exv10w15






Exhibit 10.15




EXECUTION COPY




 





IMPERIAL SETTLEMENTS FINANCING 2010, LLC,

as the Issuer,




PORTFOLIO FINANCIAL SERVICING COMPANY,

as the Initial Master Servicer,



and



WILMINGTON TRUST COMPANY,

as the Trustee and the Collateral Trustee,



MASTER TRUST INDENTURE




Dated as of September 24, 2010




 





 









 





TABLE OF CONTENTS




	 	 	 	 	 

	ARTICLE I DEFINITIONS
	 	 	2	 
	SECTION 1.01. Definitions
	 	 	2	 
	SECTION 1.02. Other Definitional Provisions
	 	 	34	 
	SECTION 1.03. Acts of Series 2010-1 Noteholders
	 	 	35	 
	SECTION 1.04. Conflict with Trust Indenture Act
	 	 	36	 
	SECTION 1.05. Benefits of Indenture
	 	 	36	 
	SECTION 1.06. Incorporation of Recitals
	 	 	36	 
	SECTION 1.07. Conditions Precedent to the Effectiveness of this Agreement
	 	 	36	 
	 
	 	 	 	 
	ARTICLE II GRANT OF SECURITY INTEREST IN RECEIVABLES; ORIGINAL ISSUANCE OF SERIES 2010-1
NOTES
	 	 	36	 
	SECTION 2.01. Grant of Security Interest in Assets; No Assumption of Obligations Related
to Receivables; Certain Matters Regarding the Grant
	 	 	36	 
	SECTION 2.02. Acceptance by Trustee
	 	 	37	 
	SECTION 2.03. General Representations and Warranties of the Issuer
	 	 	38	 
	SECTION 2.04. Affirmative Covenants of the Issuer
	 	 	41	 
	SECTION 2.05. Representations and Warranties of the Issuer Relating to the Series
Trust Assets, Liens and Security Interests
	 	 	47	 
	SECTION 2.06. Negative Covenants of the Issuer
	 	 	50	 
	 
	 	 	 	 
	ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES
	 	 	55	 
	SECTION 3.01. Acceptance of Appointment and Other Matters Relating to the
Master Servicer
	 	 	55	 
	SECTION 3.02. Servicing Compensation
	 	 	56	 
	SECTION 3.03. Representations and Warranties of the Master Servicer
	 	 	56	 
	SECTION 3.04. Covenants of the Master Servicer
	 	 	58	 
	SECTION 3.05. Reports and Records
	 	 	61	 
	SECTION 3.06. Servicing Report of Independent Public Accountants
	 	 	61	 
	SECTION 3.07. Reserved
	 	 	62	 
	SECTION 3.08. Adjustments
	 	 	62	 
	SECTION 3.09. Reserved
	 	 	62	 
	 
	 	 	 	 
	ARTICLE IV RIGHTS OF SERIES 2010-1 NOTEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
	 	 	62	 
	SECTION 4.01. Rights of Series 2010-1 Noteholders
	 	 	62	 
	SECTION 4.02. Establishment of the Master Collection Account and the Applicable
Lock-Box Accounts; Establishment of the Issuer Split Payment
Account
	 	 	63	 
	SECTION 4.03. Series Accounts
	 	 	65	 
	SECTION 4.04. Establishment of the Trustee’s Account
	 	 	67	 
	SECTION 4.05. Other Payments
	 	 	67	 






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	ARTICLE V DISTRIBUTIONS AND REPORTS TO SERIES 2010-1
NOTEHOLDERS
	 	 	67	 
	 
	 	 	 	 
	ARTICLE VI THE SERIES 2010-1 NOTES
	 	 	68	 
	SECTION 6.01. The Series 2010-1 Notes
	 	 	68	 
	SECTION 6.02. Authentication of Series 2010-1 Notes
	 	 	69	 
	SECTION 6.03. Transfer and Exchange of Series 2010-1 Notes
	 	 	70	 
	SECTION 6.04. Mutilated, Destroyed, Lost or Stolen Series 2010-1 Notes
	 	 	78	 
	SECTION 6.05. Persons Deemed Owners; Deemed Representations by Series 2010-1
Noteholders
	 	 	79	 
	SECTION 6.06. Appointment of Paying Agent
	 	 	80	 
	SECTION 6.07. Access to List of Series 2010-1 Noteholders’ Names and Addresses
	 	 	80	 
	SECTION 6.08. Authenticating Agent
	 	 	81	 
	SECTION 6.09. Issuance of the Series 2010-1 Notes
	 	 	82	 
	SECTION 6.10. Transfer of Series 2010-1 Notes
	 	 	83	 
	SECTION 6.11. Provisions Relating to the Regulation S Global Notes
	 	 	84	 
	 
	 	 	 	 
	ARTICLE VII OTHER MATTERS RELATING TO THE ISSUER
	 	 	85	 
	SECTION 7.01. Obligations Not Assignable
	 	 	85	 
	SECTION 7.02. Limitations on Liability
	 	 	85	 
	SECTION 7.03. Indemnification by the Issuer
	 	 	86	 
	SECTION 7.04. Net Worth of the Issuer
	 	 	88	 
	SECTION 7.05. Non-Payment of Settlement Receivables Due to Change in Law
	 	 	88	 
	 
	 	 	 	 
	ARTICLE VIII OTHER MATTERS RELATING TO THE MASTER SERVICER
	 	 	88	 
	SECTION 8.01. Liability of the Master Servicer
	 	 	88	 
	SECTION 8.02. Merger or Consolidation of, or Assumption of the Obligations of,
the Master Servicer
	 	 	88	 
	SECTION 8.03. Limitations on Liability
	 	 	89	 
	SECTION 8.04. Indemnification by Master Servicer
	 	 	89	 
	SECTION 8.05. Master Servicer Not to Resign
	 	 	90	 
	SECTION 8.06. Examination of Records
	 	 	90	 
	 
	 	 	 	 
	ARTICLE IX EVENTS OF DEFAULT
	 	 	90	 
	SECTION 9.01. Events of Default
	 	 	90	 
	SECTION 9.02. Additional Rights Upon the Occurrence of any Event of Default
	 	 	91	 
	SECTION 9.03. Certain Specific Rights Upon the Occurrence of an Insolvency Event
	 	 	92	 
	 
	 	 	 	 
	ARTICLE X SERVICER DEFAULTS
	 	 	93	 
	SECTION 10.01. Servicer Defaults
	 	 	93	 
	SECTION 10.02. Appointment of Successor
	 	 	94	 
	SECTION 10.03. Notification to Series 2010-1 Noteholders
	 	 	95	 
	 
	 	 	 	 
	ARTICLE XI THE TRUSTEE
	 	 	95	 
	SECTION 11.01. Duties of Trustee
	 	 	95	 
	SECTION 11.02. Certain Matters Affecting the Trustee
	 	 	97	 






ii









 






	 	 	 	 	 

	SECTION 11.03. Trustee Not Liable for Recitals in Series 2010-1 Notes
	 	 	99	 
	SECTION 11.04. Compensation; Trustee’s Expenses; Indemnification
	 	 	99	 
	SECTION 11.05. Eligibility Requirements for Trustee
	 	 	100	 
	SECTION 11.06. Resignation or Removal of Trustee
	 	 	100	 
	SECTION 11.07. Successor Trustee
	 	 	101	 
	SECTION 11.08. Merger or Consolidation of Trustee
	 	 	101	 
	SECTION 11.09. Appointment of Co-Trustee or Separate Trustee
	 	 	101	 
	SECTION 11.10. Trustee May Enforce Claims Without Possession of Series 2010-1
Notes
	 	 	102	 
	SECTION 11.11. Suits for Enforcement
	 	 	103	 
	SECTION 11.12. Rights of Series 2010-1 Noteholders to Direct Trustee
	 	 	103	 
	SECTION 11.13. Representations and Warranties of Trustee
	 	 	103	 
	SECTION 11.14. Maintenance of Office or Agency
	 	 	104	 
	SECTION 11.15. Trustee May Own Series 2010-1 Notes
	 	 	104	 
	 
	 	 	 	 
	ARTICLE XII SATISFACTION AND DISCHARGE
	 	 	104	 
	SECTION 12.01. Satisfaction and Discharge of the Indenture
	 	 	104	 
	SECTION 12.02. Final Distribution
	 	 	105	 
	SECTION 12.03. Release of Liens
	 	 	105	 
	 
	 	 	 	 
	ARTICLE XIII MISCELLANEOUS PROVISIONS
	 	 	106	 
	SECTION 13.01. Amendment; Waiver of Default Events
	 	 	106	 
	SECTION 13.02. Protection of Right, Title and Interest to Trust Assets
	 	 	107	 
	SECTION 13.03. Limitation on Rights of Series 2010-1 Noteholders
	 	 	108	 
	SECTION 13.04. Governing Law; Jurisdiction; Consent to Service of Process
	 	 	108	 
	SECTION 13.05. Notices; Payments
	 	 	109	 
	SECTION 13.06. Assignment of the Issuer Purchase Agreement; Substitution
Under the Powers of Attorney
	 	 	110	 
	SECTION 13.07. Severability of Provisions
	 	 	110	 
	SECTION 13.08. Assignment
	 	 	110	 
	SECTION 13.09. Further Assurances
	 	 	110	 
	SECTION 13.10. Nonpetition Covenant
	 	 	111	 
	SECTION 13.11. No Waiver; Cumulative Remedies
	 	 	111	 
	SECTION 13.12. Counterparts
	 	 	111	 
	SECTION 13.13. Third-Party Beneficiaries
	 	 	111	 
	SECTION 13.14. Actions by Series 2010-1 Noteholders
	 	 	111	 
	SECTION 13.15. Merger and Integration
	 	 	112	 
	SECTION 13.16. Headings
	 	 	112	 
	SECTION 13.17. Tax and Usury Treatment
	 	 	112	 
	SECTION 13.18. Liability of the Issuer
	 	 	112	 
	SECTION 13.19. Offers to Purchase Series 2010-1 Notes
	 	 	112	 
	 
