Exhibit 10.2

 

EXECUTION VERSION

 

  INDENTURE   by and between   HORIZON FUNDING TRUST 2019-1, as the Issuer,  
and   U.S. BANK NATIONAL ASSOCIATION, as the Trustee   Dated as of August 13,
2019  

  

Horizon Funding Trust 2019-1

Notes

 

 

 

 

Table of Contents

 

Page

 

ARTICLE I

 

No table of contents entries found.

 

EXHIBITS

Exhibit A — Form of Note Exhibit B — List of Loans Exhibit C — Form of Wiring
Instructions Exhibit D-1 — Form of Transferee Letter Non-Rule 144A Exhibit D-2 —
Form of Rule 144A Certification Exhibit E — Form of Transfer Certificate for
Rule 144A Global Note to Regulation S Global Note during Distribution Compliance
Period Exhibit F — Form of Transfer Certificate for Rule 144A Global Note to
Regulation S Global Note after Distribution Compliance Period Exhibit G — Form
of Transfer Certificate for Regulation S Global Note to Rule 144A Global Note
during Distribution Compliance Period Exhibit H — Form of Transfer Certificate
for Regulation S Global Note during Distribution Compliance Period

 

-i-

 

 

INDENTURE

 

THIS INDENTURE, dated as of August 13, 2019 (as amended, modified, restated,
supplemented or waived from time to time, this “Indenture”), is by and between
HORIZON FUNDING TRUST 2019-1, a Delaware statutory trust, as the issuer
(together with its successors and assigns, in such capacity, the “Issuer”), and
U.S. BANK NATIONAL ASSOCIATION, a national banking association (“U.S. Bank”) not
in its individual capacity, but solely in its capacity as the trustee (together
with its successors and assigns, in such capacity, the “Trustee”).

 

Each party hereto agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Issuer’s Notes.

 

GRANTING CLAUSE

 

The Issuer hereby Grants to the Trustee, on behalf of and for the benefit of the
Holders of the Notes, without recourse, subject to the terms of this Indenture
and the other Transaction Documents and subject to any Permitted Liens with
respect thereto, a continuing security interest in and lien on all of its right,
title and interest in and to all accounts, cash and currency, chattel paper,
copyrights, copyright licenses, equipment, fixtures, general intangibles,
instruments, commercial tort claims, deposit accounts, inventory, investment
property, letter of credit rights, software, supporting obligations, accessions,
and other property consisting of, arising out of, or related to (i) the Loans
and all Related Property included or to be included from time to time in the
Loan Assets, whether now existing or hereafter arising or acquired; (ii)
Collections on the Loans received after the related Cutoff Date; (iii) the
security interests in Related Property securing the Loans; (iv) the Loan Files
and any other loan contract files relating to the Loans; (v) an assignment of
all rights and remedies with respect to the Loans (including any warrants issued
or that may be issued in favor of the Issuer with respect to such Loans) and any
Proceeds from liquidating the Loans; (vi) an assignment of the Trust Depositor’s
rights against Obligors under agreements between the Seller and the Obligors
under the Loans; (vii) the Collection Account, the Reserve Account, the
Investment Account, the Lockbox Account and the Distribution Account, all
amounts deposited therein or credited thereto, the Permitted Investments
purchased with funds therefrom or deposited therein and all income from the
investment of the funds therein; (viii) other rights under the Transaction
Documents; (ix) all proceeds from the items described above; and (x) all present
and future claims, demands, causes of action 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 thereof, voluntary or involuntary, into
cash or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing; provided that all right, title and interest of the Issuer in and to
each Excluded Amount, the Certificate Account and any and all proceeds of any
Excluded Amount or the Certificate Account (collectively, the “Excluded
Property”) shall be excluded from the foregoing Grant by the Issuer
(collectively, the “Indenture Collateral”).

 

The foregoing Grant is made in trust to secure (x) the payment of principal of
and interest on, and any other amounts owing in respect of, the Notes and all
other sums owing by the Issuer hereunder or under any other Transaction
Document, and (y) to secure compliance with the covenants and agreement in this
Indenture and the other Transaction Documents.

 

 

 

 

The Trustee, on behalf of the Noteholders (1) acknowledges such Grant, and (2)
accepts the trusts under this Indenture in accordance with this Indenture and
agrees to perform its duties required in this Indenture to the best of its
ability to the end that the interests of the Noteholders may be adequately and
effectively protected.

 

ARTICLE I
DEFINITIONS

 

Section 1.01        Definitions.

 

Certain defined terms used throughout this Indenture are defined above or in
this Section 1.01. In addition, except as otherwise expressly provided herein or
unless the context otherwise requires, capitalized terms used but not otherwise
defined herein shall have the meanings given to such terms in the Sale and
Servicing Agreement (as defined below), which are incorporated by reference
herein.

 

“Applicable Procedures” has the meaning provided in Section 4.02(l)(i).

 

“Authorized Newspaper” means a newspaper of general circulation in the Borough
of Manhattan, The City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.

 

“Beneficial Owner” means, with respect to a Global Note, the Person who is the
beneficial owner of such Note, as reflected on the books of DTC or on the books
of a Person maintaining an account with such Depository (directly or as an
indirect participant, in accordance with the rules of such Depository), as the
case may be.

 

“Certificate Registrar” means initially, the Trustee, and thereafter, any
successor appointed pursuant to the Trust Agreement.

 

“Clearstream” means Clearstream Banking, a société anonyme, a limited liability
company organized under the laws of Luxembourg.

 

“Confidential Information” means any and all information concerning any
Disclosing Party disclosed by, or at the request or on behalf of, any Disclosing
Party to any Receiving Party or its representatives pursuant to this Indenture,
excluding, however, any information that at the time of disclosure: (a) was
generally available to the public, other than as a result of a disclosure by any
Receiving Party or its representatives in violation of this Indenture; (b) was
available to any Receiving Party on a non-confidential basis from a source other
than the Disclosing Party or its representatives; (c) was already known to the
Receiving Party and not subject to restrictions on use or disclosure; or (d) was
independently developed by or on behalf of the Receiving Party (other than at
the request of or for the benefit of the Disclosing Party) by individuals who
did not directly or indirectly receive Confidential Information.

 

2

 

 

“Corporate Trust Office” means in the case of the Trustee: with respect to Note
transfers and presentment of Notes for final payment, at U.S. Bank National
Association, 111 East Fillmore Avenue, EP-MN-WS2N, St. Paul, Minnesota 55107,
Attention: Bondholder Services - Horizon 2019-1, and for all other purposes, to
the Trustee at U.S. Bank National Association, Global Corporate Trust Services,
190 S. LaSalle Street, 7th Floor, Chicago, IL 60603, Attention: Horizon Funding
Trust 2019-1, Tel: 312-332-7464, Fax: 312-332-6573, Email:
melissa.rosal@usbank.com and eric.ott@usbank.com or at such other address as the
Trustee may designate from time to time by notice to the Issuer, or the
principal corporate trust officer of any successor Trustee at the address
designated by such successor by notice to the Issuer.

 

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

 

“Direct Participant” means any broker-dealer, bank or other financial
institution for whom the nominee of DTC holds an interest in any Note.

 

“Disclosing Party” means each of the Issuer, the Trust Depositor, the Servicer
and the Seller and “Disclosing Parties” means collectively all such parties.

 

“Distribution Compliance Period” means the 40 day period prescribed by
Regulation S commencing on the later of (a) the date upon which Notes are first
offered to Persons other than the Initial Purchaser and any other distributor
(as such term is defined in Regulation S) of the Notes and (b) the Closing Date.

 

“DTC” or the “Depository” means The Depository Trust Company, and its
successors.

 

“DTC Custodian” means the Trustee as a custodian for DTC.

 

“DTC Participant” means a Person for whom, from time to time, DTC effects
book-entry transfers and pledges of securities deposited with DTC.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, or any successor legislation thereto and the regulations
promulgated and the rulings issued thereunder.

 

“Euroclear” means the Euroclear System, operated by Morgan Guaranty Trust
Company of New York, Brussels office.

 

“Excluded Property” has the meaning provided in the Granting Clause.

 

“Event of Default” has the meaning provided in Section 5.01.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version) and any current or future
regulations or official interpretations thereof.

 

“Global Note” means any Note registered in the name of DTC or its nominee,
beneficial interests in which are reflected on the books of DTC or on the books
of a Person maintaining any account with such Depository (directly or as an
indirect participant in accordance with the rules of such Depository). The
definition of “Global Note” shall include the Rule 144A Global Notes and the
Regulation S Global Notes.

 

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“Grant” means to mortgage, pledge, sell, bargain, warrant, alienate, remise,
release, convey, assign, transfer, create, and 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 Indenture 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 such collateral or other agreement or
instrument 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.

 

“Indenture Collateral” has the meaning provided in the Granting Clause.

 

“Indirect Participant” means any financial institution for whom any Direct
Participant holds an interest in any Note.

 

“Initial Purchaser” means KeyBanc Capital Markets Inc.

 

“Issuer Documents” has the meaning provided in Section 3.25(a).

 

“Issuer Order” means a written order or request signed in the name of the Issuer
by any one of its Responsible Officers or by the Servicer or the Administrator
on behalf of the Issuer and delivered to the Trustee. An Issuer Order or request
provided in an email by a Responsible Officer of the Issuer or the Administrator
on behalf of the Issuer shall constitute an Issuer Order in each case except to
the extent the Trustee requests otherwise.

 

“Legal Final Payment Date” means, with respect to the Notes, September 15, 2027.

 

“Letter of Representations” means the Letter of Representations, dated as of
August 7, 2019 by the Issuer.

 

“Minimum Denomination” of any Note shall mean, (x) in respect of Notes purchased
by the Initial Purchaser and subsequently retransferred to the first transferee
thereof (provided that such initial transferee provides to the Initial Purchaser
and the Issuer a written certification that such transferee is both a Qualified
Purchaser and a Qualified Institutional Buyer), a minimum denomination of
$250,000 initial principal amount and integral multiples of $1,000 in excess
thereof and (y) with respect to all subsequent transfers of Notes, a minimum
denomination of $250,000 initial principal amount and integral multiples of
$1,000 in excess thereof; provided that one Note may be in a smaller multiple in
excess of the minimum denomination.

 

“Non-Permitted Holder” has the meaning provided in Section 4.02(s)(ii).

 

“Note Register” has the meaning provided in Section 4.02(a).

 

“Note Registrar” has the meaning provided in Section 4.02(a).

 

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“Outstanding” means, as of any date of determination, all Notes theretofore
executed, authenticated and delivered under this Indenture except: (i) Notes in
exchange for or in lieu of which other Notes have been executed, authenticated
and delivered pursuant to this Indenture unless proof satisfactory to the
Trustee is presented that any such Notes are held by a holder in due course;
(ii) Notes to be redeemed in connection with an Optional Redemption and in
respect of which money in the necessary amount to pay the Redemption Price, has
been theretofore deposited with the Trustee in trust for the Noteholders; and
(iii) Notes otherwise cancelled by the Note Registrar in accordance with the
express terms of this Indenture; provided that, in determining whether the
Holders of the requisite amount of any Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under the Sale
and Servicing Agreement, (1) Notes beneficially owned by the Issuer shall be
disregarded and deemed not to be Outstanding and (2) Notes beneficially owned by
the Servicer, Seller, any Affiliate of the Seller or the Servicer or any account
managed on a discretionary basis by the Servicer or an Affiliate of the Servicer
shall be disregarded and deemed not to be Outstanding with respect to any
assignment by the Servicer or termination of the Servicer under the Sale and
Servicing Agreement or this Indenture (including the exercise of any rights to
remove the Servicer or approve or object to a Successor Servicer); except that,
in determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes
that the Trustee knows to be beneficially owned in the manner indicated above
shall be so disregarded; provided that the Trustee shall be entitled to rely on
a certificate of the Servicer attesting to the ownership of Notes by the Seller,
the Servicer, any of their respective Affiliates or any account managed on a
discretionary basis by the Servicer or an Affiliate of the Servicer, if any.

 

“Owner” means each Holder of a Note.

 

“Owner Trustee” means Wilmington Trust, National Association, not in its
individual capacity but solely as owner trustee under the Trust Agreement, and
any successor Owner Trustee thereunder.

 

“Participant” means a Person that has an account with DTC.

 

“Physical Note” means any Note in certificated form registered in the name of a
holder other than DTC or its nominee.

 

“Plan” has the meaning provided in Section 4.02(t).

 

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

 

“Qualified Institutional Buyer” has the meaning provided in Rule 144A under the
Securities Act.

 

“Qualified Purchaser” has the meaning provided in Section 2(a)(51) under the
1940 Act.

 

“Receiving Party” means each Holder of a Note, the Trustee and the Owner
Trustee.

 

“Regulation S” means Regulation S under the Securities Act.

 

5

 

 

“Regulation S Global Notes” means the Notes sold in offshore transactions in
reliance on Regulation S and represented by one or more Global Notes deposited
with the Trustee as custodian for DTC.

 

“Rule 144A Certification” means a letter substantially in the form attached to
this Indenture as Exhibit D-2.

 

“Rule 144A Global Notes” means the Notes initially sold to Qualified
Institutional Buyers who are Qualified Purchasers represented by one or more
Global Notes in fully registered form without interest coupons, deposited with
the Trustee as custodian for DTC and registered in the name of Cede & Co., as
nominee of DTC.

 

“Sale” has the meaning provided in Section 5.15.

 

“Sale and Contribution Agreement” means the Sale and Contribution Agreement,
dated as of the date hereof, by and between Horizon Technology Finance
Corporation, as Seller, and Horizon Funding 2019-1 LLC, as the Trust Depositor.

 

“Sale and Servicing Agreement” means the Sale and Servicing Agreement, dated as
of date hereof, by and among Horizon Funding Trust 2019-1, as the Issuer,
Horizon Funding 2019-1 LLC, as the Trust Depositor, Horizon Technology Finance
Corporation, as the Seller and as the Servicer, and U.S. Bank National
Association, as the Trustee, Backup Servicer, Custodian and Securities
Intermediary.

 

“Securities Legend” means a legend that reads as follows: “THIS NOTE HAS NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR THE APPLICABLE SECURITIES LAWS OF ANY STATE.
ACCORDINGLY, TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH
IN SECTION 4.02 OF THE INDENTURE. BY ITS ACCEPTANCE OF THIS NOTE, THE HOLDER OF
THIS NOTE IS DEEMED TO, OR WITH RESPECT TO INVESTORS IN PHYSICAL NOTES SHALL,
REPRESENT TO THE ISSUER AND THE TRUSTEE THAT IT IS (I) IF LOCATED IN THE UNITED
STATES, A “QUALIFIED INSTITUTIONAL BUYER,” AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT IS A “QUALIFIED PURCHASER” AS DEFINED IN SECTION 2(A)(51) OF
THE INVESTMENT COMPANY ACT OF 1940 (EACH SUCH PERSON, A “QUALIFIED PURCHASER”);
OR (II) a NON-U.S. PERSON AcQUIRING Interest in THIS note outside the united
states in accordance with regulation s of the securities act (“Regulation s”)
THAT IS A QUALIFIED PURCHASER.

 

6

 

 

NO SALE, PLEDGE OR OTHER TRANSFER OF THIS NOTE SHALL BE MADE UNLESS SUCH SALE,
PLEDGE OR OTHER TRANSFER IS (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON THE TRANSFEROR
REASONABLY BELIEVES AFTER DUE INQUIRY IS A “QUALIFIED INSTITUTIONAL BUYER,” AS
DEFINED IN RULE 144A WHO IS A QUALIFIED PURCHASER AND THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A “QUALIFIED INSTITUTIONAL BUYER” WHO IS A
QUALIFIED PURCHASER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A OR (C) TO A NON-U.S. PERSON ACQUIRING AN INTEREST IN THIS
NOTE IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR 904 (AS
APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT THAT IS A QUALIFIED
PURCHASER. THE TRUSTEE MAY REQUIRE AN OPINION OF COUNSEL TO BE DELIVERED TO IT
IN CONNECTION WITH ANY SALE, PLEDGE OR OTHER TRANSFER OF THIS NOTE PURSUANT TO
CLAUSES (A) OR (C) ABOVE. ALL OPINIONS OF COUNSEL REQUIRED IN CONNECTION WITH
ANY TRANSFER SHALL BE IN A FORM REASONABLY ACCEPTABLE TO THE TRUSTEE. IN
CONNECTION WITH A TRANSFER UNDER CLAUSE (C) ABOVE, THE TRUSTEE SHALL REQUIRE
THAT THE PROSPECTIVE TRANSFEREE CERTIFY TO THE TRUSTEE AND THE SELLER, IN
WRITING THE FACTS SURROUNDING SUCH TRANSFER, WHICH CERTIFICATION SHALL BE IN
FORM AND SUBSTANCE DESCRIBED IN THE INDENTURE. ANY ATTEMPTED TRANSFER IN
CONTRAVENTION OF THE IMMEDIATELY PRECEDING RESTRICTION WILL BE VOID AB INITIO
AND THE PURPORTED TRANSFEROR WILL CONTINUE TO BE TREATED AS THE OWNER OF THE
NOTES FOR ALL PURPOSES.”

 

In addition, the Notes will include the following:

 

“EACH INVESTOR, WHETHER AS A PURCHASER OR A TRANSFEREE, IN THIS NOTE OR ANY
INTEREST HEREIN WILL BE DEEMED TO, OR WITH RESPECT TO INVESTORS IN PHYSICAL
NOTES, WHETHER AS A PURCHASER OR TRANSFEREE, SHALL, HAVE REPRESENTED AND
WARRANTED THAT EITHER (I) IT IS NOT, AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING
THIS NOTE FOR, ON BEHALF OF OR WITH ANY ASSETS OF, AN EMPLOYEE BENEFIT PLAN OR
OTHER ARRANGEMENT SUBJECT TO PART 4, SUBTITLE B, TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR
AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS OF ANY SUCH PLANS
(COLLECTIVELY, A “BENEFIT PLAN INVESTOR”) OR A PLAN OR OTHER ARRANGEMENT SUBJECT
TO ANY PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR
REGULATIONS THAT ARE SUBSTANTIVELY OR SUBSTANTIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAW”) OR (II) ITS ACQUISITION, HOLDING
AND DISPOSITION OF SUCH NOTE OR ANY INTEREST THEREIN WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE, OR A NON-EXEMPT VIOLATION OF SIMILAR LAW.

 

THE ISSUER HAS THE RIGHT, UNDER THE INDENTURE, TO COMPEL ANY BENEFICIAL OWNER OF
AN INTEREST IN THIS NOTE THAT IS NOT BOTH (A) A QUALIFIED PURCHASER OR A
CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY OR OTHER ENTITY (OTHER THAN
A TRUST) EACH SHAREHOLDER, PARTNER, MEMBER OR OTHER EQUITY OWNER OF WHICH IS A
QUALIFIED PURCHASER AND (B)(1) A QUALIFIED INSTITUTIONAL BUYER OR (2) A NON-U.S.
PERSON IN AN OFFSHORE TRANSACTION IN RELIANCE ON REGULATION S UNDER THE
SECURITIES ACT, TO SELL ITS INTEREST IN THIS NOTE, OR MAY SELL SUCH INTEREST ON
BEHALF OF SUCH OWNER.

 

7

 

 

EACH HOLDER OF THIS NOTE (AND ANY INTEREST HEREIN) WILL BE DEEMED TO HAVE
REPRESENTED AND AGREED TO TREAT SUCH NOTE AS INDEBTEDNESS FOR U.S. FEDERAL,
STATE AND LOCAL INCOME AND FRANCHISE TAX PURPOSES, EXCEPT AS OTHERWISE REQUIRED
BY LAW.

 

The failure to provide the Issuer and the Trustee (and any of their agents) with
the properly completed and signed tax certifications (generally, in the case of
U.S. federal income tax, an Internal Revenue Service Form W-9 (or applicable
successor form) in the case of a person that is a “United States Person” within
the meaning of section 7701(a)(30) of the Code or the appropriate Internal
Revenue Service Form W-8 (or applicable successor form) in the case of a person
that is not a “United States Person” within the meaning of section 7701(a)(30)
of the Code) may result in withholding from payments in respect of such Note,
including U.S. federal withholding or back-up withholding.

 

Each holder of this Note (and any interest herein) that is not a United States
person will make, or by acquiring this Note or an interest therein will be
deemed to make, a representation to the effect that (a) it is not (i) a bank (or
an entity affiliated with a bank) extending credit pursuant to a loan agreement
entered into in the ordinary course of its trade or business (within the meaning
of Section 881(c)(3)(A) of the Code), (ii) a controlled foreign corporation
related to the Issuer, and (iii) a holder (directly or by attribution) of at
least 10 percent of an interest (including a capital or profits interest) in the
Issuer, or (b) it has provided an IRS Form W-8BEN (or applicable successor form)
or an IRS Form W-8BEN-E (or applicable successor form), as applicable,
representing that it is a person that is eligible for benefits under an income
tax treaty with the united states that eliminates U.S. federal income taxation
of U.S. source interest not attributable to a permanent establishment in the
United States, or (c) it has provided an IRS Form W-8ECI (or applicable
successor form) representing that all payments received or to be received by it
on the Notes are effectively connected with the conduct of a trade or business
in the United States.

