exv10w7



 





Exhibit 10.7




EXECUTION
COPY 




OPTION ONE ADVANCE TRUST 2007-ADV2




as Issuer




and




WELLS FARGO BANK, NATIONAL ASSOCIATION




as Indenture Trustee




 






INDENTURE




Dated as of October 1, 2007




 






Option One Advance Trust 2007-ADV2

Advance Receivables Backed Notes, Series 2007-ADV2




 









 






TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 
	 	 	 	Page
	PRELIMINARY STATEMENT

	 
	 	 	 	 	 	 
	GRANTING CLAUSE

	 
	 	 	 	 	 	 
	GENERAL COVENANT

	 
	 	 	 	 	 	 
	ARTICLE I

	DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

	 
	 	 	 	 	 	 
	Section 1.01.
	 	Definitions	 	 	2	 
	Section 1.02.
	 	Rules of Construction	 	 	19	 
	 
	 	 	 	 	 	 
	ARTICLE II

	THE NOTES

	 
	 	 	 	 	 	 
	Section 2.01.
	 	Forms; Denominations	 	 	20	 
	Section 2.02.
	 	Execution, Authentication, Delivery and Dating	 	 	20	 
	Section 2.03.
	 	Acknowledgment of Receipt of the Receivables	 	 	21	 
	Section 2.04.
	 	The Notes Generally	 	 	22	 
	Section 2.05.
	 	Registration of Transfer and Exchange of Notes	 	 	22	 
	Section 2.06.
	 	Mutilated, Destroyed, Lost or Stolen Notes	 	 	24	 
	Section 2.07.
	 	Noteholder Lists	 	 	25	 
	Section 2.08.
	 	Persons Deemed Owners	 	 	25	 
	Section 2.09.
	 	Accounts	 	 	25	 
	Section 2.10.
	 	Payments on the Notes	 	 	27	 
	Section 2.11.
	 	Final Payment Notice	 	 	30	 
	Section 2.12.
	 	Compliance with Withholding Requirements	 	 	30	 
	Section 2.13.
	 	Cancellation	 	 	30	 
	Section 2.14.
	 	Additional Note Balance	 	 	31	 
	Section 2.15.
	 	Reserve Account	 	 	31	 
	Section 2.16.
	 	Redemption	 	 	31	 
	Section 2.17.
	 	Securities Accounts	 	 	32	 
	Section 2.18.
	 	Tax Treatment of the Notes	 	 	34	 
	 
	 	 	 	 	 	 
	ARTICLE III

	SATISFACTION AND DISCHARGE

	 
	 	 	 	 	 	 
	Section 3.01.
	 	Satisfaction and Discharge of Indenture	 	 	35	 
	Section 3.02.
	 	Application of Trust Money	 	 	36	 
	 
	 	 	 	 	 	 






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	 	 	 	Page
	ARTICLE IV

	EVENTS OF DEFAULT; REMEDIES

	 
	 	 	 	 	 	 
	Section 4.01.
	 	Events of Default	 	 	36	 
	Section 4.02.
	 	Acceleration of Maturity; Rescission and Annulment	 	 	38	 
	Section 4.03.
	 	Collection of Indebtedness and
Suits      for                         Enforcement            by Indenture Trustee	 	 	39	 
	Section 4.04.
	 	Remedies	 	 	41	 
	Section 4.05.
	 	Application of Money Collected	 	 	41	 
	Section 4.06.
	 	Limitation on Suits	 	 	42	 
	Section 4.07.
	 	Unconditional Right of
Noteholders        to                          Receive                Principal and Interest	 	 	42	 
	Section 4.08.
	 	Restoration of Rights and Remedies	 	 	42	 
	Section 4.09.
	 	Rights and Remedies Cumulative	 	 	43	 
	Section 4.10.
	 	Delay or Omission Not Waiver	 	 	43	 
	Section 4.11.
	 	Control by Noteholders	 	 	43	 
	Section 4.12.
	 	Waiver of Past Defaults	 	 	43	 
	Section 4.13.
	 	Undertaking for Costs	 	 	44	 
	Section 4.14.
	 	Waiver of Stay or Extension Laws	 	 	44	 
	Section 4.15.
	 	Sale of Trust Estate	 	 	45	 
	Section 4.16.
	 	Action on Notes	 	 	46	 
	 
	 	 	 	 	 	 
	ARTICLE V

	THE INDENTURE TRUSTEE

	 
	 	 	 	 	 	 
	Section 5.01.
	 	Certain Duties and Responsibilities	 	 	46	 
	Section 5.02.
	 	Notice of Defaults	 	 	49	 
	Section 5.03.
	 	Certain Rights of Indenture Trustee	 	 	50	 
	Section 5.04.
	 	Compensation and Reimbursement	 	 	51	 
	Section 5.05.
	 	Corporate Indenture Trustee Required; Eligibility	 	 	52	 
	Section 5.06.
	 	Authorization of Indenture Trustee	 	 	53	 
	Section 5.07.
	 	Merger, Conversion, Consolidation         or                          Succession             to	 	 	 	 
	 
	 	Business	 	 	53	 
	Section 5.08.
	 	Resignation and Removal; Appointment of Successor	 	 	53	 
	Section 5.09.
	 	Acceptance of Appointment by Successor	 	 	54	 
	Section 5.10.
	 	Unclaimed Funds	 	 	55	 
	Section 5.11.
	 	Illegal Acts	 	 	55	 
	Section 5.12.
	 	Communications by the Indenture Trustee	 	 	56	 
	Section 5.13.
	 	Separate Indenture Trustees and Co-Trustees	 	 	56	 
	 
	 	 	 	 	 	 
	ARTICLE VI
	 	 	 	 
	REPORTS TO NOTEHOLDERS
	 	 	 	 
	 
	 	 	 	 	 	 
	Section 6.01.
	 	Reports to Noteholders and Others	 	 	57	 
	Section 6.02.
	 	Servicer Reports	 	 	58	 
	Section 6.03.
	 	Access to Certain Information	 	 	59	 
	 
	 	 	 	 	 	 






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	 	 	 	Page
	 
	ARTICLE VII
	 	 	 	 
	FUNDING ACCOUNT; PURCHASE OF ADDITIONAL RECEIVABLES
	 	 	 	 
	 
	 	 	 	 	 	 
	Section 7.01.
	 	Funding Account	 	 	59	 
	Section 7.02.
	 	Purchase of Additional Receivables	 	 	60	 
	 
	 	 	 	 	 	 
	ARTICLE VIII
	 	 	 	 
	SUPPLEMENTAL INDENTURES; AMENDMENTS
	 	 	 	 
	 
	 	 	 	 	 	 
	Section 8.01.
	 	Supplemental Indentures or
Amendments Without Consent of Noteholders	 	 	62	 
	Section 8.02.
	 	Supplemental Indentures With Consent of Noteholders	 	 	62	 
	Section 8.03.
	 	Delivery of Supplements and Amendments	 	 	63	 
	Section 8.04.
	 	Execution of Supplemental Indentures, etc	 	 	64	 
	 
	 	 	 	 	 	 
	ARTICLE IX
	 	 	 	 
	COVENANTS; WARRANTIES
	 	 	 	 
	 
	 	 	 	 	 	 
	Section 9.01.
	 	Maintenance of Office or Agency	 	 	64	 
	Section 9.02.
	 	Existence	 	 	64	 
	Section 9.03.
	 	Payment of Taxes and Other Claims	 	 	64	 
	Section 9.04.
	 	Validity of the Notes; Title to the Trust Estate; Lien	 	 	65	 
	Section 9.05.
	 	Protection of Trust Estate	 	 	65	 
	Section 9.06.
	 	Nonconsolidation	 	 	66	 
	Section 9.07.
	 	Negative Covenants	 	 	67	 
	Section 9.08.
	 	Statement as to Compliance	 	 	67	 
	Section 9.09.
	 	Issuer may Consolidate, Etc., only on Certain Terms	 	 	67	 
	Section 9.10.
	 	Purchase of Notes	 	 	69	 
	Section 9.11.
	 	Indemnification	 	 	69	 
	 
	 	 	 	 	 	 
	ARTICLE X
	 	 	 	 
	AGENT
	 	 	 	 
	 
	 	 	 	 	 	 
	Section 10.01.
	 	Appointment	 	 	70	 
	Section 10.02.
	 	Nature of Duties	 	 	71	 
	Section 10.03.
	 	Rights, Exculpation, Etc.	 	 	71	 
	Section 10.04.
	 	Reliance	 	 	72	 
	Section 10.05.
	 	Indemnification	 	 	72	 
	Section 10.06.
	 	Agent Individually	 	 	73	 
	Section 10.07.
	 	Successor Agent	 	 	73	 
	Section 10.08.
	 	Collateral Matters	 	 	74	 
	 
	 	 	 	 	 	 
	ARTICLE XI
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 	 	 
	Section 11.01.
	 	Execution Counterparts	 	 	74	 
	Section 11.02.
	 	Compliance Certificates and
Opinions, etc.	 	 	74	 
	Section 11.03.
	 	Form of Documents Delivered to Indenture Trustee	 	 	75	 
	Section 11.04.
	 	Acts of Noteholders	 	 	76	 
	Section 11.05.
	 	Computation of Percentage of Noteholders	 	 	76	 






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	 	 	 	Page
	 
	 	 	 	 	 	 
	Section 11.06.
	 	Notice to the Indenture Trustee,
the Issuer and Certain Other Persons	 	 	77	 
	Section 11.07.
	 	Notices to Noteholders;
Notification Requirements and Waiver	 	 	77	 
	Section 11.08.
	 	Successors and Assigns	 	 	77	 
	Section 11.09.
	 	Separability Clause.	 	 	77	 
	Section 11.10.
	 	Governing Law.	 	 	78	 
	Section 11.11.
	 	Effect of Headings and Table of Contents	 	 	78	 
	Section 11.12.
	 	Benefits of Indenture	 	 	78	 
	Section 11.13.
	 	Non-Recourse Obligation.	 	 	78	 
	Section 11.14.
	 	Inspection	 	 	79	 
	Section 11.15.
	 	Method of Payment	 	 	79	 
	Section 11.16.
	 	No Recourse	 	 	79	 






	 	 	 
	Exhibits

	 	 
	 
	 	 
	Schedule I

	 	Schedule of Loan-Level Securitization Trusts
	Schedule II

	 	Schedule of Pool-Level Securitization Trusts
	Exhibit A

	 	Form of Note
	Exhibit B

	 	Form of Transferee Certificate for Transfers of Notes to Qualified Institutional
Buyers
	Exhibit C

	 	Form of Monthly Servicer Report
	Exhibit D

	 	Form of Payment Date Report
	Exhibit E

	 	Form of Funding Date Report
	Exhibit F

	 	Form of Trustee Report
	Schedule A-1

	 	Schedule of Initial Receivables
	Schedule A-2

	 	Schedule of Additional Receivables






iv









 





EXECUTION COPY




     INDENTURE, dated as of October 1, 2007, between OPTION ONE ADVANCE TRUST 2007-ADV2, a Delaware
statutory trust, as issuer (the “Issuer”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association, not in its individual capacity, but solely as Indenture Trustee (the
“Indenture Trustee”) under this Indenture.



PRELIMINARY STATEMENT




     The Issuer has duly authorized the execution and delivery of this Indenture to provide for the
issuance of its Option One Advance Receivables Backed Notes, Series 2007-ADV2 (the “Notes”).



     All things necessary to make the Notes, when the Notes are executed by the Issuer and
authenticated and delivered by the Indenture Trustee hereunder and duly issued by the Issuer, the
valid and legally binding obligations of the Issuer enforceable in accordance with their terms, and
to make this Indenture a valid and legally binding agreement of the Issuer enforceable in
accordance with its terms, have been done.



GRANTING CLAUSE




     The Issuer hereby Grants to the Indenture Trustee effective as of the Initial Funding Date, as
Indenture Trustee for the benefit of the Secured Parties, all of the Issuer’s right, title and
interest in and to (i) the Initial Receivables and any Additional Receivables and all monies due
thereon or paid thereunder or in respect thereof (including, without limitation, any Repurchase
Prices and proceeds of any sales) on and after the Initial Funding Date; (ii) all rights of the
Issuer as Purchaser under the Receivables Purchase Agreement, including, without limitation, to
enforce the obligations of the Seller thereunder with respect to the Aggregate Receivables; (iii)
the Reimbursement Account, the Note Payment Account and the Reserve Account, and all monies,
“securities,” “instruments,” “accounts,” “general intangibles,” “chattel paper,” “financial
assets,” “investment property” (the terms in quotations are defined in the UCC) and other property
on deposit or credited to the Reimbursement Account, the Note Payment Account and the Reserve
Account from time to time (whether or not such property constitutes or is derived from payments,
collections or recoveries received, made or realized in respect of the Aggregate Receivables or
otherwise); (iv) all right, title and interest of the Issuer as assignee of the Seller to the
contractual rights to payment on the Aggregate Receivables under each Pooling and Servicing
Agreement and all related documents, instruments and agreements pursuant to which the Seller
acquired, or acquired an interest in, any of the Aggregate Receivables; (v) true and correct copies
of all books, records and documents relating to the Aggregate Receivables in any medium, including
without limitation paper, tapes, disks and other electronic media; (vi) all other monies,
securities, reserves and other property now or at any time in the possession of the Indenture
Trustee or its bailee, agent or custodian and relating to any of the foregoing,
including without limitation, any of the Issuer’s funds on deposit in the Funding Account from
time to time; and (vii) all proceeds of the foregoing of every kind and nature whatsoever,
including, without limitation, all proceeds of the conversion thereof, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any and every kind and
other forms of obligations and receivables, instruments and other property that at any time
constitute all or part



 









 




of or are included in the proceeds of the foregoing ((i) through (vii), collectively, the “Trust
Estate”).




     The foregoing Grant is made in trust to secure the payment of principal of and interest on,
and any other amounts owing in respect of, the Notes, and to secure compliance with the provisions
of this Indenture, all as provided in this Indenture.



     The Indenture Trustee acknowledges such Grant, accepts the trusts hereunder in accordance with
the provisions hereof, and agrees to perform the duties herein to the best of its ability such that
the interests of the Secured Parties may be adequately and effectively protected.



GENERAL COVENANT




     AND IT IS HEREBY COVENANTED AND DECLARED that the Notes are to be authenticated and delivered
by the Indenture Trustee, that the Trust Estate is to be held by or on behalf of the Indenture
Trustee and that monies in the Trust Estate are to be applied by the Indenture Trustee for the
benefit of the Secured Parties, subject to the further covenants, conditions and trusts hereinafter
set forth, and the Issuer does hereby represent and warrant, and covenant and agree, to and with
the Indenture Trustee, for the equal and proportionate benefit and security of each Secured Party,
as follows:



ARTICLE I

DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION




     Section 1.01. Definitions



     Whenever used in this Indenture, including in the Preliminary Statement, the Granting Clause
and the General Covenant hereinabove set forth, the following words and phrases, unless the context
otherwise requires, shall have the meanings specified in this Section 1.01 or, if not specified in
this Section 1.01, then in the applicable Pooling and Servicing Agreement.



     “1933 Act”: The Securities Act of 1933, as amended, and the rules, regulations and published
interpretations of the Securities and Exchange Commission promulgated thereunder from time to time.



     “1934 Act”: The Securities Exchange Act of 1934, as amended, and the rules, regulations and
published interpretations of the Securities and Exchange Commission promulgated thereunder from
time to time.



     “1939 Act”: The Trust Indenture Act of 1939, as amended, and the rules, regulations and
published interpretations of the Securities and Exchange Commission promulgated thereunder from
time to time.



     “1940 Act”: The Investment Company Act of 1940, as amended, and the rules, regulations and
published interpretations of the Securities and Exchange Commission promulgated thereunder from
time to time.



2









 





     “Accounts”: The Reimbursement Account, the Note Payment Account, the Reserve Account and the
Funding Account.



     “Act”: As defined in Section 11.04 hereof.



     “Accrual Period”: With respect to the Notes and any Payment Date, the period commencing on and
including the Payment Date preceding such Payment Date (or, in the case of the initial Accrual
Period, the Initial Funding Date) and ending on and including the day preceding such Payment Date.



     “Additional Note Balance”: With respect to each Funding Date after the Initial Funding Date,
the amount of additional principal of the Notes advanced by the Note Purchasers on such Funding
Date in accordance with the Note Purchase Agreement.



     “Additional Receivables”: With respect to each Funding Date after the Initial Funding Date,
the Receivables sold and contributed by the Seller to the Issuer on such Funding Date and Granted
by the Issuer to the Indenture Trustee to comprise part of the Trust Estate.



     “Administration Agreement”: The Administration Agreement, dated as of October 1, 2007,
between the Issuer and Option One as administrator, as amended or restated from time to time.



     “Administrator”: Option One, and its successors and assigns in such capacity.



     “Advance”: As defined in the Pooling and Servicing Agreements.



     “Advance Category”: With respect to any Receivable, the applicable category set forth on the
Schedule of Initial Receivables or the Schedule of Additional Receivables, as applicable.



     “Advance Reimbursement Amounts”: Amounts paid to or retained by the Servicer in its capacity
as agent for the Securitization Trust, including amounts withdrawn from the related Collection
Account, as reimbursement of any Advance pursuant to the applicable Pooling and Servicing
Agreement.



     “Affiliate”: With respect to any specified Person, for purposes of this Indenture only, any
other Person that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the person specified. For the purposes of this
definition, “control” when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of
voting securities or other beneficial interest, by contract or otherwise; and the terms
“controlling” and “controlled” have the meanings correlative to the foregoing.



     “Agent”: Greenwich Capital Financial Products, Inc. as agent under the Transaction Documents
and its successors and assigns in such capacity.



     “Aggregate Collateral Value”: With respect to the Collateral as of any date, the sum of the
Collateral Value on such date and the Excess Amount on deposit in the Accounts (including the par
amount of all Permitted Investments in such Account).



3









 





     “Aggregate Receivables”: All Initial Receivables and all Additional Receivables.



     “Authenticating Agent”: As defined in Section 2.02(b).



     “Authorized Officer”: With respect to the Owner Trustee, any officer of the Owner Trustee who
is authorized to act for the Owner Trustee in matters relating to the Issuer and who is identified
on the list of authorized officers delivered by the Owner Trustee to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time thereafter) and with
respect to the Issuer, any Authorized Officer of the Owner Trustee or of the Administrator.



     “Available Funds”: With respect to any Payment Date, the sum of (i) Advance Reimbursement
Amounts collected by the Serivcer as of the close of business on the last day of the Collection
Period then most recently concluded (including amounts earned on Permitted Investments, which are
paid into the Note Payment Account) plus without duplication (ii) all funds to be deposited to the
Note Payment Account from the Reserve Account or the Funding Account on or before such Payment
Date.



     “Bill of Sale”: With respect to any Funding Date, a bill of sale, substantially in the form
found in Exhibit C to the Receivables Purchase Agreement, delivered by Option One and the Depositor
to the Issuer, the Agent and the Indenture Trustee pursuant to the Receivables Purchase Agreement.



     “Business Day”: Any day other than a Saturday, a Sunday or a day on which banking institutions
are authorized or obligated by law or executive order to remain closed in New York, New York,
Irvine, California, Charlotte, North Carolina, Minneapolis, Minnesota or in any other city in which
the Corporate Trust Office of the Indenture Trustee is located.



     “Cash”: Coin or currency of the United States or immediately available federal funds,
including such funds delivered by wire transfer.



     “Cash Purchase Price”: As defined in Section 1.01 of the Receivables Purchase Agreement.



     “Certificateholder”: As defined in the Trust Agreement.



     “Change of Control”: The acquisition by any Person, or two or more Persons acting in concert,
of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of outstanding shares of voting stock of Option One at
any time if after giving effect to such acquisition (i) such Person or Persons owns twenty percent
(20%) or more of such outstanding voting stock or (ii) H&R Block, Inc. does not own more than fifty
percent (50%) of such outstanding shares of voting stock.



     “Class Exemption”: A class exemption granted by the DOL, which provides relief from some or
all of the prohibited transaction provisions of ERISA and the related excise tax provisions of the
Code.



     “Closing Date”: October 1, 2007.



4









 





     “Code”: The Internal Revenue Code of 1986 and regulations promulgated thereunder, including
proposed regulations to the extent that, by reason of their proposed effective date, could, as of
the date of any determination or opinion as to the tax consequences of any action or proposed
action or transaction, be applied to the Notes.



     “Collateral”: Individually and collectively, the assets constituting the Trust Estate from
time to time.



     “Collateral Coverage Requirement”: With respect to any date, the requirement that the
Aggregate Collateral Value of the Collateral shall be greater than or equal to the Note Principal
Balance as of such date (after giving effect to any purchase of Additional Note Balance or
Additional Receivables on such date).



     “Collateral Value”: With respect to the Collateral as of any date, the sum of (a) the product
of (i) the outstanding Receivable Balances of the Eligible Receivables relating to Pool-Level
Advances and (ii) the applicable Discount Factor, (b) the product of (i) the outstanding Receivable
Balances of the Eligible Receivables relating to Loan-Level Advances and (ii) the applicable
Discount Factor and (c) the product of (i) the outstanding Receivables Balances of the Eligible
Receivables relating to Servicing Advances and (ii) the applicable Discount Factor. For purposes of
determining Collateral Value, a Receivable shall be deemed unreimbursed until the cash
reimbursement thereof is deposited into the Reimbursement Account.



     “Collection Account”: As defined in the Pooling and Servicing Agreements.



     “Collection Period”: With respect to any Payment Date, the calendar month immediately
preceding the month of such Payment Date.



     “Commitment”: As defined in the Note Purchase Agreement.



     “Control Person”: With respect to any Person, any other Person that constitutes a “controlling
person” within the meaning of Section 15 of the 1933 Act.



     “Conversion Event”: As such term (or term of substantially similar import) is defined in the
Pooling and Servicing Agreements.



     “Corporate Trust Office”: The principal corporate trust offices of the Indenture Trustee at
which at any particular time its corporate trust business with respect to the Issuer shall be
administered, which offices at the Closing Date are located at (i) for Note transfer purposes,
Wells Fargo Center, Sixth and Marquette Avenue, Minneapolis, Minnesota 55479-0113, Attention:
Corporate Trust Services - Option One Advance Trust 2007-ADV2 and (ii) for all other purposes, at
9062 Old Annapolis Road, Columbia, Maryland 21045-1951, Attention: Corporate Trust Services -
Option One Advance Trust 2007-ADV2.



     “Current-Paying Mortgage Loan”: As of any date of determination, a Mortgage Loan with respect
to which no payment is more than 30 days delinquent.



     “Daily Interest Amount”: With respect to each day and the related Accrual Period, an amount
equal to (x) the Floating Rate or, during the continuance of an Event of Default, the



5









 




Default Rate times (y) the Note Principal Balance as of the preceding Business Day after giving
effect to all changes to the Note Principal Balance on or prior to such preceding Business Day
times (z) a fraction, the numerator of which is one and the denominator of which is 360.




     “Default Rate”: As defined in the Pricing Side Letter.



     “Delinquency Ratio”: With respect to any Securitization Trust and any date, a ratio, expressed
as a percentage, the numerator of which is the unpaid Principal Balance of Mortgage Loans 30 days
or more Delinquent, and the denominator of which is the unpaid Principal Balance of all Mortgage
Loans.



     “Delinquent”: A Mortgage Loan is “Delinquent” if any Monthly Payment due thereon is not made
by the close of business on the day such Monthly Payment is required to be paid. A Mortgage Loan is
“30 days Delinquent” if any Monthly Payment due thereon has not been received by the close of
business on the corresponding day of the month immediately succeeding the month in which such
Monthly Payment was required to be paid or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was required to be paid on the 31st day of
such month), then on the last day of such immediately succeeding month.



     “Depositor”: Option One Advance Corporation.



     “Discount Factor”: As defined in the Pricing Side Letter.



     “DOL”: The United States Department of Labor.



     “DOL Regulations”: The regulations promulgated by the DOL at 29 C.F.R. § 2510.3-101.



     “Eligible Account”: Any of (i) an account maintained with a federal or state chartered
depository institution or trust company, the long-term deposit or long-term unsecured debt
obligations of which (or of such institution’s parent holding company) are rated “A” or better by
Fitch, A2 or better by Moody’s and “AA-”or better by S&P if the deposits are to be held in the
account for more than 30 days, or the short-term deposit or short-term unsecured debt obligations
of which (or of such institution’s parent holding company) are rated “F1” or better by Fitch, “P-1”
or better by Moody’s and “A-1+” or better by S&P if the deposits are to be held in the account for
30 days or less, in any event at any time funds are on deposit therein, or (ii) a segregated trust
account maintained with a federal or state chartered depository institution or trust company acting
in its fiduciary capacity, which, in the case of a state chartered depository institution or trust
company is subject to regulations regarding fiduciary funds on deposit therein substantially
similar to 12 CFR § 9.10(b), and which, in either case, has a combined capital and surplus of at
least $50,000,000 and is subject to supervision or examination by federal or state authority, or
(iii) an account maintained with H&R Block Bank, or (iv) any other account that is acceptable to the Majority Noteholders. Eligible Accounts may bear
interest.



     “Eligible Receivable”: A Receivable that satisfies the applicable representations and
warranties set forth in the Receivables Purchase Agreement.



6









 





     “Entitlement Order”: As defined in Section 8-102(a)(8) of the UCC.



     “ERISA”: The Employee Retirement Income Security Act of 1974, as amended.



     “Event of Default”: As defined in Section 4.01 hereof.



     “Excess Amount”: As of any date, the lesser of (i) for each Receivable, the sum of the product
of (A) each Advance Reimbursement Amount on deposit in the Reimbursement Account as of the close of
business on the prior day and (B) the applicable Discount Factor and (ii) all amounts on deposit in
the Reimbursement Account as of the close of business on the prior day minus the Expense Reserve as
of such date.



     “Expense Reserve”: As of any date, the amount required to make all of the payments specified
in Section 2.10(c)(i) through (vii) on the immediately succeeding Payment Date to the extent known
on such date.



     “Facility Fee”: As defined in the Pricing Side Letter.



     “FDIC”: Federal Deposit Insurance Corporation or any successor.



     “Final Payment Date”: The Payment Date on which the final payment on the Issuer Obligations is
made hereunder by reason of all principal, interest and other amounts due and payable on such
Issuer Obligations having been paid or the Collateral having been exhausted.



     “Financial Asset”: As defined in Section 8-102(a)(9) of the UCC.



     “Fitch”: Fitch, Inc., a nationally recognized statistical rating organization under the
federal securities laws.