	 	 	 	 
	ARTICLE XIV THE COLLATERAL TRUSTEE
	 	 	112	 
	SECTION 14.01. Duties of Collateral Trustee
	 	 	112	 
	SECTION 14.02. Certain Matters Affecting the Collateral Trustee
	 	 	114	 
	SECTION 14.03. Collateral Trustee Not Liable for Recitals in Series 2010-1 Notes
	 	 	116	 






iii









 






	 	 	 	 	 

	SECTION 14.04. Compensation; Collateral Trustee’s Expenses; Indemnification
	 	 	117	 
	SECTION 14.05. Eligibility Requirements for Collateral Trustee
	 	 	117	 
	SECTION 14.06. Resignation or Removal of Collateral Trustee
	 	 	117	 
	SECTION 14.07. Successor Collateral Trustee
	 	 	118	 
	SECTION 14.08. Merger or Consolidation of Collateral Trustee
	 	 	118	 
	SECTION 14.09. Tax Returns
	 	 	119	 
	SECTION 14.10. Representations and Warranties of Collateral Trustee
	 	 	119	 
	SECTION 14.11. Maintenance of Office or Agency
	 	 	119	 
	SECTION 14.12. Collateral Trustee May Own Series 2010-1 Notes
	 	 	119	 






SCHEDULES




	 	 	 

	Schedule I

	 	Credit Policy Manual
	Schedule II

	 	Issuer’s Chief Executive Office and Location of Records
	Schedule III

	 	Settlement Lock-Box Banks, Annuity Lock-Box Banks, Settlement Lock-Boxes,
Annuity Lock-Boxes, Settlement Lock-Box Accounts and Annuity Lock-Box Accounts
	Schedule IV

	 	ERISA Matters






EXHIBITS




	 	 	 

	Exhibit A

	 	Form of Settlement Purchase Agreements
	Exhibit B

	 	Lock-Box Notices
	Exhibit C

	 	Form of Letter to be Delivered by Accredited Investors on the Closing Date
	Exhibit D

	 	Form of Letter to be Delivered by Accredited Investors in Connection with
Subsequent Transfers
	Exhibit E

	 	Form of Daily Report
	Exhibit F

	 	Form of Monthly Report and Compliance Certificate
	Exhibit G

	 	Model Structured Settlement Statute
	Exhibit H

	 	Form of Rule 144A Transfer Certificate
	Exhibit I

	 	Form of Regulation S Transfer Certificate







iv











 





     THIS MASTER TRUST INDENTURE, dated as of September 24, 2010, is by and among IMPERIAL
SETTLEMENTS FINANCING 2010, LLC, a Georgia limited liability company, as the Issuer, PORTFOLIO
FINANCIAL SERVICING COMPANY, a Delaware corporation, as the Initial Master Servicer, and WILMINGTON
TRUST COMPANY, a Delaware banking corporation, as the Trustee and as the Collateral Trustee.



RECITALS OF THE ISSUER




     The Issuer has duly authorized the creation and issuance of the Series 2010-1 Notes (defined
below), which shall have the tenor and be in the amount set forth herein and in the Supplement. In
order to provide for the foregoing, the Issuer has duly authorized the execution and delivery of
this Indenture.



     The Series 2010-1 Notes shall each be limited recourse obligations of the Issuer and shall be
secured solely by and paid from the Series 2010-1 Noteholders’ respective allocable shares of the
Trust Assets as set forth herein. If and to the extent that such allocable share is insufficient
to pay all amounts owing with respect to such Series 2010-1 Notes, then, except as otherwise
expressly provided hereunder, the Series 2010-1 Noteholders of such Series 2010-1 Notes shall have
no claim in respect of such insufficiency against the Issuer or any of its other assets or
properties.



     All things necessary to (a) make the Series 2010-1 Notes, when executed by the Issuer and
authenticated and delivered by the Trustee hereunder and duly issued by the Issuer, the valid
obligations of the Issuer, and (b) make this Indenture a valid agreement of the Issuer, in each
case, in accordance with their respective terms, have been done.



NOW, THEREFORE, THIS INDENTURE WITNESSETH:




     That the Issuer, in consideration of the premises herein contained and of the purchase of the
Series 2010-1 Notes by the Series 2010-1 Noteholders, and for other good and lawful consideration,
the receipt of which is hereby acknowledged, will, pursuant to the Supplement, in order to secure,
equally and ratably without prejudice, priority or distinction, except as specifically otherwise
set forth in this Indenture and in the Supplement, the payment of the Series 2010-1 Notes issued
pursuant to the Supplement, the payment of all other amounts due under or in connection with the
Series 2010-1 Notes or with this Indenture, and the performance and observance of all of the
covenants and conditions contained herein or in the Series 2010-1 Notes, from time to time grant a
security interest, convey, transfer, assign and deliver, in each case, to the Trustee, its
successors and assigns and its or their assigns forever, to have and to hold in trust for the
benefit of the Series 2010-1 Noteholders all and singular in the property hereinafter described, to
wit:



     All of the Issuer’s right, title and interest in, to and under, (i) each Receivable set forth
on the List of Receivables delivered by the Issuer to the Trustee on or before the Closing Date and
each Advance Date, (ii) all Related Property relating to such Receivables, (iii) all monies due or
to become due and all Collections and other amounts received from time to time with respect to such
Receivables on or after the applicable Cut-Off Date, (iv) any Settlement Lock-Box



1









 







Account, any
Settlement Lock-Box, any Annuity Lock-Box Account, any Annuity Lock-Box, the Master Collection Account, the Series Collection Account, the Series Reserve Account, the
Series Payment Account, any other Series Account and the Trustee’s Account, together with all
monies from time to time on deposit in any such account, and all Eligible Investments and other
securities, instruments and other investments purchased from funds on deposit in any such Account,
and (v) all proceeds (including, without limitation, “proceeds” as defined in the UCC of the
jurisdiction the law of which governs the perfection of the security interest in such Receivables)
of any of the foregoing. Such property described in the preceding sentence, and the security
interest granted to the Trustee pursuant to Section 13.06 hereof, together with any other
property identified as “Series Trust Assets” in the Supplement, shall constitute the “Trust
Assets”.



     It is expressly agreed that, anything herein contained to the contrary notwithstanding, the
Issuer shall remain liable under any instrument or documents included in the Trust Assets to
perform all of the obligations assumed by it hereunder, all in accordance with and pursuant to the
terms and provisions thereof and, except as otherwise expressly provided in this Indenture, the
Trustee shall not have any obligations or liabilities under such instruments or documents by reason
of or arising out of this Indenture, nor shall the Trustee be required or obligated in any manner
to perform or fulfill any obligations of Issuer under or pursuant to such instruments or documents
or to may any payment, to make any inquiry as to the nature or sufficiency of any payment received
by it, to present or file any claim or to take any action to collect or enforce the payment of any
amounts which may have been assigned to it or to which it may be entitled at any time or times.



     AND IT IS HEREBY COVENANTED, DECLARED AND AGREED by and between the parties hereto that all
Series 2010-1 Notes are to be issued, countersigned and delivered and that all of the Trust Assets
are to be held and applied, subject to the further covenants, conditions, releases, uses and trusts
hereinafter set forth, and the Issuer and the Master Servicer, in each case, for itself and its
successors, does hereby covenant and agree to and with the Trustee and each of the foregoing’s
respective successors in said trust, for the benefit of those who shall hold the Series 2010-1
Notes, or any of them, as follows:



ARTICLE I

DEFINITIONS




     SECTION 1.01. Definitions. Whenever used in this Agreement, the following words and phrases shall
have the following meanings, and the definitions of such terms are applicable to the singular as
well as the plural forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms.



     An “Act” of one or more Series 2010-1 Noteholders has the meaning specified in
Section 1.04.



     “Advance” shall have the meaning specified in the Supplement.



     “Advance Date” shall have the meaning specified in the Supplement.



2









 





     “Affiliate” shall mean, with reference to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person; provided,
that for purposes of this Agreement when used with respect to Issuer or any of its direct or
indirect subsidiaries or Affiliates, any limited partners of such Persons shall also be deemed
“Affiliates” of any such Person. For the purposes of this definition, “control” when used with
reference to any specified Person shall mean the power to direct the management and policies of
such specified Person, directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to
the foregoing.



     “Affiliated Entity” means any of the Seller, the Issuer or any Affiliate of any of the
foregoing.



     “Aggregate Discounted Receivables Balance” shall mean, with respect to any designated
group of Receivables at any time, the sum at such time of the respective Discounted Receivables
Balances of such Receivables.



     “Aggregate Principal Balance” shall mean, with respect to any designated group of
Series 2010-1 Notes, the sum at such time of the respective Principal Balances of such Series
2010-1 Notes.



     “Agreement” or “Indenture” shall mean this Master Trust Indenture, as the same
may from time to time be amended, modified or otherwise supplemented, including, by the Supplement.



     “A.M. Best” shall mean A.M. Best Company or its successor.



     “Annuitant” shall mean, with respect to any Assignable Annuity Contract, the natural
person, if any, identified as the “annuitant” or “measuring life”, or similar, thereunder.



     “Annuity Beneficiary” shall mean, with respect to any Assignable Annuity Contract,
collectively, the Person or Persons (i) receiving or entitled to receive Scheduled Payments
thereunder (which may include any Annuity Owner and/or Annuitant), (ii) if any, identified as the
“beneficiary” or “contingent beneficiary” or “payee”, or similar, thereunder and/or (iii) otherwise
entitled to acquire pursuant to the terms of such Assignable Annuity Contract any immediate or
contingent right to receive Scheduled Payments thereunder upon the death of the related Annuitant
or Annuity Owner, in each case prior to giving effect to an assignment of such Assignable Annuity
Contract to the Company.



