Exhibit 10.13

EXECUTION VERSION

INDENTURE

between

LEAF RECEIVABLES FUNDING 2, LLC,

as Issuer,

U.S. BANK NATIONAL ASSOCIATION,

as Trustee and Custodian

Equipment Contract Backed Notes, Series 2010-1, Class A,

Equipment Contract Backed Notes, Series 2010-1, Class B,

and

Equipment Contract Backed Notes, Series 2010-1, Class C

Dated as of May 1, 2010

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TABLE OF CONTENTS

 

          PAGE

ARTICLE I DEFINITIONS

   2

  Section 1.01

   Definitions    2

  Section 1.02

   Certain Rules of Construction    2

ARTICLE II NOTE FORM

   2

  Section 2.01

   Form Generally    2

  Section 2.02

   Multiple Classes of Notes; Form for Each Class; Rights of Each Class    2

  Section 2.03

   Denomination    5

  Section 2.05

   Execution, Authentication, Delivery and Dating    5

  Section 2.07

   Issuance of Definitive Notes    5

  Section 2.08

   Registration, Registration of Transfer and Exchange    6

  Section 2.09

   Mutilated, Destroyed, Lost or Stolen Note    11

  Section 2.10

   Payment of Principal and Interest; Rights Preserved    12

  Section 2.11

   Persons Deemed Owner    13

  Section 2.12

   Cancellation    13

  Section 2.13

   Notices to Security Depository    13

  Section 2.14

   Tax Treatment; Withholding Taxes    13

ARTICLE III SUBSTITUTION OF CONTRACTS

   14

  Section 3.01

   Conditions Precedent to the Substitution of Contract Assets    14

ARTICLE IV ISSUANCE OF NOTES; CERTAIN ISSUER OBLIGATIONS

   16

  Section 4.01

   Conditions to Issuance of Notes    16

  Section 4.02

   Security for Notes    19

  Section 4.03

   Review of Contract Files    20

  Section 4.04

   Defective Contracts    21

  Section 4.05

   Reserved    22

  Section 4.06

   Administration of the Contract Assets    22

  Section 4.07

   Releases    22

ARTICLE V SATISFACTION AND DISCHARGE

   23

  Section 5.01

   Satisfaction and Discharge of Indenture    23

ARTICLE VI DEFAULTS AND REMEDIES

   24

  Section 6.01

   Events of Default    24

  Section 6.02

   Acceleration of Maturity; Rescission and Annulment    24

  Section 6.03

   Collection of Indebtedness and Suits for Enforcement by Trustee    25

  Section 6.04

   Remedies    26

 

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          PAGE

  Section 6.05

  

Optional Preservation of Collateral

   27

  Section 6.06

  

Trustee May File Proofs of Claim

   27

  Section 6.07

  

Trustee May Enforce Claims Without Possession of Notes

   28

  Section 6.08

  

Application of Money Collected

   28

  Section 6.09

  

[Reserved]

   28

  Section 6.10

  

Unconditional Right of the Noteholders to Receive Principal and Interest

   28

  Section 6.11

  

Restoration of Rights and Remedies

   28

  Section 6.12

  

Rights and Remedies Cumulative

   29

  Section 6.13

  

Delay or Omission Not Waiver

   29

  Section 6.14

  

Control by Control Party

   29

  Section 6.15

  

Waiver of Certain Events by the Control Party

   29

  Section 6.16

  

Additional Rights of Class B Noteholders and Class C Noteholders

   30

  Section 6.17

  

Waiver of Stay or Extension Laws

   30

  Section 6.18

  

Sale of Collateral

   31

  Section 6.19

  

Action on Notes

   32

ARTICLE VII THE TRUSTEE

   32

  Section 7.01

   Certain Duties and Responsibilities    32

  Section 7.02

   Notice of Default and Other Events    34

  Section 7.03

   Certain Rights of Trustee    34

  Section 7.04

   Not Responsible for Recitals or Issuance of Notes    35

  Section 7.05

   May Hold Notes    36

  Section 7.06

   Money Held in Trust    36

  Section 7.07

   Compensation and Reimbursement    36

  Section 7.08

   Corporate Trustee Required; Eligibility    38

  Section 7.09

   Resignation and Removal; Appointment of Successor    38

  Section 7.10

   Acceptance of Appointment by Successor    39

  Section 7.11

   Merger, Conversion, Consolidation or Succession to Business of Trustee    39

  Section 7.12

   Co-Trustees and Separate Trustees    39

  Section 7.13

   Maintenance of Office or Agency; Initial Appointment of Payment Agent    41

  Section 7.14

   Appointment of Authenticating Agent    41

  Section 7.15

   Appointment of Paying Agent other than Trustee; Money for Note Payments to be
Held in Trust    42

  Section 7.16

   Rights with Respect to the Servicer and Back-up Servicer    43

  Section 7.17

   Representations and Warranties of the Trustee    43

ARTICLE VIII THE CUSTODIAN

   44

  Section 8.01

   Appointment of Custodian    44

  Section 8.02

   Removal of Custodian    45

  Section 8.03

   Termination by Custodian    45

  Section 8.04

   Limitations on the Custodian’s Responsibilities    45

  Section 8.05

   Limitation on Liability    47

 

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          Page

  Section 8.06

  

Custodian Obligations Regarding Genuineness of Documents

   47

  Section 8.07

  

Force Majeure

   47 ARTICLE IX [RESERVED]    48 ARTICLE X SUPPLEMENTAL INDENTURES    48

  Section 10.01

  

Supplemental Indentures without Consent of the Noteholders

   48

  Section 10.02

  

Supplemental Indentures with Consent of the Noteholders

   49

  Section 10.03

  

Execution of Supplemental Indentures

   50

  Section 10.04

  

Effect of Supplemental Indentures

   50

  Section 10.05

  

Reference in Notes to Supplemental Indentures

   50

  Section 10.06

  

Back-Up Servicer Consent

   50

  Section 10.07

  

Amendments to the Lockbox Intercreditor Agreement

   50 ARTICLE XI REDEMPTIONS AND PREPAYMENTS OF NOTES    50

  Section 11.01

  

Redemptions of Notes

   50

  Section 11.02

  

Notice to Trustee

   51

  Section 11.03

  

Notice of Redemption to Noteholders

   51

  Section 11.04

  

Amounts Payable on Redemption Date

   52

  Section 11.05

  

Release of Contract Assets in Connection with Redemptions

   52 ARTICLE XII REPRESENTATIONS, WARRANTIES AND COVENANTS    53

  Section 12.01

  

Representations and Warranties

   53

  Section 12.02

  

Covenants

   58 ARTICLE XIII ACCOUNTS AND ACCOUNTINGS    64

  Section 13.01

  

Collection of Money

   64

  Section 13.02

  

Establishment of Trust Accounts

   65

  Section 13.03

  

Collection Account

   67

  Section 13.04

  

Reserve Account

   68

  Section 13.05

  

Servicer Transition Account

   69

  Section 13.06

  

Reports to the Noteholders

   69

  Section 13.07

  

Monthly Servicing Reports

   69 ARTICLE XIV PROVISIONS OF GENERAL APPLICATION    70

  Section 14.01

  

General Provisions

   70

  Section 14.02

  

Acts of Noteholders

   70

  Section 14.03

  

Notices

   70

  Section 14.04

  

Notices to Noteholders; Waiver

   71

  Section 14.05

  

Successors and Assigns

   71

  Section 14.06

  

Severability; No Waiver

   71

 

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          PAGE

Section 14.07

  

Benefits of Indenture Limited to Parties and Express Third Party Beneficiaries

   72

Section 14.08

  

Legal Holidays

   72

Section 14.09

  

Governing Law; Waiver of Jury Trial; Consent to Jurisdiction

   72

Section 14.10

  

Counterparts; Entire Agreement

   72

Section 14.11

  

Notifications

   73

Section 14.12

  

No Petition

   73

Section 14.13

  

Assignment

   73

 

Schedule I    Contract Schedule Schedule II    Definitions Annex

 

iv

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          PAGE EXHIBITS    A-1    Form of Global Class A Note    A-2    Form of
Definitive Class A Note    B-1    Form of Global Class B Note    B-2    Form of
Definitive Class B Note    C-1    Form of Global Class C Note    C-2    Form of
Definitive Class C Note    D-1    Form of Request for Release    D-2    Form of
Return of Documents to Custodian    E    Form of Custodian and Trustee
Certificate Re: Substitutions    F    Form of Release Agreement Re: Existing
Indebtedness    G    [Reserved]    H    Form of Global Note Transfer Certificate
   I    Form of Investor Certificate    J    Form of Substitution Certificate   

 

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This Indenture, dated as of May 1, 2010 (as amended, supplemented or modified
from time to time, this “Indenture”), is entered into between LEAF RECEIVABLES
FUNDING 2, LLC, a Delaware limited liability company, as Issuer and U.S. BANK
NATIONAL ASSOCIATION, a national banking association, as Trustee and as
Custodian.

PRELIMINARY STATEMENT

The Issuer has duly authorized the execution and delivery of this Indenture to
provide for the issuance of its Equipment Contract Backed Notes, Series 2010-1
(the “Notes”), issuable as provided in this Indenture. All covenants and
agreements made by the Issuer herein are for the benefit and security of the
Noteholders. The Issuer and the Custodian are entering into this Indenture, and
the Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.

All things necessary to make this Indenture a valid agreement of the Issuer, the
Trustee and the Custodian in accordance with its terms have been done.

GRANTING CLAUSE

To secure the payment of the principal of and interest on the Notes in
accordance with their terms, the payment of all sums payable under this
Indenture and the other Transaction Documents and the performance of the
covenants contained in this Indenture and the other Transaction Documents, the
Issuer hereby Grants to the Trustee, solely in trust and as collateral security
as provided in this Indenture, for the benefit of the Secured Parties, a
security interest in all of the Issuer’s “accounts,” “deposit accounts,”
“chattel paper,” “payment intangibles,” “commercial tort claims,” “supporting
obligations,” “promissory notes,” “letter-of-credit rights,” “documents,”
“goods,” “fixtures,” “general intangibles,” “instruments,” “inventory,”
“equipment,” “investment property,” “proceeds” (as each of the foregoing terms
is defined in the UCC), rights, interests and property (whether now owned or
hereafter acquired or arising), including the Issuer’s right, title and interest
(whether now owned or hereafter acquired or arising) in and to and under the
following: (a) the Contracts listed on the Contract Schedule; (b) the related
Contract Assets; (c) the Assignment Agreements; (d) any rights of the Issuer
under the Purchase and Contribution Agreement and the Acquisition Agreement;
(e) any rights of the Issuer under the Servicing Agreement; (f) the Reserve
Account, the Collection Account and the Servicer Transition Account and all
amounts from time to time on deposit therein (including any Eligible
Investments, investment property and other property at any time and from time to
time in such accounts); (g) all amounts from time to time on deposit in the
Lockbox Account with respect to the Contracts and the Equipment; (h) the
interest of the Issuer in the Equipment; (i) any Insurance Policy and Insurance
Proceeds and (j) all income, payments and proceeds of the foregoing (including,
but not by way of limitation, 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,
investment property and other forms of obligations and receivables which at any
time constitute all or part or are included in the proceeds of any of the
foregoing) (all of the foregoing being hereinafter referred to as the
“Collateral”). The foregoing Grant, transfer, assignment, set over and
conveyance does

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not constitute and is not intended to result in a creation or an assumption by
the Trustee or the Secured Parties of any obligation of the Issuer, the Servicer
or any other Person in connection with the Collateral or under any agreement or
instrument relating thereto. In furtherance and not in limitation of the
foregoing, the Issuer hereby assigns to the Trustee, for the benefit of the
Secured Parties, all of its right, title and interest in and to all liens and
security interests in any assets, and all UCC financing statements related
thereto. Notwithstanding the foregoing, Security Deposits shall not constitute
part of the Collateral.

The Trustee acknowledges its acceptance on behalf of the Secured Parties of a
security interest in all of the Issuer’s right, title and interest in and to the
Collateral and declares that it shall maintain the Collateral in accordance with
the provisions hereof.

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. Except as otherwise expressly provided herein or
unless the context otherwise requires, capitalized terms used but not otherwise
defined herein have the meaning set forth in the Definitions Annex attached
hereto as Schedule II.

Section 1.02 Certain Rules of Construction. Unless the context of this Indenture
clearly requires otherwise: (a) references to the plural include the singular
and to the singular include the plural; (b) references to any gender include any
other gender; (c) the words “include” and “including” are not limiting; (d) the
words “hereof,” “herein,” “hereby,” and “hereunder,” and any other similar
words, refer to this Indenture as a whole and not to any particular provision
hereof; and (e) article, section, subsection, clause, exhibit, and schedule
references are to this Indenture. Article, section, and subsection headings are
for convenience of reference only, shall not constitute a part of this Indenture
for any other purpose, and shall not affect the construction of this Indenture.
All exhibits and schedules attached hereto are incorporated herein by this
reference. Any reference herein to this Indenture or any other agreement,
document, or instrument includes all permitted alterations, amendments, changes,
extensions, modifications, renewals, or supplements thereto or thereof, as
applicable.

ARTICLE II

NOTE FORM

Section 2.01 Form Generally. The Notes and the related certificates of
authentication shall be in substantially the form described in this Indenture,
with such appropriate insertions, omissions, substitutions and other variations
as are expressly required or permitted by this Indenture. The Notes may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon, as may, consistently herewith, be determined
appropriate by the officers executing such Notes, as evidenced by their
execution of the Notes. The terms of each Note are intended to be incorporated
into this Indenture.

Section 2.02 Multiple Classes of Notes; Form for Each Class; Rights of Each
Class. This Indenture provides for the issuance by the Issuer of three classes
of Notes, the Class A Notes, the Class B Notes and the Class C Notes. Each Note
shall bear upon its face the designation of the Class to which it belongs. Each
Class A Note issued in the form of a Global

 

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Note shall be in the form of Exhibit A-1 attached hereto, and each Class A Note
issued in the form of a Definitive Note shall be in the form of Exhibit A-2
attached hereto. Each Class B Note issued in the form of a Global Note shall be
in the form of Exhibit B-1 attached hereto, and each Class B Note issued in the
form of a Definitive Note shall be in the form of Exhibit B-2 attached hereto.
Each Class C Note issued in the form of a Global Note shall be in the form of
Exhibit C-1 attached hereto, and each Class C Note issued in the form of a
Definitive Note shall be in the form of Exhibit C-2 attached hereto. All Notes
in the same Class shall be in substantially identical form except for
differences in registration information and denomination and such other
variations as may be permitted by this Indenture.

(a) Global Notes. The Notes are being offered and sold by the Issuer to the
Initial Purchaser pursuant to the Note Purchase Agreement.

Notes offered and sold to QIBs in reliance on Rule 144A shall be issued
initially in the form of Rule 144A Global Notes, which shall be delivered by the
Trustee to the Security Depository or pursuant to the Security Depository’s
instructions, and registered in the name of the Security Depository or a nominee
of the Security Depository, duly executed by the Issuer and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the Rule 144A
Global Notes may from time to time be increased (up to the maximum authorized
amount) or decreased by adjustments made on the records of the Trustee and the
Security Depository or its nominee as hereinafter provided. The Trustee shall
not be liable for any error or omission by the Security Depository in making
such record adjustments, and the records of the Trustee shall be controlling
with regard to the outstanding principal amount of Rule 144A Global Notes
hereunder absent manifest error.

Each Global Note shall represent such of the outstanding Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the amount of outstanding Notes represented thereby shall be made by
the Trustee, or by the Note Registrar at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by
Section 2.07 hereof.

Except as set forth in Section 2.07 hereof, the Global Notes may be transferred,
in whole and not in part, only to another nominee of the Security Depository or
to a successor of the Security Depository or its nominee.

(b) Book-Entry Provisions. This Section 2.02(b) shall apply only to the
Rule 144A Global Notes deposited with or on behalf of the Security Depository.

The Issuer shall execute and the Trustee shall, in accordance with this
Section 2.02(b), authenticate and deliver one Global Note for each Class of
Notes which shall be (i) registered in the name of the Security Depository or
the nominee of the Security Depository and (ii) delivered by the Trustee to the
Security Depository or pursuant to the Security Depository’s instructions.

 

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Members of, or participants in, the Security Depository shall have no rights
either under this Indenture with respect to any Global Note held on their behalf
by the Security Depository or by the Trustee as custodian for the Security
Depository or under such Global Notes, and the Security Depository may be
treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as
the absolute owner of such Global Notes for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the
Trustee or any agent of the Issuer or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Security
Depository or impair, as between the Security Depository and its Agent Members,
the operation of customary practices of such Security Depository governing the
exercise of the rights of an owner of a beneficial interest in any Global Notes.

So long as there are no Definitive Notes Outstanding, the Note Registrar and the
Trustee shall treat the Security Depository for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and the giving
of instructions or directions hereunder) as the sole Holder of the Notes, and
shall have no obligation to the Note Owners.

The rights of Note Owners shall be exercised only through the Security
Depository and shall be limited to those established by law and agreements
between such Note Owners and the Security Depository and/or the Agent Members.
The initial Security Depository will make book-entry transfers among the Agent
Members and receive and transmit payments of principal of and interest on the
Notes to such Agent Members with respect to such Global Notes.

Whenever this Indenture requires or permits actions to be taken based upon
instructions or directions of Holders of Notes evidencing a specified percentage
of the Outstanding amount of the Notes, the Security Depository shall be deemed
to represent such percentage only to the extent that it (i) has received
instructions to such effect from Note Owners and/or Agent Members owning or
representing, respectively, such required percentage of the beneficial interest
in the Notes and (ii) has delivered such instructions to the Trustee.

(c) Definitive Notes. Except as provided in Section 2.05, owners of beneficial
interests in Global Notes will not be entitled to receive physical delivery of
certificated definitive, fully registered Notes (any such Notes, the “Definitive
Notes”). The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, all as determined by
the officers executing such Notes, as evidenced by their execution of such
Notes.

(d) Each Note issued under this Indenture shall be in all respects equally and
ratably secured with each other Note by the Collateral Granted by the Issuer
hereunder. Each Note shall be entitled to the benefits hereof, without
preference, priority or distinction on account of the actual time or times of
authentication and delivery, all in accordance with the terms and provisions of
this Indenture. Notwithstanding the foregoing, all cash amounts shall be applied
by the Trustee in accordance with the express provisions hereof and (I) the
rights of the Holders of the Class B Notes (1) to receive payments of interest
in respect of the Class B Notes on any Payment Date, on the Stated Maturity Date
or on the Redemption Date shall be subordinate to the rights of the Holders of
Class A Notes to receive payment of interest on the Class A Notes and to certain
other payments as set forth in Section 13.03 and others entitled to receive
payments thereunder and (2) to receive payments of principal in respect of the
Class B Notes on

 

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any Payment Date, on the Stated Maturity Date or on the Redemption Date shall be
subordinate to the rights of the Holders of the Class A Notes to receive
principal paid on the Class A Notes and to certain other payments, as set forth
in Section 13.03 and others entitled to receive payments thereunder and (II) the
rights of the Holders of the Class C Notes (1) to receive payments of interest
in respect of the Class C Notes on any Payment Date, on the Stated Maturity Date
or on the Redemption Date shall be subordinate to the rights of the Holders of
Class A Notes and Class B Notes to receive payment of interest on the Class A
Notes and Class B Notes, as applicable, and to certain other payments as set
forth in Section 13.03 and others entitled to receive payments thereunder and
(2) to receive payments of principal in respect of the Class C Notes on any
Payment Date, on the Stated Maturity Date or on the Redemption Date shall be
subordinate to the rights of the Holders of the Class A Notes and Class B Notes
to receive principal paid on the Class A Notes and Class B Notes, as applicable,
and to certain other payments, as set forth in Section 13.03 and others entitled
to receive payments thereunder.

Section 2.03 Denomination. The aggregate stated principal amount of the Class A
Notes that may be authenticated and delivered under this Indenture is
$74,195,000, the aggregate stated principal amount of the Class B Notes that may
be authenticated and delivered under this Indenture is $15,661,000 and the
aggregate stated principal amount of the Class C Notes that may be authenticated
and delivered under this Indenture is $2,838,000, except for Notes of the same
Class authenticated and delivered upon registration of transfer, or in exchange
for, or in lieu of, other Notes pursuant to Sections 2.06, 2.08 or 10.05. The
Notes shall be issuable only as registered Notes without coupons in the
denominations of at least $100,000 with respect to any Note and multiples of
$1,000 for any amount in excess thereof; provided that the foregoing shall not
restrict or prevent the transfer, in accordance with Sections 2.06 and 2.07, of
any “stub” Note with a remaining Outstanding Note Balance of less than $100,000
with respect to any Note.

Section 2.05 Execution, Authentication, Delivery and Dating. The Notes shall be
executed on behalf of the Issuer by the manual or facsimile signature of one of
its authorized officers. Notes bearing the manual or facsimile signatures of
individuals who were at any time authorized officers of the Issuer shall bind
the Issuer, notwithstanding that such individuals or any of them have ceased to
hold such offices subsequent to the authentication or delivery of such Notes.

Each Note shall be dated as of the date of its authentication. 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 upon
receipt of an Issuer Order or by any Authenticating Agent by the manual
signature of one of its authorized officers, 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 2.07 Issuance of Definitive Notes. If Book-Entry Notes have been issued
with respect to any Class and (a) the Issuer advises the Trustee that the
Security Depository is no longer willing or able to discharge properly its
responsibilities with respect to such Class and the Trustee or the Issuer is
unable to locate a qualified successor, (b) the Issuer at its option elects to
terminate the book-entry system through DTC, or (c) after the occurrence of an
Event of Default, Noteholders of not less than 50% of the Outstanding Note
Balance of Notes of any Class advise

 

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the Trustee and DTC that it is no longer in the best interests of such Class to
have the Notes of such Class in book-entry form, then upon surrender to the
Trustee of any such Notes by the Security Depository, accompanied by
registration instructions from the Security Depository for registration of
Definitive Notes, the Issuer shall execute and the Trustee shall authenticate
and the Note Registrar shall deliver such Definitive Notes to the applicable
Noteholders. Neither the Issuer nor the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. The Trustee shall recognize the
Holders of such Definitive Notes as Noteholders hereunder.

Section 2.08 Registration, Registration of Transfer and Exchange.

(a) The Issuer shall cause to be kept a register (the “Note Register”) at the
office of an agent (the “Note Registrar”), in accordance with Section 7.13, and
in which, subject to such reasonable regulations as it may prescribe, the Note
Registrar shall, on behalf of the Issuer, provide for the registration, issuance
and ownership of the Notes and the registration of transfers of the Notes. The
Trustee is hereby appointed the initial Note Registrar. Each Noteholder and, if
the Note Registrar is someone other than the Trustee, the Trustee shall have the
right to examine the Note Register at all reasonable times and to rely
conclusively upon an Officer’s Certificate of the Note Registrar as to the names
and addresses of the Noteholders and the principal amounts and numbers of such
Notes as held.

(b) The Notes have not been registered under the Securities Act or the
securities laws of any jurisdiction. Consequently, the Notes are not
transferable other than pursuant to Rule 144A or another exemption from
registration. Each Person who has or who acquires any Ownership Interest in a
Note shall be deemed by the acceptance or acquisition of such Ownership Interest
to have agreed to be bound by the provisions of this Section 2.06.

(c) With respect to any Definitive Note, at the option of the Noteholder
thereof, Notes may be exchanged for other Notes of any authorized denominations
(together with any “stub note” reflecting the remaining principal balance of
such Note(s) that is less than the minimum authorized denomination), aggregate
principal amount and Stated Maturity Date, 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, and the Trustee or its agents shall
authenticate and deliver, the Notes which the Noteholder making the exchange is
entitled to receive.