     “Floating Rate”: As defined in the Pricing Side Letter.



     “Funding Account”: The segregated account, or accounts, each of which shall be an Eligible
Account, established and maintained pursuant to Section 2.09 and entitled “Wells Fargo Bank,
National Association, as Indenture Trustee in trust for the Noteholders of the Option One Trust
2007-ADV2 Advance Receivables Backed Notes, Series 2007-ADV2, Funding Account.” The Funding Account
may be a sub-account of the Reimbursement Account.



     “Funding Conditions”: As defined in Section 7.02.



     “Funding Date”: During the Funding Period, (i) the Initial Funding Date, (ii) the first
Business Day of each week, (iii) the 24th day of any calendar month, or if such day is
not a Business Day, the Business Day immediately following such 24th day, and (iv) any
other date agreed to by the Agent, the Issuer and the Indenture Trustee.



     “Funding Date Report”: As defined in Section 6.02(c).



     “Funding Interruption Event”: Any condition or event that with notice or the passage of time,
or both, would constitute an Event of Default.



7









 





     “Funding Notice”: As defined in Section 2.01(c) of the Receivables Purchase Agreement.



     “Funding Period”: The period beginning on the Initial Funding Date and ending upon the earlier
to occur of (i) the Scheduled Termination Date and (ii) the occurrence of a Funding Termination
Event.



     “Funding Termination Event”: Immediately upon the sending of notice by the Agent to the
Indenture Trustee and the Servicer of the occurrence of any of the following conditions or events:



     (a) the occurrence of any Event of Default under this Indenture;



     (b) voluntary election by Servicer to change reimbursement mechanics of Advances
on any Securitization Trust from Pool-Level Advances to Loan-Level Advances or
Loan-Level to Pool-Level Advances without consent of the Agent;



     (c) Option One utilizes funds on deposit in the related Collection Account to make a
Pool-Level Advance at a time when any previous Pool-Level Advance to the related Securitization
Trust has not been fully reimbursed, unless such utilization is the result of inadvertence and is
corrected within two Business Days after Option One is notified of, or otherwise becomes aware of,
such occurrences;



     (d) the Rolling Three Month Reimbursement Percentage measured monthly is less than 22%;
provided, however, that the Rolling Three Month Reimbursement Percentage shall first be measured
following the Collection Period ending November 30, 2008;



     (e) a failure to comply with any of the Servicing Standards, which is not cured within two (2)
Business Days after Option One is notified of, or otherwise becomes aware of, such occurrence;



     (f) the Verification Agent is terminated or resigns prior to the assumption of the
Verification Agent’s duties by a successor verification agent;



     (g) the Seller sells Receivables to the Depositor and/or the Depositor sells Receivables to
the Issuer that are in breach of any representation or warranty set forth in the Receivables
Purchase Agreement (a) on more than two occasions in any twelve-month period and (b) involving
Receivables with an aggregate Receivables Balance in excess of $150,000;



     (h) the Seller fails to sell all Additional Receivables relating to Securitization Trusts on
at least a monthly basis during the Funding Period except to the extent that the outstanding
principal amount of the Notes would thereby be caused to exceed the Maximum Note Balance;



     (i) the sale by the Servicer of Advances of any Securitization Trust to a third party where
the Issuer has purchased the Servicing Advances relating to such Securitization Trust; or



     (j) Option One’s servicer quality rating as primary servicer of sub-prime loans is either
withdrawn by any two (2) of S&P, Moody’s or Fitch or by any two (2) of S&P, Moody’s



8









 




or Fitch rated below any of the following categories: “Average” by S&P, “SQ3” by Moody’s or “RPS3”
by Fitch.




     “GAAP”: Such accounting principles as are generally accepted in the United States.



     “Governmental Authority”: As defined in the Receivables Purchase Agreement.



     “Grant”: To mortgage, pledge, bargain, sell, warrant, alienate, demise, convey, assign,
transfer, create and grant a security interest in and right of setoff against, deposit, set over
and confirm. A Grant of Collateral shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including without limitation the immediate and
continuing right to claim for, collect, receive and give receipt for principal and interest
payments in respect of the Collateral and all other monies and proceeds payable thereunder, to give
and receive notices and other communications, to make waivers or other agreements, to exercise all
rights and options, to bring Proceedings in the name of the granting party or otherwise, and
generally to do and receive anything which the granting party is or may be entitled to do or
receive thereunder or with respect thereto.



     “Guarantor”: As defined in the Pooling and Servicing Agreements.



     “Highest Note Balance”: An amount equal to the highest Note Principal Balance of Notes
Outstanding as of any date since the Initial Funding Date.



     “Indemnified Parties”: As defined in Section 9.11(b).



     “Indenture”: This instrument as originally executed or as it may be supplemented or amended
from time to time by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof.



     “Indenture Trustee”: Wells Fargo Bank, National Association, a national banking association,
in its capacity as indenture trustee under this Indenture, or its successor in interest, or any
successor indenture trustee appointed as provided in this Indenture.



     “Indenture Trustee Fee”: The fee payable to the Indenture Trustee on each Payment Date for
services rendered under this Indenture, which shall be equal to $2,500 per month.



     “Independent”: When used with respect to any specified Person, any such Person who (i) is in
fact independent of the Indenture Trustee, the Issuer, the Seller and any and all Affiliates
thereof, (ii) does not have any direct financial interest in or any material indirect financial
interest in any of the Indenture Trustee, the Issuer, the Seller or any Affiliate thereof, and
(iii) is not connected with the Indenture Trustee, the Issuer, the Seller or any Affiliate thereof
as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions; provided, however, that a Person
shall not fail to be Independent of the Indenture Trustee, the Issuer, the Seller or any
Affiliate thereof merely because such Person is the beneficial owner of 1% or less of any class of
securities issued by the Indenture Trustee, the Issuer, the Seller or any Affiliate thereof, as the
case may be. The Indenture Trustee may rely, in



9









 




the performance of any duty hereunder, upon the statement of any Person contained in any
certificate or opinion that such Person is Independent according to this definition.




     “Initial Funding Date”: October 2, 2007.



     “Initial Note Balance”: The Cash Purchase Price of the Initial Receivables granted on the
Initial Funding Date hereunder. The Initial Note Balance will be determined on the Initial Funding
Date.



     “Initial Payment Date”: October 10, 2007.



     “Initial Receivables”: The Receivables sold and contributed by the Seller to the Depositor and
by the Depositor to the Issuer on the Initial Funding Date pursuant to the Receivables Purchase
Agreement and Granted by the Issuer to the Indenture Trustee to comprise part of the Trust Estate.



     “Initial Reserve Account Deposit”: 2% of the Note Principal Balance.



     “Interest Carryover Shortfall”: With respect to any Payment Date, the excess of (i) the sum of
(a) the Interest Distributable Amount for the Notes for such Payment Date and (b) without
duplication, any unpaid Interest Carryover Shortfall for any preceding Payment Date plus interest
thereon accrued from the preceding Payment Date to the current Payment Date at the Default Rate
over (ii) the amount of interest, if any, actually paid to Noteholders on such Payment Date.



     “Interest Distributable Amount”: With respect to any Payment Date and the related Accrual
Period, an amount equal to the sum of the Daily Interest Amounts for all days in the related
Accrual Period.



“Interest Rate Adjustment Date”: The first day of each Accrual Period.


“Interested Person”: As of any date of determination, Option One or any of its Affiliates.


“IRS”: The United States Internal Revenue Service.




     “Issuer”: Option One Advance Trust 2007-ADV2, a Delaware statutory trust, or its successor in
interest.



     “Issuer Obligations”: means all of Issuer’s obligations to pay all interest and principal of
the Notes and all other obligations and liabilities of Issuer arising under, or in connection with,
the Transaction Documents, whether now existing or hereafter arising.



     “Issuer Request” or “Issuer Order”: A written request or order signed in the name of the
Issuer by an Authorized Officer of the Issuer.



     “Lien”: means any mortgage, deed of trust, pledge, lien (statutory or otherwise), security
interest, lease, easement, title defect, restriction, levy, execution, seizure, attachment, charge
or other encumbrance or security or preferential arrangement of any nature, including, without



10









 




limitation, any conditional sale or title retention arrangement, any capitalized lease and any
assignment, deposit arrangement or financing lease intended as, or having the effect of, security.




     “Loan-Level Advance”: Any Advance with respect to the Loan-Level Securitization Trusts.



     “Loan-Level Securitization Trusts”: The Securitization Trusts listed on Schedule I hereto.



     “Majority Noteholders”: As defined in Section 4.11.



     “Maturity Date”: With respect to the Notes, the date as of which the principal of and interest
on the Notes has become due and payable as herein provided, whether at Stated Maturity, by
acceleration or otherwise.



     “Maximum Note Balance”: $400,000,000.00.



     “Monthly Payment”: As defined in the Pooling and Servicing Agreements.



     “Monthly Servicer Report”: As defined in Section 6.02(a).



     “Moody’s”: Moody’s Investors Service, Inc., a nationally recognized statistical rating
organization under the federal securities laws.



     “Mortgage Loans”: As defined in the Pooling and Servicing Agreements.



     “Mortgagor”: As defined in the Pooling and Servicing Agreements.



     “Nonrecoverable Advance”: As defined in the relevant Pooling and Servicing Agreement.



     “Note”: Any of the Issuer’s Advance Receivables Backed Notes, Series 2007-ADV2, executed,
authenticated and delivered hereunder.



     “Note Payment Account”: The trust account or accounts created and maintained by the Indenture
Trustee pursuant to Section 2.09 which shall be entitled “Note Payment Account, Wells Fargo Bank,
National Association, as Indenture Trustee, in trust for the registered Noteholders of Option One
Advance Trust 2007-ADV2, Advance Receivables Backed Notes Series 2007-ADV2” and which must be an
Eligible Account.



     “Note Principal Balance”: With respect to the Notes, as of any date of determination (a) the
sum of the Initial Note Balance and all Additional Note Balances purchased on or prior to such date
pursuant to the Note Purchase Agreement less (b) all amounts previously distributed in respect of
principal of the Notes on or prior to such date.



     “Note Purchase Agreement”: The Note Purchase Agreement, dated as of October 1, 2007, among the
Issuer, the Note Purchasers and the Agent, as amended or restated from time to time.



11









 





     “Note Purchasers”: Greenwich Capital Financial Products, Inc., and its successors and assigns.



     “Note Redemption Amount”: An amount without duplication equal to the sum of (i) the then
outstanding Note Principal Balance of the Notes, plus the Interest Distributable Amount for the
related Payment Date and any Interest Carryover Shortfall and (ii) any fees and expenses due and
unpaid, including, but not limited to, any Facility Fee and Unused Line Fee, on the related Payment
Date.



     “Note Register”: As defined in Section 2.05(a) hereof.



     “Note Registrar”: As defined in Section 2.05(a) hereof.



     “Noteholder” or “Holder”: With respect to any Note, the Person in whose name such Note is
registered on the Note Register maintained pursuant to Section 2.05 hereof.



     “Officer’s Certificate”: A certificate signed by any Authorized Officer of the Issuer or a
Responsible Officer of the Indenture Trustee, as the case may be, or, with respect to Sections 9.08
and 11.02, a Responsible Officer of the Administrator.



     “Opinion of Counsel”: A written opinion of counsel, who shall be selected by the Person
required to provide such Opinion of Counsel (and reasonably acceptable to the Indenture Trustee).
The cost of obtaining such opinion shall be borne by the Person required to provide such Opinion of
Counsel.



     “Option One”: Option One Mortgage Corporation.



     “OTS”: Office of Thrift Supervision or any successor thereto.



     “Outstanding”: When used with respect to Notes, means, as of the date of determination, any
Note theretofore authenticated and delivered under this Indenture, except:




     (i) Notes theretofore canceled by the Note Registrar or delivered
to the Note Registrar for cancellation (other than any Note as to which any
amount that has become due and payable in respect thereof has not been paid in
full); and




     (ii) Notes in exchange for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture, other than any such Notes in respect of which there
shall have been presented to the Note Registrar proof satisfactory to it that such Notes
are held by a bona fide purchaser in whose hands such Notes are valid obligations of the
Issuer;


provided, however, that in determining whether the Holders of the requisite aggregate Note
Principal Balance of Outstanding Notes have given any request, demand, authorization, vote,
direction, notice, consent or waiver hereunder, Notes owned by an
Interested Person shall be disregarded and deemed not to be Outstanding (unless any such Person or
Persons owns all the Notes), except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, direction, notice, consent or
waiver, only Notes





12











 




which the Note Registrar knows to be so owned shall be so disregarded. Notes owned by an Interested
Person which have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Note Registrar in its sole discretion the pledgee’s right to
act with respect to such Notes and that the pledgee is not an Interested Person.




     “Ownership Interest”: As to any Note, any ownership or security interest in such Note as held
by the Holder thereof and any other interest therein, whether direct or indirect, legal or
beneficial, as owner or as pledgee.



     “Owner Trustee”: Wilmington Trust Company and its successors and assigns as owner trustee
under the Trust Agreement.



     “Payment Date”: The 10th day of each calendar month, or, if such 10th day is not a Business
Day, the next succeeding Business Day, commencing in October, 2007 and any other date agreed to by
the Agent, the Issuer and the Indenture Trustee, from time to time.



     “Payment Date Report”: As defined in Section 6.02(b).



     “Percentage Interest”: With respect to any Note and as of any date of determination, the
percentage equal to a fraction, the numerator of which is the principal balance of such Note as of
such date of determination and the denominator of which is the Note Principal Balance.



     “Permitted Investments”: Any one or more of the following obligations or securities:




     (i) direct obligations of, or obligations fully guaranteed as to timely payment of
principal and interest by, the United States or any agency or instrumentality thereof,
provided that such obligations are backed by the full faith and credit of the United States
and have a predetermined, fixed amount of principal due at maturity (that cannot vary or
change) and that each such obligation has a fixed interest rate or has its interest rate
tied to a single interest rate index plus a single fixed spread;




     (ii) repurchase agreements on obligations specified in clause (i) maturing not more
than one month from the date of acquisition thereof, provided that the unsecured
obligations of the party agreeing to repurchase such obligations are at the time rated by
each Rating Agency in its highest short-term rating category available;




     (iii) federal funds, unsecured certificates of deposit, time deposits, bankers’
acceptances and repurchase agreements having maturities of not more than 365 days, of any
bank or trust company organized under the laws of the United States or any state thereof,
provided that such items are rated the highest short-term debt rating categories of each
Rating Agency, do not have an “r” highlight affixed to its rating and have a predetermined,
fixed amount of principal due at maturity (that cannot vary or change) and that each such
obligation has a fixed interest rate or has its interest rate tied to a single interest
rate index plus a single fixed spread;




     (iv) commercial paper (having original maturities of not more than 365 days) of any
corporation incorporated under the laws of the United States or any state thereof



13









 






(or of any corporation not so incorporated, provided that the commercial paper is United
States Dollar denominated and amounts payable thereunder are not subject to any withholding
imposed by any non-United States jurisdiction) which is rated in the highest short-term
debt rating category of each Rating Agency, does not have an “r” highlight affixed to its
rating, has a predetermined fixed amount of principal due at maturity (that cannot vary or
change) and has a fixed interest rate or has its interest rate tied to a single interest
rate index plus a single fixed spread;




     (v) units of money market funds which have as one of their objectives the maintenance
of a constant net asset value and which are rated the highest applicable rating category of
Moody’s and S&P (including any funds for which the Indenture Trustee or any affiliate of
the Indenture Trustee serves as an adviser or manager); or




     (vi) any other obligation or security acceptable to the Majority Noteholders; provided
that without the consent of the Majority Noteholders (1) no investment described hereunder
shall evidence either the right to receive (x) only interest with respect to such
investment or (y) a yield to maturity greater than 120% of the yield to maturity at par of
the underlying obligations, (2) no investment described hereunder may be purchased at a
price greater than par if such investment may be prepaid or called at a price less than its
purchase price prior to stated maturity (that cannot vary or change) and (3) investments
shall be denominated in U.S. dollars.



     “Person”: Any individual, corporation, partnership, limited liability company, joint venture,
estate, trust, unincorporated association, or any federal, state, county or municipal government or
any political subdivision thereof.



     “Plan”: As defined in Section 2.05(c) hereof.



     “Pooling and Servicing Agreement”: Each pooling and servicing agreement pursuant to which the
related Securitization Trust is formed, each as amended, modified or supplemented from time to time
and collectively referred to herein as the “Pooling and Servicing Agreement”.



     “Pool-Level Advance”: Any Advance with respect to the Securitization Trusts listed on Schedule
II hereto; provided, that, any such Pool-Level Advance shall become a Loan-Level Advance upon the
effectiveness of a Conversion Event with respect to the related Securitization Trust.



     “Pool-Level Securitization Trust”: The Securitization Trusts listed on Schedule II hereto.



     “Prepayment”: As defined in the Pooling and Servicing Agreements.



     “Pricing Side Letter”: That certain letter, identified as such, of even date herewith entered
into by the Issuer and the Indenture Trustee.



     “Principal Balance”: As defined in the Pooling and Servicing Agreements.



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



14









 





     “Put Notice”: As defined in Section 2.16(b) hereof.



     “Put Option”: The right of the Agent to require the Issuer to repurchase all or a portion of
the Notes in accordance with Section 2.16(b) hereof.



     “QIB”: A “qualified institutional buyer” as defined in Rule 144A under the 1933 Act.



     “Rating Agency”: Fitch, Moody’s, S&P or their respective successors in interest. If none of
such rating agencies or any related successor remains in existence, “Rating Agency” shall be deemed
to refer to such other nationally recognized statistical rating organization or other comparable
Person designated by the Issuer, and specific ratings of Fitch, Moody’s or S&P referenced herein
shall be deemed to refer to the equivalent ratings of the party so designated. References herein to
“applicable rating category” (other than any such references to “highest applicable rating
category”) shall, in the case of Fitch, Moody’s and S&P, be deemed to refer to such applicable
rating category of Fitch, Moody’s and S&P, respectively, without regard to any plus or minus or
other comparable rating qualification.



     “Receivable”: The right to reimbursement from a Securitization Trust for an Advance or
Servicing Advance not theretofore reimbursed and all rights of the Servicer, as applicable, to
enforce payment of such obligation under the related Pooling and Servicing Agreement.



     “Receivable Balance”: As of any date of determination and with respect to a Receivable, the
outstanding unreimbursed amount of such Receivable. For purposes of determining Collateral Value,
a Receivable shall be deemed unreimbursed until the cash reimbursement thereof is deposited into
the Reimbursement Account.



     “Receivable File”: With respect to each Receivable, collectively, the following documents:




     (i) a copy of the related Pooling and Servicing Agreement and each amendment and
modification thereto (unless previously provided in another Receivable File);




     (ii) a copy of the electronic file setting forth the Monthly Servicer Reports listing
the current Receivables Balance Granted to the Indenture Trustee to comprise part of the
Trust Estate; and




     (iii) a copy of the electronic file containing the related Funding Date Report.



     “Receivables Purchase Agreement”: The Receivables Purchase Agreement, dated as of October 1,
2007, among the Seller, the Depositor and the Issuer.



     “Receivables Seller”: Option One.



     “Record Date”: With respect to any Payment Date and the Notes, the last Business Day of the
month immediately preceding the month in which such Payment Date occurs (or, in the case of the
Initial Payment Date, the Initial Funding Date).



15









 





     “Redemption Date”: The Payment Date as of which all of the outstanding Note Principal Amount
is redeemed in accordance with Section 2.16 of the Indenture.



     “Redemption Option”: The right of the Issuer to redeem all of the Notes in accordance with
Section 2.16 of the Indenture.



     “Reference Rate”: As defined in the Note Purchase Agreement.



     “Reimbursement Account”: The account or accounts created and maintained pursuant to Section
2.09, which shall be entitled “Wells Fargo Bank, National Association, as Indenture Trustee, in
trust for registered Holders of Option One Advance Trust 2007-ADV2, Advance Receivables Backed
Notes, Series 2007-ADV2, Reimbursement Account,” which must be an Eligible Account.



     “Repurchase Price”: As defined in Section 6.02 of the Receivables Purchase Agreement.



     “Required Reserve Amount”: With respect to any Payment Date, an amount equal to 2% of the Note
Principal Balance (after giving effect to all payments of principal in respect of the Notes on such
Payment Date); provided however that, at any time when Option One’s servicer quality rating as
primary servicer of sub-prime loans is either withdrawn by any two (2) of S&P, Moody’s or Fitch or
by any two (2) of S&P, Moody’s or Fitch rated below any of the following categories: “Average” by
S&P, SQ3 by Moody’s or RPS3 by Fitch, the Required Reserve Amount shall be 20%.



     “Reserve Account”: The segregated account or accounts, each of which shall be an Eligible
Account, established and maintained pursuant to Section 2.09 and entitled, “Wells Fargo Bank,
National Association, as Indenture Trustee in trust for the Noteholders of the Option One Advance
Trust 2007-ADV2, Advance Receivables Backed Notes, Series 2007-ADV2, Reserve Account.”



     “Reserve Fund Reimbursement Amount”: With respect to any Payment Date, the excess of the
Required Reserve Amount over the amount then on deposit in the Reserve Account.



     “Responsible Officer”: With respect to the Indenture Trustee, any officer of the Indenture
Trustee assigned to its Corporate Trust Services, customarily performing functions with respect to
corporate trust matters and having direct responsibility for the administration of this Indenture
and, with respect to a particular corporate trust matter under this Indenture, any other officer to
whom such matter is referred because of such officer’s knowledge of and familiarity with the
particular subject.



     “Rolling Three Month Reimbursement Percentage”: The percentage equivalent of a fraction, the
numerator of which is the aggregate Advance Reimbursement Amounts with respect to the applicable
Servicing Advances and applicable Loan Level Advances deposited to the Reimbursement Account during
the prior three related Collection Periods and the denominator of which is the aggregate
Receivables Balance with respect to Servicing Advances and Loan Level Advances outstanding as of
the beginning of the first related Collection Period.



16









 





     “Rule 144A”: Rule 144A under the 1933 Act.



     “S&P”: Standard & Poor’s Rating Services, a Division of The McGraw-Hill Companies,
Inc.



     “Schedule of Additional Receivables”: An electronic file listing by loan number and indicating
the amount of advance, applicable Securitization Trust and Advance Category, all the Additional
Receivables sold to the Issuer under the Receivables Purchase Agreement and Granted to the
Indenture Trustee since the most recent previously delivered such schedule.



     “Schedule of Initial Receivables”: An electronic file listing by loan number, amount of
advance, applicable Securitization Trust and Advance Category, all the Initial Receivables sold to
the Issuer under the Receivables Purchase Agreement and Granted to the Indenture Trustee on the
Initial Funding Date.



     “Scheduled Termination Date”: September 29, 2008.



     “Secured Parties”: The Noteholders, the Agent, the Indemnified Parties and the Indenture
Trustee.



     “Securities Intermediary”: As defined in Section 2.17(a) herein.



     “Securitization Termination Event”: With respect to any Securitization Trust, any of the following conditions or events:




	 	(a)	 	the (i) giving or receiving of notice of termination or resignation as Servicer by
Option One, (ii) giving of notice of an event of default by the Servicer under any Pooling
and Servicing Agreement that is not cured or waived within the time periods specified in
the related Pooling and Servicing Agreement, (iii) threatened termination of the Servicer
by the related Securitization Trustee in writing related to any default existing for 30 or
more days by the Servicer under the related Pooling and Servicing Agreement;
	 
	 	(b)	 	the unpaid Principal Balance of the related Mortgage Loans is less than $25,000,000;
	 
	 	(c)	 	the Delinquency Ratio with respect to such Securitization Trust exceeds 45%;





    (d)
     the aggregate Receivables Balance of the Aggregate Receivables relating to such
Securitization Trust, expressed as a percentage of (A) the aggregate of outstanding principal
amount of Advance Receivables to (B) the aggregate outstanding principal balance of Current-Paying
Mortgage Loans, exceeds 25%; or



    (e)
     Option One fails to amend, in a form acceptable to the Agent and within sixty (60) days
following the Closing Date, the related Pooling and Servicing Agreement to provide for: (i) the
Servicer entering into an advance facility; and (ii) Advance Reimbursement Amounts being paid on a
First In First Out (“FIFO”) basis.



17









 





     “Securitization Trust”: Each real estate mortgage investment conduit within the meaning of
Section 860A-860G of the Code or other mortgage-backed securities issuance described on Schedule I
and II hereto, as such schedules may be amended from time to time, and collectively referred to
herein as the “Securitization Trusts.”



     “Securitization Trustee”: Each trustee appointed under a Pooling and Servicing Agreement in
connection with a Securitization Trust.



     “Security Entitlement”: As defined in Section 8-102(a)(17) of the UCC.



     “Seller”: Option One.



     “Servicer”: Option One, a California corporation, in its capacity as servicer of the
Securitization Trusts under the Pooling and Servicing Agreements and any successor servicer
appointed thereunder.



     “Servicing Advances”: As defined in the Pooling and Servicing Agreements.



     “Servicing Compensation”: Servicing Fees, late payment charges, assumption fees, insufficient
funds charges and ancillary income (other than Prepayment charges) related to the Mortgage Loans.



     “Servicing Fee”: As defined in the Pooling and Servicing Agreements.



     “Servicing Standards”: As defined in Section 9.05 of the Receivables Purchase Agreement.



     “Stated Maturity”: With respect to the Notes, the fixed date on which the final payment of
principal of and interest on the Notes becomes finally due and payable, which will be the Payment
Date that is 24 months following the month in which the Funding Period is terminated.



     “Successor Person”: As defined in Section 9.09(a)(i) herein.



     “Tax Opinion”: An opinion of Independent counsel to the effect that the Issuer will not be
classified as (i) an association taxable as a corporation, (ii) a publicly traded partnership
taxable as a corporation or (iii) a taxable mortgage pool for federal income tax purposes.



     “Transaction Documents”: This Indenture, the Receivables Purchase Agreement, the Note
Purchase Agreement, the Trust Agreement, the Verification Agent Letter, the Notes, the
Administration Agreement and any other instrument, certificate or agreement relating to the
transactions contemplated hereunder or thereunder, but not including the Pooling and Servicing
Agreements.



     “Treasury Regulations”: Temporary, final or proposed regulations (to the extent that by reason
of their proposed effective date such proposed regulations would apply to the Issuer) of the United
States Department of the Treasury.



18









 





     “Trust Agreement”: The Trust Agreement, dated October 1, 2007, between the Depositor and the
Owner Trustee, as the same may be amended, modified or supplemented from time to time.