     “Annuity Contract” shall mean any Settlement Annuity Contract or Assignable Annuity
Contract.



     “Annuity Facility Documents” shall mean the Annuity Purchase Agreements and any other
agreements, instruments, certificates or documents delivered or contemplated to be delivered
thereunder or in connection therewith, as the same may be supplemented or amended from time to time
hereafter in accordance with the terms thereof, and “Annuity Facility Document” shall mean any of
the foregoing.



3









 





     “Annuity Lock-Box Account” shall have the meaning specified in Section
4.02(b).



     “Annuity Lock-Box” shall mean any post office box identified as an “Annuity Lock-Box”
on Schedule III into which Collections are received.



     “Annuity Lock-Box Bank” shall have the meaning specified in Section 4.02(b).



     “Annuity Owner” shall mean, with respect to any Assignable Annuity Contract,
collectively, the Person or Persons identified therein as “owner” or “annuity holder” or “contract
holder”, or any similar designation that indicates the party who owns the Assignable Annuity
Contract, in each case prior to giving effect to an assignment thereof to the Seller.



     “Annuity Package” shall mean, as it relates to any Annuity Receivable, fully executed
copies of all documentation related to the purchase of the related Assignable Annuity Contract by
the Seller, and shall include, without limitation, (i) a copy of the Annuity Purchase Agreement
related thereto, executed by the Seller and the Individual Annuity Seller, and all documents
required to be delivered to the Seller pursuant thereto, (ii) a copy of the Assignable Annuity
Contract, unless such copy is unavailable from both the Individual Annuity Seller and the
Assignable Annuity Provider after inquiry therefor by the Individual Annuity Seller and by the
Seller in accordance with the Credit Policy Manual; provided, that, for any Annuity Receivable with
respect to which the related Assignable Annuity Contract constitutes a part of, or is subject to, a
“group contract” or “group policy”, or the like, a complete copy of the Assignable Annuity Contract
(including any group contract or group policy or any related riders or endorsements) shall be
included in the related Annuity Package, (iii) a copy of the Assignable Annuity Provider
Acknowledgment, (iv) a credit report with respect to the applicable Individual Annuity Seller
(unless such Individual Annuity Seller was deceased or the subject of a bankruptcy proceeding, in
which case a credit report shall not be required), (vi) evidence that the Seller has paid the
purchase price with respect to such Annuity Receivable, (vii) a statement by the Assignable Annuity
Provider (a) confirming that such Assignable Annuity Contract (1) has been issued to the Annuity
Owner and (2) remains in force, (b) identifying the amount and payment date for each scheduled
payment owing thereunder and (c) confirming that such scheduled payments are payable by such
Assignable Annuity Provider on such dates without regard to the life or death of the Annuitant,
(viii) UCC lien search reports against the Individual Annuity Seller, (ix) any other documentation
that is expressly required to be included in such Annuity Package under the terms of the Annuity
Facility Documents, and (x) all other applicable notices, agreements, instruments and documents
required to be obtained under any applicable laws relating to the transfer of Assignable Annuity
Contracts in each Approved Annuity State related thereto.



     “Annuity Provider” shall mean, with respect to any Annuity Receivable, the related
Assignable Annuity Provider, and with respect to any Settlement Receivable, the related Settlement
Annuity Provider.



     “Annuity Purchase Agreement” shall mean any agreement substantially in the form of
Exhibit E pursuant to which an Individual Annuity Seller sells, assigns and conveys to the Seller
all or a portion of the Individual Annuity Seller’s right, title and interest in an Assignable
Annuity Contract including without limitation any payments payable to the Individual Annuity Seller
thereunder.



4









 





     “Annuity Receivable” shall mean all rights (a) to all Scheduled Payments (other than
any related Split Payments) due or to become due under an Assignable Annuity Contract, and (b) all
other rights (but not obligations or liabilities) purchased by the Seller from an Individual
Annuity Seller pursuant to an Annuity Purchase Agreement, whether such Scheduled Payments (or such
portions thereof) or other rights constitute accounts, general intangibles (including, without
limitation, payment intangibles), investment property, intangible or tangible chattel paper
(including, without limitation, electronic chattel paper), instruments, documents, securities,
cash, supporting obligations or any other kind of property, and “Annuity Receivables” shall mean
all such Receivables. Without limiting the foregoing in any way, it is understood and agreed that
the Holders of Notes of any Series shall only have rights to, and recourse against, the Series
Receivables for such Series, and shall have no rights in, or recourse against, any Receivables
relating to any other Series. Notwithstanding the foregoing, the term “Annuity Receivable” shall
not include any Scheduled Payments due prior to the applicable Series Cut-Off Date for the Series
to which such Annuity Receivable is to be allocated.



     “Applicable Lock-Box Account” shall mean any Annuity Lock-Box Account or Settlement
Lock-Box Account.



     “Applicable Lock-Box” shall mean any Annuity Lock-Box or Settlement Lock-Box.



     “Applicable Lock-Box Bank” shall mean any Annuity Lock-Box Bank or Settlement Lock-Box
Bank.



     “Approved Annuity State” shall mean with reference to any Series at any time (a) each
“Approved Annuity State” specified in the applicable Supplement or (b) if none are so specified,
each of the 50 states within the United States except for New Hampshire, Vermont, Wisconsin and the
District of Columbia.



     “Approved State” shall mean, at any time, any state that has adopted a Transfer
Statute (and which Transfer Statute is effective as of the date of determination) authorizing, upon
the issuance of an appropriate court order, transfers by Claimants of rights to receive Scheduled
Payments arising under Settlement Agreements, which statute is substantially similar to the model
structured settlement transfer statute attached hereto as Exhibit G.



     “Assignable Annuity Contract” shall mean any annuity contract, rights to receive
payments arising under an annuity contract, which annuity contract does not prohibit the assignment
of any rights arising thereunder by any related Annuity Beneficiary or Annuity Owner.



     “Assignable Annuity Provider” shall mean, with respect to any Annuity Receivable, the
insurance company that (i) is identified on the related Assignable Annuity Contract as the
“issuer”, “insurer” or similar and (ii) has an obligation to make periodic payments pursuant to the
Assignable Annuity Contract with respect to such Annuity Receivable.



     “Assignable Annuity Provider Acknowledgment” shall mean, with respect to any Annuity
Receivable, an acknowledgment signed by the related Assignable Annuity Provider pursuant to which
such Assignable Annuity Provider shall have (i) acknowledged (and consented to, if required by the
terms of the related Assignable Annuity Contract), (ii) agreed to reflect such



5









 







ownership and other rights in its books and records, (iii) agreed that there shall have been
no previous effective assignments by the related Annuity Owner of the related Assignable Annuity
Contract (other than pursuant to the related Annuity Purchase Agreement) and (iv) agreed to deliver
the related Scheduled Payments to the Annuity Lock-Box.



     “Assignee” shall mean the Person to which the obligations to make payments under a
Settlement Agreement have been assigned pursuant to an Assignment and shall include, without
limitation, a Qualified Assignee.



     “Assignment” shall mean an assignment of the obligations to make payments under a
Settlement to an Assignee, including, without limitation, a Qualified Assignment.



     “Available Issuer Funds” shall mean at any time all cash of the Issuer to the extent
fully distributable by the Issuer at the Issuer’s discretion.



     “Back-up Servicer” shall mean Imperial or any successor thereto as “Back-up Servicer”
under the Imperial BUSA.



     “Back-up Servicing Agreement” shall mean the Imperial BUSA.



     “Back-up Servicing Fee” shall mean, with respect to any Payment Date, the sum of (i)
the product of (x) 1/12 (or, in the case of the initial Payment Date, a fraction, the numerator of
which is the number of days from (and including) the Closing Date to (but excluding) such Payment
Date and the denominator of which is 360) times (y) the Back-up Servicing Fee Rate,
times (z) the Aggregate Discounted Receivables Balance of all Series Receivables on the
first day of the Collection Period immediately preceding such Payment Date plus (ii) any
accrued and unpaid Back-up Servicing Fees with respect to any Payment Dates preceding the Payment
Date for which such determination is being made; provided, that, with respect to any
Collection Period (or portion thereof) during which the obligations of the Back-up Servicer have
been terminated in accordance with the terms of the Back-up Servicing Agreement, the “Back-up
Servicing Fee” shall be zero (0.0).



     “Back-up Servicing Fee Rate” shall mean 0.02%.



     “Business Day” shall mean any day other than a Saturday or Sunday or any other day on
which national banking associations or state banking institutions in New York, New York or
Wilmington, Delaware are authorized or obligated by law, executive order or governmental decree to
be closed.



     “Certificated Notes” shall mean permanent certificated Series 2010-1 Notes issued to
Institutional Accredited Investors or Affiliated Entities that are not Qualified Institutional
Buyers pursuant to Section 6.01(e).



     “Claimant” shall mean, with respect to any Settlement, the Person entitled to receive
the Settlement under the terms of the Settlement Agreement who has agreed to sell his interest in
such Settlement (or a portion thereof) to the Seller pursuant to a Settlement Purchase Agreement
which in turn has been sold to the Issuer under the Issuer Purchase Agreement.



6









 







     “Clearstream” shall mean Clearstream Banking, societé anonyme, a corporation organized
under the laws of the Grand Duchy of Luxembourg.



     “Clearstream Account” shall have the meaning specified in Section 6.11(d).



     “Clearstream Security” shall mean a “security” (as defined in Section 8-102(a)(15) of
the UCC) that (i) is a debt security and (ii) is capable of being transferred to the relevant
depository’s account at Clearstream pursuant to Article VI, whether or not such transfer occurred.



     “Closing Date” shall mean September 24, 2010.