(d) With respect to any Definitive Note, any Definitive Note presented or
surrendered for registration of transfer or exchange shall be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed. All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Issuer, evidencing the
same rights, and entitled to the same benefits under this Indenture, as the
Notes surrendered upon such registration of transfer or exchange. No service
charge shall be charged to a Noteholder for any registration of transfer or
exchange of Notes, but the Issuer and the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.

 

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(i) Limitation on Transfer and Exchange. (1) The transfer and exchange of Global
Notes or beneficial interests therein shall be effected through the Security
Depository, in accordance with this Indenture and the procedures of the Security
Depository therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Beneficial
interests in a Global Note may be transferred to persons who take delivery
thereof in the form of a beneficial interest in the same Global Note in
accordance with the transfer restrictions set forth in the legend in
subsection (d)(xii) of Section 2.07.

(e) Transfer and Exchange from Definitive Notes to Definitive Notes. When
Definitive Notes are presented by a Holder to the Note Registrar with a request:

(i) to register the transfer of Definitive Notes in the form of other Definitive
Notes; or

(ii) to exchange such Definitive Notes for an equal principal amount of
Definitive Notes of other authorized denominations, the Note Registrar shall
register the transfer or make the exchange as requested; provided, however, that
the Definitive Notes presented or surrendered for register of transfer or
exchange:

(A) shall be duly endorsed or accompanied by a written instruction of transfer
in form satisfactory to the Note Registrar duly executed by such Holder or by
his attorney, duly authorized in writing; and

(B) shall be accompanied by an Investment Letter substantially in the form of
Exhibit I attached hereto shall be delivered by the proposed transferee to the
Issuer and to the Trustee to the effect that such transfer is in compliance with
Rule 144A.

(f) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding any
other provision of this Indenture, a Global Note may not be transferred as a
whole except by the Security Depository to a nominee of the Security Depository
or by a nominee of the Security Depository to the Security Depository or another
nominee of the Security Depository or by the Security Depository or any such
nominee to a successor Security Depository or a nominee of such successor
Security Depository.

(g) Each purchaser of a Note or an interest in a Note, other than the Initial
Purchaser, will be deemed to have represented and agreed as follows:

(i) It understands that the Notes will be offered and may be resold by the
Initial Purchaser only to QIBs pursuant to Rule 144A or another exemption from
registration.

(ii) It understands that the Notes have not been registered under, and were
transferred to it in a transaction not involving any public offering within the
meaning of, the Securities Act, and that if in the future it decides to
re-offer, resell, pledge or otherwise transfer such Notes it will do so only in
accordance with applicable state

 

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securities laws and pursuant to Rule 144A to a Person whom the seller reasonably
believes is a QIB in a transaction meeting the requirements of Rule 144A,
purchasing for its own account or for the account of a QIB, whom the holder has
informed that such re-offer, resale, pledge or other transfer is being made in
reliance on Rule 144A or to the Issuer pursuant to the terms of the Indenture.

(iii) It acknowledges that none of the Issuer, the Initial Purchaser or any
Person representing the Issuer or the Initial Purchaser has made any
representation to it with respect to the Issuer, any affiliates thereof or the
offering or sale of the Notes, other than the information contained in the
Offering Circular. It is purchasing the Notes for its own account, or for one or
more investor accounts for which it is acting as a fiduciary or agent, in each
case for investment purposes only, and not with a view to, or for offer or
resale in connection with, any distribution thereof in violation of the
Securities Act or the applicable state securities laws, subject to any
requirements of law that the disposition of its property or the property of such
investor account be at all times within its or their control and subject to its
or their ability to resell such Notes pursuant to Rule 144A.

(iv) If it is acquiring any Note as a fiduciary or agent for one or more
investor accounts, it represents that it has sole investment discretion with
respect to such account and that it has full power to make the acknowledgments,
representations and agreements contained herein on behalf of each such account.

(v) It is (1) a QIB purchasing for its own account or for the account of another
QIB and it, and such other Person (if applicable), are aware that the sale to it
is being made in reliance on Rule 144A and (2) with respect to the Class C
Notes, is a U.S. Person.

(vi) It acknowledges that transfers of the Notes shall otherwise be subject in
all respects to the restrictions applicable thereto contained in this Indenture.

(vii) (A) It is not (and for so long as it holds any Notes or an interest
therein will not be), and is not acting on behalf of (and for so long as it
holds any Notes or an interest herein will not be acting on behalf of), an
“employee benefit plan” as defined in Section 3(3) of ERISA that is subject to
Title I of ERISA, a plan described in Section 4975(e)(1) of the Code or an
entity which is deemed to hold the assets of any such plan (“Plan Assets”)
pursuant to 29 C.F.R. Section 2510.3-101 as modified by Section 3(42) of ERISA
(the “Plan Asset Regulation”) (each a “Benefit Plan Investor”), (B) in the case
of a Class A Note or a Class B Note, (i) its acquisition and continued holding
of such Note will be covered by a statutory exemption or a prohibited
transaction class exemption issued by the United States Department of Labor,
(ii) at the time of acquisition the Notes are rated at least investment grade
and (iii) it believes that the Notes are properly treated as indebtedness
without substantial equity features for purposes of the Plan Asset Regulations
and agrees to so treat such Notes or (C) in the case of a Class A Note or a
Class B Note, it has provided the Trustee with an opinion of counsel, which
opinion of counsel will not be at the expense of the Trustee, the Issuer, the
Servicer or the Initial Purchaser, which opines that the purchase, holding and
transfer of such Note or interest therein is permissible under applicable law,
will not constitute or result in a non-

 

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exempt prohibited transaction under ERISA or Section 4975 of the Code and will
not subject the Trustee, the Issuer, the Servicer or the Initial Purchaser to
any obligation in addition to those undertaken herein.

(viii) It acknowledges and agrees to treat the Notes as debt for all federal,
state and local income tax purposes.

(ix) [Reserved.]

(x) It is purchasing one or more Notes in an amount of at least $100,000, and it
understands that such Notes may be resold, pledged or otherwise transferred in
an amount of at least $100,000 (unless the outstanding principal amount of such
Note shall be less than $100,000).

(xi) It understands that the Notes will bear a legend substantially to the
following effect unless the Issuer determines otherwise consistent with
applicable law:

For Rule 144A Global Notes Only: Unless this Note is presented by an authorized
representative of The Depository Trust Company, a New York corporation (“DTC”),
to the transferor of such Note 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 the 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.

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING THIS NOTE, AGREES (1) THAT THIS NOTE MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS
AND (A) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE
SECURITIES ACT (“RULE 144A”) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (“QIB”) WITHIN THE MEANING OF RULE 144A,
PURCHASING FOR ITS OWN ACCOUNT, OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB AND
TO WHOM NOTICE IS GIVEN THAT RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, OR TO THE ISSUER PURSUANT TO THE TERMS OF THE INDENTURE,
OR (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, AND (2) THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TO BE
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THE INDENTURE
RELATING TO THIS NOTE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE OR

 

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ANY INTEREST HEREIN IN VIOLATION OF THE FOREGOING. EACH TRANSFEREE ACCEPTING A
BENEFICIAL INTEREST IN THIS NOTE IS DEEMED TO REPRESENT TO THE ISSUER AND THE
SERVICER THAT IT IS EITHER A QIB PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF ANOTHER QIB. EACH HOLDER HEREOF IS DEEMED TO
REPRESENT AND WARRANT EITHER (A) THAT IT IS NOT (AND FOR SO LONG AS IT HOLDS
THIS NOTE OR AN INTEREST HEREIN WILL NOT BE), AND IS NOT ACTING ON BEHALF OF
(AND FOR SO LONG AS IT HOLDS THIS SECURITY OR AN INTEREST HEREIN WILL NOT BE
ACTING ON BEHALF OF), AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT
IS SUBJECT TO TITLE I OF ERISA, A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR AN ENTITY WHICH IS
DEEMED TO HOLD THE ASSETS OF ANY SUCH PLAN (“PLAN ASSETS”) PURSUANT TO 29 C.F.R.
SECTION 2510.3-101 AS MODIFIED BY SECTION 3(42) OF ERISA (THE “PLAN ASSET
REGULATION”) (EACH A “BENEFIT PLAN INVESTOR”), (B) IN THE CASE OF A CLASS A NOTE
OR A CLASS B NOTE (I) ITS PURCHASE AND OWNERSHIP OF THIS SECURITY WILL BE
COVERED BY A PROHIBITED TRANSACTION CLASS EXEMPTION ISSUED BY THE UNITED STATES
DEPARTMENT OF LABOR, (II) AT THE TIME OF ACQUISITION THE NOTES ARE RATED AT
LEAST INVESTMENT GRADE AND (III) IT BELIEVES THAT THE NOTES ARE PROPERLY TREATED
AS INDEBTEDNESS WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN
ASSET REGULATIONS AND AGREES TO SO TREAT SUCH NOTES. THE NOTES OR ANY BENEFICIAL
INTEREST HEREIN MAY BE TRANSFERRED ONLY IN PERMITTED DENOMINATIONS SPECIFIED IN
THE INDENTURE. ACCORDINGLY, AN INVESTOR IN THIS NOTE MUST BE PREPARED TO BEAR
THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME, OR (C) IN
THE CASE OF A CLASS A NOTE OR A CLASS B NOTE, IT HAS PROVIDED THE TRUSTEE WITH
AN OPINION OF COUNSEL, WHICH OPINION OF COUNSEL WILL NOT BE AT THE EXPENSE OF
THE TRUSTEE, THE ISSUER, THE SERVICER OR THE INITIAL PURCHASER, WHICH OPINES
THAT THE PURCHASE, HOLDING AND TRANSFER OF SUCH NOTE OR INTEREST THEREIN IS
PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE AND WILL NOT
SUBJECT THE TRUSTEE, THE ISSUER, THE SERVICER OR THE INITIAL PURCHASER TO ANY
OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE INDENTURE.

(xii) It acknowledges that the Issuer, the Servicer, the Initial Purchaser and
others will rely on the truth and accuracy of the foregoing acknowledgments,
representations and agreements, and agrees that if any of the foregoing

 

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acknowledgments, representations and agreements deemed to have been made by it
are no longer accurate, it shall promptly notify the Issuer, the Servicer and
the Initial Purchaser.

(h) Except as otherwise required under the Note Purchase Agreement, the Initial
Purchaser shall not be required to deliver, and neither the Issuer nor the
Trustee shall demand therefrom, any of the certifications or opinions described
in this Section 2.07 in connection with the initial issuance of the Notes and
the delivery thereof by the Issuer.

Section 2.09 Mutilated, Destroyed, Lost or Stolen Note. (a) If (i) any mutilated
Note is surrendered to the Trustee or the Issuer, or the Trustee and the Issuer
receive evidence to their reasonable satisfaction of the destruction, loss or
theft of any Note, and (ii) in the case of a destroyed, lost, or stolen Note,
there is delivered to the Trustee and the Issuer such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Trustee and the Issuer that such Note has been acquired by a bona
fide purchaser and provided that the requirements of Section 8-405 of the UCC
are satisfied, the Issuer shall execute and, upon a written request therefor by
the Trustee and the Issuer shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of the
same Class, tenor and Principal Balance, bearing a number not contemporaneously
outstanding. If, after the delivery of such new Note, a bona fide purchaser of
the original Note in lieu of which such new Note was issued presents such
original Note for payment, the Trustee and the Issuer shall be entitled to
recover such new Note from the Person to whom it was delivered or any Person
taking title there from, except a bona fide purchaser, and the Trustee and the
Issuer 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
Trustee and the Issuer, in connection therewith. If any such mutilated,
destroyed, lost or stolen Note shall have become or shall be about to become due
and payable in full, or shall have been called for redemption in full, instead
of issuing a new Note, the Issuer may pay such Note without surrender thereof,
except that any mutilated Note shall be surrendered.

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

Subject to the above provisions of this Section 2.07, every new Note issued
pursuant to this Section 2.07, in lieu of any destroyed, lost or stolen Note,
shall constitute an original additional contractual obligation of the Issuer,
whether or not the destroyed, lost or stolen Note shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder.

The provisions of this Section 2.07 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.

 

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Section 2.10 Payment of Principal and Interest; Rights Preserved.

(a) For each applicable Interest Accrual Period, the Notes of each Class shall
accrue interest on the Outstanding Note Balance thereof at the Note Rate
applicable to such Class. All interest and fees accrued hereunder on the Class A
Notes, the Class B Notes and Class C Notes shall be calculated on the basis of a
three-hundred-sixty (360)-day year comprised of twelve 30-day months and shall
accrue through the day preceding the Stated Maturity Date and (to the extent
that the payment of such interest shall be legally enforceable) on any overdue
payment of interest from the date such interest becomes due and payable (giving
effect to any applicable grace periods herein) until fully paid. All accrued
interest shall be due and payable in arrears on each Payment Date and shall be
paid by the Trustee to the Noteholders in accordance with Section 13.03. In
making any interest payment, if the interest calculation with respect to a Note
shall result in a portion of such payment being less than $0.01, then such
payment shall be decreased to the nearest whole cent, and no subsequent
adjustment shall be made in respect thereof.

(b) The principal of each Note shall be payable on each Payment Date beginning
on the Initial Payment Date unless such Note becomes due and payable at an
earlier date by call for redemption in accordance with Article XI. The
installment of principal due on the Class A Notes on any Payment Date shall, to
the extent of cash flow available therefor in accordance with Section 13.03 on
such Payment Date, be paid as set forth in Section 13.03(c)(viii). The
installment of principal due on the Class B Notes on any Payment Date shall, to
the extent of cash flow available therefor in accordance with Section 13.03 on
such Payment Date, be paid as set forth in Section 13.03(c)(ix). The installment
of principal due on the Class C Notes on any Payment Date shall, to the extent
of cash flow available therefor in accordance with Section 13.03 on such Payment
Date, be paid as set forth in Section 13.03(c)(x). All unpaid principal on any
Note (together with interest thereon and all other amounts due and payable
hereunder or in respect of the Notes) shall be due and payable in full on the
Stated Maturity Date for such Note. All reductions in the principal amount of a
Note effected by payment of such installments of principal shall be binding upon
all future Noteholders of such Note and of any Note issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof, whether or not
such payment is noted on such Note. Principal shall be payable to Noteholders in
the same Class on a pro rata basis based upon the relative Outstanding Note
Balance of the Notes in such Class as of the related date of determination;
provided that, if as a result of such proration a portion of such principal
would be less than $0.01, then such payment shall be decreased to the nearest
whole cent, and such portion shall be applied to the next succeeding principal
payment.

(c) The principal of and interest on the Notes, and other amounts payable to the
Noteholders under Section 13.03, are payable, through the Paying Agent on behalf
of the Issuer, by check mailed by first-class mail to the Person whose name
appears as the Registered Holder of such Note on the Note Register at the
address of such Person as it appears on the Note Register or, at the option of
any Noteholder, by wire transfer in immediately available funds to the account
specified in writing to the Trustee by such Registered Holder at least five
(5) Business Days prior to the Record Date for the Payment Date on which wire
transfers will commence, in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts. All payments on the Notes shall be paid without any requirement
of presentment. The Issuer shall notify the Person in whose name a

 

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Note is registered at the close of business on the Record Date immediately
preceding the Payment Date on which the Issuer expects that the final
installment of principal of such Note will be paid. Such notice shall be mailed
no later than the tenth (10th) day prior to such Payment Date and shall specify
the place where such Note may be surrendered. Funds representing any such checks
returned undeliverable shall be held in accordance with Section 7.15. Each
Noteholder shall promptly surrender its Note to the Trustee at the Corporate
Trust Office or in the case of mutilated, destroyed, lost or stolen Notes, as
provided in Section 2.07, upon payment of the final installment of principal of
such Note.

Section 2.11 Persons Deemed Owner. Prior to due presentment for registration of
transfer of any Note, the Issuer, the Trustee, the Note Registrar, the Paying
Agent and any agent of any of the foregoing shall treat the Person in whose name
any Note is registered in the Note Register as the owner of such Note for the
purpose of receiving payments of principal and interest on such Note and for all
other purposes whatsoever, whether or not such Note be overdue, and none of the
Issuer, the Trustee, the Note Registrar, the Paying Agent or any agent of the
foregoing shall be affected by notice to the contrary.

Section 2.12 Cancellation. All Notes surrendered to the Trustee for payment,
registration of transfer or exchange (including Notes surrendered to any Person
other than the Trustee which shall be delivered to the Trustee) shall be
promptly canceled by the Trustee. No Notes shall be authenticated in lieu of or
in exchange for any Notes canceled as provided in this Section 2.11, except as
expressly permitted by this Indenture. All canceled Notes held by the Trustee
shall be disposed of by the Trustee in accordance with its standard practice.

Section 2.13 Notices to Security Depository. Whenever any notice or other
communication is required to be given to Noteholders of any Class with respect
to which Book-Entry Notes have been issued, unless and until Definitive Notes
shall have been issued to the related Noteholders, the Trustee shall give all
such notices and communications to the applicable Security Depository.

Section 2.14 Tax Treatment; Withholding Taxes.

(a) The Issuer has structured the transaction contemplated by this Indenture and
the Notes with the intention that the Notes will qualify under applicable tax
law as indebtedness of the Issuer. The Issuer, the Trustee, the Servicer, the
Back-up Servicer, each Noteholder and each beneficial owner of a Note by
acceptance of its Note or a beneficial interest therein, each agree to treat the
Notes as indebtedness of the Issuer for all tax purposes and further agrees not
to take any action inconsistent with such treatment, unless and to the extent
otherwise required by any taxing authority under applicable law.

Notwithstanding anything in any Transaction Document to the contrary, effective
from the date of commencement of discussions with respect to the transactions
contemplated by such documents, all parties hereto and the Noteholders may
disclose to any and all Persons, without limitation of any kind, the U.S.
Federal income tax treatment and tax structure of the Notes and the transactions
contemplated hereby and all materials of any kind, including tax opinions or
other tax analyses, if any, that are provided to such Persons regarding such tax
treatment.

 

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(b) Notwithstanding any other provision in this Indenture to the contrary or the
other Transaction Documents, the Trustee, as Paying Agent for and on behalf of,
and at the direction of the Servicer, shall comply with any and all federal
withholding requirements under applicable law, as modified by the practice of
any relevant taxing authority then in effect. If any withholding tax is imposed
on any payment by the Issuer (or allocation of income) under the Notes, such tax
shall reduce the amount otherwise payable to such Noteholder. Any amounts so
withheld shall be treated as having been paid to the related Noteholder for all
purposes of this Indenture. Failure of a Noteholder or a beneficial owner of a
Note to provide the Trustee or other paying agent with appropriate tax
certificates may result in amounts being withheld from the payment to such
Noteholder or beneficial owner. In no event shall the consent of Noteholders be
required for any withholding.

ARTICLE III

SUBSTITUTION OF CONTRACTS

Section 3.01 Conditions Precedent to the Substitution of Contract Assets. Each
acquisition of a Substitute Contract from the Partnership on any Acquisition
Date is subject to the conditions specified in Section 3.04 of the Servicing
Agreement, including satisfaction of the following conditions precedent on the
relevant date specified below:

(a) By 10:00 am (New York time) on the third Business Day prior to any proposed
Acquisition Date, the Partnership shall have delivered the following items:

(i) The Partnership shall have delivered to the Issuer, the Trustee, the
Custodian and the Back-up Servicer a draft Substitution Certificate
substantially in the form set forth on Exhibit J attached hereto (the
“Substitution Certificate”) and Amendment to Contract Schedule containing the
information required to be provided with respect to the Substitute Contracts and
related Contract Assets to be acquired on such Acquisition Date, as specified in
the definition of Contract Schedule, and a draft of the Release Agreement
relating to any Existing Indebtedness, and the Issuer shall have delivered or
shall have caused to be delivered to the Custodian, the original Contracts
described in the proposed Amendment to Contract Schedule and the related
Contract Files; and

(ii) The Partnership shall have delivered to the Trustee a draft Assignment
Agreement with respect to each Substitute Contract to be acquired by the Issuer
on such Acquisition Date and to the satisfaction of the conditions precedent set
forth in this Section 3.01 and Section 3.04(b) of the Servicing Agreement.

(b) By 1:00 p.m. (New York time) one (1) Business Day prior to the proposed
Acquisition Date, the Custodian shall deliver to the Issuer and the Trustee an
executed Custodian Certificate with respect to the Substitute Contracts to be so
acquired, which certificate shall contain the final Amendment to Contract
Schedule and no exceptions;

(c) By 11:00 am (New York time) on the proposed Acquisition Date, the
Partnership shall cause to be delivered the final executed Assignment Agreement,
Amendment to Contract Schedule and Release Agreement along with a final executed
Substitution Certificate, in each

 

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case, such document or certificate containing changes from the draft
certificates, draft Assignment Agreement or draft Amendment to Contract
Schedule, as applicable, delivered pursuant to Section 3.01(a)(ii) above, if
any, reflecting corrections or deletions of exceptions noted in the Exception
Report to the draft Assignment Agreement and/or the draft Amendment to Contract
Schedule resulting from the Custodian’s review of the Contracts to be
substituted and the Contract Files related thereto pursuant to Section 4.03(b).
The Substitution Certificate shall confirm that (A) each Substitute Contract is
a Contract that satisfies each of the representations and warranties set forth
in Clause (C) or (D) of the related Assignment Agreement, (B) all applicable
filings required under Sections 4.01(a)(v) and 4.02 have been made or are in
effect, (C) no Default, Event of Default, Event of Servicing Termination or
event which, with the passage of time or the giving of notice or both, would
cause a Default, Event of Default or Event of Servicing Termination to occur,
shall exist prior to or after giving effect to the substitution of such
Contracts and (D) all other conditions to the acquisition of Substitute
Contracts applicable to it and specified in this Section 3.01 and
Section 3.04(b) of the Servicing Agreement have been satisfied.

A document or certificate described in clause (a) or (b) above shall be regarded
as timely delivered if it is delivered by telecopy (with written confirmation of
transmission) as of the applicable time described above; provided that, the
originally executed copy shall be delivered by the applicable party promptly
thereafter. If the Custodian, upon examination of the Contract Files in
accordance with Section 4.03(b), determines that such Contract Files do not
satisfy the requirements of Section 4.03(b) or is unable to confirm that such
requirements have been met by 1:00 p.m. (New York time) on the Business Day
prior to the proposed Acquisition Date, the Custodian shall notify the Trustee
and shall not deliver an executed Custodian Certificate pursuant to clause
(b) above.

(d) With respect to any Contract substituted for an Early Termination Contract,
the Issuer shall be allowed to use the Collections received in respect thereof
to purchase a new Substitute Contract in lieu of distributing such Collections
in accordance with Section 13.03, provided that, such purchase of a Substitute
Contract shall occur simultaneously with the Issuer’s receipt of such
Collections or such Collections shall be held not later than the Payment Date
(or the then current Collection Period) on deposit in the Collection Account
until such Substitute Contract is so purchased; provided, further, that if such
Substitute Contract is not purchased on or before the immediately following
Payment Date such Collections shall be disbursed in accordance with
Section 13.03. Any Substitute Contract so substituted for such Early Termination
Contract, and related Contract Assets, must meet the same requirements as those
specified in the form of Assignment Agreement attached to the Purchase and
Contribution Agreement.

(e) If a Contract is to be removed and replaced with another lease or equipment
finance contract transferred to the Issuer by the Partnership pursuant to the
Servicing Agreement, such “substitute” lease or equipment finance contract shall
become a Contract for all purposes of the Transaction Documents and may be
referred to as a Substitute Contract. Acquisition of any Substitute Contract
shall be subject to the satisfaction of the conditions described in Article III
of this Indenture.