     “Trust Certificate”: As defined in the Trust Agreement.



     “Trust Estate”: As defined in the Granting Clause.



     “Trustee Report”: As defined in Section 6.01(a) herein.



     “UCC”: The Uniform Commercial Code as in effect in any applicable jurisdiction.



     “UCC Financing Statement”: A financing statement executed and in form sufficient for filing
pursuant to the UCC, as in effect in the relevant jurisdiction.



     “Unused Line Fee”: As defined in the Pricing Side Letter.



     “Verification Agent”: BearingPoint, Inc. or its successor as verification agent in respect of
the Aggregate Receivables under the Verification Agent Letter.



     “Verification Agent Fee”: The amount payable to the Verification Agent for its services under
the Verification Agent Letter.



     “Verification Agent Letter”: The letter agreement, dated as of May 30, 2003 and as amended on
November 24, 2003, on October 11, 2005, and on October 1, 2007 among the Seller, the Agent and the
Verification Agent, regarding the scope of services, as the same relate to the services to be
provided pursuant to Exhibit A-2 thereto, to be provided by the Verification Agent in respect of
the Aggregate Receivables, and any other agreement with the Verification Agent approved by the
Seller, the Issuer and the Noteholders.



     “Warehouse Facility”: The warehouse facility governed by the Sale and Servicing Agreement,
dated as of April 1, 2001, among Option One Owner Trust 2001-1A, a Delaware statutory trust, as the
issuer, Option One Loan Warehouse Corporation (“OOLWC”), a Delaware corporation, as depositor,
Option One, a California corporation, as originator and servicer and the Indenture Trustee as
indenture trustee, as the same has been and may be amended, supplemented and modified from time to
time, and the related Transaction Documents (as defined in such Sale and Servicing Agreement).



     “Warehouse Purchaser”: Greenwich Capital Financial Products, Inc.



     Section 1.02. Rules of Construction.



     For all purposes of this Indenture, except as otherwise expressly provided or unless the
context otherwise requires:



     (1) the terms defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular;



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     (2) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles in the United States, and, except as
otherwise herein expressly provided, the term “generally accepted accounting principles” with
respect to any computation required or permitted hereunder means such accounting principles as are
generally accepted in the United States;



     (3) the word “including” shall be construed to be followed by the words “without limitation”;



     (4) article and section headings are for the convenience of the reader and shall not be
considered in interpreting this Indenture or the intent of the parties hereto;



     (5) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to
this Indenture as a whole and not to any particular article, section or other subdivision; and



     (6) the pronouns used herein are used in the masculine and neuter genders but shall be
construed as feminine, masculine or neuter, as the context requires.



ARTICLE II




THE NOTES




     Section 2.01. Forms; Denominations.



     The Notes shall be substantially in the form attached hereto as Exhibit A provided that any of
the Notes may be issued with appropriate insertions, omissions, substitutions and variations, and
may have imprinted or otherwise reproduced thereon such legend or legends, not inconsistent with
the provisions of this Indenture, as may be required to comply with any law or with rules or
regulations pursuant thereto, or with the rules of any securities market in which the Notes are
admitted to trading, or to conform to general usage. The Notes will be issued only in registered
and certificated form. The Notes will be issuable only in denominations of not less than $100,000
and in integral multiples of $0.01 in excess thereof.



     Section 2.02. Execution, Authentication, Delivery and Dating.



     (a) The Notes shall be executed by manual or facsimile signature on behalf of the Issuer by
any Authorized Officer of the Issuer. Notes bearing the manual or facsimile signatures of
individuals who were at any time the authorized officers of the Issuer shall be entitled to all
benefits under this Indenture, subject to the following sentence, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the authentication and
delivery of such Notes or did not hold such offices at the date of such Notes. No Note shall be
entitled to any benefit under this Indenture, or be valid for any purpose, however, unless there
appears on such Note a certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by manual signature, and such certificate of authentication upon
any Note shall be conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder. All Notes shall be dated the date of their authentication.



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     (b) Upon the written request of the Issuer, the Indenture Trustee shall and, at the election
of the Indenture Trustee, the Indenture Trustee may appoint one or more agents (each an
“Authenticating Agent”) with power to act on its behalf and subject to its direction in the
authentication of Notes in connection with transfers and exchanges under Sections 2.05 and 2.06, as
fully to all intents and purposes as though each such Authenticating Agent had been expressly
authorized by those Sections to authenticate the Notes. For all purposes of this Indenture, the
authentication of Notes by an Authenticating Agent shall be deemed to be the authentication of
Notes “by the Indenture Trustee.” The Indenture Trustee shall be the initial Authenticating Agent.



     Any corporation, bank, trust company or association into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation, bank, trust company
or association resulting from any merger, consolidation or conversion to which any Authenticating
Agent shall be a party, or any corporation, bank, trust company or association succeeding to the
corporate trust business of any Authenticating Agent, shall be the successor of such Authenticating
Agent hereunder, without the execution or filing of any further act on the part of the parties
hereto or such Authenticating Agent or such successor corporation, bank, trust company or
association.



     Any Authenticating Agent may at any time resign by giving written notice of resignation to the
Indenture Trustee and the Issuer. The Indenture Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such Authenticating Agent and the
Issuer. Upon receiving such notice of resignation or upon such a termination, the Indenture Trustee
may, or at the direction of the Issuer shall, promptly appoint a successor Authenticating Agent,
give written notice of such appointment to the Issuer and give notice of such appointment to the
Noteholders. Upon the resignation or termination of the Authenticating Agent and prior to the
appointment of a successor, the Indenture Trustee shall act as Authenticating Agent.



     Each Authenticating Agent shall be entitled to all limitations on liability, rights of
reimbursement and indemnities that the Indenture Trustee is entitled to hereunder as if it were the
Indenture Trustee.



     Section 2.03. Acknowledgment of Receipt of the Receivables.



     (a) The Indenture Trustee, by its execution and delivery of this Indenture, acknowledges
receipt by it of the Receivable Files with respect to the Initial Receivables, and all other assets
delivered to it and included in the Trust Estate as of the Initial Funding Date. Such receipt shall
be in good faith and without notice of any adverse claim. The Indenture Trustee declares that it
holds and will hold such documents and the other documents received by it that constitute portions
of the Receivables Files received after the Initial Funding Date, and that it holds and will hold
all assets included in the Trust Estate, on behalf of all present and future Secured Parties.



     (b) The Indenture Trustee shall not be under any duty or obligation to inspect, review or
examine any of the documents, instruments, certificates or other papers relating to the Receivables
delivered to it to determine that the same are valid, legal, effective, genuine,



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enforceable, in recordable form if recordation is required, sufficient or appropriate for the
represented purpose or that they are other than what they purport to be on their face.




     The Indenture Trustee shall not assign, sell, dispose of or transfer any interest in the
Receivables or any other asset constituting the Trust Estate (except as expressly provided herein)
or knowingly permit the Receivables or any other asset constituting the Trust Estate to be
subjected to any lien, claim or encumbrance arising by, through or under the Indenture Trustee or
any Person claiming by, through or under the Indenture Trustee.



     Section 2.04. The Notes Generally.



     (a) The aggregate Note Principal Balance of the Notes that may be authenticated and delivered
under this Indenture is limited to the Maximum Note Balance, except for Notes authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant
to Sections 2.05 and 2.06 below.



     (b) Each Note shall rank pari passu with each other Note and be equally and ratably secured by
the Trust Estate. All Notes shall be substantially identical except as to denominations and as
expressly permitted in this Indenture.



     (c) This Indenture shall evidence a continuing lien on and security interest in the Trust
Estate to secure the full payment of the principal, interest and other amounts on all the Notes,
which (except as otherwise expressly provided herein) shall in all respects be equally and ratably
secured hereby without preference, priority or distinction on account of the actual time or times
of the authentication and delivery of such Notes.



     Section 2.05. Registration of Transfer and Exchange of Notes.



     (a) At all times during the term of this Indenture, there shall be maintained at the office of
a registrar appointed by the Issuer (the “Note Registrar”) a register (the “Note Register”) in
which, subject to such reasonable regulations as the Note Registrar may prescribe, the Note
Registrar shall provide for the registration of Notes and of transfers and exchanges of Notes as
herein provided. The Indenture Trustee is hereby initially appointed (and hereby agrees to act in
accordance with the terms hereof) as Note Registrar for the purpose of registering Notes and
transfers and exchanges of Notes as herein provided. The Indenture Trustee may appoint, by a
written instrument delivered to the Issuer, any other bank or trust company to act as Note
Registrar under such conditions as the Indenture Trustee may prescribe, provided that the Indenture
Trustee shall not be relieved of any of its duties or responsibilities hereunder as Note Registrar
by reason of such appointment. If the Indenture Trustee resigns or is removed in accordance with
the terms hereof, the successor indenture trustee shall immediately succeed to its predecessor’s
duties as Note Registrar. The Issuer and the Noteholders shall have the right to inspect the Note
Register or to obtain a copy thereof at all reasonable times upon reasonable prior notice, and to
rely conclusively upon a certificate of the Note Registrar as to the information set forth in the
Note Register.



     (b) No transfer, sale, pledge or other disposition of any Note or interest therein shall be
made unless that transfer, sale, pledge or other disposition is exempt from the registration



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and/or qualification requirements of the 1933 Act and any applicable state securities laws, or is
otherwise made in accordance with the 1933 Act and such state securities laws. If a transfer of any
Note is to be made without registration under the 1933 Act (other than in connection with the
initial issuance thereof), then the Note Registrar shall refuse to register such transfer unless it
receives (and upon receipt, may conclusively rely upon) either (i) a certificate from the
prospective transferee substantially in the form attached either as Exhibit B hereto; or (ii) an
Opinion of Counsel reasonably satisfactory to the Issuer and the Indenture Trustee to the effect
that such transfer may be made without registration under the 1933 Act (which Opinion of Counsel
shall not be an expense of the Trust Estate or of the Issuer, the Indenture Trustee or the Note
Registrar in their respective capacities as such), together with the written certifications as to
the facts surrounding such transfer from the Noteholder desiring to effect such transfer or such
Noteholder’s prospective transferee on which such Opinion of Counsel is based. None of the Issuer,
the Indenture Trustee or the Note Registrar is obligated to register or qualify any Notes under the
1933 Act or any other securities law or to take any action not otherwise required under this
Indenture to permit the transfer of any Note or interest therein without registration or
qualification. Any Noteholder desiring to effect a transfer of Notes or interests therein shall,
and does hereby agree to, indemnify the Issuer, the Seller, the Indenture Trustee, and the Note
Registrar against any liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.




     (c) No transfer of a Note or any interest therein shall be made to any employee benefit plan
or other retirement arrangement, including individual retirement accounts and annuities, Keogh
plans and bank collective investment funds, insurance company general separate accounts and other
entities in which such plans, accounts or arrangements are invested, that is subject to Part 4 of
Title I of ERISA or Section 4975 of the Code (each, a “Plan”), or to any Person who is directly or
indirectly purchasing such Note or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a Plan, if any such transfer will result in any prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code. Accordingly, each purchaser of a Note will be
required to certify that either (i) no part of the assets to be used by it to acquire and hold the
Note constitutes assets of any Plan or (ii) (I) such Note is rated investment grade or better as of
the date of purchase, (II) the transferee of the Note believes that the Note is properly treated as
indebtedness without substantial equity features for purposes of the Section 2510.3-101 of the
Department of Labor Regulations and agrees to so treat such Note and (III) its acquisition and
holding of the Notes will not constitute or otherwise result in a nonexempt prohibited transaction
in violation of Section 406 of ERISA or Section 4975 of the Code.



     (d) If a Person is acquiring any Note or interest therein as a fiduciary or agent for one or
more accounts, such Person shall be required to certify that it has (i) sole investment discretion
with respect to each such account and (ii) full power to make the foregoing acknowledgments,
representations, warranties, certifications and agreements with respect to each such account as set
forth in subsections (b) and (c) of this Section 2.05.



     (e) Subject to the preceding provisions of this Section 2.05, upon surrender for registration
of transfer of any Note at the offices of the Note Registrar maintained for such purpose, the
Issuer shall execute and the Indenture Trustee shall authenticate and deliver, in the



23









 




name of the designated transferee or transferees, one or more new Notes of a like aggregate Note
Principal Balance.




     (f) At the option of any Noteholder, its Notes may be exchanged for other Notes of authorized
denominations of a like aggregate Note Principal Balance, upon surrender of the Notes to be
exchanged at the offices of the Note Registrar maintained for such purpose. Whenever any Notes are
so surrendered for exchange, the Issuer shall execute and the Indenture Trustee shall authenticate
and deliver the Notes which the Noteholder making the exchange is entitled to receive.



     (g) Every Note presented or surrendered for transfer or exchange shall (if so required by the
Note Registrar) be duly endorsed by, or be accompanied by a written instrument of transfer in the
form satisfactory to the Note Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing.



     (h) No service charge shall be imposed for any transfer or exchange of Notes, but the Issuer,
the Indenture Trustee or the Note Registrar may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any transfer or exchange of
Notes.



     (i) All Notes surrendered for transfer and exchange shall be physically canceled by the Note
Registrar, and the Note Registrar shall dispose of such canceled Notes in accordance with its
standard procedures.



     (j) The Note Registrar or the Indenture Trustee shall provide to each of the Issuer and any
Noteholder, upon reasonable written request and at the expense of the requesting party, an updated
copy of the Note Register.



     Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes.



     If any mutilated Note is surrendered to the Note Registrar, the Issuer shall execute and the
Indenture Trustee shall authenticate and deliver, in exchange therefor, a new Note of the same
principal amount and bearing a number not contemporaneously outstanding.



     If there shall be delivered to the Issuer, the Indenture Trustee and the Note Registrar (i)
evidence to their satisfaction of the destruction (including mutilation tantamount to destruction),
loss or theft of any Note and the ownership thereof, and (ii) such security or indemnity as may be
reasonably required by them to hold each of them, and any agent of any of them harmless, then, in
the absence of notice to the Issuer or the Note Registrar that such Note has been acquired by a
bona fide purchaser, the Issuer shall execute and the Indenture Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Note, a new Note of the same tenor and
denomination registered in the same manner, dated the date of its authentication and bearing a
number not contemporaneously outstanding.



     Upon the issuance of any new Note under this Section 2.06, the Issuer, the Indenture Trustee
and the Note Registrar may require the payment by the Noteholder of an amount sufficient to pay or
discharge any tax or other governmental charge that may be imposed in



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relation thereto and any other reasonable expenses (including the reasonable fees and expenses of
the Authenticating Agent and the Indenture Trustee) in connection therewith.




     Every new Note issued pursuant to this Section 2.06 in lieu of any destroyed, mutilated, lost
or stolen Note shall constitute an original additional contractual obligation of the Issuer,
whether or not the destroyed, mutilated, lost or stolen Note shall be at any time enforceable by
any Person, and such new Note 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 2.06 are exclusive and shall preclude (to the extent permitted
by applicable law) all other rights and remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes.



     Section 2.07. Noteholder Lists.



     The Note Registrar shall preserve in as current a form as is reasonably practicable the most
recent list available to it of the names and addresses of Noteholders, which list, upon request,
will be made available to the Indenture Trustee insofar as the Indenture Trustee is no longer the
Note Registrar. Upon written request of any Noteholder at the Noteholder’s expense made for
purposes of communicating with other Noteholders with respect to their rights under this Indenture,
the Note Registrar shall promptly furnish such Noteholder with a list of the other Noteholders of
record identified in the Note Register at the time of the request. Every Noteholder, by receiving
such access, agrees with the Note Registrar that the Note Registrar will not be held accountable in
any way by reason of the disclosure of any information as to the names and addresses of any
Noteholder regardless of the source from which such information was derived.



     Section 2.08. Persons Deemed Owners.



     The Issuer, the Indenture Trustee, the Note Registrar and any agents of any of them, may treat
the Person in whose name a Note is registered as the owner of such Note for the purpose of
receiving payments of principal, interest and other amounts in respect of such Note and for all
other purposes, whether or not such Note shall be overdue, and none of the Issuer, the Indenture
Trustee, the Note Registrar or any agents of any of them, shall be affected by notice to the
contrary.



     Section 2.09. Accounts.



     (a) On or prior to the date hereof, the Indenture Trustee shall establish in its name, as
Indenture Trustee, the Reimbursement Account, the Note Payment Account, the Reserve Account and the
Funding Account. Except as provided in this Indenture, the Indenture Trustee, in accordance with
the terms of this Indenture, shall have exclusive control and sole right of withdrawal with respect
to the Accounts. Funds in the Accounts shall not be commingled with any other monies. All monies
deposited from time to time in the Accounts (including any securities or instruments in which such
monies are invested) shall be held by and under the control of the Indenture Trustee in the
Accounts for the benefit of the Secured Parties and the Issuer as herein provided. All amounts
received by the Indenture Trustee, including, without



25









 




limitation, amounts received from the Servicer in respect of the Aggregate Receivables and amounts
received from the Seller as Repurchase Prices, shall be deposited into the Reimbursement Account
within one (1) Business Day following receipt by the Indenture Trustee and shall be applied in
accordance with the terms of this Indenture. In addition, the Issuer may, from time to time, remit
additional funds to the Indenture Trustee for deposit into the Reimbursement Account to be applied
for the purposes set forth herein.




     (b) All of the funds on deposit in the Accounts may be invested and reinvested by the
Indenture Trustee at the written direction of the Agent in one or more Permitted Investments,
subject to the following requirements:




     (i) such Permitted Investments shall mature not later than one Business Day prior to
the next Payment Date or Funding Date whichever is sooner (except that if such Permitted
Investment is an obligation of or is managed by the Indenture Trustee or its Affiliate,
such Permitted Investment shall not mature later than the next Payment Date or Funding Date
whichever is sooner);




     (ii) the securities purchased with the monies in the Accounts shall be deemed to be
funds deposited in the related Accounts;




     (iii) each such Permitted Investment shall be made in the name of the Indenture
Trustee (in its capacity as such) or in the name of a nominee of the Indenture Trustee
under the Indenture Trustee’s complete and exclusive dominion and control (or, if
applicable law provides for perfection of pledges of an instrument not evidenced by a
certificate or other instrument through registration of such pledge on books maintained by
or on behalf of the issuer of such investment, a Permitted Investment may be made in such
instrument notwithstanding that such instrument is not under the dominion and control of
the Indenture Trustee, provided that such pledge is so registered);




     (iv) the Indenture Trustee shall have the sole control over such investment, the
income thereon and the proceeds thereof;




     (v) other than the investments described in the second parenthetical phrase in clause
(iii) above, any certificate or other instrument evidencing such investment shall be
delivered directly to the Indenture Trustee or its agent; and




     (vi) the proceeds of each investment shall be remitted by the purchaser thereof
directly to the Indenture Trustee for deposit in the related Account, subject to withdrawal
by the Indenture Trustee as provided herein.


In the absence of written direction from the Agent, funds on deposit in the Accounts shall be
invested by the Indenture Trustee in Permitted Investments described in clause (v) of the
definition thereof. All amounts earned on Permitted Investments during prior calendar month shall
be deposited into the Note Payment Account on each Payment Date and shall be included in the
Available Funds for such Payment Date.




26









 








     (c) The Servicer shall cause all collections in respect of the Mortgage Loans included in each
Securitization Trust to be deposited into the related Collection Account pursuant to the related
Pooling and Servicing Agreement. No less frequently than once a week, the Servicer shall withdraw
all amounts available to reimburse Advances from the related Collection Account or from related
proceeds and shall remit such amounts to the Indenture Trustee for deposit into the Reimbursement
Account.



     (d) Upon the satisfaction and discharge of this Indenture pursuant to Section 3.01 of this
Indenture, the Indenture Trustee shall pay to the Issuer all amounts, if any, held by it remaining
as part of the Trust Estate.



     Section 2.10. Payments on the Notes.



     (a) Subject to Section 2.10(b), the Issuer agrees to pay




     (i) on each Payment Date prior to the Maturity Date, interest on and principal of the
Notes in the amounts and in accordance with the priorities set forth in Section 2.10(c);
and




     (ii) on the Maturity Date, the entire Note Principal Balance of the Notes, together
with all accrued and unpaid interest thereon.



     Amounts properly withheld under the Code by any Person from a payment to any holder of a Note
of interest, principal or other amounts, or any such payment set aside on the Final Payment Date
for such Note as provided in Section 2.10(b), shall be considered as having been paid by the Issuer
to such Noteholder for all purposes of this Indenture.



     (b) With respect to each Payment Date, any interest, principal and other amounts payable on
the Notes shall be paid to the Person that is the registered holder thereof at the close of
business on the related Record Date; provided, however, that interest, principal and other amounts
payable at the Final Payment Date of any Note shall be payable only against surrender thereof at
the Corporate Trust Office of the Indenture Trustee. Payments of interest, principal and other
amounts on the Notes shall be made on the applicable Payment Date other than the Final Payment
Date, subject to applicable laws and regulations, by wire transfer to such account as such
Noteholder shall designate by written instruction received by the Indenture Trustee not later than
the Record Date related to the applicable Payment Date or otherwise by check mailed on or before
the Payment Date to the Person entitled thereto at such Person’s address appearing on the Note
Register. The Indenture Trustee shall pay each Note in whole or in part as provided herein on its
Final Payment Date in immediately available funds from funds in the Note Payment Account as
promptly as possible after presentation to the Indenture Trustee of such Note at its Corporate
Trust Office but shall initiate such payment no later than 3:00 p.m., New York City time, on the
day of such presentation, provided, that such presentation has been made no later than 1:00 p.m.,
New York City time. If presentation is made after 1:00 p.m., New York City time, on any day, such
presentation shall be deemed to have been made on the immediately succeeding Business Day.




27












 





     Except as provided in the following sentence, if a Note is issued in exchange for any other
Note during the period commencing at the close of business at the office or agency where such
exchange occurs on any Record Date and ending before the opening of business at such office or
agency on the related Payment Date, no interest, principal or other amounts will be payable on such
Payment Date in respect of such new Note, but will be payable on such Payment Date only in respect
of the prior Note. Interest, principal and other amounts payable on any Note issued in exchange for
any other Note during the period commencing at the close of business at the office or agency where
such exchange occurs on the Record Date immediately preceding the Final Payment Date for such Notes
and ending on the Final Payment Date for such Notes, shall be payable to the Person that surrenders
the new Note as provided in this Section 2.10(b).



     All payments of interest, principal and other amounts made with respects to any Note will be
allocated pro rata among the Outstanding Notes based on the Note Principal Balance thereof.



     If any Note on which the final payment was due is not presented for payment on its Final
Payment Date, then the Indenture Trustee shall set aside such payment in a segregated account
separate from the Note Payment Account but which constitutes an Eligible Account, and the Indenture
Trustee and the Issuer shall act in accordance with Section 5.10 in respect of the unclaimed funds.



     (c) On each Payment Date, the Indenture Trustee shall deposit all funds from the Reimbursement
Account into the Note Payment Account and withdraw from the Note Payment Account and apply the
Available Funds for such Payment Date for the following purposes and in the following order of
priority, in each case to the extent of remaining funds:




     (i) to the Issuer, an amount equal to the sum of its actual expenses (including the
fees and expenses of the Owner Trustee) not to exceed $5,000 per calendar year;




     (ii) to the Agent, the Facility Fee for such Payment Date;




     (iii) to the Agent, all amounts to which the Agent is entitled to for reimbursement in
accordance with this Indenture, other than amounts payable pursuant to (ii) above;




     (iv) to the Indenture Trustee and the Securities Intermediary, (A) an amount equal to
the sum of the Indenture Trustee Fee for such Payment Date, plus all accrued and unpaid
Indenture Trustee Fees, if any, for prior Payment Dates and (B) all amounts to which the
Indenture Trustee is entitled to reimbursement in accordance with this Indenture, for which
notice has been provided to the Issuer and Agent at least three Business Days prior to the
Payment Date, with backup documentation reasonably satisfactory to the Servicer, and for
which reimbursement is not available under the Transaction Documents from an alternative
source (including the Receivables Seller) or for which the Indenture Trustee has been unable to obtain reimbursement after reasonable efforts;




     (v) to the Verification Agent, an amount equal to the sum of all accrued and unpaid
Verification Agent Fees and expenses (which are invoiced to the Issuer and the



28









 






Indenture Trustee at least three Business Days prior to the Payment Date), with backup
documentation reasonably satisfactory to the Servicer, in an amount not greater than the amount set
forth in the Verification Agent Letter;




     (vi) to the Noteholders, (A) an amount equal to the sum of the Interest Distributable Amount
for the Notes for such Payment Date, plus any Interest Carryover Shortfall, if any, for prior
Payment Dates and (B) the Unused Line Fee for such Payment Date;




     (vii) to the Indemnified Parties (other than the Indenture Trustee and the Verification
Agent), any amounts then due to such Indemnified Parties under Section 9.11 of this Indenture
(which are invoiced to the Issuer and the Indenture Trustee at least three Business Days prior to
the Payment Date) and for which reimbursement is not available under the Transaction Documents from
an alternative source (including the Receivables Seller) or for which the Indemnified Parties have
been unable to obtain reimbursement after reasonable efforts;




     (viii) to the Reserve Account, the Reserve Fund Reimbursement Amount for such Payment Date, if
applicable;




     (ix) during the Funding Period, in the following order of priority:




	 	(A)	 	to the Funding Account, the Cash Purchase Price of any Additional Receivables
to be acquired by the Issuer and Granted to the Indenture Trustee on such Payment
Date in accordance with Article VII;
	 
	 	(B)	 	to the Noteholders, in respect of principal of the Notes, until the Note
Principal Balance is equal to the Collateral Value (after giving effect to any
proposed purchases in (A) above);
	 
	 	(C)	 	to the Certificateholders, the remaining Available Funds; provided, however,
that any amounts due and owing to the Owner Trustee shall be paid prior to such
payment;






     (x) following the termination of the Funding Period, in the following order or priority:




	 	(A)	 	to the Noteholders, in respect of principal of the Notes, until the Note
Principal Balance is reduced to zero;
	 
	 	(B)	 	to the Persons entitled thereto, any amounts payable by the Issuer pursuant to
this Indenture; and
	 
	 	(C)	 	to the Certificateholders, the remaining Available Funds; provided, however,
that any amounts due and owing to the Owner Trustee shall be paid prior to such
payment.





29









 





     (d) On each date that is a Funding Date as set forth in subclause (ii) of the definition
thereof, the Indenture Trustee shall deposit any Excess Amount from the Reimbursement Account into
the Note Payment Account and withdraw from the Note Payment Account and apply such Excess Amount to
reduce the Note Principal Balance of the Notes, until such Note Principal Balance is equal to the
aggregate Collateral Value as of such date.



