3, A-4, A-5 and A-6, respectively.
Notwithstanding the foregoing, the entire unpaid principal

                                      18
<PAGE>

amount of the Notes shall be due and payable, if not previously paid, on the
date on which an Event of Default shall have occurred and be continuing, if the
Indenture Trustee, as directed by the Declaring Noteholders, has declared the
Notes to be immediately due and payable in the manner provided in Section 5.2.
All principal payments on each class of Notes shall be made pro rata to the
Noteholders of such class entitled thereto. Upon written notice from the Issuer,
the Indenture Trustee shall notify the Person in whose name a Note is registered
at the close of business on the Record Date preceding the Payment Date on which
the Issuer expects that the final installment of principal of and interest on
such Note will be paid. Such notice shall be mailed or transmitted by facsimile
prior to such final Payment Date and shall specify that such final installment
will be payable only upon presentation and surrender of such Note and shall
specify the place where such Note may be presented and surrendered for payment
of such installment. Notices in connection with redemptions of Notes shall be
mailed to Noteholders as provided in Section 10.2.

          (c)  If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable Interest Rate in any lawful manner. The
Issuer shall pay such defaulted interest to the Persons who are Noteholders on
the immediately following Payment Date.

          SECTION 2.8  Cancellation.  All Notes surrendered for payment,
                       ------------
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly canceled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly canceled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as provided in this Section, except as expressly permitted by
this Indenture. All canceled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall timely direct by an Issuer Order that
they be destroyed or returned to it; provided that such Issuer Order is timely
and the Notes have not been previously disposed of by the Indenture Trustee.

          SECTION 2.9  Release of Collateral. The Indenture Trustee shall, on or
                       ---------------------
after the termination of the Trust pursuant to Section 8.1 of the Trust
Agreement, release any remaining portion of the Trust Estate from the lien
created by this Indenture and deposit in the Collection Account any funds then
on deposit in any other Account. The Indenture Trustee shall release property
from the lien created by this Indenture pursuant to this Section 2.9 only upon
receipt of an Issuer Request accompanied by an Officer's Certificate, an Opinion
of Counsel and (if required by the TIA) Independent Certificates in accordance
with TIA (S)(S) 314(c) and 314(d)(1) meeting the applicable requirements of
Section 11.1.

          SECTION 2.10 Book-Entry Notes. The Notes, upon original issuance, will
                       ----------------
be issued in the form of typewritten Notes representing the Book-Entry Notes, to
be delivered to The Depository Trust Company, the initial Clearing Agency, by,
or on behalf of, the Issuer. Such Notes shall initially be registered on the
Note Register in the name of Cede & Co., the nominee of the initial Clearing
Agency, and no Note Owner will receive a Definitive Note representing such Note
Owner's interest in such Note, except as provided in Section 2.12.

                                      19
<PAGE>

Unless and until definitive, fully registered Notes (the "Definitive Notes")
have been issued to Note Owners pursuant to Section 2.12:

          (i)   the provisions of this Section shall be in full force and
     effect;

          (ii)  the Note Registrar and the Indenture Trustee shall be entitled
     to deal with the Clearing Agency for all purposes of this Indenture
     (including the payment of principal of and interest on the Notes and the
     giving of instructions or directions hereunder) as the sole Holder of the
     Notes, and shall have no obligation to the Note Owners;

          (iii) to the extent that the provisions of this Section conflict with
     any other provisions of this Indenture, the provisions of this Section
     shall control;

          (iv)  the rights of Note Owners shall be exercised only through the
     Clearing Agency and shall be limited to those established by law and
     agreements between such Note Owners and the Clearing Agency and/or the
     Clearing Agency Participants. Unless and until Definitive Notes are issued
     pursuant to Section 2.12, the initial Clearing Agency will make book-entry
     transfers among the Clearing Agency Participants and receive and transmit
     payments of principal of and interest on the Notes to such Clearing Agency
     Participants;

          (v)   whenever this Indenture requires or permits actions to be taken
     based upon instructions or directions of Noteholders evidencing a specified
     percentage of the Outstanding Amount of the Notes, the Clearing Agency
     shall be deemed to represent such percentage only to the extent that it has
     received instructions to such effect from Note Owners and/or Clearing
     Agency Participants owning or representing, respectively, such required
     percentage of the beneficial interest in the Notes and has delivered such
     instructions to the Indenture Trustee; and

          (vi)  Note Owners may receive copies of any reports sent to
     Noteholders pursuant to this Indenture, upon written request, together with
     a certification that they are Note Owners and payment of reproduction and
     postage expenses associated with the distribution of such reports, from the
     Indenture Trustee at the Corporate Trust Office.

          SECTION 2.11  Notices to Clearing Agency. Whenever a notice or other
                        --------------------------
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to the Noteholders to the Clearing Agency, and
shall have no obligation to the Note Owners.

          SECTION 2.12  Definitive Notes. If (i) the Servicer advises the
                        ----------------
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Notes, and
the Servicer is unable to locate a qualified successor, (ii) the Servicer at its
option advises the Indenture Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence of
an Event of Default, Note Owners representing beneficial interests aggregating
at least a majority of the Outstanding Amount of the Notes advise the Indenture
Trustee through the Clearing Agency

                                      20
<PAGE>

in writing that the continuation of a book entry system through the Clearing
Agency is no longer in the best interests of the Note Owners, then the Clearing
Agency shall notify all Note Owners and the Indenture Trustee of the occurrence
of any such event and of the availability of Definitive Notes to Note Owners
requesting the same. Upon surrender to the Indenture Trustee of the typewritten
Note or Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency. None of the Issuer, the Note Registrar or
the Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be fully protected in
relying on, such instructions. Upon the issuance of Definitive Notes, the
Indenture Trustee shall recognize the Holders of the Definitive Notes as
Noteholders.

                                  ARTICLE III

                                   Covenants
                                   ---------

          SECTION 3.1  Payment of Principal and Interest. The Issuer will duly
                       ---------------------------------
and punctually pay the principal of and interest on the Notes in accordance with
the terms of the Notes and this Indenture. Without limiting the foregoing, the
Issuer will cause to be distributed all amounts on deposit in the Note Account
on a Payment Date deposited therein pursuant to the Sale and Servicing Agreement
(i) for the benefit of the Class A-1 Notes, to Class A-1 Noteholders, (ii) for
the benefit of the Class A-2 Notes, to Class A-2 Noteholders, (iii) for the
benefit of the Class A-3 Notes, to Class A-3 Noteholders, (iv) for the benefit
of the Class A-4 Notes, to Class A-4 Noteholders, (v) for the benefit of the
Class B Notes, to Class B Noteholders and (vi) for the benefit of the Class C
Notes, to Class C Noteholders. Amounts properly withheld under the Code by any
Person from a payment to any Noteholder of interest and/or principal shall be
considered as having been paid by the Issuer to such Noteholder for all purposes
of this Indenture.

          SECTION 3.2  Maintenance of Office or Agency. The Issuer will maintain
                       -------------------------------
in Wilmington, Delaware, an office or agency where Notes may be surrendered for
registration of transfer or exchange, and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Indenture Trustee to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the Indenture
Trustee of the location, and of any change in the location, of any such office
or agency. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.

          SECTION 3.3  Money for Payments to be Held in Trust. On or before each
                       --------------------------------------
Payment Date and Redemption Date, the Issuer shall deposit or cause to be
deposited in the Note Account from the Collection Account an aggregate sum
sufficient to pay the amounts then becoming due under the Notes, such sum to be
held in trust for the benefit of the Persons entitled thereto and (unless the
Note Paying Agent is the Indenture Trustee) shall promptly notify the Indenture
Trustee of its action or failure so to act.

                                      21
<PAGE>

          The Issuer will cause each Note Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Note Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Note Paying Agent, it hereby so agrees), subject to
the provisions of this Section, that such Note Paying Agent will:

          (i)   hold all sums held by it for the payment of amounts due with
     respect to the Notes in trust for the benefit of the Persons entitled
     thereto until such sums shall be paid to such Persons or otherwise disposed
     of as herein provided and pay such sums to such Persons as herein provided;

          (ii)  give the Indenture Trustee notice of any default by the Issuer
     of which it has actual knowledge in the making of any payment required to
     be made with respect to the Notes;

          (iii) at any time during the continuance of any such default, upon the
     written request of the Indenture Trustee, forthwith pay to the Indenture
     Trustee all sums so held in trust by such Note Paying Agent;

          (iv)  immediately resign as a Note Paying Agent and forthwith pay to
     the Indenture Trustee all sums held by it in trust for the payment of Notes
     if at any time it ceases to meet the standards required to be met by a Note
     Paying Agent at the time of its appointment; and

          (v)   comply with all requirements of the Code with respect to the
     withholding from any payments made by it on any Notes of any applicable
     withholding taxes imposed thereon and with respect to any applicable
     reporting requirements in connection therewith.

          The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Note Paying Agent to pay to the Indenture Trustee all sums held
in trust by such Note Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such Note
Paying Agent; and upon such a payment by any Note Paying Agent to the Indenture
Trustee, such Note Paying Agent shall be released from all further liability
with respect to such money.

          Subject to applicable laws with respect to the escheat of funds, any
money held by the Indenture Trustee or any Note Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
two years after such amount has become due and payable shall be discharged from
such trust and be paid to the Certificateholder on Issuer Request; and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Cerificateholder for payment thereof (but only to the extent of the
amounts so paid to the Certificateholder), and all liability of the Indenture
Trustee or such Note Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that the Indenture Trustee or such Note
                 --------  -------
Paying Agent, before being required to make any such repayment, shall at the
expense and request of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in New

                                      22
<PAGE>

York, New York, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Certificateholder. The Indenture Trustee shall also adopt and employ, at
the expense and request of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Note Paying Agent, at the last address of record for each such
Holder).

          SECTION 3.4  Existence.  Except as otherwise permitted by the
                       ---------
provisions of Section 3.10, the Issuer will keep in full effect its existence,
rights and franchises as a business trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.

          SECTION 3.5  Protection of Trust Estate. The Issuer intends the
                       --------------------------
security interest Granted pursuant to this Indenture in favor of the Holders of
the Notes, to be prior to all other liens in respect of the Trust Estate, and
the Issuer shall take all actions necessary to obtain and maintain, in favor of
the Indenture Trustee, for the benefit of the Holders of the Notes, a first lien
on and a first priority, perfected security interest in the Trust Estate. The
Issuer will from time to time prepare (or shall cause to be prepared), execute
and deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:

          (i)   Grant more effectively all or any portion of the Trust Estate;

          (ii)  maintain or preserve the lien and security interest (and the
     priority thereof) in favor of the Indenture Trustee for the benefit of the
     Holders of the Notes, created by this Indenture or carry out more
     effectively the purposes hereof;

          (iii) perfect, publish notice of or protect the validity of any Grant
     made or to be made by this Indenture;

          (iv)  enforce any of the Collateral;

          (v)   preserve and defend title to the Trust Estate and the rights of
     the Indenture Trustee in such Trust Estate against the claims of all
     persons and parties; and

          (vi)  pay all taxes or assessments levied or assessed upon the Trust
     Estate when due.

                                      23
<PAGE>

The Issuer hereby designates the Indenture Trustee its agent and attorney-in-
fact to execute any financing statement, continuation statement or other
instrument required by the Indenture Trustee pursuant to this Section.

          SECTION 3.6  Opinions as to Trust Estate.
                       ---------------------------

          (a)  On the Closing Date, the Issuer shall furnish to the Indenture
Trustee, an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording and filing of
this Indenture, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements, as are necessary to perfect and make
effective the first priority lien and security interest in favor of the
Indenture Trustee, for the benefit of the Holders of the Notes, created by this
Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.

          (b)  Within 120 days after the beginning of each calendar year,
beginning with the first calendar year beginning more than six months after the
Closing Date, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and with respect to the execution and filing of any financing
statements and continuation statements as are necessary to maintain the lien and
security interest created by this Indenture and reciting the details of such
action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and the execution and filing of any financing statements and continuation
statements that will, in the opinion of such counsel, be required to maintain
the lien and security interest of this Indenture until January 30 in the
following calendar year.

          SECTION 3.7  Performance of Obligations; Servicing of Receivables.
                       ----------------------------------------------------

          (a)  The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's material covenants or obligations under any instrument
or agreement included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
ordered by any bankruptcy or other court or as expressly provided in this
Indenture, the Basic Documents or such other instrument or agreement.

          (b)  The Issuer may contract with other Persons acceptable to the
Indenture Trustee to assist it in performing its duties under this Indenture,
and any performance of such duties by a Person identified to the Indenture
Trustee in an Officer's Certificate of the Issuer shall be deemed to be action
taken by the Issuer. Initially, the Issuer has contracted with the Servicer to
assist the Issuer in performing its duties under this Indenture.

                                      24
<PAGE>

          (c)  The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Trust Estate, including, but
not limited to, preparing (or causing to prepared) and filing (or causing to be
filed) all UCC financing statements and continuation statements required to be
filed by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Basic Document or any provision
thereof without the consent of the Indenture Trustee or the Majority Noteholders
and the Issuer shall notify each Rating Agency prior to any such waiver,
amendment, modification, supplement or termination, and, to the extent
practicable, such notice shall be given not less than 10 days prior to the date
on which such waiver, amendment, modification, supplement or termination is
executed.

          (d)  If a responsible officer of the Owner Trustee shall have actual
knowledge of the occurrence of a Servicer Default under the Sale and Servicing
Agreement, the Issuer shall promptly notify the Indenture Trustee and the Rating
Agencies thereof in accordance with Section 11.4, and shall specify in such
notice the action, if any, the Issuer is taking in respect of such default. If a
Servicer Default shall arise from the failure of the Servicer to perform any of
its duties or obligations under the Sale and Servicing Agreement with respect to
the Receivables, the Issuer shall take all reasonable steps available to it to
remedy such failure.

          (e)  The Issuer agrees that it will not waive timely performance or
observance by the Servicer or the Seller of their respective duties under the
Basic Documents if the effect thereof would adversely affect the Holders of the
Notes.

          SECTION 3.8  Negative Covenants. So long as any Notes are Outstanding,
                       ------------------
the Issuer shall not:

          (i)    except as expressly permitted by this Indenture or the Basic
     Documents, sell, transfer, exchange or otherwise dispose of any of the
     properties or assets of the Issuer, including those included in the Trust
     Estate, unless directed to do so by the Controlling Class;

          (ii)   claim any credit on, or make any deduction from the principal
     or interest payable in respect of, the Notes (other than amounts properly
     withheld from such payments under the Code) or assert any claim against any
     present or former Noteholder by reason of the payment of the taxes levied
     or assessed upon any part of the Trust Estate; or

          (iii)  (A) permit the validity or effectiveness of this Indenture to
     be impaired, or permit the lien in favor of the Indenture Trustee created
     by this Indenture to be amended, hypothecated, subordinated, terminated or
     discharged, or permit any Person to be released from any covenants or
     obligations with respect to the Notes under this Indenture except as may be
     expressly permitted hereby, (B) permit any lien, charge, excise, claim,
     security interest, mortgage or other encumbrance (other than the lien of
     this Indenture) to be created on or extend to or otherwise arise upon or
     burden the Trust Estate or any part thereof or any interest therein or the
     proceeds thereof (other than tax liens, mechanics'

                                      25
<PAGE>

     liens and other liens that arise by operation of law, in each case on a
     Financed Vehicle and arising solely as a result of an action or omission of
     the related Obligor), (C) permit the lien of this Indenture not to
     constitute a valid first priority (other than with respect to any such tax,
     mechanics' or other lien) security interest in the Trust Estate or (D),
     except as expressly permitted in the Basic Documents, amend, modify or fail
     to comply with the provisions of the Basic Documents without the prior
     written consent of the Controlling Class.