     “Code” shall mean the Internal Revenue Code of 1986, together with the rules and
regulations promulgated thereunder, as amended from time to time.



     “Collateral Trustee” shall mean the Person serving in such capacity under this
Agreement and the Supplement (not individually but solely in its capacity as Collateral Trustee);
provided, that in any event, the Collateral Trustee shall at all times be the same Person
as the Trustee. The initial Collateral Trustee shall be Wilmington Trust Company.



     “Collateral Trustee Office” has the meaning specified in Section 14.11.



     “Collection Period” shall mean, with respect to any Payment Date, the calendar month
immediately preceding the calendar month in which such Payment Date occurs.



     “Collections” shall mean with respect to all Receivables, all cash payments thereon
and other cash proceeds thereof, whether in the form of cash, checks, wire transfers, electronic
transfers or any other form of cash payment (including, without limitation, (x) from the Seller in
connection with any repurchase of such Receivables (or the Issuer’s beneficial ownership thereof)
pursuant to Section 2.04(s), (y) any substitution of additional Scheduled Payments or
deposit of cash with respect to such Receivable or the Issuer’s interest therein pursuant to
Section 2.04(s), or (z) any “Holdback Replacement Payments” made in respect thereof (as
defined in the Supplement), including, without limitation, in each case with respect to all
Receivables, any interest earned on such amounts while on deposit in any collection account;
provided, however, that (i) Collections shall not include any Split Payments; (ii)
Servicer Advances shall also be deemed to be Collections; and (iii) Collections shall not include
any amounts related to Scheduled Payments due prior to the applicable Cut-Off Date for any
Receivable.



     “Common Depository” shall mean The Depository Trust Company, its nominees, and their
respective assigns.



     “Control Party” shall have the meaning specified in the Supplement.



     “Credit Policy Manual” shall mean the credit and collection policies and practices of
the Seller, including, without limitation, those described in Schedule I hereto, in effect
on the date hereof, relating to Receivables, as modified from time to time in compliance with
Section 2.06(g).



7









 





     “Cut-Off Date” shall have the meaning specified in the Supplement.



     “Daily Report” shall mean a report in the form attached hereto as Exhibit E to
be delivered by the Master Servicer to the Trustee and the Collateral Trustee on each Business Day,
and relating to the preceding Business Day.



     “Defaulted Receivable” shall mean, unless otherwise specified in the Supplement
exclusively with respect to the related Series designated thereunder, a Receivable with respect to
which:



     (a) any Scheduled Payment (or any portion thereof) due thereunder has been or should have been
deemed to be uncollectible by the Master Servicer or its sub-servicer in accordance with the Credit
Policy Manual; provided, however, that only such portion of such Receivable that has been or should
have been so deemed uncollectible shall constitute a Defaulted Receivable pursuant to this clause
(a);



     (b) the Trustee does not have a first priority perfected security interest, free and clear of
any Liens other than Permitted Liens;



     (c) the related Annuity Provider has become or has been deemed insolvent, and either (x) its
liquidation or rehabilitation plan has caused the stated amount of the Scheduled Payments due in
respect of the related Annuity Contract to be reduced, delayed or otherwise modified; provided,
that only such portion of such Receivable which is so reduced, delayed or otherwise modified shall
be deemed to be a Defaulted Receivable pursuant to this clause (x), (y) a liquidation or
rehabilitation plan providing for the full payment of the related Annuity Contract has been adopted
or approved by the applicable court but such order remains subject to appeal, or (z) no
rehabilitation or reorganization plan dealing with payment of the related Annuity Contracts has yet
been adopted and approved by the applicable court; provided, that in the case of clause (y) or (z)
above, to the extent that such court has entered an order authorizing or requiring the continued
payment in full of the Scheduled Payments owing by such Annuity Provider under the related Annuity
Contract in accordance with the terms thereof pending the entry and approval of such a plan or such
a plan becoming final, then such Receivables shall not be deemed to be Defaulted Receivables
pursuant to this clause (c);



     (d) any Scheduled Payment (or any portion thereof) is more than 90 days past due;



     (e) any Scheduled Payment (or any portion thereof) has been diverted by the Claimant or any
other Person and such diverted payment has not been returned to the Issuer within 15 days after
such diversion; or



     (f) any Person other than the Trustee obtains an interest in all or any portion of the
Scheduled Payments to be made thereunder; provided, that this clause (f) shall not be deemed to
include any interest of any such other Person in any Scheduled Payment (or portion thereof) to the
extent constituting (i) any Split Payment obligation owing to any Claimant or Individual Annuity
Seller with respect thereto, (ii) a Permitted Lien or (iii) any Lien granted by, or imposed
against, any of the Noteholders or the Trustee covering such Scheduled Payment;



8









 







     it being understood and agreed, that a Receivable that
was a Defaulted Receivable may thereafter cease to be deemed a Defaulted Receivable if such
Receivable is Rehabilitated.



     “Definitive Notes” shall mean Series 2010-1 Notes issued to individual Series 2010-1
Noteholders in the form of registered Series 2010-1 Notes in exchange for U.S. Global Notes or
Regulation S Notes pursuant to Section 6.03(c).



     “Deposit Account” shall mean any of the Master Collection Account, the Series
Collection Account, the Series Reserve Account, any Settlement Lock-Box Account, any Annuity
Lock-Box Account, the Series Payment Account, and any other bank accounts established and
maintained for the benefit of the Issuer or Series 2010-1, and “Deposit Accounts” shall
mean all such accounts, collectively.



     “Discount Rate” shall mean the per annum rate specified as such in the Supplement.



     “Discounted Receivables Balance” shall mean, with respect to any Receivable at any
time, the present value at such time of the Scheduled Payments (net of the Split Payment
obligations associated therewith) included as a Receivable discounted at the applicable Discount
Rate.



     “Eligible Annuity Receivable” shall mean, with reference to any Series, unless
otherwise specified in the Supplement for such Series, an Annuity Receivable designated as a Series
Receivable for such Series in respect of which, on the Series Closing Date for such Series (or for
any Annuity Receivable that is not such a Series Receivable on such Series Closing Date, on such
later date as such Receivable shall become a “Series Receivable” for such Series in accordance with
the terms hereof and of the related Supplement):



     (a) (x) all Scheduled Payments required to be made thereon to the Seller or the Issuer from
the time of the Seller’s purchase of such Receivable have been paid (or no portion thereof is past
due more than thirty (30) days at such time) and (y) no such Scheduled Payments have been diverted
from the Seller or the Issuer, unless, in either case, such Receivable shall have been and
continues to be Rehabilitated (in which case only the Rehabilitated portion of such Receivable
shall constitute an Eligible Annuity Receivable hereunder);



     (b) (x) such Annuity Receivable was purchased by the Seller from an Individual Annuity Seller
that purchased the related Assignable Annuity Contract from the related Assignable Annuity Provider
at the time of the original issuance thereof, or otherwise acquired ownership of such annuity
contract, in either case in full compliance with (1) the terms thereof, (2) the terms of any
predecessor annuity contract in respect of which the related Assignable Annuity Contract was issued
as a full or partial replacement, and (3) all applicable laws, including if applicable any
insurable interest requirements, and (y) with respect to which the related Assignable Annuity
Contract was issued in full compliance with all applicable laws, including if applicable any
insurable interest requirements;



     (c) the Assignable Annuity Contract relating to such Receivable has been duly authorized and
issued and constitutes the legal, valid and binding obligation of the related Assignable Annuity
Provider and is not subject to rescission, reduction, set-off or other defenses and does not
contravene in any material respect any requirement of law applicable thereto;



9









 





     (d) such Receivable was purchased by the Seller (x) at least six (6) months after the issuance
of the related Assignable Annuity Contract by the related Assignable Annuity Provider, unless the
Seller shall have provided documentation confirming that the Individual Annuity Seller (or, if
applicable, its predecessor in interest) did not procure such annuity contract with the intention
to assign it, and (y) after the expiration of any contestability or rescission period applicable to
such Assignable Annuity Contract;



     (e) such Receivable was purchased by the Seller from the related Individual Annuity Seller
pursuant to an Annuity Purchase Agreement and sold to the Issuer pursuant to the Issuer Purchase
Agreement, in each case in full compliance with all applicable laws and with the terms of the
related Assignable Annuity Contract;



     (f) the related Assignable Annuity Contract is denominated and payable only in U.S. Dollars
and payments in respect of which will be made without deduction or withholding for any federal
income tax or any premium or similar tax;



     (g) neither the related Assignable Annuity Contract nor the related Assignable Annuity
Provider, prior to the acquisition thereof by the Issuer, has designated any Person as an
irrevocable beneficiary or irrevocable payee thereof;



     (h) (x) after the acquisition of such Assignable Annuity Contract by the Issuer, the
Assignable Annuity Provider shall have designated the Issuer or its designee as the sole payee,
beneficiary and owner thereof, and copies of documentation reflecting such designations in such
Assignable Annuity Provider’s books and records shall have been included in the related Annuity
Package;



     (i) the following are true: (I) the Seller has conducted a UCC lien search and obtained a
credit report with respect to the related Individual Annuity Seller, (II) such Annuity Receivable
is not subject to any outstanding lien, encumbrance, deduction, withholding, dispute, litigation,
counterclaim, defense (including usury), rescission, or set-off, including garnishment proceedings,
with respect thereto in each case other than Permitted Liens; provided that only such portion of
such Annuity Receivable which is subject to any of the foregoing shall be deemed ineligible
pursuant to this clause (II); (III) such Annuity Receivable is not evidenced by any instrument or
chattel paper; and (IV) such Receivable is not a Defaulted Receivable;



     (j) the Back-up Servicer has verified its receipt of all documents required to be contained in
the related Annuity Package in accordance with the definition thereof and the Back-up Servicing
Agreement;