     Section 2.11. Final Payment Notice.



     (a) Notice of final payment under Section 2.10(b) shall be given by the Indenture Trustee not
later than the 5th day prior to the Final Payment Date to each Noteholder as of the close of
business on the Record Date preceding the Final Payment Date at such Noteholder’s address appearing
in the Note Register, and also to the Agent and the Issuer.



     (b) All notices of final payment in respect of the Notes shall state (i) the Final Payment
Date, (ii) the amount of the final payment for such Notes and (iii) the place where such Notes are
to be surrendered for payment, which shall be the Corporate Trust Office of the Indenture Trustee.



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



     Section 2.12. Compliance with Withholding Requirements.



     Notwithstanding any other provision of this Indenture, the Indenture Trustee shall comply with
all federal and state withholding requirements with respect to payments to Noteholders of interest,
original issue discount, or other amounts that the Indenture Trustee reasonably believes are
applicable under the Code. The consent of Noteholders shall not be required for any such
withholding. The Indenture Trustee will withhold on payments of the Unused Line Fee to Non-U.S.
Noteholders unless such Noteholder is eligible for benefits under an income tax treaty with the
United States that eliminates U.S. federal income taxation on U.S. source Unused Line Fees and such
Non-U.S. Noteholder provides a correct, complete and executed U.S. Internal Revenue Service Form
W-8BEN.



     Section 2.13. Cancellation.



     The Issuer may at any time deliver to the Note Registrar for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly canceled by the Note Registrar.



     All Notes delivered to the Indenture Trustee for payment shall be forwarded to the Note
Registrar. All such Notes and all Notes surrendered for transfer and exchange in accordance with
the terms hereof shall be canceled and disposed of by the Note Registrar in accordance with its
customary procedures.



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     Section 2.14. Additional Note Balance.



     (a) In the event of the purchase of any Additional Note Balances by the Note Purchasers as
provided in the Note Purchase Agreement, each Note Purchaser shall, and is hereby authorized to,
record on the schedule attached to its Note the date and amount of any Additional Note Balance
purchased by it, and each repayment thereof; provided that failure to make any such recordation on
such schedule or any error in such schedule shall not adversely affect any Noteholders rights with
respect to its Additional Note Balance and its right to receive interest payments in respect of the
Additional Note Balance held by such Noteholder.



     (b) Absent manifest error, the Note Principal Balance of each Note as set forth in the
notations made by the related Noteholder on such Note shall be binding upon the Indenture Trustee
and the Issuer; provided that failure by a Noteholder to make such recordation on its Note or any
error in such notation shall not adversely affect any Noteholder’s rights with respect to its Note
Principal Balance and its right to receive principal and interest payments in respect thereof.



     Section 2.15. Reserve Account.



     On or prior to the Initial Funding Date, the Issuer shall cause the Initial Reserve Account
Deposit to be deposited into the Reserve Account.



     The Indenture Trustee shall hold in the Reserve Account on each Payment Date the amount
distributed in respect of the Reserve Fund Reimbursement Amount pursuant to Section 2.10(c). If, on
any Payment Date prior to the Maturity Date, the Available Funds for such Payment Date is
insufficient to pay the amounts required to be paid pursuant to clauses (i) through (vi) of Section
2.10(c) or, on any Payment Date following the Maturity Date, the Available Funds is insufficient to
pay any of the amounts required to be paid, the Indenture Trustee shall withdraw the amount of such
shortfall from the Reserve Account and deposit the same into the Note Payment Account to be applied
to the payment of such items.



     Upon payment in full of all of the Issuer Obligations, the Indenture Trustee shall release all
amounts remaining in the Reserve Account to or at the direction of the Issuer.



     Section 2.16. Redemption.



     (a) The Notes shall be subject to optional redemption, in whole but not in part, by the Issuer
on any Payment Date (which date shall be the Redemption Date with respect to the portion of the
Notes subject to such redemption), upon 30 days’ prior notice to the Agent. The Issuer shall give
written notice (a “Redemption Notice”) of its intent to redeem all of the Notes pursuant to this
Section 2.16 to the Agent and the Indenture Trustee at least 30 days prior to the Redemption Date.
Following issuance of the Redemption Notice by the Issuer, the Issuer shall be required to purchase
the entire Outstanding Note Principal Balance of the Notes for the Note Redemption Amount on the
Redemption Date. Upon the Issuer’s payment of the Redemption Amount, the Commitment of the Initial
Purchaser under section 2.01 of the Note Purchase Agreement to purchase Additional Note Balances
shall terminate.



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     (b) On any Payment Date on which both (i) the aggregate Note Principal Balance of the Notes is
less than or equal to 10% of the sum of the Initial Note Balance and all Additional Note Balances
purchased on or prior to such date pursuant to the Note Purchase Agreement and (ii) as of such
Payment Date, the Collateral shall have consisted, in part, of either Loan-Level Advances or
Servicing Advances, the Agent may effect a put of the entire Outstanding Note Principal Balance of
the Notes to the Issuer by exercise of the Put Option. The Agent shall give written notice (a “Put
Notice”) of its intent to put the Notes pursuant to this Section 2.16(b) to the Issuer and the
Indenture Trustee at least 30 days prior to the related Payment Date. Upon exercise of the Put
Option by the Agent, the Issuer shall be required to purchase the entire Outstanding Note Principal
Balance of the Notes for the Note Redemption Amount on the Put Date.



     (c) Subject to Section 9.06 of the Receivables Purchase Agreement or unless otherwise agreed
by the Agent, on the third Business Day prior to the applicable Redemption Date or Put Date, as
applicable, the Issuer shall cause there to be deposited the Note Redemption Amount into the Note
Payment Account.



     Section 2.17. Securities Accounts



     (a) The Issuer and the Indenture Trustee hereby appoint Wells Fargo Bank, National Association
as securities intermediary (in such capacity, the “Securities Intermediary”) with respect to each
of the Accounts. The Security Entitlements and all Financial Assets credited to the Accounts,
including without limitation all amounts, securities, investments, Financial Assets, investment
property and other property from time to time deposited in or credited to such account and all
proceeds thereof, held from time to time in the Accounts will continue to be held by the Securities
Intermediary for the Indenture Trustee for the benefit of the Secured Parties. Upon the termination of this
Indenture, the Indenture Trustee shall inform the Securities Intermediary of such termination. By
acceptance of their Notes or interests therein, the Noteholders and all beneficial owners of Notes
shall be deemed to have appointed Wells Fargo Bank, National Association as Securities
Intermediary. Wells Fargo Bank, National Association hereby accepts such appointment as Securities
Intermediary.




     (i) With respect to any portion of the Trust Estate that is credited to the Accounts,
the Securities Intermediary agrees that:




     (A) with respect to any portion of the Trust Estate that is held in deposit
accounts, each such deposit account shall be subject to the security interest
granted pursuant to this Indenture, and the Securities Intermediary shall comply
with instructions originated by the Indenture Trustee directing dispositions of
funds in the deposit accounts without further consent of the Issuer and otherwise
shall be subject to the exclusive custody and control of the Securities
Intermediary, and the Securities Intermediary shall have sole signature authority
with respect thereto;




     (B) the sole assets permitted in the Accounts shall be those that the
Securities Intermediary agrees to treat as Financial Assets;



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     (C) any portion of the Trust Estate that is, or is treated as, a Financial Asset shall
be physically delivered (accompanied by any required endorsements) to, or credited to an
account in the name of, the Securities Intermediary or other eligible institution
maintaining any Account in accordance with the Securities Intermediary’s customary
procedures such that the Securities Intermediary or such other institution establishes a
Security Entitlement in favor of the Indenture Trustee with respect thereto over which the
Securities Intermediary or such other institution has control; and




     (D) it will use reasonable efforts to promptly notify the Indenture Trustee and the
Issuer if any other Person claims that it has a property interest in a Financial Asset in
any Account and that it is a violation of that Person’s rights for anyone else to hold,
transfer or deal with such Financial Asset.




     (ii) The Securities Intermediary hereby confirms that (A) each Account is an account to which
Financial Assets are or may be credited, and the Securities Intermediary shall, subject to the
terms of this Indenture, treat the Indenture Trustee as entitled to exercise the rights that
comprise any Financial Asset credited to any Account, (B) any portion of the Trust Estate in
respect of any Account will be promptly credited by the Securities Intermediary to such account,
and (C) all securities or other property underlying any Financial Assets credited to any Account
shall be registered in the name of the Securities Intermediary, endorsed to the Securities
Intermediary or in blank or credited to another securities account maintained in the name of the Securities Intermediary,
and in no case will any Financial Asset credited to any Account be registered in the name of the
Issuer, the Servicer or the Seller, payable to the order of the Issuer, the Servicer or the Seller
or specially endorsed to any of such Persons.




     (iii) If at any time the Securities Intermediary shall receive an Entitlement Order from the
Indenture Trustee directing transfer or redemption of any Financial Asset relating to any Account,
the Securities Intermediary shall comply with such Entitlement Order without further consent by the
Issuer, the Servicer, the Seller or any other Person. If at any time the Indenture Trustee notifies
the Securities Intermediary in writing that this Indenture has been discharged in accordance
herewith, then thereafter if the Securities Intermediary shall receive any order from the Issuer
directing transfer or redemption of any Financial Asset relating to any Account, the Securities
Intermediary shall comply with such Entitlement Order without further consent by the Indenture
Trustee or any other Person.




     (iv) In the event that the Securities Intermediary has or subsequently obtains by agreement,
operation of law or otherwise a security interest in any Account or any Financial Asset or Security
Entitlement credited thereto, the Securities Intermediary hereby agrees that such security interest
shall be subordinate to the security interest of the Indenture Trustee. The Financial Assets and
Security Entitlements credited to the Accounts will not be subject to deduction, set-off, banker’s
lien, or any other right in favor of any Person other than the Indenture Trustee in the case of the
Accounts.



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     (v) There are no other agreements entered into between the Securities Intermediary in
such capacity, and the Securities Intermediary agrees that it will not enter into any
agreement with, the Issuer, the Servicer, the Seller or any other Person with respect to
any Account. In the event of any conflict between this Indenture (or any provision of this
Indenture) and any other agreement now existing or hereafter entered into, the terms of
this Indenture shall prevail.




     (vi) The rights and powers granted herein to the Indenture Trustee have been granted
in order to perfect its interest in the Accounts and the Security Entitlements to the
Financial Assets credited thereto, and are powers coupled with an interest and will neither
be affected by the bankruptcy of the Issuer, the Servicer or the Seller nor by the lapse of
time. The obligations of the Securities Intermediary hereunder shall continue in effect
until the interest of the Indenture Trustee in the Accounts and in such Security
Entitlements, has been terminated pursuant to the terms of this Indenture and the Indenture
Trustee has notified the Securities Intermediary of such termination in writing.



     (b) Capitalized terms used in this Section 2.17 and not defined herein shall have the meanings
assigned to such terms in the New York UCC. For purposes of Section 8-110(e) of the New York UCC,
the “securities intermediary’s jurisdiction” shall be the State of New York.



     (c) None of the Securities Intermediary or any director, officer, employee or agent of the
Securities Intermediary shall be under any liability to the Indenture Trustee or the Secured
Parties for any action taken, or not taken, in good faith pursuant to this Indenture, or for errors
in judgment; provided, however, that this provision shall not protect the Securities Intermediary
against any liability to the Indenture Trustee or the Secured Parties which would otherwise be
imposed by reason of the Securities Intermediary’s willful misconduct, bad faith or negligence in
the performance of its obligations or duties hereunder. The Securities Intermediary and any
director, officer, employee or agent of the Securities Intermediary may rely in good faith on any
document of any kind which, prima facie, is properly executed and submitted by any Person
respecting any matters arising hereunder. The Securities Intermediary shall be under no duty to
inquire into or investigate the validity, accuracy or content of such document. The Issuer shall
indemnify the Securities Intermediary for and hold it harmless against any loss, liability or
expense arising out of or in connection with this Indenture and carrying out it duties hereunder,
including the costs and expenses of defending itself against any claim of liability, except in
those cases where the Securities Intermediary has been guilty of bad faith, negligence or willful
misconduct. The foregoing indemnification shall survive any termination of this Indenture or the
resignation or removal of the Securities Intermediary.



     (d) Prior to the date which is one year and one day, or if longer the applicable preference
period then in effect, after the payment in full of all of the Notes, the Securities Intermediary
will not institute against, or join any other Person in instituting against, the Issuer any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings
under any bankruptcy, insolvency, reorganization or similar law in any jurisdiction.



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     Section 2.18. Tax Treatment of the Notes.



     The Issuer intends that, for U.S. federal, state or local income tax, franchise tax and any
other income tax purposes, the Notes be treated as debt. Each prospective purchaser and any
subsequent transferee of a Note or any interest therein shall, by virtue of its purchase or other
acquisition of such Note or interest therein, be deemed to have agreed to treat such Note in a
manner consistent with the preceding sentence for U.S. federal income tax purposes.



ARTICLE III




SATISFACTION AND DISCHARGE




     Section 3.01. Satisfaction and Discharge of Indenture.



     This Indenture shall cease to be of further effect except as to (i) any surviving rights
herein expressly provided for, including any rights of transfer or exchange of Notes herein
expressly provided for, (ii) in the case of clause (1)(B) below, the rights of the Noteholders
hereunder to receive payment of the Note Principal Balance of and interest on the Notes and any
other rights of the Noteholders hereunder, and (iii) the provisions of Section 3.02 herein, when



     (1) either (A) all Notes theretofore authenticated and delivered (other than (i) Notes which
have been destroyed, lost or stolen and which have been replaced or paid as provided in Section
2.06 and (ii) Notes for which payment of money has theretofore been deposited in the Note Payment
Account by the Indenture Trustee and thereafter repaid to the Issuer or discharged from such trust,
as provided in Section 5.10) have been delivered to the Note Registrar for cancellation; or (B) all
such Notes not theretofore delivered to the Note Registrar for cancellation (i) have become due and
payable, or (ii) will become due and payable on the next Payment Date, and in the case of clause
(B)(i) or (B)(ii) above, cash in an amount sufficient to pay and discharge the entire indebtedness
on such Notes not theretofore delivered to the Note Registrar for cancellation or sufficient to pay
the Note Principal Balance thereof and any interest thereon accrued to the date of such deposit (in
the case of Notes which have become due and payable) or to the end of the Accrual Period for the
next Payment Date has been deposited with the Indenture Trustee as trust funds in trust for these
purposes;



     (2) the Issuer has paid or caused to be paid all other sums payable or reasonably expected to
become payable by the Issuer to the Indenture Trustee and each of the Secured Parties; and



     (3) the Issuer has delivered to the Indenture Trustee an Officer’s Certificate of the Issuer
stating that all conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.



     Notwithstanding the foregoing, the obligations of the Issuer to the Indenture Trustee under
Section 5.04 hereof and the obligations of the Indenture Trustee to the Noteholders under Section
3.02 hereof shall survive satisfaction and discharge of this Indenture.



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     Section 3.02. Application of Trust Money.



     Subject to the provisions of Sections 2.09, 2.10, 2.15, 5.10 and 7.01, all Cash deposited with
the Indenture Trustee pursuant to Section 3.01 shall be held in the Note Payment Account and
applied by the Indenture Trustee, in accordance with the provisions of the Notes and this Indenture
to pay the Persons entitled thereto.



ARTICLE IV




EVENTS OF DEFAULT; REMEDIES




     Section 4.01. Events of Default.



     “Event of Default,” wherever used herein with respect to the Notes, means any one of the
following events (whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or governmental body):



     (a) any failure to pay all interest on and principal of any Note when the same shall be due
and payable without regard to Available Funds; or



     (b) any failure by the Issuer, the Seller or the Servicer to make (or cause to be made) any
payment, transfer or deposit, or deliver (or cause to be delivered) to the Indenture Trustee any
proceeds or payment required to be so delivered under the terms of this Indenture or any of the
other Transaction Documents; or



     (c) any failure on the part of the Issuer, the Depositor, the Servicer or the Seller duly to
observe or perform any covenants or agreements of it in any of the Transaction Documents in any
material respect and such failure continues for a period of five days after the date on which such
party receives notice of or otherwise becomes aware of such failure to observe or perform; or



     (d) the entry of a decree or order for relief by a court or agency or supervisory authority
having jurisdiction in respect of the Issuer, the Depositor, the Servicer or the Seller for the
appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar
official in any insolvency, conservatorship, receivership, readjustment of debt, marshalling of
assets and liabilities or similar proceedings for the Issuer, the Depositor or the Seller or of any
substantial part of its property, or ordering the winding up or liquidation of the affairs of the
Issuer, the Depositor or the Seller; or



     (e) the Issuer, the Depositor, the Servicer or the Seller shall voluntarily commence
liquidation, consent to the appointment of a conservator or receiver or liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Issuer, the Depositor or the Seller or of or relating to all or
substantially all of its property; or the Issuer, the Depositor or the Seller shall admit in
writing its inability to pay its debts generally as they become due, file a petition to take
advantage of any



36









 




applicable insolvency or reorganization statute, make a general assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or




     (f) the Issuer or the Trust Estate shall have become subject to registration as an “investment company” within the meaning of the 1940 Act; or



     (g) the Issuer shall fail to own the Trust Estate free and clear of liens other than the liens
contemplated hereby or the Indenture Trustee shall fail to have a first priority perfected security
interest in the Trust Estate; or



     (h) the Depositor sells, transfers, pledges or otherwise disposes of any of the Trust
Certificates, whether voluntarily or by operation of law, foreclosure or other enforcement by a
Person of its remedies against the Depositor, except to a wholly-owned subsidiary of Option One; or



     (i) Option One transfers its servicing rights under any Pooling and Servicing Agreement for a
Securitization Trust or its rights as Servicer under any such Pooling and Servicing Agreement are
terminated, and the Issuer fails to cause a Redemption of the entire Outstanding Note Principal
Amount pursuant to Section 2.16(a) hereof on or before the date such servicing rights are
transferred or terminated; or



     (j) the Servicer fails to deposit any collections in respect of the Mortgage Loans to the
related Collection Account (except with respect to Advance Reimbursement Amounts deposited to the
Reimbursement Account or Servicing Compensation in each case permitted under the Pooling and
Servicing Agreements), except for nominal amounts as a result of inadvertence, error or oversight,
which are corrected within two Business Days after the Servicer receives notice of or otherwise
becomes aware of such failure; or



     (k) the Servicer issues disbursement instructions to a Securitization Trustee or otherwise
withdraws funds from a Collection Account, except as expressly authorized by the provisions of the
Pooling and Servicing Agreements and the Transaction Documents, except for directions or
withdrawals relating to nominal amounts as a result of inadvertence, error or oversight, which are
corrected within two Business Days after the Servicer receives notice of or otherwise becomes aware
of such failure; or



     (l) the Servicer fails to deliver any Funding Date Report, Monthly Servicer Report or Payment
Date Report required to be delivered hereunder and the Servicer has received notice of such failure
from the Agent; or



     (m) the Collateral Coverage Requirement is not satisfied as of the close of business on any
date and such failure is not remedied within one Business Day; or



     (n) any representation or warranty made or deemed made by or on behalf of the Issuer, the
Depositor, the Seller, the Servicer or any of their respective Affiliates or by any officer of the
foregoing under or in connection with any Transaction Document or under or in connection with any
report, certificate, or other document delivered to the Agent, the Indenture Trustee or the
Noteholders pursuant to any Transaction Document shall have been incorrect or



37









 




misleading in any material respect when made or deemed made and the same remains unremedied for a
period of five days after such party receives notice of or otherwise becomes aware of such breach;
or




     (o) (i) any material provision of any Transaction Document shall at any time for any reason
(other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable
against the Issuer, the Depositor, the Seller, the Servicer or any of their respective Affiliates
intended to be a party thereto, (ii) the validity or enforceability of any Transaction Document
shall be contested by the Issuer, the Depositor, the Seller, the Servicer or any of their
respective Affiliates, (iii) a proceeding shall be commenced by the Issuer, the Depositor, the
Seller, the Servicer or any of their respective Affiliates or any Governmental Authority having
jurisdiction over the Issuer, the Depositor, the Seller, the Servicer or any of their respective
Affiliates, seeking to establish the invalidity or unenforceability of any Transaction Document, or
(iv) the Issuer, the Depositor, the Seller, the Servicer or any of their respective Affiliates
shall deny in writing that it has any liability or obligation purported to be created under any
Transaction Document.



     (p) Option One has taken any action to impair the lien or rights of the Indenture Trustee or
to cause the Issuer’s funding of the Receivables to be characterized as a financing rather than a
true sale for purposes of bankruptcy or similar laws.



     (q) An “Event of Default” occurs under the Warehouse Facility (as defined in the related Sale
and Servicing Agreement), giving effect to any notice or grace period afforded thereunder.



     (r) A Change of Control of Option One.



     Section 4.02. Acceleration of Maturity; Rescission and Annulment.



     If an Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee shall, at the direction of the Agent, on behalf of the Majority Noteholders,
declare all of the Notes to be immediately due and payable, by a notice in writing to the Issuer,
and upon any such declaration the unpaid Note Principal Balance of such Notes, together with
accrued interest thereon through the date of acceleration, shall become immediately due and
payable.



     At any time after such declaration of acceleration has been made and before a judgment or
decree for payment of the money due in respect of the Notes has been obtained by the Indenture
Trustee as hereinafter provided in this Section 4, the Agent, on behalf of the Majority
Noteholders, by written notice to the Issuer and to the Indenture Trustee, may rescind and annul
such declaration and its consequences if:



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



38









 






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




     (ii) all sums paid or advanced by the Indenture Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and counsel, in
each case incurred in connection with such Event of Default; and



     (b) all Events of Default, other than the nonpayment of the principal of the Notes that has
become due solely by virtue of such acceleration, have been cured or waived as provided in Section
4.12.



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



     Section 4.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.



     (a) If the Issuer fails to pay all amounts due upon an acceleration of the Notes under Section
4.02 forthwith upon demand and such declaration and its consequences shall not have been rescinded
and annulled, the Indenture Trustee, in its capacity as Indenture Trustee and as trustee of an
express trust, may institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against
the Issuer or any other obligor upon such Notes and collect the monies adjudged or decreed to be
payable in the manner provided by law out of the Trust Estate, wherever situated, or may institute
and prosecute such non-judicial proceedings in lieu of judicial proceedings as are then permitted
by applicable law.



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



     (c) In case (x) there shall be pending, relative to the Issuer or any Person having or
claiming an ownership interest in the Trust Estate, proceedings under Title 11 of the United States
Code or any other applicable federal or state bankruptcy, insolvency or other similar law, (y) a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or shall have taken
possession of the Issuer or its property or such Person or (z) there shall be pending a comparable
judicial proceeding brought by creditors of the Issuer or affecting the property of the Issuer, the
Indenture Trustee, irrespective of whether the principal of or interest on any Notes shall then be
due and payable as therein expressed or by declaration or otherwise and irrespective of whether the
Indenture Trustee shall have made any demand pursuant to the provisions of this Section 4.03, shall
be entitled and empowered, by intervention in such proceedings or otherwise:



39









 






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




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




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




     (iv) to file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee or the Noteholders allowed
in any judicial proceedings relative to the Issuer, its creditors and its property; and any
trustee, receiver, liquidator, custodian or other similar official in any such proceeding
is hereby authorized by each of such Noteholders to make payments to the Indenture Trustee,
and, in the event that the Indenture Trustee shall consent to the making of payments
directly to such Noteholders, to pay to the Indenture Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective attorneys, and all other expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of willful misconduct, negligence or bad faith of the Indenture
Trustee or predecessor Indenture Trustee.



     (d) Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder
any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the
rights of any related Noteholder or to authorize the Indenture Trustee to vote in respect of the
claim of any Noteholder in any such proceeding except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar Person.



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



     (f) In the event that the Indenture Trustee, following an Event of Default hereunder
institutes proceedings to foreclose on the Trust Estate, the Indenture Trustee shall promptly give
a notice to that effect to each Noteholder.



40









 





     (g) All rights of action and claims under this Indenture or the Notes may be prosecuted and
enforced by the Indenture Trustee without the possession of any of the Notes or the production
thereof in any proceeding relating thereto, and any such proceeding instituted by the Indenture
Trustee shall be brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its counsel, be for the ratable benefit of
the Noteholders in respect of which such judgment has been recovered, subject to the payment
priorities of Section 2.10.



     Section 4.04. Remedies.



     If an Event of Default has occurred and is continuing, and the Notes have been declared due
and payable pursuant to Section 4.02 hereof and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may do one or more of the following:



     (a) institute, or cause to be instituted, Proceedings for the collection of all amounts then
payable on or under this Indenture with respect to the Notes, whether by declaration of
acceleration or otherwise, enforce any judgment obtained, and collect from the Trust Estate monies
adjudged due;



     (b) sell, or cause to be sold, the Trust Estate or any portion thereof or rights or interest
therein, at one or more public or private sales called and conducted in any manner permitted by
applicable law, provided, however, that the Indenture Trustee shall give the Issuer written notice
of any private sale called by or on behalf of the Indenture Trustee pursuant to this Section
4.04(b) at least 10 days prior to the date fixed for such private sale;



     (c) institute, or cause to be instituted, Proceedings from time to time for the complete or
partial foreclosure with respect to the Trust Estate;



     (d) exercise, or cause to be exercised, any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies of the Indenture
Trustee or the Holders of the Notes hereunder; and



     (e) maintain possession of the Trust Estate and, in its own name or in the name of the Issuer
or otherwise, collect and otherwise receive in accordance with this Indenture any money or property
at any time payable or receivable on account of or in exchange for any of the Collateral; provided,
however, that the Indenture Trustee shall not, unless required by law, sell or otherwise liquidate
all or any portion of the Trust Estate following any Event of Default except in accordance with
Section 4.15.



     Section 4.05. Application of Money Collected.



     Any money collected by the Indenture Trustee pursuant to this Article IV shall be deposited in
the Note Payment Account and, on each Payment Date, shall be applied in accordance with Section
2.10 hereof and, in case of the distribution of such money on account of the principal of or
interest on the Notes, upon presentation and surrender of the Notes if fully paid.



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     Section 4.06. Limitation on Suits.