          SECTION 3.9  Annual Statement as to Compliance. The Issuer will
                       ---------------------------------
deliver to the Indenture Trustee, within 120 days after the end of each fiscal
year of the Issuer (commencing with the fiscal year ended December 31, 2001),
and otherwise in compliance with the requirements of TIA Section 314(a)(4) an
Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that

          (i)   a review of the activities of the Issuer during such year and of
     performance under this Indenture has been made under such Authorized
     Officer's supervision; and

          (ii)  to the best of such Authorized Officer's knowledge, based on
     such review, the Issuer has complied with all conditions and covenants
     under this Indenture throughout such year or longer period, or, if there
     has been a default in the compliance of any such condition or covenant,
     specifying each such default known to such Authorized Officer and the
     nature and status thereof.

          SECTION 3.10 Issuer May Consolidate, Etc. Only on Certain Terms.
                       --------------------------------------------------

          (a)  The Issuer shall not consolidate or merge with or into any other
     Person, unless

          (i)   the Person (if other than the Issuer) formed by or surviving
     such consolidation or merger shall be a Person organized and existing under
     the laws of the United States of America or any state and shall expressly
     assume, by an indenture supplemental hereto, executed and delivered to the
     Indenture Trustee, in form satisfactory to the Indenture Trustee, the due
     and punctual payment of the principal of and interest on all Notes and the
     performance or observance of every agreement and covenant of this Indenture
     on the part of the Issuer to be performed or observed, all as provided
     herein;

          (ii)  immediately after giving effect to such transaction, no Default
     or Event of Default shall have occurred and be continuing;

          (iii) the Rating Agency Condition shall have been satisfied with
     respect to such transaction;

          (iv)  the Issuer shall have received an Opinion of Counsel (and shall
     have delivered copies thereof to the Indenture Trustee) to the effect that
     such transaction will not have any material adverse tax consequence to the
     Trust, any Noteholder or the Certificateholder;

                                      26
<PAGE>

          (v)   any action as is necessary to maintain the lien and security
     interest created by this Indenture shall have been taken; and

          (vi)  the Issuer shall have delivered to the Indenture Trustee an
     Officer's Certificate and an Opinion of Counsel each stating that such
     consolidation or merger and such supplemental indenture comply with this
     Article III and that all conditions precedent herein provided for relating
     to such transaction have been complied with (including any filing required
     by the Exchange Act).

          (b)  The Issuer shall not convey or transfer all or substantially all
of its properties or assets, including those included in the Trust Estate, to
any Person, unless

          (i)   the Person that acquires by conveyance or transfer the
     properties and assets of the Issuer the conveyance or transfer of which is
     hereby restricted shall (A) be a United States citizen or a Person
     organized and existing under the laws of the United States of America or
     any state, (B) expressly assume, by an indenture supplemental hereto,
     executed and delivered to the Indenture Trustee, in form satisfactory to
     the Indenture Trustee, the due and punctual payment of the principal of and
     interest on all Notes and the performance or observance of every agreement
     and covenant of this Indenture and each of the Basic Documents on the part
     of the Issuer to be performed or observed, all as provided herein, (C)
     expressly agree by means of such supplemental indenture that all right,
     title and interest so conveyed or transferred shall be subject and
     subordinate to the rights of Holders of the Notes, (D) unless otherwise
     provided in such supplemental indenture, expressly agree to indemnify,
     defend and hold harmless the Issuer against and from any loss, liability or
     expense arising under or related to this Indenture and the Notes and (E)
     expressly agree by means of such supplemental indenture that such Person
     (or if a group of persons, then one specified Person) shall prepare (or
     cause to be prepared) and make all filings with the Commission (and any
     other appropriate Person) required by the Exchange Act in connection with
     the Notes;

          (ii)  immediately after giving effect to such transaction, no Default
     or Event of Default shall have occurred and be continuing;

          (iii) the Rating Agency Condition shall have been satisfied with
     respect to such transaction;

          (iv)  the Issuer shall have received an Opinion of Counsel (and shall
     have delivered copies thereof to the Indenture Trustee) to the effect that
     such transaction will not have any material adverse tax consequence to the
     Trust, any Noteholder or the Certificateholder;

          (v)   any action as is necessary to maintain the lien and security
     interest created by this Indenture shall have been taken; and

          (vi)  the Issuer shall have delivered to the Indenture Trustee an
     Officers' Certificate and an Opinion of Counsel each stating that such
     conveyance or transfer and such supplemental indenture comply with this
     Article III and that all conditions precedent

                                      27
<PAGE>

     herein provided for relating to such transaction have been complied with
     (including any filing required by the Exchange Act).

          SECTION 3.11 Successor or Transferee.
                       -----------------------

          (a)  Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.

          (b)  Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10 (b), Chevy Chase Auto Receivables Trust
2000-1 will be released from every covenant and agreement of this Indenture to
be observed or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery of written notice to the Indenture Trustee stating
that Chevy Chase Auto Receivables Trust 2000-1 is to be so released.

          SECTION 3.12 No Other Business. The Issuer shall not engage in any
                       -----------------
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the Basic Documents
and activities incidental thereto.

          SECTION 3.13 No Borrowing. The Issuer shall not issue, incur, assume,
                       ------------
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes and (ii) any other Indebtedness permitted
by or arising under the Basic Documents. The proceeds of the Notes shall be used
exclusively to fund the Issuer's purchase of the Receivables and the other
assets specified in the Sale and Servicing Agreement, to pay the Issuer's
organizational, transactional and start-up expenses.

          SECTION 3.14 Servicer's Obligations. The Issuer shall cause the
                       ----------------------
Servicer to comply with Sections 4.9, 4.10, 4.11 and 5.6 of the Sale and
Servicing Agreement.

          SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities. Except
                       -------------------------------------------------
as contemplated by the Sale and Servicing Agreement or this Indenture, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.

          SECTION 3.16 Capital Expenditures. The Issuer shall not make any
                       --------------------
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).

          SECTION 3.17 Compliance with Laws. The Issuer shall comply with the
                       --------------------
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
Basic Document.

                                      28
<PAGE>

          SECTION 3.18 Restricted Payments. The Issuer shall not, directly or
                       -------------------
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, distributions
--------  -------
to the Servicer, the Owner Trustee, the Indenture Trustee and the
Certificateholders as permitted by, and to the extent funds are available for
such purpose under, the Sale and Servicing Agreement or Trust Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions from
the Collection Account except in accordance with this Indenture and the Basic
Documents.

          SECTION 3.19 Notice of Events of Default.
                       ---------------------------

          Upon a Responsible Officer of the Owner Trustee having actual
knowledge or receipt of written notice thereof, the Issuer agrees to give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and each default on the part of the Servicer or the Seller of
its obligations under the Sale and Servicing Agreement.

          SECTION 3.20 Further Instruments and Acts. Upon request of the
                       ----------------------------
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.

          SECTION 3.21 Amendments of Sale and Servicing Agreement and Trust
                       ----------------------------------------------------
Agreement. The Issuer shall not agree to any amendment to Section 12.1 of the
---------
Sale and Servicing Agreement or Section 13.1 of the Trust Agreement to eliminate
the requirements thereunder that the Indenture Trustee or the Holders of the
Notes consent to amendments thereto as provided therein.

          SECTION 3.22 Income Tax Characterization. For purposes of federal
                       ---------------------------
income, state and local income and franchise and any other income taxes, the
Issuer will treat the Notes as indebtedness and hereby instructs the Indenture
Trustee to treat the Notes as indebtedness for all applicable tax reporting
purposes.

                                  ARTICLE IV

                          Satisfaction and Discharge
                          --------------------------

          SECTION 4.1  Satisfaction and Discharge of Indenture. This Indenture
                       ---------------------------------------
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8,
3.10, 3.12, 3.13, 3.20, 3.21 and 3.22, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.7 and the obligations of the Indenture Trustee
under Section 4.2) and (vi) the rights of Noteholders as

                                      29
<PAGE>

beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when

               (A)   either

               (1)   all Notes theretofore authenticated and delivered (other
          than (i) Notes that have been destroyed, lost or stolen and that have
          been replaced or paid as provided in Section 2.5 and (ii) Notes for
          whose payment money has theretofore been deposited in trust or
          segregated and held in trust by the Issuer and thereafter repaid to
          the Issuer or discharged from such trust, as provided in Section 3.3)
          have been delivered to the Indenture Trustee for cancellation; or

               (2)   all Notes not theretofore delivered to the Indenture
          Trustee for cancellation

               (i)   have become due and payable,

               (ii)  will become due and payable at their respective Final
          Scheduled Payment Dates within one year, or

               (iii) are to be called for redemption within one year under
          arrangements satisfactory to the Indenture Trustee for the giving of
          notice of redemption by the Indenture Trustee in the name, and at the
          expense, of the Issuer,

          and the Issuer, in the case of (i), (ii) or (iii) above, has
          irrevocably deposited or caused to be irrevocably deposited with the
          Indenture Trustee cash or direct obligations of or obligations
          guaranteed by the United States of America (which will mature prior to
          the date such amounts are payable), in trust for such purpose, in an
          amount sufficient to pay and discharge the entire indebtedness on such
          Notes not theretofore delivered to the Indenture Trustee for
          cancellation when due to the Final Scheduled Payment Date or
          Redemption Date (if Notes shall have been called for redemption
          pursuant to Section 10.1(a)), as the case may be;

               (B)   the Issuer has paid or caused to be paid all amounts and
          obligations which the Issuer owes to the Indenture Trustee under this
          Indenture or any other Basic Document; and

               (C)   the Issuer has delivered to the Indenture Trustee an
          Officer's Certificate, an Opinion of Counsel and if required by the
          TIA or the Indenture Trustee, an Independent Certificate from a firm
          of certified public accountants, each meeting the applicable
          requirements of Section 11.1(a) and each stating that all conditions
          precedent herein provided for relating to the satisfaction and
          discharge of this Indenture have been complied with.

          SECTION 4.2  Application of Trust Money. All moneys deposited with the
                       --------------------------
Indenture Trustee pursuant to Section 4.1 hereof shall be held in trust and
applied by it, in

                                      30
<PAGE>

accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Note Paying Agent, as the Indenture Trustee may
determine, to the Holders of the particular Notes for the payment or redemption
of which such moneys have been deposited with the Indenture Trustee, of all sums
due and to become due thereon for principal and interest; but such moneys need
not be segregated from other funds except to the extent required herein or in
the Sale and Servicing Agreement or required by law.

          SECTION 4.3  Repayment of Moneys Held by Note Paying Agent. In
                       ---------------------------------------------
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all moneys then held by any Note Paying Agent other than the
Indenture Trustee under the provisions of this Indenture with respect to such
Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be
held and applied according to Section 3.3 and thereupon such Note Paying Agent
shall be released from all further liability with respect to such moneys.

                                   ARTICLE V

                                   Remedies
                                   --------

          SECTION 5.1  Events of Default. "Event of Default", wherever used
                       -----------------
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

          (i)   default in the payment of any interest on any Note when the same
     becomes due and payable, and such default shall continue for a period of
     five days; or

          (ii)  default in the payment of the Outstanding Amount of any Note on
     the applicable Final Scheduled Payment Date, and such default shall
     continue for a period of five days; or

          (iii) default in the observance or performance of any covenant or
     agreement of the Issuer made in this Indenture (other than a covenant or
     agreement, a default in the observance or performance of which is elsewhere
     in this Section specifically dealt with), or any representation or warranty
     of the Issuer made in this Indenture or in any certificate or other writing
     delivered pursuant hereto or in connection herewith proving to have been
     incorrect in any material respect as of the time when the same shall have
     been made, and such default shall continue or not be cured, or the
     circumstance or condition in respect of which such misrepresentation or
     warranty was incorrect shall not have been eliminated or otherwise cured,
     for a period of 30 days (or for such longer period, not in excess of 90
     days, as may be reasonably necessary to remedy such default; provided that
     such default is capable of remedy within 90 days or less and the Servicer
     on behalf of the Owner Trustee delivers an Officer's Certificate to the
     Indenture Trustee to the effect that the Issuer has commenced, or will
     promptly commence and diligently pursue, all reasonable efforts to remedy
     such default) after there shall have been given, by registered or certified
     mail, to the Issuer by the Indenture Trustee or to the Issuer and the
     Indenture Trustee by the Holders of at least 25% of the Outstanding Amount
     of the Notes, a written notice

                                      31
<PAGE>

     specifying such default or incorrect representation or warranty and
     requiring it to be remedied and stating that such notice is a "Notice of
     Default" hereunder; or

          (iv)  the filing of a decree or order for relief by a court having
     jurisdiction in the premises in respect of the Issuer or any substantial
     part of the Trust Estate in an involuntary case under any applicable
     federal or State bankruptcy, insolvency or other similar law now or
     hereafter in effect, or appointing a receiver, liquidator, assignee,
     custodian, trustee, sequestrator or similar official of the Issuer or for
     any substantial part of the Trust Estate, or ordering the winding-up or
     liquidation of the Issuer's affairs, and such decree or order shall remain
     unstayed and in effect for a period of 60 consecutive days; or

          (v)   the commencement by the Issuer of a voluntary case under any
     applicable federal or State bankruptcy, insolvency or other similar law now
     or hereafter in effect, or the consent by the Issuer to the entry of an
     order for relief in an involuntary case under any such law, or the consent
     by the Issuer to the appointment or taking possession by a receiver,
     liquidator, assignee, custodian, trustee, sequestrator or similar official
     of the Issuer or for any substantial part of the Trust Estate, or the
     making by the Issuer of any general assignment for the benefit of
     creditors, or the failure by the Issuer generally to pay its debts as such
     debts become due, or the taking of action by the Issuer in furtherance of
     any of the foregoing.

          The Issuer shall deliver to the Indenture Trustee, within five days
after the occurrence thereof, written notice in the form of an Officer's
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (iii), its status and what action
the Issuer is taking or proposes to take with respect thereto.

          SECTION 5.2  Acceleration of Maturity; Rescission and Annulment.
                       --------------------------------------------------

          (a)  If an Event of Default of the type described in clauses (i),
(ii), (iv) or (v) of Section 5.1 shall have occurred and be continuing, the
Notes may become immediately due and payable at par, together with accrued
interest thereon, and the Indenture Trustee may exercise any of the remedies
specified in Section 5.4(a), but only if so requested in writing by the
Controlling Class. If an Event of Default of the type described in Section
5.1(iii) shall have occurred and be continuing, the Notes shall become
immediately due and payable at par, together with accrued interest thereon, and
the Indenture Trustee may exercise any of the remedies specified in Section
5.4(a), if so requested in writing by the Majority Noteholders, voting on a
Class-by-Class basis (with respect to a particular Event of Default, the
Controlling Class or the Majority Noteholders voting on a Class-by-Class basis,
as appropriate, the "Declaring Noteholders").