     (k) the Issuer shall have obtained a first priority, indefeasible ownership interest in, and
good title to, such Annuity Receivable, the related Assignable Annuity Contract and in all
Scheduled Annuity Payments due thereunder, free and clear of any Lien, claim or encumbrance of any
Person (except for the portion(s) of any such Scheduled Payments that constitute Split Payments or
any Permitted Liens);



     (l) with respect to such Annuity Receivable, each person that is an Annuity Owner, an
Annuitant or an Annuity Beneficiary shall have entered into an Annuity Purchase Agreement pursuant
to which it has (x) sold to the Seller all of its right, title and interest under the related



10









 







Assignable Annuity Contract or (y) if it has no such right, title or interest, acknowledged
the sale or purported sale to the Seller of all right, title and interest thereunder by other
parties to such Annuity Purchase Agreement;



     (m) under the related Assignable Annuity Contract (x) all Scheduled Payments are guaranteed
payments that are required to be made at the times and in the amounts specified in the related
Annuity Purchase Agreement, without regard to whether the Individual Annuity Seller or any other
Person is or continues to be alive, and (y) no payment will be made at the election of the
Assignable Annuity Provider upon or as a result of the death of the Annuitant or any other Person
if such payment would not otherwise be required to be made at such time;



     (n) the assignment of such Receivable to both the Seller and the Issuer (w) is not prohibited
by the terms of the related Assignable Annuity Contract, (x) is not subject to any life settlement,
senior settlement or viatical settlement statute or regulation, (y) does not require any conditions
to be satisfied, either under law or the related Assignable Annuity Contract, to be permissible or
to become fully effective, that shall not have been satisfied at the time of each such assignment,
and (z) does not require any consents or approvals, either under law or the related Assignable
Annuity Contract, to be permissible or to become fully effective, except those consents or
approvals which have been obtained and are evidenced by documentation included in the related
Annuity Package;



     (o) all premium obligations under the related Assignable Annuity Contract were paid in full by
the Annuity Owner (or any predecessor thereof) prior to the purchase thereof by the Seller, and no
further amounts are required to be paid to the related Assignable Annuity Provider or any other
Person to maintain such Assignable Annuity Contract in full force and effect;



     (p) the total purchase price (excluding, other than with respect to any substituted Receivable
pursuant to Section 2.04(s) hereof, any holdback funds in respect thereof) has been paid in full by
the Seller to the Individual Annuity Seller under the applicable Annuity Purchase Agreement, by the
Issuer to the Seller under the Issuer Purchase and Contribution Agreement, and all obligations of
the Seller under such Annuity Purchase Agreement and of the Seller under the Issuer Purchase and
Contribution Agreement have been fully performed, in each case to fully effectuate the purchase of
such Annuity Receivable;



     (q) such Receivable was originated by the Seller in accordance with its policies and
procedures and in the ordinary course of its business;



     (r) no related Individual Annuity Seller was a minor in any jurisdiction in which such
Individual Annuity Seller was a resident at the time of such Individual Annuity Seller’s execution
of the related Annuity Purchase Agreement;



     (s) such Receivable was purchased by the Seller from an Individual Annuity Seller that was a
resident of an Approved Annuity State both at the time of the issuance of such Assignable Annuity
Contract and at the time of such purchase by the Seller;



     (t) the terms and conditions of the related Annuity Purchase Agreement complied with all
applicable federal, state, and local laws; provided, that this clause (u) shall not be construed to
limit the scope of clause (b);



11









 





     (u) (x) the purchase of such Receivable by the Seller was made pursuant to and in full
compliance with the Credit Policy Manual and (y) Collections in respect of which, from and after
the date of the Company’s purchase thereof, have been received, collected and otherwise pursued by
the Seller or the Master Servicer (or its sub-servicer) pursuant to and in full compliance with the
policies and procedures set forth in the Credit Policy Manual;



     (v) neither the related Assignable Annuity Contract nor any document in the related Annuity
Package has been satisfied, subordinated or rescinded;



     (w) the related Annuity Purchase Agreement is subject to, and expressly governed by the laws
of, an Approved Annuity State (and not any state that is not an Approved Annuity State); and



     (x) the related Assignable Annuity Provider is not a Governmental Authority.



     “Eligible Institution” shall mean a commercial bank or trust company organized under
the laws of the United States of America or any one of the states thereof, including the District
of Columbia (or any domestic branch of a foreign bank), which at all times (i) is a member of the
FDIC, has a combined capital and surplus of at least $500,000,000 and (ii)(a) with respect to
Wilmington Trust Company, has a certificate of deposit rating or long-term unsecured senior debt
rating of at least “BBB-” (or the equivalent thereof) by each of S&P and Moody’s or (b) with
respect to any other commercial bank or trust company, has a certificate of deposit rating or
long-term unsecured senior debt rating of at least “BBB+” (or the equivalent thereof) by each of
S&P and Moody’s; provided, however, that (x) a commercial bank which does not
satisfy the requirements set forth in clause (ii) shall nonetheless be deemed to be an
Eligible Institution for purposes of holding any Deposit Account or any other account so long as
such commercial bank is a federally or state chartered depository institution subject to
regulations regarding fiduciary funds on deposit substantially similar to 12 C.F.R. §9.10(b) and
such account is maintained as a segregated trust account with the corporate trust department of
such bank and (y) in the event that Wilmington Trust Company fails to satisfy the requirements set
forth in clause (ii)(a), Wilmington Trust Company shall nonetheless be deemed to be an
Eligible Institution for all purposes of this Agreement and the other Operative Documents unless
the Control Party shall have delivered written notice to the Issuer and the Master Servicer
requesting the resignation of Wilmington Trust Company as Trustee, Collateral Trustee or holder of
any Deposit Account, in which case Wilmington Trust Company shall cease to be considered an
Eligible Institution for the purposes described in such written notice on the sixtieth
(60th) day following the Issuer’s and the Master Servicer’s receipt of such notice.



     “Eligible Investments” shall mean book-entry securities entered on the books of the
registrar of such security and held in the name or on behalf of the Trustee or negotiable
instruments or securities represented by instruments in bearer or registered form which evidence:




     (a) direct obligations of and obligations fully guaranteed as to timely payment by, the
full faith and credit of the United States of America or any agency or instrumentality
thereof;



12









 






     (b) demand and time deposits in, certificates of deposit of, and federal funds sold by,
depository institutions or trust companies incorporated under the laws of the United States
of America or any state thereof (or domestic branches of foreign banks), subject to
supervision and examination by Federal or state banking or depository institution
authorities, and having, at the time of the Issuer’s investment or contractual commitment to
invest therein, a short-term unsecured debt rating of “P-1” or better by Moody’s and “A-1”
or better by S&P;




     (c) commercial paper having, at the time of the Issuer’s investment or contractual
commitment to invest therein, a rating of “P-1” or better by Moody’s and “A-1” or better by
S&P;




     (d) readily marketable investments in money market funds (including funds for which the
Trustee or any of its affiliates acts as an investment adviser or manager) (which money
market funds may be 12b-1 funds, as contemplated under the rules promulgated by the
Securities Exchange Commission under the Investment Company Act) or in mutual funds
(including funds for which the Trustee or any of its affiliates acts as an investment
adviser or manager) having as their sole investments any of the investments described in the
foregoing clauses (a), (b) and (c), which in either case (i) are
rated “Aaa” by Moody’s and “AAA” by S&P and (ii) seek to maintain a constant net asset
value; or




     (e) investment agreements or guaranteed investment contracts issued or guaranteed by an
entity with a long-term senior debt or financial strength rating of “Aaa” and “AAA” by
Moody’s and S&P, respectively,


in each case, provided that all such investments do not have a final maturity date occurring later
than the Business Day immediately preceding the next Payment Date.




     “Eligible Master Servicer” shall mean PFSC or any other operating entity which, at the
time of its appointment as Master Servicer, (a) is servicing a portfolio of receivables having
similar attributes as the Receivables, (b) is legally qualified and has the capacity to service the
Receivables, and (c) is approved by the Control Party as having demonstrated the ability to
professionally and competently service a portfolio of receivables of a nature similar to the
Receivables in accordance with high standards of skill and care.



     “Eligible Receivable” shall mean, with reference to any Series, those Series
Receivables that are either Eligible Settlement Receivables or Eligible Annuity Receivables.



     “Eligible Settlement Receivable” shall mean a Settlement Receivable designated as a
Series Receivable in respect of which, on the Closing Date (or, for any Settlement Receivable that
is not such a Series Receivable on such Closing Date, on such later Advance Date or other date as
such Receivable shall become a “Series Receivable” in accordance with the terms hereof and of the
Supplement):




     (a) (x) all Scheduled Payments required to be made thereon to the Seller and/or the
Issuer, as applicable, from the time of their acquisition of such Receivable,



13









 







have been paid (or no portion thereof is past due more than thirty (30) days at such
time) and (y) no such Scheduled Payments have been diverted from the Seller or the Issuer,
unless, in either case, such Receivable shall have been and continues to be Rehabilitated
(in which case only the Rehabilitated portion of such Receivable shall constitute an
Eligible Receivable hereunder);




     (b) the underlying Settlement (x) does not arise from a settlement that is subject to
appeal or court approval (unless such approval has been received and written evidence of
such approval has been delivered to the Trustee and the Back-up Servicer) and (y) is the
subject of a transaction in which the related Settlement Agreement remains in full force and
effect notwithstanding any Assignee’s or Obligor’s purchase or ownership of any Settlement
Annuity Contracts;




     (c) the underlying Settlement is denominated and payable only in U.S. Dollars, the
related Claimant is a U.S. resident and payments on the underlying Settlement will be made
without deduction or withholding for any Federal income tax;




     (d) if such Settlement is the subject of a Qualified Assignment or other assignment,
the underlying Settlement Agreement releases all liable parties (other than the Assignee)
under the applicable Settlement Agreement from all liability pertaining thereto;