 

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(f) Upon satisfaction of the conditions specified in the Transaction Documents,
including this Section 3.01, and any conditions to the repurchase of Contracts
under the Purchase and Contribution Agreement or substitution of Contracts under
the Servicing Agreement (as the case may be), the Trustee shall, upon receipt of
the Contract Repurchase Price, or the Substitute Contract, and the Request for
Release, release the Contract and related Contract Assets being repurchased by
the Transferor or substituted for by the Partnership from the Lien of this
Indenture.

(g) In addition to the conditions specified above, at no time may the sum of
(1) the aggregate Discounted Contract Balances of Substitute Contracts (as
measured on their respective Cut-Off Dates) and (2) the aggregate Discounted
Contract Balances of Contracts (as measured on their respective Cut-Off Dates)
repurchased by the Transferor or Partnership, but excluding Contracts
repurchased or substituted pursuant to Warranty Events, exceed 8.00% of the
aggregate Discounted Pool Balance as of the Closing Date. The Trustee and
Custodian shall have no duty to monitor the limit set forth in this
Section 3.01(g).

ARTICLE IV

ISSUANCE OF NOTES; CERTAIN ISSUER OBLIGATIONS

Section 4.01 Conditions to Issuance of Notes. All Notes shall be executed by the
Issuer and delivered to the Trustee for authentication. The Notes issued on the
Closing Date shall be authenticated and delivered by the Trustee upon Issuer
Order and upon satisfaction of the following conditions precedent:

(a) receipt by the Trustee, or its agents, of the following, in form and
substance satisfactory to the Initial Purchaser, which satisfaction shall be
evidenced to the Trustee by receipt of item 4.01(a)(xv) below from the Initial
Purchaser:

(i) a copy of an officially certified document, dated not more than ten
(10) days prior to the Closing Date, evidencing the due organization and good
standing of each of the Issuer, the Partnership, the Servicer and the
Transferor;

(ii) certified copies of the organizational documents (together with all
amendments thereto) of the Issuer, the Partnership, the Servicer and the
Transferor, along with certified resolutions or certified executed consents of
each of the Issuer, the Partnership, the Servicer and the Transferor,
authorizing the execution, delivery and performance of the Transaction Documents
and the transactions contemplated by the Transaction Documents by such entities
and certificates evidencing the incumbency of the officers executing such
Transaction Documents;

(iii) certified copies of requests for information or copies (or a similar
search report certified by a party acceptable to the Initial Purchaser), dated a
date reasonably near to the Closing Date (no earlier than ten (10) days prior to
the Closing Date), listing all effective tax and judgment liens and financing
statements which name the Transferor as debtor and which are filed in the
jurisdictions in which the statements referred to in clause (v)(1) below were or
are to be filed, together with copies of such tax and judgment liens and
financing statements (none of which, other than financing statements naming

 

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the party under the Transaction Documents to which transfers (including grants
of security interests) thereunder purport to have been made, shall cover any of
the property purported to be conveyed thereunder);

(iv) certified copies of requests for information or copies (or a similar search
report certified by a party acceptable to the Initial Purchaser’s counsel),
dated a date reasonably near to the Closing Date (no earlier than ten (10) days
prior to the Closing Date), listing all effective tax and judgment liens and
financing statements which name Issuer (under its present name and any previous
name) as debtor and which are filed in the jurisdictions in which the statements
referred to in clause (v)(2) below were or are to be filed, together with copies
of such tax and judgment liens and financing statements (none of which, other
than financing statements naming the party under the Transaction Documents to
which transfers (including grants of security interests) thereunder purport to
have been made, shall cover any of the property purported to be conveyed
thereunder);

(v) except as otherwise provided below, evidence of filing (or evidence of
delivery for filing to the appropriate filing offices) of, and each of the
following, together with evidence of all filing fees, taxes or other amounts
required to be paid in connection with the following have been paid:

(1) UCC-1 financing statements, for filing with the Secretary of State of the
State of Delaware, naming the Transferor, as debtor, the Issuer, as assignor
secured party, and the Trustee, for the benefit of the Secured Parties, as the
total assignee secured party;

(2) UCC-1 financing statements, for filing with the Secretary of State of the
State of Delaware, naming the Issuer, as debtor, and the Trustee, for the
benefit of the Secured Parties, as Secured Party;

(3) UCC-3 financing statement releases, for filing with the Secretary of State
of the State of Delaware, naming the Transferor, as debtor and Morgan Stanley
Bank, as secured party;

(4) such other, similar instruments or documents, as may be necessary or, in the
opinion of any Noteholder, desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the transfers (including grants
of security interests) under the Transaction Documents;

(vi) a fully executed original counterpart of each of the Assignment Agreement
related to the initial Contract Assets, the Purchase and Contribution Agreement,
this Indenture, the Servicing Agreement, the Securities Account Control
Agreement, each Lienholder Nominee Agreement and the Note Purchase Agreement
shall have been received by the Initial Purchaser or its agents;

(vii) a copy of the fully executed Lockbox Intercreditor Agreement and the
Joinder to Lockbox Intercreditor Agreement shall have been received by the
Initial Purchaser or its agents;

 

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(viii) written evidence of establishment of the Reserve Account, the Collection
Account, the Servicer Transition Account and continued existence of the Lockbox
Account;

(ix) a certificate listing the Servicing Officers of the Servicer as of the
Closing Date;

(x) confirmation that the Rating Agency has issued rating letters confirming
ratings for the Notes as set forth in the Offering Circular;

(xi) executed favorable legal opinions of counsel to the Servicer, the
Partnership, the Issuer, the Transferor, the Back-up Servicer, the Custodian and
the Trustee, addressed to the Trustee, the Back-up Servicer and the Initial
Purchaser (as applicable), dated the Closing Date and covering general corporate
matters, the due execution and delivery of, and the enforceability of, each of
the Transaction Documents to which the Servicer, the Partnership, the Issuer,
the Transferor, the Back-up Servicer, the Custodian and the Trustee
(individually or in any other capacity) is party, true sale, non-consolidation,
security interest, tax matters and such other matters as the Initial Purchaser
may request;

(xii) certificates of the Secretary or Assistant Secretary of each of the
Servicer, the Partnership, the Issuer, the Transferor, dated as of the Closing
Date, and certifying (A) that attached thereto is a true, complete and correct
copy of (a) the organizational documents of the Servicer, the Partnership, the
Transferor and the Issuer (as applicable), and (b) resolutions duly adopted by
the Servicer, the Partnership, the Issuer and the Transferor authorizing the
execution, delivery and performance of the Transaction Documents to which it is
a party and the transactions contemplated thereunder, and that such resolutions
have not been amended, modified, revoked or rescinded, and (B) as to the
incumbency and specimen signature of each officer executing any Transaction
Documents on behalf of the Servicer, the Partnership, the Issuer and the
Transferor (as the case may be);

(xiii) copies of all waivers, licenses, approvals or consents, if any, required
or advisable, in the opinion of the Initial Purchaser, in connection with the
execution, delivery and performance by the Servicer, the Partnership, the Issuer
and the Transferor (as the case may be) of the Transaction Documents (and the
validity and enforceability thereof), which waivers, licenses, approvals or
consents shall be in full force and effect;

(xiv) written confirmation of the payment (or deposit for payment with the
Trustee) of all fees and expenses of the Trustee, the Custodian, the Back-up
Servicer, the Initial Purchaser (including the fees and charges of their
respective agents, auditors and counsel) accrued as of the Closing Date;

(xv) [Reserved];

(xvi) delivery by the Custodian of an executed Custodian Certificate dated as of
the Closing Date and certifying as to its review of the Contract Assets; and

 

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(xvii) such additional documents, instruments, certificates, opinions, ratings
letters or other confirmations as the Initial Purchaser may reasonably request.

(b) all Collateral in which a security interest has been granted to the Trustee
under the Indenture shall be subject to no other Liens other than Permitted
Liens.

Section 4.02 Security for Notes.

(a) The Servicer shall at its own expense, in consideration of the Servicer Fee,
cause to be filed the financing statements and assignments described in
Sections 4.01(a)(v) and 4.02(b) in accordance with such Sections. In addition,
from time to time, the Servicer shall take or cause to be taken at its own
expense, in consideration of the Servicer Fee, any other such actions and
execute such documents as are necessary to perfect and protect the Issuer’s
precautionary security interest against the Transferor, as applicable, in
respect of the Contract Assets and the assignment to the Trustee thereof, and
the Trustee’s security interests in and liens on the Collateral against all
other Persons, including the filing of financing statements, amendments thereto
and continuation statements, the execution of transfer instruments and the
making of notations on or taking possession of all records or documents of
title; provided that, none of the Servicer, the Transferor nor the Issuer shall
be required to file UCC-1 financing statements against Obligors with respect to
a Contract related to Equipment that had an original equipment cost at
origination of less than (A) if such Contract is a secured loan or finance lease
that provides for a $1 purchase option, $25,000, or (B) if such Contract
provides for a “fair market value” purchase option, $50,000 or to file or record
assignments of any UCC-1 financing statements or other lien recordings or
notations made against any Obligor. Notwithstanding anything to the contrary
contained herein, if the Servicer is not LEAF Financial Corporation or one of
its Affiliates, the successor Servicer shall not be responsible for the initial
filings of any UCC financing statements, or any continuation statements filed by
any predecessor Servicer, or the information contained therein (including the
exhibits thereto), the perfection of any such security interests during the term
of such predecessor Servicer, or the accuracy or sufficiency of any description
of collateral in such filings, and the successor Servicer shall be fully
protected in relying on such initial filings and any continuation statements or
modifications thereto made by a predecessor Servicer pursuant to this
Section 4.02 but shall continue to be responsible for requirements expressed
above during the period it acts as Servicer.

(b) If any change in the Servicer’s or the Issuer’s name, identity, structure or
the location of its principal place of business, chief executive office or State
of organization occurs, then such party shall deliver thirty (30) days’ prior
written notice of such change or relocation to the Servicer, the Trustee, the
Back-up Servicer and the Rating Agency, and, no later than the effective date of
such change or relocation, the Servicer shall file or cause to be filed such
amendments or statements as may be required to preserve and protect the Issuer’s
precautionary security interest against the Transferor in respect of the
Contract Assets and the assignment to the Trustee thereof, and the Trustee’s
security interest in and liens on the Collateral.

(c) During the term of this Indenture, the Issuer will maintain its sole state
of organization in the State of Delaware, and the Servicer will maintain its
sole state of incorporation in a State of the United States.

 

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Section 4.03 Review of Contract Files.

(a) On or prior to the Closing Date and each Acquisition Date for a Substitute
Contract, the Issuer shall cause to be delivered to the Custodian the documents
comprising the Contract Files for the Contracts to be acquired on such date.
Each Contract and the folder containing other Contract Files documents for such
Contract shall be clearly marked with a LEAF Contract Number, which LEAF
Contract Number shall be used by the Issuer, the Trustee and the Custodian to
identify such Contract on the Contract Schedule.

(b) Prior to the Acquisition Date for a Contract, the Custodian will review the
Contract Files related to each proposed Contract and shall perform such reviews
as are sufficient to enable it to confirm the items required to be certified by
it in the Custodian Certificate in the form attached hereto as Exhibit E. By
execution and delivery of any such Custodian Certificates, the Custodian shall
evidence completion of such review and confirmation. The Custodian shall include
in any Exception Report any failure of a document to correspond to the
information on the Amendment to Contract Schedule or the absence of any one or
more of the documents comprising the Contract Files for such Contract and shall
deliver such Exception Report to the Servicer, the Trustee and the Note Issuer.

(c) If any Contracts or Contract Assets to be pledged to the Trustee are
Contracts or Contract Assets that at any time were subject to a Lien in favor of
a Person that has held a Lien thereon, concurrently with the delivery of an
Officer’s Certificate, the Issuer shall have delivered to (x) the Custodian
(with a copy to the Trustee) a facsimile copy or an original executed Release
Agreement from each Person that has held a Lien on the applicable Contract
and/or Contract Assets, together with the certification in the Officer’s
Certificate that each such Release Agreement constitutes a release of such
Person’s security interest in each such Contract and/or Contract Asset (and the
other Collateral related thereto), and (y) the Custodian (with a copy to the
Trustee) the original UCC partial or full release relating to the Release
Agreement described in clause (x) above.

(d) The Custodian shall use reasonable care in the performance of its duties
under the Transaction Documents, shall identify and segregate all items
constituting the Contract Files and shall maintain continuous custody of all
items constituting the Contract Files in secure, fire resistant facilities in
accordance with customary standards for such custody. The Custodian makes no
representations as to and shall not be responsible to verify (i) the validity,
legality, enforceability, sufficiency, due authorization or genuineness of any
document constituting Contract Files or of any of the Contracts or (ii) the
collectibility, insurability, effectiveness or suitability of any Contract.

(e) The Custodian shall hold all Contracts and all other Collateral delivered to
it pursuant to the Transaction Documents as Custodian for the benefit of the
Trustee (for the benefit of the Secured Parties). With respect to each item of
Contract Files delivered to the Custodian, the Custodian shall (i) hold all
documents constituting such Contract Files received by it for the exclusive use
and benefit of the Trustee (for the benefit of the Secured Parties) and
(ii) make disposition thereof only in accordance with the terms of this
Indenture and the Servicing Agreement.

 

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(f) In the event that (i) the Trustee, the Servicer, the Issuer or the Custodian
shall be served by a third party with any type of levy, attachment, writ or
court order with respect to any Contract Files or (ii) a third party shall
institute any court proceeding by which any Contract Files shall be required to
be delivered otherwise than in accordance with the provisions of this Indenture,
the party or parties receiving such service shall promptly deliver or cause to
be delivered to the other parties to this Indenture copies of all court papers,
orders, documents and other materials concerning such proceedings. The Custodian
shall continue to hold and maintain all the Contract Files that is the subject
of such proceedings pending a final order of a court of competent jurisdiction
permitting or directing disposition thereof. Upon final determination of such
court, the Custodian shall deliver such Contract Files as directed by such
determination or, if no such determination is made, in accordance with the
provisions of this Indenture. Expenses of the Custodian incurred as a result of
such proceedings shall be borne by the Issuer.

(g) At its own expense, the Custodian shall maintain at all times prior to the
satisfaction and discharge of this Indenture and keep in full force and effect
fidelity insurance, theft of documents insurance, forgery insurance and errors
and omissions insurance. All such insurance shall be in amounts, with standard
coverage and subject to deductibles, all as is customary for insurance typically
maintained by banks which act as custodian of collateral substantially similar
to the Collateral. Upon at least ten (10) days’ prior written request, the
Issuer and/or the Servicer shall be entitled to receive a certificate of the
Custodian’s respective insurer that such insurance is in full force and effect.

Section 4.04 Defective Contracts.

(a) If, upon examination of any Contract File in accordance with Section 4.03
hereof, the Custodian determines that such Contract File does not satisfy the
requirements described in Section 4.03(b), or is unable to confirm that such
requirements have been met, the Custodian shall promptly notify the Servicer,
the Partnership and the Transferor by telephone or telecopy. If the Transferor
does not satisfy the Custodian in accordance with the foregoing sentence prior
to the second Business Day prior to the applicable Acquisition Date, the
Custodian shall return the applicable Substitute Contract and related files to
the Transferor, or as otherwise directed by the Transferor. Notwithstanding the
foregoing, if the Majority Holders approve an Exception Report and allow the
inclusion of any Substitute Contract that the Custodian has identified as
defective in its review under Section 4.03(b), all parties agree that such
approval shall be valid only with respect to such included Substitute Contract,
shall not constitute a course of dealing, and the allowance of such included
Contract shall not operate as a waiver of any rights of the Trustee or any
Secured Party hereunder, under the Purchase and Contribution Agreement, the
Assignment Agreements or any other Transaction Documents with respect to any
adverse consequence caused by such defect.

(b) If a Responsible Officer of the Trustee, or if another party to any of the
Transaction Documents, notifies the Servicer (pursuant to the Servicing
Agreement), the Partnership, the Transferor, the Back-up Servicer and the Issuer
of the existence of any Warranty Event, the Partnership (pursuant to the
Servicing Agreement) or the Transferor (pursuant to the Purchase and
Contribution Agreement) shall (i) cure the breach(es) which caused the Warranty
Event or (ii) repurchase or substitute, as applicable, such Contract and related
Contract Assets at the Contract Repurchase Price or for a Substitute Contract,
respectively, as required in

 

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accordance with Section 3.03 of the Purchase and Contribution Agreement or
Section 3.09 of the Servicing Agreement. If any such Contract is substituted or
repurchased by the Partnership in accordance with the provisions of the
Servicing Agreement, or repurchased by the Transferor pursuant to the Purchase
and Contribution Agreement, and the Trustee has received a written request in
the form attached hereto as Exhibit D-1 relating thereto, the Trustee shall,
upon receipt of the applicable Contract Repurchase Price, but subject to
Section 4.07 hereof, return the affected Contract and related files to the
Issuer (or, if the Issuer so requests, directly to the Servicer or the
Transferor, as the case may be), release its interest therein and in the related
Contract Assets, and such items shall no longer constitute a Contract or
Contract Asset hereunder and shall be released from the Lien of this Indenture.

Section 4.05 Reserved.

Section 4.06 Administration of the Contract Assets. The Contract Assets shall be
serviced by the Servicer in accordance with the terms of the Servicing
Agreement. The Servicer, as agent of the Issuer prior to the occurrence of an
Event of Default, shall have the right to provide any notices and instructions
to Obligors in connection with the Contract Assets. In the event that the Issuer
or the Trustee receives any notices, requests for information or other
communication from an Obligor, it shall immediately forward such communication
to the Servicer. The Trustee shall deposit any Collections received by it in the
Collection Account, in accordance with Section 13.02 and it shall deliver
written or electronic statements regarding such collections and deposits to the
Servicer at least monthly. The Trustee shall have no obligation to advance its
own funds to the Collection Account. In the absence of an Event of Default, the
Trustee shall not contact any Obligor or take any action with respect to the
enforcement, modification or release of any Contract against an Obligor without
the express written authorization of the Servicer or the Issuer.

Section 4.07 Releases.

(a) The Issuer shall be entitled to obtain a release from the Lien of this
Indenture for any individual Contract and the related Contract Assets at any
time after all of the conditions for such release set forth in the Transaction
Documents have been satisfied and (i) after a payment by the Transferor or the
Servicer, as applicable, under the provisions of the relevant Transaction
Documents, of the related Contract Repurchase Price therefor or (ii) after a
Substitute Contract and the related Contract Assets are substituted for such
Contract and the related Contract Assets in accordance with the Transaction
Documents. In order to effect any such release, the Servicer, on behalf of the
Issuer, shall deliver to the Trustee and the Custodian in accordance with the
Transaction Documents a Request for Release, in the form attached hereto
Exhibit D-1, (1) identifying the Contracts and the related Equipment to be
released, (2) requesting the release thereof, (3) setting forth the amount
deposited in the Collection Account with respect thereto, or identifying the
Substitute Contract substituted therefor in the event that the subject Contracts
and the related Equipment are being released from the Lien of this Indenture
pursuant to clause (ii) above, (4) certifying that the amount deposited in the
Collection Account equals the Contract Repurchase Price relating to such
Contracts and the related Equipment in the event that the subject Contracts and
the related Equipment are being released from the Lien of this Indenture
pursuant to clause (i) above and (5) certifying that all other conditions
precedent set forth in the Transaction Documents relating to such release have
been satisfied. The Trustee, upon receipt of

 

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a written request in the form attached hereto as Exhibit D-1, and the Trustee’s
confirmation that the related (i) Contract Repurchase Price has been deposited
into the Collection Account or (ii) Substitute Contract has been substituted for
the Contract, shall execute instruments to release a Contract from the lien of
this Indenture, or convey the Trustee’s interest in the same.

(b) Upon receipt of the Request for Release from the Servicer in the form
attached hereto as Exhibit D-1, including a certification that all of the
conditions specified in clause (a) of this Section 4.07 have been satisfied, and
provided that if Item 7 of the Request for Release has been checked, all other
certifications and documents required under the terms of this Indenture have
been received by the Trustee, the Trustee shall release from the Lien of this
Indenture and the Custodian shall deliver to the Issuer or upon Issuer Order the
Contracts and all related Contract Assets described in the Issuer’s Request for
Release.

(c) The Custodian may, if requested by the Servicer, in the form attached hereto
as Exhibit D-1, for purposes of servicing a Contract, temporarily deliver to the
Servicer the original Contract. Any Contract temporarily delivered from the
custody of the Custodian to the Servicer or its agents shall have affixed to
such Contract a copy of such written request in the Form of Exhibit D-1, which
shall contain a legend to the effect that the Contract is the property of the
Issuer and has been pledged to U.S. Bank National Association, as Trustee for
the benefit of the Secured Parties. The Servicer shall promptly return the
Contract to the Custodian, along with a letter attached hereto as Exhibit D-2,
upon the need therefor no longer existing; provided that if an Event of Default
has occurred, the Servicer shall forthwith return to the Custodian each Contract
temporarily delivered pursuant to this Section 4.07.

ARTICLE V

SATISFACTION AND DISCHARGE

Section 5.01 Satisfaction and Discharge of Indenture.

(a) Following (i) payment in full of (A) all of the Notes, (B) the fees and
charges and reimbursements of the Trustee, the Back-up Servicer, the
Partnership, the Custodian and the Noteholders and (C) all other obligations of
the Issuer under this Indenture and the other Transaction Documents and (ii) a
written request by the Issuer to the Trustee to terminate this Indenture and
release the Collateral, this Indenture shall be discharged and terminated and
the lien of this Indenture on the Collateral thereupon shall be released. All
Contract Files shall then include an Officer’s Certificate from the Issuer,
stating that all conditions precedent provided for herein relating to the
satisfaction and discharge of this Indenture with respect to the Notes have been
complied with.

(b) Upon the discharge and termination of this Indenture, the Trustee shall
release from the lien of this Indenture and deliver to the Issuer all remaining
Collateral, and the Trustee shall file, or cause to be filed, at the Servicer’s
expense, UCC termination statements evidencing such discharge and release;
provided, if the Back-up Servicer has become the Servicer, the Servicer shall be
entitled to reimbursement of all expenses incurred under this Section 5.01(b) by
the Issuer payable solely from amounts that are available to the Servicer
therefore under Section 13.03 of the Indenture.

 

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ARTICLE VI

DEFAULTS AND REMEDIES

Section 6.01 Events of Default.

“Event of Default” wherever used herein means the occurrence of any one of the
following events, unless any such particular occurrence is waived as an “Event
of Default” in writing in accordance with the provisions of this Indenture;
provided that, unless and until any such waiver is given, an “Event of Default”
shall be deemed to exist for all purposes under the Transaction Documents, even
if the event giving rise to such Event of Default is no longer continuing or has
been cured:

(a) the Issuer shall fail to make when due any payment with respect to interest
on any Class of Notes then outstanding, or the Servicer shall fail to make when
due any deposit required under the Transaction Documents (other than as
described in clause (e) below), in any case on or before the date occurring five
(5) Business Days after the date such payment or deposit shall become due;

(b) the Issuer, Servicer, the Partnership or the Transferor shall fail to
perform or observe any covenant with respect to it set forth in any Transaction
Document, and in each case such failure shall remain unremedied for thirty
(30) Business Days after the earlier of (x) actual knowledge thereof by such
Person or (y) receipt by such Person of written notice thereof;

(c) any representation or warranty made by the Issuer, the Partnership
Transferor or Servicer in any Transaction Document or in any other document
delivered pursuant thereto (other than a representation or warranty made with
respect to the Contracts) shall prove to have been incorrect in any material
respect when made or deemed made and continues to be incorrect in any material
respect for a period of thirty (30) Business Days after the earlier to occur of
(x) the actual knowledge thereof by such Person or (y) the receipt by such
Person of written notice thereof;

(d) an Insolvency Event shall occur with respect to the Issuer;

(e) the Outstanding Note Balance of any Class of Notes is not reduced to zero
and all interest due on any Class is not paid by that Class’s Stated Maturity
Date;

(f) [Reserved];

(g) the Issuer is required to register as an “investment company” under the
Investment Company Act of 1940, as amended; or

(h) any Class A Note or Class B Note shall cease to constitute debt for federal
income tax purposes, as evidenced by a written determination by the Internal
Revenue Service.