          (b)  If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall, if so requested by the Declaring Noteholders, declare
by written notice to the Issuer that the Notes become, whereupon they shall
become immediately due and payable at par, together with accrued interest
thereon.

                                      32
<PAGE>

          (c)  At any time after such declaration of acceleration of maturity
has been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as hereinafter in this Article V
provided, the Declaring Noteholders, by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its consequences
if:

          (i)  the Issuer has paid or deposited with the Indenture Trustee a sum
     sufficient to pay:

                    (A)  all payments of principal of and interest on all Notes
               and all other amounts that would then be due hereunder or upon
               such Notes if the Event of Default giving rise to such
               acceleration had not occurred; and

                    (B)  all sums paid or advanced by the Indenture Trustee
               hereunder and the reasonable compensation, expenses,
               disbursements and advances of the Indenture Trustee and its
               agents and counsel; and

          (ii) all Events of Default, other than the nonpayment of the principal
     of the Notes that has become due solely by such acceleration, have been
     cured or waived as provided in Section 5.13.

          No such rescission shall affect any subsequent default or impair any
right consequent thereto.

          SECTION 5.3  Collection of Indebtedness and Suits for Enforcement by
                       -------------------------------------------------------
Trustee.
-------

          (a)  The Issuer covenants that if (i) default is made in the payment
of any interest on any Note when the same becomes due and payable, and such
default continues for a period of five days, or (ii) default is made in the
payment of the Outstanding Amount of any Note on the applicable Final Scheduled
Payment Date and such default continues for a period of five days, the Issuer
will pay to the Indenture Trustee, for the benefit of the Holders of the Notes,
the whole amount then due and payable on such Notes for principal and interest,
with interest upon the overdue principal, and, to the extent payment at such
rate of interest shall be legally enforceable, upon overdue installments of
interest, at the applicable Interest Rate and in addition thereto such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee and its agents and counsel.

          (b)  If an Event of Default occurs and is continuing, the Indenture
Trustee may in its discretion but with the consent of the Declaring Noteholders,
and shall, at the direction of the Declaring Noteholders, proceed to protect and
enforce its rights and the rights of the Noteholders by such appropriate
Proceedings as the Indenture Trustee or the Declaring Noteholders, as
applicable, shall deem most effective to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy or legal or equitable right vested in the Indenture
Trustee by this Indenture or by law.

                                      33
<PAGE>

          (c)  In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, proceedings under Title 11 of the United States
Code or any other applicable federal or State bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:

          (i)   to file and prove a claim or claims for the whole amount of
     principal and interest owing and unpaid in respect of the Notes and to file
     such other papers or documents as may be necessary or advisable in order to
     have the claims of the Indenture Trustee (including any claim for
     reasonable compensation to the Indenture Trustee and each predecessor
     Trustee, and their respective agents, attorneys and counsel, and for
     reimbursement of all expenses and liabilities incurred, and all advances
     made, by the Indenture Trustee and each predecessor Trustee, except as a
     result of negligence, bad faith or willful misconduct) and of the
     Noteholders allowed in such proceedings;

          (ii)  unless prohibited by applicable law and regulations, to vote on
     behalf of the Noteholders in any election of a trustee, a standby trustee
     or person performing similar functions in any such proceedings;

          (iii) to collect and receive any moneys or other property payable or
     deliverable on any such claims and to distribute all amounts received with
     respect to the claims of the Noteholders and of the Indenture Trustee on
     their behalf; and

          (iv)  to file such proofs of claim and other papers or documents as
     may be necessary or advisable in order to have the claims of the Indenture
     Trustee or the Noteholders allowed in any judicial proceedings relative to
     the Issuer, its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor
Trustee except as a result of negligence, bad faith or wilful misconduct.

          (d)  Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any

                                      34
<PAGE>

Holder thereof or to authorize the Indenture Trustee to vote in respect of the
claim of any Noteholder in any such proceeding except, as aforesaid, to vote for
the election of a trustee in bankruptcy or similar person.

          (e)  All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other proceedings relative thereto, and any such action or proceedings
instituted by the Indenture Trustee shall be brought in its own name as
Indenture Trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Trustee and their respective agents and attorneys,
shall be for the ratable benefit of the Holders of the Notes.

          (f)  In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture),
the Indenture Trustee shall be held to represent all the Holders of the Notes,
and it shall not be necessary to make any Noteholder a party to any such
proceedings.

          SECTION 5.4  Remedies.
                       --------

          (a)  If an Event of Default shall have occurred and be continuing, the
Declaring Noteholders may do one or more of the following (subject to Section
5.5):

          (i)   direct the Indenture Trustee to institute Proceedings in its own
     name and as trustee of an express trust for the collection of all amounts
     then payable on the Notes or under this Indenture with respect thereto,
     whether by declaration or otherwise, enforce any judgment obtained, and
     collect from the Issuer and any other obligor upon such Notes moneys
     adjudged due;

          (ii)  direct the Indenture Trustee to institute Proceedings from time
     to time for the complete or partial foreclosure of this Indenture with
     respect to the Trust Estate;

          (iii) direct the Indenture Trustee to exercise any remedies of a
     secured party under the UCC and take any other appropriate action to
     protect and enforce the rights and remedies of the Indenture Trustee and
     the Holders of the Notes; and

          (iv) direct the Indenture Trustee to sell the Trust Estate or any
     portion thereof or rights or interest therein, at one or more public or
     private sales called and conducted in any manner permitted by law;
     provided, however, that the Indenture Trustee may not sell or otherwise
     --------  -------
     liquidate the Trust Estate following an Event of Default unless

                    (I)  such Event of Default is of the type described in
                Section 5.1(i) or (ii), or

                    (II) either

                         (x)  the Holders of 100% of the Outstanding Amount of
                    the Notes consent thereto, or

                                      35
<PAGE>

                         (y)  the proceeds of such sale or liquidation
                    distributable to the Noteholders are sufficient to discharge
                    in full all amounts then due and unpaid upon such Notes for
                    principal and interest, or

                         (z)  the Indenture Trustee determines that the Trust
                    Estate will not continue to provide sufficient funds for the
                    payment of principal of and interest on the Notes as they
                    would have become due if the Notes had not been declared due
                    and payable, and the Indenture Trustee provides prior
                    written notice to the Rating Agencies and obtains the
                    consent of Holders of 66-2/3% of the Outstanding Amount of
                    the Notes.

          In determining such sufficiency or insufficiency with respect to
clause (y) and (z), the Indenture Trustee may, but need not, obtain and
conclusively rely upon a report of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose (a
"Verification Report").  The Declaring Noteholders may direct the Indenture to
commission such a report, or may themselves commission such a report.

          SECTION 5.5  Optional Preservation of the Receivables.  If the Notes
                       ----------------------------------------
have been declared to be due and payable under Section 5.2 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, if so directed by the Declaring
Noteholders, or if the conditions to a sale of the Trust Estate pursuant to
Section 5.4 have not been satisfied, maintain possession of the Trust Estate.

          SECTION 5.6  Priorities.
                       ----------

          (a)  Following the acceleration of the Notes pursuant to Section 5.2
or the occurrence of an Event of Default, any money or property collected
pursuant to Section 5.4, but net of any amounts applied to the costs of the
Indenture Trustee or of the Noteholders relating to the Event of Default and the
remedies in connection therewith, shall be applied by the Indenture Trustee on
the related Payment Date in the following order of priority:

          First: amounts due and owing and required to be distributed
          -----
     to the Servicer (provided there is no Servicer Default), the Owner
     Trustee and the Indenture Trustee, respectively, and not previously
     distributed without preference or priority of any kind within such
     priority;

          Second: to accrued and unpaid interest on, and to the reduction
          ------
     of, the aggregate Note Principal Balance of the Class A-1 Notes, the
     Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes,
     concurrently and in proportion to their then outstanding Note Principal
     Balances, rather than sequentially as provided in Section 5.4(b)(i)
     through (iv) of the Sale and Servicing Agreement.  Once the aggregate
     Note Principal Balance of all Class A Notes has been reduced to zero,
     the amount on deposit in the Note Account shall be applied to the
     payment of accrued and unpaid interest on, and the payment of the Note
     Principal Balance of, the Class B Notes and

                                      36
<PAGE>

     then the Class C Notes, sequentially, as provided in Section 5.4(b)(v)
     and (vi) of the Sale and Servicing Agreement; and

          Third: to the Certificateholders, any remainder.
          -----

          (b)  The Indenture Trustee may fix a record date and payment date for
any payment to Noteholders pursuant to this Section 5.6. At least 15 days before
such record date the Issuer shall mail to each Noteholder and the Indenture
Trustee a notice that states the record date, the payment date and the amount to
be paid.

          SECTION 5.7  Limitation of Suits. No Holder of any Note shall have any
                       -------------------
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:

          (i)    such Holder has previously given written notice to the
     Indenture Trustee of a continuing Event of Default;

          (ii)   the Holders of not less than 25% of the Outstanding Amount of
     the Notes have made written request to the Indenture Trustee to institute
     such proceeding in respect of such Event of Default in its own name as
     Indenture Trustee hereunder;

          (iii)  such Holder or Holders have offered to the Indenture Trustee
     indemnity reasonably satisfactory to it against the costs, expenses and
     liabilities to be incurred in complying with such request;

          (iv)   the Indenture Trustee for 60 days after its receipt of such
     notice, request and offer of indemnity has failed to institute such
     proceedings; and

          (v)    no direction inconsistent with such written request has been
     given to the Indenture Trustee during such 60-day period by the Holders of
     a majority of the Outstanding Amount of the Notes;

it being understood and intended that no one or more Noteholders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other
Noteholders or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the manner
herein provided.

          In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders, each
representing less than a majority of the Outstanding Amount of the Notes, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.

          SECTION 5.8  Unconditional Rights of Noteholders To Receive Principal
                       --------------------------------------------------------
and Interest.  Notwithstanding any other provisions in this Indenture, the
------------
Holder of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to

                                      37
<PAGE>

institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.

          SECTION 5.9   Restoration of Rights and Remedies. If any Noteholder
                        ----------------------------------
has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason
or has been determined adversely to the Indenture Trustee or to such Noteholder,
then and in every such case the Issuer, the Indenture Trustee and the
Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Indenture Trustee and the Noteholders shall
continue as though no such proceeding had been instituted.

          SECTION 5.10  Rights and Remedies Cumulative. No right or remedy
                        ------------------------------
herein conferred upon or reserved to the Noteholders is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

          SECTION 5.11  Delay or Omission Not a Waiver. No delay or omission of
                        ------------------------------
the Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or by
the Noteholders, as the case may be.

          SECTION 5.12  Control by Noteholders. Declaring Noteholders, with
                        ----------------------
respect to the related Events of Default, shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that

          (i)    such direction shall not be in conflict with any rule of law or
     with this Indenture;

          (ii)   subject to the express terms of Section 5.4, any direction to
     the Indenture Trustee to sell or liquidate the Trust Estate shall be by the
     Noteholders representing not less than 100% of the Outstanding Amount of
     the Notes;

          (iii)  if the conditions set forth in Section 5.5 have been satisfied
     and the Indenture Trustee elects to retain the Trust Estate pursuant to
     such Section, then any direction to the Indenture Trustee by Noteholders
     representing less than 100% of the Outstanding Amount of the Notes to sell
     or liquidate the Trust Estate shall be of no force and effect; and

          (iv)   the Indenture Trustee may take any other action deemed proper
     by the Indenture Trustee that is not inconsistent with such direction;

                                      38
<PAGE>

provided, however, that, subject to Article VI, the Indenture Trustee need not
--------  -------
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to such
action.  The Noteholders may, but need not, base their directions to the
Indenture Trustee on a Verification Report commissioned pursuant to Section 5.5.

          SECTION 5.13  Waiver of Past Defaults. Prior to the declaration of the
                        -----------------------
acceleration of the maturity of the Notes as provided in Section 5.2, Declaring
Noteholders may waive any past Default or Event of Default and its consequences
except a Default (a) in payment of principal of or interest on any of the Notes
or (b) in respect of a covenant or provision hereof which cannot be modified or
amended without the consent of the Holder of each Note. In the case of any such
waiver, the Issuer, the Indenture Trustee and the Holders of the Notes shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereto.

          Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.

          SECTION 5.14  Undertaking for Costs. All parties to this Indenture
                        ---------------------
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for
the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).

          SECTION 5.15  Waiver of Stay or Extension Laws. The Issuer covenants
                        --------------------------------
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.

          SECTION 5.16  Action on Notes. The Indenture Trustee's right to seek
                        ---------------
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking,

                                      39
<PAGE>

obtaining or application of any other relief under or with respect to this
Indenture. Neither the lien of this Indenture nor any rights or remedies of the
Indenture Trustee or the Noteholders shall be impaired by the recovery of any
judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer.

          SECTION 5.17  Performance and Enforcement of Certain Obligations.
                        --------------------------------------------------

          (a)  Promptly following a request from the Indenture Trustee to do so
and at the Servicer's expense, the Issuer agrees to take all such lawful action
as the Indenture Trustee may request to compel or secure the performance and
observance by the Seller and the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Sale and Servicing
Agreement in accordance with the terms thereof, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Sale and Servicing Agreement to the extent and in the
manner directed by the Indenture Trustee, including the transmission of notices
of default on the part of the Seller or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller or the Servicer of each of their obligations
under the Sale and Servicing Agreement.

          (b)  If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the written direction of the Holders of 66-2/3%
of the Outstanding Amount of the Notes shall, subject to Article VI, exercise
all rights, remedies, powers, privileges and claims of the Issuer against the
Seller or the Servicer under or in connection with the Sale and Servicing
Agreement, including the right or power to take any action to compel or secure
performance or observance by the Seller or the Servicer of each of their
obligations to the Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Sale and Servicing Agreement,
and any right of the Issuer to take such action shall be suspended.

          SECTION 5.18  Application of the Trust Indenture Act. Pursuant to
                        --------------------------------------
Section 316(a) and Section 316(b) of the TIA, all provisions automatically
provided for in Section 316(a) and Section 316(b) are hereby expressly excluded.

                                  ARTICLE VI

                             The Indenture Trustee
                             ---------------------

          SECTION 6.1   Duties of Indenture Trustee.
                        ---------------------------

          (a)  The Indenture Trustee, both prior to and after the occurrence of
a Servicer Default, shall undertake to perform such duties as are specifically
set forth in this Indenture. If a Servicer Default shall have occurred and shall
not have been cured, the Indenture Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and shall use the same degree of care and
skill in their exercise, as a prudent man or woman would exercise or use under
the circumstances in the conduct of his or her own affairs.

                                      40
<PAGE>

          (b)  The Indenture Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Indenture Trustee that shall be specifically
required to be furnished pursuant to any provision of this Indenture, shall
examine them to determine whether they conform as to form to the requirements of
this Indenture.