     (e) except as provided in the Transfer Statute, neither the transfer thereof from the
related Claimant to the Seller nor the underlying Settlement Agreement related thereto is
subject to the law of a state or other jurisdiction which expressly prohibits the
assignability of Scheduled Payments related to Settlements;




     (f) (i) the transfer thereof from the related Claimant to the Seller was approved as
evidenced by a Transfer Order which remains in full force and effect and a copy of which has
been delivered by the Seller to the related Obligor (and any Settlement Annuity Provider) in
accordance with the Notice Procedures and (ii) the transfer thereof from the related
Claimant to the Seller was made in full compliance with all applicable Requirements of Law
(including without limitation Transfer Statutes);




     (g) the following are true: (I) the Seller has conducted a UCC lien search and has
received a credit report with respect to the related Claimant; (II) such Receivable is not
subject to any lien, encumbrance, deduction, withholding, dispute, litigation, counterclaim,
defense (including usury), rescission, or set-off, including garnishment proceedings, with
respect thereto; provided that only such portion of such Receivable which is subject
to any of the foregoing shall be deemed ineligible pursuant to this clause (II),
(III) such Receivable is not evidenced by any instrument or chattel paper, (IV) such
Receivable is a “payment intangible” within the meaning of the UCC as adopted in the state
in which the Claimant has its domicile, unless such UCC expressly excludes rights to payment
under Settlements from the scope of Article 9 of such UCC, and (V) such Receivable is not a
Defaulted Receivable;



14









 






     (h) the Back-up Servicer has verified (in a written certification to the Trustee for
the benefit of the Series 2010-1 Noteholders) its receipt of all documents required to be
contained in the related Settlement Package in accordance with the definition thereof and
the Back-up Servicing Agreement;




     (i) all notices (including, without limitation, notices to Obligors and Settlement
Annuity Providers), filings and other actions required to (x) create an ownership interest
in such Receivable in favor of the Seller as against the related Claimant, and in favor of
the Issuer as against the Seller, and (y) perfect a first priority security interest therein
in favor of the Trustee, on behalf of the Secured Parties, as against each of the Issuer and
the Seller, in each case under the UCC and all other applicable Requirements of Law and in
each case enforceable against the creditors and/or a bankruptcy trustee or
debtor-in-possession of or for the Seller and the Issuer have been given, made or taken (or,
in the case of UCC filings, will have been made within ten days of the Closing Date);




     (j) such Receivable is included on the List of Receivables delivered either on the
Closing Date, Advance Date or other date on which such Receivable shall become a “Series
Receivable” in accordance with the terms hereof and of the Supplement;




     (k) the Issuer shall have obtained a first priority indefeasible ownership interest in,
and good and valid title to, such Receivable and in all Scheduled Payments due thereunder,
free and clear of any Lien, security interest, claim or encumbrance of any Person (except
for the portion(s) of any such Scheduled Payments that constitute Split Payments or any
Permitted Liens);




     (l) the payment of the underlying Settlement is supported by a Settlement Annuity
Contract in the full amount thereof, or is the direct obligation of a highly-rated Obligor,
and the Collections thereon have been directed to be made directly from the Settlement
Annuity Provider (or, if none, the Obligor) relating thereto to a Settlement Lock-Box
Account or a Settlement Lock-Box;




     (m) the Seller delivered timely notice of the proceeding giving rise to the Transfer
Order in respect of such Receivable to each Notice Party in accordance with the Notice
Procedures;




     (n) neither the related Settlement Agreement nor any other agreement relating thereto
releases the Assignee (or, if there is no Assignee, the Settlement Counterparty thereunder)
from liability thereunder as a result of the existence of any Settlement Annuity Contract
purchased to fund the Settlement relating thereto;




     (o) the Claimant thereon did not at the time of its sale of such Receivable to the
Seller pursuant to the applicable Settlement Purchase Agreement own the Settlement Annuity
Contract related thereto;




     (p) all representations and warranties relating to such Receivable set forth in
Section 2.05 hereof are true and correct;




15











 






     (q) no portion of the Obligor’s and/or the Settlement Annuity Provider’s
obligation to make any of the Scheduled Payments under such Receivable may be terminated or
prepaid at a discount as a result of the death of the related Claimant;




     (r) such Receivable was originated by the Seller (i) in accordance with the Credit
Policy Manual and all applicable Requirements of Law and (ii) in the ordinary course of its
business;




     (s) such Receivable is evidenced by each of a Settlement Agreement and a Settlement
Purchase Agreement that is legal, valid and binding against all parties thereto;




     (t) the Settlement Agreement related to such Receivable evidences a contractual
settlement of a personal injury or workers’ compensation claim and the related contractual
obligation of the Obligor thereunder, and the related Claimant’s assignment of its rights
under such Settlement Agreement does not constitute an assignment of a right represented by
a judgment within the meaning of Section 9-109 of the UCC;




     (u) the related Claimant was not a minor in any jurisdiction in which he was a resident
and/or to which the underlying Settlement Agreement was subject at the time of his transfer
to the Seller of his rights under such Settlement Agreement;




     (v) the Seller’s purchase of such Receivable and entry into the related Settlement
Purchase Agreement were not made in violation of the terms of any (i) agreement entered into
between the Seller or any of its Affiliates and any Obligor or Settlement Annuity Provider,
including, without limitation, any requirement therein that the origination of such
Receivable be made pursuant to any type of court order, (ii) class action settlement
agreement entered into by the Seller or any of its Affiliates, (iii) other settlement
agreement entered into by the Seller or any of its Affiliates and the Claimant related to
such Receivable or (iv) agreement or stipulation entered into by the Seller or any of its
Affiliates and the Attorney General of the jurisdiction the law of which governs such
purchase;




     (w) such Receivable constituted a structured settlement factoring transaction which
satisfied all applicable requirements of Section 5891 of the Code and in connection with
which the Seller obtained a “qualified order” as defined in Section 5891 of the Code;
provided, that if the related Transfer Order was not issued under the authority of
an “applicable State statute” by an “applicable State court” (in each case, as defined in
Section 5891 of the Code), such Receivable shall only constitute an “Eligible Receivable”
if, as of the date of such transfer, (x) none of the states in which any of the related
Claimant, the related Obligor or the related Settlement Annuity Provider were then domiciled
had enacted a Transfer Statute or (y) the Seller and the related Claimant, Obligor and
Settlement Annuity Provider (if any) collectively were unable to satisfy the jurisdictional
requirements of any Transfer Statute in any such state as a matter of law;




     (x) the purchase of which by the Seller was made pursuant to and in full compliance
with the Credit Policy Manual and all applicable Requirements of Law and



16









 






(b) Collections in respect of which, since the date of the Seller’s purchase thereof,
have been received, collected and otherwise pursued by the Master Servicer pursuant to and
in full compliance with the Credit Policy Manual and all applicable Requirements of Law;




     (y) with respect to such Receivable, the Seller obtained a Transfer Order either (i) in
the jurisdiction in which the related Claimant was domiciled at the time of the Seller’s
purchase of the Scheduled Payments giving rise to such Receivable from such Claimant or (ii)
if such jurisdiction did not at such time have a Transfer Statute, in the jurisdiction in
which either (A) the applicable Obligor was domiciled at such time or (B) (1) the original
claim giving rise to the related Structured Settlement was adjudicated and (2) the court
adjudicating such claim had exclusive jurisdiction over such claim;




     (z) in respect of which the underlying Settlement Agreement does not arise under, and
is not subject to, any workmen’s compensation statute as in effect in any applicable state
or other jurisdiction, unless such Settlement Receivable is an Eligible Worker’s
Compensation Receivable;




     (aa) the related Obligor is not a Governmental Authority;




     (bb) such Receivable was purchased (i) by the Seller pursuant to a Settlement Purchase
Agreement, and (ii) by the Issuer pursuant to the Issuer Purchase Agreement; and




     (cc) the total purchase price (excluding, other than with respect to any substituted
Receivable pursuant to Section 2.04(s) hereof, any Holdback Funds in respect
thereof) required to be paid by the Seller to the Claimant for such Receivable under the
applicable Settlement Purchase Agreement has been paid in full and all obligations of the
Seller to fully effectuate the purchase of such Receivable pursuant to the Settlement
Purchase Agreement have been fully performed by the Seller (it being understood and agreed
that the Seller may have a continuing obligation to remit Split Payments to such Claimant
from time to time, but such obligation alone shall not render the foregoing incorrect).



     “Eligible WC Transfer Statute” shall mean any Transfer Statute that expressly permits
assignments of Worker’s Compensation Receivables.



     “Eligible Worker’s Compensation Receivable” shall mean a Worker’s Compensation
Receivable designated as a Series Receivable in respect of which, on the Closing Date (or, for any
Worker’s Compensation Receivable that is not such a Series Receivable on such Closing Date, on the
Advance Date or other date on which such Receivable shall become a “Series Receivable” in
accordance with the terms hereof and of the Supplement):




     (a) arising under, and the Settlement Agreement and Settlement Purchase Agreement
related to which shall have been entered into in compliance with, an Eligible Worker’s
Compensation Statute, and, in connection with such Settlement Agreement and Settlement
Purchase Agreement, the related Claimant and the Seller shall have obtained any and all
required approvals under the laws of the jurisdiction that has enacted such



17









 







Eligible Worker’s Compensation Statute, including, if applicable, the approval of the
applicable worker’s compensation commission or similar Governmental Authority;




     (b) purchased by the Seller from the related Claimant pursuant to a Transfer Order
issued by a court in accordance with an Eligible WC Transfer Statute;




     (c) in respect of which the related Settlement Counterparty has entered into an
Assignment, and the related Assignee is the Obligor and has purchased a Settlement Annuity
Contract from a Settlement Annuity Provider to fund the payment obligations assumed by it
pursuant to such Assignment;




     (d) if such Worker’s Compensation Receivable is a Longshore Act Receivable, then (i)
the related Claimant is (and was, on the effective date of the related Settlement Purchase
Agreement) a resident of Alabama, Florida or Georgia, (ii) the situs of the Claimant’s
employment out of which the underlying worker’s compensation claim arose was within Alabama,
Florida or Georgia, and (iii) the related Transfer Order was obtained in a court, and
pursuant to the Transfer Statute, of either Alabama, Florida or Georgia; and




     (e) if the related Eligible Worker’s Compensation Statute is the Texas worker’s
compensation statute, T.C.A. Labor Code §401.001 et seq., then the related Claimant is a
legal beneficiary of a deceased employee, the related Settlement represents the Claimant’s
right to receive certain Scheduled Payments as a result of such employee’s death and the
Claimant has obtained the consent of the Texas commissioner of workers’ compensation, all as
contemplated by §408.202 of the above-referenced statute.