 

This Note may be issued with original issue discount (“OID”) for U.S. federal
income tax purposes. The issue price, amount of OID, issue date and yield to
maturity of this Note may be obtained by writing to the servicer.”

 

8

 

 

In addition, each Regulation S Global Note will include the following:

 

“THIS REGULATION S GLOBAL NOTE IS A GLOBAL NOTE WHICH IS EXCHANGEABLE FOR
INTERESTS IN OTHER GLOBAL NOTES AND DEFINITIVE NOTES SUBJECT TO THE TERMS AND
CONDITIONS SET FORTH HEREIN AND IN THE INDENTURE (AS DEFINED HEREIN). EACH
HOLDER OF THIS REGULATION S GLOBAL NOTE (OR A BENEFICIAL OWNERSHIP INTEREST
THEREIN) MUST PROVIDE A WRITTEN CERTIFICATION TO THE ISSUER THAT SUCH HOLDER (OR
BENEFICIAL OWNER) IS A QUALIFIED PURCHASER AND MAY NOT TRANSFER ITS INTEREST IN
SUCH NOTE UNLESS IT REASONABLY BELIEVES THAT THE TRANSFEREE IS ALSO A QUALIFIED
PURCHASER.”

 

“Series” means 2019-1.

 

“Similar Law” has the meaning provided in Section 4.02(t).

 

“Super-Majority Noteholders” means prior to the payment in full of the Notes,
the Noteholders evidencing more than 66 2/3% of the aggregate Outstanding
Principal Balance of Notes.

 

“Transferee Letter” means the letter set forth in Exhibit D-1 to this Indenture.

 

“Trust Certificate” means a certificate evidencing ownership of the beneficial
interest of a Certificateholder in the Issuer, substantially in the form of
Exhibit A attached to the Trust Agreement.

 

“Trust Company” means Wilmington Trust, National Association (and any successor
thereto or assign thereof), in its individual capacity, and any other Person who
shall act as Owner Trustee under the Trust Agreement, in its individual
capacity.

 

“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939, as amended
from time to time, as in effect on any relevant date.

 

“Trustee” has the meaning provided in the Preamble.

 

“USA PATRIOT Act” means the United States Uniting and Strengthening America By
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, signed into law on and effective as of October 26, 2001, which, among
other things, requires that financial institutions, a term that includes banks,
broker-dealers and investment companies, establish and maintain compliance
programs to guard against money laundering activities.

 

Section 1.02        Rules of Construction.

 

Unless the context otherwise requires:

 

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

 

(ii)         an accounting term not otherwise defined has the meaning given to
it in accordance with generally accepted accounting principles;

 

(iii)        “or” is not exclusive;

 

9

 

 

(iv)        “including” means including without limitation;

 

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

 

(vi)        any pronouns shall be deemed to cover all genders; and

 

(vii)       any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified, waived
or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.

 

ARTICLE II
THE NOTES

 

Section 2.01         Form.

 

The Notes, together with the Trustee’s certificate of authentication, shall be
in substantially the forms set forth as Exhibit A to this Indenture 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 appropriate Responsible
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 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 Responsible Officers executing such Notes, as evidenced by
their execution of such Notes.

 

The terms of the Notes set forth in Exhibit A are part of the terms of this
Indenture.

 

Section 2.02         Execution, Authentication and Delivery.

 

The Notes shall be executed on behalf of the Issuer by any of its Responsible
Officers. The signature of any such Responsible Officer on the Notes may be
manual or facsimile.

 

Notes bearing the manual or facsimile signature of individuals who were at any
time Responsible 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 Trustee shall upon receipt of an Issuer Order authenticate and deliver the
Notes for original issue in an aggregate amount equal to the Initial Note
Principal Balance.

 

Each Note shall be dated the date of its authentication. The Notes shall be
issued in fully registered form in minimum initial denominations equal to the
applicable Minimum Denomination and in integral multiples of $1,000 in excess
thereof; provided that one Note may be issued in a smaller multiple in excess of
the minimum denomination.

 

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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
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 2.03         Opinions of Counsel.

 

On the Closing Date, the Trustee shall have received: (i) an Opinion of Counsel,
with respect to securities law matters; (ii) an Opinion of Counsel, with respect
to the U.S. federal income tax treatment of the Issuer and the Notes; (iii) an
Opinion of Counsel to the Issuer, with respect to the due authorization, valid
execution and delivery of this Indenture and with respect to its binding effect
on the Issuer; (iv) an Opinion of Counsel with respect to certain “true sale”
and “non-consolidation” issues relating to Seller and Trust Depositor; and (v)
an Opinion of Counsel with respect to certain trust and limited liability
matters and with respect to certain “perfection and priority” issues.

 

ARTICLE III
COVENANTS

 

Section 3.01         Transaction Accounts.

 

The Securities Intermediary shall establish and maintain as required therein or
herein, as applicable, the Collection Account, the Reserve Account, the
Investment Account and the Distribution Account specified in Sections 7.01,
7.02, 7.03 and 7.04 of the Sale and Servicing Agreement. On the Closing Date the
Issuer will deposit, or cause to be deposited, an initial deposit of
$1,200,252.23 from proceeds of the issuance and sale of the Notes into the
Reserve Account. The Issuer shall establish as required therein or herein, as
applicable, the Lockbox Account specified in Section 7.01 of the Sale and
Servicing Agreement. Subject to the Priority of Payments, the Trustee shall make
all payments of principal of and interest on the Notes, subject to Section 3.03
and as provided in Section 3.05, from moneys on deposit in the Distribution
Account in accordance with the instructions of the Servicer pursuant to Section
7.06 of the Sale and Servicing Agreement.

 

Section 3.02         Maintenance of Office or Agency.

 

The Issuer will maintain with the Trustee an office or agency where, subject to
satisfaction of conditions set forth herein, 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 Trustee to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the 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 Trustee with the address thereof (if such office or agency
is no longer maintained with the Trustee), such surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Issuer hereby appoints the Trustee as its agent to receive all such surrenders,
notices and demands.

 

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Section 3.03        Money for Payments To Be Held in Trust; Paying Agent.

 

The Issuer hereby appoints the Trustee to act as agent for the payment (the
“Paying Agent”) of principal and interest on the Notes and all other amounts
payable pursuant to the Sale and Servicing Agreement (including without
limitation the Priority of Payments) and this Indenture. As provided in Section
3.01, all payments of amounts due and payable with respect to any Notes that are
to be made from amounts withdrawn from the Distribution Account shall be made on
behalf of the Issuer by the Paying Agent, and no amounts so withdrawn from the
Distribution Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section 3.03 and in Section 3.05.

 

The Issuer may at any time and from time to time vary or terminate the
appointment of any such agent or appoint any additional agents for any or all of
such purposes; provided that no Paying Agent shall be appointed in a
jurisdiction that subjects payments on the Notes to withholding tax; provided
that unless such agent has short-term debt rated at least investment grade from
Morningstar, S&P or Moody’s it may not hold funds pursuant to this Indenture
overnight. The Issuer shall give prompt written notice to the Trustee, the
Rating Agency and the Noteholders of the appointment or termination of any such
agent and of the location and any change in the location of any such office or
agency.

 

On the Business Day prior to each Payment Date, or on the Business Day prior to
any Redemption Date, as applicable, the Paying Agent (provided that sufficient
funds therefor are available) shall deposit or cause to be deposited in the
Distribution Account from amounts on deposit in the Collection Account an
aggregate sum sufficient to pay the amounts then becoming due, such sum to be
held in trust for the benefit of the Persons entitled thereto and (unless the
Trustee is the Paying Agent) shall promptly notify the Issuer in writing of its
action or failure so to act.

 

The Issuer will cause each party other than the Trustee that it appoints as
Paying Agent to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee (and if the Trustee acts as Paying
Agent, it hereby so agrees), subject to the provisions of this Section 3.03,
that such 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)         at any time during the continuance of any Event of Default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent;

 

(iii)        immediately resign as Paying Agent and forthwith pay to the 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 Paying Agent at the time of its
appointment; and

 

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(iv)        to the extent such Paying Agent is located in, or makes payments
within, the United States, 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
Paying Agent to pay to the Trustee all sums held in trust by such Paying Agent,
such sums to be held by the Trustee upon the same trusts as those upon which the
sums were held by such Paying Agent; and upon such payment by any Paying Agent
to the Trustee, such Paying Agent shall be released from all further liability
with respect to such money.

 

Subject to applicable laws with respect to escheat of funds, any money held by
the 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 Issuer on an
Issuer Order; and the Holder of such Note shall thereafter, as an unsecured
general creditor, look only to the Issuer for payment thereof (but only to the
extent of the amounts so paid to the Issuer), and all liability of the Paying
Agent with respect to such trust money shall thereupon cease; provided that the
Paying Agent, before being required to make any such repayment, shall at the
expense and direction of the Issuer cause to be published once, in an Authorized
Newspaper, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Issuer. The Trustee shall also adopt and employ, at the expense and
direction 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 Trustee or of any other party
acting as Paying Agent, at the last address of record for each such Holder).

 

Section 3.04        Existence; Separate Legal Existence.

 

(a)          The Issuer will keep in full effect its existence, rights and
franchises as a statutory 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, 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 other Transaction Documents, the Indenture Collateral and each other
instrument or agreement included in the Indenture Collateral.

 

(b)          The Issuer shall:

 

(i)           Maintain its own deposit account or accounts, separate from those
of any Affiliate, with commercial banking institutions and in accordance with
the terms of this Indenture. The funds of the Issuer will not be diverted to any
other Person or for other than authorized uses of the Issuer.

 

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(ii)         Ensure that it is at all times in compliance with Section 4.01 of
the Trust Agreement.

 

(iii)        Ensure that, to the extent that it jointly contracts with any of
its beneficial owners or Affiliates to do business with vendors or service
providers or to share overhead expenses, the costs incurred in so doing shall be
allocated fairly among such entities, and each such entity shall bear its fair
share of such costs. To the extent that the Issuer contracts or does business
with vendors or service providers when the goods and services provided are
partially for the benefit of any other Person, the costs incurred in so doing
shall be fairly allocated to or among such entities for whose benefit the goods
and services are provided, and each such entity shall bear its fair share of
such costs. All material transactions between Issuer and any of its Affiliates
shall be only at fair market value on an arm’s length basis and, as applicable
thereto, in accordance with the Sale and Servicing Agreement.

 

(iv)        Conduct its affairs strictly in accordance with its organizational
documents and observe all necessary, appropriate and customary statutory trust
formalities, including, but not limited to, holding all regular and special
board of trustees meetings, if any, as required under the terms of the Trust
Agreement appropriate to authorize all statutory trust action, keeping separate
and accurate minutes of its meetings, passing all resolutions or consents
necessary to authorize actions taken or to be taken, and maintaining accurate
and separate books, records and accounts, including, but not limited to, payroll
and intercompany transaction accounts.

 

(v)         Conduct its affairs in its own name, duly correct any known
misunderstandings regarding its separate identity and shall not take any action
or conduct its affairs in a manner that is likely to result in its separate
existence being ignored or its assets and liabilities being substantively
consolidated with any other Person in a bankruptcy, reorganization or other
insolvency proceeding.

 

Section 3.05        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 such Notes, this Indenture and the Sale
and Servicing Agreement (including the Priority of Payments therein). The Issuer
will cause to be distributed all amounts on deposit in the Distribution Account
on a Payment Date, or such other date selected by the Trustee pursuant to
Section 5.04(b), deposited therein pursuant to the Sale and Servicing Agreement
for the benefit of the Notes, to the applicable Noteholders. Amounts properly
withheld under the Code or any applicable state law 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.

 

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Section 3.06        Protection of Indenture Collateral.

 

(a)          The Issuer intends the security interest Granted pursuant to this
Indenture in favor of the Trustee on behalf of the Noteholders to be prior to
all other liens in respect of the Indenture Collateral other than Permitted
Liens, and the Issuer shall take or shall cause the Servicer to take all actions
necessary to obtain and maintain, for the benefit of the Trustee on behalf of
the Noteholders, a first lien on and a first priority, perfected security
interest in the Indenture Collateral, subject to any Permitted Liens with
respect thereto. In connection therewith, pursuant to Section 2.09 of the Sale
and Servicing Agreement, the Issuer shall cause to be delivered into the
possession of the Trustee (or to the Custodian on behalf of the Trustee) as
pledgee hereunder, indorsed in blank, any “instruments” (within the meaning of
the UCC), not constituting part of chattel paper, evidencing any Loan which is
part of the Indenture Collateral and all other portions of the Loan Files. The
Trustee acknowledges and agrees that (i) it holds the Loan Assets delivered to
it (or to the Custodian) under the Sale and Contribution Agreement for the
benefit of the Trust Depositor, (ii) it holds the Loan Assets delivered to it
(or to the Custodian) under the Sale and Servicing Agreement for the benefit of
the Issuer, and (iii) it holds the Indenture Collateral delivered to it pursuant
to this Indenture for the benefit of the Noteholders. The Trustee agrees to
maintain continuous possession of such delivered instruments and the Loan Files
(directly or via the Custodian on its behalf) as pledgee hereunder until this
Indenture shall have terminated in accordance with its terms or until, pursuant
to the terms hereof or of the Sale and Servicing Agreement, the Trustee is
otherwise authorized to release such instrument from the Indenture Collateral.
The Issuer will or will cause the Servicer from time to time to 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)          maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the purposes
hereof;

 

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

 

(iii)        enforce any of the Loans transferred to the Issuer as and to the
extent commercially reasonable and in accordance with the Sale and Servicing
Agreement; or

 

(iv)        preserve and defend title to the Indenture Collateral and the rights
of the Trustee and the Noteholders in such Indenture Collateral against the
claims of all persons and parties.

 

Except as otherwise provided in or permitted by the Sale and Servicing Agreement
or this Indenture, the Trustee shall not remove any portion of the Indenture
Collateral held by it that consists of money or is evidenced by an instrument,
certificate or other writing from the jurisdiction in which it was held at the
date of the most recent Opinion of Counsel delivered pursuant to Section 3.07
(or from the jurisdiction in which it was held as described in the Opinion of
Counsel delivered at the Closing Date pursuant to Section 3.07(a), if no Opinion
of Counsel has yet been delivered pursuant to Section 3.07(b)) unless the
Trustee shall have first received an Opinion of Counsel to the effect that the
lien and security interest created by this Indenture with respect to such
property will continue to be maintained after giving effect to such action or
actions.

 

15

 

 

The Issuer hereby designates the Trustee its agent and attorney-in-fact to
execute any financing statement, continuation statement or other instrument
required to be executed pursuant to this Section 3.06, provided however, that
the Trustee shall not be obligated to execute or authorize such instruments
except at the written direction of the Issuer.

 

Section 3.07         Opinions as to Indenture Collateral.

 

(a)          On or before the Closing Date, the Issuer shall furnish to the
Trustee an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the delivery of the
Underlying Notes and any other requisite documents, and with respect to the
execution and filing of any financing statements and continuation statements, as
is necessary to perfect and make effective the lien and security interest of
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)          On or before June 30 in each calendar year, beginning in 2020, the
Servicer on behalf of the Issuer will furnish to the Trustee and the Rating
Agency an Opinion of Counsel at the expense of the Issuer either stating that,
in the opinion of such counsel, such action has been taken with respect to any
other requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
perfection of 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 the perfection of such lien and
security interest. Such Opinion of Counsel shall also describe 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 June 30 in
the following calendar year.

 

Section 3.08         Furnishing of Rule 144A Information.

 

The Issuer will furnish, upon the written request of any Noteholder or of any
owner of a beneficial interest therein, such information as is specified in
paragraph (d)(4) of Rule 144A under the Securities Act (i) to such Noteholder or
beneficial owner, (ii) to a prospective purchaser of such Note or interest
therein who is a Qualified Institutional Buyer and a Qualified Purchaser
designated by such Noteholder or beneficial owner, or (iii) to the Trustee for
delivery to such Noteholder, beneficial owner or prospective purchaser, in order
to permit compliance by such Noteholder or beneficial owner with Rule 144A in
connection with the resale of such Note or beneficial interest therein by such
Noteholder or beneficial owner in reliance on Rule 144A unless, at the time of
such request, the Issuer is subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, or exempt from reporting pursuant to Rule
12g3-2(b) under the Exchange Act.

 

Section 3.09         Performance of Obligations; Sale and Servicing Agreement.

 

(a)          The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Transaction
Documents and in the instruments and agreements included in the Indenture
Collateral.

 

(b)          The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, the other Transaction Documents and
the instruments and agreements included in the Indenture Collateral, and any
performance of such duties by a Person identified to the 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 and the Administrator to
assist the Issuer in performing its duties under this Indenture, the other
Transaction Documents and the instruments and agreements included in the
Indenture Collateral.

 

16

 

 

(c)          The Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person’s
covenants or obligations under any of the documents relating to the Loans or
under any instrument included in the Indenture Collateral, or which would result
in the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any of the documents relating to the
Loans or any such instrument, except such actions as the Servicer is expressly
permitted to take in the Transaction Documents.

 

(d)          If a Responsible Officer of the Issuer shall have knowledge of the
occurrence of a Servicer Default, the Issuer shall promptly notify in writing
the Trustee, the Backup Servicer and the Rating Agency thereof, and shall
specify in such notice the action, if any, the Issuer is taking in respect of
such Servicer Default. If such Servicer Default arises from the failure of the
Servicer to perform any of its duties or obligations under the Sale and
Servicing Agreement with respect to the Indenture Collateral, the Issuer may,
and shall pursuant to direction of the Majority Noteholders, remedy such
failure. So long as any such Servicer Default shall be continuing, the Trustee
may, and shall pursuant to direction of the Majority Noteholders, exercise its
remedies set forth in Section 8.02 of the Sale and Servicing Agreement. Unless
granted or permitted by the Holders of the Notes to the extent provided in
Article VIII of the Sale and Servicing Agreement, the Issuer may not waive any
such Servicer Default or terminate the rights and powers of the Servicer under
the Sale and Servicing Agreement.

 

Section 3.10        Negative Covenants.

 

So long as any Notes are Outstanding, the Issuer shall not:

 

(i)          except as expressly permitted by this Indenture or any other
Transaction Document, sell, transfer, exchange or otherwise dispose of any
portion the Indenture Collateral, unless directed to do so by the Trustee;

 

(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 applicable state law), or assert any claim
against any present or former Noteholder by reason of the payment of the taxes
levied or assessed upon the Issuer;

 

(iii)        permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released from
any covenants or obligations with respect to the Notes under this Indenture
except as may be expressly permitted hereby, permit any lien, charge, excise,
claim, security interest, mortgage or other encumbrance (other than the lien of
this Indenture or any other Transaction Document) to be created on or extend to
or otherwise arise upon or burden the Indenture Collateral or any part thereof
or any interest therein or the proceeds thereof (except for Permitted Liens) or
permit the lien of this Indenture not to constitute a valid first priority
security interest in the Indenture Collateral (subject to Permitted Liens);

 

17

 

 

(iv)        except as contemplated in the Transaction Documents, dissolve or
liquidate in whole or in part;

 

(v)         engage in any activities other than financing, acquiring, owning,
pledging and managing the Loans as contemplated by the Transaction Documents and
activities incidental to those activities; or

 

(vi)        incur, assume or guarantee any indebtedness other than indebtedness
evidenced by the Notes or indebtedness otherwise permitted by the Transaction
Documents.

 

Section 3.11        Annual Statement as to Compliance.

 

The Issuer will deliver to the Trustee and the Rating Agency, within 90 days
after the end of each calendar year (commencing with the calendar year ending
December 31, 2019), an Officer’s Certificate stating, as to the Person signing
such Officer’s Certificate, that:

 

(i)          a review of the activities of the Issuer during such year and of
its performance under this Indenture has been made under such Person’s
supervision or direction; and

 

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

 

Section 3.12        [Reserved].

 

Section 3.13        Representations and Warranties Concerning the Loans.

 

The Issuer has pledged to the Trustee for the benefit of the Noteholders all of
its rights under the Sale and Contribution Agreement and the Sale and Servicing
Agreement (except for the Excluded Property) and the Trustee has the benefit of
the representations and warranties made by the Seller and the Trust Depositor in
such documents concerning the Loans transferred into the Loan Assets and the
right to enforce any remedy against the Seller and the Trust Depositor provided
in the Sale and Contribution Agreement and the Sale and Servicing Agreement, to
the same extent as though such representations and warranties were made directly
to the Trustee.

 

Section 3.14        Custodian Review of Loan Files.

 

The Custodian, on behalf of the Trustee, for the benefit of the Noteholders
shall review the Loan Files as provided in Section 2.11 of the Sale and
Servicing Agreement.

 

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Section 3.15        Sale and Servicing Agreement.

 

In order to facilitate the servicing of the Loans, the Issuer authorizes the
Servicer, in the name and on behalf of the Trustee and the Issuer, and the
Trustee accepts such appointment, to perform its respective duties and
obligations under the Sale and Servicing Agreement and the rights of the Trustee
pursuant to the third sentence of Section 8.01 hereof. The Trustee agrees to
perform its express obligations under the Sale and Servicing Agreement in
accordance with the terms thereof subject to Section 6.01 hereof.