          (c)  No provision of this Indenture shall be construed to relieve the
Indenture Trustee from liability for its own negligent action, its own negligent
failure to act, or its own bad faith; provided, however, that:

          (i)    prior to the occurrence of a Servicer Default, and after the
     curing of all such Servicer Defaults that may have occurred, the duties and
     obligations of the Indenture Trustee shall be determined solely by the
     express provisions of this Indenture, the Indenture Trustee shall not be
     liable except for the performance of such duties and obligations as shall
     be specifically set forth in this Indenture, no implied covenants or
     obligations shall be read into this Indenture against the Indenture Trustee
     and, in the absence of bad faith on the part of the Indenture Trustee, or
     manifest error, the Indenture Trustee may conclusively rely on the truth of
     the statements and the correctness of the opinions expressed in any
     certificates or opinions furnished to the Indenture Trustee and conforming
     to the requirements of this Indenture;

          (ii)   the Indenture Trustee shall not be liable for an error of
     judgment made in good faith by a Responsible Officer, unless it shall be
     proved that the Indenture Trustee shall have been negligent in ascertaining
     the pertinent facts;

          (iii)  the Indenture Trustee shall not be liable with respect to any
     action taken, suffered, or omitted to be taken in good faith in accordance
     with this Indenture or at the direction of the Declaring Noteholders
     relating to the time, method, and place of conducting any proceeding for
     any remedy available to the Indenture Trustee, or exercising any trust or
     power conferred upon the Indenture Trustee, under this Indenture;

          (iv)   the Indenture Trustee shall not be charged with knowledge of
     any failure by the Servicer to comply with the obligations of the Servicer
     referred to in clause (i) or (ii) of Section 8.1(a) of the Sale and
     Servicing Agreement, unless a Responsible Officer of the Indenture Trustee
     has actual knowledge or receives written notice of such failure (it being
     understood that knowledge of the Servicer or the Servicer as custodian, in
     its capacity as agent for the Indenture Trustee, is not attributable to the
     Indenture Trustee) from the Servicer or the Holders of Notes evidencing not
     less than 25% of the Note Principal Balance; and

          (v)    without limiting the generality of this Section or Section 6.2,
     the Indenture Trustee shall have no duty (i) to see to any recording,
     filing, or depositing of this Indenture or any agreement referred to herein
     or any financing statement evidencing a security interest in the
     Receivables or the Financed Vehicles, or to see to the maintenance of any
     such recording or filing or depositing or to any rerecording, refiling or
     redepositing of any thereof, (ii) to see to any insurance of the Financed
     Vehicles or Obligors or to effect or maintain any such insurance, (iii) to
     see to the payment or

                                      41
<PAGE>

     discharge of any tax, assessment, or other governmental charge or any Lien
     or encumbrance of any kind owing with respect to, or assessed or levied
     against, any part of the Trust, (iv) to confirm or verify the contents of
     any reports or certificates of the Servicer delivered to the Indenture
     Trustee pursuant to this Indenture believed by the Indenture Trustee to be
     genuine and to have been signed or presented by the proper party or
     parties, or (v) to inspect the Financed Vehicles at any time or ascertain
     or inquire as to the performance or observance of any of the Seller's or
     the Servicer's representations, warranties or covenants or the Servicer's
     duties and obligations as Servicer and as custodian of the Receivable Files
     under this Indenture.

          (d)  The Indenture Trustee shall not be required to expend or risk its
own funds or otherwise incur financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if
there shall be reasonable ground for believing that the repayment of such funds
or adequate indemnity against such risk or liability shall not be reasonably
assured to it, and none of the provisions contained in this Indenture shall in
any event require the Indenture Trustee to perform, or be responsible for the
manner of performance of, any of the obligations of the Servicer under this
Indenture except during such time, if any, as the Indenture Trustee shall be the
successor to, and be vested with the rights, duties, powers, and privileges of,
the Servicer in accordance with the terms of this Indenture.

          (e)  Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture.

          (f)  The Indenture Trustee shall, and hereby agrees that it will,
perform all of the obligations and duties required of it under this Indenture.
In no event shall U.S. Bank National Association, in any of its capacities
hereunder, be deemed to have assumed any duties of the Owner Trustee under the
Delaware Business Trust Statute, common law, or the Trust Agreement.

          (g)  U.S. Bank National Association by its execution hereof accepts
its appointment as Indenture Trustee under this Indenture. The Indenture Trustee
shall act upon and in compliance with the written instructions of the
Noteholders delivered pursuant to the Indenture promptly following receipt of
such written instructions; provided that the Indenture Trustee shall not act in
accordance with any instructions (i) which are not authorized by, or in
violation of the provisions of this Indenture, (ii) which are in violation of
any applicable law, rule or regulation or (iii) for which the Indenture Trustee
has not received indemnity reasonably satisfactory to it. Receipt of such
instructions shall not be a condition to the exercise by the Indenture Trustee
of its express duties hereunder, except where this Indenture provides that the
Indenture Trustee is permitted to act only following and in accordance with such
instructions.

          SECTION 6.2  Rights of Indenture Trustee.
                       ---------------------------

          (a)  The Indenture Trustee may conclusively rely on any document
believed by it to be genuine and to have been signed or presented by the proper
person. The Indenture Trustee need not investigate any fact or matter stated in
the document.

                                      42
<PAGE>

          (b)  Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on the Officer's Certificate or Opinion of Counsel.

          (c)  The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, Chevy Chase Bank, F.S.B., or any other such agent, attorney,
custodian or nominee appointed with due care by it hereunder.

          (d)  The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
                  --------  -------
not constitute willful misconduct, negligence or bad faith.

          (e)  The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.

          (f)  The Indenture Trustee shall be under no obligation to institute,
conduct or defend any litigation under this Indenture or in relation to this
Indenture, at the request, order or direction of any of the Noteholders,
pursuant to the provisions of this Indenture, unless such Noteholders shall have
offered to the Indenture Trustee reasonable security or indemnity against the
costs, expenses and liabilities that may be incurred therein or thereby;
provided, however, that the Indenture Trustee shall, upon the occurrence of an
--------  -------
Event of Default (that has not been cured), exercise the rights and powers
vested in it by this Indenture with reasonable care and skill and shall remain
subject to the provisions of Section 6.1(d).

          (g)  The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do so
by Noteholders evidencing not less than 25% of the Outstanding Amount thereof;
provided, however, that if the payment within a reasonable time to the Indenture
--------  -------
Trustee of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Indenture Trustee, not
reasonably assured to the Indenture Trustee by the security afforded to it by
the terms of this Indenture or the Sale and Servicing Agreement, the Indenture
Trustee may require reasonable indemnity against such cost, expense or liability
as a condition to so proceeding; the reasonable expense of every such
examination shall be paid by the Person making such request, or, if paid by the
Indenture Trustee, shall be reimbursed by the Person making such request upon
demand.

          (h)  The Indenture Trustee shall not be liable for any losses on
investments except for losses resulting from the failure of the Indenture
Trustee to make an investment in accordance with instructions given in
accordance hereunder. If the Indenture Trustee acts as the

                                      43
<PAGE>

Note Paying Agent or Note Registrar, the rights and protections afforded to the
Indenture Trustee shall be afforded to the Note Paying Agent and Note Registrar.

          (i)  Subject to the provisions of Section 11.17 hereof, the Indenture
Trustee hereby agrees that it shall not disclose any information with respect to
Obligors to any Person unless directed to do so in writing by the Servicer.

          SECTION 6.3  Individual Rights of Indenture Trustee.  The Indenture
                       --------------------------------------
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Note Paying Agent,
Note Registrar, co-registrar or co-Note Paying Agent may do the same with like
rights. However, the Indenture Trustee must comply with Sections 6.11 and 6.12.

          SECTION 6.4  Indenture Trustee's Disclaimer. The Indenture Trustee
                       ------------------------------
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture, the Trust Estate or the Notes, it shall not be
accountable for the Issuer's use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Issuer in the Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other
than the Indenture Trustee's certificate of authentication.

          SECTION 6.5  Notice of Defaults.  If an Event of Default occurs and is
                       ------------------
continuing and if it is either known by, or written notice of the existence
thereof has been delivered to, a Responsible Officer of the Indenture Trustee,
the Indenture Trustee shall mail to each Noteholder notice of the Event of
Default within 90 days after such knowledge or notice occurs. Except in the case
of an Event of Default in payment of principal of or interest on any Note
(including payments pursuant to the mandatory redemption provisions of such
Note), the Indenture Trustee may withhold the notice if and so long as a
committee of two or more of its Responsible Officers in good faith determines
that withholding the notice is in the interests of Noteholders.

          SECTION 6.6  Reports by Trustee to Holders. The Indenture Trustee
                       -----------------------------
shall deliver to each Noteholder such information as may be reasonably required
to enable such Holder to prepare its federal and state income tax returns.

          SECTION 6.7  Compensation and Indemnity.
                       --------------------------

          (a)  Pursuant to Section 5.4(a) of the Sale and Servicing Agreement,
the Issuer shall, or shall cause the Servicer to, pay to the Indenture Trustee
from time to time compensation for its services. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall cause the Servicer to reimburse the Indenture
Trustee for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall cause the Servicer to indemnify the
Indenture Trustee and its officers, directors, employees and agents against any
and all loss, liability or expense (including attorneys' fees and expenses)
incurred by each of them in

                                      44
<PAGE>

connection with the acceptance or the administration of this trust and the
performance of its duties hereunder. The Indenture Trustee shall notify the
Issuer and the Servicer promptly of any claim for which it may seek indemnity.
Failure by the Indenture Trustee to so notify the Issuer and the Servicer shall
not relieve the Issuer of its obligations hereunder or the Servicer of its
obligations under Article X of the Sale and Servicing Agreement. The Issuer
shall cause the Servicer to defend the claim. The Indenture Trustee may have
separate counsel and the Issuer shall cause the Servicer to pay the fees and
expenses of such counsel. Neither the Issuer nor the Servicer need reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.

          (b)  The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section shall survive the discharge of this Indenture or the
earlier resignation or removal of the Indenture Trustee. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.1(iv) or (v) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or State bankruptcy, insolvency or similar law.
Notwithstanding anything else set forth in this Indenture or the Basic
Documents, the Indenture Trustee agrees that the obligations of the Issuer (but
not the Servicer) to the Indenture Trustee hereunder and under the Basic
Documents shall be recourse to the Trust Estate only and specifically shall not
be recourse to the assets of the Certificateholder or any Noteholder. In
addition, the Indenture Trustee agrees that its recourse to the Issuer, the
Trust Estate and the Seller shall be limited to the right to receive the
distributions referred to in Section 5.4(a) of the Sale and Servicing Agreement.

          SECTION 6.8  Replacement of Indenture Trustee.  The Indenture Trustee
                       --------------------------------
may resign at any time by so notifying the Issuer and the Servicer. The Issuer
or the Servicer may remove the Indenture Trustee, if:

          (i)    the Indenture Trustee fails to comply with Section 6.11;

          (ii)   a court having jurisdiction in the premises in respect of the
     Indenture Trustee in an involuntary case or proceeding under federal or
     state banking or bankruptcy laws, as now or hereafter constituted, or any
     other applicable federal or state bankruptcy, insolvency or other similar
     law, shall have entered a decree or order granting relief or appointing a
     receiver, liquidator, assignee, custodian, trustee, conservator,
     sequestrator (or similar official) for the Indenture Trustee or for any
     substantial part of the Indenture Trustee's property, or ordering the
     winding-up or liquidation of the Indenture Trustee's affairs;

          (iii)  an involuntary case under the federal bankruptcy laws, as now
     or hereafter in effect, or another present or future federal or state
     bankruptcy, insolvency or similar law is commenced with respect to the
     Indenture Trustee and such case is not dismissed within 60 days;

          (iv)   the Indenture Trustee commences a voluntary case under any
     federal or state banking or bankruptcy laws, as now or hereafter
     constituted, or any other applicable federal or state bankruptcy,
     insolvency or other similar law, or consents to the

                                      45
<PAGE>

     appointment of or taking possession by a receiver, liquidator, assignee,
     custodian, trustee, conservator, sequestrator (or other similar official)
     for the Indenture Trustee or for any substantial part of the Indenture
     Trustee's property, or makes any assignment for the benefit of creditors or
     fails generally to pay its debts as such debts become due or takes any
     corporate action in furtherance of any of the foregoing; or

          (v)  the Indenture Trustee otherwise becomes incapable of acting.

          If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Servicer
shall promptly appoint a successor Indenture Trustee.

          (b)  A successor Indenture Trustee shall deliver a written acceptance
of its appointment to the retiring Indenture Trustee, to the Issuer and the
Servicer. Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the retiring Indenture Trustee under this Indenture
subject to satisfaction of the Rating Agency Condition. The successor Indenture
Trustee shall mail a notice of its succession to Noteholders. The retiring
Indenture Trustee shall promptly transfer all property held by it as Indenture
Trustee to the successor Indenture Trustee.

          (c)  If a successor Indenture Trustee does not take office within 60
days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority in Outstanding Amount
of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.

          (d)  If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.

          (e)  Any resignation or removal of the Indenture Trustee and
appointment of a successor Indenture Trustee pursuant to any of the provisions
of this Section shall not become effective until acceptance of appointment by
the successor Indenture Trustee pursuant to Section 6.8 and payment of all fees
and expenses owed to the outgoing Indenture Trustee.

          (f)  Notwithstanding the replacement of the Indenture Trustee pursuant
to this Section, the Issuer's and the Servicer's obligations under Section 6.7
shall continue for the benefit of the retiring Indenture Trustee.

          SECTION 6.9  Successor Indenture Trustee by Merger.  If the Indenture
                       -------------------------------------
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee. The Indenture
Trustee shall provide the Servicer and the Rating Agencies prior written notice
of any such transaction.

                                      46
<PAGE>

          In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.

          SECTION 6.10  Appointment of Co-Trustee or Separate Trustee.
                        ---------------------------------------------

          (a)  Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust may at the time be located, the Indenture Trustee
shall have the power and may execute and deliver all instruments to appoint one
or more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such Person
or Persons, in such capacity and for the benefit of the Noteholders, such title
to the Trust, or any part hereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Indenture
Trustee may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
Indenture Trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.8 hereof.

          (b)  Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:

          (i)   all rights, powers, duties and obligations conferred or imposed
     upon the Indenture Trustee shall be conferred or imposed upon and exercised
     or performed by the Indenture Trustee and such separate trustee or co-
     trustee jointly (it being understood that such separate trustee or co-
     trustee is not authorized to act separately without the Indenture Trustee
     joining in such act), except to the extent that under any law of any
     jurisdiction in which any particular act or acts are to be performed the
     Indenture Trustee shall be incompetent or unqualified to perform such act
     or acts, in which event such rights, powers, duties and obligations
     (including the holding of title to the Trust or any portion thereof in any
     such jurisdiction) shall be exercised and performed singly by such separate
     trustee or co-trustee, but solely at the direction of the Indenture
     Trustee;

          (ii)  no trustee hereunder shall be personally liable by reason of any
     act or omission of any other trustee hereunder, including acts or omissions
     of predecessor or successor Indenture Trustees; and

          (iii) the Indenture Trustee may at any time accept the resignation of
     or remove any separate trustee or co-trustee.