Section 6.02 Acceleration of Maturity; Rescission and Annulment. If an Event of
Default exists, then, unless waived pursuant to Section 6.15 hereof, and in
every such case, the

 

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Control Party may, and the Trustee shall, at the written direction of the
Control Party, declare the principal of all the Notes to be immediately due and
payable, by notice given in writing to the Issuer and upon any such declaration,
such principal and all accrued interest under the Notes shall become immediately
due and payable without any presentment, demand, protest or other notice of any
kind (except such notices as shall be expressly required by the provisions of
this Indenture), all of which are hereby expressly waived; provided, that if
such Event of Default consists of an Insolvency Event with respect to the
Issuer, then all such principal and accrued interest shall be automatically due
and payable without the need for any such notice or further action by any
Person.

At any time after such a declaration of acceleration has been made, but before
any Sale of the Collateral has been made or a judgment or decree for payment of
the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Control Party, by written notice to the Issuer and the
Trustee, may rescind and annul such declaration and its consequences if
(notwithstanding Section 6.15 hereof) (a) and (b) below are satisfied:

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

(1) all overdue installments of interest on all Notes and interest thereon at
the overdue interest rate from the time such overdue interest first became due
until the date when paid;

(2) the principal of any Notes which has become due otherwise than by such
declaration of acceleration and interest thereon at the overdue interest rate
from the time such principal first became due until the date when paid; and

(3) all sums paid or advanced, together with interest thereon, by the Trustee,
the Partnership and any Secured Party, and the reasonable compensation,
expenses, disbursements and advances of the Trustee and any Secured Party, their
agents and counsel incurred in connection with the enforcement of this Indenture
to the date of such payment or deposit.

(b) all Events of Default, other than the nonpayment of the principal on any of
the Notes which has become due solely by such declaration of acceleration, have
been cured or waived by the Control Party unless (i) an Event of Default in the
payment of interest on any Note when due or principal not paid at the Stated
Maturity Date or (ii) in respect of a covenant or provision hereof which by its
terms cannot be modified or amended without the consent of the Noteholders of
each Outstanding Note affected thereby, in which case a waiver by the
Noteholders of each Outstanding Notes is required.

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

Section 6.03 Collection of Indebtedness and Suits for Enforcement by Trustee.

(a) The Issuer covenants that, if an Event of Default shall occur and the Notes
have been declared due and payable and such declaration has not been rescinded
and annulled, the Issuer will pay to the Trustee, for the benefit of the
Noteholders, the whole amount then due and

 

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payable on the Notes for principal and interest (with interest upon the overdue
principal and overdue interest at the rate provided herein), any and all amounts
due and payable to the Noteholders, the Partnership, the Back-up Servicer, the
Custodian, the Paying Agent and the Trustee 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 each of the Trustee, the Paying Agent and the Noteholders and their
respective agents and counsel.

(b) If the Issuer fails to pay such amount forthwith upon such demand, the
Trustee, in its own name and as Trustee of an express trust, may, with the prior
written consent of the Control Party, and shall, at the written direction of the
Control Party, institute Proceedings for the collection of the sums so due and
unpaid, and prosecute such Proceedings to judgment or final decree, and enforce
the same against the Issuer and collect the monies adjudged or decreed to be
payable in the manner provided by law out of the property of the Issuer,
wherever situated.

(c) If an Event of Default exists, the Trustee shall, at the written direction
of the Control Party, proceed to protect and enforce the rights of the
Noteholders and the Paying Agent by such appropriate Proceedings as the Trustee,
at the written direction of the Control Party, shall deem most effectual 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.

Section 6.04 Remedies. If an Event of Default exists, the Trustee may, with the
prior written consent of the Control Party, and shall, at the written direction
of the Control Party, do one or more of the following:

(a) institute Proceedings for the collection of all amounts remaining unpaid on
the Notes or under this Indenture or the other Transaction Documents whether by
declaration or otherwise, enforce any judgment obtained, and collect from the
Issuer and the Collateral the monies adjudged due;

(b) take possession of and sell the Collateral or any portion thereof or rights
or interest therein, at one or more private or public Sales called and conducted
in any manner permitted by law;

(c) institute any Proceedings from time to time for the complete or partial
foreclosure of the lien created by this Indenture with respect to the
Collateral;

(d) redirect Obligor payments to such account or accounts as the Control Party
determines necessary in its sole discretion, or at the direction of the Control
Party;

(e) during the continuance of a default under a Contract, exercise any of the
rights of the lessor or lender (as applicable) under such Contract;

(f) exercise any remedies of a secured party under the Uniform Commercial Code
(irrespective of whether the Uniform Commercial Code applies) or any applicable
law and take any other appropriate action to protect and enforce the rights and
remedies of the Trustee or the Noteholders hereunder or under the other
Transaction Documents; and

 

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(g) exercise any and all rights, powers and privileges available to the Trustee
or the Noteholders (whether at law, in equity or by contract).

Section 6.05 Optional Preservation of Collateral. If an Event of Default exists,
the Trustee shall, upon written request from the Control Party, elect, by giving
written notice of such election to the Issuer, to take possession of and retain
the Collateral intact, collect or cause the collection of all income, payments
and proceeds thereof and make and apply all payments and deposits and maintain
all accounts in respect of such Notes in accordance with the provisions of
Article XIII. If the Trustee is unable to or is stayed from giving such notice
to the Issuer for any reason whatsoever, such election shall be effective as of
the time of such request from the Control Party, as the case may be,
notwithstanding any failure to give such notice, and the Trustee shall give such
notice upon the removal or cure of such inability or stay (but shall have no
obligation to effect such removal or cure). Any such election may be rescinded
with respect to any portion of the Collateral remaining at the time of such
rescission by written notice to the Trustee and the Issuer from the Control
Party.

Section 6.06 Trustee May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial Proceeding relating to the Issuer or
the property of the Issuer or its creditors, the Trustee (irrespective of
whether the principal of any of the 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 on the Issuer for the payment of overdue
principal or interest) shall be entitled and empowered and shall, at the prior
written direction of the Control Party, intervene in such proceeding or
otherwise:

(a) to file and prove a claim for all amounts of principal and interest owing
and unpaid in respect of the Notes issued hereunder and to file such other
papers or documents and take such other actions, including participating as a
member, voting or otherwise, in any committee of creditors appointed in the
matter as may be necessary or advisable in order to have the claims of the
Trustee, the Noteholders, the Paying Agent, the Custodian (including any claim
for the reasonable compensation, expenses, disbursements and advances of each
such Person and their respective agents and counsel and any other amounts due
the Trustee under Section 7.07) and of the Noteholders allowed in such judicial
Proceeding;

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

(c) to petition for lifting of the automatic stay and thereupon to foreclose
upon the Collateral as elsewhere provided herein; and

(d) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same; and any receiver, assignee,
trustee, liquidator, or sequestrator (or other similar official) in any such
judicial Proceeding is hereby authorized by the Noteholders and the Paying Agent
to make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to each such Person, to pay to
the Trustee or such Person any amount due to it for the reasonable compensation,
expenses,

 

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disbursements and advances of each of the Trustee and such other Person, their
agents and counsel, and any other amounts due the Trustee under Section 7.07.

Nothing contained in this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Secured Party any
plan of reorganization, arrangement, adjustment or composition affecting any of
the Notes or the rights of any Secured Party, or to authorize the Trustee to
vote in respect of the claim of any Secured Party in any such Proceeding;
provided, however, that the Control Party shall be authorized to vote on all of
the foregoing matters described above on behalf of the Noteholders and to
consent to certain amendments as described under Section 10.02 hereof.

Section 6.07 Trustee May Enforce Claims Without Possession of Notes.

(a) In all Proceedings brought by the Trustee in accordance with this Indenture
(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 of the Noteholders and it shall not be necessary to make any
Noteholder a party to any such Proceedings.

(b) All rights of actions and claims under this Indenture or any of the Notes
may be prosecuted and enforced by the Trustee without the possession of any of
the Notes or the production thereof in any Proceeding relating thereto, and any
such Proceedings instituted by the Trustee shall be brought with the prior
written consent of the Control Party and in the Trustee’s own name as trustee of
an express trust, and any recovery, whether by judgment, settlement or otherwise
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, be for the
benefit of the Noteholders, as the case may be.

Section 6.08 Application of Money Collected. If the Notes have been declared due
and payable following an Event of Default and such declaration has not been
rescinded or annulled, any money collected by the Trustee with respect to the
Notes and the other Transaction Documents pursuant to this Article VI or
otherwise and any other money that may be held thereafter by the Trustee as
security for the Notes and the other Transaction Documents shall be applied in
the order set forth in Section 13.03 on the earlier of the next Payment Date and
such dates as the Trustee may designate for the release of such funds, to the
same extent as if such date were a Payment Date.

Section 6.09 [Reserved]

Section 6.10 Unconditional Right of the Noteholders to Receive Principal and
Interest. Notwithstanding any other provision in this Indenture, each Noteholder
shall have the right, which is absolute and unconditional, to receive payment of
the principal and interest on such Note on the dates on which such principal and
interest becomes due and payable and to institute any Proceeding for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Noteholder.

Section 6.11 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

 

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adversely to the Trustee or to such Noteholder, then, and in every 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 6.12 Rights and Remedies Cumulative. Except as otherwise provided with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Notes in the last paragraph of Section 2.08, 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 6.13 Delay or Omission Not Waiver. No delay or omission of the Trustee
or of any Noteholder to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Event of Default or any acquiescence therein. Every right and remedy given by
this Article VI 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
the Noteholders, as the case may be.

Section 6.14 Control by Control Party. The Control Party shall have the right to
direct in writing the time, method and place of conducting any Proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on the Trustee; provided that:

(a) such direction shall not be in conflict with any rule of law or with this
Indenture including any provision hereof which expressly provides for approval
by a percentage of Outstanding Note Balance of all Notes or of all Notes within
a Class;

(b) if the Trustee has reasonable grounds for believing that repayment of any
funds expended or risked by it is not assured to it without an indemnity
reasonably satisfactory to it against such risk or liability, such indemnity
shall have been provided.

Section 6.15 Waiver of Certain Events by the Control Party.

The Control Party may waive on behalf of all Noteholders any Event of Servicing
Termination, Default or Event of Default and its consequences in each case
except:

(i) an Event of Default in the payment of interest on any Note when due or
principal not paid at the Stated Maturity Date;

(ii) in respect of a covenant or provision hereof which by its terms cannot be
modified or amended without the consent of the Noteholder of each Outstanding
Note affected thereby; or

(iii) or in the circumstances provided in Section 6.02 hereof.

 

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Upon any such waiver, such Event of Servicing Termination, Default or Event of
Default shall cease to exist, and any Event of Default shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Event of Servicing Termination, Default or Event of
Default or impair any right consequent thereon.

Section 6.16 Additional Rights of Class B Noteholders and Class C Noteholders.
At any time during the period from the first to occur of (i) the commencement of
an Insolvency Event or any other insolvency proceeding with respect to the
Issuer, (ii) the acceleration of the Class A Notes pursuant to Section 6.02 or
(iii) the commencement of the foreclosure of any Collateral under this
Article VI following the occurrence of an Event of Default, and without
prejudice to any other rights of the Holders of the Class B Notes under the
Transaction Documents, any one or more Holders of the Class B Notes shall
initially have the right to deliver written notice, which notice shall be sent
to the Trustee (the “Class A Buyout Notice”) electing to purchase (without
recourse, warranty or representation (other than that the Holders of such
Class A Notes own such Class A Notes free and clear of any Liens created or
granted by the Holder of such Class A Notes)) the entire (but not less than the
entire) aggregate amount of Outstanding Class A Notes (and all associated
rights, titles, claims and privileges associated therewith) for an amount (the
“Class A Buyout Price”) equal to the Outstanding Note Balance of, and accrued
but unpaid interest on, the Class A Notes (excluding therefrom any premium or
penalty otherwise payable). The Trustee agrees that it shall give to the Holders
of the Class B Notes and Class C Notes written notice of the events described in
clauses (i), (ii), and (iii) of this Section 6.16 promptly upon its receiving
notice of such event or a Responsible Officer of the Trustee having actual
knowledge thereof (such date of notice, the “Default Notice Date”).

If no Holder of the Class B Notes exercises its rights to purchase the Class A
Notes within ten (10) Business Days of the Default Notice Date, then, without
prejudice to any other rights of the Holders of the Class C Notes under the
Transaction Documents, any one or more Holders of the Class C Notes shall then
have the right to deliver the Class A Buyout Notice, which notice shall be sent
to the Trustee electing to purchase (without recourse, warranty or
representation (other than that the Holders of such Class A Notes own such
Class A Notes free and clear of any Liens created or granted by the Holder of
such Class A Notes)) the entire (but not less than the entire) aggregate amount
of Outstanding Class A Notes (and all associated rights, titles, claims and
privileges associated therewith) for the Class A Buyout Price.

The purchase of the Class A Notes pursuant to this Section shall close no later
than the date specified in the operative Class A Buyout Notice. The Class A
Buyout Price shall be remitted by wire transfer in immediately available federal
funds to the Trustee. Interest shall be calculated to but excluding the Business
Day on which such purchase shall occur if the Class A Buyout Price is wired to
the Trustee prior to 11:00 am New York time and interest shall be calculated to
and including such Business Day if the Class A Buyout Price is wired to the
Trustee, later than 11:00 am New York time.

Section 6.17 Waiver of Stay or Extension Laws. The Issuer covenants (to the
extent that it may lawfully do so) that it will not, at any time, insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby

 

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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 6.18 Sale of Collateral.

(a) The power to effect any sale (a “Sale”) of any portion of the Collateral
pursuant to Section 6.04 shall not be exhausted by any one or more Sales as to
any portion of the Collateral remaining unsold, but shall continue unimpaired
until the entire Collateral securing the Notes shall have been sold or all
amounts payable on the Notes and under this Indenture and the other Transaction
Documents shall have been paid. The Trustee may from time to time postpone any
Sale by public announcement made at the time and place of such Sale.

(b) To the extent permitted by applicable law, the Trustee shall not, in any
private Sale, sell to one or more third parties, or otherwise liquidate, all or
any portion of the Collateral, unless:

(i) the Control Party consents to such Sale or liquidation; or

(ii) the proceeds of such Sale or liquidation available to be distributed to the
Noteholders are sufficient to pay in full all amounts then due with respect to
the Notes and, without duplication, all amounts owed to the Servicer,
Partnership, Trustee, Custodian, and Back-up Servicer.

(c) Any Noteholder may bid for and acquire any portion of the Collateral in
connection with a Sale thereof. After the Trustee has received each offer to
purchase all or any portion of the Collateral, the Trustee shall notify each
Class B Noteholder and Class C Noteholder of the highest offer (the date of such
notification, the “Collateral Purchase Notice Date”) and any one or more Class B
Noteholders will initially have the right to purchase (not later than five
Business Days after delivery of written notice to the Trustee of exercise of
each right to purchase) the Collateral at the highest price there offered. If no
Holder of the Class B Notes exercises its rights to purchase the Collateral
within ten (10) Business Days of the Collateral Purchase Notice Date, the
Trustee shall notify each Class C Noteholder of the highest offer and any one or
more Class C Noteholders will then have the right to purchase (not later than
five Business Days after delivery of written notice to the Trustee of exercise
of each right to purchase) the Collateral at the highest price there offered If
a Noteholder submits the highest bid, in lieu of paying cash therefor, such
bidder may make settlement for the purchase price by crediting against the
purchase price that portion of the net proceeds of such Sale to which such
bidder would be entitled, after deducting the reasonable costs, charges and
expenses (including reasonable attorneys’ fees and expenses) incurred by such
Noteholder in connection with such Sale. The Notes need not be produced in order
to complete any such Sale, or in order for the net proceeds of such Sale to be
credited against the Notes. The Noteholders may hold, lease, operate, manage or
otherwise deal with any property so acquired in any manner permitted by law.

(d) The Trustee shall execute and deliver an appropriate instrument of
conveyance provided to it by the Servicer transferring its interest in any
portion of the Collateral in

 

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connection with a Sale thereof. In addition, the Trustee is hereby irrevocably
appointed the agent and attorney-in-fact with full irrevocable power and
authority in the place and stead of the Issuer and in the name of the Issuer or
in its own name, from time to time, from and after the occurrence of an Event of
Default for the purpose of exercising the rights and remedies of the Trustee
hereunder and, to take any and all action and to execute and deliver any and all
documents and instruments which may be necessary or desirable to accomplish the
foregoing, including without limitation, to transfer and convey its interest in
any portion of the Collateral in connection with a Sale thereof, and to take all
action necessary to effect such Sale. 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
monies.

(e) The method, manner, time, place and terms of any Sale of all or any portion
of the Collateral shall be commercially reasonable. The Trustee shall incur no
liability for any Sale conducted in accordance with this Section.

Section 6.19 Action on Notes. The Trustee’s right to seek and recover judgment
on the Notes or under this Indenture or the other Transaction Documents shall
not be affected by the seeking, obtaining or application of any other relief
under or with respect to this Indenture or the other Transaction Documents.
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 Collateral or upon any of the assets of the Issuer.

ARTICLE VII

THE TRUSTEE

Section 7.01 Certain Duties and Responsibilities.

(a) Except during the existence of an Event of Default known to the Trustee as
provided in subsection (e) below:

(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 or negligence 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; but in the case of
any such certificates or opinions, which by any provision hereof are
specifically required to be furnished to the Trustee, such certificate or
opinion shall cite the applicable provision and the Trustee shall be under a
duty to examine the same and to determine whether or not they conform to the
requirements of this Indenture.

(b) So long as any Event of Default or Event of Servicing Termination exists,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and shall use the same degree of care and skill in their exercise, as
a prudent person would exercise or use

 

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under the circumstances in the conduct of his or her own affairs, and nothing
contained herein shall relieve the Trustee of such obligations.

(c) No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct or bad faith (as determined by a court of
competent jurisdiction), except that:

(i) this subsection (c) shall not be construed to limit the effect of
subsection (a) of this Section;

(ii) neither the Trustee nor any of its officers, directors, employees or agents
shall be liable with respect to any action taken or omitted to be taken by the
Trustee in good faith in accordance with the written direction (A) given
pursuant to this Indenture or (B) by the Control Party in accordance with
Section 6.14 relating to the time, method and place of conducting any Proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture;

(iii) no provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur any liability (financial or otherwise) in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds is not assured to it without an indemnity reasonably
satisfactory to it against such risk or liability; and

(iv) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it shall be conclusively proven by a
court of competent jurisdiction that the Trustee was negligent in ascertaining
the pertinent facts.

(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this
Section 7.01.

(e) For all purposes under this Indenture, the Trustee shall not be deemed to
have notice of any Default, Event of Default (except as described in
Section 6.01(a) or (b)) or Event of Servicing Termination unless a Responsible
Officer assigned to and working in the Trustee’s Corporate Trust Office has
actual knowledge or has received written notice (at the address and in the
manner specified in Section 14.03) of any such event, and such notice references
(i) the Notes generally, the Issuer or this Indenture or (ii) the applicable
Default, Event of Default or Event of Servicing Termination.

(f) Subject to Section 7.03(e), the Trustee shall be under no obligation to
institute any suit, or to take any remedial proceeding under this Indenture, or
to enter any appearance or in any way defend in any suit in which it may be made
defendant, or to take any steps in the execution of the trusts hereby created or
in the enforcement of any rights and powers hereunder if it has reasonable
grounds for believing that repayment of any funds expended or risked by it is
not assured to it without an indemnity reasonably satisfactory to it against
such risk or liability, until such indemnity shall have been provided.

 

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(g) Notwithstanding any extinguishment of all right, title and interest of the
Issuer in and to the Collateral following an Event of Default and a consequent
declaration of acceleration of the maturity of the Notes, whether such
extinguishment occurs through a Sale of the Collateral to another person or the
acquisition of the Collateral by the Trustee or the Noteholders, the rights of
the Noteholders shall continue to be governed by the terms of this Indenture.

(h) Notwithstanding anything to the contrary contained herein, the provisions of
subsections (e) through (g), inclusive, of this Section 7.01 shall be subject to
the provisions of subsections (a) through (c), inclusive, of this Section 7.01.

(i) At all times during the term of this Indenture, the Trustee and the
Custodian shall keep at their Corporate Trust Office for inspection by the
Noteholders, the Contract Schedule and all amendments thereto delivered to it.

(j) The Trustee shall have no obligation to ascertain whether any payment of
interest on an overdue installment of interest is legally enforceable.

Section 7.02 Notice of Default and Other Events. Promptly upon the existence of
any Default or Event of Default or Event of Servicing Termination known to the
Trustee (within the meaning of Section 7.01(e)), the Trustee shall transmit by
telephonic or telecopy communication confirmed by mail to all Noteholders, as
their names and addresses appear the Note Register, notice of such event
hereunder known to the Trustee.

Section 7.03 Certain Rights of Trustee. Except as otherwise provided in
Section 7.01:

(a) the Trustee may in good faith conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
note or other obligation, paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;

(b) any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by an Issuer Request, an Issuer Order, or any writing
executed by a duly authorized officer of the Issuer;

(c) whenever in the administration of this Indenture the Trustee shall 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, negligence or willful
misconduct on its part, reasonably request and conclusively rely upon an
Officer’s Certificate of the Servicer or the Issuer;

(d) the Trustee may consult with counsel selected by it with due care and
familiar with such matters and the written advice or opinion of such counsel or
any Opinion of Counsel (in form and substance satisfactory to the Trustee and
addressed to the Trustee) shall be full and complete authorization and
protection and the Trustee shall not be liable in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;

 

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(e) the Trustee may, at any time during the administration of this Indenture,
request and receive a written direction from the Control Party in connection
with actions to be taken in its capacity as Trustee and shall not be liable for
any action taken or omitted in good faith reliance thereon;

(f) the Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture which are exercisable at the request or
direction of any of the Noteholders or the Control Party pursuant to this
Indenture, if it has reasonable grounds for believing that repayment of the
costs, expenses (including legal fees and expenses) and liabilities which might
be incurred by it in compliance with such request or direction is not assured to
it without an indemnity reasonably satisfactory to it against such cost, expense
or liability;

(g) the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, approval, entitlement, bond,
note or other paper or document, unless requested in writing to do so by the
Control Party; provided, however, that the Trustee shall be under no obligation
to make such investigation if it has reasonable grounds for believing that
repayment of any cost, expense or liability likely to be incurred in making such
investigation is not assured to it without an indemnity reasonably satisfactory
to it against such cost, expense or liability, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Issuer, upon reasonable notice and at reasonable
times personally or by agent or attorney;

(h) the Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents, custodians, nominees
or attorneys provided that the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed by it
with due care; and

(i) except as otherwise agreed in writing, the Trustee shall not be responsible
for the payment of any interest on amounts deposited with it hereunder.

Notwithstanding the foregoing, nothing in this Indenture or the Servicing
Agreement or any other Transaction Document regarding the Trustee shall limit
the Back-up Servicer’s obligations under this Indenture or the Servicing
Agreement or any other Transaction Document, which shall be governed by the
respective agreement.

Section 7.04 Not Responsible for Recitals or Issuance of Notes.