 

Section 3.16        Amendments to Sale and Servicing Agreement.

 

The Trustee may enter into any amendment or supplement to the Sale and Servicing
Agreement only in accordance with Section 13.01 of the Sale and Servicing
Agreement. The Trustee may, in its reasonable discretion, decline to enter into
or consent to any such supplement or amendment if its own rights, duties or
immunities shall be adversely affected in any material respect.

 

Section 3.17        Servicer as Agent and Bailee of Trustee.

 

(a)          Solely for purposes of perfection under Section 9-313 of the UCC or
other similar applicable law, rule or regulation of the state in which such
property is held by the Servicer, the Trustee hereby acknowledges that the
Servicer is acting as agent and bailee of the Trustee in holding any documents
released to the Servicer pursuant to the Sale and Servicing Agreement as well as
any other items constituting a part of the Indenture Collateral which from time
to time come into the possession of the Servicer. It is intended that, by the
Servicer’s execution and delivery of the Sale and Servicing Agreement, the
Trustee, as a secured party, will be deemed to have possession of such
documents, such moneys and such other items for purposes of Section 9-313 of the
UCC of the state in which such property is held by the Servicer.

 

(b)          Solely for purposes of perfection under Section 9-313 of the UCC or
other similar applicable law, rule or regulation of the state in which such
property is held by the Trustee, if the transfer of the Loans and the other
assets in the Indenture Collateral by the Trust Depositor to the Issuer is
deemed to be a loan, the Custodian hereby acknowledges it is acting as agent and
bailee of the Issuer in holding items constituting a part of the Indenture
Collateral which from time to time come into the possession of the Trustee.

 

Section 3.18        Investment Company Act of 1940.

 

The Issuer shall not and the Trustee shall not knowingly take any action that
would cause the Issuer or the pool of Indenture Collateral to be required to
register as an “investment company” under the 1940 Act (or any successor or
amendatory statute).

 

Section 3.19        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 or any state thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and delivered to
the Trustee in form satisfactory to the 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, the Notes, the Trust Certificate
and each other Transaction Document on the part of the Issuer to be performed or
observed, all as provided herein and therein;

 

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

 

(iii)        each Holder of a Note has consented in writing to such transaction
(and notice thereof has been provided to the Rating Agency);

 

(iv)        the Issuer shall have received written advice from Dechert LLP or an
opinion of tax counsel of nationally recognized standing in the United States
experienced in such matters (and shall have delivered copies thereof to the
Trustee on which the Trustee may conclusively rely) to the effect that such
transaction will not (1) cause the Issuer to be treated as an association or
publicly traded partnership taxable as a corporation for U.S. federal income tax
purposes, (2) cause the Notes to be deemed to have been sold or exchanged under
Section 1001 of the Code or (3) cause any Notes that were characterized as
indebtedness at the time of issuance to be characterized as other than
indebtedness;

 

(v)         any action that 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 Trustee an Officer’s
Certificate and Opinion of Counsel (which may conclusively rely on the Officer’s
Certificate with respect to clauses (ii) and (iii) above and as to the taking of
any action required by such Opinion of Counsel as it relates to clause (v)
above) each stating that such consolidation or merger complies with this Section
3.19 and that all conditions precedent herein provided for relating to such
transaction have been complied with.

 

(b)          Except as otherwise permitted hereunder or under the Transaction
Documents, the Issuer shall not convey or transfer all or substantially all of
its properties or assets, including those included in the Indenture Collateral,
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 be a United States citizen or a Person organized and existing
under the laws of the United States or any state thereof or the District of
Columbia, expressly assumes, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form and substance reasonably satisfactory to the
Trustee, the due and punctual payment of the principal of and interest on all
Notes, and the performance of each other Transaction Document, and the
performance or observance of every agreement and covenant of this Indenture, the
Notes, the Trust Certificate and each other Transaction Document on the part of
the Issuer to be performed or observed, all as provided herein, expressly agrees
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 the
Holders of the Notes as provided in the Transaction Documents, and unless
otherwise provided in such supplemental indenture, expressly agrees 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
arising from such transfer;

 

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

 

(iii)        each Holder of a Note has consented in writing to such transaction
(and notice thereof has been provided to Rating Agency);

 

(iv)        the Issuer shall have received written advice from Dechert LLP or an
opinion of tax counsel of nationally recognized standing in the United States
experienced in such matters (and shall have delivered copies thereof to the
Trustee on which the Trustee may conclusively rely) to the effect that such
transaction will not (1) cause the Issuer to be treated as an association or
publicly traded partnership taxable as a corporation for U.S. federal income tax
purposes, (2) cause the Notes to be deemed to have been sold or exchanged under
Section 1001 of the Code or (3) cause any Notes that were characterized as
indebtedness at the time of issuance to be characterized as other than
indebtedness;

 

(v)         any action that 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 Trustee an Officer’s
Certificate and Opinion of Counsel (which may conclusively rely on a certificate
of the transferee as to the transferee’s citizenship, if applicable, and on the
Officer’s Certificate with respect to clauses (ii) and (iii) above and to the
taking of any action required by such Opinion of Counsel as it relates to clause
(v) above) each stating that such conveyance or transfer, and such supplemental
indenture, comply with this Section 3.19 and that all conditions precedent
herein provided for relating to such transaction have been complied with.

 

Section 3.20        Successor or Transferee.

 

(a)          Upon any consolidation or merger of the Issuer in accordance with
Section 3.19(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 or substantially all of the
assets and properties of the Issuer pursuant to Section 3.19(b), the Issuer 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 Trustee stating that the Issuer is to
be so released.

 

Section 3.21        No Other Business.

 

The Issuer shall not engage in any business other than financing, purchasing,
owning, selling, managing and enforcing the Loans and Related Property,
including through any subsidiaries permitted pursuant to Section 5.10 of the
Sale and Servicing Agreement, in the manner contemplated by this Indenture and
the other Transaction Documents and all activities incidental thereto, issuing
the Notes and the Trust Certificate and as otherwise expressly permitted in the
Trust Agreement or the other Transaction Documents.

 

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Section 3.22         No Borrowing; Use of Proceeds.

 

The Issuer shall not issue, incur, assume, guarantee or otherwise become liable,
directly or indirectly, for any indebtedness except for the Notes and any other
indebtedness permitted by the Transaction Documents. In consideration of the
Trust Depositor’s transfer of the Initial Loans to the Issuer, the Issuer will
transfer the net cash proceeds from the sale of the Notes to the Trust
Depositor, together with the Trust Certificate. The Trust Depositor will use a
portion of the net proceeds to acquire the Initial Loans from the Seller on the
Closing Date.

 

Section 3.23         Guarantees, Loans, Advances and Other Liabilities.

 

Except as contemplated by this Indenture or the other Transaction Documents, 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, other than any subsidiary established
by the Issuer pursuant to Section 5.10 of the Sale and Servicing Agreement.

 

Section 3.24         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 3.25         Representations and Warranties of the Issuer.

 

The Issuer represents and warrants as of the date hereof and as of the date of
any subsequent acquisition of a Substitute Loan or an Additional Loan, as
applicable, as follows:

 

(a)          Power and Authority. It has full power, authority and legal right
to execute, deliver and perform its obligations as Issuer under this Indenture
and the Notes (the foregoing documents, the “Issuer Documents”) and under each
of the other Transaction Documents to which the Issuer is a party.

 

(b)          Due Authorization and Binding Obligation. The execution and
delivery of the Issuer Documents and the other Transaction Documents to which
the Issuer is a party, and the consummation of the transactions provided for
therein have been duly authorized by all necessary action on its part. Each of
the Issuer Documents and the other Transaction Documents to which the Issuer is
a party constitutes the legal, valid and binding obligation of the Issuer and is
enforceable in accordance with its terms, except as enforcement of such terms
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally and by the availability of equitable
remedies.

 

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(c)          No Conflict. The execution and delivery of the Issuer Documents and
the other Transaction Documents to which the Issuer is a party, the performance
of the transactions contemplated thereby and the fulfillment of the terms
thereof will not conflict with, result in any material breach of any of the
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a default under, any indenture, contract, agreement, mortgage, deed of
trust, or other instrument to which the Issuer is a party or by which it or any
of its property is bound.

 

(d)          No Violation. The execution and delivery of the Issuer Documents
and the other Transaction Documents to which the Issuer is a party, the
performance of the transactions contemplated thereby and the fulfillment of the
terms thereof will not conflict with or violate, in any material respect, any
Applicable Law.

 

(e)          All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or any Governmental Authority required in
connection with the execution and delivery of the Issuer Documents and the other
Transaction Documents to which the Issuer is a party, the performance of the
transactions contemplated thereby and the fulfillment of the terms thereof have
been obtained.

 

(f)          No Proceedings. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to the
knowledge of the Issuer, threatened, against the Issuer or any of its respective
properties or with respect to the Issuer Documents or any other Transaction
Document to which the Issuer is a party that, if adversely determined, would
have a material adverse effect on the business, properties, assets or condition
(financial or otherwise) of the Issuer or the transactions contemplated by the
Issuer Documents or any of the other Transaction Documents to which the Issuer
is a party.

 

(g)          Organization and Good Standing. The Issuer is a statutory trust
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite power to own its assets and to transact
the business in which it is currently engaged, and had at all relevant times,
and now has, all necessary power, authority and legal right under its
organizational documents and under Applicable Law to acquire, own and pledge the
Indenture Collateral.

 

(h)          1940 Act. The Issuer is not an “investment company” within the
meaning of the 1940 Act. The Issuer will rely on an exclusion or exemption from
the definition of “investment company” under the 1940 Act contained in Section
3(c)7 thereof and Rule 3a-7 thereof, and will qualify for the “loan
securitization” exemption set forth in the implementing regulations of the
Volcker Rule. The Issuer is not a “covered fund” for purposes of the regulations
adopted to implement Section 619 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (such statutory provision together with such
implementing regulations, the “Volcker Rule”).

 

(i)          Location. The Issuer is located (within the meaning of Article 9 of
the UCC) in the State of Delaware. The Issuer agrees that it will not change its
location (within the meaning of Article 9 of the UCC) without at least 30 days
prior written notice to the Seller, the Servicer, the Trustee and the Rating
Agency.

 

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(j)          Security Interest in Collateral.

 

(i)          This Indenture creates a valid, continuing and enforceable security
interest (as defined in the applicable UCC) in the Indenture Collateral in favor
of the Trustee, which security interest is prior to all other Liens (except for
Permitted Liens), and is enforceable as such against creditors of and purchasers
from the Issuer;

 

(ii)         the Indenture Collateral constitutes “general intangibles,”
“instruments,” “accounts,” “investment property,” or “chattel paper,” within the
meaning of the applicable UCC;

 

(iii)        the Issuer owns and has good and marketable title to the Indenture
Collateral free and clear of any Lien (other than Permitted Liens), claim or
encumbrance of any Person;

 

(iv)        the Issuer has received all consents and approvals required by the
terms of the Indenture Collateral to the pledge of the Indenture Collateral
hereunder to the Trustee;

 

(v)         the Issuer has caused the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
Applicable Law in order to perfect the security interest in the Indenture
Collateral granted to the Trustee under this Indenture;

 

(vi)        other than the security interest granted by the Issuer pursuant to
this Indenture and any Permitted Liens, the Issuer has not pledged, assigned,
sold, granted a security interest in or otherwise conveyed any of the Indenture
Collateral. The Issuer has not authorized the filing of and is not aware of any
financing statements against the Issuer that include a description of collateral
covering the Indenture Collateral other than any financing statement (A)
relating to the security interest granted by the Issuer under this Indenture, or
(B) that has been terminated or for which a release or partial release has been
filed. The Issuer is not aware of the filing of any judgment or tax Lien filings
against the Issuer;

 

(vii)       all original executed copies of each Underlying Note that constitute
or evidence the Indenture Collateral have been delivered to and are in the
possession of the Trustee;

 

(viii)      the Issuer has received a written acknowledgment from the Trustee
that the Trustee or its bailee is holding the Underlying Notes that constitute
or evidence the Indenture Collateral solely on behalf of and for the benefit of
the Securityholders; and

 

(ix)         none of the Underlying Notes that constitute or evidence the
Indenture Collateral has any marks or notations indicating that they have been
pledged, assigned or otherwise conveyed to any Person other than the Issuer and
the Trustee.

 

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The representations and warranties in Section 3.25(j) shall survive the
termination of this Indenture.

 

Section 3.26         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, (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 that the Issuer may make, or cause to be made, (w) distributions to the
Owner Trustee, the Trust Depositor and the Certificateholder as contemplated by,
and to the extent funds are available for such purpose under, the Trust
Agreement and the Sale and Servicing Agreement, (x) payments to the Servicer
and/or Trust Depositor pursuant to the terms of the Sale and Servicing Agreement
or the other Transaction Documents and (y) payments to the Trustee and other
Persons entitled thereto pursuant to terms of the Sale and Servicing Agreement.
The Issuer will not, directly or indirectly, make payments to or distributions
from the Distribution Account except in accordance with this Indenture and the
other Transaction Documents.

 

Section 3.27         Notice of Events of Default, Amendments and Waivers.

 

Promptly upon a Responsible Officer becoming aware thereof, the Issuer shall
give the Trustee and the Rating Agency prompt written notice of each Event of
Default hereunder, of each Servicer Default under the Sale and Servicing
Agreement, of any material default or material breach of any other Transaction
Document, and of any amendment or waiver of any Transaction Document.

 

Section 3.28         Further Instruments and Acts.

 

Upon request of the 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 (provided nothing
herein shall be deemed to impose an obligation on the Trustee to so request).

 

Section 3.29         Statements to Noteholders.

 

The Trustee shall make available on its secure internet website to each
Noteholder and the Rating Agency, the Monthly Reports and Quarterly Reports
prepared by the Servicer pursuant to Article IX of the Sale and Servicing
Agreement. Upon request, the Trustee may make available to the Noteholders, the
parties to the Transaction Documents and the Rating Agency, via the Trustee’s
internet website, a copy of the Transaction Documents, each Monthly Report,
Quarterly Report and, with the consent or at the written direction of the Trust
Depositor, such other information regarding the Notes and/or the Loans as the
Trustee may have in its possession or as may be provided to the Trustee by the
Servicer or the Trust Depositor, but only with the use of its secure internet
website; provided the Trustee shall have no obligation to provide such
information described in this Section 3.29 until it has received the requisite
information from the Trust Depositor or the Servicer. The Trustee will make no
representation or warranties as to the accuracy or completeness of such
documents and will assume no responsibility therefor.

 

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The Trustee’s secure internet website shall be initially located at
http://pivot.usbank.com or at such other address as shall be specified by the
Trustee from time to time in writing to the Noteholders, the parties to the
Transaction Documents and the Issuer (who shall promptly forward the same to the
Rating Agency). In connection with providing access to the Trustee’s internet
website, the Trustee shall (other than with respect to the parties to the
Transaction Documents and the Rating Agency) require registration and the
acceptance of a disclaimer. The Trustee shall be permitted to change the method
by which the Monthly Reports and Quarterly Reports are distributed in order to
make such distributions more convenient and/or more accessible to the Holders.
The Trustee shall not be liable for the dissemination of information in
accordance with this Indenture.

 

Section 3.30         Grant of Substitute Loans and Additional Loans.

 

In consideration of the delivery or acquisition of Loans transferred on each
Substitute Loan Cutoff Date or each Additional Loan Cutoff Date, as applicable,
pursuant to and in accordance with the terms of Section 2.04, Section 2.06 or
Section 2.07, as applicable, of the Sale and Servicing Agreement, the Issuer
grants to the Trustee a security interest in all of its right, title and
interest in the Loans transferred on such Substitute Loan Cutoff Date or such
Additional Loan Cutoff Date, as applicable, and simultaneously with the transfer
of the Substitute Loans and Additional Loans, as applicable, the Issuer will
cause the related Loan File to be delivered to the Trustee or the Custodian on
its behalf.

 

ARTICLE IV
THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE

 

Section 4.01         The Notes.

 

The Notes shall be registered initially in the name of Cede & Co., as nominee of
DTC. Beneficial Owners will hold interests in such Notes through the book-entry
facilities of DTC in minimum denominations equal to the applicable Minimum
Denomination for such Notes.

 

The Notes shall, on original issue, be executed on behalf of the Issuer by the
Owner Trustee, not in its individual capacity but solely as Owner Trustee,
authenticated and delivered by the Trustee upon receipt of an Issuer Order.

 

Section 4.02         Registration of Transfer and Exchange of Notes.

 

(a)          The Trustee shall cause to be kept a Note 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 and exchanges of Notes as herein provided. The Trustee shall be “Note
Registrar” for the purpose of registering Notes and transfers of Notes as herein
provided. The Note Register shall contain the name, remittance instructions, as
well as the Series and the number in the Series.

 

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(b)          Each Note shall be issued in minimum denominations of not less than
the Minimum Denomination, so that on the Closing Date the sum of the
denominations of all outstanding Notes shall equal the applicable Initial Note
Principal Balance. On the Closing Date and pursuant to an Issuer Order, the
Trustee will execute and authenticate (i) one or more Global Notes and/or (ii)
Physical Notes all in an aggregate principal amount that shall equal the Initial
Note Principal Balance.

 

(c)          The Global Notes (i) shall be delivered by the Issuer to DTC or,
pursuant to DTC’s instructions, shall be delivered by the Issuer on behalf of
DTC to and deposited with the DTC Custodian, and in each case shall be
registered in the name of Cede & Co. and (ii) with respect to the Rule 144A
Global Notes, shall bear a legend substantially to the following effect:

 

“Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Note Registrar 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 Global Notes may be deposited with such other depository as the Issuer may
from time to time designate, and shall bear such legend as may be appropriate;
provided that such successor depository maintains a book-entry system that
qualifies to be treated as “registered form” under Section 163(f)(3) of the
Code.

 

The Issuer is hereby authorized to execute and deliver a Letter of
Representations with DTC relating to the Notes.

 

(d)          With respect to Notes registered in the Note Register in the name
of Cede & Co., as nominee of DTC, the Issuer, the Servicer, the Owner Trustee
(as such and in its individual capacity) and the Trustee shall have no
responsibility or obligation to Direct or Indirect Participants or Beneficial
Owners for which DTC holds Notes from time to time as a Depository. Without
limiting the immediately preceding sentence, the Issuer, the Servicer, the Owner
Trustee (as such and in its individual capacity), and the Trustee shall have no
responsibility or obligation with respect to (i) the accuracy of the records of
DTC, Cede & Co., or any Direct or Indirect Participant with respect to the
ownership interest in the Notes, (ii) the delivery to any Direct or Indirect
Participant or any other Person, other than a registered Holder, of a Note,
(iii) the payment to any Direct or Indirect Participant or any other Person,
other than a registered Holder of a Note as shown in the Note Register, of any
amount with respect to any distribution of principal or interest on the Notes or
(iv) the making of book-entry transfers among Participants of DTC with respect
to Notes registered in the Note Register in the name of the nominee of DTC. No
Person other than a registered Holder of a Note as shown in the Note Register
shall receive a physical Note evidencing such Note.

 

27

 

 

(e)          Upon delivery by DTC to the Trustee of written notice to the effect
that DTC has determined to substitute a new nominee in place of Cede & Co., and
subject to the provisions hereof with respect to the payment of distributions by
the mailing of checks or drafts to the registered Holders of Notes appearing as
registered Owners in the Note Register on a Record Date, the name “Cede & Co.”
in this Indenture shall refer to such new nominee of DTC.

 

(f)          In the event that (i) DTC or the Servicer advises the Trustee in
writing that DTC is no longer willing or able to discharge properly its
responsibilities as nominee and depository with respect to the Global Notes and
the Servicer is unable to locate a qualified successor; (ii) the Administrator,
at its option, elects to terminate the book-entry system through DTC; (iii) DTC
is no longer registered or in good standing under the Securities Exchange Act of
1934, as amended, or other applicable statute or regulation, and in either case
the Administrator or the Trustee, as applicable, is unable to appoint a
qualified successor; or (iv) after the occurrence of an Event of Default under
the Indenture, the beneficial owners of the Notes representing not less than 51%
of the outstanding principal amount of the applicable Notes advise the Trustee
and DTC that the continuation of a book-entry system through DTC, or a successor
to DTC, is no longer in the best interests of the beneficial owners of the
Notes, the Global Notes shall no longer be restricted to being registered in the
Note Register in the name of Cede & Co. (or a successor nominee) as nominee of
DTC. At that time, the Servicer may determine that the Global Notes shall be
registered in the name of and deposited with a successor depository operating a
global book-entry system, as may be acceptable to the Servicer, or such
depository’s agent or designee but, if the Servicer does not select such
alternative global book-entry system, then upon surrender to the Note Registrar
of the Global Notes by DTC, accompanied by the registration instructions from
DTC for registration, the Trustee shall at the Servicer’s expense authenticate
Physical Notes. Neither the Servicer nor the Trustee shall be liable for any
delay in DTC’s delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Physical Notes, the Trustee, the Note Registrar, the Servicer, the Paying Agent,
the Securities Intermediary and the Issuer shall recognize the Holders of the
Physical Notes as Noteholders hereunder.