          (c)  Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as

                                      47
<PAGE>

if given to each of them. Every instrument appointing any separate trustee or
co-trustee shall refer to this Agreement and the conditions of this Article VI.
Each separate trustee and co-trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture, specifically including every provision of this Indenture relating to
the conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.

          (d)  Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to he extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or co-
trustee shall die, dissolve, become insolvent, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Indenture Trustee, to the extent
permitted by law, without the appointment of a new or successor Indenture
Trustee.

          (e)  Any and all amounts relating to the fees and expenses of the co-
trustee or separate trustee will be borne by the Trust Estate.

          SECTION 6.11  Eligibility: Disqualification.  The Indenture Trustee
                        -----------------------------
shall at all times satisfy the requirements of TIA (S) 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and it shall have
a long term debt rating of BBB- or better by the Rating Agencies. The Indenture
Trustee shall comply with TIA (S) 310(b), including the optional provision
permitted by the second sentence of TIA (S) 310(b)(9); provided, however, that
                                                       --------  -------
there shall be excluded from the operation of TIA (S) 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA (S) 310(b)(1) are met.

          SECTION 6.12  Preferential Collection of Claims Against Issuer.  The
                        ------------------------------------------------
Indenture Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA (S) 311(a) to the extent indicated.

          SECTION 6.13  Appointment and Powers.  Subject to the terms and
                        ----------------------
conditions hereof, each of the Holders of the Notes hereby appoints U.S. Bank
National Association as the Indenture Trustee with respect to the Collateral,
and U.S. Bank National Association hereby accepts such appointment and agrees to
act as Indenture Trustee with respect to the Collateral for the Holders of the
Notes, to maintain custody and possession of such Collateral (except as
otherwise provided hereunder) and to perform the other duties of the Indenture
Trustee in accordance with the provisions of this Indenture and the other Basic
Documents. The Indenture Trustee shall act upon and in compliance with the
written instructions of the Declaring Noteholders delivered pursuant to this
Indenture promptly following receipt of such written instructions; provided that
                                                                   --------
the Indenture Trustee shall not act in accordance with any instructions (i)
which are not authorized by, or in violation of the provisions of, this
Indenture and the other Basic Documents, (ii) which are in violation of any
applicable law, rule or regulation or (iii) for

                                      48
<PAGE>

which the Indenture Trustee has not received reasonable indemnity. Receipt of
such instructions shall not be a condition to the exercise by the Indenture
Trustee of its express duties hereunder, except where this Indenture provides
that the Indenture Trustee is permitted to act only following and in accordance
with such instructions.

          SECTION 6.14  Performance of Duties.  The Indenture Trustee shall
                        ---------------------
have no duties or responsibilities except those expressly set forth in this
Indenture and the other Basic Documents to which the Indenture Trustee is a
party in accordance with this Indenture. Except as expressly provided herein,
Indenture Trustee shall not be required to take any discretionary actions
hereunder except at the written direction and with the indemnification of the
Declaring Noteholders. The Indenture Trustee shall, and hereby agrees that it
will, subject to this Article, perform all of the duties and obligations
required of it under the Sale and Servicing Agreement.

          SECTION 6.15  Limitation on Liability.  Neither the Indenture Trustee
                        -----------------------
nor any of its directors, officers or employees shall be liable for any action
taken or omitted to be taken by it or them hereunder, or in connection herewith,
except that the Indenture Trustee shall be liable for its negligence, bad faith
or willful misconduct; nor shall the Indenture Trustee be responsible for the
validity, effectiveness, value, sufficiency or enforceability against the Issuer
of this Indenture or any of the Collateral (or any part thereof).
Notwithstanding any term or provision of this Indenture, the Indenture Trustee
shall incur no liability to the Issuer or the Holders of the Notes for any
action taken or omitted by the Indenture Trustee in connection with the
Collateral, except for the negligence, bad faith or willful misconduct on the
part of the Indenture Trustee, and, further, shall incur no liability to the
Holders of the Notes except for negligence, bad faith or willful misconduct in
carrying out its duties to the Holders of the Notes. The Indenture Trustee shall
be protected and shall incur no liability to any such party in relying upon the
accuracy, acting in reliance upon the contents, and assuming the genuineness of
any notice, demand, certificate, signature, instrument or other document
reasonably believed by the Indenture Trustee to be genuine and to have been duly
executed by the appropriate signatory, and (absent actual knowledge to the
contrary by a Responsible Officer of the Indenture Trustee) the Indenture
Trustee shall not be required to make any independent investigation with respect
thereto. The Indenture Trustee shall at all times be free independently to
establish to its reasonable satisfaction, but shall have no duty to
independently verify, the existence or nonexistence of facts that are a
condition to the exercise or enforcement of any right or remedy hereunder or
under any of the Basic Documents. The Indenture Trustee may consult with
counsel, and shall not be liable for any action taken or omitted to be taken by
it hereunder in good faith and in accordance with the advice of such counsel.
The Indenture Trustee shall not be under any obligation to exercise any of the
remedial rights or powers vested in it by this Indenture or to follow any
direction from the Declaring Noteholders or risk its own funds or otherwise
incur financial liability in the performance of any of its duties hereunder
unless it shall have received reasonable security or indemnity satisfactory to
the Indenture Trustee against the costs, expenses and liabilities which might be
incurred by it.

          SECTION 6.16  Reliance Upon Documents.  In the absence of negligence,
                        -----------------------
bad faith or willful misconduct on its part, the Indenture Trustee shall be
entitled to conclusively rely on any communication, instrument, paper or other
document reasonably believed by it to be genuine and correct and to have been
signed or sent by the proper Person or Persons and shall have no liability in
acting, or omitting to act, where such action or omission to act is in

                                      49
<PAGE>

reasonable reliance upon any statement or opinion contained in any such document
or instrument.

          SECTION 6.17  Reserved.
                        --------

          SECTION 6.18  Representations and Warranties of the Indenture Trustee.
                        -------------------------------------------------------
The Indenture Trustee represents and warrants to the Issuer as follows:

          (a)  Due Organization.  The Indenture Trustee is a national banking
               ----------------
association and is duly authorized and licensed under applicable law to conduct
its business as presently conducted.

          (b)  Corporate Power.  The Indenture Trustee has all requisite right,
               ---------------
power and authority to execute and deliver this Indenture and to perform all of
its duties as Indenture Trustee hereunder.

          (c)  Due Authorization.  The execution and delivery by the Indenture
               -----------------
Trustee of this Indenture and the other Basic Documents to which it is a party,
and the performance by the Indenture Trustee of its duties hereunder and
thereunder, have been duly authorized by all necessary corporate proceedings and
no further approvals or filings, including any governmental approvals, are
required for the valid execution and delivery by the Indenture Trustee, or the
performance by the Indenture Trustee, of this Indenture and such other Basic
Documents.

          (d)  Valid and Binding Indenture.  The Indenture Trustee has duly
               ---------------------------
executed and delivered this Indenture and each other Basic Document to which it
is a party, and each of this Indenture and each such other Basic Document
constitutes the legal, valid and binding obligation of the Indenture Trustee,
enforceable against the Indenture Trustee in accordance with its terms, except
as (i) such enforceability may be limited by bankruptcy, insolvency,
reorganization and similar laws relating to or affecting the enforcement of
creditors' rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability.

          SECTION 6.19  Waiver of Setoffs.  The Indenture Trustee hereby
                        -----------------
expressly waives any and all rights of setoff that the Indenture Trustee may
otherwise at any time have under applicable law with respect to any Account and
agrees that amounts in the Accounts shall at all times be held and applied
solely in accordance with the provisions hereof.

          SECTION 6.20  Control by the Declaring Noteholders.  The Indenture
                        ------------------------------------
Trustee shall comply with notices and instructions given by the Issuer only if
accompanied by the written consent of the Declaring Noteholders, except that if
any Event of Default shall have occurred and be continuing, the Indenture
Trustee shall act upon and comply with notices and instructions given by the
Declaring Noteholders alone in the place and stead of the Issuer.

                                  ARTICLE VII

                        Noteholders' Lists and Reports
                        ------------------------------

          SECTION 7.1  Issuer To Furnish To Indenture Trustee Names and
                       ------------------------------------------------
Addresses of Noteholders.  The Issuer will furnish or cause to be furnished to
------------------------
the Indenture Trustee (a) not

                                      50
<PAGE>

more than five days after the earlier of (i) each Record Date and (ii) three
months after the last Record Date, a list, in such form as the Indenture Trustee
may reasonably require, of the names and addresses of the Holders as of such
Record Date, (b) at such other times as the Indenture Trustee may request in
writing, within 30 days after receipt by the Issuer of any such request, a list
of similar form and content as of a date not more than 10 days prior to the time
such list is furnished; provided, however, that so long as the Indenture Trustee
                        --------  -------
is the Note Registrar, no such list shall be required to be furnished.

          SECTION 7.2  Preservation of Information; Communications to
                       ----------------------------------------------
Noteholders.
-----------

          (a)  The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.1
and the names and addresses of Holders received by the Indenture Trustee in its
capacity as Note Registrar. The Indenture Trustee may destroy any list furnished
to it as provided in such Section 7.1 upon receipt of a new list so furnished.

          (b)  Noteholders may communicate pursuant to TIA (S) 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.

          (c)  The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA (S) 312(c).

          SECTION 7.3  Reports by Issuer.  The Issuer (a) shall deliver to the
                       -----------------
Indenture Trustee within 15 days after the Issuer is required to file the same
with the Commission copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe) that the Issuer is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, and (b) shall also comply with the
other provisions of TIA Section 314(a).

          SECTION 7.4  Reports by Indenture Trustee.  If required by TIA (S)
                       ----------------------------
313(a), within 60 days after each May 31, beginning with May 31, 2001, the
Indenture Trustee shall mail to each Noteholder as required by TIA (S) 313(c) a
brief report dated as of such date that complies with TIA (S) 313(a). The
Indenture Trustee also shall comply with TIA (S) 313(b).

          A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed.  The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.

                                 ARTICLE VIII

                     Accounts, Disbursements and Releases
                     ------------------------------------

          SECTION 8.1  Collection of Money.  Except as otherwise expressly
                       -------------------
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all

                                      51
<PAGE>

money and other property payable to or receivable by the Indenture Trustee
pursuant to this Indenture and the Sale and Servicing Agreement. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture
and the Sale and Servicing Agreement. Except as otherwise expressly provided in
this Indenture or in the Sale and Servicing Agreement, if any default occurs in
the making of any payment or performance under any agreement or instrument that
is part of the Trust Estate, the Indenture Trustee may take such action as may
be appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.

          SECTION 8.2  Release of Trust Estate.
                       -----------------------

          (a)  Subject to the payment of its fees and expenses and other amounts
pursuant to Section 6.7, the Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture. No party relying upon an
instrument executed by the Indenture Trustee as provided in this Article VIII
shall be bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
moneys.

          (b)  The Indenture Trustee shall, at such time as there are no Notes
outstanding and all sums due the Indenture Trustee pursuant to Section 6.7 have
been paid, release any remaining portion of the Trust Estate that secured the
Notes from the lien of this Indenture and release to the Issuer or any other
Person entitled thereto any funds then on deposit in the Accounts. The Indenture
Trustee shall release property from the lien of this Indenture pursuant to this
Section 8.2(b) only upon receipt of an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel and (if required by the TIA)
Independent Certificates in accordance with TIA (S)(S) 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.1.

          SECTION 8.3  Opinion of Counsel.  The Indenture Trustee shall receive
                       ------------------
at least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.2(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require as a condition to such action, an
Opinion of Counsel in form and substance satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with and such action will not materially and
adversely impair the security for the Notes or the rights of the Noteholders in
contravention of the provisions of this Indenture; provided, however, that such
                                                   --------  -------
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Trust Estate. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate or
other instrument delivered to the Indenture Trustee in connection with any such
action.

                                      52
<PAGE>

                                  ARTICLE IX

                            Supplemental Indentures
                            -----------------------

          SECTION 9.1  Supplemental Indentures Without Consent of Noteholders.
                       ------------------------------------------------------
          (a)  Without the consent of the Holders of any Notes and with prior
notice to the Rating Agencies by the Issuer, as evidenced to the Indenture
Trustee, the Issuer and the Indenture Trustee, when authorized by an Issuer
Order, at any time and from time to time, may enter into one or more indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:

          (i)   to correct or amplify the description of any property at any
     time subject to the lien of this Indenture, or better to assure, convey and
     confirm unto the Indenture Trustee any property subject or required to be
     subjected to the lien of this Indenture, or to subject to the lien of this
     Indenture additional property;

          (ii)  to evidence the succession, in compliance with the applicable
     provisions hereof, of another person to the Issuer, and the assumption by
     any such successor of the covenants of the Issuer herein and in the Notes
     contained;

          (iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred upon
the Issuer;

          (iv)  to convey, transfer, assign, mortgage or pledge any property to
     or with the Indenture Trustee;

          (v)   to cure any ambiguity, to correct or supplement any provision
     herein or in any supplemental indenture which may be inconsistent with any
     other provision herein or in any supplemental indenture or to make any
     other provisions with respect to matters or questions arising under this
     Indenture or in any supplemental indenture; provided that such action shall
     not adversely affect the interests of the Holders of the Notes;

          (vi)  to evidence and provide for the acceptance of the appointment
     hereunder by a successor Indenture Trustee with respect to the Notes and to
     add to or change any of the provisions of this Indenture as shall be
     necessary to facilitate the administration of the trusts hereunder by more
     than one trustee, pursuant to the requirements of Article VI; or

          (vii) to modify, eliminate or add to the provisions of this Indenture
     to such extent as shall be necessary to effect the qualification of this
     Indenture under the TIA or under any similar federal statute hereafter
     enacted and to add to this Indenture such other provisions as may be
     expressly required by the TIA.

          The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.

                                      53
<PAGE>

          (b)  The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Holders of the Notes
but with prior notice to the Rating Agencies by the Issuer, as evidenced to the
Indenture Trustee, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
                                                                    --------
however, that such action shall not, as evidenced by an Opinion of Counsel,
-------
adversely affect in any material respect the interests of any Noteholder.