     “Eligible Worker’s Compensation Statute” shall mean (a) each “Eligible Worker’s
Compensation Statute” specified in the Supplement or (b) if none are so specified, (i) any state or
federal worker’s compensation statute that does not prohibit the transfer or assignment of benefits
under such statute and (ii) the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. §916.



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated thereunder.



     “ERISA Affiliate” shall mean with respect to any Person, at any time, such trade or
business (whether or not incorporated) that would, at the time, be treated together with such
Person as a single employer under Section 4001 of ERISA or any of Sections 414(b), (c), (m) or (o)
of the Code.



     “Euroclear” shall mean Euroclear Bank S.A./N.V., as operator of the Euroclear system.



     “Euroclear Account” shall have the meaning specified in Section 6.11(c).



     “Euroclear/Clearstream Global Notes” shall mean the Series 2010-1 Notes delivered in
book-entry form on the Closing Date or on any date thereafter through the facilities of Clearstream
and Euroclear.



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     “Euroclear Security” shall mean a “security” (as defined in Section 8-102(a)(15) of
the UCC) that (i) is a debt security and (ii) is capable of being transferred to the relevant
depository’s account at Euroclear pursuant to Article VI, whether or not such transfer has
occurred.



     “Event of Default” shall mean (a) any event described in clauses (a),
(b) or (c) of Section 9.01, and (b) any Series Event of Default, but only
to the extent giving rise to an Event of Default pursuant to the terms of the Supplement.



     “Force Majeure Event” shall mean any event due to any cause beyond the reasonable
control of the Trustee or Master Servicer, such as restrictions on convertibility or
transferability, requisitions, involuntary transfers, general unavailability of communications
system, sabotage, fire, flood, explosions, acts of God, civil commotion, strikes or industrial
action of any kind, riots, insurrection, war or acts of government.



     “FDIC” shall mean the Federal Deposit Insurance corporation or any successor.



     “Fiscal Year” shall mean the taxable year of the Issuer which shall be the calendar
year (or such other year as is required by Section 706(b) of the Code).



     “GAAP” shall mean generally accepted accounting principles as are in effect from time
to time in the United States of America and applied on a consistent basis.



     “Global Notes” shall mean the U.S. Global Notes and the Regulation S Global Notes.



     “Governmental Authority” shall mean any country or nation, any political subdivision
of such country or nation, and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government of any country or nation or political
subdivision thereof.



     “Granting Clause” means the provisions of this Agreement and/or the Supplement
effecting the grant by the Issuer to the Trustee of a security interest in the Trust Assets, as
described in the Recitals hereto.



     “Holder” shall mean a Series 2010-1 Noteholder.



     “Imperial” shall mean Imperial Finance & Trading, LLC a Florida limited liability
company.



     “Imperial BUSA” shall mean that certain Back-up Servicing Agreement, dated as of
September 24, 2010, among Wilmington Trust Company, as trustee under each of the “Indentures”
defined therein, the Collateral Trustee, the Initial Master Servicer and Imperial, as Back-up
Servicer, as amended, restated, supplemented or otherwise modified from time to time.



     “Imperial Holdings” shall mean Imperial Holdings, LLC, the sole member of the Seller.



     “Indebtedness” shall mean, with respect to any Person, (i) the principal amount of all
obligations of such Person for borrowed money, (ii) the principal amount of all obligations of



19









 




such Person evidenced by bonds, debentures, notes, trust certificates or other similar
instruments (in each case, other than the Series 2010-1 Notes), (iii) all obligations of such
Person to pay the deferred purchase price of property or services recorded on the books of such
Person, except for (a) trade and other similar accounts payable and accrued expenses arising in the
ordinary course of business and (b) employee compensation and pension obligations and other
obligations arising from employee benefit programs and agreements or other similar employment
arrangements, (iv) all obligations of such Person as lessee which are capitalized on the books of
such Person in accordance with GAAP, (v) all indebtedness or obligations (other than under this
Agreement) which would constitute Indebtedness under the other provisions of this definition which
are secured by a Lien on the assets of such Person, whether such Person has assumed the obligation
to pay such indebtedness or obligation, and (vi) all obligations of such Person under any direct or
indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the types which would constitute Indebtedness under the other provisions
of this definition.




     “Indemnified Party” shall mean each of the Trustee (in its individual and trustee
capacities), the Collateral Trustee (in its individual and collateral trustee capacities), the
Series 2010-1 Noteholders, any other persons as may be named as indemnified parties in the
Supplement and any Affiliate of any of the foregoing.



     “Individual Annuity Seller” shall mean, with respect to any Annuity Receivable,
collectively, each Person that has entered into an Annuity Purchase Agreement pursuant to which it
has (i) sold or purported to sell to the Seller all of its right, title and interest under the
related Assignable Annuity Contract or (ii) if it has no such right, title or interest,
acknowledged the sale or purported sale to the Seller of all right, title and interest thereunder
by other parties to such Annuity Purchase Agreement.



     “Initial Cut-Off Date” shall mean the date specified as such in the Supplement.



     “Initial Master Servicer” shall mean PFSC in its capacity as the initial Master
Servicer with respect to such Series pursuant to Section 3.01.



     “Initial Series Payment Date” shall have the meaning specified in the Supplement.



     “Initial Servicing Fee Rate” shall mean 0.18%.



     “Institutional Accredited Investor” shall mean an institution that is an “accredited
investor” as such term is defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.



     “Insolvency Event” shall mean with respect to a specified Person, that:




     (a) such Person shall fail to, or admit in writing its inability to, pay its debts
generally as they become due, or shall commence a voluntary case or other proceeding under
any applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution or
other similar law now or hereafter in effect, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian or sequestrator
(or other similar official) for, such Person or for any substantial part of its



20









 







property, or shall make any general assignment for the benefit of creditors, or shall
take any corporate, partnership or company action authorizing the taking of any of the
foregoing actions; or




     (b) a case or other proceeding shall be commenced, without the application or consent
of such Person, in any court, seeking the liquidation, reorganization, debt arrangement,
dissolution, winding up, or composition or readjustment of debts of such Person, the
appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the
like for such Person or any substantial part of its assets, or any similar action with
respect to such Person under any law (foreign or domestic) relating to bankruptcy,
insolvency, reorganization, winding up or composition or adjustment of debt, or any of the
actions sought in such petition or proceeding, including the entering of an unappealable
order for relief in respect of such Person or the appointment of any trustee, receiver,
custodian, liquidator, assignee, sequestrator or the like for such Person or any substantial
portion of such Person’s property shall be granted or otherwise occur, and any such case,
proceeding or action shall continue undismissed, or unstayed and in effect, for a period of
30 days.



     “Investment Company Act” shall mean the Investment Company Act of 1940, together with
the rules and regulations promulgated thereunder, as amended from time to time.



     “Investment Proceeds” shall have the meaning specified in Section 4.03(c).



     “Issuer” shall mean Imperial Settlements Financing 2010, LLC, a Georgia limited
liability company.



     “Issuer Indemnified Losses” shall have the meaning specified in Section 7.03.



     “Issuer Interest” shall have the meaning specified in the Supplement.



     “Issuer Interest Holder” shall have the meaning specified in the Supplement.



     “Issuer Purchase Agreement” shall mean that certain Purchase and Contribution
Agreement, dated as of the Closing Date, between the Seller and the Issuer, as the same may be
amended, restated, supplemented or otherwise modified from time to time.



     “Issuer’s Account” shall mean the checking account maintained by the Issuer for
deposits by the Master Servicer, the Collateral Trustee or the Trustee in accordance with the
Master Servicer’s instructions, as applicable pursuant hereto or to the Supplement. The initial
Issuer’s Account shall be Account No. 1000090005843 maintained at SunTrust Bank, or such other
account as the Issuer may designate for such purpose from time to time, maintained at such bank as
the Issuer may designate from time to time.



     “Issuer Split Payment Account” shall mean an account maintained by the Collateral
Trustee with an Eligible Institution pursuant to Section 4.03(a) and into which Split
Payments are to be deposited in accordance with the Daily Reports and Section 4.03(a). The
Issuer Split Payment Account shall initially be Account No. 1000089497233 maintained at SunTrust
Bank.



21









 





     “Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment,
encumbrance, lien (statutory or other), preference, participation interest, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing and the filing of any financing
statement under the UCC or comparable law of any jurisdiction to evidence any of the foregoing but
not including any statutory liens with respect to payments not yet due and payable.



     “List of Receivables” shall mean, with reference to any Series, a list of the
Receivables pledged by the Issuer on any Series Closing Date or any other date on which a
Receivable shall become a Series Receivable in accordance with the terms hereof and the applicable
Supplement, specifying for each such Receivable the name of the Claimant or Individual Annuity
Seller, the Discounted Receivables Balance thereof, the name of the Obligor or Annuity Provider
making payments thereon, the Series that such Receivables support, and the Applicable Lock-Box to
which Scheduled Payments thereunder are to be sent.