(a) The recitals contained herein and in the Notes, except the certificates of
authentication on the Notes, shall be taken as the statements of the Issuer, and
the Trustee assumes no responsibility for their correctness or validity. Other
than pursuant to Section 7.17 hereof, the Trustee makes no representations as to
the validity, adequacy or condition of the Collateral or any part thereof, or as
to the title of the Issuer thereto or as to the security afforded thereby or
hereby, or as to the validity or genuineness of any securities at any time
pledged and deposited with the Trustee hereunder or as to the validity or
sufficiency of this Indenture or of the Notes. The Trustee shall not be
accountable for the use or application by the Issuer of Notes

 

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or the proceeds thereof or of any money paid to the Issuer or upon Issuer Order
or for the use or application by the Servicer of any amounts paid to the
Servicer under any provisions hereof.

(b) Except as otherwise expressly provided herein or in the other Transaction
Documents, and without limiting the generality of the foregoing, the Trustee
shall have no responsibility or liability for or with respect to the existence
or validity of any Contract, the perfection of any security interest (whether as
of the date hereof or at any future time), the filing of any financing
statements, amendments thereto, or continuation statements, the maintenance of
or the taking of any action to maintain such perfection, the validity of the
assignment of any portion of the Collateral to the Trustee or of any intervening
assignment, the review of any Contract (it being understood that the Trustee (in
its capacity as Trustee) has not reviewed and does not intend to review the
substance or form of any such Contract), the performance or enforcement of any
Contract, the compliance by the Issuer, the Servicer, the Transferor or any
Obligor with any covenant or the breach by the Issuer, the Servicer, the
Transferor or any Obligor of any warranty or representation made hereunder or in
any related document or the accuracy of any such warranty or representation, any
investment of monies in the Collection Account, or any loss resulting therefrom
(other than losses from nonpayment of investments in obligations of U.S. Bank
National Association issued in its capacity other than as Trustee or investments
made in violation of the provisions hereof), the acts or omissions of the
Issuer, the Servicer, the Transferor or any Obligor or any action of the Issuer,
the Transferor or the Servicer taken in the name of the Trustee or the validity
of the Servicing Agreement.

(c) The Trustee shall not have any obligation or liability under any Contract by
reason of or arising out of this Indenture or the granting of a security
interest in such Contract hereunder or the receipt by the Trustee of any payment
relating to any Contract pursuant hereto, nor shall the Trustee be required or
obligated in any manner to perform or fulfill any of the obligations of the
Issuer under or pursuant to any Contract, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by it, or
the sufficiency of any performance by any party, under any Contract.

Section 7.05 May Hold Notes. The Trustee, any Paying Agent, Note Registrar, or
Authenticating Agent may, in its individual capacity, become the owner or
pledgee of Notes.

Section 7.06 Money Held in Trust. Money and investments held in trust by the
Trustee or any Paying Agent hereunder shall be held in one or more segregated,
non-interest bearing trust accounts (which shall be Eligible Accounts), in the
name of the Trustee on behalf of the Secured Parties at the Corporate Trust
Office, which accounts shall bear a designation clearly indicating that the
funds deposited therein are held for the benefit of the Secured Parties. The
Trustee or any Paying Agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in writing with the
Issuer or otherwise specifically provided herein (in such case subject to the
provisions of Section 13.03).

Section 7.07 Compensation and Reimbursement. The Issuer agrees:

(a) Solely from amounts distributed from the Collection Account pursuant to
Section 13.03, to: (i) pay the Trustee monthly its fee for all services rendered
by it hereunder as Trustee, in the amount of the Trustee Fee (which compensation
shall not otherwise be limited by

 

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any provision of law in regard to the compensation of a trustee of an express
trust), (ii) pay the Custodian monthly its fee for all services rendered by it
hereunder as Custodian, in the amount of the Custodian Fee and (iii) pay to the
Back-up Servicer its fee for all services rendered by it hereunder and under the
Servicing Agreement as Back-up Servicer, in the amount of the Back-up Servicer
Fee, in each case in accordance with the priorities set forth in Section 13.03;

(b) except as otherwise expressly provided herein and solely from amounts
distributed pursuant to Section 13.03, to reimburse the Trustee, the Custodian
or the Back-up Servicer upon its request for all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by the Trustee, the
Custodian or the Back-up Servicer, respectively, in accordance with any
provision of this Indenture or the Servicing Agreement or any other Transaction
Document relating thereto (including the reasonable compensation and the
expenses and disbursements of the Trustee’s, the Custodian’s and Back-up
Servicer’s agents and counsel), except any such expense, disbursement or advance
as may be attributable to its willful misconduct, negligence or bad faith; and

(c) to indemnify and hold harmless the Trustee, the Custodian, the Securities
Intermediary, the Back-up Servicer and their respective officers, directors,
employees, representatives and agents from and against, and reimburse for, any
loss, claim, obligation, action, suit liability, expense, penalty, stamp or
other similar tax, reasonable costs and expenses (including reasonable
attorneys’ and agents’ fees and expenses) damage or injury (to person, property
or natural resources) of any kind and nature sustained or suffered by the
Trustee, the Custodian, the Securities Intermediary and the Back-up Servicer by
reason of any acts or omissions (or alleged acts or omissions) of the Trustee,
the Custodian, the Securities Intermediary or the Back-up Servicer under the
Transaction Documents or arising directly or indirectly out of the activities of
the Issuer or any of the transactions contemplated hereby (including any
violation of any applicable laws by the Issuer as a result of the transactions
contemplated by this Indenture) or the participation by the Trustee, the
Custodian, the Securities Intermediary and the Back-up Servicer in the
transactions contemplated by the Transaction Documents, including any judgment,
award, settlement, reasonable attorneys’ fees and other expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim; provided that, the Issuer shall not indemnify the Trustee, the Custodian,
the Securities Intermediary or the Back-up Servicer if such loss, liability,
expense, damage or injury is due to the Trustee’s, the Custodian’s, the
Securities Intermediary’s or the Back-up Servicer’s negligence or willful
misconduct, willful misfeasance or bad faith in the performance of duties;
provided, further, that all amounts payable in respect of such indemnity shall
be payable by the Issuer solely from the amounts distributed pursuant to
Section 13.03 or released from the Lien of this Indenture. The provisions of
this indemnity shall run directly to and be enforceable by an injured person
subject to the limitations hereof and the provisions of this Section 7.07 shall
survive the termination of this Indenture or the earlier resignation or removal
of the Trustee, the Custodian, the Securities Intermediary or the Back-up
Servicer.

(d) The Trustee hereby acknowledges and agrees that if the Servicer and/or the
Issuer fails to pay the amounts set forth in this Section 7.07, the Trustee will
continue to perform its obligations under this Indenture, regardless of the
Servicer and/or the Issuer’s failure to pay such amounts, until the appointment
of a successor Trustee in accordance with Section 7.09 of this Indenture;
provided, however, that in such event, the Trustee shall continue to be entitled
to be

 

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paid all accrued amounts due it pursuant to this Section 7.07 from amounts
payable pursuant to Section 13.03.

Section 7.08 Corporate Trustee Required; Eligibility. There shall at all times
be a trustee hereunder, who shall be the Trustee, which shall: (a) be a banking
corporation or association organized and doing business under the laws of the
United States of America or of any state, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$100,000,000 and subject to supervision or examination by federal or state
authority and having an office within the United States of America; and (b) have
a commercial paper or other short-term rating of at least A-1/P-1 from each of
Moody’s and S & P and R-1 from the Rating Agency (if rated by the Rating
Agency). If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.

Section 7.09 Resignation and Removal; Appointment of Successor.

(a) No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee.

(b) The Trustee may resign at any time by giving thirty (30) days’ prior written
notice thereof to the Issuer and the Noteholders. If an instrument of acceptance
by a successor Trustee shall not have been delivered to the Trustee within
thirty (30) days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee, whose acceptance will not be unreasonably withheld or
delayed. Such court may thereupon, after such notice, if any, as it may deem
proper and may prescribe, appoint a successor Trustee.

(c) The Trustee may be removed by the Control Party at any time if one of the
following events has occurred:

(i) the Trustee shall cease to be eligible under Section 7.08 and shall fail to
resign after written request therefor by the Issuer or the Control Party;

(ii) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation;

(iii) the Trustee has failed to perform its duties in accordance with this
Indenture or has breached any representation of warranty made in this Indenture;
or

(iv) upon thirty (30) days’ prior written notice of termination by the Control
Party.

 

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(d) If the Trustee shall resign, be removed or become incapable of acting, or if
a vacancy shall occur in the office of the Trustee for any cause with respect to
any of the Notes, the Issuer shall promptly appoint a successor Trustee. If no
successor Trustee shall have been so appointed by the Issuer within thirty
(30) days of notice of removal or resignation and shall have accepted
appointment in the manner hereinafter provided, then the Control Party may
appoint a successor Trustee. No removal or resignation of the Trustee shall
become effective until the acceptance of the appointment of a successor Trustee
that is eligible to act as Trustee under Section 7.08.

(e) The Issuer shall give notice in the manner provided in Section 14.03 of each
resignation and each removal of the Trustee and each appointment and acceptance
of appointment of a successor Trustee with respect to the Notes. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.

(f) All amounts owing to the resigning or removed Trustee shall be payable
solely on the next scheduled date for distributions and solely in accordance
with the priorities set forth in Section 13.03.

Section 7.10 Acceptance of Appointment by Successor. Every successor Trustee
appointed hereunder shall execute, acknowledge and deliver to the Issuer, the
Secured Parties and the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee but, on request of the Issuer, the Control Party
or the successor Trustee, such retiring Trustee shall execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee, and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder. Upon request of any such successor Trustee or the Control Party, the
Issuer shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.

No successor Trustee shall accept its appointment unless at the time of such
acceptance such successor Trustee shall be eligible under this Article.

Section 7.11 Merger, Conversion, Consolidation or Succession to Business of
Trustee. Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder
(provided that such successor shall at all times be required to be eligible
under Section 7.08), without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Notes have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes.

Section 7.12 Co-Trustees and Separate Trustees.

 

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(a) At any time or times, for the purpose of meeting the legal requirements of
any jurisdiction in which any of the Collateral may at the time be located, the
Issuer and the Trustee shall have power to appoint, and, upon the written
request of the Trustee, the Issuer shall for such purpose join with the Trustee
in the execution, delivery and performance of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by the Trustee and
meeting the eligibility standards for the Trustee specified in Section 7.08,
either to act as Co-Trustee, jointly with the Trustee of all or any part of such
Collateral, or to act as separate Trustee of any such property (a “Co-Trustee”),
in either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section. If the Issuer does not join in such
appointment within fifteen (15) days after the receipt by it of a request so to
do, or, in case an Event of Default exists, the Trustee alone shall have power
to make such appointment.

(b) Should any written instrument from the Issuer be reasonably required by any
Co-Trustee or separate Trustee so appointed for more fully confirming to such
Co-Trustee or separate Trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Issuer.

(c) Every Co-Trustee or separate Trustee shall, to the extent permitted by law,
but to such extent only, be appointed subject to the following terms:

(i) the Notes shall be authenticated and delivered by, and all rights, powers,
duties and obligations hereunder in respect of the custody of securities, cash
and other personal property held by, or required to be deposited or pledged
with, the Trustee hereunder, shall be exercised solely by the Trustee;

(ii) the rights, powers, duties and obligations hereby conferred or imposed upon
the Trustee in respect of any property covered by such appointment shall be
conferred or imposed upon and exercised or performed by the Trustee or by the
Trustee and such Co-Trustee or separate Trustee jointly, as shall be provided in
the instrument appointing such Co-Trustee or separate Trustee, except to the
extent that under any law of any jurisdiction in which any particular act is to
be performed, the Trustee shall be incompetent or unqualified to perform such
act, in which event such rights, powers, duties and obligations shall be
exercised and performed by such Co-Trustee or separate Trustee at the direction
or with the consent of the Trustee;

(iii) the Trustee at any time, by an instrument in writing executed by it and,
prior to the occurrence of an Event of Default, the Issuer, may accept the
resignation of or remove any Co-Trustee or separate Trustee, appointed under
this Section, and, in case an Event of Default exists, the Trustee shall have
power to accept the resignation of, or remove, any such Co-Trustee or separate
Trustee without the concurrence of the Issuer. Upon the written request of the
Trustee, the Issuer shall join with the Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to effectuate
such resignation or removal. A successor to any Co-Trustee or separate Trustee
that has so resigned or been removed may be appointed in the manner provided in
this Section;

 

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(iv) no Co-Trustee or separate Trustee hereunder shall be personally liable by
reason of any act or omission of the Trustee or any other such Trustee hereunder
nor shall the Trustee be liable by reason of any act or omission of any
Co-Trustee or separate Trustee selected by the Trustee with due care or
appointed in accordance with directions to the Trustee pursuant to Section 6.14
provided, that the appointment of any Co-Trustee or separate Trustee shall not
relieve the Trustee from any of its express duties and obligations under this
Indenture; and

(v) any Act of Noteholders delivered to the Trustee shall be deemed to have been
delivered to each such Co-Trustee and separate Trustee.

Section 7.13 Maintenance of Office or Agency; Initial Appointment of Payment
Agent. The Note Registrar will maintain an office within the State of New York
or the State of Minnesota where Notes may be presented or surrendered for
payment, where Notes may be surrendered for registration of transfer or exchange
and where notices and demand to or upon the Issuer in respect of the Notes and
this Indenture may be served. The Issuer hereby appoints the Trustee as the
Paying Agent and its Corporate Trust Office as the office for each of said
purposes.

Section 7.14 Appointment of Authenticating Agent. The Trustee may at its expense
appoint an Authenticating Agent or Authenticating Agents with respect to the
Notes which shall be authorized to act on behalf of the Trustee to authenticate
Notes issued upon original issue or upon exchange, registration of transfer or
pursuant to Section 2.08, and Notes so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Notes by the Trustee or the
Trustee certificate of authentication or the delivery of Notes to the Trustee
for authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent
and delivery of the Notes to the Authenticating Agent on behalf of the Trustee.
Each Authenticating Agent shall be acceptable to the Issuer (whose acceptance
shall not be unreasonably withheld or delayed) and shall at all times be a
corporation having a combined capital and surplus of not less than the
equivalent of $50,000,000 and subject to supervision or examination by federal
or state authority or the equivalent foreign authority, in the case of an
Authenticating Agent who is not organized and doing business under the laws of
the United States of America, any state thereof or the District of Columbia. If
such Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Authenticating Agent shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time an Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which such Authenticating Agent shall be a party,
or any corporation succeeding to the corporate agency or corporate trust
business of such Authenticating Agent, shall continue

 

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to be an Authenticating Agent without the execution or filing of any paper or
any further act on the part of the Trustee or such Authenticating Agent,
provided that such corporation shall be otherwise eligible under this Section.

An Authenticating Agent may resign at any time by giving written notice thereof
to the Trustee and to the Issuer. The Trustee may at any time terminate the
agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent, the Noteholders and to the Issuer. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Issuer and, after the occurrence of an
Event of Default, the Control Party, and shall mail written notice of such
appointment by first-class mail, postage prepaid, to all Noteholders, if any,
with respect to which such Authenticating Agent will serve, as their names and
addresses appear in the Note Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.

If an appointment is made pursuant to this Section, the Notes may have endorsed
thereon, in addition to the Trustee certificate of authentication, an alternate
certificate of authentication in the following form:

This is one of the Notes described in the within-mentioned Indenture.

U.S. Bank National Association, as Trustee

 

By:  

 

  As Authenticating Agent By:  

 

  Authorized Officer

Section 7.15 Appointment of Paying Agent other than Trustee; Money for Note
Payments to be Held in Trust.

If, at the request of the Trustee, a party other than the Trustee is ever
appointed as a Paying Agent, the Issuer will cause such Paying Agent to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee that, subject to the provisions of this Section, such Paying
Agent will:

(a) hold all sums held by it for the payment of principal or interest on Notes
in trust in an Eligible Account in the name of the Trustee on behalf of the
Issuer at the Corporate Trust Office, which account shall bear a designation
clearly indicating that the funds deposited therein

 

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are held for the benefit of the Secured Parties, until such sums shall be paid
to such Persons or otherwise disposed of as provided in Section 13.03;

(b) give the Trustee and the Noteholders notice of any Default by the Issuer (or
any other obligor upon the Notes) in the making of any payment of principal or
interest; and

(c) at any time, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.

The Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay, or 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 such 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 Section 11.04, any money deposited with the Trustee or any Paying
Agent in trust for the payment of the principal or interest on any Note and
remaining unclaimed for two years after such principal or interest has become
due and payable shall be paid to the Issuer on Issuer Request, and the
Noteholder of such Note shall thereafter, as an unsecured general creditor, and
subject to any applicable statute of limitations, look only to the Issuer for
payment thereof, and all liability of the Trustee and such Paying Agent with
respect to such trust money or the related Note, shall thereupon cease; provided
that the Trustee or such Paying Agent, before being required to make any such
repayment, may (upon delivery of an Issuer Order), cause to be published once,
in a newspaper published in the English language, customarily published on each
Business Day and of general circulation in the city in which the Corporate Trust
Office is located, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than thirty (30) days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Trustee may also adopt and employ, any other
reasonable means of notification of such repayment (including mailing notice of
such repayment to the Noteholders whose right to or interest in monies due and
payable but not claimed is determinable from the records of any Paying Agent, at
the last address as shown on the Note Register for each such Noteholder). No
additional interest shall accrue on the related Note subsequent to the date on
which such funds were available for distribution to such Noteholder.

Section 7.16 Rights with Respect to the Servicer and Back-up Servicer. The
Trustee’s rights and obligations with respect to the Servicer and the Back-up
Servicer shall be governed by this Indenture, the Servicing Agreement and the
other Transaction Documents.

Section 7.17 Representations and Warranties of the Trustee. The Trustee hereby
represents and warrants for the benefit of the parties hereto and the Secured
Parties that:

(a) Organization and Good Standing. The Trustee is a national banking
association duly organized, validly existing and in good standing under the laws
of the United States, and has the power to own its assets and to transact the
business in which it is presently engaged;

 

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(b) Authorization. The Trustee has the power, authority and legal right to
execute, deliver and perform this Indenture and each other Transaction Document
to which it is a party and to authenticate the Notes, and the execution,
delivery and performance of this Indenture and each other Transaction Document
and the authentication of the Notes has been duly authorized by the Trustee by
all necessary corporate action;

(c) Binding Obligations. This Indenture and each other Transaction Document to
which the Trustee is a party, assuming due authorization, execution and delivery
by the other parties hereto and thereto, constitute the legal, valid and binding
obligations of the Trustee, enforceable against the Trustee in accordance with
its terms, except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws (whether statutory,
regulatory or decisional) now or hereafter in effect relating to creditors’
rights generally and the rights of trust companies in particular and (ii) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to certain equitable defenses and to the discretion of the
court before which any proceeding therefore may be brought, whether in a
proceeding at law or in equity;

(d) No Violation. The performance by the Trustee of its obligations under this
Indenture and each other Transaction Document to which the Trustee is a party
will not conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice, lapse of time or both) a default
under, the charter documents or bylaws of the Trustee;

(e) No Proceedings. To the best of its knowledge, there are no proceedings or
investigations to which the Trustee is a party pending, or, to the knowledge of
the Trustee, threatened, before any court, regulatory body, administrative
agency or other tribunal or Governmental Authority (A) asserting the invalidity
of this Indenture or any other Transaction Documents, (B) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by this Indenture or any other Transaction Document or (C) seeking
any determination or ruling that would materially and adversely affect the
performance by the Trustee of its obligations under, or the validity or
enforceability of, this Indenture, the Notes or any other Transaction Documents;

(f) Approvals. Neither the execution or delivery by the Trustee of this
Indenture or any other Transaction Document to which it is a party nor the
consummation of the transactions by the Trustee contemplated hereby or by any
other Transaction Document to which it is a party requires the consent or
approval of, the giving of notice to, the registration with or the taking of any
other action with respect to any Governmental Authority under any existing
federal or state law governing the banking or trust powers of the Trustee; and

(g) Eligibility. The Trustee meets the eligibility requirements set forth in
Section 7.08 hereof.

ARTICLE VIII

THE CUSTODIAN

Section 8.01 Appointment of Custodian. Subject to the terms and conditions
hereof, the Issuer hereby revocably appoints the Custodian, and the Custodian
hereby accepts such

 

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appointment and agrees to act as Custodian on behalf of the Secured Parties to
maintain exclusive custody of the Contract Files in order to perfect the
ownership interest of the Issuer in the Contracts and the security interest of
the Secured Parties in the Contracts and the other items in the Contract Files
and any and all proceeds of the foregoing; provided that from and after the
release or discharge of the Secured Parties’ lien in and to the Contracts and
the other items in the Contract Files and any and all proceeds of the foregoing,
the Custodian shall serve as exclusive agent and custodian of the Issuer with
respect to the Contract Files.

Section 8.02 Removal of Custodian. With or without cause, with sixty (60) days’
notice, (a) prior to the occurrence of an Event of Default the Issuer may, with
the prior written consent of the Control Party, or (b) following the occurrence
of an Event of Default, the Control Party may, remove and discharge the
Custodian from the performance of its duties under this Indenture with respect
to any or all of the Contracts and related Contract Files by written notice from
the Issuer or the Control Party, as the case may be, to the Custodian, with a
copy to the Trustee and the Servicer. Having given notice of such removal, the
Issuer (prior to the occurrence of an Event of Default) or the Control Party
(following the occurrence of an Event of Default) shall, by written instrument
and with the consent of the Control Party (if the notice of removal came from
the Issuer), promptly appoint a successor custodian to act on behalf of the
Issuer in replacement of the Custodian under this Indenture, which successor
Custodian shall be satisfactory to the Control Party in its sole discretion. In
the event of any such removal, the Custodian shall promptly transfer to the
successor custodian, as directed, all affected Contracts and related Contract
Files. In the event of removal of the Custodian for cause and the appointment of
a successor custodian under this Indenture, the expenses of transferring the
Contracts and related Contract Files to the successor custodian shall be at the
expense of the Custodian. In the event of removal of the Custodian without cause
by the Issuer (prior to the occurrence of an Event of Default) or the Control
Party, as the case may be, and the appointment of a successor custodian under
this Indenture, the Issuer shall be responsible for the expenses of transferring
the Contracts and related Contract Files to the successor custodian.
Notwithstanding the foregoing, this Indenture shall remain in full force and
effect with respect to any Contracts and related Contract Files for which this
Indenture is not terminated hereunder. The Custodian may petition a court of
competent jurisdiction to appoint a successor hereunder if no successor is
appointed within such 60-day notice period.

Section 8.03 Termination by Custodian. The Custodian may terminate its
obligations under this Indenture upon at least sixty (60) days’ notice to the
Servicer, the Issuer and the Noteholders; provided, no termination shall be
effective until appointment of a successor acceptable to the Issuer or, if an
Event of Default has occurred, the Control Party. In the event of such
termination, the Issuer shall promptly appoint a successor custodian; provided
that after the occurrence of an Event of Default, solely the Control Party may
appoint a successor custodian. The payment of such successor custodian’s fees
and expenses with respect to each Contract and related Contract Files shall be
solely the responsibility of the Issuer. Upon such appointment, the Custodian
shall promptly transfer to the successor custodian, as directed, all Contracts
and related Contract Files being held under this Indenture. The Custodian may
petition a court of competent jurisdiction to appoint a successor hereunder if
no successor is appointed within such sixty (60) day notice period.

Section 8.04 Limitations on the Custodian’s Responsibilities.

 

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(a) Except as provided herein, the Custodian shall be under no duty or
obligation to inspect, review or examine the Contracts or related Contract Files
to determine that the contents thereof are appropriate for the represented
purpose or that they have been actually recorded or that they are other than
what they purport to be on their face.

(b) The Custodian shall not be responsible for preparing or filing any reports
or returns relating to federal, state or local income taxes with respect to this
Indenture, other than for the Custodian’s compensation or for reimbursement of
expenses.