          SECTION 9.2  Supplemental Indentures with Consent of Noteholders.  The
                       ---------------------------------------------------
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior notice to the Rating Agencies, with the consent of Majority
Noteholders of each Class of Notes then Outstanding, by act of such Holders
delivered to the Issuer and the Indenture Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that no such supplemental indenture shall, without
           --------  -------
the consent of the Holder of each Outstanding Note affected thereby:

          (i)   change the date of payment of any installment of principal of or
     interest on any Note, or reduce the principal amount thereof, the interest
     rate thereon or the Optional Purchase Price with respect thereto, change
     the provision of this Indenture relating to the application of collections
     on, or the proceeds of the sale of, the Trust Estate to payment of
     principal of or interest on the Notes, or change any place of payment
     where, or the coin or currency in which, any Note or the interest thereon
     is payable;

          (ii)  impair the right to institute suit for the enforcement of the
     provisions of this Indenture requiring the application of funds available
     therefor, as provided in Article V, to the payment of any such amount due
     on the Notes on or after the respective due dates thereof (or, in the case
     of redemption, on or after the Redemption Date);

          (iii) reduce the percentage of the Outstanding Amount of the Notes,
     the consent of the Holders of which is required for any such supplemental
     indenture, or the consent of the Holders of which is required for any
     waiver of compliance with certain provisions of this Indenture or certain
     defaults hereunder and their consequences provided for in this Indenture;

          (iv)  modify or alter the provisions of the proviso to the definition
     of the term "Outstanding";

          (v)   reduce the percentage of the Outstanding Amount of the Notes
     required to direct the Indenture Trustee to direct the Issuer to sell or
     liquidate the Trust Estate pursuant to Section 5.4;

          (vi)  modify any provision of this Section except to increase any
     percentage specified herein or to provide that certain additional
     provisions of this Indenture or the

                                      54
<PAGE>

     Basic Documents cannot be modified or waived without the consent of the
     Holder of each Outstanding Note affected thereby;

          (vii)  modify any of the provisions of this Indenture in such manner
     as to affect the calculation of the amount of any payment of interest or
     principal due on any Note on any Payment Date (including the calculation of
     any of the individual components of such calculation) or to affect the
     rights of the Noteholders to the benefit of any provisions for the
     mandatory redemption of the Notes contained herein; or

          (viii) permit the creation of any lien ranking prior to or on a parity
     with the lien of this Indenture with respect to any part of the Trust
     Estate or, except as otherwise permitted or contemplated herein or in any
     of the Basic Documents, terminate the lien of this Indenture on any
     property at any time subject hereto or deprive the Holder of any Note of
     the security provided by the lien of this Indenture.

          The Indenture Trustee may determine whether or not any Notes would be
affected by any supplemental indenture and any such determination shall be
conclusive upon the Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder.  The Indenture Trustee shall not be
liable for any such determination made in good faith.

          It shall not be necessary for any act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such act shall approve the substance thereof.

          Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture.  Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

          SECTION 9.3  Execution of Supplemental Indentures.  In executing, or
                       ------------------------------------
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the amendments or modifications thereby of the
trusts created by this Indenture, the Indenture Trustee shall be entitled to
receive, shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Indenture Trustee may, but shall not be obligated to, enter
into any such supplemental indenture that affects the Indenture Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.

          SECTION 9.4  Effect of Supplemental Indenture.  Upon the execution of
                       --------------------------------
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental

                                      55
<PAGE>

indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.

          SECTION 9.5  Conformity With Trust Indenture Act.  Every amendment of
                       -----------------------------------
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.

          SECTION 9.6  Reference in Notes to Supplemental Indentures.  Notes
                       ---------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.

                                   ARTICLE X

                              Redemption of Notes
                              -------------------

          SECTION 10.1  Redemption.
                        ----------

          (a)  The Notes are subject to redemption in whole, but not in part, at
the direction of the Servicer pursuant to Section 11.1(a) of the Sale and
Servicing Agreement, on any Payment Date on which the Servicer exercises its
option to purchase the Trust Estate pursuant to said Section 11.1(a), for a
purchase price equal to the Optional Purchase Price. If the Notes are to be
redeemed pursuant to this Section 10.1(a), the Issuer shall deposit with the
Indenture Trustee in the Note Account the Optional Purchase Price in immediately
available funds by 12:00 noon, New York City time, on such Payment Date and,
upon notice to the Indenture Trustee of such deposit, the Indenture Trustee
shall release the Receivables and the Receivable Files and all other property of
the Trust to the Servicer, whereupon all such Notes shall be due and payable on
the Redemption Date upon the furnishing of a notice complying with Section 10.2
to each Holder of Notes.

          (b)  In the event that the Trust is terminated pursuant to Section
10.1(a), all amounts on deposit in the Note Account shall be paid to the
Noteholders up to the Outstanding Amount of the Notes and all accrued and unpaid
interest thereon. If amounts are to be paid to Noteholders pursuant to this
Section 10.1(b), the Servicer or the Issuer shall, to the extent practicable,
furnish notice of such event to the Indenture Trustee not later than 45 days
prior to the Redemption Date whereupon all such amounts shall be payable on the
Redemption Date.

          SECTION 10.2  Form of Redemption Notice.
                        -------------------------

          (a)  Notice of redemption under Section 10.1(a) shall be given by the
Indenture Trustee by facsimile or by first-class mail, postage prepaid,
transmitted or mailed prior to the applicable Redemption Date to each Holder of
Notes, as of the close of business on the Record

                                      56
<PAGE>

Date preceding the applicable Redemption Date, at such Holder's address
appearing in the Note Register.

          All notices of redemption shall state:

          (i)   the Redemption Date;

          (ii)  the Optional Purchase Price;

          (iii) that the Record Date otherwise applicable to such Redemption
     Date is not applicable and that payments shall be made only upon
     presentation and surrender of such Notes and the place where such Notes are
     to be surrendered for payment of the Optional Purchase Price (which shall
     be the office or agency of the Issuer to be maintained as provided in
     Section 3.2); and

          (iv)  that interest on the Notes shall cease to accrue on the
     Redemption Date.

          Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.

          SECTION 10.3  Notes Payable on Redemption Date.  The Notes to be
                        --------------------------------
redeemed shall, following notice of redemption as required by Section 10.2 (in
the case of redemption pursuant to Section 10.1(a)), on the Redemption Date
become due and payable at the Optional Purchase Price and (unless the Issuer
shall default in the payment of the Optional Purchase Price) no interest shall
accrue on the Optional Purchase Price for any period after the date to which
accrued interest is calculated for purposes of calculating the Optional Purchase
Price.

                                  ARTICLE XI

                                 Miscellaneous
                                 -------------

          SECTION 11.1  Compliance Certificates and Opinions, etc.
                        -----------------------------------------

          (a)  Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee (i) an Officer's Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.

                                      57
<PAGE>

          Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

          (i)   a statement that each signatory of such certificate or opinion
     has read or has caused to be read such covenant or condition and the
     definitions herein relating thereto;

          (ii)  a brief statement as to the nature and scope of the examination
     or investigation upon which the statements or opinions contained in such
     certificate or opinion are based;

          (iii) a statement that, in the opinion of each such signatory, such
     signatory has made such examination or investigation as is necessary to
     enable such signatory to express an informed opinion as to whether or not
     such covenant or condition has been complied with; and

          (iv)  a statement as to whether, in the opinion of each such signatory
     such condition or covenant has been complied with.

          (b) Other than with respect to the release of any Purchased
Receivables or Liquidated Receivables, prior to the deposit of any Collateral or
other property or securities with the Indenture Trustee that is to be made the
basis for the release of any property or securities subject to the lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in Section
11.1(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of each person signing
such certificate as to the fair value (within 90 days of such deposit) to the
Issuer of the Collateral or other property or securities to be so deposited.

          (i)   Whenever the Issuer is required to furnish to the Indenture
     Trustee an Officer's Certificate certifying or stating the opinion of any
     signer thereof as to the matters described in clause (b) above, the Issuer
     shall also deliver to the Indenture Trustee an Independent Certificate as
     to the same matters, if the fair value to the Issuer of the securities to
     be so deposited and of all other such securities made the basis of any such
     withdrawal or release since the commencement of the then-current fiscal
     year of the Issuer, as set forth in the certificates delivered pursuant to
     clause (b) above and this clause (i), is 10% or more of the Outstanding
     Amount of the Notes, but such a certificate need not be furnished with
     respect to any securities so deposited, if the fair value thereof to the
     Issuer as set forth in the related Officer's Certificate is less than
     $25,000 or less than 1 percent of the Outstanding Amount of the Notes.

          (ii)  Other than with respect to the release of any Purchased
     Receivables or Liquidated Receivables, whenever any property or securities
     are to be released from the lien of this Indenture, the Issuer shall also
     furnish to the Indenture Trustee an Officer's Certificate certifying or
     stating the opinion of each person signing such certificate as to the fair
     value (within 90 days of such release) of the property or securities
     proposed to be released and stating that in the opinion of such person the
     proposed release will not impair the security under this Indenture in
     contravention of the provisions hereof.

                                      58
<PAGE>

          (iii)  Whenever the Issuer is required to furnish to the Indenture
     Trustee an Officer's Certificate certifying or stating the opinion of any
     signer thereof as to the matters described in clause (ii) above, the Issuer
     shall also furnish to the Indenture Trustee an Independent Certificate as
     to the same matters if the fair value of the property or securities and of
     all other property other than Purchased Receivables and Defaulted
     Receivables, or securities released from the lien of this Indenture since
     the commencement of the then current calendar year, as set forth in the
     certificates required by clause (ii) above and this clause (iii), equals
     10% or more of the Outstanding Amount of the Notes, but such certificate
     need not be furnished in the case of any release of property or securities
     if the fair value thereof as set forth in the related Officer's Certificate
     is less than $25,000 or less than 1 percent of the then Outstanding Amount
     of the Notes.

          (iv)   Notwithstanding Section 2.9 or any other provision of this
     Section, the Issuer may (A) collect, liquidate, sell or otherwise dispose
     of Receivables as and to the extent permitted or required by the Basic
     Documents and (B) make cash payments out of the Accounts as and to the
     extent permitted or required by the Basic Documents.

          SECTION 11.2  Form of Documents Delivered to Indenture Trustee.  In
                        ------------------------------------------------
any case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.

          Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous.  Any such certificate of an Authorized Officer
or Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or officers
of the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.

          Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

          Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts

                                      59
<PAGE>

and opinions stated in such document shall in such case be conditions precedent
to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.

          SECTION 11.3   Acts of Noteholders.
                         -------------------

          (a)  Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.1) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section.

          (b)  The fact and date of the execution by any person of any such
instrument or writing may be proved in any customary manner of the Indenture
Trustee.

          (c)  The ownership of Notes shall be proved by the Note Register.

          (d)  Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.

          SECTION 11.4  Notices, etc., to Indenture Trustee, Issuer and Rating
                        ------------------------------------------------------
Agencies.  Any request, demand, authorization, direction, notice, consent,
--------
waiver or act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to or filed with:

          (a)  The Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if personally delivered, delivered by
overnight courier or mailed certified mail, return receipt requested and shall
be deemed to have been duly given upon receipt to the Indenture Trustee at its
Corporate Trust Office, or

          (b)  The Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if personally delivered, delivered by
overnight courier or mailed certified mail, return receipt requested and shall
deemed to have been duly given upon receipt to the Issuer addressed to: Chevy
Chase Auto Receivables Trust 2000-1, in care of Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration, with a copy to the Indenture Trustee
at its Corporate Trust Office, Attention: Structured Finance, or at any other
address previously
                                      60
<PAGE>

furnished in writing to the Indenture Trustee by Issuer. The Issuer shall
promptly transmit any notice received by it from the Noteholders to the
Indenture Trustee.

          Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered, delivered by overnight courier or mailed certified mail, return
receipt requested to (i) in the case of Moody's, at the following address:
Moody's Investors Service, Inc., 99 Church Street, Attention: ABS Monitoring
Group, (4th Floor), New York, New York 10007, (ii) in the case of S&P, at the
following address: Standard & Poor's Ratings Services, 26 Broadway (15th Floor),
New York, New York 10004, Attention of Asset Backed Surveillance Department, and
(iii) in the case of Fitch at the following address: One State Street Plaza, New
York, NY 10004; or as to each of the foregoing, at such other address as shall
be designated by written notice to the other parties.

          SECTION 11.5  Notices to Noteholders; Waiver. Where this Indenture
                        ------------------------------
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner here
in provided shall conclusively be presumed to have been duly given.

          Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.

          In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.

          Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default or
Event of Default.

          SECTION 11.6  Alternate Payment and Notice Provisions. Notwithstanding
                        ---------------------------------------
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee or any Paying Agent to such Holder,
that is different from the methods provided for in this Indenture for such
payments or notices, provided that such methods are reasonable and consented to
by the Indenture Trustee (which consent shall not be unreasonably withheld). The
Issuer will furnish to the Indenture Trustee a copy of each such agreement and
the

                                      61
<PAGE>

Indenture Trustee will cause payments to be made and notices to be given in
accordance with such agreements..

          SECTION 11.7   Conflict with Trust Indenture Act.  If any provision
                         ---------------------------------
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.

          The provisions of TIA (S)(S) 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.

          SECTION 11.8   Effect of Headings and Table of Contents.  The Article
                         ----------------------------------------
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.

          SECTION 11.9   Successors and Assigns.  All covenants and agreements
                         ----------------------
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors.

          SECTION 11.10  Separability.  In case any provision in this
                         ------------
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

          SECTION 11.11  Benefits of Indenture.  Nothing in this Indenture or
                         ---------------------
in the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, and any
other party secured hereunder, and any other person with an ownership interest
in any part of the Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.

          SECTION 11.12  Legal Holidays.  In any case where the date on which
                         --------------
any payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date an which nominally due, and no interest shall
accrue for the period from and after any such nominal date.

          SECTION 11.13  GOVERNING LAW.  THIS INDENTURE SHALL BE CONSTRUED IN
                         -------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

          SECTION 11.14  Counterparts.  This Indenture may be executed in any
                         ------------
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

                                      62
<PAGE>

          SECTION 11.15   Trust Obligation; Limitation of Liabilities.  (a) No
                          -------------------------------------------
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Servicer, the Indenture Trustee, or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of the
Seller, the Servicer, the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Seller, the Servicer, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Seller, the Servicer, the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacity) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity. For all purposes of this Indenture, in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Article VI, VII and
VIII of the Trust Agreement.

          (b)  Notwithstanding anything contained herein to the contrary, this
Indenture has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the Trust and
in no event shall Wilmington Trust Company in its individual capacity or, except
as expressly provided in the Trust Agreement, as Owner Trustee have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Trust hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Trust. For all purposes of this Indenture, in the
performance of its duties or obligations hereunder or in the performance of any
duties or obligations of the Trust hereunder, the Owner Trustee shall be subject
to, and entitled to the benefits of, the terms and provisions of Articles V, VI
and VII of the Trust Agreement.

          (c)  Notwithstanding anything contained herein to the contrary, this
Agreement has been executed and delivered by U.S. Bank National Association, not
in its individual capacity but solely as Indenture Trustee and in no event shall
U.S. Bank National Association, have any liability for the representations,
warranties, covenants, agreements or other obligations of the Trust hereunder or
in any of the certificates, notices or agreements delivered pursuant hereto, as
to all of which recourse shall be had solely to the assets of the Trust.

          (d)  In no event shall U.S. Bank National Association, in any of its
capacities hereunder, be deemed to have assumed any duties of the Owner Trustee
under the Delaware Business Trust Statute, common law, or the Trust Agreement.

          SECTION 11.16  No Petition.  The Indenture Trustee by entering into
                         -----------
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Seller, or the
Issuer, or join in any institution against the Seller, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or State bankruptcy or
similar

                                      63
<PAGE>

law in connection with any obligations relating to the Notes, this Indenture or
any of the Basic Documents.