     Except as provided in Section 4.07, no Noteholder shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:



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



     (2) the Majority Noteholders shall have made written request to the Indenture Trustee to
institute proceedings in respect of such Event of Default in its own name as Indenture Trustee
hereunder;



     (3) such Noteholder or Noteholders have offered to the Indenture Trustee adequate indemnity or
security satisfactory to the Indenture Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request;



     (4) the Indenture Trustee for 60 days after its receipt of such notice, request and offer of
indemnity or security has failed to institute any such proceeding;



     (5) no direction inconsistent with such written request has been given to the Indenture
Trustee during such 60-day period by the Majority Noteholders; and



     (6) an Event of Default shall have occurred and be continuing; it being understood and
intended that no one or more of such Noteholders shall have any right in any manner whatever by
virtue of, or by availing itself or themselves of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other of such Noteholders, or to obtain or to seek to obtain
priority or preference over any other of such Noteholders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable benefit of all of
such Noteholders. Subject to the foregoing restrictions, the Noteholders may exercise their rights
under this Section 4.06 independently.



     Section 4.07. Unconditional Right of Noteholders to Receive Principal and Interest.



     Notwithstanding any other provision in this Indenture, following the Maturity Date, the Holder
of any Note shall have the right, which is absolute and unconditional, to receive payments of
interest, principal and other amounts then due on such Note (subject to Section 2.10) and to
institute suit for the enforcement of any such payment (subject to Section 4.06), and such rights
shall not be impaired without the consent of such Noteholder, unless a non-payment has been cured
pursuant to Section 4.02. The Issuer shall, however, be subject to only one consolidated lawsuit by
the Noteholders, or by the Indenture Trustee on behalf of the Noteholders, for any one cause of
action arising under this Indenture or otherwise.



     Section 4.08. Restoration of Rights and Remedies.



     If the Indenture Trustee or any Noteholder has instituted any proceeding to enforce any right
or remedy under this Indenture and such proceeding has been discontinued, waived, rescinded or
abandoned for any reason, or has been determined adversely to the Indenture



42









 




Trustee or to such Noteholder, then and in every such case, subject to any determination in such
proceeding, the Issuer, the Indenture Trustee and the Noteholders shall be restored severally and
respectively to their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the Noteholders shall continue as though no such proceeding had been
instituted.




     Section 4.09. Rights and Remedies Cumulative.



     Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Notes in Section 2.06, no right or remedy herein conferred upon or
reserved to the Indenture 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 4.10. Delay or Omission Not Waiver.



     No delay or omission of the Indenture Trustee, or 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 an acquiescence therein. Every right and remedy given by
this Indenture or by law to the Indenture Trustee or to the Noteholders may be exercised from time
to time, and as often as may be deemed expedient, to the extent permitted by applicable law, by the
Indenture Trustee or the Noteholders, as the case may be.



     Section 4.11. Control by Noteholders.



     The Noteholders holding more than 50% in aggregate Note Principal Balance of the Outstanding
Notes (the “Majority Noteholders”) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee, or exercising any
trust or power conferred on the Indenture Trustee, provided, that such direction shall not be in
conflict with any rule of law or with this Indenture or involve the Indenture Trustee in personal
liability and provided, further, that the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee which is not inconsistent with such direction. Notwithstanding the
foregoing, the Noteholders will not be required to provide, and the Indenture Trustee will not be
required to obtain, a Tax Opinion in the case of a direction by the Noteholders to the Indenture
Trustee, following an Event of Default, to realize upon the Trust Estate by liquidating the
Collateral or otherwise.



     Section 4.12. Waiver of Past Defaults.



     Prior to the acceleration of the Maturity Date of the Notes, the Majority Noteholders may on
behalf of the Noteholders of all the Notes waive any past default hereunder and its consequences,
except a default



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     (1) in the payment of principal of or interest on any Note, which waiver shall require the
waiver by Noteholders holding 100% in aggregate Note Principal Balance of the Outstanding Notes
affected; or



     (2) in respect of a covenant or provision hereof which under Article VIII cannot be modified
or amended without the consent of the Holder of each Outstanding Note affected, which waiver shall
require the waiver by each Holder of an Outstanding Note affected;



     (3) depriving the Indenture Trustee or any Noteholder of a lien or the benefit of a lien, as
the case may be, upon any part of the Trust Estate, which waiver shall require the consent of the Indenture Trustee or such Noteholder, as the case may be; or



     (4) depriving the Indenture Trustee of any fee, reimbursement for any expense incurred, or any
indemnification to which the Indenture Trustee is entitled, which waiver shall require the consent
of the Indenture Trustee.



     Upon any such waiver, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Indenture, but no such
waiver shall extend to any subsequent or other default or impair any right consequent thereon. Any
costs or expenses incurred by the Indenture Trustee in connection with such acceleration and prior
to such waiver shall be reimbursable to the Indenture Trustee in accordance with Section 2.10(c).



     Section 4.13. Undertaking for Costs.



     All parties to this Indenture agree, and each Noteholder by its acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against the Indenture
Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses
based on time expended, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Issuer, or to any suit instituted by the
Indenture Trustee, or to any suit instituted by any Noteholder, or group of Noteholders, holding in
the aggregate at least 25% in aggregate Note Principal Balance of Outstanding Notes or to any suit
instituted by any Noteholder for the enforcement of the payment of the principal of or interest on
any Note on or after the Maturity Date of such Note.



     Section 4.14. Waiver of Stay or Extension Laws.



     The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead, or in any manner whatsoever claim to 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 expressly waives all benefit or advantage of such law and covenants that it will not
hinder, delay or impede the exercise of any power herein granted to the Indenture



44









 




Trustee, but will suffer and permit the exercise of every such power as though no such law had been
enacted.




     Section 4.15. Sale of Trust Estate.



     (a) The power to effect any public or private sale of any portion of the Trust Estate pursuant to Section 4.04 hereof shall not be exhausted by any one or more sales as to
any portion of the Trust Estate remaining unsold, but shall continue unimpaired until either the
entire Trust Estate shall have been sold or all amounts payable on the Notes and under this
Indenture with respect thereto shall have been paid. The Indenture Trustee may from time to time
postpone any sale by public announcement made at the time and place of such sale. The Indenture
Trustee hereby expressly waives its right to any amount fixed by law as compensation for any such
sale but such waiver does not apply to any amounts to which the Indenture Trustee is otherwise
entitled under Section 5.04 of this Indenture.



     (b) The Indenture Trustee shall not sell the Trust Estate, or any portion thereof, unless:




     (i) the Majority Noteholders consent to, or direct the Indenture Trustee to make, such
sale; or




     (ii) the proceeds of such sale would be not less than the entire amount which would be
payable to the Holders of the Notes, in full payment thereof, in accordance with Section
4.05, on the Payment Date next succeeding the date of such sale, together with all other
amounts due under this Indenture.



          The foregoing provisions of this Section 4.15 shall not preclude or limit the ability of the
Indenture Trustee to purchase all or any portion of the Trust Estate at any sale, public or
private, and the purchase by the Indenture Trustee of all or any portion of the Trust Estate at any
sale shall not be deemed a sale or disposition thereof for purposes of this Section 4.15(b).




     (c) Unless the Holders of all Outstanding Notes have otherwise consented or directed the
Indenture Trustee, at any sale of all or any portion of the Trust Estate at which a minimum bid
equal to or greater than the amount described in paragraph (ii) of subsection (b) of this Section
4.15 has not been established by the Indenture Trustee and no Person bids an amount equal to or
greater than such amount, the Indenture Trustee shall in accordance with paragraph (ii) of
subsection (d) of this Section 4.15 bid an amount at least $1.00 more than the highest other bid in
order to preserve the Trust Estate.



     (d) In connection with a sale of all or any portion of the Trust Estate:




     (i) any Holder or Holders of Notes may bid for and purchase the property offered for
sale, and upon compliance with the terms of sale may hold, retain and possess and dispose
of such property, without further accountability, and may, in paying the purchase money
therefor, deliver any Outstanding Notes or claims for interest thereon in lieu of cash up
to the amount which shall, upon distribution of the net proceeds of such sale, be payable
thereon, and such Notes, in case the amounts so payable thereon shall be



45









 






less than the amount due thereon, shall be returned to the Holders thereof after being
appropriately stamped to show such partial payment;




     (ii) the Indenture Trustee may bid for and acquire the property offered for sale in
connection with any sale thereof, and, in lieu of paying cash therefor, may make settlement
for the purchase price by crediting the gross sale price against the sum of (A) the amount
which would be distributable to the Holders of the Notes as a result of such sale in
accordance with Section 4.05 on the Payment Date next succeeding the date of such sale and
(B) the expenses of the sale and of any Proceedings in connection therewith which are
reimbursable to it, without being required to produce the Notes in order to complete any
such sale or in order for the net sale price to be credited against such Notes, and any
property so acquired by the Indenture Trustee shall be held and dealt with by it in
accordance with the provisions of this Indenture;




     (iii) the Indenture Trustee shall execute and deliver, without recourse, an
appropriate instrument of conveyance transferring its interest in any portion of the Trust
Estate in connection with a sale thereof;




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




     (v) no purchaser or transferee at such a sale shall be bound to ascertain the
Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or
see to the application of any monies.



     Section 4.16. Action on Notes.



     The Indenture Trustee’s right to seek and recover judgment on the Notes or under this
Indenture shall not be affected by the seeking, obtaining or application of any other relief under
or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the
Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any
portion of the Trust Estate.



ARTICLE V




THE INDENTURE TRUSTEE




     Section 5.01. Certain Duties and Responsibilities.



     The Issuer hereby irrevocably constitutes and appoints the Indenture Trustee and any
Responsible Officer thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in place and stead of the Issuer
and in the name of the Issuer or in its own name or in the name of a nominee, from time to time in
the Indenture Trustee’s discretion, for the purpose of enforcing the rights, powers and remedies of
the Issuer



46









 




under the Receivables Purchase Agreement and to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to accomplish the
purposes of this Indenture and the Receivables Purchase Agreement, all as set forth in this Section
5.01.




     (a) The rights, duties and liabilities of the Indenture Trustee in respect of this Indenture
shall be as follows:




     (i) The Indenture Trustee shall have the full power and authority to do all things not
inconsistent with the provisions of this Indenture that it may deem advisable in order to
enforce the provisions hereof or to take any action with respect to a default or an Event
of Default hereunder, or to institute, appear in or defend any suit or other proceeding
with respect hereto, or to protect the interests of the Noteholders. The Indenture Trustee
shall not be answerable or accountable except for its own bad faith, willful misconduct or
negligence. The Issuer shall prepare and file or cause to be filed, at the Issuer’s
expense, a UCC Financing Statement, describing the Issuer as debtor, the Indenture Trustee
as secured party and the Trust Estate as the collateral, in all appropriate locations
promptly following the initial issuance of the Notes, and the Issuer shall prepare and file
at each such office, continuation statements with respect thereto, in each case within six
months prior to each fifth anniversary of the original filing. The Issuer is hereby
authorized and obligated to make, at the expense of the Issuer, all required filings and
refilings of which the Issuer becomes aware, necessary to preserve the liens created by
this Indenture to the extent not done by the Issuer as provided herein. The Indenture
Trustee shall not be required to take any action to exercise or enforce the trusts hereby
created which, in the opinion of the Indenture Trustee, shall be likely to involve expense
or liability to the Indenture Trustee, unless the Indenture Trustee shall have received an
agreement satisfactory to it in its sole reasonable discretion to indemnify it against such
liability and expense. Except as otherwise expressly provided herein, the Indenture Trustee
shall not be required to ascertain or inquire as to the performance or observance of any of
the covenants or agreements contained herein, or in the Receivables Purchase Agreement or
in any other instruments to be performed or observed by the Issuer or any party to the
Receivables Purchase Agreement.




     (ii) Subject to the other provisions of this Article V, the Indenture Trustee, upon receipt of
all resolutions, certificates, statements, opinions, reports, documents, orders, or other
instruments furnished to the Indenture Trustee that are specifically required to be furnished
pursuant to any provisions of this Indenture, shall examine them to determine whether they are on their face in the form required by this
Indenture to the extent expressly set forth herein. If any such instrument is found on its face not
to conform to the requirements of this Indenture in a material manner, the Indenture Trustee shall
take such action as it deems appropriate to have the instrument corrected, and if the instrument is
not corrected to the Indenture Trustee’s reasonable satisfaction, the Indenture Trustee will
provide notice thereof to the Noteholders. The Indenture Trustee shall not incur any liability in
acting upon any signature, notice, request, consent, certificate, opinion, or other instrument
reasonably believed by it to be genuine. In administering the trusts hereunder, the Indenture
Trustee may execute any of the trusts or powers hereunder directly or through its agents or
attorneys, provided that it shall remain




47












 






liable for the acts of all such agents and attorneys. The Indenture Trustee may, subject to
Section 5.04, consult with counsel, accountants and other professionals to be selected and
employed by it, and the Indenture Trustee shall not be liable for anything done, suffered
or omitted in good faith by it in accordance with the advice of any such Person nor for any
error of judgment made in good faith by a Responsible Officer, unless it shall be proved
that the Indenture Trustee was negligent in ascertaining the pertinent facts.




     (iii) The Indenture Trustee shall not have any duty to make, arrange or ensure the
completion of any recording, filing or registration of any instrument or other document
(including any UCC Financing Statements), or any amendments or supplements to any of said
instruments or to determine if any such instrument or other document is in a form suitable
for recording, filing or registration, and the Indenture Trustee shall not have any duty to
make, arrange or ensure the completion of the payment of any fees, charges or taxes in
connection therewith.




     (iv) Whenever in performing its duties hereunder, the Indenture Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Indenture Trustee may, in the absence of bad faith on
the part of the Indenture Trustee, rely upon (unless other evidence in respect thereof be
specifically prescribed herein) an Officer’s Certificate of the Issuer, and such Officer’s
Certificate shall be full warrant to the Indenture Trustee for any action taken, suffered
or omitted by it on the faith thereof.




     (v) The Indenture Trustee shall not have any obligations to see to the payment or
discharge of any liens (other than the liens hereof) upon the Receivables, or to see to the
application of any payment of the principal of or interest on any note secured thereby or
to the delivery or transfer to any Person of any property released from any such lien, or
to give notice to or make demand upon any mortgagor, mortgagee, trustor, beneficiary or
other Person for the delivery or transfer of any such property. The Indenture Trustee (and
any successor trustee or co-trustee in its individual capacity) nevertheless agrees that it
will, at its own cost and expense, promptly take all action as may be necessary to
discharge any liens or encumbrances on the Receivables arising as a result of the Indenture
Trustee (or such successor trustee or co-trustee, as the case may be) acting improperly in
its capacity as Indenture Trustee (or such successor trustee or co-trustee, as the case may
be).




     (vi) The Indenture Trustee shall not be concerned with or accountable to any Person
for the use or application of any deposited monies or of any property or securities or the
proceeds thereof that shall be released or withdrawn in accordance with the provisions
hereof or of any property or securities or the proceeds thereof that shall be released from
the lien hereof or thereof in accordance with the provisions hereof or thereof and the
Indenture Trustee shall not have any liability for the acts of other parties that are not
in accordance with the provisions hereof.



     (b) The rights, duties and liabilities of the Indenture Trustee in respect of the Receivables
and this Indenture, in addition to those set forth in Section 5.01(a), shall be as follows:



48









 






     (i) except during the continuance of an Event of Default with respect to the Notes,
the Indenture 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 Indenture Trustee; and




     (ii) the Indenture Trustee may, in the absence of bad faith on its part, conclusively
rely, as to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Indenture 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 Indenture
Trustee, the Indenture Trustee shall be under a duty to examine the same to determine
whether or not they conform on their face to the requirements of this Indenture, to the
extent expressly set forth herein.



     (c) Subject to Section 4.12 hereof, in case an Event of Default actually known to the
Indenture Trustee with respect to the Notes has occurred and is continuing, the Indenture Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.



     (d) No provision of this Indenture shall be construed to relieve the Indenture Trustee from
liability for its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that




     (i) this subsection shall not be construed to limit the effect of subsections (a), (b)
or (c) of this Section; (ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be proved that the
Indenture Trustee was negligent in ascertaining the pertinent facts;




     (ii) the Indenture Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the directions of the Majority
Noteholders, relating to the time, method and place of conducting any proceeding for any
remedy available to the Indenture Trustee, or exercising any trust or power conferred upon
the Indenture Trustee, under this Indenture with respect to the Notes; and




     (iii) the Indenture Trustee shall not be charged with knowledge of a default in the
observance of any covenant contained in Section 9.06 or Section 9.07 unless either (i) a
Responsible Officer of the Indenture Trustee shall have actual knowledge of such default or
(ii) written notice of such default shall have been given by the Issuer or by any
Noteholder to and received by a Responsible Officer of the Indenture Trustee.



     Section 5.02. Notice of Defaults.



     (a) The Indenture Trustee, promptly but not later than two (2) Business Days after a
Responsible Officer of the Indenture Trustee acquires actual knowledge of the occurrence of any
Event of Default or any event which, after notice or lapse of time would become an Event of Default
with respect to the Notes, shall notify the Issuer, the Noteholders and the Agent of any



49









 







such event, unless all such events known to the Indenture Trustee shall have been cured before the
giving of such notice or unless the same is rescinded and annulled, or waived by the Noteholders
pursuant to Section 4.02 or Section 4.12. For the purpose of this Section 5.02, the term “default”
means any event which is, or after notice or lapse of time or both would become, an Event of
Default with respect to the Notes.



     (b) The Indenture Trustee also agrees, promptly but no later than two (2) Business Days after
a Responsible Officer of the Indenture Trustee acquires actual knowledge of the occurrence of any
default or event of default under the Receivables Purchase Agreement, to notify the Issuer, the
Noteholders and the Agent of such default or event of default.



     Section 5.03. Certain Rights of Indenture Trustee.



     Subject to the provisions of Section 5.01, in connection with this Indenture:



     (a) the Indenture Trustee may request and rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties as may be required by such party or
parties pursuant to the terms of this Indenture;



     (b) any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by
an Issuer Request or Issuer Order;



     (c) whenever in the administration of this Indenture the Indenture Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or omitting any action
hereunder, the Indenture Trustee (unless other evidence be herein specifically prescribed) may, in
the absence of bad faith on its part, rely upon an Officer’s Certificate;



     (d) the Indenture Trustee may consult with counsel and the advice of such counsel or any
Opinion of Counsel rendered thereby shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon;



     (e) the Indenture Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Noteholders pursuant to
this Indenture, unless such Noteholders shall have offered to the Indenture Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction;



     (f) the Indenture Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, note, debenture, note, coupon, other evidence of indebtedness
or other paper or document, but the Indenture Trustee in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if the Indenture
Trustee shall determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Issuer, personally or by agent or attorney;



50









 





     (g) the Indenture Trustee may, subject to Section 5.04, execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through agents or attorneys of
the Indenture Trustee, provided that it shall remain liable for the acts of all such attorneys and
agents;



     (h) the Indenture Trustee shall not be required to provide any surety or note of any kind in
connection with the execution or performance of its duties hereunder;



     (i) except with respect to the representations made by it in Section 5.06, the Indenture
Trustee shall not make any representations as to the validity or sufficiency of this Indenture; and



     (j) the Indenture Trustee shall not at any time have any responsibility or liability with
respect to the legality, validity or enforceability of the Receivables other than its failure to
act in accordance with the terms of this Indenture.



     None of the provisions contained in this Indenture shall in any event require the Indenture
Trustee to expend or risk its own funds or otherwise incur personal financial liability in the
performance of any of its duties hereunder or in the exercise of any of its rights or powers
hereunder if there are reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.



     Section 5.04. Compensation and Reimbursement.



     (a) Subject to Section 5.04(b), the Issuer hereby agrees:




     (1) to pay or cause to be paid to the Indenture Trustee on a monthly basis, the
Indenture Trustee Fee as compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the compensation of
a trustee of an express trust) and all reasonable expenses (including the reasonable
expenses of its counsel), disbursements and advances incurred or made by the Indenture
Trustee in connection with this Indenture, the Receivables or the Notes, provided that the
Issuer shall have no obligation to pay the Indenture Trustee’s overhead or other internal
costs or expenses;




     (2) to reimburse, indemnify and hold harmless the Indenture Trustee and any director,
officer, employee, agent, Affiliate or Control Person of the Indenture Trustee for any
loss, liability, expense or disbursements (including without limitation costs and expenses
of litigation, and of investigation, reasonable counsel fees, damages, judgments and
amounts paid in settlement) incurred in connection with the acceptance of performance of
the trusts and duties by the Indenture Trustee with respect to this Indenture, the
Receivables or the Notes (other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of duties, or as may arise
from a breach of any representation or warranty of the Indenture Trustee set forth herein).



     With respect to any third party claim:



51









 






     (i) the Indenture Trustee shall give the Issuer, the Noteholders and the Agent written
notice thereof promptly after the Indenture Trustee shall have knowledge thereof;




     (ii) while maintaining control over its own defense, the Indenture Trustee shall
cooperate and consult fully with the Issuer in preparing such defense; and




     (iii) notwithstanding the foregoing provisions of this Section 5.04(a), the Indenture
Trustee shall not be entitled to reimbursement out of the Note Payment Account for
settlement of any such claim by the Indenture Trustee entered into without the prior
consent of the Issuer, which consent shall not be unreasonably withheld or delayed.



     The Indenture Trustee agrees to fully perform its duties under this Indenture notwithstanding
any failure on the part of the Issuer to make any payments, reimbursements or indemnifications to
the Indenture Trustee pursuant to this Section 5.04(a); provided, however, that (subject to
Sections 5.04(b) and 5.04(c)) nothing in this Section 5.04 shall be construed to limit the exercise
by the Indenture Trustee of any right or remedy permitted under this Indenture in the event of the
Issuer’s failure to pay any sums due the Indenture Trustee pursuant to this Section 5.04.



     (b) The obligations of the Issuer set forth in Section 5.04(a) are nonrecourse obligations
solely of the Issuer and will be payable only from the Trust Estate in accordance with Section
2.10(c). The Indenture Trustee hereby agrees that it has no rights or claims against the Issuer
directly and shall only look to the Trust Estate to satisfy the Issuer’s obligations under Section
5.04(a). The Indenture Trustee also hereby agrees not to file or join in filing any petition in
bankruptcy or commence any similar proceeding in respect of the Issuer.



     Section 5.05. Corporate Indenture Trustee Required; Eligibility.



     The Issuer hereby agrees, for the benefit of the Noteholders, that there shall at all times be
an Indenture Trustee hereunder which shall be a bank (within the meaning of Section 2(a)(5) of the
1940 Act) organized and doing business under the laws of the United States or any state thereof,
authorized under such laws to exercise corporate trust powers, having aggregate capital, surplus
and undivided profits of at least $100,000,000, and subject to supervision or examination by
federal or state authority, the long term debt of which is rated not lower than “A” by any Rating
Agency. If such bank 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, surplus and undivided profits of such bank shall be deemed to be its combined
capital, surplus and undivided profits as set forth in its most recent report of condition so
published. The Indenture Trustee shall at all times meet the requirements of Section 26(a)(1) of
the 1940 Act and shall in no event be an Affiliate of the Issuer or an Affiliate of any Person
involved in the organization or operation of the Issuer or be directly or indirectly controlled by
the Issuer. If at any time a Responsible Officer of the Indenture Trustee becomes aware that the
Indenture Trustee has ceased to be eligible in accordance with the provisions of this Section 5.05,
it shall resign immediately in the manner and with the effect hereinafter specified in this
Article.



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     Section 5.06. Authorization of Indenture Trustee.



     The Indenture Trustee represents and warrants as to itself: that it is duly authorized under
applicable federal law and the law of the state of its organization, its charter and its by-laws to
execute and deliver this Indenture, and to perform its obligations hereunder, including, without
limitation, that it is duly authorized to accept the Grant to it for the benefit of the Noteholders
of the Trust Estate and is authorized to authenticate the Notes, and that all corporate action
necessary or required therefor has been duly and effectively taken or obtained and all federal and
state governmental consents and approvals required with respect thereto have been obtained.



     Section 5.07. Merger, Conversion, Consolidation or Succession to Business.



     Any corporation, bank, trust company or association into which the Indenture Trustee may be
merged or converted or with which it may be consolidated, or any corporation, bank, trust company
or association resulting from any merger, conversion or consolidation to which the Indenture
Trustee shall be a party, or any corporation, bank, trust company or association succeeding to all
or substantially all the corporate trust business of the Indenture Trustee, shall be the successor
of the Indenture Trustee hereunder, provided such corporation, bank, trust company or association
shall be otherwise qualified and eligible under this Article V, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.



     Section 5.08. Resignation and Removal; Appointment of Successor.



     (a) No resignation or removal of the Indenture Trustee and no appointment of a successor
Indenture Trustee pursuant to this Article V shall become effective until (i) the acceptance of
appointment by the successor Indenture Trustee in accordance with the applicable requirements of
Section 5.09 and (ii) repayment to the predecessor Indenture Trustee of all unpaid fees and
expenses.



     (b) The Indenture Trustee may resign at any time by giving written notice thereof to the
Issuer and the Agent. If the respective instruments of acceptance by a successor Indenture Trustee
required by Section 5.09 shall not have been delivered to each such party within 30 days after the
giving of such notice of resignation, the resigning Indenture Trustee may petition any court of
competent jurisdiction for the appointment of their respective successors.



     (c) The Indenture Trustee may be removed at any time by the Majority Noteholders and notice of
such action by the Noteholders shall be delivered to the Indenture Trustee and the Issuer.



     (d) If at any time:




     (i) the Indenture Trustee shall cease to be eligible under Section 5.05, or the
representations of the Indenture Trustee in Section 5.06 shall prove to be untrue in any
material respect, and the Indenture Trustee shall fail to resign after written request
therefor by the Issuer or Noteholders of 10% of the aggregate Note Principal Balance of the
Outstanding Notes; or



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


then, in any such case, (i) the Issuer may remove the Indenture Trustee, or (ii) subject to Section
4.13, any Noteholder may, on its own behalf and on behalf of all others similarly situated,
petition any court of competent jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee.




     (e) If the Indenture Trustee shall resign, be removed or become incapable of acting, or if a
vacancy shall occur in the office of Indenture Trustee for any cause, the Issuer shall promptly
remove the Indenture Trustee and appoint a successor Indenture Trustee, subject to the Agent’s
consent, who shall comply with the applicable requirements of Section 5.09. If, within 60 days
after such resignation, removal or incapacity, or the occurrence of such vacancy, a successor
Indenture Trustee shall not have been appointed by the Issuer and shall not have accepted such
appointment in accordance with the applicable requirements of Section 5.09, then a successor
Indenture Trustee shall be appointed by the Majority Noteholders by notice delivered to the Issuer
and the retiring Indenture Trustee, and the successor Indenture Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the applicable requirements of
Section 5.09, become the successor Indenture Trustee with respect to the Notes.