(c) The Custodian shall not be responsible or liable for, and makes no
representation or warranty with respect to, the validity, adequacy or perfection
of any lien upon or security interest in any Contract; provided that, the
foregoing shall not reduce or eliminate the Custodian’s obligations under
Section 4.03 hereof.

(d) Any other provision of this Indenture to the contrary notwithstanding, the
Custodian shall have no notice, and shall not be bound by any of the terms and
conditions of any document executed or delivered in connection with, or intended
to control any part of, the transactions anticipated by or referred to in this
Indenture unless the Custodian is a signatory party to that document or such
document is the Indenture, the Servicing Agreement or the Lockbox Intercreditor
Agreement. Notwithstanding the foregoing sentence, the Custodian shall be deemed
to have notice of the terms and conditions (including, without limitation,
definitions not otherwise set forth in full in this Indenture) of documents
executed or delivered in connection with, or intended to control any part of,
the transactions anticipated by or referred to in this Indenture, to the extent
such terms and provisions are referenced, or are incorporated by reference, into
this Indenture only as long as the Custodian shall have been provided a copy of
any such document or Indenture. Each of the Trustee, the Back-up Servicer and
the Custodian acknowledges receipt of a copy of the Transaction Documents to
which it is a party on the Closing Date.

(e) The duties and obligations of the Custodian shall only be such as are
expressly set forth in this Indenture or as set forth in a written amendment to
this Indenture executed by the parties hereto or their successors and assigns.
In the event that any provision of this Indenture implies or requires that
action or forbearance be taken by a party, but is silent as to which party has
the duty to act or refrain from acting, the parties agree that the Custodian
shall not be the party required to take the action or refrain from acting. In no
event shall the Custodian have any responsibility to ascertain or take action
except as expressly provided herein.

(f) Nothing in this Indenture shall be deemed to impose on the Custodian any
duty to qualify to do business in any jurisdiction, other than (i) any
jurisdiction where any Contract and related Contract Files is or may be held by
the Custodian from time to time hereunder, and (ii) any jurisdiction where its
ownership of property or conduct of business requires such qualification and
where failure to qualify could have a material adverse effect on the Custodian
or its property or business or on the ability of the Custodian, the Issuer or
the Servicer to perform its duties hereunder or under the other Transaction
Documents.

(g) The Custodian may consult with counsel selected by the Custodian with regard
to legal questions arising out of or in connection with this Indenture, and the
written opinion of

 

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such counsel shall be full and complete authorization and protection in respect
of any action reasonably taken, omitted or suffered by the Custodian in good
faith and in accordance therewith.

(h) The Custodian may, at any time during the administration of this Indenture,
request and receive a written direction from the Control Party in connection
with actions to be taken under this Indenture and shall not be liable for any
action taken or omitted in good faith reliance thereon;

(i) No provision of this Indenture shall require the Custodian to expend or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights and powers,
if, in its reasonable judgment, it shall believe that repayment of such funds is
not reasonably assured to it without an indemnity against such risk or
liability.

(j) The Custodian shall have no duty to ascertain whether or not each amount or
payment has been received by the Trustee or any third person.

Section 8.05 Limitation on Liability. Neither the Custodian nor any of its
directors, officers, agents or employees, shall be liable for any action taken
or omitted to be taken by it or them hereunder or in connection herewith in good
faith and believed (which belief may be based upon the opinion or advice of
counsel selected by it in the exercise of reasonable care) by it or them to be
within the purview of this Indenture, except for its or their own negligence,
lack of good faith or willful misconduct. The Custodian and any director,
officer, employee or agent of the Custodian may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. In no event shall the Custodian or its
directors, officers, agents and employees be held liable for any special,
indirect or consequential damages resulting from any action taken or omitted to
be taken by it or them hereunder or in connection herewith even if advised of
the possibility of such damages. The provisions of this Section 8.05 shall
survive the termination of this Indenture.

Section 8.06 Custodian Obligations Regarding Genuineness of Documents. In the
absence of bad faith or negligence on the part of the Custodian, the Custodian
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any request, instructions, certificate,
opinion or other document furnished to the Custodian, reasonably believed by the
Custodian to be genuine and to have been signed or presented by the proper party
or parties and conforming to the requirements of this Indenture; provided that
the provisions of this Section shall not in any manner limit or reduce the
responsibilities of the Custodian under this Indenture.

Section 8.07 Force Majeure. The Custodian shall not be responsible for delays or
failures in performance resulting from acts of God, strikes, lockouts, riots,
acts of war or terrorism, epidemics, nationalization, expropriation, currency
restrictions, government regulations adopted after the date of this Indenture,
fire, communication line failures, computer viruses, power failures, earthquakes
or other disasters of a similar nature which are beyond its control.

 

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ARTICLE IX

[RESERVED]

ARTICLE X

SUPPLEMENTAL INDENTURES

Section 10.01 Supplemental Indentures without Consent of the Noteholders.

(a) The Issuer, the Trustee and the Custodian, without the consent of the
Holders of any Notes may, at any time and from time to time, enter into one or
more amendments to this Indenture or indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes, provided that
(x) any such amendment or supplemental indenture, as evidenced by an opinion of
counsel, will not have an adverse effect on the rights or interests of the
Holders, (y) the Rating Agency Condition shall have been satisfied and (z) any
such amendment does not modify this Indenture in a manner requiring the consent
of all affected Noteholders as described in Section 10.02 hereof:

(i) to better 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; or

(ii) to cause the provisions in this Indenture to conform to or be consistent
with or in furtherance of the statements made with respect to the Notes, the
Collateral or the Transaction Documents in the Offering Circular to the extent
that such provisions were intended to be verbatim recitations of a provision in
the Offering Circular, or to correct or supplement any provision in the
Indenture which may be inconsistent with any other provisions therein or with
the provisions of any other Transaction Document; or

(iii) to evidence the succession of another Person to the Issuer, and the
assumption by such successor of the covenants of the Issuer in this Indenture
and in the Notes; or

(iv) to add to the covenants of, and the conditions, limitations and
restrictions to be observed by, the Issuer, for the benefit of the Secured
Parties or to surrender any right or power conferred upon the Issuer in this
Indenture; or

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

(vi) to evidence the succession of the Trustee pursuant to the terms of this
Indenture.

(b) 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, but the Trustee shall not be
obligated to enter into any such supplemental indenture that affects the
Trustee’s own rights, duties, indemnities, liabilities or immunities under this
Indenture or otherwise.

 

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(c) Promptly after the execution by the Issuer, the Custodian and the Trustee of
any supplemental indenture pursuant to this Section, the Issuer shall mail to
the Rating Agency and each Noteholder a copy of such supplemental indenture.

Section 10.02 Supplemental Indentures with Consent of the Noteholders. With the
prior written consent of the Majority Holders and the Servicer, the Issuer, the
Trustee and the Custodian may enter into an amendment or modification to this
indenture or into indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of the
Notes under this Indenture (other than as provided in Section 10.01 hereof);
provided, however, that no such amendment or supplemental indenture shall become
effective without the consent of each of the Holders of the Notes adversely
affected thereby if such amendment or supplemental indenture shall:

(a) change the Stated Maturity Date of any Note or the due date of any
installment of principal of, or method of computing principal of, or any
installment of interest on, any Note, or change the principal amount thereof or
the applicable Note Rate thereof or change any place of payment where, or the
coin or currency in which, any Note or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment; or

(b) reduce the percentage of the principal amount of Outstanding Notes, the
consent of the Holders of which is required for any such amendment or
supplemental indenture, or the consent of the Holders of which is required for
any waiver of compliance with certain provisions of this Indenture or Events of
Default or their consequences; or

(c) impair or adversely affect the priority of any payments payable by the
Trustee from the Collection Account on each Payment Date under this Indenture;
or

(d) permit the creation of any Lien ranking prior to, on a parity with, or
subordinate to the Lien of the Trustee with respect to any part of the
Collateral or, except as expressly provided in this Indenture, terminate or
release the Lien of the Trustee on any material portion of the Collateral at any
time subject to the Indenture or deprive any Secured Party of the security
afforded by the Lien of this Indenture; or

(e) modify or alter any of the provisions of this Section 10.02 or any defined
term used in Sections 10.01 or 10.02 of this Indenture (or any defined term used
therein), except to increase the percentage of Holders required for any
modification or waiver or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of each Noteholder
affected thereby; or

(f) modify Sections 6.01(a) or 6.01(b) or any defined term used therein, or
Section 13.03.

The Trustee is hereby authorized to join in the execution of any such amendment
or supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into any such

 

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amendment or supplemental indenture that affects in any adverse respect the
Trustee’s own rights, duties, liabilities or immunities under this Indenture or
otherwise.

Promptly after the execution by the Issuer, the Servicer, and the Trustee (and
all Noteholders if required to approve such amendment or supplement) of any
supplemental indenture pursuant to this Section, the Issuer shall mail to the
Rating Agency, the Back-up Servicer and each Noteholder a copy of such
supplemental indenture.

Section 10.03 Execution of Supplemental Indentures. In executing any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture and the Trustee receive, and (solely with
respect to the Trustee, subject to Section 7.01) shall be not be liable for and
shall be fully authorized to conclusively rely in good faith upon, an Opinion of
Counsel reasonably acceptable to the Trustee stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture and all
conditions precedent to such execution have been satisfied.

Section 10.04 Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Noteholder theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.

Section 10.05 Reference in Notes to Supplemental Indentures. Notes authenticated
and delivered after the execution of any supplemental indenture pursuant to this
Article may, and if required by the Issuer shall, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Issuer shall so determine, new Notes so modified as to
conform, in the opinion of 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 10.06 Back-Up Servicer Consent. Notwithstanding any other provision to
the contrary, for so long as there is a Back-Up Servicer, the Issuer, the
Indenture Trustee and the Custodian shall not, without the consent of the
Back-Up Servicer (such consent not to be unreasonably withheld), make, execute,
acknowledge or deliver amendments to this Indenture or enter into any
supplemental indentures hereto or thereto or otherwise waive or amend any
provision of this Indenture if such action shall have, or it is expected may
have, a material adverse effect on the Back-Up Servicer or any successor
Servicer.

Section 10.07 Amendments to the Lockbox Intercreditor Agreement. The Trustee
shall not enter into any material amendment, modification, supplement, consent
or waiver of the Lockbox Intercreditor Agreement without the satisfaction of the
Rating Agency Condition.

ARTICLE XI

REDEMPTIONS AND PREPAYMENTS OF NOTES

Section 11.01 Redemptions of Notes.

 

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(a) Optional Redemption. The Issuer shall have the right, subject to the terms
hereof, to redeem, in whole but not in part, all Outstanding Notes prior to the
Stated Maturity Date on any Payment Date on which the Aggregate Outstanding Note
Balance, after giving effect to the payments to be made on such Payment Date, is
less than or equal to ten percent (10%) of the Aggregate Initial Note Balance
issued under this Indenture. In connection with any such redemption of all
Outstanding Notes, the Issuer shall set the Redemption Date and give notice
thereof in writing to the Trustee pursuant to Section 11.02. Installments of
interest and principal due on or prior to the Redemption Date shall continue to
be payable to the Holders of the Notes called for redemption as of the relevant
Record Dates according to their terms and the provisions of Section 2.09 hereof.
The election of the Issuer to redeem any Notes pursuant to this Section shall be
evidenced by a written notice from the Issuer directing the Trustee to make the
payment of the Redemption Price on all of the Notes to be redeemed from monies
deposited with the Trustee pursuant to Section 11.02 hereof.

Section 11.02 Notice to Trustee. In the case of the redemption pursuant to
Section 11.01 hereof, (a) the Issuer shall, at least 15 days prior to the
Redemption Date, notify the Trustee and the Holders of the Notes in writing of
the Issuer’s election to cause a redemption of the Notes; (b) the Issuer shall
deposit in the Collection Account on the Business Day immediately preceding the
Redemption Date the amounts described in Section 11.02(c); and (c) the Issuer
shall deliver an Issuer Order directing the Trustee to make payment of the sum
of (A) the Redemption Price plus, (B) all other amounts that are due or will be
due to the Noteholders, the Partnership, the Trustee, the Securities
Intermediary, the Custodian, the Back-up Servicer and the Servicer under the
Transaction Documents. Upon delivery to the Trustee, the Noteholders, the
Custodian, the Paying Agent, and the Back-up Servicer of such documents and an
Officer’s Certificate from the Servicer certifying that (1) the amounts required
to be deposited into the Collection Account shall have been deposited and
(2) the requirements of Section 11.01(a) have been satisfied, the Trustee shall
promptly release its interest in the entire Collateral as provided in
Section 11.05.

Section 11.03 Notice of Redemption to Noteholders. Upon receipt of the notice
set forth in Section 11.02(a), the Trustee shall provide notice thereof with a
copy of such notice of redemption pursuant to Section 11.01 by first class mail
or courier delivery, dispatched no later than five (5) Business Days following
the date on which such notice was provided, to each Noteholder (at its address
in the Note Register).

All notices of redemption shall state:

(a) the Redemption Date;

(b) the amount that will be deposited in the Collection Account, which shall be
the sum of (A) the Redemption Price plus (B) all other amounts that are payable
to the Noteholders, the Trustee, the Partnership, the Custodian, the Back-up
Servicer, and the Servicer under the Transaction Documents on the Redemption
Date;

(c) that on the Redemption Date, the Redemption Price will become due and
payable with respect to the Notes, and that interest on all Outstanding Notes
shall cease to accrue on such date;

 

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(d) all conditions precedent in connection with such redemption have been
satisfied;

(e) the address at which such redeemed Notes shall be delivered; and

(f) the record date for such Redemption Date, which shall be one Business Day
before the Redemption Date.

Notice of redemption of Notes shall be given by the Trustee in the name and at
the expense of the Issuer.

Section 11.04 Amounts Payable on Redemption Date. Notice of redemption having
been given to Noteholders as provided in Section 11.03, such Notes shall, on the
Redemption Date, become due and payable at the Redemption Price specified in
Section 11.03(b), and on such Redemption Date (unless the Issuer shall default
in the payment of such Redemption Price), all of the Outstanding Notes shall
cease to bear interest. On the Redemption Date: (A) each Noteholder shall be
paid such Noteholder’s applicable share of the Redemption Price by the Paying
Agent on behalf of the Issuer upon presentation and surrender of their
respective Notes at the office or agency specified in Section 7.13; and (B) each
other Person to whom monies are owed under Section 11.03(b) shall be paid all
amounts owing to such Person from the amounts deposited in the Collection
Account in accordance with Section 11.02(b); provided, that no redemption may be
effectuated unless, concurrently with the redemption occurring under this
Article XI, all amounts due under this clause (B) shall be paid in full from
funds on deposit in the Collection Account. If the Holder of any Note called for
redemption shall not be so paid, then the principal shall, until paid, bear
interest from the Redemption Date at the applicable Note Rate and the redemption
shall be canceled, the Paying Agent shall return the Redemption Price specified
in Section 11.03(b) to the Issuer or other Person providing the funds for
payment, and the Notes shall be payable on the Stated Maturity Date or earlier
to the extent otherwise provided herein. All amounts payable on the Redemption
Date shall be paid in accordance with this Section 11.04, without regard to the
priority of distribution provisions contained in Section 13.03.

Section 11.05 Release of Contract Assets in Connection with Redemptions.

(a) In connection with the redemption permitted under this Article XI, the
Trustee shall release its Lien on the Contracts, at any time after the
conditions to the redemption set forth in this Article XI have been satisfied
and the Notes have been paid in full. In order to effect any such release, the
Issuer shall deliver to the Trustee and the Custodian an Officer’s Certificate,
(1) identifying the Contracts and the related Equipment to be released,
(2) requesting the release thereof, (3) setting forth the amount deposited in
the Collection Account with respect thereto, (4) certifying that the amount
deposited in the Collection Account is equal to the Redemption Price and all
other amounts required to be paid in connection with a Redemption under this
Article XI, and (5) certifying that all other conditions precedent set forth in
the Transaction Documents relating to such release have been satisfied.

(b) Upon receipt of the Officer’s Certificate from the Issuer containing the
certifications required under clause (a) of this Section, and provided that all
other certifications and documents required under the terms of this Indenture
have been received by the Trustee and

 

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the Notes have been paid in full, the Trustee shall release from the Lien of
this Indenture and the Custodian shall deliver to the Issuer or upon Issuer
Order the Contracts and all related Contract Assets described in the Issuer’s
Officer’s Certificate.

ARTICLE XII

REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 12.01 Representations and Warranties.

The Issuer hereby makes the following representations and warranties for the
benefit of the Trustee, the Custodian and the Secured Parties on which the
Trustee relies in accepting the Collateral in trust and in authenticating the
Notes. Except as specifically provided otherwise, such representations and
warranties are made as of the Closing Date and each Acquisition Date and shall
survive the transfer, grant and assignment of the Collateral to the Trustee.

(a) Organization and Good Standing. The Issuer is a Delaware limited liability
company duly organized, validly existing and is not organized under the laws of
any other jurisdiction. The Issuer is in good standing under the law of the
State of Delaware and each other State where the nature of its activities
requires it to “qualify to do business”, except to the extent that the failure
to so qualify would not individually or in the aggregate materially adversely
affect the ability of the Issuer to perform its obligations under the
Transaction Documents.

(b) Authorization. The Issuer has the power, authority and legal right to
execute, deliver and perform under the Transaction Documents and the execution,
delivery and performance of the Transaction Documents have been duly authorized
by the Issuer by all necessary limited liability company action.

(c) Binding Obligation. Each of the Transaction Documents to which the Issuer is
a party, assuming due authorization, execution and delivery by the parties
thereto other than the Issuer, constitutes a legal, valid and binding obligation
of the Issuer, enforceable against the Issuer in accordance with its terms
except that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, rehabilitation, moratorium or other similar laws (whether
statutory, regulatory or decisional) now or hereafter in effect relating to
creditors’ rights generally and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, whether a proceeding at law or in equity.

(d) No Violation. The consummation of the transactions contemplated by the
fulfillment of the terms of the Transaction Documents will not: (i) conflict
with, result in any breach of any of the material terms and provisions of, or
constitute (with or without notice, lapse of time or both) a default under the
organizational documents of the Issuer, any indenture, agreement, mortgage, deed
of trust or other instrument to which the Issuer is a party or by which it is
bound; (ii) result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of such indenture, agreement, mortgage, deed of
trust or other such instrument, other than any Lien created or imposed pursuant
to the terms of the Transaction Documents, or (iii) violate any law or, to the
best of the Issuer’s knowledge, any material order,

 

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rule or regulation applicable to the Issuer of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Issuer or any of its properties.

(e) No Proceedings. There are no proceedings or investigations to which the
Issuer, or any of the Issuer’s Affiliates, is a party pending, or, to the
knowledge of the Issuer, threatened, before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality
(A) asserting the invalidity of the Transaction Documents or any Receivable or
any Contract, (B) seeking to prevent the issuance of any of the Notes or the
consummation of any of the transactions contemplated by the Transaction
Documents, or (C) seeking any determination or ruling that would adversely
affect the performance by the Issuer of its obligations under, or the validity
or enforceability of, the Transaction Documents or any Receivable or any
Contract.

(f) Approvals. All approvals, authorizations, consents, orders or other actions
of any Person, or of any court, governmental agency or body or official,
required in connection with the execution and delivery of the Transaction
Documents and with the valid and proper authorization, issuance and sale of the
Notes pursuant to this Indenture (except that no such representation is made
with respect to any necessary approvals of State securities officials under the
Blue Sky Laws), have been or will be taken or obtained on or prior to the
Closing Date.

(g) Principal Office. The Issuer’s principal place of business and chief
executive office is located at the Issuer Address.

(h) Transfer and Assignment. Upon the delivery by or on behalf of the Issuer to
the Trustee of the Contracts and the filing of the financing statements
described in Sections 4.01(a)(v) and 4.02(b), the Trustee, for the benefit of
the Secured Parties, shall have a first priority perfected security interest in
the Issuer’s interest in the Contracts and Receivables and the proceeds thereof
and that portion of the Collateral in which a security interest may be perfected
by possession or the filing of a financing statement, in each case, under the
UCC, limited to the extent set forth in Section 9-315 of the UCC as in effect in
the applicable jurisdiction; provided that none of the Servicer, the Transferor
and the Issuer shall be required to file or record assignments of any UCC-1
financing statements or other lien recordings made against an Obligor. All
filings (including UCC filings) as are necessary in any jurisdiction to perfect
the security interest of the Trustee in the Collateral, including the transfer
of the Contracts and any other payments to become due thereunder, have been
made.

(i) Owners of the Issuer. LEAF Capital Funding III, LLC owns one hundred percent
(100%) of the Equity Interest in the Issuer, and such Equity Interest is duly
authorized, validly issued, fully paid for and non-assessable by the Issuer.

(j) Bulk Transfer Laws. The transfer, assignment and conveyance of the Contract
Assets by the Issuer pursuant to this Indenture are not subject to the bulk
transfer or any similar statutory provisions in effect in any applicable
jurisdiction.

(k) The Contract Assets. The rights of the Issuer with respect to the
representations and warranties that are made by the Transferor in Section 3.01
of the Purchase and Contribution

 

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Agreement and each Assignment Agreement, as of each Acquisition Date have been
assigned by the Issuer to the Trustee pursuant to the terms hereof, and the
Issuer is not aware of any inaccuracy in any such representations and warranties
except for such inaccuracies as have been provided in writing to the Trustee.

(l) Solvency. The Issuer, both prior to and after giving effect to the
transactions contemplated hereby, (i) is not “insolvent” (as such term is
defined in §101(32)(A) of the Bankruptcy Code); (ii) is able to pay its debts as
they become due; and (iii) does not have unreasonably small capital for the
activities that it conducts or for any transaction(s) in which it is about to
engage.

(m) Investment Company. The Issuer is not an “investment company” or a company
controlled by an “investment company” registered or required to be registered
under the Investment Company Act of 1940, as amended, or otherwise subject to
any other federal or state statute or regulation limiting its ability to incur
indebtedness. The Issuer, at all times, within the meaning of 17 C.F.R.
270.3a-7, (1) will have issued only the Notes and the membership interests
issued to its managing member at its formation, and any other securities issued
by the Issuer are “fixed income securities or other securities ... that depend
primarily on the cash flow from eligible assets” and for which a trustee is
appointed in compliance with 17 C.F.R. 270.3a-7(a)(4), (2) will sell its
securities only to its affiliates, “qualified institutional buyers”, or
institutional accredited investors or will sell securities “rated, at the time
of initial sale, in one of the four highest categories assigned long-term debt”
by one of DBRS, Moody’s, S & P or Fitch, (3) will either acquire or dispose of
(x) the Contracts only in accordance with and as permitted by the Purchase and
Contribution Agreement, the Assignment Agreements, its limited liability company
operating agreement and the Indenture, in the case of Contract dispositions,
only in consequence of breach of representation or warranty, Contract default or
Contract substitutions, or (y) any other “eligible assets” only (a) in
accordance with the agreements under which its securities are issued, (b) if a
rating downgrade of any of its outstanding “fixed-income securities” does not
result and (c) if such acquisition or disposition is not “for the primary
purpose of recognizing gains or decreasing losses resulting from market value
changes”. The Issuer will not engage in any business other than that expressly
permitted by the Transaction Documents and its limited liability company
operating agreement.

(n) Limited Activities. Since its formation, the Issuer has conducted no
activities other than the execution, delivery and performance of the Transaction
Documents contemplated hereby, and such other activities as are incidental to
the foregoing and otherwise permitted under Section 12.02(i). The Issuer has
incurred no indebtedness nor engaged in any activities or transactions nor
acquired any assets except as expressly contemplated hereunder and under the
other Transaction Documents.