 

(g)          Notwithstanding any other provision of this Indenture to the
contrary, so long as any Global Notes are registered in the name of Cede & Co.,
as nominee of DTC, all distributions of principal and interest on such Global
Notes and all notices with respect to such Global Notes shall be made and given,
respectively, in the manner provided in the Letter of Representations.

 

(h)          Subject to the preceding paragraphs, upon surrender for
registration of transfer of any Note at the office of the Note Registrar and,
upon satisfaction of the conditions set forth below, the Issuer shall execute,
in the name of the designated transferee or transferees, a new Note and of the
same aggregate Percentage Interest and dated the date of authentication by the
Trustee. The Note Registrar shall maintain a record of any such transfer and
deliver it to the Issuer, Servicer or Trustee upon request.

 

(i)          At the option of the Noteholders, Notes may be exchanged for other
Notes in authorized denominations, upon surrender of the Notes to be exchanged
at the Corporate Trust Office. Whenever any Notes are so surrendered for
exchange, the Issuer shall execute the Notes which the Noteholder making the
exchange is entitled to receive. Every Note presented or surrendered for
transfer or exchange shall be accompanied by wiring instructions, if applicable,
in the form of Exhibit C. 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 called for redemption.

 

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(j)          No service charge shall be made for any transfer or exchange of
Notes, but prior to transfer the Note Registrar may require payment by the
transferor of a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer or exchange of Notes.

 

All Notes surrendered for payment, transfer and exchange or redemption shall be
marked canceled by the Note Registrar and retained and destroyed in accordance
with its policies and procedures.

 

(k)          By acceptance of a Physical Note, whether upon original issuance or
subsequent transfer, each Holder of such a Note acknowledges the restrictions on
the transfer of such Note set forth in the Securities Legend and agrees that it
will transfer such Note only as provided herein. In addition to the provisions
of Sections 4.02(m) and (n), the following restrictions shall apply with respect
to the transfer and registration of transfer of a Physical Note to a transferee
that takes delivery in the form of a Physical Note:

 

(i)          The Note Registrar shall register the transfer of a Physical Note
if the requested transfer is being made to a transferee who has provided the
Note Registrar with a Rule 144A Certification or to a transferee who is an
Affiliate of the Seller in a transfer which otherwise complies with Section
4.02(s); or

 

(ii)         The Note Registrar shall register the transfer of any Physical Note
if (x) the transferor has advised the Note Registrar in writing that the Note is
being transferred to a Person that is both a Qualified Institutional Buyer and a
Qualified Purchaser; (y) prior to the transfer the transferee furnishes to the
Note Registrar a Transferee Letter; and (z) such transfer otherwise complies
with Section 4.02(s).

 

(l)          Subject to Section 4.02(n), so long as a Global Note remains
outstanding and is held by or on behalf of DTC, transfers of beneficial
interests in the Global Note, or transfers by Holders of Physical Notes to
transferees that take delivery in the form of beneficial interests in the Global
Note, may be made only in accordance with this Section 4.02(l) and in accordance
with the rules of DTC.

 

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(i)          Rule 144A Global Note to Regulation S Global Note During the
Distribution Compliance Period. If, during the Distribution Compliance Period, a
Beneficial Owner of an interest in a Rule 144A Global Note wishes at any time to
transfer its beneficial interest in such Rule 144A Global Note to a Person who
wishes to take delivery thereof in the form of a beneficial interest in a
Regulation S Global Note, such Beneficial Owner may, in addition to complying
with all applicable rules and procedures of DTC and Clearstream or Euroclear
applicable to transfers by their respective participants (the “Applicable
Procedures”), transfer or cause the transfer of such beneficial interest for an
equivalent beneficial interest in the Regulation S Global Note only upon
compliance with the provisions of this Section 4.02(l)(i). Upon receipt by the
Note Registrar at its Corporate Trust Office of (1) written instructions given
in accordance with the Applicable Procedures from a Depository Participant
directing the Note Registrar to credit or cause to be credited to another
specified Depository Participant’s account a beneficial interest in the
Regulation S Global Note in an amount equal to the Note balance of the
beneficial interest in the Rule 144A Global Note to be transferred, (2) a
written order given in accordance with the Applicable Procedures containing
information regarding the account of the DTC Participant (and the Euroclear or
Clearstream account, as the case may be) to be credited with, and the account of
the DTC Participant to be debited for, such beneficial interest, and (3) a
certificate in the form of Exhibit E hereto given by the Beneficial Owner that
is transferring such interest, the Note Registrar shall instruct DTC to reduce
the denomination of the Rule 144A Global Note by the Note balance of the
beneficial interest in the Rule 144A Global Note to be so transferred and,
concurrently with such reduction, to increase the denomination of the Regulation
S Global Note by the Note balance of the beneficial interest in the Rule 144A
Global Note to be so transferred, and to credit or cause to be credited to the
account of the Person specified in such instructions (who shall be a Depository
Participant acting for or on behalf of Euroclear or Clearstream, or both, as the
case may be) a beneficial interest in the Regulation S Global Note having a Note
balance equal to the amount by which the denomination of the Rule 144A Global
Note was reduced upon such transfer.

 

(ii)         Rule 144A Global Note to Regulation S Global Note After the
Distribution Compliance Period. If, after the Distribution Compliance Period, a
Beneficial Owner of an interest in a Rule 144A Global Note wishes at any time to
transfer its beneficial interest in such Rule 144A Global Note to a Person who
wishes to take delivery thereof in the form of a beneficial interest in a
Regulation S Global Note, such Holder may, in addition to complying with all
Applicable Procedures, transfer or cause the transfer of such beneficial
interest for an equivalent beneficial interest in a Regulation S Global Note
only upon compliance with the provisions of this Section 4.02(l)(ii). Upon
receipt by the Note Registrar at its Corporate Trust Office of (1) written
instructions given in accordance with the Applicable Procedures from a
Depository Participant directing the Note Registrar to credit or cause to be
credited to another specified Depository Participant’s account a beneficial
interest in the Regulation S Global Note in an amount equal to the Note balance
of the beneficial interest in the Rule 144A Global Note to be transferred, (2) a
written order given in accordance with the Applicable Procedures containing
information regarding the account of the DTC Participant (and, in the case of a
transfer pursuant to and in accordance with Regulation S, the Euroclear or
Clearstream account, as the case may be) to be credited with, and the account of
the DTC Participant to be debited for, such beneficial interest, and (3) a
certificate in the form of Exhibit F hereto given by the Beneficial Owner that
is transferring such interest, the Note Registrar shall instruct DTC to reduce
the denomination of the Rule 144A Global Note by the Note balance of the
beneficial interest in the Rule 144A Global Note to be so transferred and,
concurrently with such reduction, to increase the denomination of the Regulation
S Global Note by the Note balance of the beneficial interest in the Rule 144A
Global Note to be so transferred, and to credit or cause to be credited to the
account of the Person specified in such instructions (who shall be a Depository
Participant acting for or on behalf of Euroclear or Clearstream, or both, as the
case may be) a beneficial interest in the Regulation S Global Note having a Note
balance equal to the amount by which the denomination of the Rule 144A Global
Note was reduced upon such transfer.

 

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(iii)        Regulation S Global Note to Rule 144A Global Note. If the
Beneficial Owner of an interest in a Regulation S Global Note wishes at any time
to transfer its beneficial interest in such Regulation S Global Note to a Person
who wishes to take delivery thereof in the form of a beneficial interest in the
Rule 144A Global Note, such Holder may, in addition to complying with all
Applicable Procedures, transfer or cause the transfer of such beneficial
interest for an equivalent beneficial interest in the Rule 144A Global Note only
upon compliance with the provisions of this Section 4.02(l)(iii). Upon receipt
by the Note Registrar at its Corporate Trust Office of (1) written instructions
given in accordance with the Applicable Procedures from a Depository Participant
directing the Note Registrar to credit or cause to be credited to another
specified Depository Participant’s account a beneficial interest in the Rule
144A Global Note in an amount equal to the Note balance of the beneficial
interest in the Regulation S Global Note to be transferred, (2) a written order
given in accordance with the Applicable Procedures containing information
regarding the account of the DTC Participant to be credited with, and the
account of the DTC Participant (or, if such account is held for Euroclear or
Clearstream, the Euroclear or Clearstream account, as the case may be) to be
debited for such beneficial interest, and (3) with respect to a transfer of a
beneficial interest in the Regulation S Global Note for a beneficial interest in
the related Rule 144A Global Note (i) during the Distribution Compliance Period,
a certificate in the form of Exhibit G hereto given by the Beneficial Owner, or
(ii) after the Distribution Compliance Period, a Rule 144A Certification from
the transferee of such interest to the effect that such transferee is a
Qualified Institutional Buyer and a Qualified Purchaser, the Note Registrar
shall instruct DTC to reduce the denomination of the Regulation S Global Note by
the Note balance of the beneficial interest in the Regulation S Global Note to
be transferred and, concurrently with such reduction, to increase the
denomination of the Rule 144A Global Note by the Note balance of the beneficial
interest in the Regulation S Global Note to be so transferred, and to credit or
cause to be credited to the account of the Person specified in such instructions
(who shall be a Depository Participant acting for or on behalf of Euroclear or
Clearstream, or both, as the case may be) a beneficial interest in the Rule 144A
Global Note having a Note balance equal to the amount by which the denomination
of the Regulation S Global Note was reduced upon such transfer.

 

(iv)        Transfers Within Regulation S Global Notes During Distribution
Compliance Period. If, during the Distribution Compliance Period, the Beneficial
Owner of an interest in a Regulation S Global Note wishes at any time to
transfer its beneficial interest in such Regulation S Global Note to a Person
who wishes to take delivery thereof in the form of a Regulation S Global Note,
such Beneficial Owner may transfer or cause the transfer of such beneficial
interest for an equivalent beneficial interest in such Regulation S Global Note
only upon compliance with the provisions of this Section 4.02(l)(iv) and all
Applicable Procedures. Upon receipt by the Note Registrar at its Corporate Trust
Office of (1) written instructions given in accordance with the Applicable
Procedures from a Depository Participant directing the Note Registrar to credit
or cause to be credited to another specified Depository Participant’s account a
beneficial interest in such Regulation S Global Note in an amount equal to the
Note balance of the beneficial interest to be transferred, (2) a written order
given in accordance with the Applicable Procedures containing information
regarding the account of the DTC Participant to be credited with (or, if such
account is held for Euroclear or Clearstream, the Euroclear or Clearstream
account, as the case may be), and the account of the DTC Participant (or, if
such account is held for Euroclear or Clearstream, the Euroclear or Clearstream
account, as the case may be) to be debited for, such beneficial interest and (3)
a certificate in the form of Exhibit H hereto given by the transferor, the Note
Registrar shall instruct DTC to credit or cause to be credited to the account of
the Person specified in such instructions (who shall be a Depository Participant
acting for or on behalf of Euroclear or Clearstream, or both, as the case may
be) a beneficial interest in the Regulation S Global Note having a Note balance
equal to the amount specified in such instructions by which the account to be
debited was reduced upon such transfer. The Note Registrar shall not be required
to monitor compliance by Beneficial Owners with the provisions of this Section
4.02(l)(iv).

 

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(m)          Transfers of Interests in Global Notes to Physical Notes. Any and
all transfers from a Global Note to a transferee wishing to take delivery in the
form of a Physical Note will require the transferee to take delivery subject to
the restrictions on the transfer of such Physical Note described on the face of
such Note, and such transferee agrees that it will transfer such Physical Note
only as provided therein and herein. No such transfer shall be made and the Note
Registrar shall not register any such transfer unless such transfer is made in
accordance with this Section 4.02(m) or is made to an Affiliate of the Seller in
a transfer which otherwise complies with Section 4.02(s).

 

(i)          Transfers of a beneficial interest in a Global Note to a Person who
is both a Qualified Institutional Buyer and a Qualified Purchaser will require
delivery of such Note to the transferee in the form of a Physical Note and the
Note Registrar shall register such transfer only if prior to the transfer such
transferee furnishes to the Note Registrar (1) a Transferee Letter to the effect
that the transfer is being made to a Qualified Institutional Buyer and a
Qualified Purchaser in accordance with an applicable exemption under the
Securities Act, and (2) an Opinion of Counsel acceptable to the Trustee that
such transfer is in compliance with the Securities Act.

 

(ii)         Upon acceptance for exchange or transfer of a beneficial interest
in a Global Note for a Physical Note, as provided herein, the Note Registrar
shall endorse on the schedule affixed to the related Global Note Registrar (or
on a continuation of such schedule affixed to such Global Note Registrar and
made a part thereof) an appropriate notation evidencing the date of such
exchange or transfer and a decrease in the denomination of such Global Note
equal to the Note balance of such Physical Note issued in exchange therefor or
upon transfer thereof. Unless determined otherwise by the Servicer and the
Issuer in accordance with applicable law, a Physical Note issued upon transfer
of or exchange for a beneficial interest in the Global Note shall bear the
Securities Legend.

 

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(n)          Transfers of Physical Notes to the Global Notes. If a Holder of a
Physical Note wishes at any time to transfer such Note to a Person who wishes to
take delivery thereof in the form of a beneficial interest in the related
Regulation S Global Note or the related Rule 144A Global Note, such transfer may
be effected only in accordance with the Applicable Procedures and this Section
4.02(n). Upon receipt by the Note Registrar at the Corporate Trust Office of (1)
the Physical Note to be transferred with an instrument of assignment and
transfer, (2) written instructions given in accordance with the Applicable
Procedures from the Holder of such Physical Note directing the Note Registrar to
credit or cause to be credited to the applicable Participant’s account a
beneficial interest in such Regulation S Global Note or such Rule 144A Global
Note, as the case may be, in an amount equal to the Note balance of the Physical
Note to be so transferred, (3) a written order given in accordance with the
Applicable Procedures containing information regarding the account of the DTC
Participant (and, in the case of any transfer pursuant to Regulation S, the
Euroclear or Clearstream account, as the case may be) to be credited with such
beneficial interest, and (4) (x) a certificate in the form of Exhibit F or
Exhibit H, as applicable, hereto, given by the Holder of such Physical Note, if
delivery is to be taken in the form of a beneficial interest in the Regulation S
Global Note or (y) a Rule 144A Certification from the transferee to the effect
that such transferee is a Qualified Institutional Buyer who is a Qualified
Purchaser, if delivery is to be taken in the form of a beneficial interest in
the Rule 144A Global Note, the Note Registrar shall cancel such Physical Note,
execute and deliver a new Physical Note for that portion, if any, of the Note
balance of the Physical Note not so transferred, registered in the name of the
Holder, and the Note Registrar shall instruct DTC to increase the denomination
of the Regulation S Global Note or the Rule 144A Global Note, as the case may
be, by the Note balance of the Physical Note to be so transferred, and to credit
or cause to be credited to the account of the Person specified in such
instructions (who, in the case of any increase in the Regulation S Global Note
during the Distribution Compliance Period, shall be a Depository Participant
acting for or on behalf of Euroclear or Clearstream, or both, as the case may
be) a corresponding Note balance of the Rule 144A Global Note or the Regulation
S Global Note, as the case may be.

 

(o)          An exchange of a beneficial interest in a Global Note for a
Physical Note or Notes, an exchange of a Physical Note or Notes for a beneficial
interest in a Global Note and an exchange of a Physical Note or Notes for
another Physical Note or Notes (in each case, whether or not such exchange is
made in anticipation of subsequent transfer, and in the case of the Global
Notes, so long as the Global Notes remain outstanding and are held by or on
behalf of DTC), may be made only in accordance with this Section 4.02 and in
accordance with the rules of DTC and Applicable Procedures (to the extent
applicable).

 

(p)          (i)          Upon acceptance for exchange or transfer of a Physical
Note for a beneficial interest in a Global Note as provided herein, the Note
Registrar shall cancel such Physical Note and shall (or shall request DTC to)
endorse on the schedule affixed to such Global Note (or on a continuation of
such schedule affixed to such Global Note and made a part thereof) an
appropriate notation evidencing the date of such exchange or transfer and an
increase in the denomination of such Global Note equal to the Note balance of
such Physical Note exchanged or transferred therefor.

 

(ii)         Upon acceptance for exchange or transfer of a beneficial interest
in a Global Note for a Physical Note as provided herein, the Note Registrar
shall (or shall request DTC to) endorse on the schedule affixed to such Global
Note (or on a continuation of such schedule affixed to such Global Note and made
a part thereof) an appropriate notation evidencing the date of such exchange or
transfer and a decrease in the denomination of such Global Note equal to the
Note balance of such Physical Note issued in exchange therefor or upon transfer
thereof.

 

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(q)          Unless determined otherwise by the Servicer and the Issuer in
accordance with applicable law, the Securities Legend shall be placed on any
Physical Note issued in exchange for or upon transfer of another Physical Note
or of a beneficial interest in a Global Note.

 

(r)          Subject to the restrictions on transfer and exchange set forth in
this Section 4.02, the Holder of any Physical Note may transfer or exchange the
same in whole or in part (in a Note balance amount or amounts not less than the
applicable Minimum Denomination) by surrendering such Note at the Corporate
Trust Office, or at the office of any transfer agent, together with an executed
instrument of assignment and transfer reasonably satisfactory in form and
substance to the Note Registrar in the case of transfer and a written request
for exchange in the case of exchange. The Holder of a beneficial interest in a
Global Note may, subject to the rules and procedures of DTC, cause DTC (or its
nominee) to notify the Note Registrar in writing of a request for transfer or
exchange of such beneficial interest for a Physical Note or Notes. Following a
proper request for transfer or exchange, the Note Registrar shall, within five
Business Days of such request made at such Corporate Trust Office, cause the
Trustee to authenticate and the Note Registrar to deliver at such Corporate
Trust Office, to the transferee (in the case of transfer) or Holder (in the case
of exchange) or send by first-class mail or by overnight delivery service at the
risk of the transferee (in the case of transfer) or Holder (in the case of
exchange) to such address as the transferee or Holder, as applicable, may
request, a Physical Note or Notes, as the case may require, for a like aggregate
Percentage Interest and in such Note balance amount or amounts and authorized
denomination or denominations as may be requested. The presentation for transfer
or exchange of any Physical Note shall not be valid unless made at the Corporate
Trust Office by the registered Holder in person, or by a duly authorized
attorney-in-fact.

 

(s)          (i)          No transfer of any Note shall be made unless such
transfer is exempt from the registration requirements of the Securities Act and
any applicable state securities laws or is made in accordance with the
Securities Act and such laws. No transfer of any Note shall be made if such
transfer would require the Issuer to register as an “investment company” under
the 1940 Act. In the event of any such transfer, unless such transfer is made in
reliance upon Rule 144A under the Securities Act or Regulation S under the
Securities Act or is a transfer of a Physical Note to an Affiliate of the
Seller, (i) the Trustee may require a written Opinion of Counsel acceptable to
and in form and substance reasonably satisfactory to the Trustee that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trustee, the Issuer, or the Servicer and (ii) the Trustee shall require
the transferee to execute a Transferee Letter certifying to the Issuer and the
Trustee the facts surrounding such transfer, which Transferee Letter or
certification shall not be an expense of the Trustee, the Issuer or the
Servicer. The Holder of a Note desiring to effect such transfer shall, and by
accepting a Note and the benefits of this Indenture does hereby agree to,
indemnify the Trustee, the Issuer, the Servicer and the Initial Purchaser
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws. None of the Issuer, the
Trustee, the Servicer, the Trust Depositor or the Initial Purchaser is obligated
to register or qualify any Note under the Securities Act or any state or
international securities laws.

 

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(ii)         If, at any time, (x) any Holder of any Note is not (1) both a
Qualified Purchaser and a Qualified Institutional Buyer or (2) a non-U.S. Person
that acquired such Note outside of the United States in compliance with
Regulation S or that is not a Qualified Purchaser (or a corporation,
partnership, limited liability company or other entity (other than a trust),
each shareholder, partner, member or other equity owner of which is a Qualified
Purchaser), and in each case, that does not have an exemption available under
the Securities Act and the 1940 Act shall become the holder or beneficial owner
of an interest in any Note, (y) any person that is not a Qualified Purchaser (or
a corporation, partnership, limited liability company or other entity (other
than a trust), each shareholder, partner, member or other equity owner of which
is a Qualified Purchaser) and also a Qualified Institutional Buyer or (z) any
holder of Notes shall fail to comply with the reporting obligations of such
Noteholder (any such person, a “Non-Permitted Holder”), the Issuer (or the
Trustee on behalf of the Issuer) shall, promptly after discovery that such
person is a Non-Permitted Holder by the Issuer, or, if a responsible officer of
the Trustee obtains actual knowledge, the Trustee (and notice by the Trustee to
the Issuer, if a Responsible Officer of the Trustee has actual knowledge), send
notice to such Non-Permitted Holder demanding that such Non-Permitted Holder
transfer its interest to a Person that is not a Non-Permitted Holder within
thirty (30) days of the date of such notice. If such Non-Permitted Holder fails
to transfer such Notes, the Issuer (or its designee) shall have the right,
without further notice to the Non-Permitted Holder, to sell such Notes or
interests in such Notes to a purchaser selected by the Issuer (or its designee)
that is not a Non-Permitted Holder on such terms and by such means as the Issuer
may choose in its sole discretion. The Holder of each Note, the Non-Permitted
Holder and each other Person in the chain of title from the Holder to the
Non-Permitted Holder, by its acceptance of an interest in the Notes, agrees to
cooperate with the Issuer, any of the Issuer’s designees, and the Trustee to
effect such transfers. The proceeds of such sale, net of any commissions,
expenses and taxes due in connection with such sale, shall be remitted to the
Non-Permitted Holder. The terms and conditions of any sale under this subsection
shall be determined in the sole discretion of the Issuer, and none of the
Issuer, its designees or the Trustee shall be liable to any Person having an
interest in the Notes sold as a result of any such sale or the exercise of such
discretion.