     If, within 120 days after such resignation, removal or incapacity, or the occurrence of such
vacancy, no successor Indenture Trustee shall have been so appointed and accepted appointment in
the manner required by Section 5.09, the resigning Indenture Trustee may, on its own behalf and on
behalf of all others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.



     (f) The Issuer shall give notice of any resignation or removal of the Indenture Trustee and
the appointment of a successor Indenture Trustee by giving notice of such event to the Noteholders.
Each notice shall include the name of the successor Indenture Trustee and the address of its
Corporate Trust Office.



     Section 5.09. Acceptance of Appointment by Successor.



     In case of the appointment hereunder of a successor Indenture Trustee, the successor Indenture
Trustee so appointed shall execute, acknowledge and deliver to the Issuer and to the retiring
Indenture Trustee an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Indenture Trustee shall become effective and such successor Indenture
Trustee without any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Indenture Trustee; but, on the request of the Issuer or
the successor Indenture Trustee such retiring Indenture Trustee shall, upon payment of each of its
fees and expenses, execute and deliver an instrument transferring to such successor Indenture
Trustee all the rights, powers and trusts of the retiring Indenture Trustee shall duly assign,
transfer and deliver to such successor Indenture Trustee all property and money held by such
retiring Indenture Trustee hereunder, shall take such action as may be



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requested by the Administrator on behalf of the Issuer to provide for the appropriate interest in
the Trust Estate to be vested in such successor Indenture Trustee, but shall not be responsible for
the recording of such documents and instruments as may be necessary to give effect to the
foregoing.



     Upon request of any such successor Indenture Trustee, the Issuer shall execute any and all
instruments for more fully and certainly vesting in and confirming to such successor Indenture
Trustee all such rights, powers and trusts referred to in this Section 5.09.



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



     Section 5.10. Unclaimed Funds.



     The Indenture Trustee is required to hold any payments received by it with respect to the
Notes that are not paid to the Noteholders in trust for the Noteholders. Notwithstanding the
foregoing, at the expiration of two years following the Final Payment Date for the Notes, any
monies set aside in accordance with Section 2.10(b) for payment of principal, interest and other
amounts on such Notes remain unclaimed by any lawful owner thereof, such unclaimed funds and, to
the extent required by applicable law, any accrued interest thereon shall be remitted to the Issuer
to be held in trust by the Issuer for the benefit of the applicable Noteholder until distributed in
accordance with applicable law, and all liability of the Indenture Trustee with respect to such
money shall thereupon cease; provided, that the Indenture Trustee, before being required to make
any such repayment, may, at the expense of the applicable Noteholder, payable out of such unclaimed
funds, to the extent permitted by applicable law, and otherwise at the expense of the Issuer, cause
to be published at least once but not more than three times in two newspapers in the English
language customarily published on each Business Day and of general circulation, in New York, New
York, a notice to the effect that such monies remain unclaimed and have not been applied for the
purpose for which they were deposited, and that after a date specified therein, which shall be not
less than 30 days after the date of first publication of said notice, any unclaimed balance of such
monies then remaining in the hands of the Indenture Trustee will be paid to the Issuer upon its
written directions to be held in trust for the benefit of the applicable Noteholder until
distributed in accordance with applicable law. Any successor to the Issuer through merger,
consolidation or otherwise or any recipient of substantially all the assets of the Issuer in a
liquidation of the Issuer shall remain liable for the amount of any unclaimed balance paid to the
Issuer pursuant to this Section 5.10.



     Section 5.11. Illegal Acts.



     No provision of this Indenture or any amendment or supplement hereto shall be deemed to impose
any duty or obligation on the Indenture Trustee to do any act in the performance of its duties
hereunder or to exercise any right, power, duty or obligation conferred or imposed on it, which
under any present or future law shall be unlawful, or which shall be beyond the corporate powers,
authorization or qualification of the Indenture Trustee.



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     Section 5.12. Communications by the Indenture Trustee.



     The Indenture Trustee shall send to the Issuer, within one Business Day after the Maturity
Date thereof, if any principal of or interest on such Notes due and payable hereunder is not paid,
a written demand for payment thereof.



     Section 5.13. Separate Indenture Trustees and Co-Trustees.



     (a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of
meeting legal requirements applicable to it in the performance of its duties hereunder, the
Indenture Trustee shall have the power to, and shall execute and deliver all instruments to,
appoint one or more Persons to act as separate trustees or co-trustees hereunder, jointly with the
Indenture Trustee, of any of the Trust Estate subject to this Indenture, and any such Persons shall
be such separate trustee or co-trustee, with such powers and duties consistent with this Indenture
as shall be specified in the instrument appointing such Person but without thereby releasing the
Indenture Trustee from any of its duties hereunder. If the Indenture Trustee obtains the consent of
the Agent and the Issuer to the retention of any such separate trustee or co-trustee, the Indenture
Trustee shall not be responsible for any fees or expenses of any such separate trustee or
co-trustee. If the Indenture Trustee shall request the Issuer to do so, the Issuer shall join with
the Indenture Trustee in the execution of such instrument, but the Indenture Trustee shall have the
power to make such appointment without making such request. A separate trustee or co-trustee
appointed pursuant to this Section 5.13 need not meet the eligibility requirements of Section 5.05.



     (b) Every separate trustee and co-trustee shall, to the extent not prohibited by law, be
subject to the following terms and conditions:




     (i) the rights, powers, duties and obligations conferred or imposed upon such separate
or co-trustee shall be conferred or imposed upon and exercised or performed by the
Indenture Trustee and such separate or co-trustee jointly, as shall be provided in the
appointing instrument, except to the extent that under any law of any jurisdiction in which
any particular act is to be performed any nonresident 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 separate trustee or co-trustee;




     (ii) all powers, duties, obligations and rights conferred upon the Indenture Trustee,
in respect of the custody of all cash deposited hereunder shall be exercised solely by the
Indenture Trustee; and




     (iii) the Indenture Trustee may at any time by written instrument accept the
resignation of or remove any such separate trustee or co-trustee, and, upon the request of
the Indenture Trustee, the Issuer shall join with the Indenture Trustee in the execution,
delivery and performance of all instruments and agreements necessary or proper to make
effective such resignation or removal, but the Indenture Trustee shall have the power to
accept such resignation or to make such removal without making such request. A successor to
a separate trustee or co-trustee so resigning or removed may be appointed in the manner
otherwise provided herein.



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     (c) Such separate trustee or co-trustee, upon acceptance of such trust, shall be vested with
the estates or property specified in such instrument, jointly with the Indenture Trustee, and the
Indenture Trustee shall take such action as may be necessary to provide for (i) the appropriate
interest in the Trust Estate to be vested in such separate trustee or co-trustee, (ii) the
execution and delivery of any transfer documentation or note powers that may be necessary to give
effect to transfer of the Receivables to the co-trustee. Any separate trustee or co-trustee may, at
any time, by written instrument, constitute the Indenture Trustee its agent or attorney in fact
with full power and authority, to the extent permitted by law, to do all acts and things and
exercise all discretion authorized or permitted by it, for and on behalf of it and in its name. If
any separate trustee or co-trustee shall be dissolved, become incapable of acting, resign, be
removed or die, all the estates, property, rights, powers, trusts, duties and obligations of said
separate trustee or co-trustee, so far as permitted by law, shall vest in and be exercised by the
Indenture Trustee, without the appointment of a successor to said separate trustee or co-trustee,
until the appointment of a successor to said separate trustee or co-trustee is necessary as
provided in this Indenture.



     (d) Any notice, request or other writing, by or on behalf of any Noteholder, delivered to the
Indenture Trustee shall be deemed to have been delivered to all separate trustees and co-trustees.



     (e) Although co-trustees may be jointly liable, no co-trustee or separate trustee shall be
severally liable by reason of any act or omission of the Indenture Trustee or any other such
trustee hereunder.



ARTICLE VI




REPORTS TO NOTEHOLDERS




     Section 6.01. Reports to Noteholders and Others.



     (a) Based on information provided to the Indenture Trustee by the Servicer pursuant to the
Pooling and Servicing Agreements and the Transaction Documents, the Indenture Trustee shall
prepare, or cause to be prepared, and deliver by first class mail or electronic means on each
Payment Date, or as soon thereafter as is practicable, to the Issuer, any Interested Person, each
Noteholder and Certificateholder or any of their designees (the “Interested Parties”) a statement
in respect of the payments made on such Payment Date setting forth the information set forth in
Exhibit F hereto (the “Trustee Report”). On each Payment Date, the Indenture Trustee shall make
the Trustee Report available each month to the Agent and Interested Parties via the Indenture
Trustee’s internet website. The Indenture Trustee’s internet website shall initially be located at
www.ctslink.com which may be accessed by Interested Parties with the use of an assigned password.
The Indenture Trustee shall provide reasonable assistance in using the website to users that call
the Indenture Trustee’s customer service desk at (866) 846-4526. Parties that are unable to use the
above distribution options are entitled to have a paper copy mailed to them via first class mail by
calling the customer service desk and indicating the need for assistance.



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     (b) Within a reasonable period of time after the end of each calendar year, upon request
unless required pursuant to the Code, (but in no event more than 60 days following the end of such
calendar year), the Indenture Trustee shall prepare, or cause to be prepared, and mail to each
Person who at any time during the calendar year was a Noteholder (i) a statement containing the
aggregate amount of principal and interest payments on the Notes for such calendar year or
applicable portion thereof during which such person was a Noteholder and (ii) such other customary
information as the Indenture Trustee deems necessary or desirable for Noteholders to prepare their
federal, state and local income tax returns. The obligations of the Indenture Trustee in the
immediately preceding sentence shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Indenture Trustee pursuant to any
requirements of the Code. As soon as practicable following the request of any Noteholder in
writing, the Indenture Trustee shall furnish to such Noteholder such information regarding the
Receivables as such holder may reasonably request.



     Section 6.02. Servicer Reports.



     (a) By no later than the second Business Day before each Payment Date, the Servicer shall
deliver to the Issuer, the Indenture Trustee, the Agent and the Verification Agent a report in the
form of Exhibit C hereto (the “Monthly Servicer Report”) (in electronic form) listing each Event of
Default, Funding Termination Event and Securitization Termination Event for each Securitization
Trust with a yes or no answer beside each indicating whether each possible Event of Default,
Funding Termination Event and Securitization Termination Event has occurred as of the end of the
preceding Collection Period, the information described in Exhibit C with respect to the Aggregate
Receivables and the Securitization Trusts.



     (b) In addition, no later than the second Business Day before each Payment Date, the Servicer
shall deliver to the Issuer, the Indenture Trustee, the Verification Agent and the Agent a report
in substantially the form of Exhibit D hereto (the “Payment Date Report”) containing the
information described in Exhibit D. Each Payment Date Report shall also (A) state the aggregate
Collateral Value as of the end of the preceding Collection Period and (B) demonstrate that the
Collateral Coverage Requirement was met at such time and (C) contain any other information
necessary for the Indenture Trustee to make the payments required by Section 2.10 on such Payment
Date and all information necessary for the Indenture Trustee to send statements to Noteholders
pursuant to Section 6.01(a) and such additional information as may be reasonably requested by the
Indenture Trustee, the Agent or the Verification Agent from time to time.



     (c) By no later than 7:00 PM Eastern time two Business Days prior to each Funding Date (or,
with respect to any Funding Date described in clause (iii) of the definition thereof, by no later
than 7:00 PM Eastern time one (1) Business Day prior to each such Funding Date), the Servicer shall
deliver to the Issuer, the Indenture Trustee, the Verification Agent and the Agent a report in
substantially the form of Exhibit E hereto (each, a “Funding Date Report”) containing the
information described in Exhibit E and (A) listing all Additional Receivables to be purchased as of
the close of business on such Funding Date (summarized in each case by Pool-Level Advances,
Loan-Level Advances and Servicing Advances for each Securitization Trust at such date and including
each Loan-Level Advance and Servicing Advance by loan number and (B) stating the aggregate amount
of the Cash Purchase Price to be paid on the Funding Date.



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     (d) Notwithstanding anything contained herein to the contrary, none of the Verification Agent
(except as described in the Verification Agent Letter), the Indenture Trustee nor the Agent shall
have any obligation to verify or recalculate any information provided to them by the Servicer.



     Section 6.03. Access to Certain Information.



     (a) The Indenture Trustee shall afford to the Issuer, the Agent, the Servicer, the Seller and
any Holder or Holders of Notes, and to the OTS, the FDIC and any other banking or insurance
regulatory authority that may exercise authority over any Noteholder, access to any documentation
regarding the Receivables within its control that may be required to be provided by this Indenture
or by applicable law. Such access shall be afforded without charge but only upon reasonable prior
written request and during normal business hours at the offices of the Indenture Trustee designated
by it.



     (b) The Indenture Trustee shall maintain at its office primarily responsible for
administration of the Trust Estate and shall deliver to the Issuer, the Servicer, the Seller, the
Agent and any Noteholder or Person identified to the Indenture Trustee as a prospective transferee
of a Note or an interest therein (at the reasonable request and expense of the requesting party),
copies of the following items (to the extent that such items have been delivered to the Indenture
Trustee or the Indenture Trustee can cause such items to be delivered to it without unreasonable
burden or expense): (i) this Indenture, the Receivables Purchase Agreement and any amendments
hereto or thereto; (ii) all reports prepared by, and all reports delivered to, the Indenture
Trustee or the Servicer since the Closing Date; (iii) all Officer’s Certificates delivered by the
Servicer since the Closing Date and all Officer’s Certificates delivered by the Issuer since the
Closing Date pursuant to Section 9.08 of this Indenture; (iv) all accountants’ reports caused to be
delivered by the Servicer since the Closing Date; and (v) each of the Receivables Files. The
Indenture Trustee shall make available copies of any and all of the foregoing items upon request of
any party set forth in the previous sentence. However, the Indenture Trustee shall be permitted to
require of such party the payment of a sum sufficient to cover the reasonable costs and expenses of
providing such copies as are requested by such party.



ARTICLE VII




FUNDING ACCOUNT; PURCHASE OF ADDITIONAL RECEIVABLES




     Section 7.01. Funding Account.



     On each Funding Date, the Indenture Trustee shall deposit or cause to be deposited into the
Funding Account based on the information set forth in the Funding Date Report: (i) the amount of
any Additional Note Balances purchased by the Note Purchasers pursuant to the Note Purchase
Agreement on such Funding Date (to the extent that the Excess Amount is insufficient to pay the
Cash Purchase Price with respect to the Additional Receivables to be acquired by the Issuer on such
Funding Date); and (ii) subject to Section 2.10(d), the Excess Amount, if any, on deposit in the
Reimbursement Account to the extent required to fund the Cash Purchase Price of the Additional
Receivables on such Funding Date. On each Funding Date, subject to satisfaction of the Funding
Conditions and the other requirements of Section 7.02, the Indenture Trustee shall



59









 







withdraw from the Funding Account and pay to the Servicer the Cash Purchase Price for the
Additional Receivables to be acquired by the Issuer on such Funding Date.



     Section 7.02. Purchase of Additional Receivables.



     Two Business Days prior to each Funding Date, the Seller shall deliver a Funding Notice and,
pursuant to Section 6.02(c), a Funding Date Report to the Indenture Trustee and the Agent. The
Seller shall certify in the Funding Notice that the Funding Conditions set forth in clauses (ii),
(iv), (v), (vi), (vii), (viii), (xii), (xiii) (with respect to Sections 3.01(a)(ii), (iii) and (iv)
of the Note Purchase Agreement) and (xiv) of this Section 7.02 have been satisfied and, on the
Funding Date, the Seller shall re-certify that such Funding Conditions are satisfied. Upon receipt
of the Funding Notice and Funding Date Report by the Indenture Trustee and confirmation by the
Indenture Trustee that the Funding Conditions set forth in clauses (i) (as to the Indenture
Trustee’s receipt), (iii), (iv) (based on the Funding Notice), (ix), (x), (xi) and (xii) of this
Section 7.02 have been satisfied on or prior to such Funding Date (provided that with respect to
conditions (i), (iii) and (xii), that the Indenture Trustee has not received notice from the Agent
or any Noteholder that such condition has not been satisfied), on the Funding Date the Indenture
Trustee shall apply funds on deposit in the Funding Account in the manner specified in Section 7.01
with respect to such Additional Receivables, provided that the Indenture Trustee shall not fund the
Cash Purchase Price of the Additional Receivables if it receives notice from the Issuer or the
Agent that any of the Funding Conditions have not been satisfied. In the event that the Indenture
Trustee determines that any of the Funding Conditions set forth conditions in clauses (i), (iii),
(iv)(based on the information set forth in the Funding Notice), (ix), (x), (xi) and (xii) of this
Section 7.02 have not been satisfied on or prior to such Funding Date, the Indenture Trustee shall
promptly notify the Seller and the Agent.



     The funding by the Indenture Trustee of the Cash Purchase Price with respect to any Additional
Receivable shall be subject to the satisfaction on the related Funding Date of the following
conditions precedent (the “Funding Conditions”):




     (i) the Issuer shall have delivered (or caused to be delivered) to the Indenture
Trustee and the Agent the related Schedule of Additional Receivables along with the
applicable Funding Notice and Bill of Sale pursuant to the Receivables Purchase Agreement;




     (ii) as of such Funding Date, neither the Seller nor the Issuer shall (A) be
insolvent, (B) be made insolvent by the transfer of the related Receivables or (C) have
reason to believe that its insolvency is imminent;




     (iii) the Funding Period shall not have terminated;




     (iv) as of such Funding Date (after giving effect to the transfer of the related
Additional Receivables on such Funding Date), the Collateral Coverage Requirement shall be
satisfied;




     (v) each of the representations and warranties made by the Seller under the
Receivables Purchase Agreement with respect to the related Receivables shall be true and



60









 







correct in all material respects as of such Funding Date (or, as of the date of conveyance of the
related Additional Receivable with respect to the representations and warranties set forth in
Sections 6.01(r)(iv), (v), (x) and (xi) of the Receivables Purchase Agreement) with the same effect
as if then made and each of the Seller and the Issuer shall have performed all obligations to be
performed by it under the Transaction Documents on or prior to such Funding Date;




     (vi) the Seller or the Issuer shall have taken any action requested by the Indenture Trustee
or the Noteholders required to maintain the ownership interest of the Issuer and the first priority
lien of the Indenture Trustee in the Trust Estate;




     (vii) all conditions precedent to the transfer of the related Additional Receivable pursuant
to the Receivables Purchase Agreement shall have been fulfilled as of such Funding Date;




     (viii) if any Additional Note Balance is being purchased in respect of such Funding Date, the
conditions precedent to the Note Purchasers’ purchase of Additional Note Balance set forth in
Section 3.01 of the Note Purchase Agreement shall have been fulfilled as of such Funding Date;




     (ix) sufficient funds are on deposit in the Funding Account (including, without limitation,
proceeds of purchase by Noteholders of Additional Note Balances) to pay the full Cash Purchase
Price with respect to such Additional Receivable;




     (x) the Indenture Trustee has received confirmation from the Verification Agent that the
verification procedures have been performed in accordance with the Verification Agent letter to the
satisfaction of the Verification Agent;




     (xi) commencing with the first Funding Date after the Initial Funding Date, an amount equal to
not less than the Expense Reserve is on deposit in the Reimbursement Account (after taking into
account the purchase of such Additional Receivable);




     (xii) the Note Principal Balance is equal to or less than the Maximum Note Balance, after
taking into account the purchase of such Additional Receivable;




     (xiii) a Funding Interruption Event shall not have occurred and be continuing; and




     (xiv) the Additional Receivable does not relate to a Securitization Trust for which a
Securitization Termination Event has occurred and such event has not been waived by the Agent.



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ARTICLE VIII




SUPPLEMENTAL INDENTURES; AMENDMENTS




     Section 8.01. Supplemental Indentures or Amendments Without Consent of Noteholders.



     Without the consent of the Noteholders but with the consent of the Agent and Option One (for
so long as it holds any interest in the trust), the Issuer and the Indenture Trustee, at any time
and from time to time, may enter into one or more indentures supplemental hereto, or one or more
amendments hereto or to the Notes or the Receivables Purchase Agreement, for any of the following
purposes:




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




     (2) to correct any manifestly incorrect description, or amplify the description, of
any property subject to the lien of this Indenture;




     (3) to modify the Indenture or the Receivables Purchase Agreement as required by, or
made necessary by any change in, applicable law; or




     (4) to correct any mistake or typographical error or cure any ambiguity, or to cure,
correct or supplement any defective or inconsistent provision herein or in the Notes or the
Receivables Purchase Agreement.



     No such supplemental indenture or amendment shall be effective unless (i) the Issuer obtains a
Tax Opinion and obtains an Opinion of Counsel to the effect that such supplemental indenture or
amendment would not cause the Notes to be characterized other than as indebtedness for federal
income tax purposes or cause the Notes to be deemed to have been exchanged for a new debt
instrument pursuant to Treasury Regulation §1.1001-3, and furnishes each such Opinion of Counsel to
the Indenture Trustee in connection therewith, and (ii) with respect to the clauses (1), (3) and
(4) above, the party requesting such supplemental indenture or amendment furnishes to the Indenture
Trustee and the Issuer an Opinion of Counsel that, such action will not adversely affect the
interests of Noteholders under this Indenture in any material way.



     Section 8.02. Supplemental Indentures With Consent of Noteholders.



     With the consent of the Noteholders of not less than 66 2/3% in aggregate Note Principal
Balance of the Outstanding Notes materially affected thereby and Option One (for so long as it
holds any interest in the trust), the Issuer and the Indenture Trustee may enter into one or more
indentures supplemental hereto, or one or more amendments hereto or to the Notes or the Receivables
Purchase Agreement, for the purpose of adding any provisions hereto or thereto, changing in any
manner or eliminating any of the provisions hereof or thereof, modifying in any manner the rights
of the Noteholders hereunder or thereunder or evidencing and providing for the acceptance of
appointment by a successor Indenture Trustee or Servicer; provided that no such



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supplemental indenture or amendment shall be effective unless the Issuer obtains a Tax Opinion and
obtains an Opinion of Counsel to the effect that such supplemental indenture or amendment would not
cause the Notes to be characterized other than as indebtedness for federal income tax purposes or
cause the Notes to be deemed to have been exchanged for a new debt instrument pursuant to Treasury
Regulation §1.1001-3 and, furnishes each such Opinion of Counsel to the Indenture Trustee in
connection therewith; and provided, further, that no such supplemental indenture or amendment
shall, without the consent of the Noteholders of 100% in aggregate Note Principal Balance of the
Outstanding Notes affected thereby,




     (1) change the Maturity Date or the Payment Date of any principal, interest or other
amount on any Note, or reduce the Note Principal Balance thereof or the Floating Rate
thereon, or authorize the Indenture Trustee to agree to delay the timing of, or reduce the
payments to be made on or in respect of, the Receivables except as provided herein or in
the Receivables Purchase Agreement, or change the coin or currency in which the principal
of any Note or interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Maturity Date thereof;




     (2) reduce the percentage of the then aggregate Note Principal Balance of the
Outstanding Notes, the consent of whose Noteholders is required for any such supplemental
indenture or amendment, or the consent of whose Noteholders is required for any waiver of
defaults hereunder and their consequences provided for in this Indenture, or for any other
reason under this Indenture (including for actions taken by the Indenture Trustee pursuant
to Section 5.01(a) hereof);




     (3) change any obligation of the Issuer to maintain an office or agency in the places
and for the purposes specified in Section 9.01;




     (4) except as otherwise expressly provided in this Indenture, deprive any Noteholder
of the benefit of a first priority security interest in the Trust Estate as provided in
this Indenture;




     (5) modify Section 2.10; or




     (6) release from the lien of the Indenture (except as specifically permitted hereby on
the date of execution hereof) all or any part of the Trust Estate.



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



     Section 8.03. Delivery of Supplements and Amendments.



     Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental
indenture or amendment pursuant to the provisions hereof, the Indenture Trustee, at the expense of
the Issuer payable out of the Trust Estate pursuant to Section 5.04, shall furnish a notice setting
forth in general terms the substance of such supplemental indenture or amendment to each Noteholder
at the address for such Noteholder set forth in the Note Register.



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     Section 8.04. Execution of Supplemental Indentures, etc.



     In executing, or accepting the additional trusts created by, any supplemental indenture or
amendment permitted by this Article VIII or in accepting the modifications thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to receive, at the Issuer’s
expense payable out of the Trust Estate pursuant to Section 5.04, and shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture,
amendment or modification is authorized or permitted by this Indenture. The Indenture Trustee may,
but shall not be obligated to, enter into any such supplemental indenture or amendment or consent
to any such modification which affects the Indenture Trustee’s own rights, duties or immunities
under this Indenture or otherwise.



ARTICLE IX




COVENANTS; WARRANTIES




     Section 9.01. Maintenance of Office or Agency.



     The Issuer shall maintain or cause to be maintained an office or agency in the continental
United States where notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer shall give prompt written notice to the Indenture Trustee and
the Noteholders of the location, and any change in the location, of such office or agency.



     The Issuer may also from time to time designate one or more other offices or agencies outside
the United States where the Notes may be presented or surrendered for any or all such purposes and
may from time to time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency
in accordance with the requirements set forth in the preceding paragraph. The Issuer shall give
prompt written notice to the Indenture Trustee, Noteholders of any such designation or rescission
and of any change in the location of such office or agency.



     Section 9.02. Existence.



     Subject to Section 9.08, the Issuer will keep in full effect its existence, rights and
franchises under the laws of its jurisdiction of organization, and the existence, rights and
franchises (if any) of the Issuer under the laws of its jurisdiction of organization.



     Section 9.03. Payment of Taxes and Other Claims.



     The Issuer shall pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, all taxes, assessments and governmental charges levied or imposed upon the
Issuer or upon the income, profits or property of the Issuer, or shown to be due on the tax returns
filed by the Issuer, except any such taxes, assessments, governmental charges or claims which the
Issuer is in good faith contesting in appropriate proceedings and with respect to which reserves
are established if required in accordance with GAAP, provided, that such failure to pay or
discharge will not cause a forfeiture of, or a lien to encumber, any property included in the Trust
Estate. The Indenture Trustee is authorized to pay out of the Note Payment Account, prior



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to making payments on the Notes, any such taxes, assessments, governmental charges or claims which,
if not paid, would cause a forfeiture of, or a lien to encumber, any property included in the Trust
Estate.



     Section 9.04. Validity of the Notes; Title to the Trust Estate; Lien.