          SECTION 11.17   Inspection.  The Issuer agrees that, on reasonable
                          ----------
prior notice, it will permit any representative of the Indenture Trustee, during
the Issuer's normal business hours, to examine all the books of account,
records, reports, and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with the
Issuer's officers, employees, and independent certified public accountants, all
at such reasonable times and as often as may be reasonably requested. Subject to
the provisions of the immediately following sentence, the Indenture Trustee
agrees that it shall keep all information obtained in the course of such
examination confidential. Notwithstanding anything herein to the contrary, the
foregoing shall not be construed to prohibit (i) disclosure of any and all
information that is or becomes publicly known, (ii) disclosure of any and all
information (A) if required to do so by any applicable statute, law, rule or
regulation, (B) to any government agency or regulatory body having or claiming
authority to regulate or oversee any respects of the Indenture Trustee's
business or that of its affiliates, (C) pursuant to any subpoena, civil
investigative demand or similar demand or request of any court, regulatory
authority, arbitrator or arbitration to which the Indenture Trustee or an
affiliate or an officer, director, employer or shareholder thereof is a party,
(D) in any preliminary or final offering circular, registration statement or
contract or other document pertaining to the transactions contemplated by the
Indenture approved in advance by the Servicer or the Issuer or (E) to any
independent or internal auditor, agent, employee or attorney of the Indenture
Trustee having a need to know the same, provided that the Indenture Trustee
advises such recipient of the confidential nature of the information being
disclosed, or (iii) any other disclosure authorized by the Servicer or the
Issuer.

          [THIS SPACE LEFT INTENTIONALLY BLANK]

                                      64
<PAGE>

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

                 CHEVY CHASE AUTO RECEIVABLES TRUST 2000-1,

                  By:  Wilmington Trust Company, not in its individual capacity
                       but solely as Owner Trustee

                  By: /s/ Patricia A. Evans
                     ---------------------------------------------------
                     Name:  Patricia A. Evans
                     Title: Senior Financial Services Officer

                   U.S. BANK NATIONAL ASSOCIATION, not in its individual
                   capacity but solely as Indenture Trustee

                   By: /s/  Edward F. Kachinski
                     ---------------------------------------------------
                      Name:  Edward F. Kachinski
                      Title: Vice President

                                      65
<PAGE>

                                                                     EXHIBIT A-1

REGISTERED                                                       $79,000,000

No. RB-1-1
                      SEE REVERSE FOR CERTAIN DEFINITIONS
                                                          CUSIP NO.  166778 AL 4

          Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

          THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

                   CHEVY CHASE AUTO RECEIVABLES TRUST 2000-1

                      CLASS A-1 6.87% ASSET BACKED NOTES

          Chevy Chase Auto Receivables Trust 2000-1, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of SEVENTY-NINE MILLION DOLLARS payable on
each Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $79,000,000 and the denominator of which is
$79,000,000 by (ii) the aggregate amount, if any, payable from the Note Account
in respect of principal on the Class A-1 Notes pursuant to the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
--------  -------
due and payable on July 12, 2001 (the "Final Scheduled Payment Date").  The
Issuer will pay interest on this Note at the rate per annum shown above on each
Payment Date until the principal of this Note is paid or made available for
payment.  Interest on this Note will accrue for each Payment Date from the most
recent Payment Date on which interest has been paid to but excluding such
Payment Date or, if no interest has yet been paid, from June 21, 2000.  Interest
will be computed on the basis of the actual number of days elapsed in a 360-day
year.  Such principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.

          The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.  All payments made by the Issuer
with respect to this Note shall be applied first to

                                     A-1-1
<PAGE>

interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.

          Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.

          Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                     A-1-2
<PAGE>

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.

                                 CHEVY CHASE AUTO RECEIVABLES TRUST
                                 2000-1

                                 by

                                 Wilmington Trust Company, not in its individual
                                 capacity but solely as Owner Trustee under the
                                 Trust Agreement

                                 by__________________________________________
                                 Name:
                                 Title:

                                     A-1-3
<PAGE>

               INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
          This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

Date:  June 21, 2000               U.S. BANK NATIONAL ASSOCIATION, not in its
                                   individual capacity but solely as Indenture
                                   Trustee

                                   by______________________________________
                                   Authorized Signer

                                     A-1-4
<PAGE>

                               [REVERSE OF NOTE]

          This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 6.87% Asset Backed Notes (herein called the "Class
A-1 Notes"), all issued under an Indenture dated as of June 1, 2000 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and U.S. Bank National Association , as Indenture Trustee
(the "Indenture Trustee", which term includes any successor Indenture Trustee
under the Indenture) to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes.  The Notes are subject to all terms of the Indenture.  All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.

          The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes and  the Class C Notes (together, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.

          Principal of the Class A-1 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing July 17, 2000.  The term "Payment Date,"
shall be deemed to include the Final Scheduled Payment Date.

          As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Payment Date and
the Redemption Date, if any, pursuant to the Indenture.  Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee, at the direction of the Declaring
Noteholders, has declared the Notes to be immediately due and payable in the
manner provided in the Indenture.  All principal payments on the Class A-1 Notes
shall be made pro rata to the Class A-1 Noteholders entitled thereto.

          Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee.  Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment.  Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon.  If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Holder hereof as of the Record

                                     A-1-5
<PAGE>

Date preceding such Payment Date by notice mailed prior to such Payment Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's principal Corporate Trust
Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in St. Paul, Minnesota.

          The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Interest Rate to the extent lawful.

          As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Servicer, on any Payment Date on or after the
date on which the Pool Balance is less than or equal to 5% of the Original Pool
Balance.

          As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("Stamp") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, Stamp,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees.  No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.

          Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Servicer, the Owner Trustee, the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the Seller,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Seller, the Servicer, the Indenture Trustee or the Owner Trustee
in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity).

          Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer, the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this

                                     A-1-6
<PAGE>

Note be overdue, and neither the Issuer, the Indenture Trustee nor any such
agent shall be affected by notice to the contrary.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Noteholders representing a majority
of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture
also contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.  The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of Holders of the Notes issued thereunder.

          The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.

          The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.

          The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.

          This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.

          No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.

                                     A-1-7
<PAGE>

                                  ASSIGNMENT

Name, Address, Social Security or taxpayer I.D. or other identifying number of
assignee:

____________________________________________________________

          FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________________________________
                          (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, _________________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.

Dated ____________________    Signature by or on behalf of assignee:

                              _______________________________________ /1/

                                           Signature Guaranteed:

                              __________________________________________________

_____________________________
     /1/  NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.

                                     A-1-8
<PAGE>

                                                                     EXHIBIT A-2

REGISTERED                                                  $70,000,000

No. RB-2-1
                      SEE REVERSE FOR CERTAIN DEFINITIONS

                                                           CUSIP NO. 166778 AM 2

          Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

          THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

                   CHEVY CHASE AUTO RECEIVABLES TRUST 2000-1

                      CLASS A-2 7.25% ASSET BACKED NOTES

          Chevy Chase Auto Receivables Trust 2000-1, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of SEVENTY MILLION DOLLARS payable on each
Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $70,000,000 and the denominator of which is
$70,000,000 by (ii) the aggregate amount, if any, payable from the Note Account
in respect of principal on the Class A-2 Notes pursuant to the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
--------  -------
due and payable on the December, 2002 Payment Date (the "Final Scheduled Payment
Date"). The Issuer will pay interest on this Note at the rate per annum shown
above on each Payment Date until the principal of this Note is paid or made
available for payment.  Interest on this Note will accrue for each Payment Date
from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from June 21,
2000.  Interest will be computed on the basis of a 360-day year assumed to
consist of twelve 30-day months.  Such principal of and interest on this Note
shall be paid in the manner specified on the reverse hereof.

          The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and

                                     A-2-1
<PAGE>

private debts. All payments made by the Issuer with respect to this Note shall
be applied first to interest due and payable on this Note as provided above and
then to the unpaid principal of this Note.

          Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.

          Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                     A-2-2
<PAGE>

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.

                              CHEVY CHASE AUTO RECEIVABLES TRUST 2000-1

                              by:  Wilmington Trust Company,
                              not in its individual capacity but solely as Owner
                              Trustee under the Trust Agreement

                              by ________________________________
                              Name:
                              Title:

                                     A-2-3
<PAGE>

               INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

Date: June 21, 2000           U.S. BANK NATIONAL ASSOCIATION, not in its
                              individual capacity but solely as Indenture
                              Trustee

                              by ________________________________
                              Authorized Signer

                                     A-2-4
<PAGE>

                               [REVERSE OF NOTE]

          This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-2 7.25% Asset Backed Notes (herein called the "Class
A-2 Notes"), all issued under an Indenture dated as of June 1, 2000 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and U.S. Bank National Association, as Indenture Trustee (the
"Indenture Trustee", which term includes any successor Indenture Trustee under
the Indenture) to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes.  The Notes are subject to all terms of the Indenture.  All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.

          The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes and  the Class C Notes (together, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.

          Principal of the Class A-2 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing July 17, 2000.  The term "Payment Date,"
shall be deemed to include the Final Scheduled Payment Date.

          As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Payment Date and
the Redemption Date, if any, pursuant to the Indenture.  Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee, at the direction of the Declaring
Noteholders, has declared the Notes to be immediately due and payable in the
manner provided in the Indenture.  All principal payments on the Class A-2 Notes
shall be made pro rata to the Class A-2 Noteholders entitled thereto.

          Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee.  Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment.  Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon.  If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Holder hereof as of the Record

                                     A-2-5
<PAGE>

Date preceding such Payment Date by notice mailed prior to such Payment Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's principal Corporate Trust
Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in St. Paul, Minnesota.

          The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Interest Rate to the extent lawful.

          As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Servicer on any Payment Date on or after the
date on which the Pool Balance is less than or equal to 5% of the Original Pool
Balance.

          As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("Stamp") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, Stamp,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees.  No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.

          Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the Seller,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Seller, the Servicer, the Indenture Trustee or the Owner Trustee
in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity).

          Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer, the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this

                                     A-2-6
<PAGE>

Note be overdue, and neither the Issuer, the Indenture Trustee nor any such
agent shall be affected by notice to the contrary.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Noteholders representing a majority
of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture
also contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.  The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of Holders of the Notes issued thereunder.

          The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.

          The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.

          The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.

          This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.

          No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.

                                     A-2-7
<PAGE>

                                  ASSIGNMENT

Name, Address, Social Security or taxpayer I.D. or other identifying number of
assignee:

____________________________________________________________

          FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ______________________________________________________
             (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, ____________________ , attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.

Dated _____________________   Signature by or on behalf of assignee:

                              _______________________________________ /1/

                              Signature Guaranteed:

                              _______________________________________

________________________________

     /1/  NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.

                                     A-2-8
<PAGE>

                                                                     EXHIBIT A-3

REGISTERED                                                 $111,000,000

No. RB-3-1

                      SEE REVERSE FOR CERTAIN DEFINITIONS

                                                          CUSIP NO.  166778 AN 0

          Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

          THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

                   CHEVY CHASE AUTO RECEIVABLES TRUST 2000-1
                       CLASS A-3 7.39% ASSET BACKED NOTES

          Chevy Chase Auto Receivables Trust 2000-1, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of ONE HUNDRED AND ELEVEN MILLION DOLLARS
payable on each Payment Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $111,000,000 and the
denominator of which is $111,000,000 by (ii) the aggregate amount, if any,
payable from the Note Account in respect of principal on the Class A-3 Notes
pursuant to the Indenture; provided, however, that the entire unpaid principal
                           --------  -------
amount of this Note shall be due and payable on the June, 2004 Payment Date (the
"Final Scheduled Payment Date").  The Issuer will pay interest on this Note at
the rate per annum shown above on each Payment Date until the principal of this
Note is paid or made available for payment.  Interest on this Note will accrue
for each Payment Date from the most recent Payment Date on which interest has
been paid to but excluding such Payment Date or, if no interest has yet been
paid, from June 21, 2000.  Interest will be computed on the basis of a 360-day
year assumed to consist of twelve 30-day months.  Such principal of and interest
on this Note shall be paid in the manner specified on the reverse hereof.

          The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and

                                     A-3-1
<PAGE>

private debts. All payments made by the Issuer with respect to this Note shall
be applied first to interest due and payable on this Note as provided above and
then to the unpaid principal of this Note.

          Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.

          Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                     A-3-2
<PAGE>

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.

                              CHEVY CHASE AUTO RECEIVABLES TRUST 2000-1

                              by:  Wilmington Trust Company,
                              not in its individual capacity but solely as Owner
                              Trustee under the Trust Agreement

                              by_________________________________
                              Name:
                              Title:

                                     A-3-3
<PAGE>

               INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

Date: June 21, 2000        U.S. BANK NATIONAL ASSOCIATION, not in its individual
                           capacity but solely as Indenture Trustee

                           by______________________________
                           Authorized Signer

                                     A-3-4
<PAGE>

                               [REVERSE OF NOTE]

          This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-3 7.39% Asset Backed Notes (herein called the "Class
A-3 Notes"), all issued under an Indenture dated as of June 1, 2000 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and U.S. Bank National Association, as Indenture Trustee (the
"Indenture Trustee", which term includes any successor Indenture Trustee under
the Indenture) to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes.  The Notes are subject to all terms of the Indenture.  All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.

          The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes and the Class C Notes (together, the "Notes")
are and will be equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture.

          Principal of the Class A-3 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing July 17, 2000.  The term "Payment Date,"
shall be deemed to include the Final Scheduled Payment Date.

          As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Payment Date and
the Redemption Date, if any, pursuant to the Indenture.  Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee, at the direction of the Declaring
Noteholders, has declared the Notes to be immediately due and payable in the
manner provided in the Indenture.  All principal payments on the Class A-3 Notes
shall be made pro rata to the Class A-3 Noteholders entitled thereto.

          Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee.  Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment.  Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon.  If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Holder hereof as of the Record

                                     A-3-5
<PAGE>

Date preceding such Payment Date by notice mailed prior to such Payment Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's principal Corporate Trust
Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in St. Paul, Minnesota.

          The Issuer shall pay interest on overdue installments of interest at
the Class A-3 Interest Rate to the extent lawful.

          As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Servicer on any Payment Date on or after the
date on which the Pool Balance is less than or equal to 5% of the Original Pool
Balance.

          As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("Stamp") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, Stamp,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees.  No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.

          Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the Seller,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Seller, the Servicer, the Indenture Trustee or the Owner Trustee
in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity).

          Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer, the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this

                                     A-3-6
<PAGE>

Note be overdue, and neither the Issuer, the Indenture Trustee nor any such
agent shall be affected by notice to the contrary.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Noteholders representing a majority
of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture
also contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.  The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of Holders of the Notes issued thereunder.

          The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.

          The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.

          The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.

          This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.

          No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.

                                     A-3-7
<PAGE>

                                   ASSIGNMENT

Name, Address, Social Security or taxpayer I.D. or other identifying number of
assignee:

____________________________________________________________

          FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________________________________________________________
                        (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, __________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.

Dated________________________          Signature by or on behalf of assignee:

                                       ______________________________________/1/

                                 Signature Guaranteed:

                                 ____________________________________________

_________________________________

   /1/ NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.