 

(t)          No Note, or any interest therein, may be acquired directly or
indirectly by, for, on behalf of or with any assets of an employee benefit plan
as defined in Section 3(3) of ERISA that is subject to Part 4, Subtitle B, Title
I of ERISA, any plan described in and subject to Section 4975 of the Code
(collectively, a “Plan”) or governmental, non-U.S. or church plan or arrangement
subject to any federal, state, local or non-U.S. law or regulation substantively
similar or of similar effect to the foregoing provisions of ERISA or the Code
(“Similar Law”) unless it represents or is deemed to represent that its
acquisition, holding and disposition of the Note will not constitute or result
in a non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code or, in the case of a plan or other arrangement subject to
Similar Law, will not constitute or result in a non-exempt violation of Similar
Law. In the case of a Physical Note, such representation shall be made in a
certification from the transferee to the Trustee; in the case of a Note other
than a Physical Note, the transferee shall be deemed to have made such
representation.

 

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(u)          The Trustee, Note Registrar and Certificate Registrar shall not be
responsible for ascertaining whether any transfer complies with, or otherwise
monitoring or determining compliance with, the requirements or terms of the
Securities Act, applicable state or international securities laws, ERISA, the
Code or the 1940 Act; except that if a transfer certificate or opinion is
specifically required by the terms of this Section (or by the terms of the Trust
Agreement, as applicable) to be provided to the Trustee, Note Registrar or
Certificate Registrar by a prospective transferee or transferor, the Trustee,
Note Registrar or Certificate Registrar, as applicable, shall be under a duty to
receive and examine the same to determine whether it conforms substantially on
its face to the applicable requirements of this Section (or the Trust Agreement,
as applicable).

 

(v)         Any Note may be cancelled by the Note Registrar without any notice
to or approval of any Noteholder in accordance with Section 4.03 or once such
Note has been properly surrendered for (i) final payment, (ii) transfer and
exchange or (iii) redemption. Any Note acquired by the Issuer or otherwise
surrendered for cancellation or marked as abandoned by Holder thereof will be
cancelled by the Note Registrar only upon receipt of written consent thereto
from both the Servicer and the Majority Noteholders.

 

(w)          Each Noteholder and each beneficial owner of a Note shall be deemed
to acknowledge that (i) none of the Issuer, the Servicer, the Trustee, the Owner
Trustee, the Custodian, or any of their respective affiliates is acting as a
fiduciary or financial or investment adviser for such beneficial owner; and (ii)
such beneficial owner has consulted with its own legal, regulatory, tax,
business, investment, financial and accounting advisors to the extent it has
deemed necessary and has made its own investment decisions (including decisions
regarding the suitability of any transaction pursuant to the Indenture) based
upon its own judgment and upon any advice from such advisors as it has deemed
necessary and not upon any view expressed by the Issuer, the Servicer, the
Trustee, the Owner Trustee, the Custodian or any of their respective affiliates.

 

(x)          Each Noteholder and each beneficial owner of a Note shall be deemed
to acknowledge that (i) such beneficial owner was not formed for the purpose of
investing in the Global Notes; and (ii) such beneficial owner understands that
the Issuer may receive a list of participants holding interests in the Global
Notes from one or more book-entry depositories.

 

Section 4.03         Mutilated, Destroyed, Lost or Stolen Notes.

 

If (i) any mutilated Note is surrendered to the Trustee, or the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note, and
(ii) there is delivered to the Trustee such security or indemnity as may be
required by it to hold the Issuer and the Trustee harmless, then, in the absence
of notice to the Issuer, the Note Registrar or the Trustee that such Note has
been acquired by a protected purchaser, the Issuer shall execute, and upon its
request the Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Note, a replacement Note;
provided 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 pay such destroyed, lost or stolen Note when so due 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 protected purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer
and the 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 protected purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Trustee in
connection therewith.

 

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Upon the issuance of any replacement Note under this Section 4.03, 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 reasonable expenses of the
Trustee) connected therewith.

 

Every replacement Note issued pursuant to this Section 4.03 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 4.03 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 4.04         Payment of Principal and Interest; Defaulted Interest.

 

(a)          The Notes shall accrue interest during each Interest Period on the
basis of a 360 day year consisting of twelve 30-day months (or in the case of
the first Payment Date, an accrual period of thirty (30) days). 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 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 (i) with respect to Notes
registered on the Record Date in the name of the nominee of DTC (initially, such
nominee to be Cede & Co.), such payment will be made by wire transfer in
immediately available funds to the account designated by such Person and except
for the final installment of principal payable with respect to such Note on a
Payment Date or on the Legal Final Payment Date and (ii) the Redemption Price
for any Note called for redemption pursuant to Article X hereof shall be payable
as provided in Section 4.04(b) or Article X hereof, as applicable. The funds
represented by any such checks returned undelivered shall be held in accordance
with Section 3.03.

 

(b)          The principal of each Note shall be payable on each Payment Date to
the extent of funds available therefor in accordance with the Priority of
Payments as provided in the Sale and Servicing Agreement. Notwithstanding the
foregoing, the entire unpaid principal 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 Trustee with the consent or at the
direction of the Majority Noteholders has declared the Notes to be immediately
due and payable in the manner provided in Section 5.02. All principal payments
among the Notes shall be made in the order and priorities set forth herein and
in the Sale and Servicing Agreement and all principal payments on the Notes
shall be made pro rata to the Noteholders. The 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; provided
that the Issuer or Servicer shall have provided the Trustee with timely notice
of such expectation. Such notice shall be mailed or transmitted by facsimile or
other electronic mail 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 a
redemption shall be given to Noteholders as provided in Article X.

 

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Section 4.05         Tax Treatment.

 

(a)          The Issuer has entered into this Indenture, and the Notes will be
issued, with the intention that, for federal, state and local income and
franchise tax purposes, (i) the Notes will be treated as indebtedness secured by
the Indenture Collateral and (ii) the Issuer shall not be treated as an
association, taxable mortgage pool or publicly traded partnership taxable as a
corporation. The Issuer, by entering into this Indenture, and each Noteholder,
by the acceptance of any such Note (and each beneficial owner of a Note, by its
acceptance of an interest in the applicable Note), agree to treat such Notes for
federal, state and local income and franchise tax purposes as indebtedness. Each
Holder of any such Note agrees that it will cause any beneficial owner of such
Note acquiring an interest in a Note through it to comply with this Indenture as
to treatment of indebtedness under applicable tax law, as described in this
Section 4.05. The parties hereto agree that they shall not cause or permit the
making, as applicable, of any election under Treasury Regulation Section
301.7701-3 whereby the Issuer or any portion thereof would be treated as a
corporation for federal income tax purposes and, except as required by the terms
of this Indenture or applicable law, shall not file tax returns for the Issuer,
but shall treat the Issuer as a disregarded entity for federal income tax
purposes (unless, pursuant to Section 4.05(b)(ii), the Issuer is treated as a
partnership). The provisions of this Indenture shall be construed in furtherance
of the foregoing intended tax treatment.

 

(b)          It is the intent of the Trust Depositor, the Servicer and the
Certificateholder that, for federal income tax purposes, (i) in the event that
the Trust Certificate is owned by a single beneficial owner for federal income
tax purposes, the Issuer will be disregarded as an entity separate from such
beneficial owner, and the Certificateholder (and the beneficial owner of the
Trust Certificate), by acceptance of the Trust Certificate (or a beneficial
interest therein), agrees to take no action inconsistent with such treatment and
(ii) in the event that the Trust Certificate is owned by more than one
beneficial owner for federal income tax purposes, the Issuer will be treated as
a partnership, the partners of which are the beneficial owners of the Trust
Certificate, and each Certificateholder (and beneficial owner of the Trust
Certificate), by acceptance of a Trust Certificate (or beneficial interest
therein), agrees to treat the Trust Certificate as equity and to take no action
inconsistent with the treatment described herein.

 

(c)          All payments made by the Issuer under the Notes will be made
without any deduction or withholding for or on account of any tax unless such
deduction or withholding is required by applicable law, as modified by the
practice of any relevant governmental revenue authority, then in effect. If the
Issuer is so required to deduct or withhold it will provide notice to the
Trustee of such requirement promptly after a Responsible Officer becomes aware
thereof and the Issuer will not be obligated to pay to the holder of any such
Note any additional amounts in respect of such withholding or deduction.

 

38

 

 

(d)          Each Holder and each beneficial owner of a Note, by acceptance of
such Note or its interest in such Note, shall be deemed to understand and
acknowledge that failure to provide the Issuer, the Trustee or any other party
acting as Paying Agent with the applicable U.S. federal income tax
certifications (generally, an Internal Revenue Service Form W-9 (or successor
applicable form) in the case of a person that is a “United States person” within
the meaning of Section 7701(a)(30) of the Code or an appropriate Internal
Revenue Service Form W-8 (or successor applicable form) in the case of a person
that is not a “United States person” within the meaning of Section 7701(a)(30)
of the Code) or any other form prescribed by Applicable Law as a basis for
claiming exemption from or a reduction in U.S. withholding tax (including, but
not limited to, any withholding tax imposed under FATCA), duly completed
together with such supplementary documentation as may be prescribed by
Applicable Law to permit the Issuer to determine the withholding or deduction
required to be made, may result in amounts being withheld from payments in
respect of such Note.

 

Section 4.06        Satisfaction and Discharge of Indenture.

 

(a)          The following shall survive the satisfaction and discharge of this
Indenture: (i) rights of registration of transfer and exchange, (ii)
substitution of mutilated, destroyed, lost or stolen Notes pursuant to Section
4.03, (iii) rights of Noteholders to receive payments of principal thereof and
interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.10, 3.19, 3.21, 3.22, 4.05,
6.07, 11.15 and the second sentence of 11.16, (v) the rights, obligations and
immunities of the Trustee hereunder (including the rights of the Trustee under
Section 6.07 and the obligations of the Trustee under Section 4.07) and (vi) the
rights of Noteholders as beneficiaries hereof with respect to the property so
deposited with the Trustee payable to all or any of them. This Indenture shall
cease to be of further effect with respect to the Notes (and the Trustee, on
written 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 4.03 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 3.03) have been delivered to the Trustee for cancellation
(two Business Days prior to the final Payment Date) pursuant to Section 4.02(v);
or

 

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

 

(i)          have become due and payable; or

 

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

 

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and the Issuer, in the case of (2)(i) or (ii) above, has irrevocably deposited
or caused to be irrevocably deposited with the 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 Trustee for cancellation when due to
the Stated Maturity therefor, Redemption Date (if Notes shall have been called
for redemption pursuant to Article X), as the case may be; and

 

(B)         the Issuer has delivered to the Trustee an Officer’s Certificate and
an opinion of counsel, which may be internal counsel to the Issuer or the
Servicer and if requested by the Trustee, a certificate from a firm of
acceptable public accountants, meeting the applicable requirements of Section
11.02 and, subject to Section 11.02, stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this Indenture
with respect to the Notes have been complied with;

 

(C)         unless each Holder of each Note has consented to such deposit and
satisfaction and discharge of this Indenture, the Issuer has delivered to the
Trustee an opinion of U.S. tax counsel of nationally recognized standing in the
United States experienced in such matters to the effect that the Holders of the
Notes would recognize no gain or loss for U.S. federal income tax purposes
solely as a result of such deposit and satisfaction and discharge of this
Indenture; and

 

(D)         the Issuer has made payment of all other sums due under this
Indenture, the Trust Agreement and the Sale and Servicing Agreement.

 

(b)          By acceptance of any Note, the Holder thereof agrees to surrender
such Note to the Trustee promptly upon such Noteholder’s receipt of the final
payment thereon or as otherwise provided in the Transaction Documents.

 

Section 4.07         Application of Trust Money.

 

All moneys deposited with the Trustee pursuant to Section 4.06 hereof shall be
held in trust and applied by it, in accordance with the provisions of the Notes
and this Indenture, to the payment, either directly or through any Paying Agent,
as the Trustee may determine, to the Holders of Notes for the payment or
redemption for which such moneys have been deposited with the 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 4.08         Repayment of Moneys Held by Paying Agent.

 

In connection with the satisfaction and discharge of this Indenture with respect
to the Notes, all moneys then held by any Paying Agent other than the Trustee
under the provisions of this Indenture with respect to such Notes shall, upon
demand of the Issuer, be paid to the Trustee to be held and applied according to
Section 3.05 and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.

 

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ARTICLE V
REMEDIES

 

Section 5.01        Events of Default.

 

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) shall constitute an
“Event of Default”:

 

(i)          failure to pay all accrued interest on the Notes on any Payment
Date and such failure continues unremedied for two (2) or more Business Days;

 

(ii)         failure to pay the Outstanding Principal Balance of the Notes by
the Legal Final Payment Date;

 

(iii)        the Issuer or the Servicer shall fail to make any other required
payment on any Payment Date and such failure continues for a period of two (2)
or more Business Days;

 

(iv)        the aggregate Outstanding Principal Balance of the Notes exceeds the
Borrowing Base for a period of three (3) consecutive calendar months (after
giving effect to all distributions on such Payment Dates);

 

(v)         other than as expressly set forth in this definition of “Event of
Default”, a default in the observance or performance of any material covenant or
agreement of the Issuer, the Trust Depositor or the Seller made in this
Indenture or any other Transaction Document, and such default has a material
adverse effect on the Noteholders, which default continues unremedied for a
period of 30 days after the first to occur of (A) actual knowledge thereof by a
Responsible Officer of the Issuer, the Trust Depositor or the Seller or (B)
there shall have been given, by registered or certified mail, to the Issuer, the
Trust Depositor or the Seller by the Trustee, a written notice specifying such
default and requiring it to be remedied and stating that such notice is a notice
of default hereunder;

 

(vi)        any representation, warranty, certification or written statement of
the Issuer made in the Transaction Documents or in any certificate or written
statement delivered under this Indenture or in connection herewith shall prove
to have been incorrect in any respect as of the time when made and the
circumstance or condition in respect of which such representation or warranty
was incorrect, and such incorrectness has a material adverse effect on the
Noteholders and which default continues unremedied for a period of 30 days after
the first to occur of (A) actual knowledge thereof by a Responsible Officer of
the Issuer, or (B) the delivery to the Issuer by the Trustee, by registered or
certified mail, a written notice specifying such incorrect representation or
warranty and requiring it to be remedied and stating that such notice is a
notice of default hereunder;

 

(vii)       the Trustee fails to have a first priority security interest in the
Issuer Property;

 

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(viii)      there occurs the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Trust Depositor, the
Issuer or any substantial part of the Indenture Collateral 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 Trust
Depositor, the Issuer or for any substantial part of the Indenture Collateral,
or ordering the winding-up or liquidation of the Trust Depositor’s or the
Issuer’s affairs, and such decree or order shall remain unstayed and in effect
for a period of 30 consecutive days;

 

(ix)         there occurs the commencement by the Trust Depositor or 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 Trust
Depositor or the Issuer to the entry of an order for relief in an involuntary
case under any such law, or the consent by the Trust Depositor or the Issuer to
the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Trust Depositor or
the Issuer or for any substantial part of the Indenture Collateral, or the
making by the Trust Depositor or the Issuer of any general assignment for the
benefit of creditors, or the failure by the Trust Depositor or the Issuer
generally to pay its debts as such debts become due, or the taking of any action
by the Trust Depositor or the Issuer in furtherance of any of the foregoing;

 

(x)          the Trustee, on behalf of the Noteholders, shall fail to have a
valid and perfected first priority security interest in the Indenture Collateral
except as otherwise expressly permitted to be released in accordance with the
applicable Transaction Document, and such failure to have a perfected first
priority security interest shall have a material adverse effect on the
Noteholders; or

 

(xi)         a Servicer Termination Event occurs and is continuing.

 

Section 5.02         Acceleration of Maturity; Rescission and Annulment.

 

If an Event of Default should occur and be continuing (other than an Event of
Default specified in Sections 5.01(viii) or (ix)), then and in every such case
the Trustee may, and shall at the direction of the Super-Majority Noteholders,
declare the Notes to be immediately due and payable by a notice in writing to
the Issuer (who shall promptly forward the same to the Rating Agency) and the
Owner Trustee (and to the Trustee if given by Noteholders), and upon any such
declaration the unpaid principal amount of the Notes, together with accrued and
unpaid interest thereon, through the date of acceleration, shall become
immediately due and payable. If an Event of Default specified in Sections
5.01(viii) or (ix) occurs, the unpaid principal amount of the Notes, together
with accrued and unpaid interest thereon, through the date of acceleration,
shall automatically, and without any notice to the Issuer, become immediately
due and payable.

 

At any time after such declaration or automatic occurrence of acceleration of
maturity and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article V provided, the
Super-Majority Noteholders, by written notice to the Issuer and the Trustee, may
rescind and annul such declaration and its consequences if the Issuer has paid
or deposited with the Trustee a sum sufficient to pay:

 

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

 

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

 

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

 

If the Notes are accelerated following an Event of Default specified in Sections
5.01(viii) or (ix), then on each Payment Date on or after such Event of Default,
payments will be made by the Trustee from all funds available to it in the same
order of priority as that provided for in Section 7.06(c) of the Sale and
Servicing Agreement.

 

Section 5.03        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, or (ii) default is made in the payment of the
principal of or any installment of the principal of any Note, when the same
becomes due and payable, and in each case such default continues for a period of
two (2) Business Days, the Issuer will, upon demand of the Trustee, pay to it,
for the benefit of the Noteholders, the whole amount then due and payable on the
Notes for principal and interest, with interest upon the overdue principal, 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 Trustee and its agents and counsel.

 

(b)          In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
with the consent of the Majority Noteholders and subject to the provisions of
Section 11.15 hereof may institute a Proceeding for the collection of the sums
so due and unpaid, and may prosecute such Proceeding to judgment or final
decree, and may enforce the same against the Issuer or other obligor upon the
Notes and collect in the manner provided by law out of the Indenture Collateral,
wherever situated, the moneys adjudged or decreed to be payable.

 

(c)          If an Event of Default occurs and is continuing, and the Notes have
been declared due and payable and such declaration and its consequences have not
been rescinded and annulled, the Trustee subject to the provisions of Section
5.04 and Section 11.15 hereof may, as more particularly provided in Section
5.04, in its discretion, proceed to protect and enforce its rights and the
rights of the Noteholders by such appropriate Proceedings as the Trustee 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 Trustee by this Indenture or by law.

 

43

 

 

(d)          In case there shall be pending, relative to the Issuer or any
Person having or claiming an ownership interest in the Indenture Collateral,
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 Person, or in case of any
other comparable judicial Proceedings relative to the Issuer, or to the
creditors or property of the Issuer, the 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 Trustee shall have made
any demand pursuant to the provisions of this Section 5.03, 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, as applicable, 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 Trustee (including any claim for reasonable
compensation to the Trustee and each predecessor Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of all reasonable expenses
and liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee, except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;

 

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

 

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

 

(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 Trustee or the
Noteholders allowed in any judicial proceedings relative to the Issuer, its
creditors and its property; and

 

(v)         to participate as a member, voting or otherwise, of any official
committee of creditors appointed in such matter;

 

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 Trustee, and, in the event that the Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the Trustee such
amounts as shall be sufficient to cover reasonable compensation to the Trustee,
each predecessor Trustee and their respective agents, attorneys and counsel, and
all other reasonable expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee except as a result of negligence or
bad faith.

 

(e)          Nothing herein contained shall be deemed to authorize the 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 Holder thereof or to authorize the
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.

 

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(f)          All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the 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 Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment, subject to the payment of the expenses, disbursements and
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Notes.

 

(g)          In any Proceedings brought by the Trustee (and also any Proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the 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 5.04        Remedies; Priorities.