     (a) The Issuer represents and warrants that the Issuer is duly authorized under applicable law
to create and issue the Notes, to execute and deliver this Indenture, the other documents referred
to herein to which it is a party and all instruments included in the Trust Estate which it has
executed and delivered, and that all corporate action and governmental consents, authorizations and
approvals necessary or required therefor have been duly and effectively taken or obtained. The
Notes, when issued, will be, and this Indenture and such other documents are, valid and legally
binding obligations of the Issuer enforceable in accordance with their terms.



     (b) The Issuer represents and warrants that, immediately prior to its Grant of the Trust
Estate provided for herein, it was the sole obligee of each Receivable, free and clear of any
pledge, lien, encumbrance or security interest.



     (c) The Issuer represents and warrants that, upon the issuance of the Notes, the Indenture
Trustee has a valid and enforceable first priority security interest in the Trust Estate, subject
only to exceptions permitted hereby.



     (d) The Issuer represents and warrants that the Indenture is not required to be qualified
under the 1939 Act and that the Issuer is not required to be registered as an “investment company”
under the 1940 Act.



     Section 9.05. Protection of Trust Estate.



     The Issuer and, to the extent directed by the Issuer or the Majority Noteholders, the
Indenture Trustee shall execute and deliver all such amendments and supplements hereto (subject to
Sections 8.01 and 8.02) and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and shall take such other action necessary or advisable
to:



     (a) Grant more effectively all or any portion of the Trust Estate securing the Notes;



     (b) maintain or preserve the lien (and the priority thereof) of this Indenture or carry out
more effectively the purposes hereof;



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



     (d) enforce any of the Receivables included in the Trust Estate; or



     (e) preserve and defend title to the Trust Estate securing the Notes and the rights of the
Indenture Trustee, and of the Noteholders, in the Trust Estate against the claims of all Persons
and parties.



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     The Issuer hereby designates the Indenture Trustee and the Agent, its agent and
attorney-in-fact, to prepare and file any financing statement, continuation statement or other
instrument required pursuant to this Section 9.05; provided that, subject to and consistent with
Section 5.01, neither the Indenture Trustee nor the Agent will be obligated to prepare or file any
such statements or instruments.



     Section 9.06. Nonconsolidation.



     The Issuer shall at all times:



     (a) maintain separate records and books of account from any other person or entity;



     (b) maintain separate bank accounts from any other person or entity;



     (c) maintain its assets in its own name and not commingle its assets with those of any other
person or entity;



     (d) conduct its own business in its own name;



     (e) maintain separate financial statements, showing its assets and liabilities separate and
apart from those of any other person or entity and not have its assets listed on the financial
statements of any other person or entity (other than as required with respect to consolidated
financial statements prepared in accordance with generally accepted accounting principles, and with
respect to any consolidated or combined financial statements having appropriate footnotes
indicating that the Issuer is a separate legal entity);



     (f) pay its own liabilities and expenses only out of its own funds;



     (g) observe all corporate and other organizational formalities;



     (h) maintain an arm’s length relationship with each of its Affiliates;



     (i) pay the salaries of its employees, if any, out of its own funds;



     (j) maintain a sufficient number of employees or engage independent agents, in each case to
the extent reasonably required in light of its contemplated business operations;



     (k) not guarantee, become obligated or pay for the debts of any other entity or person;



     (l) not hold out its credit as being available to satisfy the obligations of any other person
or entity;



     (m) not pledge its assets for the benefit of any other party (except the pledges set forth in
this Indenture);



     (n) hold itself out as a separate entity;



     (o) correct any known misunderstanding regarding its separate identity; and



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     (p) maintain adequate capital in light of its contemplated business operations.



     Section 9.07. Negative Covenants.



     The Issuer shall not:



     (a) sell, transfer, exchange or otherwise dispose of any of the Collateral, except as
expressly permitted by this Indenture;



     (b) dissolve or liquidate in whole or in part, except as provided herein (it being understood
that the payment or repurchase of Receivables does not constitute a partial liquidation within the
meaning of this provision);



     (c) engage, directly or indirectly, in any business other than that arising out of the issue
of the Notes, and the actions contemplated or required to be performed under this Indenture or the
Receivables Purchase Agreement;



     (d) incur, create or assume any indebtedness for borrowed money other than the Notes;



     (e) make or permit to remain outstanding, any loan or advance to, or own or acquire any stock
or securities of, any Person other than the Receivables and any other instruments constituting part
of the Trust Estate, it being understood that the Issuer’s purchase of Receivables does not
constitute lending, making advances or acquiring stock; or



     (f) voluntarily file a petition for bankruptcy, reorganization, assignment for the benefit of
creditors or similar proceeding.



     Section 9.08. Statement as to Compliance.



     The Issuer shall deliver to the Indenture Trustee, Agent and the Noteholders, within 90 days
after the end of each calendar year, an Officer’s Certificate of the Issuer stating that (a), in
the course of the performance by the officer executing such Officer’s Certificate of such officer’s
present duties as an officer of the Issuer, such officer would normally obtain knowledge or have
made due inquiry as to the existence of any condition or event which would constitute an Event of
Default after notice or lapse of time or both and that to the best of the officer’s knowledge, (b)
the Issuer has fulfilled all of its obligations under this Indenture in all material respects
throughout such year, or, if there has been a default in the fulfillment of any such obligation in
any material respect, specifying each such default known to such officer and the nature and status
thereof, and (c) no event has occurred and is continuing which is, or after notice or lapse of time
or both would become, an Event of Default, or, if such an event has occurred and is continuing,
specifying each such event known to such officer and the nature and status thereof.



     Section 9.09. Issuer may Consolidate, Etc., only on Certain Terms.



     (a) The Issuer shall not consolidate or merge with or into any other Person or convey or
transfer the Trust Estate to any Person without the consent of Noteholders with an aggregate




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Note Principal Balance of not less than 66 2/3% of the aggregate Note Principal Balance of the
Outstanding Notes and unless:





     (i) the Person (if other than the Issuer) formed by or surviving such consolidation or
merger or that acquires by conveyance or transfer the Trust Estate (the “Successor
Person”), shall be a Person organized and existing under the laws of the United States of
America or any State and shall have expressly assumed, executed and delivered to the
Indenture Trustee, the obligation (to the same extent as the Issuer was so obligated) to
make payments of principal, interest and other amounts on all of the Notes and pay all
amounts owned by the Issuer under this Indenture, and the obligation to perform every
covenant of this Indenture on the part of the Issuer to be performed or observed, all as
provided herein;




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




     (iii) the Issuer shall have delivered to the Indenture Trustee an Officer’s
Certificate and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance or transfer comply with and satisfy all conditions precedent relating to the
transactions set forth in this Section 9.09;




     (iv) the Successor Person shall have delivered to the Indenture Trustee an Officer’s
Certificate and an Opinion of Counsel each stating that, with respect to a Successor Person
that is a corporation, limited liability company, partnership or trust, such Successor
Person shall be duly organized, validly existing and in good standing in the jurisdiction in
which such Successor Person is organized; that the Successor Person has sufficient power and
authority to assume the obligations set forth in clause (i) above and to execute and deliver
an indenture supplemental hereto for the purpose of assuming such obligation; that the
Successor Person has duly authorized the execution, delivery and performance of an indenture
supplemental hereto for the purpose of assuming such obligations; and that such supplemental
indenture is a valid, legal and binding obligation of the Successor Person, enforceable in
accordance with its terms, subject only to bankruptcy, reorganization, insolvency and other
laws affecting the enforcement of creditor’s rights generally and to general principles of
equity (regardless of whether such enforceability is considered in a proceeding in equity or
law); and that, immediately following the event which causes the Successor Person to become
the Successor Person, (A) the Successor Person has good and marketable title, free and clear
of any lien, security interest or charge other than the lien and security interest of this
Indenture and any other lien permitted hereby, to the Collateral and (B) the Indenture
Trustee continues to have a perfected first priority security interest in the Collateral.



     (b) Upon any consolidation or merger, or any conveyance or transfer of the Trust Estate
securing the Notes, the Successor Person shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same effect as if such
Successor Person had been named as the Issuer herein. In the event of any such conveyance or
transfer of the Trust Estate permitted by this Section 9.09, the Person named as the “Issuer” in
the first paragraph of this Indenture, or any successor that shall theretofore have become such in



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the manner prescribed in this Article and that has thereafter effected such a conveyance or
transfer, may be dissolved, wound-up and liquidated at any time thereafter, and such Person
thereafter shall be released from its liabilities as obligor and maker on all of the then
Outstanding Notes and from its obligations under this Indenture.




     Section 9.10. Purchase of Notes.



     The Issuer may reacquire Notes, in its discretion, by open market purchases in privately
negotiated transactions or otherwise.



     Section 9.11. Indemnification.



          (a) Without limiting any other rights that an Indemnified Party may have
hereunder or under applicable law, the Issuer hereby agrees to indemnify each Indemnified
Party (as defined below) from and against any and all Indemnified Amounts (as defined below),
excluding, however, Indemnified Amounts to the extent resulting from gross negligence or
willful misconduct on the part of such Indemnified Party. To the extent that the foregoing
undertaking to indemnify the Indemnified Parties may be unenforceable because it is violative
of any law or public policy, the Issuer nevertheless shall pay such amounts as may be permitted
under applicable law to satisfy its indemnification obligations hereunder to the fullest
extent permissible under applicable law.



Without limiting or being limited by the foregoing, the Issuer shall pay in accordance with
Section 2.10(c) to each Indemnified Party any and all amounts necessary to indemnify such
Indemnified Party from and against any and all Indemnified Amounts relating to or resulting from:





	 	(i)	 	a breach of any representation or warranty made by the Issuer
under or in connection with this Indenture or any other Transaction
Document; or
	 
	 	(ii)	 	the failure by the Issuer to comply
with any term, provision or covenant contained in this Indenture
or any other Transaction Document; or
	 
	 	(iii)	 	any information prepared by and furnished
or to be furnished by any of the Issuer or the Seller or any of their
Affiliates pursuant to or in connection with the transactions
contemplated hereby including, without limitation, such written
information as may have been and may be furnished in connection with
any due diligence investigation with respect to the business,
operations, financial condition of the Issuer, the Seller, any of their
Affiliates or with respect to the Receivables, to the extent such
information contains any untrue statement or alleged untrue statement
of material fact.





          (b) Any
Indemnified Amounts subject to the indemnification provisions of this Section 9.11 shall be paid to the Indemnified Party within 20 Business Days following
demand therefor; provided that, prior to an Event of Default, amounts payable under this
Section




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9.11 shall only be payable on Payment Dates pursuant to Section 2.10(c). “Indemnified Party” means
any of the Indenture Trustee, the Owner Trustee, the Securities Intermediary, the Agent and the
Secured Parties and their officers, employees, directors, attorneys, consultants, agents and
successors or assigns. “Indemnified Amounts” means any and all claims, losses, liabilities,
obligations, damages, penalties, actions, judgments, suits, and related reasonable costs and
reasonable expenses of any nature whatsoever, including reasonable attorneys’ fees and
disbursements, imposed on, incurred by or asserted against an Indemnified Party with respect to
this Indenture or any other Transaction Document.




          (c) Promptly after an Indemnified Party shall have been served with the summons or other first
legal process or shall have received written notice of the threat of a claim in respect of which an
indemnity may be claimed against the Issuer under this Section 9.11, the Indemnified Party shall
notify the Issuer in writing of the service of such summons, other legal process or written notice,
giving information therein as to the nature and basis of the claim, but failure so to notify the
Issuer shall not relieve the Issuer from any liability which it may have hereunder or otherwise
except to the extent that the Issuer is prejudiced by such failure so to notify the Issuer. The
Issuer will be entitled, at its own expense, to participate in the defense of any such claim or
action and to assume the defense thereof, with counsel reasonably satisfactory to such Indemnified
Party, unless the defendants in any such action include both the Indemnified Party and the Issuer,
and the Indemnified Party (upon the advice of counsel) shall have reasonably concluded that there
may be legal defenses available to it that are different from or additional to those available to
the Issuer, or one or more Indemnified Parties, and which in the reasonable opinion of such counsel
are sufficient to create a conflict of interest for the same counsel to represent both the Issuer
and such Indemnified Party; provided, however, that the Issuer shall not be responsible for the
fees and expenses of more than one firm of attorneys for all Indemnified Parties related to the
Secured Parties and one firm of attorneys for the Indenture Trustee. Each Indemnified Party shall
cooperate with the Issuer in the defense of any such action or claim. The Issuer shall not, without
the prior written consent of the Indemnified Party which consent shall not be unreasonably withheld
or delayed, effect any settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of such proceeding or
threatened proceeding.




ARTICLE X




AGENT




     Section 10.01. Appointment. Each Noteholder, by its acceptance of a Note or a beneficial
interest in a Note, hereby irrevocably appoints and authorizes the Agent to perform the duties of
the Agent as set forth in this Indenture including: (i) to receive on behalf of each Noteholder
any payment of principal of or interest on the Notes outstanding hereunder and all other amounts
accrued hereunder for the account of the Noteholders and paid to the Agent, and to distribute
promptly to each Noteholder its Percentage Interest of all payments so received and (ii) to
distribute to each Noteholder copies of all material notices (including any Funding Notice
delivered in accordance with the Note Purchase Agreement) and agreements received by the Agent and
not required to be delivered to each Noteholder pursuant to the terms of this



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Indenture, provided that the Agent shall not have any liability to the Noteholders for the Agent’s
inadvertent failure to distribute any such notices or agreements to the Noteholders and (iii)
subject to Section 10.03 of this Indenture, to take such action as the Agent deems appropriate on
its behalf to administer the Notes and the other Transaction Documents and to exercise such other
powers delegated to the Agent by the terms hereof or the other Transaction Documents (including,
without limitation, the power to give or to refuse to give notices, waivers, consents, approvals
and instructions and the power to make or to refuse to make determinations and calculations)
together with such powers as are reasonably incidental thereto to carry out the purposes hereof
and thereof. As to any matters not expressly provided for by this Indenture and the other
Transaction Documents (including, without limitation, enforcement or collection of the Notes), the
Agent shall not be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Majority Noteholders, and such instructions of the Majority
Noteholders shall be binding upon all Noteholders and all holders of Notes; provided, however,
that the Agent shall not be required to take any action which, in the reasonable opinion of the
Agent, exposes the Agent to liability or which is contrary to this Indenture or any other
Transaction Document or applicable law.




     Section 10.02. Nature of Duties. The Agent shall have no duties or responsibilities except
those expressly set forth in this Indenture or in the other Transaction Documents. The duties of
the Agent shall be mechanical and administrative in nature. The Agent shall not have by reason of
this Indenture or any Transaction Document a fiduciary relationship in respect of any Noteholder.
Nothing in this Indenture or any of the Transaction Documents, express or implied, is intended to
or shall be construed to impose upon the Agent any obligations in respect of this Indenture or any
of the other Transaction Documents except as expressly set forth herein or therein. Each Noteholder
shall make its own independent investigation of the financial condition and affairs of the Issuer
in connection with the advancing Additional Note Balance pursuant to the Note Purchase Agreement
and shall make its own appraisal of the creditworthiness of the Issuer and the value of the
Collateral, and the Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Noteholder with any credit or other information with respect thereto, whether
coming into its possession before the advance of the Initial Note Balance hereunder or at any time
or times thereafter, provided that, upon the reasonable request of a Noteholder, the Agent shall
provide to such Noteholder any documents or reports delivered to the Agent by the Issuer pursuant
to the terms of this Indenture or any other Transaction Document. The Agent shall obtain the
approval of the Majority Noteholders prior to taking any of the following actions: (i) the giving
of notice or waiving of a Funding Termination Event, (ii) the waiving of a Securitization
Termination Event or (iii) the delivery of notice or waiving of an Event of Default. If the Agent
seeks the consent or approval of the Majority Noteholders to the taking or refraining from taking
any action hereunder, the Agent shall send notice thereof to each Noteholder. The Agent shall
promptly notify each Noteholder any time that the Majority Noteholders have instructed the Agent to
act or refrain from acting pursuant hereto.



     Section 10.03. Rights, Exculpation, Etc. The Agent and its directors, officers, agents or
employees shall not be liable for any action taken or omitted to be taken by it under or in
connection with this Indenture or the other Transaction Documents unless such action or inaction



71









 




shall constitute gross negligence or willful misconduct on the part of the Agent or its directors,
officers, agents or employees. Without limiting the generality of the foregoing, the Agent (i) may
treat the payee of any Note as the holder thereof until the Agent receives written notice of the
assignment or transfer thereof, pursuant to Section 10.08 hereof, signed by such payee and in form
satisfactory to the Agent; (ii) may consult with legal counsel (including, without limitation,
counsel to the Agent or counsel to the Issuer), independent public accountants, and other experts
selected by it and shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel or experts; (iii) makes no warranty or
representation to any Noteholder and shall not be responsible to any Noteholder for any statements,
certificates, warranties or representations made in or in connection with this Indenture or the
other Transaction Documents; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this Indenture or the
other Transaction Documents on the part of any Person, the existence or possible existence of any
default or Event of Default, or to inspect the Collateral or other property (including, without
limitation, the books and records) of any Person; (v) shall not be responsible to any Noteholder
for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of
this Indenture or the other Transaction Documents or any other instrument or document furnished
pursuant hereto or thereto; and (vi) shall not be deemed to have made any representation or
warranty regarding the existence, value or collectability of the Collateral, the existence,
priority or perfection of the Indenture Trustee’s Lien thereon, or any certificate prepared by the
Issuer in connection therewith, nor shall the Agent be responsible or liable to the Noteholders for
any failure to monitor or maintain any portion of the Collateral. The Agent shall not be liable for
any apportionment or distribution of payments made in good faith pursuant to Section 2.10, and if
any such apportionment or distribution is subsequently determined to have been made in error the
sole recourse of any Noteholder to whom payment was due but not made, shall be to recover from
other Noteholders any payment in excess of the amount which they are determined to be entitled. The
Agent may at any time request instructions from the Noteholders with respect to any actions or
approvals which by the terms of this Indenture or of any of the other Transaction Document the
Agent is permitted or required to take or to grant, and if such instructions are promptly
requested, the Agent shall be absolutely entitled to refrain from taking any action or to withhold
any approval under any of the other Transaction Documents until it shall have received such
instructions from the Majority Noteholders. Without limiting the foregoing, no Noteholder shall
have any right of action whatsoever against the Agent as a result of the Agent acting or refraining
from acting under this Indenture, the Notes or any of the other Transaction Documents in accordance
with the instructions of the Majority Noteholders.




     Section 10.04. Reliance. The Agent shall be entitled to rely upon any written notices,
statements, certificates, orders or other documents or any telephone message believed by it in
good faith to be genuine and correct and to have been signed, sent or made by the proper Person,
and with respect to all matters pertaining to this Indenture or any of the other Transaction
Documents and its duties hereunder or thereunder, upon advice of counsel selected by it.



     Section 10.05. Indemnification. To the extent that the Agent is not reimbursed and
indemnified by the Issuer, the Noteholders will reimburse and indemnify the Agent from and against
any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits,



72









 




costs, expenses, advances or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising out of this
Indenture or any of the other Transaction Documents or any action taken or omitted by the Agent
under this Indenture or any of the other Transaction Documents, in proportion to each Noteholder’s
Percentage Interest, including, without limitation, advances and disbursements made pursuant to
Section 10.08; provided, however, that no Noteholder shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses,
advances or disbursements for which there has been a final judicial determination that such
resulted from the Agent’s gross negligence or willful misconduct. The obligations of the
Noteholders under this Section 10.05 shall survive the payment in full of the Notes and the
termination of this Indenture.




     Section 10.06. Agent Individually. With respect to its Percentage Interest of the Commitment
under the Note Purchase Agreement, the advances made by it and the Notes issued to or held by it,
the Agent shall have and may exercise the same rights and powers hereunder and is subject to the
same obligations and liabilities as and to the extent set forth herein for any other Noteholder or
holder of a Note. The terms “Noteholders” or “Majority Noteholders” or any similar terms shall,
unless the context clearly otherwise indicates, include the Agent in its individual capacity as a
Noteholder or one of the Majority Noteholders. The term “Agent” shall mean the Agent solely in its
individual capacity as the Agent hereunder. The Agent and its Affiliates may accept deposits from,
lend money to, and generally engage in any kind of banking, trust or other business with the Issuer
as if it were not acting as an Agent pursuant hereto without any duty to account to the
Noteholders.



     Section 10.07. Successor Agent.



     (a) The Agent may resign from the performance of all its functions and duties
hereunder and under the other Transaction Documents at any time by giving at least thirty (30)
Business Days’ prior written notice to the Issuer and each Noteholder. Such resignation
shall take effect upon the acceptance by a successor Agent of appointment pursuant to clauses (b)
and (c) below or as otherwise provided below.



     (b) Upon any such notice of resignation, the Majority Noteholders shall appoint a
successor Agent (or, in the event that the Agent’s Percentage Interest is less than fifty-one
percent, the Noteholders may appoint a successor Agent) who, in the absence of a continuing
Event of Default, shall be reasonably satisfactory to the Issuer. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this
Indenture and the other Transaction Documents. After the Agent’s resignation hereunder as the
Agent, the provisions of this Article X shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Indenture and the other Transaction Documents.



     (c) If a successor Agent shall not have been so appointed within said thirty (30)
Business Day period, the retiring Agent shall then appoint a successor Agent who, if an Event
of Default is not continuing, shall be reasonably satisfactory to the Issuer, who shall serve as
Agent until such time, if any, as the Majority Noteholders appoint a successor Agent as provided
above.



73









 





     Section 10.08. Collateral Matters.



     (a) The
Agent may from time to time, during the occurrence and continuance of an
Event of Default, make such disbursements and advances (“Agent Advances”) which the Agent,
in its sole discretion, deems necessary or desirable to preserve or protect the Collateral or
any portion thereof, to enhance the likelihood or maximize the amount of repayment by the Issuer
of the Notes and other Issuer Obligations or to pay any other amount chargeable to the Issuer
pursuant to the terms of this Indenture, including, without limitation, costs, fees and
expenses as described in Section 10.05. The Agent Advances shall be repayable on demand and be secured
by the Collateral. The Agent Advances shall not constitute advances on the Notes but shall
otherwise constitute Issuer Obligations hereunder. The Agent shall notify each Noteholder and
the Issuer in writing of each Agent Advance, which notice shall include a description of the
purpose of such Agent Advance. Without limitation to its obligations pursuant to Section
10.05, each Noteholder agrees that it shall make available to the Agent, upon the Agent’s demand, in
U.S. dollars in immediately available funds, the amount equal to such Noteholder’s Percentage
Interest of such Agent Advance. If such funds are not made available to the Agent by such
Noteholder, the Agent shall be entitled to recover such funds on demand from such Noteholder,
together with interest thereon, for each day from the date such payment was due until the date
such amount is paid to the Agent, at the Reference Rate.



     (b) The Agent shall have no obligation whatsoever to any Noteholders to assure that
the Collateral exists or is owned by the Issuer or is cared for, protected or insured or has
been
encumbered or that the Lien granted to the Indenture Trustee pursuant to this Indenture has
been
properly or sufficiently or lawfully created, perfected, protected or enforced or is entitled
to any
particular priority, or to exercise at all or in any particular manner or under any duty of
care,
disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers
granted
or available to the Agent in this Section 10.08 or in any of the other Transaction Documents,
it
being understood and agreed that in respect of the Collateral, or any act, omission or event
related thereto, the Agent may act in any manner it may deem appropriate, in its sole
discretion,
given the Agent’s own interest in the Collateral as one of the
Noteholders and that the Agent
shall have no duty or liability whatsoever to any other Noteholder.



ARTICLE XI




MISCELLANEOUS




     Section 11.01. Execution Counterparts.



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



     Section 11.02. Compliance Certificates and Opinions, etc.



     Upon any application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee an



74









 




Officer’s Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with.




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




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




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




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




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



     Section 11.03. Form of Documents Delivered to Indenture Trustee.



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



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



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



75









 





     Whenever in this Indenture, in connection with any application or certificate or report to the
Indenture Trustee, it is provided that any Person shall deliver any document as a condition of the
granting of such application, or as evidence of such Person’s compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such application or at the
effective date of such certificate or report (as the case may be), of the facts and opinions stated
in such document shall in such case be conditions precedent to the right of such Person to have
such application granted or to the sufficiency of such certificate or report. The foregoing shall
not, however, be construed to affect the Indenture Trustee’s right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided in Article V.



     Section 11.04. Acts of Noteholders.



     (a) Any request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by such Noteholders
in person or by agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such instrument or instruments are delivered
to the Indenture Trustee, and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 5.01) conclusive in favor
of
the Indenture Trustee and the Issuer, if made in the manner provided in this Section. With
respect
to authorization to be given or taken by Noteholders, the Indenture Trustee shall be
authorized to
follow the written directions or the vote of the Majority Noteholders, unless any greater or
lesser
percentage is required by the terms hereunder.



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



     (c) The
Note Principal Balance and serial numbers of Notes held by any Person, and
the date of holding the same, shall be proved by the Note Register.



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



     Section 11.05. Computation of Percentage of Noteholders.



     Whenever this Indenture states that any action may be taken by a specified percentage of the
Noteholders, such statement shall mean that such action may be taken by the Noteholders of such
specified percentage of the aggregate Note Principal Balance of the Outstanding Notes.



76









 





     Section 11.06. Notice to the Indenture Trustee, the Issuer and Certain Other Persons.



     Any communication provided for or permitted hereunder shall be in writing and, unless
otherwise expressly provided herein, shall be deemed to have been duly given if delivered by
courier or mailed by first class mail, postage prepaid, or if transmitted by telecopier and
confirmed in a writing delivered or mailed as aforesaid, to: (i) in the case of the Issuer, Option
One Advance Trust 2007-ADV2, 3 Ada, Irvine, California 92618, Attention: Rod Smith, telecopy
number: (949) 790-7514, telephone number: (949) 790-8100 and (ii) in the case of the Indenture
Trustee, the Corporate Trust Office, or as to each such Person, such other address or facsimile
number as may hereafter be furnished by such Person to the parties hereto in writing.



     Section 11.07. Notices to Noteholders; Notification Requirements and Waiver.



     Where this Indenture provides for notice to Noteholders of any event, such notice shall be
sufficiently given if in writing and delivered by courier or mailed by first-class mail, postage
prepaid; 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 where notice to Noteholders is given by mail, neither the
failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder
shall affect the sufficiency of such notice with respect to other Noteholders, and any notice that
is delivered or 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
Indenture Trustee but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.