                                     A-3-8
<PAGE>

                                                                     EXHIBIT A-4

REGISTERED                                                   $73,508,000

No. RB-4-1

                      SEE REVERSE FOR CERTAIN DEFINITIONS

                                                          CUSIP NO.  166778 AP 5

          Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

          THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

                   CHEVY CHASE AUTO RECEIVABLES TRUST 2000-1
                       CLASS A-4 7.47% ASSET BACKED NOTES

          Chevy Chase Auto Receivables Trust 2000-1, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of SEVENTY-THREE MILLION FIVE HUNDRED AND
EIGHT THOUSAND DOLLARS payable on each Payment Date in an amount equal to the
result obtained by multiplying (i) a fraction the numerator of which is
$73,508,000 and the denominator of which is $73,508,000 by (ii) the aggregate
amount, if any, payable from the Note Account in respect of principal on the
Class A-4 Notes pursuant to the Indenture; provided, however, that the entire
                                           --------  -------
unpaid principal amount of this Note shall be due and payable on the July 15,
2005 Payment Date (the "Final Scheduled Payment Date").  The Issuer will pay
interest on this Note at the rate per annum shown above on each Payment Date
until the principal of this Note is paid or made available for payment.
Interest on this Note will accrue for each Payment Date from the most recent
Payment Date on which interest has been paid to but excluding such Payment Date
or, if no interest has yet been paid, from June 21, 2000.  Interest will be
computed on the basis of a 360-day year assumed to consist of twelve 30-day
months.  Such principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.

          The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and

                                     A-4-1
<PAGE>

private debts. All payments made by the Issuer with respect to this Note shall
be applied first to interest due and payable on this Note as provided above and
then to the unpaid principal of this Note.

          Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.

          Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                     A-4-2
<PAGE>

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.

                              CHEVY CHASE AUTO RECEIVABLES TRUST 2000-1

                              by:  Wilmington Trust Company,
                              not in its individual capacity but solely as Owner
                              Trustee under the Trust Agreement

                              by______________________________________
                              Name:
                              Title:

                                     A-4-3
<PAGE>

               INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

Date: June 21, 2000        U.S. BANK NATIONAL ASSOCIATION, not in its individual
                           capacity but solely as Indenture Trustee

                           by____________________________________
                           Authorized Signer

                                     A-4-4
<PAGE>

                               [REVERSE OF NOTE]

          This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-4 7.47% Asset Backed Notes (herein called the "Class
A-4 Notes"), all issued under an Indenture dated as of June 1, 2000 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and U.S. Bank National Association, as Indenture Trustee (the
"Indenture Trustee", which term includes any successor Indenture Trustee under
the Indenture) to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes.  The Notes are subject to all terms of the Indenture.  All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.

          The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes and the Class C Notes (together, the "Notes")
are and will be equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture.

          Principal of the Class A-4 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing July 17, 2000.  The term "Payment Date,"
shall be deemed to include the Final Scheduled Payment Date.

          As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Payment Date and
the Redemption Date, if any, pursuant to the Indenture.  Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee, at the direction of the Declaring
Noteholders, has declared the Notes to be immediately due and payable in the
manner provided in the Indenture.  All principal payments on the Class A-4 Notes
shall be made pro rata to the Class A-4 Noteholders entitled thereto.

          Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee.  Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment.  Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon.  If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Holder hereof as of the Record

                                     A-4-5
<PAGE>

Date preceding such Payment Date by notice mailed prior to such Payment Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's principal Corporate Trust
Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in St. Paul, Minnesota.

          The Issuer shall pay interest on overdue installments of interest at
the Class A-4 Interest Rate to the extent lawful.

          As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Servicer on any Payment Date on or after the
date on which the Pool Balance is less than or equal to 5% of the Original Pool
Balance.

          As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("Stamp") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, Stamp,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees.  No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.

          Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the Seller,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Seller, the Servicer, the Indenture Trustee or the Owner Trustee
in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity).

          Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer, the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this

                                     A-4-6
<PAGE>

Note be overdue, and neither the Issuer, the Indenture Trustee nor any such
agent shall be affected by notice to the contrary.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Noteholders representing a majority
of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture
also contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.  The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of Holders of the Notes issued thereunder.

          The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.

          The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.

          The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.

          This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.

          No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.

                                     A-4-7
<PAGE>

                                   ASSIGNMENT

Name, Address, Social Security or taxpayer I.D. or other identifying number of
assignee:

____________________________________________________________

          FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ____________________________________________________________
                      (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, _____________________________________________________________ ,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.

Dated__________________________      Signature by or on behalf of assignee:

                                     ______________________________________/1/

                                  Signature Guaranteed:

     ________________

__________________________

     /1/ NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.

                                     A-4-8
<PAGE>

                                                                     EXHIBIT A-5

REGISTERED                                                      $7,059,000

No. RB-5-1
                      SEE REVERSE FOR CERTAIN DEFINITIONS

                                                         CUSIP NO.   166778 AQ 3

          Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

          THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

                   CHEVY CHASE AUTO RECEIVABLES TRUST 2000-1

                        CLASS B 7.76% ASSET BACKED NOTES

          Chevy Chase Auto Receivables Trust 2000-1, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of SEVEN MILLION FIFTY-NINE THOUSAND
DOLLARS payable on each Payment Date in an amount equal to the result obtained
by multiplying (i) a fraction the numerator of which is $7,059,000 and the
denominator of which is $7,059,000 by (ii) the aggregate amount, if any, payable
from the Note Account in respect of principal on the Class B Notes pursuant to
the Indenture; provided, however, that the entire unpaid principal amount of
               --------  -------
this Note shall be due and payable on the November, 2005  Payment Date (the
"Final Scheduled Payment Date").  The Issuer will pay interest on this Note at
the rate per annum shown above on each Payment Date until the principal of this
Note is paid or made available for payment.  Interest on this Note will accrue
for each Payment Date from the most recent Payment Date on which interest has
been paid to but excluding such Payment Date or, if no interest has yet been
paid, from June 21, 2000.  Interest will be computed on the basis of a 360-day
year assumed to consist of twelve 30-day months.  Such principal of and interest
on this Note shall be paid in the manner specified on the reverse hereof.

          The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and

                                     A-5-1
<PAGE>

private debts. All payments made by the Issuer with respect to this Note shall
be applied first to interest due and payable on this Note as provided above and
then to the unpaid principal of this Note.

          Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.

          Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                     A-5-2
<PAGE>

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.

                              CHEVY CHASE AUTO RECEIVABLES TRUST 2000-1

                              by:  Wilmington Trust Company,
                              not in its individual capacity but solely as Owner
                              Trustee under the Trust Agreement

                              by____________________________________
                              Name:
                              Title:

                                     A-5-3
<PAGE>

               INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
          This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

Date: June 21, 2000        U.S. BANK NATIONAL ASSOCIATION, not in its individual
                           capacity but solely as Indenture Trustee

                           by___________________________________________________
                             Authorized Signer

                                     A-5-4
<PAGE>

                               [REVERSE OF NOTE]

          This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class B 7.76% Asset Backed Notes (herein called the "Class B
Notes"), all issued under an Indenture dated as of June 1, 2000 (such indenture,
as supplemented or amended, is herein called the "Indenture"), between the
Issuer and U.S. Bank National Association, as Indenture Trustee (the "Indenture
Trustee", which term includes any successor Indenture Trustee under the
Indenture) to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.
The Notes are subject to all terms of the Indenture.  All terms used in this
Note that are defined in the Indenture, as supplemented or amended, shall have
the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.

          The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes and the Class C Notes (together, the "Notes")
are and will be equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture.

          Principal of the Class B Notes will be payable on each Payment Date in
an amount described on the face hereof. "Payment Date" means the fifteenth day
of each month, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing July 17, 2000.  The term "Payment Date," shall be
deemed to include the Final Scheduled Payment Date.

          As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Payment Date and
the Redemption Date, if any, pursuant to the Indenture.  Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee, at the direction of the Declaring
Noteholders, has declared the Notes to be immediately due and payable in the
manner provided in the Indenture.  The Controlling Class will have the right
under most circumstances to accelerate the Notes, or waive an Event of Default,
as well as direct remedies following an Event of Default.  All principal
payments on the Class B Notes shall be made pro rata to the Class B Noteholders
entitled thereto.

          Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee.  Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment.  Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon.  If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining

                                     A-5-5
<PAGE>

unpaid principal amount of this Note on a Payment Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Holder hereof as of the Record Date preceding such Payment Date by
notice mailed prior to such Payment Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in St. Paul,
Minnesota.

          The Issuer shall pay interest on overdue installments of interest at
the Class B Interest Rate to the extent lawful.

          As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Servicer on any Payment Date on or after the
date on which the Pool Balance is less than or equal to 5% of the Original Pool
Balance.

          As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("Stamp") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, Stamp,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees.  No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.

          Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the Seller,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Seller, the Servicer, the Indenture Trustee or the Owner Trustee
in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity).

          Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer, the
Indenture Trustee may treat the Person

                                     A-5-6
<PAGE>

in whose name this Note (as of the day of determination or as of such other date
as may be specified in the Indenture) is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Issuer, the
Indenture Trustee nor any such agent shall be affected by notice to the
contrary.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Noteholders representing a majority
of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture
also contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.  The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of Holders of the Notes issued thereunder.

          The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.

          The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.

          The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.

          This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.

          No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.

                                     A-5-7
<PAGE>

                                   ASSIGNMENT
Name, Address, Social Security or taxpayer I.D. or other identifying number of
assignee:

____________________________________________________________

          FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ____________________________________________________________
             (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, ______________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.

Dated__________________________        Signature by or on behalf of assignee:

                                       ____________________________________/1/

                           Signature Guaranteed:

                                                                ________________

__________________________________

     /1/ NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.

                                     A-5-8
<PAGE>

                                                                     EXHIBIT A-6

REGISTERED                                                           $8,823,000

No. RB-6-1

                      SEE REVERSE FOR CERTAIN DEFINITIONS

                                                         CUSIP NO. 166778 AR 1

          Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

          THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

                   CHEVY CHASE AUTO RECEIVABLES TRUST 2000-1

                        CLASS C 8.15% ASSET BACKED NOTES

          Chevy Chase Auto Receivables Trust 2000-1, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of EIGHT MILLION EIGHT HUNDRED AND TWENTY-
THREE THOUSAND DOLLARS payable on each Payment Date in an amount equal to the
result obtained by multiplying (i) a fraction the numerator of which is
$8,823,000 and the denominator of which is $8,823,000 by (ii) the aggregate
amount, if any, payable from the Note Account in respect of principal on the
Class C Notes pursuant to the Indenture; provided, however, that the entire
                                         --------  -------
unpaid principal amount of this Note shall be due and payable on the December,
2006 Payment Date (the "Final Scheduled Payment Date").  The Issuer will pay
interest on this Note at the rate per annum shown above on each Payment Date
until the principal of this Note is paid or made available for payment.
Interest on this Note will accrue for each Payment Date from the most recent
Payment Date on which interest has been paid to but excluding such Payment Date
or, if no interest has yet been paid, from June 21, 2000.  Interest will be
computed on the basis of a 360-day year assumed to consist of twelve 30-day
months.  Such principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.

          The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and

                                     A-6-1
<PAGE>

private debts. All payments made by the Issuer with respect to this Note shall
be applied first to interest due and payable on this Note as provided above and
then to the unpaid principal of this Note.

          Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.

          Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                     A-6-2
<PAGE>

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.

                              CHEVY CHASE AUTO RECEIVABLES TRUST 2000-1

                              by Wilmington Trust Company, not in its individual
                              capacity but solely as Owner Trustee under the
                              Trust Agreement

                              by___________________________________
                              Name:
                              Title:

                                     A-6-3
<PAGE>

                    TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

Date:  June 21, 2000          U.S. BANK NATIONAL ASSOCIATION, not in its
                              individual capacity but solely as Indenture
                              Trustee

                              by________________________________
                              Authorized Signer

                                     A-6-4
<PAGE>

                               [REVERSE OF NOTE]

          This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class C 8.15% Asset Backed Notes (herein called the "Class C
Notes"), all issued under an Indenture dated as of June 1, 2000 (such indenture,
as supplemented or amended, is herein called the "Indenture"), between the
Issuer and U.S. Bank National Association, as Indenture Trustee (the "Indenture
Trustee", which term includes any successor Indenture Trustee under the
Indenture) to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.
The Notes are subject to all terms of the Indenture.  All terms used in this
Note that are defined in the Indenture, as supplemented or amended, shall have
the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.

          The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes and the Class C Notes (together, the "Notes")
are and will be equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture.

          Principal of the Class C Notes will be payable on each Payment Date in
an amount described on the face hereof. "Payment Date" means the fifteenth day
of each month, or, if any such date is not a Business Day, the next succeeding
Business Day, provided, that such day for payment shall in no event be earlier
than the third Business Day of the month, commencing July 17, 2000.  The term
"Payment Date," shall be deemed to include the Final Scheduled Payment Date.

          As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Payment Date and
the Redemption Date, if any, pursuant to the Indenture.  Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee, at the direction of the Declaring
Noteholders, has declared the Notes to be immediately due and payable in the
manner provided in the Indenture. The Controlling Class will have the right
under most circumstances to accelerate the Notes, or waive an Event of Default,
as well as direct remedies following an Event of Default.  All principal
payments on the Class C Notes shall be made pro rata to the Class C Noteholders
entitled thereto.

          Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee.  Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment.  Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of

                                     A-6-5
<PAGE>

transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Payment Date, then the Indenture Trustee, in the name of and on behalf of the
Issuer, will notify the Person who was the Holder hereof as of the Record Date
preceding such Payment Date by notice mailed prior to such Payment Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's principal Corporate Trust
Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in St. Paul, Minnesota.

          The Issuer shall pay interest on overdue installments of interest at
the Class C Interest Rate to the extent lawful.

          As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Servicer, on any Payment Date on or after the
date on which the Pool Balance is less than or equal to 5% of the Original Pool
Balance.

          As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("Stamp") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, Stamp,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees.  No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.

          Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Seller, the Servicer, the Indenture Trustee or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Seller, the Servicer, the Indenture Trustee or the
Owner Trustee in its individual capacity, any holder of a beneficial interest in
the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Seller, the Servicer, the Indenture Trustee
or the Owner Trustee in its individual capacity, except as any such Person may
have expressly agreed (it being understood that the Indenture Trustee and the
Owner Trustee have no such obligations in their individual capacity).

                                     A-6-6
<PAGE>

          Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer, the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Noteholders representing a majority
of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture
also contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.  The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of Holders of the Notes issued thereunder.

          The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.

          The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.

          The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.

          This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.

          No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.

                                     A-6-7
<PAGE>

                                   ASSIGNMENT

Name, Address, Social Security or taxpayer I.D. or other identifying number of
assignee:

____________________________________________________________

          FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ______________________________________________________________
                    (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, _____________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.

Dated _________________________      Signature by or on behalf of assignee:

                                     ______________________________________/1/

                           Signature Guaranteed:

____________________________

     /1/ NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.

                                     A-6-8

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