 

(a)          If an Event of Default has occurred and is continuing, and the
Notes have been declared due and payable and such declaration and its
consequences have not been rescinded and annulled, subject to the provisions of
Section 11.15 hereof, the Trustee may do one or more of the following (subject
to the provisions of this Section 5.04 and Section 5.15):

 

(i)          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)         institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Indenture Collateral;

 

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

 

(iv)        sell the Indenture Collateral or any portion thereof or rights or
interest therein at one or more public or private sales called and conducted in
any matter permitted by law;

 

provided, however, that the Trustee may not sell or otherwise liquidate the
Indenture Collateral following and during the continuance of an Event of Default
unless (A) the Notes have been declared or otherwise become immediately due and
payable in accordance with Section 5.02 and such declaration or acceleration and
its consequences have not been rescinded and annulled and (B) either (1) the
proceeds of such Sale or liquidation are sufficient to discharge in full all
amounts then due and unpaid upon the Notes for principal and interest (including
any interest payable pursuant to Section 7.06(a)(6) or 7.06(c)(4)) of the Sale
and Servicing Agreement, (2) the Trustee determines that the Indenture
Collateral would not be sufficient on an ongoing basis to make all payments on
the Notes as those payments would have become due had the Notes not been
declared due and payable and the Super-Majority Noteholders (excluding Notes
held by the Trust Depositor, the Seller, the Servicer or any of their respective
affiliates) consent to such Sale or (3) 100% of the holders of the outstanding
Notes (excluding Notes held by the Trust Depositor, the Seller, the Servicer or
any of their respective affiliates) consent to such Sale. In determining whether
the proceeds of such Sale or liquidation distributable to the Noteholders and
the other parties entitled thereto are sufficient to discharge in full the
amounts referenced in clause (B)(1) above, the Trustee may, but need not,
obtain, at the Issuer’s expense, and rely upon an opinion of an independent
accountant or an investment banking firm of national reputation as to
feasibility of such proposed action and as to the sufficiency of the expected
sales proceeds of the Indenture Collateral for such purpose.

 

45

 

 

(b)          If the Trustee collects any money pursuant to this Article V, it
shall distribute such money in accordance with Section 7.06(c) of the Sale and
Servicing Agreement. The Trustee may fix a record date and distribution date
(which may be a date other than a Payment Date) for any payment to Noteholders
pursuant to this Section 5.04. At least five days before such record date, the
Issuer shall mail to each Noteholder and the Trustee a notice that states the
record date, the distribution date and the amount to be paid.

 

Section 5.05        [Reserved].

 

Section 5.06        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 and subject to
the provisions of Section 11.15 hereof:

 

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

 

(ii)         prior to the payment in full of Notes, the Noteholders evidencing
not less than 25% of the aggregate Outstanding Principal Balance of the Notes
have made written request to the Trustee to institute such Proceeding in respect
of such Event of Default in its capacity as Trustee hereunder;

 

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

 

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

 

(v)         prior to the payment in full of the Notes, no direction inconsistent
with such written request has been given to the Trustee during such 60 day
period by the Holders of a majority of the Outstanding Principal Balance of the
Notes.

 

It is understood and intended that no one or more of the Holders of Notes 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 Holders of Notes 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.

 

46

 

 

In the event the Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Holders of Notes, each representing less
than a majority of the Aggregate Outstanding Principal Balance of the Notes then
entitled to make such request, the Trustee shall take the action requested by
the Holders of the Notes representing the greatest percentage of the Aggregate
Outstanding Note Balance to determine what action, if any, shall be taken,
notwithstanding any other provisions of this Indenture.

 

Section 5.07         Unconditional Rights of Noteholders To Receive Principal
and Interest.

 

Notwithstanding any other provisions in this Indenture, but subject to Section
11.15 hereof, 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 and such right shall not be impaired without the consent of
such Holder.

 

Section 5.08         Restoration of Rights and Remedies.

 

If the Trustee or any Noteholder has instituted any Proceeding to enforce any
right or remedy under this Indenture and such Proceeding has been discontinued
or abandoned for any reason or has been determined adversely to the Trustee or
to such Noteholder, then and in every such case the Issuer, the 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 Trustee and the Noteholders shall continue as
though no such Proceeding had been instituted.

 

Section 5.09         Rights and Remedies Cumulative.

 

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

 

Section 5.10         Delay or Omission Not a Waiver.

 

No delay or omission of the Trustee or any Holder of any Note in the exercise of
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 Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the
Noteholders, as the case may be.

 

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Section 5.11        Control by Noteholders.

 

The Majority Noteholders shall have the right to direct the time, method and
place of conducting any Proceeding for any remedy available to the Trustee with
respect to the Notes or exercising any trust or power conferred on the Trustee;
provided that:

 

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

 

(ii)         the Super-Majority Noteholders or 100% of the Noteholders (as
applicable) may provide any direction to the Trustee to sell or liquidate the
Indenture Collateral pursuant to the express terms of Section 5.04; and

 

(iii)        the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction.

 

Notwithstanding the rights of Noteholders set forth in this Section 5.11,
subject to Section 6.01, the Trustee need not take any action that it determines
might involve it in liability.

 

Section 5.12        Waiver of Past Defaults.

 

Prior to the declaration of the acceleration of the maturity of the Notes as
provided in Section 5.02, the Majority Noteholders may waive any past Event of
Default and its consequences except an Event of Default with respect to payment
of principal or interest, as applicable, on any of the Notes or in respect of a
covenant or provision hereof which cannot be modified or amended without the
waiver or consent of each of the Holders of the Outstanding Notes affected
thereby. In the case of any such waiver, the Issuer, the Trustee and the
Noteholders shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Event
of Default or impair any right consequent thereto.

 

Upon any such waiver, 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 Event of Default or
impair any right consequent thereto.

 

Section 5.13        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 Trustee for any action
taken, suffered or omitted by it as 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 5.13 shall not apply to (i) any suit instituted by
the Trustee, (ii) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 25% of the
Aggregate Outstanding Principal Balance or (iii) any suit instituted by any
Noteholder for the enforcement of the payment of principal or interest, as
applicable, on any Note on or after the respective due dates expressed in such
Note and in this Indenture.

 

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Section 5.14        Waiver of Stay or Extension Laws.

 

The Issuer covenants (to the extent that it may lawfully do so) that it will not
at any time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
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 Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.

 

Section 5.15        Sale of Indenture Collateral.

 

(a)          The power to effect any sale or other disposition (a “Sale”) of any
portion of the Indenture Collateral pursuant to Section 5.04 is expressly
subject to the provisions of Section 5.11 and this Section 5.15. The power to
effect any such Sale shall not be exhausted by any one or more Sales as to any
portion of the Indenture Collateral remaining unsold, but shall continue
unimpaired until the entire Indenture Collateral shall have been sold or all
amounts payable on the Notes and under this Indenture shall have been paid. The
Trustee hereby expressly waives its right to any amount fixed by law as
compensation for any Sale.

 

(b)          The Trustee shall not in any private Sale sell the Indenture
Collateral, or any portion thereof, unless the Majority Noteholders consent to
or such Noteholders as required by Section 5.11 direct the Trustee to make such
Sale and:

 

(i)          the proceeds of such Sale or liquidation are sufficient to
discharge in full all amounts then due and unpaid upon the Notes for principal
and interest, as applicable, to pay all amounts then due and payable to the
Trustee, the Custodian, the Backup Servicer and the Lockbox Bank and to
reimburse the Servicer for any outstanding unreimbursed Servicing Advances and
Scheduled Payment Advances; or

 

(ii)         the Trustee determines, at the direction of Noteholders
representing at least 25% of the aggregate Outstanding Principal Balance of the
Notes, that the conditions for liquidation of the Indenture Collateral set forth
in Section 5.04 are satisfied (in making any such determination, the Trustee may
rely upon an opinion of an Independent investment banking firm obtained and
delivered as provided in Section 5.04).

 

(c)          In connection with a Sale of all or any portion of the Indenture
Collateral:

 

(i)          other than in the case of a Sale of any Loan as contemplated by the
Sale and Servicing Agreement, any Holder or Holders of Notes (other than the
Trust Depositor) may bid for and purchase the property offered for Sale, and
upon compliance with the terms of Sale may hold, retain and possess and dispose
of such property, without further accountability, and may, in paying the
purchase money therefor, deliver any Notes or claims for interest thereon in
lieu of cash up to the amount which shall, upon distribution of the net proceeds
of such Sale, be payable thereon, and such Notes, in case the amounts so payable
thereon shall be less than the amount due thereon, shall be returned to the
Holders thereof after being appropriately stamped to show such partial payment;

 

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(ii)         other than in the case of a Sale of any Loan as contemplated by the
Sale and Servicing Agreement, the Trustee may bid for and acquire the property
offered for Sale in connection with any Sale thereof, and, subject to any
requirements of, and to the extent permitted by, Requirements of Law in
connection therewith, may purchase all or any portion of the Indenture
Collateral in a private sale, and, in lieu of paying cash therefor, may make
settlement for the purchase price by crediting the gross Sale price against the
sum of (A) the amount which would be distributable to the Holders of the Notes
as a result of such Sale in accordance with Section 5.04(b) on the Payment Date
next succeeding the date of such Sale and (B) the expenses of the Sale and of
any Proceedings in connection therewith which are reimbursable to it, without
being required to produce the Notes in order to complete any such Sale or in
order for the net Sale price to be credited against such Notes, and any property
so acquired by the Trustee shall be held and dealt with by it in accordance with
the provisions of this Indenture;

 

(iii)        the Trustee shall execute and deliver an appropriate instrument of
conveyance transferring its interest in any portion of the Indenture Collateral
in connection with a Sale thereof;

 

(iv)        the Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer to transfer and convey its interest in any
portion of the Indenture Collateral in connection with a Sale thereof, and to
take all action necessary to effect such Sale;

 

(v)         the Trustee shall use commercially reasonable efforts to maximize
the proceeds of any such Sale of the Indenture Collateral;

 

(vi)        no purchaser or transferee at such a Sale shall be bound to
ascertain the Trustee’s authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys; and

 

(vii)       all proceeds received by the Trustee in connection with the
liquidation or sale of the Indenture Collateral shall be deposited into the
Collection Account no later than two (2) Business Days following receipt
thereof.

 

Section 5.16        Action on Notes.

 

The Trustee’s right to seek and recover judgment on the Notes or under this
Indenture shall not be affected by the seeking, 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 Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Trustee against the Issuer or by
the levy of any execution under such judgment upon any portion of the Indenture
Collateral or upon any of the assets of the Issuer. Any money or property
collected by the Trustee shall be applied in accordance with Section 5.04(b).

 

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Section 5.17        Performance and Enforcement of Certain Obligations.

 

(a)          Promptly following a request from the Trustee to do so, the Issuer
shall take all such lawful action as the Trustee at the direction of the
Majority Noteholders may request to compel or secure the performance and
observance by the Seller, the Trust Depositor and the Servicer, as applicable,
of each of their obligations to the Issuer under or in connection with the
Transaction Documents, and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection with the
Transaction Documents to the extent and in the manner directed by the Trustee,
including the transmission of notices of default to the Seller, the Trust
Depositor or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller, the Trust Depositor or the Servicer of each of their obligations under
the Transaction Documents.

 

(b)          If a Servicer Default has occurred and is continuing, the Trustee,
at the direction of the Majority Noteholders, shall exercise all rights,
remedies, powers, privileges and claims of the Issuer against 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
Servicer, of its 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 not
be suspended.

 

ARTICLE VI
THE TRUSTEE

 

Section 6.01        Duties of Trustee.

 

(a)          If an Event of Default has occurred and is continuing, of which a
Responsible Officer of the Trustee has actual knowledge, the Trustee shall
exercise the rights and powers vested in it by this Indenture and use the same
degree of care and skill in their exercise as a prudent person would exercise or
use under the circumstances in the conduct of such person’s own affairs with
respect to the Indenture Collateral.

 

(b)          Except during the continuance of an Event of Default:

 

(i)          the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and

 

(ii)         in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; however, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform on their face to the requirements of this Indenture.

 

(c)          The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful misconduct
or bad faith, except that:

 

(i)          this paragraph does not limit the effect of paragraph (b) of this
Section 6.01;

 

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(ii)         the Trustee shall not be liable for any error of judgment made in
good faith by the Trustee unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and

 

(iii)        the Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it
pursuant to Section 5.11.

 

(d)          Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c), (g) and (i) of this Section
6.01.

 

(e)          The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuer.

 

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

 

(g)          The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture, to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder or to honor the request or direction of any of the Noteholders
pursuant to this Indenture, unless such Noteholder or Noteholders shall have
offered to the Trustee security or indemnity against the costs, expenses, and
liabilities reasonably satisfactory to the Trustee that might be incurred by it
in compliance with the request or direction. Anything in this Indenture to the
contrary notwithstanding, in no event shall the Trustee be liable for special,
indirect, punitive or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits).

 

(h)          Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 6.01.

 

(i)          The Trustee shall not be deemed to have notice of any Event of
Default or Servicer Default, breach of representation or warranty, or other
event unless a Responsible Officer assigned to and working in the Trustee’s
Corporate Trust Office has actual knowledge thereof or has received written
notice of thereof in accordance with this Indenture.

 

Section 6.02        Rights of Trustee.

 

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

 

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

 

(c)          The 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 Trustee shall not be responsible
for any misconduct or negligence on the part of, or for the supervision of, any
such agent, attorney, custodian or nominee appointed with due care by it
hereunder.

 

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(d)          The 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 that the Trustee’s conduct does not constitute willful
misconduct, negligence or bad faith.

 

(e)          The Trustee may consult with counsel, and the advice of counsel or
an 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 such advice of counsel or such Opinion of
Counsel.

 

(f)          The Trustee shall not be bound to (i) make any investigation into
the performance of the Issuer or the Servicer under this Indenture or any other
Transaction Document or into the matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note or other document or (ii) institute, conduct or defend
litigation or investigate any matter unless requested to do so in writing by the
Noteholders evidencing not less than 25% of the Aggregate Outstanding Principal
Balance.

 

(g)          The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.

 

(h)          In the event that the Trustee is also acting in the capacity of
Custodian, Backup Servicer, Securities Intermediary, Lockbox Bank, Paying Agent,
Note Registrar or Certificate Registrar hereunder or under the other Transaction
Documents, the rights, protections, immunities and indemnities afforded the
Trustee pursuant to this Article VI shall also be afforded to the Trustee in
such capacities.

 

(i)          Whenever in the administration of this Indenture the Trustee shall
(i) deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer’s Certificate or (ii) be required to determine the value of
any Indenture Collateral or funds hereunder or the cash flows projected to be
received therefrom, the Trustee may, in the absence of bad faith on its part,
rely on reports of nationally recognized accountants (which may or may not be
the Independent Accountants appointed by the Issuer pursuant to Section ‎9.05 of
the Sale and Servicing Agreement), investment bankers or other persons qualified
to provide the information required to make such determination, including
nationally recognized dealers in securities of the type being valued and
securities quotation services.

 

(j)          Nothing herein shall be construed to impose an obligation on the
part of the Trustee to recalculate, evaluate or verify or independently
determine the accuracy of any report, certificate or information received from
the Issuer or Servicer (unless and except to the extent otherwise expressly set
forth herein).

 

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(k)          Any permissive right of the Trustee to take or refrain from taking
actions enumerated in this Indenture shall not be construed as a duty.

 

(l)          The Trustee shall be without liability for any damage or loss
resulting from or caused by events or circumstances beyond it’s reasonable
control including nationalization, expropriation, currency restrictions, the
interruption, disruption or suspension of the normal procedures and practices of
any securities market, power, mechanical, communications or other technological
failures or interruptions, computer viruses or the like, fires, floods,
earthquakes or other natural disasters, civil and military disturbance, acts of
war or terrorism, riots, revolution, acts of God, work stoppages, strikes,
national disasters of any kind, or other similar events or acts; errors by the
Issuer or Servicer (including any Responsible Officer) in its instructions to
the Trustee; or changes in applicable law, regulation or orders.

 

(m)          The Trustee shall not be required to take any action it is directed
to take under this Indenture if the Trustee reasonably determines in good faith
that the action so directed would subject U.S. Bank in its individual capacity
to personal liability, is contrary to law or is inconsistent with the terms of
this Indenture or any other Transaction Document.

 

(n)          The Trustee shall not be liable for failure to perform its duties
hereunder if such failure is a direct or proximate result of another party’s
failure to perform its obligations hereunder unless such other party’s failure
is caused by the Trustee’s willful misconduct, bad faith or negligence.

 

Section 6.03         Individual Rights of Trustee.

 

The 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 Trustee. Any Note Registrar,
co-registrar, Paying Agent or co-paying agent may do the same with like rights.
However, the Trustee must comply with Section 6.11.

 

Section 6.04         Trustee’s Disclaimer.

 

The Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture, the Sale and Servicing Agreement, the
Trust Agreement, the Notes or any other Transaction Document, the validity or
sufficiency of any security interest intended to be created or the
characterization of the Notes for tax purposes, 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 this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee’s
certificate of authentication.

 

Section 6.05         Notice of Event of Default.

 

The Trustee shall mail to each Noteholder, the Servicer (who shall promptly
forward the same to the Rating Agency, for so long as any of the Notes are
Outstanding) and the Owner Trustee notice of an Event of Default within 30 days
after the Trustee has actual knowledge thereof in accordance with Section 6.01.

 

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Section 6.06         Reports by Trustee to Holders.

 

The Trustee shall deliver to each Noteholder such information in its possession
as may be required to enable such holder to prepare its federal and state income
tax returns. In addition, upon the Issuer’s or a Noteholder’s written request,
the Trustee shall promptly furnish information reasonably requested by the
Issuer or such Noteholder that is reasonably available to the Trustee to enable
the Issuer or such Noteholder to perform its federal and state income tax
reporting obligations.

 

The Trustee shall not be responsible for any tax reporting, disclosure, record
keeping or list maintenance requirements of the Issuer under Internal Revenue
Code sections 6011(a), 6111(d) or 6112, including, but not limited to, the
preparation of IRS Form 8886 pursuant to Treasury Regulations Section
1.6011-4(d) or any successor provision and any required list maintenance under
Treasury Regulations Section 301.6112-1 or any successor provision.

 

Section 6.07         Compensation and Indemnity.

 

The Issuer shall pay to the Trustee on each Payment Date reasonable compensation
for its services under this Indenture and the other Transaction Documents in
accordance with the Priority of Payments and pursuant to the separate fee
agreement between the Trustee and the Issuer. The Trustee’s compensation shall
not be limited by any law on compensation of a trustee of an express trust. The
Issuer shall reimburse the 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 Trustee’s agents,
counsel, accountants and experts. The Issuer shall indemnify, defend and hold
harmless the Trustee and its officers, directors, employees and agents for and
against any and all loss, liability or expense (including attorneys’ fees)
incurred by it in connection with the administration of this Indenture and the
performance of its duties hereunder and under the other Transaction Documents,
including the reasonable costs and expenses of defending themselves against any
claim, loss, damage or liability in connection with the exercise or performance
of any of their powers or duties under this Indenture or under any other
Transaction Documents and any reasonable and documented legal fees or other
expenses incurred by the Trustee in connection with the enforcement of the
Issuer’s contractual and indemnification obligations herein. The Trustee shall
notify the Issuer and the Trust Depositor promptly of any claim for which it may
seek indemnity. Failure by the Trustee to so notify the Issuer and the Trust
Depositor shall not relieve the Issuer of its obligations hereunder or under the
Trust Agreement. The Issuer need not reimburse any expense or indemnify against
any loss, liability or expense incurred by the Trustee through the Trustee’s own
willful misconduct, negligence or bad faith, except that the Trustee shall not
be liable (i) for any error of judgment made by it in good faith unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts, (ii)
for any action it takes or omits to take in good faith in accordance with
directions received by it from the Holders of the Notes in accordance with the
terms hereunder, or (iii) for interest on any money received by it except as the
Trustee and the Issuer may agree in writing. The Issuer shall assume (with the
consent of the Trustee, such consent not to be unreasonably withheld) the
defense of claim for indemnification hereunder and any settlement of any such
claim and pay all expenses in connection therewith, including reasonable counsel
fees. If the consent of the Trustee required in the immediately preceding
sentence is unreasonably withheld, the Issuer is relieved of its indemnification
obligations hereunder with respect thereto. The obligations of the Issuer set
forth in this Section 6.07 are subject in all respects to Section 11.15(b).

 

55

 

 

The Trustee hereby agrees not to cause the filing of a petition in bankruptcy,
insolvency, reorganization, moratorium, receivership, conservatorship or other
similar laws now or hereafter in effect against the Issuer for the non-payment
to the Trustee of any amounts provided by this Section 6.07 until at least one
year and one day, or, if longer, the applicable preference period then in
effect, after the payment in full of all Notes issued under this Indenture.

 

The amounts payable to the Trustee pursuant to this Section 6.07 shall not,
except as provided by Section 7.06 of the Sale and Servicing Agreement, exceed
on any Payment Date the limitation on the amount thereof described in the
Priority of Payments for such Payment Date and in the definition of
Administrative Expenses in the Sale and Servicing Agreement; provided that (i)
the Trustee shall not institute any proceeding for payment of any amount payable
hereunder except in connection with an action pursuant to Section 5.03 or 5.04
for the enforcement of the lien of this Indenture for the benefit of the
Noteholders and (ii) the Trustee may only seek to enforce payment of such
amounts in conjunction with the enforcement of the rights of the Noteholders in
the manner set forth in Section 5.04.