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



     Section 11.08. Successors and Assigns.



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



     Section 11.09. Separability Clause.



     In case any provision of this Indenture or of the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall, to the
extent permitted by law, not in any way be affected or impaired thereby.



77









 





     Section 11.10. Governing Law.



     (a) THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REFERENCE TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF
OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).



     (b) Any action or proceeding against any of the parties hereto relating in any way to
this Indenture or any Note or the Trust Estate may be brought and enforced in the courts of
the
State of New York sitting in the borough of Manhattan or of the United States District Court
for
the Southern District of New York and the Issuer irrevocably submits to the jurisdiction of
each
such court in respect of any such action or proceeding. The Issuer hereby waives, to the
fullest
extent permitted by law, any right to remove any such action or proceeding by reason of

improper venue or inconvenient forum.



     Section 11.11. Effect of Headings and Table of Contents.



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



     Section 11.12. Benefits of Indenture.



     Nothing in this Indenture or in the Notes, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, the Noteholders and any other party
secured hereunder or named as a beneficiary of any provision hereof, any benefit or any legal or
equitable right, remedy or claim under this Indenture.



     Section 11.13. Non-Recourse Obligation.



     Notwithstanding any other provision of this Indenture, the obligations of the Issuer under
this Indenture and the Notes are limited recourse obligations of the Issuer, payable solely from
the Collateral in accordance with the terms of this Indenture.



     No recourse may be taken, directly or indirectly, with respect to the obligations of the
Issuer on the Notes or under this Indenture (other than with respect to Permitted Investments as to
which such Person is the issuer) or any certificate or other writing delivered in connection
herewith or therewith, against (i) any owner of an interest in the Issuer or (ii) any partner,
owner, beneficiary, agent, officer, director, employee, agent or Control Person of the Indenture
Trustee in its individual capacity, the Indenture Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture Trustee does not have
any such obligations in its individual capacity). It is understood that the foregoing provisions of
this Section 11.13 shall not (i) prevent recourse to the Collateral for the sums due or to become
due under any security, instrument or agreement which is part of the Collateral or (ii) constitute
a waiver, release or discharge of any indebtedness or obligation evidenced by the Notes or secured
by this Indenture, and the same shall continue until paid or discharged. It is further understood
that the foregoing provisions of this Section 11.13 shall not limit the right of any person to name
the Issuer as a party defendant in any action or suit or in the exercise of any other remedy under



78









 




the Notes or this Indenture, so long as no judgment in the nature of a deficiency judgment or
seeking personal liability shall be asked for or (if obtained) enforced against any such person or
entity.




     Section 11.14. Inspection.



     The Issuer agrees that, on reasonable prior notice, it will permit any representative of the
Indenture Trustee, during the Issuer’s normal business hours, to examine all the books of account,
records, reports, and other papers of the Issuer, to make copies and extracts therefrom, to cause
such books to be audited by independent certified public accountants, and to discuss the Issuer’s
affairs, finances and accounts relating to the Receivables with the Issuer’s officers, employees,
and independent certified public accountants, all at such reasonable times and as often as may be
reasonably requested. The Indenture Trustee shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) or the Indenture Trustee may
reasonably determine that such disclosure is consistent with its obligations hereunder.



     Section 11.15. Method of Payment.



     Except as otherwise provided in Section 2.10(b), all amounts payable or to be remitted
pursuant to this Indenture shall be paid or remitted or caused to be paid or remitted in
immediately available funds by wire transfer to an account specified in writing by the recipient
thereof.



     Section 11.16. No Recourse.



     It is expressly understood and agreed by the parties hereto that (a) this Indenture is
executed and delivered by Wilmington Trust Company, not individually or personally but solely as
trustee of the Issuer, in the exercise of the powers and authority conferred and vested in it, (b)
each of the representations, undertakings and agreements herein made on the part of the Issuer is
made and intended not as personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose of binding only the Issuer, (c) nothing herein
contained shall be construed as creating any liability on Wilmington Trust Company, individually
or personally, to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any Person claiming by,
through or under the parties hereto and (d) under no circumstances shall Wilmington Trust Company
be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable
for the breach or failure of any obligation, representation, warranty or covenant made or
undertaken by the Issuer under this Indenture or any other related documents.



79









 





     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as
of the day and year first above written.



OPTION ONE ADVANCE TRUST 2007-ADV2




By: Wilmington Trust Company, not in its

individual capacity but solely as Owner

Trustee




By:                                                        

Name:

Title:




WELLS FARGO BANK, NATIONAL

ASSOCIATION

as Indenture Trustee




By:
/s/ Darron C. Woodus                    

Name: Darron C. Woodus

Title: Assistant Vice President




Accepted and Acknowledged by




GREENWICH CAPITAL FINANCIAL

PRODUCTS, INC.

as Agent




By:
/s/ (ILLEGIBLE)                    

Name:

Title:




 









 












	 	 	 
	STATE OF Delaware	)	 
	 	) ss.:	 
	COUNTY OF New Castle	)	 




     On
this            day of [                    ], 2007, before me, the undersigned officer, personally
appeared Jeanne Oller, and acknowledged himself to me to be
the Senior Financial Services Officer of Wilmington Trust Company, and that as such officer, being duly
authorized to do so pursuant to such entity’s by-laws or a resolution of its board of directors,
executed and acknowledged the foregoing instrument for the purposes therein contained, by signing
the name of such entity by himself or herself as such officer as his or her free and voluntary act
and deed and the free and voluntary act and deed of said entity.



     IN
WITNESS WHEREOF, I hereunto set my hand and official seal.



/s/
Roseline K. Maney                    

Notary Public




	 	 	 
	NOTARIAL SEAL

   [SEAL]	 	 
	 	ROSELINE K. MANEY

Notary Public — State of Delaware

My Comm. Expires Aug. 20, 2011
	 




 









 









	 	 	 
	STATE OF Maryland	)	 
	 	) ss.:	 
	COUNTY OF Howard	)	 




     On this 1st day of October, 2007, before me, the undersigned officer, personally appeared
Darron C. Woodus, and acknowledged himself to me to be the Assistant
Vice President of Wells Fargo Bank, National Association, and that as such officer, being duly
authorized to do so pursuant to such entity’s by-laws or a resolution of its board of directors,
executed and acknowledged the foregoing instrument for the purposes therein contained, by signing
the name of such entity by himself or herself as such officer as his or her free and voluntary act
and deed and the free and voluntary act and deed of said entity.



     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



/s/
Graham M. Oglesby                    

Notary Public





	 	 	 
	NOTARIAL SEAL	 	 
	 	GRAHAM
M. OGLESBY

NOTARY PUBLIC

BALTIMORE CITY

MARYLAND

MY COMMISSION EXPIRES JANUARY 7 2009
	 



 









 





SCHEDULE I




[LIST OF LOAN-LEVEL SECURITIZATION TRUSTS INITIALLY INCLUDED]




I-1









 





     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as
of the day and year first above written.



OPTION ONE ADVANCE TRUST 2007-ADV2




By: Wilmington Trust Company, not in its

individual capacity but solely as Owner

Trustee




By:
/s/
Jeanne M. Oller                    

Name: Jeanne M. Oller

Title: Senior Financial Services Officer




WELLS FARGO BANK, NATIONAL

ASSOCIATION

as Indenture Trustee




By:                                                        

Name:

Title:




Accepted and Acknowledged by




GREENWICH CAPITAL FINANCIAL

PRODUCTS, INC.

as Agent




By:                                                        

Name:

Title:




 









 





EXHIBIT A




FORM OF NOTE



THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE MAXIMUM NOTE
PRINCIPAL BALANCE SHOWN ON THE FACE HEREOF.



THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR
ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF SUCH REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.



THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
NOTE ONLY (A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE 1933
ACT, (B) FOR SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE 1933 ACT,
TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A
UNDER THE 1933 ACT WHO IS A QUALIFIED PURCHASER UNDER SECTION 3(C)(7) OF THE INVESTMENT COMPANY ACT
OF 1940, AS AMENDED (THE “1940 ACT”) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER WHO IS A QUALIFIED PURCHASER UNDER SECTION 3(C)(7) OF THE 1940 ACT TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (C) PURSUANT TO
ANOTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, IN EACH CASE IN COMPLIANCE WITH THE
REQUIREMENTS OF THE INDENTURE AND APPLICABLE STATE SECURITIES LAWS.



EACH TRANSFEREE OF THIS NOTE SHALL PROVIDE THE INDENTURE TRUSTEE THE CERTIFICATION REQUIRED IN

SECTION 2.05(c) OF THE INDENTURE.




Aggregate Principal Balance: $

Maximum Note Principal Balance: $

Initial Percentage Interest: %

No.




A-1









 





Option One Advance Trust 2007-ADV2




ADVANCE RECEIVABLES BACKED NOTES, SERIES 2007-ADV2




          Option
One Advance Trust 2007-ADV2, a Delaware statutory trust (the “Issuer”),
for value received, hereby promises to pay to                                                             , or registered
assigns (the “Noteholder”), the principal sum of                                                  ($          
) or so
much thereof as may be advanced and outstanding hereunder and to pay interest on such principal
sum or such part thereof as shall remain unpaid from time to time, at the rate and at the times
provided in the Indenture. Principal of this Note is payable on each Payment Date in an amount
equal to the result obtained by multiplying (i) the Percentage Interest of this Note by (ii) the
principal amount distributed in respect of such Payment Date.




          The Outstanding Note Principal Balance of this Note bears interest at the Floating Rate. On
each Payment Date amounts in respect of interest on this Note will be paid in an amount equal to
the result obtained by multiplying (i) the Percentage Interest of this Note by (ii) the aggregate
amount paid in respect of interest on the Notes with respect to such Payment Date.




          Capitalized terms used but not defined herein have the meanings set forth in the Indenture
(the “Indenture”), dated as of October 1, 2007 between the Issuer and Wells Fargo Bank, National
Association, as Indenture Trustee (the “Indenture Trustee”).




          By its acceptance of this Note, each Noteholder covenants and agrees, until the earlier of (a)
the termination of the Funding Period and (b) the Maturity Date, on each Funding Date to advance
amounts in respect of Additional Note Balance hereunder to the Issuer, subject to and in accordance
with the terms of the Indenture, the Receivables Purchase Agreement and the Note Purchase
Agreement.




          In the event of an advance of Additional Note Balance by the Noteholders as provided in
Section 2.01 of the Note Purchase Agreement, each Noteholder shall, and is hereby
authorized to, record on the schedule attached to its Note the date and amount of any Additional
Note Balance purchased by it, and each repayment thereof; provided that failure to make any such
recordation on such schedule or any error in such schedule shall not adversely affect any
Noteholder’s rights with respect to its Additional Note Balance and its right to receive interest
payments in respect of the Additional Note Balance held by such Noteholder.




          Absent manifest error, the Note Principal Balance of each Note as set forth in the notations
made by the related Noteholder on such Note shall be binding upon the Indenture Trustee and the
Issuer; provided, that failure by a Noteholder to make such recordation on its Note or any error
in such notation shall not adversely affect any Noteholder’s rights with respect to its Note
Principal Balance and its right to receive principal and interest payments in respect thereof.




          Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.




A-2









 





          The statements in the legend set forth above are an integral part of the terms of this Note
and by acceptance hereof each Holder of this Note agrees to be subject to and bound by the terms
and provisions set forth in such legend.




          Unless the certificate of authentication hereon shall have been executed by an authorized
officer of the Indenture Trustee, by manual signature, this Note shall not entitle the Noteholder
hereof to any benefit under the Indenture or the Note Purchase Agreement and/or be valid for any
purpose.




          THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK AND WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PROVISIONS THEREOF.





A-3












 





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




Date:                                         , 2007




	 	 	 	 	 
	 	 	OPTION ONE ADVANCE TRUST 2007-ADV2
	 
	 	 	 	 
	 	 	By: Wilmington Trust Company, not in its

individual capacity but solely as Owner Trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Signatory






INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION




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



Date:                                         , 2007




	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL

ASSOCIATION, not in its individual capacity but

solely as Indenture Trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	 Authorized Signatory






A-4









 






[Reverse Of Note]




          This Note is one of the duly authorized Notes of the Issuer, designated as its Advance
Receivables Backed Notes, Series 2007-ADV2 (herein called the
“Notes”), all issued under the
Indenture. Reference is hereby made to the Indenture and all indentures supplemental thereto, and
the Note Purchase Agreement for a statement of the respective rights and obligations thereunder of
the Issuer, the Indenture Trustee and the Holders of the Notes. To the extent that any provision of
this Note contradicts or is inconsistent with the provisions of the Indenture or the Note Purchase
Agreement, the provisions of the Indenture or the Note Purchase Agreement, as applicable, shall
control and supersede such contradictory or inconsistent provision herein. The Notes are subject to
all terms of the Indenture and the Note Purchase Agreement.




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




          The entire unpaid principal amount of this Note shall be due and payable on the Maturity Date
or any Redemption Date in full in connection with a Redemption in whole of the Notes pursuant to
the Indenture. Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall
be due and payable on the date on which an Event of Default shall have occurred and be continuing
and the Indenture Trustee, at the direction or upon the prior written consent of the Majority
Noteholders, has declared the Notes to be immediately due and payable in the manner provided in the
Indenture. All principal payments on the Notes shall be made pro rata to the Holders of the Notes
entitled thereto.




          The Collateral secures this Note and all other Notes equally and ratably without prejudice,
priority or distinction between any Note and any other Note. The Notes are non-recourse obligations
of the Issuer and are limited in right of payment to amounts available from the Collateral, as
provided in the Indenture. The Issuer shall not otherwise be liable for payments on the Notes, and
none of the owners, agents, officers, directors, employees, or successors or assigns of the Issuer
shall be personally liable for any amounts payable, or performance due, under the Notes or the
Indenture.




          Any installment of interest or principal on this Note shall be paid on the applicable Payment
Date to the Person in whose name this Note (or one or more predecessor Notes) is registered in the
Note Register as of the close of business on the related Record Date by wire transfer in
immediately available funds to the account
specified in writing by the related Noteholder to the extent provided by the Indenture and
otherwise by check mailed to the Noteholder.




          Any reduction in the principal amount of this Note (or any one or more predecessor Notes)
effected by any payments made on any Payment Date shall be binding upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. Any increase in the principal amount of this Note (or any
one or more predecessor Notes) effected by payments to the Issuer of Additional Note Balances shall
be binding upon the Issuer and shall inure to the benefit of all




A-5









 







future Holders of this Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon.




          As provided in the Indenture and subject to certain limitations set forth therein, the
transfer of this Note may be registered on the Note Register upon surrender of this Note for
registration of transfer at the office or agency designated by the Issuer pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of transfer in the form
attached hereto duly executed by, the Holder hereof or such Holder’s attorney duly authorized in
writing, with such signature guaranteed by an “eligible guarantor institution” meeting the
requirements of the Securities Transfer Agent’s Medallion Program (“STAMP”), and thereupon one or
more new Notes of authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the Issuer may require the Noteholder to pay
a sum sufficient to cover any tax or other governmental charge that may be imposed in connection
with any such registration of transfer or exchange.




          Each Noteholder, by acceptance of a Note or a beneficial interest in a Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of
the Issuer or the Indenture Trustee on the Notes or under the Indenture or any certificate or other
writing delivered in connection therewith, against (i) the Indenture Trustee or Owner Trustee in
their individual capacities, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or “control person” within the
meaning of the 1933 Act and the Exchange Act of the Indenture Trustee or Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer or the Indenture Trustee or
Owner Trustee or of any successor or assign of the Indenture Trustee or Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment
or call owing to such entity.




          Each Noteholder, by acceptance of a Note or a beneficial interest in a Note, covenants and
agrees by accepting the benefits of the Indenture that such Noteholder will not at any time
institute against the Issuer, or join in any institution against the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any United States federal
or state bankruptcy or similar law in connection with any obligations relating to the Notes or the
Transaction Documents.




          The Issuer has entered into the Indenture and this Note is issued with the intention that, for
federal, state and local income, single business and franchise tax purposes, the Notes will qualify
as indebtedness of the Issuer secured by the Collateral. Each Noteholder, by acceptance of a Note,
agrees to treat the Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.




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



A-6









 






Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected
by notice to the contrary.




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




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




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




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




          Anything herein to the contrary notwithstanding, except as expressly provided in the
Transaction Documents, none of the Issuer in its individual capacity, any owner of a beneficial
interest in the Issuer, or any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications contained in the
Indenture. The Holder of this Note by its acceptance hereof agrees that, except as expressly
provided in the Transaction Documents, in the case of an Event of Default under the Indenture, the
Holder shall have no claim against any of the foregoing for any deficiency, loss or claim
therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to,
and enforcement against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.




A-7









 








ASSIGNMENT



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




          FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers


unto: 





(name and address of assignee)



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




			
	 	 	 
	Dated:
	 	*/






Signature Guaranteed:




*/



*/NOTICE: The signature to this assignment must correspond with the name of the registered owner as
it appears on the face of the within Note in every particular, without alteration, enlargement or
any change whatever. Such signature must be guaranteed by an “eligible guarantor institution”
meeting the requirements of STAMP.




A-8









 








Schedule to Series 2007-ADV2 Note

dated as of [                    ], 2007

of Option One Advance Trust 2007-ADV2




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	 	 	 	 	 
	Date of advance	 	advance of	 	 	 	 	 	 
	of Additional	 	Additional Note	 	Percentage	 	Aggregate Note	 	Note Principal
	Note Balance	 	Balance	 	Interest	 	Balance	 	Balance of Note
	 
	 	 	 	 	 	 	—	%	 	 	 	 	 	 	 	 






A-1-1









 






EXHIBIT B




FORM OF TRANSFEREE CERTIFICATE FOR TRANSFERS OF NOTES TO QUALIFIED

INSTITUTIONAL BUYERS




[Date]




Wells Fargo Bank, National Association 

Wells Fargo Center 

Sixth and Marquette Avenue

Minneapolis, Minnesota 55479-0113

Attention: Corporate Trust Services — Option One Advance Trust 2007-ADV2




          Re:
          Option One Advance Trust 2007-ADV2, Advance Receivables Backed Notes, Series 2007-ADV2 (the “Notes”)




Ladies and Gentlemen:




     This letter is delivered to you in connection with the transfer by                                          (the
“Transferor”) to                                          (the
“Transferee”) of the Notes having an initial Note Principal Balance as of [                                        ],
of $                                        . The Notes were issued pursuant to an Indenture, dated as of October 1, 2007 (the
“Indenture”), between Option One Advance Trust 2007-ADV2 as issuer and Wells Fargo Bank, National
Association as indenture trustee. All terms used herein and not otherwise defined shall have the
meanings set forth in the Indenture. The Transferee hereby certifies, represents and warrants to
you, as Note Registrar, that:




          1. The Transferee is a “qualified institutional buyer” (a “Qualified
Institutional Buyer”) as that term is defined in Rule 144A (“Rule 144A”) under the Securities Act
of 1933, as amended, and has completed one of the forms of certification to that effect attached
hereto as Annex A and Annex B. The Transferee is a “qualified purchaser” (a “Qualified Purchaser”)
as defined in Section 3(c)(7) of the Investment Company Act of 1940, as amended (the “1940 Act”).
The Transferee is aware that the sale to it of the Notes is being made in reliance on Rule 144A and
Section 3(c)(7) of the 1940 Act. The Transferee is acquiring the Notes for its own account or for
the account of a Qualified Institutional Buyer who is a Qualified Purchaser, and understands that
such Notes may be resold, pledged or transferred only (i) to a person reasonably believed to be a
Qualified Institutional Buyer and Qualified Purchaser that purchases for its own account or for the
account of a Qualified Institutional Buyer and Qualified Purchaser to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A and Section 3(c)(7) of the 1940
Act, or (ii) pursuant to another exemption from registration under the Securities Act.




          2. The Transferee understands that it may not sell or otherwise transfer any
Notes except in compliance with the provisions of the Indenture, which provisions it has carefully
reviewed, and that each Notes will bear the following legend:



B-1









 






THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933
ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION.




          3. The Transferee represents to the Issuer and the Indenture Trustee that either: (a) it is
not, and is not purchasing on behalf of, as fiduciary of, or with assets of, an employee benefit
plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), that is subject to Part 4 of Title I of ERISA, or a plan within the meaning of
Section 4975 of the Internal Revenue Code of 1986; or (b)(i) the Notes are rated investment grade
or better as of the date of purchase, (ii) it believes that the Notes are properly treated as
indebtedness without substantial equity features for purposes of the Section 2510.3-101 of the
Department of Labor Regulations and agrees to so treat such Notes and (iii) the acquisition and
holding of the Notes will not result in a violation of the prohibited transaction rules of ERISA or
Section 4975 of the Code.




          4. The Transferee has been furnished with all information regarding (a) the
Notes and distributions thereon, (b) the nature, performance and servicing of the Receivables, (c)
the Indenture and (d) any other matter related thereto, that it has requested.



	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	(Transferor)
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 






B-2









 








ANNEX 1 TO EXHIBIT B




QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A




[for Transferees other than Registered Investment Companies]




     The undersigned hereby certifies as follows to [name of Transferor] (the “Transferor”) and
[name of Note Registrar], as Note Registrar, with respect to the Notes (the “Notes”) being
transferred as described in the Transferee Certificate to which this certification relates and to
which this certification is an Annex:




          1. As indicated below, the undersigned is the chief financial officer, a person
fulfilling an equivalent function, or other executive officer of the entity purchasing the
Notes (the “Transferee”).




          2. The Transferee is a “qualified institutional buyer” as that term is defined in Rule
l44A under the Securities Act of 1933 (“Rule 144A”) because (i) the Transferee owned and/or
invested on a discretionary basis $25,000,000 or more in securities (other than the
excluded securities referred to below) as of the end of the Transferee’s most recent fiscal
year (such amount being calculated in accordance with Rule 144A) and (ii) the Transferee
satisfies the criteria in the category marked below.



	 	 	 
	—

	 	Corporation, etc. The Transferee is a corporation (other than a bank, savings and
loan association or similar institution), Massachusetts or similar business trust,
partnership, or any organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986.
	 
	 	 
	—

	 	Bank. The Transferee (a) is a national bank or a banking institution organized
under the laws of any State, U.S. territory or the District of Columbia, the business
of which is substantially confined to banking and is supervised by the State or
territorial banking commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is attached hereto, as of a
date not more than 16 months preceding the date of sale of the Note in the case of a
U.S. bank, and not more than 18 months preceding such date of sale for a foreign bank
or equivalent institution.
	 
	 	 
	—

	 	Savings and Loan. The Transferee (a) is a savings and loan association, building
and loan association, cooperative bank, homestead association or similar institution,
which is supervised and examined by a state or federal authority having supervision
over any such institutions or is a foreign
savings and loan association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto, as of a date not more than 16 months
preceding the date of sale of the Note in the case of a U.S. savings and loan
association, and not more than 18 months preceding such date of sale for a foreign
savings and loan association or equivalent institution.






B-3









 






	 	 	 
	—

	 	Broker-dealer. The Transferee is a dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934.
	 
	 	 
	—

	 	Insurance Company. The Transferee is an insurance company whose primary and predominant
business activity is the writing of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the insurance commissioner or a
similar official or agency of a State, U.S. territory or the District of Columbia.
	 
	 	 
	—

	 	State or Local Plan. The Transferee is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of the State or its
political subdivisions, for the benefit of its employees.
	 
	 	 
	—

	 	ERISA Plan. The Transferee is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, as amended.
	 
	 	 
	—

	 	Investment Advisor. The Transferee is an investment advisor registered under the
Investment Advisers Act of 1940.
	 
	 	 
	—

	 	Other. (Please supply a brief description of the entity and a cross-reference to the
paragraph and subparagraph under subsection (a)(1) of Rule 144A pursuant to which it
qualifies. Note that registered investment companies should complete Annex B rather than this
Annex A.)







          3. The term “securities” as used herein does not include (i) securities of issuers that are
affiliated with the Transferee, (ii) securities that are part of an unsold allotment to or
subscription by the Transferee, if the Transferee is a dealer, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities owned
but subject to a repurchase agreement and (vii) currency, interest rate and commodity swaps. For
purposes of determining the aggregate amount of securities owned and/or invested on a discretionary
basis by the Transferee, the Transferee did not include any of the securities referred to in this
paragraph.




          4. For purposes of determining the aggregate amount of securities owned and/or invested on a
discretionary basis by the Transferee, the Transferee used the cost of such securities to the
Transferee, unless the Transferee reports its securities holdings in its financial statements on
the basis of their market value, and no current information with respect to the cost of those
securities has been published, in which case the securities were valued at market. Further, in
determining such aggregate amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if such subsidiaries are consolidated with the Transferee
in its financial statements prepared in accordance with generally accepted accounting principles
and if the investments of such subsidiaries are managed under the Transferee’s direction. However,
such securities were not included if the Transferee is a majority-owned, consolidated subsidiary of
another enterprise and the Transferee is not itself a reporting company under the Securities
Exchange Act of 1934.



B-4









 






          5. The Transferee acknowledges that it is familiar with Rule 144A and understands that the
Transferor and other parties related to the Notes are relying and will continue to rely on the
statements made herein because one or more sales to the Transferee may in reliance on Rule 144A.



	 	 	 	 	 	 
	 	 	 	 	 	Will the Transferee be purchasing the Notes 
	 	 
	 	 	 	 
	 	Yes
	 	No
	 	only for the Transferee’s own account?







          6. If the answer to the foregoing question is “no,” then in each case where the Transferee is
purchasing for an account other than its own, such account belongs to a third party that is itself
a “qualified institutional buyer” within the meaning of Rule l44A, and the “qualified institutional
buyer” status of such third party has been established by the Transferee through one or more of the
appropriate methods contemplated by Rule 144A.




          7. The Transferee will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given, the Transferee’s
purchase of the Notes will constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the Transferee is a bank or savings and loan as provided above, the
Transferee agrees that it will furnish to such parties any updated annual financial statements that
become available on or before the date of such purchase, promptly after they become available.



	 	 	 	 	 
	 	 	Print Name of Transferee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 

	 	Date:	 	 






B-5









 






EXHIBIT C




FORM OF MONTHLY SERVICER REPORT




C-1









 





EXHIBIT D




FORM OF PAYMENT DATE REPORT




D-1









 





EXHIBIT E




FORM OF FUNDING DATE REPORT




E-1









 





EXHIBIT F




FORM OF TRUSTEE REPORT




F-1









 





SCHEDULE A-1




SCHEDULE OF INITIAL RECEIVABLES





A-1-1