(o) Taxes. The Issuer has filed or caused to be filed all Federal, state and
local tax returns which are required to be filed by it, and has paid or caused
to be paid all taxes shown to be due and payable on such returns or on any
assessments received by it, other than any taxes or assessments, the validity of
which are being contested in good faith by appropriate proceedings and with
respect to which the Issuer or the Servicer on its behalf has set aside adequate
reserves on its books in accordance with GAAP and which proceedings have not
given rise to any Lien.

 

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(p) Lockbox Accounts. The Issuer has no lockbox accounts or other bank accounts
for the collection of the Contract Assets other than the Lockbox Account.

(q) Accuracy of Information. All certificates, reports, financial statements and
similar writings furnished by or on behalf of the Issuer to the Trustee or any
Noteholder, at any time pursuant to any requirement of, or in response to any
written request of any such party under, this Indenture or any other Transaction
Document, have been, and all such certificates, reports, financial statements
and similar writings hereafter furnished by the Issuer to such parties will be,
true and accurate in every respect material to the transactions contemplated
hereby on the date as of which any such certificate, report, financial statement
or similar writing was or will be delivered, and shall not omit to state any
material facts or any facts necessary to make the statements contained therein
not materially misleading.

(r) Rating Agency Perfection Requirements as to Collateral.

(1) This Indenture creates a valid and continuing security interest (as defined
in the UCC) in the Collateral in favor of the Trustee, which security interest
is prior to all other Liens and is enforceable as such as against creditors of
and purchasers from the Issuer. The Issuer has good and marketable title to the
Collateral (including the Collection Account, the Reserve Account, the Servicer
Transition Account and all amounts from time to time on deposit in the Lockbox
Account with respect to the Contracts), free and clear of any Liens (except as
otherwise provided in the Lockbox Intercreditor Agreement and the rights of
Obligors to Security Deposits retained by the Issuer).

(2) All of the Contracts included in the Collateral constitute “tangible chattel
paper” within the meaning of the UCC. The Issuer has transferred to the Trustee
the original copies of such tangible chattel paper, and, other than the stamp,
if any, in favor of a prior lender that signed a Release Agreement related to a
Contract, none of such tangible chattel paper has any marks or notations
indicating that it has been pledged, assigned or otherwise conveyed to any
Person other than in favor of the Issuer or the Trustee. The Equipment related
to each Contract constitutes either “equipment” for purposes of
section 9-102(33) of the UCC or “inventory” for purposes of section 9-102(48) of
the UCC; provided however, that not more than 5.0% of the Contracts may relate
to Equipment that does not constitute “equipment” for purposes of
section 9-102(33) of the UCC or “inventory” for purposes of section 9-102(48) of
the UCC.

(3) The Issuer has caused (and will instruct the Servicer to cause), 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 granted in the Collateral to the Trustee hereunder. Each such financing
statement will contain a statement that a “purchase of, or security interest in,
any collateral described in this financing statement will violate the rights of
the Trustee.”

(4) Each of the Reserve Account, the Collection Account and the Servicer
Transition Account constitutes a “securities account” within the meaning of the

 

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applicable UCC. As provided in Section 13.02(e), the securities intermediary for
the Collection Account, the Reserve Account and the Servicer Transition Account
has agreed to treat all assets credited thereto as “financial assets” within the
meaning of the UCC and the Issuer has taken all steps necessary to cause the
securities intermediary to identify in its records the Trustee as the person
having a security entitlement against the securities intermediary in the
Collection Account, the Reserve Account and the Servicer Transition Account.
None of the Reserve Account, the Collection Account or the Servicer Transition
Account is in the name of any person other than the Trustee for the benefit of
the Secured Parties. The Issuer has not permitted the securities intermediary of
the Collection Account, the Reserve Account or the Servicer Transition Account
to comply with entitlement orders of any person other than the Trustee. The
Issuer has received all consents and approvals required in connection with the
Grant to the Trustee of its interest and rights in the Reserve Account, the
Collection Account and the Servicer Transition Account.

(5) The Lockbox Account constitutes a “deposit account” within the meaning of
the applicable UCC. The Issuer has delivered, or has caused the Servicer to
deliver, to the Trustee, a fully executed Lockbox Intercreditor Agreement
relating to the Lockbox Account, pursuant to which the Lockbox Bank has agreed
to comply with all instructions by the Trustee, as securities intermediary
thereunder, directing the disposition of funds in the Lockbox Account without
further consent by the Issuer or the Servicer. The Issuer has not permitted any
Lockbox Bank to comply with any instructions of any other Person regarding
withdrawal of funds other than the Trustee and, to the extent permitted under
the Transaction Documents, the Servicer. The Lockbox Account is not in the name
of any person other than the Issuer, the Trustee or the Lockbox Bank, as
securities intermediary under the Lockbox Intercreditor Agreement.

(6) Other than the security interest granted to the Trustee pursuant to this
Indenture, the Issuer has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Collateral. The Issuer has not
authorized the filing of and is not aware of any financing statements against
the Issuer, the Transferor or the Acquirer that include a description of
collateral that includes the Collateral other than any financing statement that
have been terminated or released. The Issuer is not aware of any judgment, ERISA
or tax lien filings against the Issuer, the Transferor or the Acquirer.

(7) Notwithstanding any other provision of this Indenture or any other
Transaction Document, the representations contained in this Section 12.01(r)
shall be continuing and remain in full force and effect, without waiver, until
the date on which the Notes have been paid in full.

(8) In the event that the sale of a Contract by the Transferor to the Issuer
under the Purchase and Contribution Agreement and the pledge of such Contract by
the Issuer to the Trustee, for the benefit of the Secured Parties, hereunder are
insufficient, without a notation on a related Motorized Titled Equipment’s
certificate of title, or without fulfilling any additional administrative
requirements under the laws of the state in which such Motorized Titled
Equipment is located, to assign the ownership of

 

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such Motorized Titled Equipment to the Issuer or to perfect a security interest
in such Motorized Titled Equipment (and the proceeds thereof) in favor of the
Trustee, for the benefit of the Secured Parties, the parties hereto agree that
(i) the designation of the Servicer (or its nominee) or the Acquirer (or its
nominee) under a Lienholder Nominee Agreement, to be executed within 180 days
following the first day of inclusion of such Contract secured by such Motorized
Titled Equipment in the calculation of the Discounted Pool Balance, as the
lienholder on the certificate of title with respect to such Motorized Titled
Equipment, is in its capacity as agent of the Issuer and the Trustee, for the
benefit of the Secured Parties, as their interests may appear, and (ii) such
designation shall be sufficient until such notations are made or additional
administrative requirements are fulfilled.

(9) Any Contract for which the Servicer shall not have within 180 days of the
first day of inclusion of such Contract secured by such Motorized Titled
Equipment in the calculation of the Discounted Pool Balance, (i) received a Lien
Certificate showing the Issuer, Servicer (or its nominee) or the Acquirer (or
its nominee) under a Lienholder Nominee Agreement as secured party with respect
to the related Motorized Titled Equipment from the applicable Registrar of
Titles and (ii) delivered such Lien Certificate or such evidence to the
Custodian, shall no longer be included in the calculation of the Discounted Pool
Balance. In the case of any Contract excluded from the calculation of the
Discounted Pool Balance pursuant to the previous sentence, the Contract so
excluded from the calculation of the Discounted Pool Balance may at a later time
be included in the calculation of the Discounted Pool Balance, provided, that
the Custodian shall have received a Lien Certificate showing the Issuer,
Servicer (or its nominee) or the Acquirer (or its nominee) under a Lienholder
Nominee Agreement as secured party with respect to the related Motorized Titled
Equipment from the applicable Registrar of Titles.

(10) At all times, all Collateral will consist of property in which a security
interest may be created and attach under the UCC.

(s) Existing Contracts. As to each Initial Contract and the related Contract
Assets, as of the Closing Date: (i) the information set forth in the Contract
Schedule with respect to such Contract is true and correct; (ii) except as
otherwise described on an Exception Report delivered in connection with the
acquisition of such Contract, (A) immediately prior to such Contract’s
Acquisition Date, the Servicer (or a custodian designated to hold such Contracts
on the Servicer’s behalf) had possession of the original of such Contract and
all related Contract Files; (B) each of such documents required to be signed by
the Obligor was signed by the Obligor in the appropriate spaces; and (C) the
complete Contract File for such Contract was delivered to the Custodian; and
(iv) as of the date that such Contract was acquired, the Servicer used no
selection procedures that identified the Contracts or other Contract Assets
being acquired on such date as being less desirable or valuable than other
comparable equipment leases or loans owned by the Transferor.

Section 12.02 Covenants. The Issuer hereby makes the following covenants for the
benefit of the Secured Parties and on which the Trustee relies in accepting the
Collateral in trust and in authenticating the Notes.

 

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(a) No Liens. Except for the conveyances and grant of security interests
hereunder, the Issuer will not sell, pledge, assign, convey, dispose of or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Collateral now existing or hereafter created, or any interest
therein prior to the termination of this Indenture pursuant to Section 5.01; the
Issuer will notify the Trustee in writing of the existence of any Lien on any of
the Collateral immediately upon discovery thereof; the Issuer shall promptly
discharge (or cause to be discharged) any Lien (other than Permitted Liens) on
the Collateral; and the Issuer shall defend the right, title and interest of the
Trustee in, to and under the Collateral now existing or hereafter created,
against all claims of third parties claiming through or under the Issuer;
provided that nothing in this Section 12.02(a) shall prevent or be deemed to
prohibit the Issuer from suffering to exist upon any of the Equipment any Liens
for municipal or other local taxes and other governmental charges due from the
Issuer if such taxes or governmental charges shall not at the time be due and
payable or, if the Issuer shall currently be contesting the validity thereof in
good faith by appropriate proceedings, nonpayment of such taxes or charges shall
not pose any risk of forfeiture of such Equipment, and the aggregate amount at
dispute shall not be greater than $50,000.00, unless the Control Party otherwise
approves.

(b) Obligations with Respect to the Contract Assets. The Issuer will do nothing
to impair the rights of the Trustee (for the benefit of the Secured Parties) in
the Collateral. In addition, to the extent the Issuer actually receives any
Collections, it shall deposit or cause to be deposited in the Collection Account
within two (2) Business Days of receipt thereof the amount of such Collections
in accordance with Section 13.03 and will hold such monies in trust for the
Trustee until so deposited. The Issuer agrees to take all such lawful action as
the Trustee or the Control Party may request to compel or secure the performance
and observance by the Transferor and the Servicer, as applicable, of each of
their obligations to the Issuer under or in connection with the Purchase and
Contribution Agreement, the Assignment Agreements and the Servicing Agreement in
accordance with the terms thereof, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in connection
with such Transaction Documents to the extent and in the manner directed by the
Trustee or the Control Party, as applicable, including the transmission of
notices of default thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Transferor or the
Servicer of each of their obligations thereunder.

(c) Notice of Default, Etc. The Issuer will deliver to the Trustee and each
Holder of Outstanding Notes immediately upon becoming aware of the existence of
any condition or event that constitutes a Default, an Event of Default or an
Event of Servicing Termination, a written notice describing its nature and
period of existence and what action is being taken or proposed to be taken with
respect thereto.

(d) Compliance with Law. The Issuer will comply, in all material respects, with
all acts, rules, regulations, orders, decrees and directions of any Governmental
Authority applicable to it or the Collateral or any part thereof or necessary
for it to perform its responsibilities hereunder and under the other Transaction
Documents; provided that the Issuer may contest any act, regulation, order,
decree or direction in good faith and in any reasonable manner which shall not
adversely affect the rights of the Trustee (for the benefit of the Secured
Parties) in the Collateral.

 

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(e) Preservation of Security Interest. The Issuer shall execute and file such
documents requested of it which may be required by law to fully preserve and
protect the first priority security interest of the Trustee (for the benefit of
the Secured Parties) in the Collateral.

(f) Maintenance of Office, Etc. The Issuer will not, without providing thirty
(30) days’ prior written notice to the Trustee and without filing such
amendments to any previously filed financing statements as the Trustee may
require or as may be required in order to maintain the Trustee’s perfected
security interest in the Collateral (for the benefit of the Secured Parties),
(a) change its jurisdiction of organization or the location of its principal
place of business, or (b) change its name, identity or corporate structure in
any manner that would make any financing statement or continuation statement
filed by the Issuer in accordance with this Indenture seriously misleading
within the meaning of Section 9-506 of any applicable enactment of the UCC.

(g) Further Assurances. The Issuer will make, execute or endorse, acknowledge,
and file or deliver to the Trustee and the Control Party from time to time such
schedules, confirmatory assignments, conveyances, transfer endorsements, powers
of attorney, certificates, reports, UCC financing statements, and other
assurances or instruments and take such further steps relating to the
Collateral, as the Trustee may reasonably request and reasonably require in
connection with the transactions the subject of the Transaction Documents,
except that UCC financing statements are not required to have been filed against
the related Obligor for any Equipment related to any Contract that had an
original equipment cost at origination of less than (A) if such Contract is a
secured loan or finance lease that provides for a $1 purchase option, $25,000,
or (B) if such Contract provides for a “fair market value” purchase option,
$50,000.

(h) Notice of Liens. The Issuer shall notify the Trustee in writing immediately
after becoming aware of any Lien on any portion of the Collateral, except for
any Liens on Equipment for municipal or other local taxes due from the Issuer if
such taxes shall not at the time be due or payable without penalty or, provided
the same are Permitted Liens, if the Issuer shall currently be contesting the
validity thereof in good faith by appropriate proceedings, such nonpayment shall
not pose any risk of forfeiture of such Collateral and the Issuer shall have set
aside on its books adequate reserves with respect thereto.

(i) Separateness Covenants. The Issuer (i) shall not engage in any other
business than (A) the acquisition, ownership, selling and pledging of the
property acquired by it pursuant to the Purchase and Contribution Agreement, any
Assignment Agreement, the Servicing Agreement and this Indenture and causing the
issuance of, receiving and selling the Notes issued pursuant to this Indenture,
(B) the exercise of any powers permitted to limited liability companies under
Delaware law which are incidental to the foregoing or necessary to accomplish
the foregoing and are not prohibited by the terms of its certificate of
formation, its limited liability company agreement or the other Transaction
Documents; (ii) will hold such appropriate meetings of its board of managers or
distribute appropriate unanimous consents in lieu of a meeting as are necessary
to authorize all of the Issuer’s actions that are required by law to be
authorized by the board of managers, keep minutes of its meetings and otherwise
observe all other customary corporate formalities; (iii) will (A) maintain its
books and records separate from the books and records of any other entity,
(B) maintain separate bank accounts and no funds of the Issuer shall be
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the Lockbox Intercreditor Agreement, (C) keep in full effect its existence,
rights, privileges, licenses and franchises as a limited liability company under
the laws of its applicable state of organization, and will obtain and preserve
its “qualification to do business” as a foreign limited liability company in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Indenture, (D) cause its
managers and officers to act independently and in its interests, (E) cause its
board of managers to duly authorize all of its corporate actions and (F) observe
all company procedures required by its organizational documents and applicable
laws; and (iv) will not (A) dissolve or liquidate in whole or in part, (B) own
any subsidiary or lend or advance any moneys to, or make an investment in, any
Person, (C) incur any debt in connection with or make any capital expenditures,
(D)(1) commence any case, proceeding or other action under any existing or
future bankruptcy, insolvency or similar law seeking to have an order for relief
entered with respect to it, or seeking reorganization, arrangement, adjustment,
wind-up, liquidation, dissolution, composition or other relief with respect to
it or its debts, (2) seek appointment of a receiver, trustee, custodian or other
similar official for it or any part of its assets, (3) make a general assignment
for the benefit of creditors, or (4) take any action in furtherance of, or
consenting or acquiescing in, any of the foregoing, (E) 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 its
capability of doing so, or otherwise), endorse or otherwise become contingently
liable (directly or indirectly) for the obligations of, or own or purchase any
stock, obligations or securities of or any other interest in, or make any
capital contribution to, any other Person other than as specifically provided
for in the Transaction Documents, (F) merge or consolidate with any other
Person, (G) engage in any other action that bears on whether the separate legal
identity of the Issuer will be respected, including (1) holding itself out as or
permitting itself to be held out as being liable for the debts of any other
Person or (2) acting other than in its name and through its duly authorized
officers or agents, (H) create, incur, assume, or in any manner become liable in
respect of any indebtedness other than the Notes, expenses associated with the
Closing Date, trade payables and expense accruals incurred in the ordinary
course of business in an amount less than $12,300 at any one time outstanding
and which are incidental to its permitted activities, and as provided in or
under the Transaction Documents, (I) sponsor or contribute, or contract to or
incur any other obligation to contribute to any Pension Plans, or (J) enter into
or become party to any agreements or instruments other than the Transaction
Documents or any documents or instruments executed pursuant thereto and in
connection therewith. So long as any Notes remain Outstanding or any other
amounts are owed under the Transaction Documents, the Issuer shall not amend its
organizational documents without the prior written consent of the Control Party
and prior written notice to the Rating Agency and the Trustee. The Issuer shall
not make any investment in any Person through the direct or indirect holding of
securities or otherwise other than in Eligible Investments. The Issuer shall not
declare or pay any dividends, except out of funds released to it under
Section 13.03. The Issuer will not have any of its indebtedness guaranteed by
the Transferor or any Affiliate of the Transferor. Furthermore, the Issuer will
not hold itself out, or permit itself to be held out, as having agreed to pay or
as being liable for the debts of the Transferor and the Issuer will not engage
in any transactions with the Transferor, except as expressly contemplated by the
Transaction Documents and on an arm’s-length basis. The Issuer will not hold the
Transferor out to third parties as other than an entity with assets and
liabilities distinct from the Issuer. The Issuer will cause any financial
statements consolidated with those of the Transferor to state that the Issuer is
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separate creditors who, in any liquidation of the Issuer, will be entitled to be
satisfied out of the Issuer’s assets prior to any value in the Issuer becoming
available to the Issuer’s equity holders. The Issuer will not act in any other
matter that could foreseeably mislead others with respect to the Issuer’s
separate identity. Without the prior written consent of the Control Party, the
Issuer will not, nor will it permit or allow others to, amend, modify, terminate
or waive any provision of any Contract Assets, except to the extent otherwise
expressly permissible under the Transaction Documents. Notwithstanding the
foregoing, the Servicer may, without the prior written consent of the Control
Party, waive any assumption fees, late payment charges, charges for checks
returned for insufficient funds, or other fees which may be collected in the
ordinary course of servicing the Contracts. The Issuer shall take such actions
as the Trustee (at the direction of the Control Party) shall request to enforce
the Issuer’s rights under the Contracts, and, at any time during which a Default
shall have occurred and be continuing, shall take such actions as are necessary
to enable the Trustee (at the direction of the Control Party) to exercise such
rights in the Trustee’s own name. On or before June 15 of each year, so long as
any of the Notes are Outstanding, the Issuer shall furnish to the Trustee and
each Noteholder, an Officer’s Certificate confirming that the Issuer is in
compliance with its obligations under this Section 12.02(i).

(j) Directors. The Issuer agrees that at all times, at least one (1) of the
directors of the Issuer will be professional directors that are not, and have
not been, a director, shareholder, officer or employee of any direct or ultimate
parent or Affiliate of the Transferor; provided that an independent director or
independent officer may serve in similar capacities for other “special purpose
entities” formed by the Transferor and its Affiliates.

(k) Treatment for Tax Purposes. The Issuer shall treat the Notes as indebtedness
of the Issuer and the Collateral as assets owned by the Issuer for purposes of
all federal, state and local income taxes, unless and until otherwise required
by an applicable taxing authority.

(l) Information Regarding the Issuer. The Issuer shall, on the written request
of the Trustee or the Control Party, on reasonable notice, furnish to the
Trustee and the Noteholders the books and records of the Issuer maintained
pursuant to its limited liability company agreement and any and all other
information maintained or held by the Issuer regarding the Issuer or the
Collateral.

(m) Preservation of the Contract Assets. The Issuer shall not assign, sell,
pledge, or exchange, or in any way encumber or permit the encumbrance of, or
otherwise dispose of, the Contract Assets except as expressly permitted under
the Transaction Documents to which it is a party.

(n) Enforcement of Transaction Documents. Upon request, the Issuer will
cooperate with the taking of all actions necessary, and the diligent pursuit of
all remedies available to it, in all cases to the extent commercially
reasonable, to allow the Control Party and the Trustee in the name of the Issuer
to enforce all obligations of the Transferor and the Servicer owing to the
Issuer under the Transaction Documents to which such Persons are a party and to
secure its rights thereunder.

 

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(o) Issuer May Not Merge, etc. The Issuer shall not merge with or into any other
Person or convey or transfer its properties and assets substantially as an
entirety to any Person.

(p) [Reserved.]

(q) Use of Proceeds. The proceeds from the sale of the Notes may be used by the
Issuer solely to pay to or on behalf of the applicable assignor, the Purchase
Price owed to it in accordance with the Assignment Agreement for the purchase of
Contract Assets, and to pay expenses owed to the Noteholders, the Trustee, the
Custodian, the Servicer and the Back-up Servicer related thereto or otherwise
associated with the issuance of the Notes. None of the transactions contemplated
in this Indenture (including the use of the proceeds from the sale of the Notes)
will result in a violation of Section 7 of the Securities and Exchange Act of
1934, as amended, or any regulations issued pursuant thereto, including
Regulations T, U and X of the Board of Governors of the Federal Reserve System.
The Issuer does not own or intend to, and none of the proceeds from the Notes
will be used to, carry or purchase any margin securities originally issued by it
or any “margin stock” within the meaning of said Regulation U.

(r) Indemnification. The Issuer shall indemnify and hold harmless the
Noteholders from and against any loss, liability, expense, damage or injury
sustained or suffered by them by reason of any acts, omissions or alleged acts
or omissions (i) by the Issuer in the performance of its obligations under the
Transaction Documents (including any violation of any applicable laws by the
Issuer as a result of the transactions contemplated by this Indenture) to which
it is a party, or (ii) arising out of the activities of any of them with respect
to the Collateral, including enforcement of rights and remedies against the
Issuer under the Transaction Documents to which it is a party and any judgment,
award, settlement, reasonable attorneys’ fees and other expenses reasonably
incurred in connection with the defense of any actual or threatened action,
proceeding or claim; provided that the Issuer shall not indemnify the
Noteholders if such loss, liability, expense, damage or injury is due to such
Person’s gross negligence, willful misconduct, willful misfeasance or bad faith
in the performance of its rights or duties hereunder. Any indemnification
pursuant to this Section shall only be payable, subject to the priority of
payments in Section 13.03, from the assets of the Issuer released from the
Collateral except as otherwise expressly provided in the Transaction Documents.
The provisions of this indemnity shall survive the termination of this
Indenture.

(s) Taxes. The Issuer shall pay and discharge all taxes and governmental charges
upon it or against any of its properties or assets or its income prior to the
date after which penalties attach for failure to pay, except (a) to the extent
that the Issuer shall be contesting in good faith in appropriate proceedings its
obligation to pay such taxes or charges, and adequate reserves having been set
aside for the payment thereof and no Lien has been created on any of its assets
in connection therewith, or (b) with respect to such taxes and charges which are
not material in either nature or amount such that any failure to pay or
discharge them, and any resulting penalties, either in any one instance or in
the aggregate, would not materially and adversely affect the financial
condition, operations, activities or prospects of the Issuer or the interests of
each Noteholder under this Indenture, a Note or any other Transaction Document,
and no Lien has been created on any of the Issuer’s assets in connection
therewith.

 

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(t) No Adverse Transactions. The Issuer shall not enter into any transaction
which adversely affects the Collateral or any Secured Party’s rights under this
Indenture, a Note or any other Transaction Document.