 

The Trustee shall, subject to the Priority of Payments, receive amounts pursuant
to this Section 6.07 and Section 7.06 of the Sale and Servicing Agreement, and
only to the extent that the payment thereof would not result in an Event of
Default and the failure to pay such amounts to the Trustee will not, by itself,
constitute an Event of Default. Subject to Section 6.08, the Trustee shall
continue to serve as Trustee under this Indenture notwithstanding the fact that
the Trustee shall not have received amounts due it hereunder and hereby agrees
not to cause the filing of a petition in bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship or other similar laws now or hereafter
in effect against the Issuer for the nonpayment to the Trustee of any amounts
provided by this Section 6.07 until at least one year and one day, or, if
longer, the applicable preference period then in effect, after the payment in
full of all Notes issued under this Indenture.

 

The Issuer’s payment obligations and indemnity to the Trustee pursuant to this
Section 6.07 shall survive the discharge of this Indenture and resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence of
an Event of Default specified in clauses (vi) or (vii) of the definition of
“Event of Default” 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.

 

Section 6.08         Replacement of Trustee.

 

No resignation or removal of the Trustee shall become effective until the
appointment of a successor Trustee pursuant to this Section 6.08 and that meets
the criteria set forth in Section 6.11 has become effective. The Trustee may
resign at any time upon at least 30 days written notice by so notifying the
Issuer and the Noteholders of that resignation. The Majority Noteholders or the
Issuer, with the written consent of the Majority Noteholders, may remove the
Trustee without cause upon at least 30 days written notice by so notifying the
Trustee in writing (a copy of which notice shall promptly be provided by the
Issuer to the Rating Agency). The Issuer shall remove the Trustee if:

 

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

 

(ii)         the Trustee is adjudged bankrupt or insolvent;

 

(iii)        a receiver or other public officer takes charge of the Trustee or
its property;

 

(iv)        the Trustee otherwise becomes incapable of acting; or

 

(v)         the Trustee defaults in any of its obligations under the Transaction
Documents and such default is not cured within 30 days after a Responsible
Officer of the Trustee receives written notice of such default.

 

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

 

A successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Issuer. Upon the appointment becoming effective, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. No successor Trustee shall accept appointment as provided
in this Section 6.08 unless at the time of such appointment becoming effective
such Person shall be eligible under the provisions of Section 6.11. The retiring
Trustee shall promptly transfer all property (including all Indenture
Collateral) held by it as Trustee to the successor Trustee and shall execute and
deliver such instruments and such other documents as may reasonably be required
to more fully and certainly vest and confirm in the successor Trustee all such
rights, powers, duties and obligations.

 

If a successor Trustee does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Issuer or the Majority
Noteholders may petition any court of competent jurisdiction for the appointment
of a successor Trustee.

 

Notwithstanding the replacement of the Trustee pursuant to this Section 6.08,
the Issuer’s obligations under Section 6.07 shall continue for the benefit of
the retiring Trustee.

 

Upon the appointment of a successor Trustee as provided in this Section 6.08,
the successor Trustee shall mail notice of such succession hereunder at the
expense of the Issuer to all Holders of Notes at their addresses as shown in the
Note Register.

 

Section 6.09         Successor Trustee by Merger.

 

If the 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 Trustee; provided that such
corporation or banking association shall be otherwise qualified and eligible
under Section 6.11.

 

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In case at the time such successor or successors by merger, conversion or
consolidation to the 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 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 Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere provided for in
the Notes or in this Indenture.

 

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 Indenture Collateral may at the time be located, the
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 Indenture Collateral,
and to vest in such Person or Persons, in such capacity and for the benefit of
the Noteholders, such interest to the Indenture Collateral, or any part hereof,
and, subject to the other provisions of this Section 6.10, such powers, duties,
obligations, rights and trusts as the 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 Trustee under Section 6.11 and no notice
to the Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.08 hereof. No appointment of a co-trustee or a
separate trustee shall relieve the Trustee of its duties and obligations
hereunder.

 

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

 

(i)          all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or performed
by the 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 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 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 Indenture Collateral 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 Trustee;

 

(ii)         no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and

 

(iii)        the 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 Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture 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 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 Trustee. Every
such instrument shall be filed with the Trustee.

 

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

 

Section 6.11        Eligibility; Disqualification.

 

The Trustee hereunder shall at all times (i) be a national banking association
or banking corporation or trust company organized and doing business under the
laws of any state or the United States, (ii) be authorized under such laws to
exercise corporate trust powers, (iii) have a combined capital and surplus of at
least $50,000,000, (iv) have unsecured and unguaranteed long-term debt
obligations rated investment grade or better by Morningstar, S&P and Moody’s, in
each case to the extent that such rating agency has rated such Trustee, and (v)
be subject to supervision or examination by federal or state authority. If such
banking association publishes reports of condition at least annually, pursuant
to Applicable Law or the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 6.11 its combined capital and
surplus shall be deemed to be as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.11, the Trustee
shall give prompt notice to the Issuer (who shall promptly forward the same to
the Rating Agency), the Trust Depositor, the Servicer and the Noteholders that
it has so ceased to be eligible to be the Trustee.

 

Section 6.12        Representations, Warranties and Covenants of the Trustee.

 

As of the Closing Date, the Trustee hereby makes the following representations,
warranties and covenants on which the Issuer, the Trust Depositor, the Servicer
and the Noteholders shall rely:

 

(a)          The Trustee is a national banking association and trust company
duly organized and validly existing under the laws of the United States.

 

(b)          The Trustee satisfies the criteria specified in Section 6.11.

 

(c)          The Trustee has full power, authority and legal right to execute,
deliver and perform this Indenture and the other Transaction Documents to which
it is a party and has taken all necessary action to authorize the execution,
deliver and performance by it of this Indenture and the other Transaction
Documents to which it is a party.

 

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(d)          The execution, delivery and performance by the Trustee of this
Indenture and the other Transaction Documents to which it is a party shall not
(i) violate any provision of any law or any order, writ, judgment or decree of
any court, arbitrator or governmental authority applicable to it or any of its
assets, (ii) violate any provision of the corporate charter or by-laws of the
Trustee or (iii) violate any provision of, or constitute, with or without notice
or lapse of time, a default under, or result in the creation or imposition of
any lien on any properties included in the Indenture Collateral pursuant to the
provisions of, any mortgage, indenture, contract, agreement or other undertaking
to which it is a party, which violation, default or lien could reasonably be
expected to materially and adversely affect the Trustee’s performance or ability
to perform its duties as Trustee under this Indenture and the other Transaction
Documents to which it is a party or the transactions contemplated in this
Indenture and the other Transaction Documents to which it is a party.

 

(e)          The execution, delivery and performance by the Trustee of this
Indenture and the other Transaction Documents to which it is a party shall not
require the authorization, consent or approval of, the giving of notice to, the
filing or registration with or the taking of any other action in respect of any
governmental authority or agency regulating the banking and corporate trust
activities of the Trustee.

 

(f)          This Indenture and the other Transaction Documents to which it is a
party have been duly executed and delivered by the Trustee and constitute the
legal, valid and binding agreements of the Trustee enforceable in accordance
with their respective terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally or the application of equitable principles in any
proceeding, whether at law or in equity. The Trustee hereby agrees and covenants
that it will not, at any time in the future, deny that this Indenture and the
other Transaction Documents to which it is a party constitute its legal, valid
and binding agreements.

 

(g)          The Trustee shall not take any action, or fail to take any action,
if such action or failure to take action will materially interfere with the
enforcement of any rights of the Noteholders under this Indenture or the other
Transaction Documents.

 

(h)          The Trustee is not affiliated, as that term is defined in Rule 405
under the Securities Act, with the Issuer.

 

Section 6.13        Directions to Trustee.

 

The Trustee is hereby directed and authorized:

 

(i)          to accept a collateral assignment of the Loans, and hold the assets
of the Indenture Collateral as security for the Noteholders;

 

(ii)         to authenticate and deliver the Notes substantially in the forms
prescribed by Exhibit A in accordance with the terms of this Indenture;

 

(iii)        to execute and deliver the Transaction Documents to which it is a
party; and

 

(iv)        to take all other actions as shall be required to be taken by it by
the terms of this Indenture and the other Transaction Documents to which it is
party.

 

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For avoidance of doubt, in entering into and performing under the Transaction
Documents to which it is a party, U.S. Bank (in all its capacities) shall be
subject to the protections, rights, indemnities and immunities afforded it under
Article VI of this Indenture.

 

Section 6.14         Conflicts.

 

If a Default occurs and is continuing and the Trustee is deemed to have a
“conflicting interest” (as defined in the TIA) as a result of acting as trustee
for the Notes, the Issuer, at its expense, shall appoint a successor Trustee for
the affected Notes so that there will be a separate Trustee for such affected
Notes. No such event shall alter the voting rights of the Noteholders under this
Indenture or under any of the other Transaction Documents.

 

ARTICLE VII
NOTEHOLDERS’ LISTS AND REPORTS

 

Section 7.01         Issuer To Furnish Trustee Names and Addresses of
Noteholders.

 

The Issuer will furnish or cause to be furnished to the Trustee (a) within five
(5) days after each Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Notes as of
such Record Date and (b) at such other times as the Trustee may reasonably
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 that so long as the Trustee
is the Note Registrar, no such list shall be required to be furnished.

 

Section 7.02         Preservation of Information; Communications to Noteholders.

 

(a)          The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Trustee as provided in Section 7.01 and the
names and addresses of Holders of Notes received by the Trustee in its capacity
as Note Registrar. The Trustee may destroy any list furnished to it as provided
in such Section 7.01 upon receipt of a new list so furnished.

 

(b)          The Trustee shall furnish to the Noteholders promptly upon receipt
of a written request therefor, duplicates or copies of all reports, notices,
requests, demands, certificates and financial statements of the Issuer or of the
Servicer furnished to the Trustee under the Transaction Documents.

 

Section 7.03         Fiscal Year.

 

Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end
on December 31 of each year. The Issuer shall notify the Trustee of any change
in its fiscal year.

 

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ARTICLE VIII
TRANSACTION ACCOUNTS, DISBURSEMENTS AND RELEASES

 

Section 8.01         Collection of Money.

 

Except as otherwise expressly provided herein or in the Sale and Servicing
Agreement, the Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent or
other intermediary, all money and other property payable to or receivable by the
Trustee pursuant to this Indenture. The Trustee shall apply all such money
received by it as provided in this Indenture. Except as otherwise expressly
provided in this Indenture or in the Sale and Servicing Agreement, if any event
of default occurs in the making of any payment or performance under any
agreement or instrument that is part of the Indenture Collateral, the Trustee
(at the direction of the Servicer pursuant to the Sale and Servicing Agreement)
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 8.02         Transaction Accounts.

 

(a)          On or prior to the Closing Date, the Securities Intermediary on
behalf of the Issuer shall establish and maintain, in the name of the Securities
Intermediary, for the benefit of the Securityholders, the Distribution Account,
the Reserve Account, the Investment Account and the Collection Account and the
Issuer shall establish the Lockbox Account as a non-interest bearing, segregated
account at the Lockbox Bank and in the name of the Securities Intermediary for
the benefit of the Securityholders, in each case, as provided in Sections 7.01,
7.02, 7.03 and 7.04 of the Sale and Servicing Agreement.

 

(b)          All funds required to be deposited in the Collection Account with
respect to the preceding Collection Period will be deposited in the Collection
Account as provided in Section 7.03 of the Sale and Servicing Agreement. On or
before the last day of each Collection Period or such other date as determined
by the Trustee pursuant to Section 7.06(c) of the Sale and Servicing Agreement,
the Collections with respect to the preceding Collection Period on deposit in
the Collection Account will be transferred from the Collection Account to the
Distribution Account as provided in Section 7.06 of the Sale and Servicing
Agreement. On or before the Business Day immediately preceding each Payment
Date, all other amounts then on deposit in the Collection Account (including,
without limitation, any amounts deposited into the Collection Account from the
Reserve Account pursuant to Section 7.02 of the Sale and Servicing Agreement)
will be deposited into the Distribution Account and will remain uninvested while
deposited in the Distribution Account. The Securities Intermediary shall invest
any funds in the Reserve Account as provided in the Sale and Servicing
Agreement. Funds will be deposited into the Reserve Account as provided in
Section 7.06 of the Sale and Servicing Agreement.

 

(c)          On each Payment Date or such other date as determined by the
Trustee pursuant to Section 5.04(b), the Trustee, as Paying Agent, shall
distribute all amounts on deposit in the Distribution Account to Noteholders in
respect of Notes and any other parties specified in the Priority of Payments,
and to the Trustee, as paying agent under the Trust Agreement, for distribution
to the Holders of the Trust Certificates in accordance with the Priority of
Payments.

 

(d)          All moneys deposited from time to time in the Distribution Account
and the Reserve Account pursuant to the Sale and Servicing Agreement and all
deposits therein pursuant to this Indenture are for the benefit of the
Securityholders and all investments made with such moneys including all income
or other gain from such investments are for the benefit of the Securityholders
as provided by the Sale and Servicing Agreement.

 

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(e)          The Redemption Price described in Section 10.01 hereof shall be
deposited in the Distribution Account.

 

Section 8.03         Officer’s Certificate.

 

Except for releases or conveyances required or permitted by the Sale and
Servicing Agreement and the other Transaction Documents, the Trustee shall
receive at least two Business Days’ notice when requested by the Issuer to take
any action pursuant to Section 8.05(a), accompanied by copies of any instruments
to be executed, and the Trustee shall also require, as a condition to such
action, an Officer’s Certificate, in form and substance reasonably satisfactory
to the Trustee, stating the 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.

 

Section 8.04         Termination Upon Distribution to Noteholders.

 

Subject to Section 4.06, this Indenture and the respective obligations and
responsibilities of the Issuer and the Trustee created hereby shall terminate
upon the distribution to the Noteholders and the Trustee of all amounts required
to be distributed to such parties pursuant to the applicable provisions of this
Indenture and the Sale and Servicing Agreement.

 

Section 8.05         Release of Indenture Collateral.

 

(a)          Subject to the payment of its fees and reasonable expenses, the
Trustee may, and when required by the provisions of this Indenture shall,
execute instruments to release property from the lien of this Indenture, or
convey the Trustee’s interest in the same, in a manner and under circumstances
that are not inconsistent with the provisions of this Indenture, the Sale and
Servicing Agreement and the other Transaction Documents. No party relying upon
an instrument executed by the Trustee as provided in Article IV hereunder shall
be bound to ascertain the Trustee’s authority, inquire into the satisfaction of
any conditions precedent, or see to the application of any moneys. The Trustee
shall not release any Loan from the lien of this Indenture in connection with a
sale of such Loan to an Affiliate of the Servicer or the Issuer without first
receiving an Officer’s Certificate of the Servicer in the form of Exhibit F to
the Sale and Servicing Agreement. The Trustee shall make copies of any such
Officer’s Certificate available to any Noteholder upon written request of such
Noteholder, subject to Section 11.01.

 

(b)          The Trustee shall, at such time as (i) there are no Notes
Outstanding and (ii) all sums due the Trustee pursuant to this Indenture have
been paid, release any remaining portion of the Indenture Collateral that
secured the Notes from the lien of this Indenture. The Trustee shall release
property from the lien of this Indenture pursuant to this Section 8.05(b) only
upon receipt of a request from the Issuer accompanied by an Officer’s
Certificate and an Opinion of Counsel stating that all conditions precedent to
such release have been satisfied.

 

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ARTICLE IX
SUPPLEMENTAL INDENTURES

 

Section 9.01        Supplemental Indentures Without Consent of Noteholders.

 

(a)          Without the consent of the Holders of any Notes but with prior
written notice to all Noteholders, the Rating Agency and the Servicer, the
Issuer and the Trustee, when authorized by an Issuer Order, at any time and from
time to time, may enter into a supplemental indenture, in form reasonably
satisfactory to the Trustee, for any of the following purposes; provided that
the Issuer shall only enter into a supplemental indenture in compliance with
Section 4.01(d) of the Trust Agreement and Section 9.06 hereof:

 

(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 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;

 

(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 Trustee;

 

(v)         to cure any ambiguity or manifest error, to correct or supplement
any provision in this Indenture or in any supplemental indenture that may be
defective or inconsistent with any other provision herein or in any supplemental
indenture or to make any modification that is of a formal, minor or technical
nature;

 

(vi)        to evidence and provide for the acceptance of the appointment
hereunder by a successor 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;

 

(vii)       to add to the conditions, limitations and restrictions on the
authorized amount, terms and purposes of the issuance, authentication and
delivery of Notes, as herein set forth, additional conditions, limitations and
restrictions thereafter to be observed;

 

(viii)      to modify the restrictions on and procedures for resales and other
transfers of the Notes to reflect any changes in Applicable Law or regulations
(or the interpretation thereof);

 

(ix)         to enable the Issuer or the Trustee to rely upon any exemption from
registration under the Securities Act or the 1940 Act or to remove restrictions
on resale or transfer to the extent required under Applicable Law or otherwise
make any changes necessary to comply with changes to U.S. securities laws or the
regulations implementing such laws;

 

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(x)          to evidence or implement any change to this Indenture required by
regulations or guidelines enacted to support the USA PATRIOT Act;

 

(xi)         to comply with any changes to the Code or the regulations
implementing the Code;

 

(xii)        to reflect any written change to the guidelines, methodology or
standards established by any Rating Agency that are applicable to this
Indenture;

 

(xiii)       to conform this Indenture to the Offering Memorandum;

 

(xiv)      to amend, modify or otherwise accommodate changes to this Indenture
relating to compliance with Rule 17g-5 under the Exchange Act or to permit
compliance with the Dodd-Frank Act (including, without limitation, the Volcker
Rule), as applicable to the Issuer, the Trustee, the Servicer or the Notes, or
to comply with any rule or regulation enacted by regulatory agencies of the U.S.
federal government after the Closing Date that are applicable to the Notes or
the transactions contemplated by this Indenture; and

 

(xv)       to add any new provisions with respect to matters or questions
arising under this Indenture or in any supplemental indenture that will not be
inconsistent with any existing provisions of this Indenture or such supplemental
indenture; provided that such action shall not, as evidenced by an Officer’s
Certificate delivered to the Trustee, adversely affect in any material respect
the interests of the Noteholders.

 

The 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.

 

(b)          The Issuer and the 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 Agency (to be delivered by the Issuer) and the Servicer,
enter into a supplemental indenture for the purpose of adding any provisions to,
or changing in any manner or eliminating any of the provisions of, this
Indenture or of modifying in any manner the rights of the Noteholders under this
Indenture (other than as included in clauses (i) through (xiv) of Section
9.01(a) above); provided that such action shall not, as evidenced by an
Officer’s Certificate of the Servicer, materially adversely affect the interest
of any Noteholder.

 

(c)          The Issuer and the Trustee may only enter into one or more
supplemental indentures pursuant to this Section 9.01, with or without the
consent of the Noteholders, to the extent that written advice from Dechert LLP
or an opinion of tax counsel of nationally recognized standing in the United
States experienced in such matters is delivered to the Issuer (with a copy to
the Trustee) to the effect that such supplemental indenture will not (i) cause
the Issuer to be treated as an association or publicly traded partnership
taxable as a corporation for U.S. federal income tax purposes, (ii) cause the
Notes to be deemed to have been sold or exchanged under Section 1001 of the Code
or (iii) cause any Notes that were characterized as indebtedness at the time of
issuance to be characterized as other than indebtedness.

 

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(d)          In the event that any proposed supplemental indenture pursuant to
this Section 9.01, in the reasonable judgment of the Servicer (on behalf of the
Issuer) does not satisfy the proviso in Section 9.01(b), such amendment may
become effective with the consent of each Holder of a Note. It shall not be
necessary for the Noteholders to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall approve
the substance thereof.

 

Section 9.02        Supplemental Indentures With Consent of Noteholders.

 

(a)          Except as provided in Section 9.02(b), the Issuer and the Trustee,
when authorized by an Issuer Order, also may, with prior notice to the Rating
Agency and the Servicer and with the consent of the Majority Noteholders, enter
into a supplemental indenture 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 that the Issuer shall only enter into a supplemental
indenture in compliance with Section 4.01(c) of the Trust Agreement and Section
9.06 hereof; provided further that (i) such action shall not, as evidenced by an
Officer’s Certificate of the Servicer, materially adversely affect the interest
of any Noteholder.

 

(b)          No supplemental indenture shall, without the consent of the Holder
of each Note adversely affected thereby:

 

(i)          change the Legal Final Payment Date for the Notes or the due date
of any installment of principal of or interest on any Note or reduce the
principal amount of any Note, the Interest Rate specified for any Note or the
Redemption Price with respect to any Note, change the provisions of the
Indenture relating to the application of Collections on, or the proceeds of the
sale of, the assets of the Issuer 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 any interest on any Note is payable;

 

(ii)         impair the right to institute suit for the enforcement of any
provisions of the Indenture regarding payment on the Notes;

 

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

 

(iv)        modify or alter the provisions hereunder regarding the voting of
Notes held by the Issuer, the Seller, the Servicer, an affiliate of any of them
or any obligor on the Notes;

 

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(v)         reduce the percentage of the aggregate Outstanding Principal Balance
of the Notes, the consent of the Holders of which is required to direct the
Trustee to sell or liquidate the Indenture Collateral pursuant to Section 5.04;

 

(vi)        modify any provision hereunder specifying a percentage of the
Outstanding Principal Balance of the Notes necessary to amend the Indenture, the
Trust Agreement or the Sale and Servicing Agreement except to increase any
percentage specified herein or to provide that certain additional provisions of
this Indenture or the other Transaction Documents cannot be modified or waived
without the consent of the Holder of each outstanding Note affected thereby;

 

(vii)       modify any provisions hereunder in such a manner as to affect the
calculation of the amount of any payment of interest or principal due on any
Note on any Payment Date or to affect the rights of the Noteholders to the
benefit of any provisions for the mandatory redemption of the Notes contained in
the Indenture; 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 Indenture Collateral
or, except as otherwise permitted or contemplated herein, terminate the lien of
this Indenture on any property at any time subject hereto or deprive any
Noteholder of the security provided by the lien of this Indenture.

 

(c)          Prior to entering into any supplemental indenture pursuant to this
Section 9.02, the Issuer and Trustee shall obtain the written consent of each
Holder of a Note. It shall not be necessary for any Act of Noteholders under
this Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.

 

(d)          The Issuer and the Trustee may only enter into one or more
supplemental indentures pursuant to this Section 9.02, to the extent that
written advice from Dechert LLP or an opinion of tax counsel of nationally
recognized standing in the United States experienced in such matters is
delivered to the Issuer (with a copy to the Trustee) to the effect that such
supplemental indenture will not (i) cause the Issuer to be treated as an
association or publicly traded partnership taxable as a corporation for U.S.
federal income tax purposes, (ii) cause the Notes to be deemed to have been sold
or exchanged under Section 1001 of the Code or (iii) cause any Notes that were
characterized as indebtedness at the time of issuance to be characterized as
other than indebtedness.

 

(e)          Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section 9.02, the Trustee shall forward
to the Servicer (who shall promptly forward the same to the Rating Agency) and
the Holders of the Notes to which such amendment or supplemental indenture
relates a copy of such supplemental indenture or a notice setting forth in
general terms the substance of such supplemental indenture. Any failure of the
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.

 

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Section 9.03         Execution of Supplemental Indentures.

 

In executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modification thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and subject
to Sections 6.01 and 6.02, 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 and all conditions precedent have been
satisfied, which Opinion of Counsel may rely upon an Officer’s Certificate of
the Servicer with respect to the effect of any such supplemental indenture on
the economic interests of the Holders of the Notes. The Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Trustee’s own rights, duties, liabilities or immunities under this Indenture or
otherwise. The Issuer shall provide copies of each supplemental indenture to the
Rating Agency.

 

Section 9.04         Effect of Supplemental Indenture.

 

Upon the execution of any supplemental indenture pursuant to the provisions
hereof, this Indenture shall be and shall 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 Trustee, the Issuer and the Noteholders
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 indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.

 

Section 9.05         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 Trustee shall,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Issuer or the Trustee shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the
Issuer, to any such supplemental indenture may be prepared and executed by the
Issuer and authenticated and delivered by the Trustee in exchange for
Outstanding Notes.

 

Section 9.06         Consent of the Servicer and Owner Trustee.

 

The Issuer agrees that it will not permit to become effective any supplemental
indenture that adversely affects the obligations or rights of the Servicer or
the Owner Trustee or the amount or priority or payment of any fees or other
amounts payable to the Servicer or the Owner Trustee unless, in each such case,
the Servicer or the Owner Trustee has been given prior written notice of such
supplemental indenture and has consented thereto in writing.

 

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ARTICLE X
OPTIONAL redemption

 

Section 10.01      Optional Redemption.

 

(a)          The Issuer may, where the aggregate Outstanding Principal Balance
as of the last day of any Collection Period shall be less than or equal to 10%
of the aggregate Outstanding Principal Balance as of the Closing Date, effect an
Optional Redemption, in whole but not in part, on any Redemption Date (such
Redemption Date shall be a Payment Date to be specified in a notice to be
delivered to the Issuer and the Trustee at least 15 Business Days prior to such
Redemption Date) by deposit in full of the Redemption Price in the Distribution
Account for distribution to the Holders of the Notes and other persons entitled
thereto by 10:00 a.m. (New York City time) on the business day preceding the
applicable Payment Date whereupon all such Notes shall be due and payable on the
applicable Payment Date, in connection with which the Issuer shall comply with
the provisions of this Section 10.01 and Section 10.02. The Servicer or the
Issuer will furnish notice of such election to the Trustee, the Owner Trustee
and the Rating Agency no later than 10 Business Days prior to the proposed
Redemption Date and, provided that sufficient funds are received by the
Servicer, the Servicer on behalf of the Issuer shall deposit in the Distribution
Account an amount equal to the Redemption Price of the Notes to be redeemed on
the Redemption Date.

 

(b)          The Notes to be redeemed shall, following delivery of a notice of
an Optional Redemption complying with Section 10.02, on the Redemption Date
become due and payable at the Redemption Price with respect thereto and (unless
such Redemption Price is not paid) no interest shall accrue on such Redemption
Price for any period after the date to which accrued interest is calculated for
purposes of calculating the Redemption Price. On the Redemption Date, upon
deposit in full by the Servicer in the Distribution Account of an amount equal
to the Redemption Price, the Indenture Collateral (other than the Transaction
Accounts) shall cease to constitute assets of the Issuer and the Noteholders
shall have no interest therein nor any claim to any distributions in respect of
the Indenture Collateral (other than the Transaction Accounts).

 

(c)          The portion of the Redemption Price constituting payment of
principal of the Notes shall be distributed to Noteholders in accordance with
Section 7.06(b) of the Sale and Servicing Agreement and all other amounts
included in the Redemption Price shall be distributed in accordance with Section
7.06(a) of the Sale and Servicing Agreement.

 

(d)          The Issuer or the Servicer may withdraw any notice of Optional
Redemption or specify a new Redemption Date at any time prior to the proposed
Redemption Date set forth in any prior notice of Optional Redemption by
providing written notice to the Trustee, the Owner Trustee and the Rating Agency
by no later than the second Business Day preceding such Redemption Date. A
withdrawal of such notice of Optional Redemption or the inability of the Issuer
to complete an Optional Redemption of the Notes will not constitute an Event of
Default.

 

Section 10.02      Form of Redemption Notice by Trustee.

 

(a)          Notice of redemption under Section 10.01 shall be given by the
Trustee by facsimile, electronic mail, overnight courier 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 Date
preceding the applicable Redemption Date at such Holder’s address appearing in
the Note Register.

 

(b)          All notices of redemption shall state:

 

(i)          the Redemption Date;

 

(ii)         the Redemption Price;

 

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(iii)        that the Record Date otherwise applicable to such Redemption Date,
is not applicable and that, unless waived by the Issuer, 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 Redemption Price with respect
thereto (which shall be the office or agency of the Issuer to be maintained as
provided in Section 3.02); and

 

(iv)        that interest on the Notes shall cease to accrue on the Redemption
Date, as applicable; provided that the Redemption, as applicable, occurs on such
date.

 

(c)          Notice of redemption of the Notes shall be given by the 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.

 

ARTICLE XI
MISCELLANEOUS

 

Section 11.01      Confidentiality.

 

(a)          No Receiving Party shall use any Confidential Information except to
the extent necessary to evaluate and monitor the transaction represented by the
Transaction Documents. Each Receiving Party agrees (and each Holder of a Note is
deemed to agree) that it will make available Confidential Information only to
(i) its officers, employees, directors, affiliates, advisors, agents,
shareholders, members, partners and managers who have a need to know such
Confidential Information for the purpose of evaluating or monitoring the
transaction, (ii) its accounting firms and legal counsel (and their respective
officers, employees, directors, agents, affiliates and advisors) and (iii) any
prospective purchasers of a Note, in each case who have need to know such
Confidential Information for the purposes of evaluating or monitoring the
transaction (collectively, “representatives”), and that all persons to whom such
Confidential Information is made available will be made aware of the
confidential nature of such Confidential Information and agree to be bound by
the restrictions imposed by this Indenture on the use of Confidential
Information. This Section 11.01 shall constitute a confidentiality agreement for
purposes of Regulation FD under the Exchange Act.

 

(b)          No Receiving Party or any of its representatives will disclose any
Confidential Information to any third party, except as may be required by law or
expressly permitted pursuant to this Section 11.01.

 

(c)          Each Receiving Party acknowledges and agrees that the breach or
threatened breach of this Section 11.01 by it may result in irreparable and
continuing damage to the Disclosing Parties, for which there will be no adequate
remedy at law. Accordingly, each Receiving Party agrees that the Disclosing
Parties shall be entitled, without prejudice, to all the rights and remedies
available to each of them, including an injunction or specific performance to
prevent breaches or threatened breaches of any of the provisions of this
Indenture by an action instituted in a court having proper jurisdiction.

 

(d)          The confidentiality provisions of this Section 11.01 shall remain
in effect for a period commencing on the date hereof and end two years after the
Legal Final Payment Date.

 

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(e)          If any Receiving Party or any of its affiliates or representatives
is required by legal process to disclose any of the Confidential Information,
such Receiving Party shall provide the Disclosing Parties with notice of such
requirement so that the Disclosing Parties may seek a protective order or other
appropriate remedy or waive compliance with the provisions of this Indenture. If
a protective order or other remedy is not obtained, such Receiving Party, its
affiliates and representatives may, without violating this Indenture, disclose
that portion of the Confidential Information that such party is legally required
to disclose.

 

Section 11.02      Form of Documents Delivered to 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 a Responsible 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 that the certificate or
opinion or representations with respect to the matters upon which the
certificate or opinion is based are erroneous. Any such certificate of a
Responsible 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 Issuer, the Trust Depositor, or any
other appropriate Person, stating that the information with respect to such
factual matters is in the possession of the Servicer, the Issuer, the Trust
Depositor or such other Person, unless such counsel knows 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 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 in all material respects, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the 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 11.03      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 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 6.01) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this
Section 11.03.

 

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

 

(c)          The ownership of Notes shall be proved by the Note Register;
provided that in all cases except where otherwise required by law or regulation,
any act by a Holder of a Note may be taken by the Beneficial Owner of such Note.

 

(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
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.

 

Section 11.04         Notices, etc., to Trustee and Others.

 

(a)          Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing (which writing may include electronic mail) and if
such request, demand, authorization, direction, notice, consent, waiver or Act
of Noteholders is to be made upon, given or furnished to or filed with:

 

(i)          the Trustee by any Noteholder or by the Issuer, shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to and
mailed, by certified mail, return receipt requested, hand delivered, sent by
overnight courier service guaranteeing next day delivery or by telecopy in
legible form, to the Trustee addressed to it at U.S. Bank National Association,
Global Corporate Trust Services, 190 S. LaSalle Street, 7th Floor, Chicago, IL
60603, Attention: Horizon Funding Trust 2019-1, Tel: 312-332-7464, Fax:
312-332-7996, Email: melissa.rosal@usbank.com and Nicholas.xeros@usbank.com or
at any other address previously furnished in writing to the Issuer, the
Noteholder, or the Servicer by the Trustee;

 

(ii)         the Issuer by the Trustee or by any Noteholder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, hand delivered, sent by
overnight courier service or by telecopy in legible form, to the Issuer
addressed to it at c/o Wilmington Trust, National Association, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration, Facsimile No.: (302) 636-4140, or at any other
address previously furnished in writing to the Trustee by the Issuer;

 

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(iii)        the Servicer by the Issuer or the Trustee shall be sufficient for
every purpose hereunder if in writing and mailed, first-class postage prepaid,
hand delivered, sent by overnight courier service or by telecopy in legible
form, to the Servicer addressed to Horizon Technology Finance Corporation, 312
Farmington Avenue, Farmington, Connecticut 06032 Attention: Legal Department,
Re: Horizon Funding Trust 2019-1
Telephone: (860) 676-8654, Facsimile No.: 860-676-8655; with a copy to Horizon
Technology Finance Corporation, 312 Farmington Avenue, Farmington, Connecticut
06032, Attention: Legal Department, Re: Horizon Funding Trust 2019-1, Telephone:
(860) 676-8654, Facsimile No.: 860-676-8655; or at any other address previously
furnished in writing to the Issuer or the Trustee by the Servicer; and

 

(iv)        the Owner Trustee by the Issuer or the Trustee shall be sufficient
for every purpose hereunder if in writing and mailed, first-class postage
prepaid, hand delivered, sent by overnight courier service or by telecopy in
legible form, to the Owner Trustee addressed to Wilmington Trust, National
Association, Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890; Attention: Corporate Trust Administration; Facsimile No.: (302) 636-4140.

 

(b)          Notices required to be given to the Rating Agency shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, to Morningstar, at the following address: Morningstar Credit Ratings,
LLC, 4 World Trade Center, 48th Floor, New York, New York 10007, Email:
ABSMonitoring@morningstar.com; or as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties; provided
that no notice shall be required to be given to Morningstar unless the
Outstanding Notes is rated by Morningstar.

 

(c)          Delivery of any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other documents made as provided above
will be deemed effective: (i) if in writing and delivered in Person or by
overnight courier service, on the date it is delivered; (ii) if sent by
facsimile transmission, on the date that transmission is received by the
recipient in legible form (it being agreed that the burden of proving receipt
will be on the sender and will not be met by a transmission report generated by
the sender’s facsimile machine); (iii) if sent by mail, on the date that mail is
delivered or its delivery is attempted; and (iv) if sent by email, on the date
of transmission; in each case, unless the date of that delivery (or attempted
delivery) or that receipt, as applicable, is not a Business Day or that
communication is delivered (or attempted) or received, as applicable, after the
close of business on a Business Day, in which case that communication shall be
deemed given and effective on the first following day that is a Business Day.

 

Section 11.05      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, by nationally recognized overnight courier or by
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, if any, 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 herein
provided shall conclusively be presumed to have been duly given. Whenever a
notice or other communication to the Noteholders is required under this
Indenture, unless and until definitive Notes shall have been issued to such
Noteholders, the Trustee shall give all such notices and communications
specified herein to be given to Noteholders of the book entry Notes to DTC, and
shall have no obligation to such holders of the book entry Notes.

 

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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 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 Trustee shall be deemed to be a
sufficient giving of such notice.

 

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

 

Section 11.06      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 Trustee or any other party
acting as paying agent to such Holder, that is different from the methods
provided for in this Indenture for such payments or notices. The Issuer will
furnish to the Trustee a copy of each such agreement and the Trustee, at the
expense of the Issuer, will cause payments to be made and notices to be given in
accordance with such agreements.

 

Section 11.07      Effect of Headings.

 

The Article and Section headings herein are for convenience only and shall not
affect the construction hereof.

 

Section 11.08      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 Trustee in this Indenture shall bind its successors, co-trustees and agents.

 

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Section 11.09      Severability.

 

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 11.10      Benefits of Indenture.

 

Except as otherwise specifically provided herein, nothing in this Indenture or
in the Notes shall give to any Person, other than the parties hereto and their
successors hereunder, the Owner Trustee and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Indenture Collateral, any benefit or any legal or equitable right, remedy
or claim under this Indenture.

 

Section 11.11      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 on which
nominally due, and no interest shall accrue for the period from and after any
such nominal date.

 

Section 11.12      GOVERNING LAW; JURY WAIVER.

 

(a)          THIS INDENTURE, EACH SUPPLEMENT AND THE NOTES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

(b)          EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS INDENTURE. Each party hereto (i) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (ii) acknowledges that it and the other parties hereto have been
induced to enter into this Indenture by, among other things, the mutual waivers
and certifications in this Section 11.12(b).

 

Section 11.13      Counterparts.

 

This Indenture may be executed in any number of counterparts (including by
facsimile), 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.

 

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Section 11.14      Issuer Obligation.

 

No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Trustee on the Notes or
under this Indenture or any of the other Transaction Documents or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Trustee or the Owner Trustee in its individual capacity, (ii)
any of the Trust Depositor, the Seller, the Servicer and any holder of a Trust
Certificate or (iii) any partner, owner, beneficiary, stockholder, manager,
member, officer, director, employee or agent of any of the parties identified in
clauses (i) and (ii) or of any successor or assign of any such Person. For all
purposes of this Indenture, in the performance of any duties or obligations of
the Issuer hereunder, the Owner Trustee and the Trust Company shall be subject
to, and entitled to the benefits of, the terms and provisions of the Trust
Agreement.

 

Section 11.15      No Petition; Limited Recourse.

 

(a)          The Trustee, by entering into this Indenture, and each Noteholder,
by accepting a Note, hereby covenant and agree that they will not prior to the
date which is one year and one day or, if longer, the preference period then in
effect after payment in full of the Notes rated by any Rating Agency, institute
against the Trust Depositor or the Issuer, or join in any institution against
the Trust Depositor 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 law in connection with
any obligations relating to the Notes, this Indenture or any of the other
Transaction Documents.

 

(b)          Notwithstanding any other provisions of the Notes, this Indenture
or any other Transaction Document, the obligations of the Issuer under the Notes
and this Indenture and any other Transaction Document are limited recourse
obligations of the Issuer payable solely from the Indenture Collateral in
accordance with the Priority of Payments and, following realization of the
Indenture Collateral and distribution in accordance with the Priority of
Payments, any claims of the Noteholders, and any other parties to any
Transaction Document shall be extinguished. No recourse shall be had against any
officer, administrator, member, director, employee, security holder, holder of a
beneficial interest in or incorporator of the Issuer or their respective
successors or assigns for the payment of any amounts payable under the Notes,
this Indenture or any other Transaction Document. It is understood that the
foregoing provisions of this Section 11.15(b) shall not (i) prevent recourse to
the Loan Assets or the Indenture Collateral for the sums due or to become due
under any security, instrument or agreement which is part of the Loan Assets or
the Indenture Collateral or (ii) constitute a waiver, release or discharge of
any indebtedness or obligation evidenced by the Notes or secured by this
Indenture or payable under any other Transaction Document until such Loan Assets
and such Indenture Collateral have been realized and distributed in accordance
with the Priority of Payments and the other applicable provisions of the
Transaction Documents, whereupon any such outstanding indebtedness or obligation
shall be extinguished. Except as otherwise provided hereunder or agreed in
writing among the parties hereto, the Issuer shall retain the authority to
institute, participate and join in any plan of reorganization, readjustment,
merger or consolidation with respect to the issuer of any securities held
hereunder, and, in general, to exercise each and every other power or right with
respect to each such asset or investment as individuals generally have and enjoy
with respect to their own assets and investment, including power to vote upon
any securities.

 

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Section 11.16      Inspection; Confidentiality.

 

The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Trustee, upon reasonable notice and during the Issuer’s
normal business hours, and in a manner that does not unreasonably interfere with
the Issuer’s normal operations, 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, in such reasonable manner, and as often as may be reasonably
requested. The Trustee shall and shall cause its representatives, its legal
counsel and its auditors to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Trustee may reasonably determine that such disclosure is consistent with its
obligations hereunder and under Applicable Law.

 

Section 11.17      Limitation of Liability.

 

It is expressly understood and agreed by the parties hereto that (i) this
Indenture is executed and delivered by Wilmington Trust, National Association,
not individually or personally but solely as Owner Trustee on behalf of the
Issuer under the Trust Agreement, in the exercise of the powers and authority
conferred and vested in it, (ii) each of the representations, undertakings and
agreements herein made on the part of the Issuer is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust,
National Association but is made and intended for the purpose of binding only
the Issuer, (iii) nothing herein contained shall be construed as creating any
liability on Wilmington Trust, National Association individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties to this Indenture and
by any person claiming by, through or under them and (iv) under no circumstances
shall Wilmington Trust, National Association be personally liable for the
payment of any indebtedness or expenses of the Issuer or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaking by the Issuer under this Indenture or any related documents.

 

Section 11.18      Disclaimer.

 

Each Noteholder by accepting a Note and by accepting the benefits of this
Indenture acknowledges and agrees that this Indenture and the Notes represent a
debt obligation of the Issuer only and do not represent an interest in any
assets (other than the Indenture Collateral) of the Trust Depositor or any
holder of a Trust Certificate (including by virtue of any deficiency claim in
respect of obligations not paid or otherwise satisfied from the Trust Assets and
proceeds thereof).

 

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IN WITNESS WHEREOF, the Issuer and the Trustee have caused their names to be
signed hereto by their respective officers thereunto duly authorized, all as of
the day and year first above written.

 

  HORIZON FUNDING TRUST 2019-1         By: Wilmington Trust, National
Association, not in its individual capacity, but solely as Owner Trustee on
behalf of the Issuer         By:     Name:      Title:  

 

Horizon Funding Trust 2019-1

Indenture

 

 

 

 

IN WITNESS WHEREOF, the Issuer and the Trustee have caused their names to be
signed hereto by their respective officers thereunto duly authorized, all as of
the day and year first above written.

 

  U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, except as
expressly set forth herein, but solely as the Trustee         By:
                        Name:      Title:  

 

Horizon Funding Trust 2019-1

Indenture