(u) Transactions by Issuer. None of the Noteholders shall have any obligation to
authorize the Issuer to, and the Issuer shall not (without the prior written
consent of the Majority Holders), enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of property or the rendering
of any service, with any Person (including, without limitation any Affiliate,
any shareholder, director, manager, officer or employee (or any relative
thereof) of the Issuer or any such Affiliate) unless such transaction is
(a) expressly permitted under this Indenture or any other Transaction Document,
(b) in the ordinary course of conducting the Issuer’s permitted activities and
(c) upon fair and reasonable terms no less favorable to the Issuer than it would
obtain in a comparable arm’s-length transaction.

(v) Further Limitations on Actions. The Issuer shall not do any of the following
without the consent of the Control Party: (i) redeem, retire, purchase or
otherwise acquire, directly or indirectly, any of the Issuer’s membership
interests, except in connection with employment or similar agreements with
officers and directors of the Issuer, or (ii) make any change in the Issuer’s
capital structure (except for permitted redemptions or prepayments of the Notes
hereunder), or (iii) make any material change in any of its objectives, purposes
or operations.

(w) Rule 144A Information. With respect to the Holder of any Note, the Issuer
shall promptly furnish or cause to be furnished to such Holder or to a
prospective purchaser of such Note designated by such Holder, as the case may
be, the information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act (“Rule 144A Information”) in order to permit compliance by
such Holder with Rule 144A in connection with the resale of such Note by such
Holder; provided, however, that the Issuer shall not be required to furnish
Rule 144A Information in connection with any request made on or after the date
which is three years from the later of (a) the date such Note (or any
predecessor Note) was acquired from the Issuer or (b) the date such Note (or any
predecessor Note) was last acquired from an “affiliate” of the Issuer within the
meaning of Rule 144 under the Securities Act; and provided, further, that the
Issuer shall not be required to furnish such information at any time to a
prospective purchaser located outside the United States who is not a U.S.
Person.

ARTICLE XIII

ACCOUNTS AND ACCOUNTINGS

Section 13.01 Collection of Money. Except as otherwise expressly provided
herein, 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, upon request from the
Servicer, provide the Servicer with sufficient information regarding the amount
of collections with respect to the Contract Assets and the other Collateral
received by the Trustee in any accounts held in the name of the Trustee to
permit the Servicer to perform its duties under the Servicing Agreement. The
Trustee shall hold all such money and property so received by it as part of the
Collateral and shall apply it as provided in this Indenture. If any Contract
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a Defaulted Contract, the Trustee, upon the request of the Issuer or the
Servicer, may, and upon the request of the Control Party shall, 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 deem a Contract a “Defaulted Contract” for
purposes of the Transaction Documents and to claim a Default or Event of Default
under this Indenture and to proceed thereafter as provided in Article VI.

Section 13.02 Establishment of Trust Accounts. (a) Prior to the Closing Date,
the Issuer established, and as of the Closing Date the Issuer maintains, with
the Trustee (i) a segregated, trust account (the “Reserve Account”) for the
deposit and retention of amounts required to be maintained therein; (ii) a
segregated, trust account (the “Collection Account”) for the receipt and/or
retention (as applicable) of (A) Collections, (B) Partnership Advances, (C) any
interest or other earnings earned on all or part of the funds in any of the
Collection Account or on any other Collateral and any other amounts, if any,
remitted by the Issuer pursuant to Section 13.02(d), (D) amounts received in
accordance with Section 11.02(b) in connection with a redemption of Outstanding
Notes in accordance with Article XI, (E) amounts transferred from the Reserve
Account or the Servicer Transition Account in accordance with the terms of this
Indenture and (F) amounts transferred from the Lockbox Account in accordance
with the Servicing Agreement and (iii) a segregated, non-interest bearing trust
account (the “Servicer Transition Account”) for the deposit and retention of
amounts required to be maintained therein. The Collection Account, the Reserve
Account and the Servicer Transition Account are collectively referred to as the
“Trust Accounts.”

(b) The Trust Accounts shall be in the name of the Trustee on behalf of the
Noteholders at the Corporate Trust Office, which shall bear a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Secured Parties. Funds in each Trust Account shall not be commingled with
any other monies. The Trustee shall ensure that the Trust Accounts are at all
times Eligible Accounts. All payments to be made from time to time by the Issuer
to the Noteholders and other Persons out of funds in any Trust Account pursuant
to this Indenture shall be made by the Trustee or the Paying Agent. All monies
deposited from time to time in the Trust Accounts pursuant to this Indenture
shall be held by the Trustee as part of the Collateral as herein provided.

(c) Upon direction of the Servicer, the Trustee shall invest the funds in or
credited to any or all of the Trust Accounts in Eligible Investments. The
direction of the Servicer shall specify the Eligible Investments in which the
Trustee shall invest, shall state that the same are Eligible Investments and
shall further specify the percentage of funds to be invested in each Eligible
Investment. No such Eligible Investment shall mature later than the Business Day
preceding the next following Payment Date. In the absence of direction of the
Servicer, the Trustee shall invest funds in the Trust Accounts in Eligible
Investments described in clause (g) of the definition thereof. Eligible
Investments for funds in or credited to the Trust Accounts shall be made in the
name of the Trustee for the benefit of the Secured Parties.

(d) Any proceeds, payments, income or other gain from investments in Eligible
Investments made in respect of funds in or credited to the Trust Accounts, as
outlined in (c) above, shall be credited to the respective Trust Account from
which such funds were derived. The Trustee shall not be liable for any loss
incurred on any funds invested in Eligible

 

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Investments pursuant to the provisions of this Section (other than losses from
nonpayment of investments in obligations of U.S. Bank National Association
issued in its individual capacity). In no event shall the Trustee be liable for
the selection of investments or for losses incurred as a result of the
liquidation of any investment prior to its Stated Maturity Date or for the
failure of any appropriate Person to provide timely written investment
direction.

(e) Each party hereto agrees that each of the Trust Accounts constitutes a
“securities account” within the meaning of Article 8 of the UCC and in such
capacity U.S. Bank National Association shall be acting as a “securities
intermediary” within the meaning of 8-102 of the UCC and that, regardless of any
provision in any other agreement, for purposes of the UCC, the State of New York
shall be deemed to be the “securities intermediary’s jurisdiction” under
Section 8-110 of the UCC. The Trustee shall be the “entitlement holder” within
the meaning of Section 8-102(a)(7) of the UCC with respect to the Trust
Accounts. In furtherance of the foregoing, U.S. Bank National Association,
acting as a “securities intermediary,” shall comply with “entitlement
orders” within the meaning of Section 8-102(a)(8) of the UCC originated by the
Trustee with respect to the Trust Accounts, without further consent by the
Issuer. Each item of property (whether investment property, financial asset,
security, instrument or cash) credited to each Trust Account shall be treated as
a “financial asset” within the meaning of Section 8-102(a)(9) of the UCC. All
securities or other property underlying any financial assets credited to each
Trust Account shall be registered in the name of the Trustee or indorsed to the
Trustee or in blank, and in no case will any financial asset credited to any
Trust Account be registered in the name of the Issuer, payable to the order of
the Issuer or specially indorsed to the Issuer except to the extent the
foregoing have been specially indorsed to the Trustee or in blank. Any Eligible
Investment consisting of “certificated securities,” as defined in the applicable
UCC will be evidenced directly or indirectly by physical certificates and each
such certificated security (i) will be delivered and held in its direct physical
possession by the Securities Intermediary in the State of Minnesota and
(ii) (x) is registered in the name of the Securities Intermediary or (y) has
been appropriately assigned thereon, or is accompanied by a bond power and/or
assignment appropriately executed, in blank or to the Securities Intermediary,
and is accompanied by any other documents required by the documents governing
such security to effect the transfer of the registration thereof to the
Securities Intermediary. The Trust Accounts shall be under the sole dominion and
control (as defined in Section 8-106 of the UCC) of the Trustee, and the Issuer
shall have no right to close, make withdrawals from, or give disbursement
directions with respect to, or receive distributions from, the Collection
Account or the Reserve Account, except in accordance with Section 13.03, or with
respect to the Servicer Transition Account, the Issuer shall have no right to
close, make withdrawals from, or give disbursement directions with respect to,
or receive distributions from, the Servicer Transition Account, except in
accordance with Section 13.05.

(f) In the event that U.S. Bank National Association, as securities
intermediary, has or subsequently obtains by agreement, by operation of law or
otherwise a security interest in the Trust Accounts or any security entitlement
credited thereto, it hereby agrees that such security interest shall be
subordinate to the security interest created by this Indenture and that the
Trustee’s rights to the funds on deposit therein shall be subject to
Section 13.03. The financial assets credited to, and other items deposited to
the Trust Accounts will not be subject to deduction, set-off, banker’s lien, or
any other right in favor of any person other than as created pursuant to this
Indenture.

 

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Section 13.03 Collection Account. (a) Except as otherwise expressly provided
herein, all amounts received by the Issuer other than (i) proceeds of the sale
of the Notes to the Initial Purchaser, (ii) the Initial Reserve Deposit
deposited in the Reserve Account, (iii) amounts deposited in the Servicer
Transition Account or (iv) amounts erroneously credited to the Issuer for which
the Control Party has provided its prior consent to the application thereof,
shall be deposited in the Collection Account until applied, together with funds
from the Reserve Account and Servicer Transition Account in accordance with this
Section 13.03.

(b) By no later than 1:00 p.m. (New York time) on each Payment Date, after
making all transfers and deposits to the Collection Account pursuant to
Section 13.03, Section 13.04(b), and Section 13.05, the Trustee shall withdraw
from the Collection Account all Available Funds with respect to the related
Collection Period and shall disburse such Available Funds in accordance with the
related Monthly Servicing Report; provided that, if the Trustee shall not have
received the Monthly Servicing Report, (x) the Trustee shall withdraw from the
Collection Account amounts verified in writing by the Servicer as needed to pay
first, all accrued and unpaid fees and properly invoiced costs and expenses of
each of the Partnership, Servicer, Back-up Servicer, Trustee and Custodian and
second, amounts in accordance with the priorities set forth in
Section 13.03(c)(v) through 13.03(c)(x), (y) the Trustee shall distribute such
funds in order to make such payments to the appropriate Persons and (z) upon
subsequent receipt of the Monthly Servicing Report, or such other information as
may be required by the Trustee, the Trustee shall pay each such other amounts
set forth below, all as set forth in the Monthly Servicing Report or in such
other information delivered to the Trustee; provided further that amounts
deposited in the Collection Account in accordance with Section 11.02(b) shall be
disbursed in accordance with Section 11.04 and not this Section 13.03;

(c) On each Payment Date, whether or not an Event of Default has occurred and is
continuing and the maturity of the Notes has been accelerated, the Trustee shall
make the following payments from the Available Funds then on deposit in the
Collection Account (after required deposits therein from the Reserve Account and
the Servicer Transition Account) in the following order of priority (to the
extent funds are available therefor):

(i) to the Partnership, any unreimbursed Partnership Advances;

(ii) to the Partnership (as agent for the Servicer) or to the Servicer if LEAF
Financial Corporation or an affiliate is no longer the Servicer, the Servicer
Fee then due, together with any accrued and unpaid Servicer Fees from prior
Collection Periods;

(iii) (a) to the Partnership, (if LEAF Financial is still the servicer) or to
the Servicer, if a LEAF Financial affiliate is no longer the servicer, any
Servicing Charges and (b) to the Servicer (including any accrued and unpaid
amounts owing to a predecessor Servicer), any unreimbursed Collection Costs
incurred by such Person;

(iv) to the Trustee, the Custodian and the Back-up Servicer, the Trustee Fees
and out-of-pocket expenses, Custodian Fees and out-of-pocket expenses and
Back-up Servicer Fees and out-of-pocket expenses (which includes out-of-pocket
expenses due to any successor Servicer) then due, together with any unpaid
Trustee Fees and out-of-pocket expenses, Custodian Fees and out-of-pocket
expenses and Back-up Servicer Fees

 

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and out-of-pocket expenses from prior collection periods (subject to certain
limitations set forth herein), and, solely from funds from the Servicer
Transition Account, any unpaid Transition Costs in an amount not to exceed in
the aggregate $150,000;

(v) to the Class A Noteholders, pro rata, the total amount of Note Interest due
and payable to such Class of Notes;

(vi) to the Class B Noteholders, pro rata, the total amount of Note Interest due
and payable to such Class of Notes;

(vii) to the Class C Noteholders, pro rata, the total amount of Note Interest
due and payable to such Class of Notes;

(viii) to the Class A Noteholders in reduction of principal until the
Outstanding Note Balance of the Class A Notes has been reduced to zero;

(ix) to the Class B Noteholders in reduction of principal until the Outstanding
Note Balance of the Class B Notes has been reduced to zero;

(x) to the Class C Noteholders in reduction of principal until the Outstanding
Note Balance of the Class C Notes has been reduced to zero;

(xi) to the Trustee, Securities Intermediary, Custodian and Back-up Servicer,
any indemnification payments owed by the Issuer; and

(xii) to the Issuer, any remaining Available Funds.

(d) On the related Redemption Date, the Trustee shall withdraw the sum of the
applicable Redemption Price from the Collection Account, and the Paying Agent
shall remit the Redemption Price to the applicable Noteholders in accordance
with Section 11.03.

Section 13.04 Reserve Account. (a) On the Closing Date, the Issuer shall
deposit, or cause to be deposited, into the Reserve Account an amount equal to
1.90% of the Initial Discounted Pool Balance.

(b) If on any Payment Date, (i) amounts on deposit in the Collection Account are
insufficient to reduce the Aggregate Outstanding Note Balance to an amount lower
than or equal to the Discounted Pool Balance after applying clauses (i) through
(x) of Section 13.03(c) or (ii) amounts on deposit in the Reserve Account are
greater than or equal to the Aggregate Outstanding Note Balance, the Trustee
will withdraw, to the extent of funds on deposit in the Reserve Account, in the
case of (i), the amount of such insufficiency or, in the case of (ii), all funds
and deposit such amounts into the Collection Account to be used as Available
Funds. Upon the occurrence of any Event of Default that results in acceleration
of the Notes and is not waived or cured on or before the next Payment Date, all
funds maintained in the Reserve Account shall be transferred to the Collection
Account. On the Stated Maturity Date, and at the option of the Issuer in
connection with the redemption pursuant to Article XI, any remaining funds on
deposit in the Reserve Account shall be deposited in the Collection Account and
distributed in accordance with Section 13.03(c).

 

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Section 13.05 Servicer Transition Account. (a) On the Closing Date, the Issuer
shall deposit, or cause to be deposited, into the Servicer Transition Account an
amount equal to $150,000.

(b) On each Payment Date following the occurrence of an Event of Servicing
Termination, the Trustee shall withdraw from the Servicer Transition Account an
amount equal to the lesser of (i) the Transition Costs then due and (ii) the
amount that is then credited to the Servicer Transition Account, and deposit
such funds in the Collection Account for the payment of properly invoiced
Transition Costs in accordance with Section 13.03(c).

(c) On the Stated Maturity Date, and at the option of the Issuer in connection
with the redemption pursuant to Article XI, any remaining funds on deposit in
the Servicer Transition Account shall be deposited in the Collection Account and
distributed in accordance with Section 13.03(c).

Section 13.06 Reports to the Noteholders. (a) On each Payment Date, the Trustee
will make available to each Noteholder the Monthly Servicing Report.

The Trustee will make the Monthly Servicing Report available to the Noteholders,
via the Trustee’s Internet website, and, with the consent or at the direction of
the Issuer, such other information regarding the Notes and/or the Contracts as
the Trustee may have in its possession, but only with the use of a password
provided by the Trustee or its agent to such Person. The Trustee will make no
representation or warranties as to the accuracy or completeness of such
documents and will assume no responsibility for the contents thereof.

The Trustee’s Internet website initially shall be located at www.usbank.com/abs
or at such other address as shall be specified by the Trustee from time to time
in writing to the Noteholders. In connection with providing access to the
Trustee’s Internet website, the Trustee may require registration and the
acceptance of a disclaimer. The Trustee shall not be liable for errors in the
dissemination of information in accordance with this Indenture.

Such reports will not constitute financial statements prepared in accordance
with generally accepted accounting principles.

(b) At least annually, or as otherwise required by law, the Servicer shall
prepare or cause to be prepared, and the Trustee shall distribute to the
Noteholders, any 1099 form, or other tax information or statements as are
required by applicable tax law.

Section 13.07 Monthly Servicing Reports. No later than 12:00 p.m. (New York
time) on each Reporting Date, the Servicer shall deliver the Monthly Servicing
Report to the Trustee, the Back-up Servicer and the Rating Agency. No later than
12:00 noon (New York time) on the following Verification Date, the Back-up
Servicer shall perform its obligations and duties set forth in Section 4.05 of
the Servicing Agreement and shall notify the Issuer and the Trustee of any
discrepancies therein or the need for any additional information to complete
such verification, and the Servicer shall promptly re-issue a revised Monthly
Servicing Report addressing such discrepancies and such information request
which revised Monthly Servicing Report shall supersede the prior report for
purposes of making the distributions described in Section 13.03. The Monthly
Servicing Report shall include the information specified in the form

 

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of Monthly Servicing Report attached to the Servicing Agreement, as such form
may be modified from time to time with the consent of the Servicer, the Back-up
Servicer, the Control Party.

ARTICLE XIV

PROVISIONS OF GENERAL APPLICATION

Section 14.01 General Provisions. All of the provisions of this Article shall
apply to this Indenture.

Section 14.02 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 an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
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 7.01) conclusive in favor of
the Trustee and the Issuer, if made in the manner provided in this Section.

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

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

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

Section 14.03 Notices. Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or the Control Party or other document
provided or permitted by this Indenture to be made upon, given or furnished to,
or filed with any party hereto shall be sufficient for every purpose hereunder
if in writing and telecopied (with written confirmation of receipt), mailed by
registered mail, overnight bonded courier or personally delivered, and addressed
to the appropriate address below (or such other address as may be provided to
the other parties in writing from time to time):

(a) to the Trustee at 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota
55107, telecopier number 651-495-8090, Attention: LEAF Receivables Funding 2,
LLC, Equipment Contract Backed Notes, Series 2010-1;

 

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(b) to the Custodian at 1133 Rankin Street, EP-MN-TMZD, St. Paul, MN 55116
telecopy number: 651-695-6102, Attention: LEAF Receivables Funding 2, LLC,
Equipment Contract Backed Notes, Series 2010-1;

(c) to the Servicer at 2005 Market Street, 15th Floor, Philadelphia, PA 19103,
telecopy number: 215-640-6363, Attention: Miles Herman;

(d) to the Issuer at 2005 Market Street, 15th Floor, Philadelphia, PA 19103,
telecopy number: 215-640-6363, Attention: Miles Herman;

(e) to the Back-up Servicer at 1310 Madrid Street, Suite 103, Marshall, MN
56258, telecopy number: 866-806-0775, Attention: Joseph Andries, Re: LEAF
Receivables Funding 2, LLC, Equipment Contract Backed Notes, Series 2010-1; or

(f) DBRS, Inc. at 140 Broadway, 35th Floor, New York, NY 10005, telecopy number:
212-806-3201, Attention: Chuck Weilamann, Re: LEAF Receivables Funding 2, LLC,
Equipment Contract Backed Notes, Series 2010-1.

Section 14.04 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 telecopied (with
written confirmation of receipt from each addressee), mailed by registered mail,
overnight bonded courier or delivered personally to each Noteholder affected by
such event, at its address as it appears on the Note Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case in which 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 which is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.

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

Section 14.05 Successors and Assigns. All covenants and agreements in this
Indenture by the Issuer shall bind its successors and assigns, whether so
expressed or not.

Section14.06 Severability; No Waiver. 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. No failure on the part of the Trustee, the Control Party or
any Noteholder to exercise, and no delay in exercising, any

 

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right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

Section 14.07 Benefits of Indenture Limited to Parties and Express Third Party
Beneficiaries. Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto, the Noteholders and any
of their successors hereunder, any benefit or any legal or equitable right,
remedy or claim under this Indenture or under the Notes. Each of the Noteholders
are express third party beneficiaries of this Indenture each entitled to enforce
the provisions hereof as if a party hereto.

Section 14.08 Legal Holidays. In any case in which the date of any Payment Date,
or the Stated Maturity Date of any Note shall not be a Business Day, then
(notwithstanding any other provision of the Notes or this Indenture) payment of
principal or interest 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 nominal
date of any such Stated Maturity Date or Payment Date.

Section 14.09 Governing Law; Waiver of Jury Trial; Consent to Jurisdiction.

(a) This Indenture and each Note shall be construed in accordance with and
governed by the laws of the State of New York applicable to agreements made and
to be performed therein, except to the extent that the perfection or effect of
perfection of the security interests granted hereunder are governed by the laws
of a jurisdiction other than the State of New York. Section 5-1401 and
Section 5-1402 of the New York General Obligations Law shall be applicable.

(b) The Issuer hereby agrees to the jurisdiction of any federal court located
within the State of New York, and waives personal service of any and all process
upon it and consents that all such service of process be made by registered mail
directed to the Issuer at the address set forth in Section 14.03 hereof and
service so made shall be deemed to be completed five (5) days after the same
shall have been deposited in the U.S. mails, postage prepaid. With respect to
the foregoing consent to jurisdiction, the Issuer hereby waives any objection
based on forum non conveniens, and any objection to venue of any action
instituted hereunder and consents to the granting of such legal or equitable
relief as is deemed appropriate by the court.

(c) The Issuer hereby waives any right to have a jury participate in resolving
any dispute, whether sounding in contract, tort, or otherwise among the parties
hereto or otherwise arising out of, connected with, related to, or incidental to
the relationship between them in connection with this Indenture. Instead, any
dispute resolved in court will be resolved in a bench trial without a jury.
Nothing in this Section 14.09 shall affect the right of the Trustee, the Control
Party or any Noteholder to serve legal process in any other manner permitted by
law or to bring any action or proceeding against the Issuer or its property in
the courts of any other jurisdiction.

Section 14.10 Counterparts; Entire Agreement. This Indenture may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all such

 

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counterparts shall together constitute but one and the same instrument. Delivery
by telecopier of an executed counterpart of a signature page to this Indenture
shall be as effective as delivery of the original executed counterpart. This
Indenture, together with the exhibits hereto and the other written Transaction
Documents referenced herein, sets forth the entire agreement among the parties
hereto with respect to the subject matter hereof, superseding all prior oral or
written understandings.

Section 14.11 Notifications. Notwithstanding any provision to the contrary
contained in this Indenture, all reports, notices, communications and consents
which are required, by the terms of this Indenture, to be delivered by the
Noteholders, shall be required to be delivered to the Trustee in writing.

Section 14.12 No Petition. During the term of this Indenture and for one year
and one day after payment in full of all obligations of the Issuer under the
Transaction Documents, none of the parties hereto or any Affiliate thereof or
any Noteholder will file any involuntary petition against the Issuer or
otherwise institute, or cooperate with or encourage any other Person to file or
otherwise institute, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or any other proceedings under federal or state
bankruptcy or similar law against or concerning the Issuer; provided that if
such proceeding shall have commenced, nothing herein shall preclude any
Noteholder from filing a proof of claim in any such proceeding.

Section 14.13 Assignment.

Notwithstanding anything to the contrary contained herein, this Indenture may
not be assigned by the Issuer.

 

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In Witness Whereof, the Issuer, the Trustee and the Custodian have caused this
Indenture to be duly executed by their respective duly authorized officers as of
the date and year first above written.

 

LEAF Receivables Funding 2, LLC,

as Issuer

By:  

 

Name:  

 

Title:  

 

U.S. Bank National Association,

as Trustee

By:  

 

Name:  

 

Title:  

 

U.S. Bank National Association,

as Custodian

By:  

 

Name:  

 

Title:  

 

Indenture

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

SCHEDULE I

CLOSING DATE CONTRACT SCHEDULE

[See attached.]

 

Sched. I-1

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SCHEDULE II

DEFINITIONS ANNEX

[See attached.]

 

Sched. II-1