     “Lock-Box Notice” shall have the meaning specified in Section 4.02(c).



     “Longshore Act Receivable” shall mean any Worker’s Compensation Receivable in respect
of which the related Eligible Worker’s Compensation Statute is the Longshore and Harbor Workers’
Compensation Act, 33 U.S.C. §916.



     “Master Collection Account” shall have the meaning specified in Section
4.02(a).



     “Master Collection Account Bank” shall have the meaning specified in Section
4.02(a).



     “Master Servicer” initially shall mean PFSC in its capacity as Master Servicer
pursuant to this Agreement, and after any Service Transfer, shall mean the Successor Servicer.



     “Master Servicer Indemnified Losses” shall the meaning specified in Section
8.04.



     “Master Servicing Fee” shall mean, with respect to any Payment Date, (i) to the extent
PFSC, any Affiliated Entity or the Back-up Servicer shall have acted as Master Servicer during the
immediately preceding Collection Period, the sum of (a) the product of (x) 1/12 (or, in the case of
the initial Payment Date or in the event that the Back-up Servicer acted as Master Servicer for
only a portion of the immediately preceding Collection Period, a fraction, the numerator of which
is the number of days from (and including) the Closing Date or the first day on which the Back-up
Servicer acted as Master Servicer, as applicable, to (and including) the last day of the
immediately preceding Collection Period for such Series and the denominator of which is 360), (y)
the Aggregate Discounted Receivables Balance of all Series Receivables on the first day of such
Collection Period and (z) (1) the Successor Servicing Fee Rate to the extent that the Back-up
Servicer has acted as Master Servicer during the immediately preceding Collection Period, and (2)
the Initial Servicing Fee Rate to the extent that PFSC or any other Affiliated Entity has acted as
Master Servicer during the immediately preceding Collection Period, plus (b) any unpaid
Master Servicing Fees for any Payment Date preceding the Payment Date for which such determination
is being made and (ii) to the extent any Successor Servicer not described in the foregoing clause
(i) shall have acted as Master Servicer during the immediately preceding Collection Period, such
fee as may be agreed upon by the Trustee, at the



22









 




direction of the Control Party, and such Successor Servicer pursuant to Section
10.02(c) at the time of such Successor Servicer’s appointment as Master Servicer, which fee, if
greater than the fee described in clause (i) (using sub-clause (1) of clause (i)(a)(z)),
shall not exceed 120% of the actual reasonable out-of-pocket costs and expenses reasonably incurred
by such Successor Servicer in performing its duties hereunder and under the Supplement with respect
to the Series Trust Assets.




     “Material Adverse Effect” shall mean, (i) with respect to any Person, the occurrence
or existence of any event or condition which has a material adverse effect (x) on such Person’s
ability to perform under the Operative Documents or (y) on the businesses, properties or condition
(financial or otherwise) of such Person, (ii) the occurrence or existence of any event or condition
which has a material adverse effect (x) on the ability of the Trustee, the Collateral Trustee or
the requisite Series 2010-1 Noteholders to enforce any of the Operative Documents or (y) on the
rights of the Trustee, for the benefit of the Secured Parties, in the Trust Assets, or (z) on any
material portion of the Series Trust Assets or (iii) the occurrence or existence of any event or
condition that could reasonably be expected to impair the timely payment in full of amounts due and
owing with respect to the Series 2010-1 Notes.



     “Maturity Date” shall mean the earlier of (i) the date following the Closing Date on
which (x) the principal amount of the Series 2010-1 Notes, all interest thereon and all fees and
other amounts payable in connection therewith have been paid in full, under this Agreement and (y)
the Series 2010-1 Revolving Period shall have terminated, and (ii) the date of discharge and
satisfaction of this Agreement in accordance with Section 12.01 hereof.



     “Monthly Report” shall mean a report in the form of that attached hereto as
Exhibit F to be delivered by the Master Servicer to the Collateral Trustee, the Trustee and
each Series 2010-1 Noteholder on or prior to 3:00 p.m. (New York City time) on each Series
Determination Date and relating to the immediately preceding Collection Period.



     “Moody’s” shall mean Moody’s Investors Service, Inc. or its successor.



     “Multiemployer Plan” shall mean a “multiemployer plan” as defined in Section
4001(a)(3) of ERISA to which contributions are or have been made during the preceding six years by
any Person or any ERISA Affiliate of such Person.



     “Note Rate” shall mean the note rate specified therefor in the Supplement.



     “Note Register” shall have the meaning specified in Section 6.03(a).



     “Note Registrar and Transfer Agent” shall have the meaning specified in Section
6.03(a).



     “Notice Party” shall mean, with respect to any Settlement Receivable, the related
Claimant, the related Obligor, any applicable Settlement Annuity Provider and, if the Seller has
obtained a Transfer Order with respect to such Receivable, any other Person required to receive
notice in connection with the issuance of such Transfer Order under any applicable Transfer
Statute.



23









 





     “Notice Procedures” shall mean, with respect to any notice or Transfer Order required
to be delivered to any Person, that such notice or Transfer Order shall be delivered by (i)
national overnight courier service, (ii) certified mail, return receipt requested or (iii) personal
delivery.



     “Notices” shall have the meaning specified in Section 13.05(a).



     “Obligor” shall mean any party obligated to make Scheduled Payments under any
Settlement Agreement (including any Qualified Assignment or any other assignment thereof),
including, without limitation, any Settlement Counterparty and any Qualified Assignee.



     “OC Shortfall” shall mean an “OC Shortfall” as defined in the Supplement.



     “Officer’s Certificate” shall mean, unless otherwise specified in this Agreement, a
certificate signed by the president, any vice president, the chief financial officer, the chief
operating officer, the treasurer or controller of the Issuer, the Master Servicer, or the Back-up
Servicer, as the case may be, and delivered to the Trustee, the Collateral Trustee or the Series
2010-1 Noteholders, as the case may be.



     “Operative Documents” shall mean this Agreement, the Supplement, the Series 2010-1
Notes, the Issuer Purchase Agreement, the Annuity Purchase Agreements, the Settlement Purchase
Agreements, the Back-up Servicing Agreement, each note purchase agreement described in the
Supplement, and the other agreements and instruments related to any of the foregoing or any other
instruments, documents and/or agreements, if any, designated as such in the Supplement.



     “Opinion of Counsel” shall mean a written opinion of counsel, who, except as otherwise
provided herein, may be counsel for, or an employee of, the Person providing the opinion and who
shall be reasonably acceptable to the Trustee and the Control Party.



     “Order” shall mean a written direction or order executed by the Issuer and delivered
to the Trustee.



     “Organizational Documents” shall mean the Issuer’s Certificate of Formation and
Limited Liability Company Agreement.



     “Original Series Note Principal Balance” shall have the meaning specified in the
Supplement.



     “Paying Agent” shall mean any paying agent appointed pursuant to Section 6.06.



     “Payment Date” shall mean the 15th day of each calendar month (commencing
on the Initial Series Payment Date) or, if such day is not a Business Day, the next following
Business Day.



     “PBGC” shall mean the Pension Benefit Guaranty Corporation (or any successor).



24









 





     “Permanent Regulation S Global Note” shall mean the Regulation S Notes held by the
Common Depository or any other depository representing the Euroclear/Clearstream Global Notes
following the Restricted Period.



     “Permitted Lien” shall mean any Lien arising under the Operative Documents and
assigned to the Issuer and pledged to the Trustee under such Operative Documents and under this
Agreement, respectively.



     “Person” shall mean any individual, corporation, partnership, joint venture, limited
liability company association, joint-stock company, trust, unincorporated organization,
Governmental Authority or any other entity of similar nature.



     “PFSC” means Portfolio Financial Servicing Company, a Delaware corporation.



     “Plan” shall mean, with respect to any Person, any defined benefit plan (as defined in
Section 3(35) of ERISA) that (a) is or was at any time during the past six years maintained by such
Person or any ERISA Affiliate of such Person, or to which contributions by any such Person are or
were at any time during the past six years required to be made or under which such Person has or
could have any liability, (b) is subject to the provisions of Title IV of ERISA and (c) is not a
Multiemployer Plan.



     “Plan Event” shall mean, with respect to any Person, (a) the imposition of an
obligation of such Person or any of its ERISA Affiliates under Section 4041 of ERISA to provide any
affected parties written notice of an intent to terminate a Plan in a distress termination
described in Section 4041(c) of ERISA, (b) the receipt of any notice by any Plan to the effect that
the PBGC intends to apply for the appointment of a trustee to administer any Plan, (c) the
termination of any Plan which results in any liability of such Person and/or any of its ERISA
Affiliates in excess of the Plan Liability Threshold, (d) the withdrawal of such Person or any
ERISA Affiliate of such Person from any Plan described in Section 4063 of ERISA which may
reasonably be expected to result in any liability of such Person and/or any of its ERISA Affiliates
in excess of the Plan Liability Threshold, (e) the complete or partial withdrawal of such Person or
any ERISA Affiliate of such person from any Multiemployer Plan which may reasonably be expected to
result in any liability of such Person and/or any of its ERISA Affiliates in excess of the Plan
Liability Threshold, (f) a Reportable Event or an event described in Section 4068(f) of ERISA which
may reasonably be expected to result in any liability of such Person and/or any of its ERISA
Affiliates in excess of the Plan Liability Threshold, and (g) any other event or condition which
under ERISA or the Code may reasonably be expected to constitute grounds for the imposition of a
lien on the property of such Person in respect of any Plan or Multiemployer Plan.



     “Plan Liability Threshold” shall mean, with respect to any Person and its ERISA
Affiliates, any liability of such Person and such ERISA Affiliates with respect to any Plan Event
which when aggregated with all other liabilities of such Person and its ERISA Affiliates incurred
as a result of any other Plan Events during the immediately preceding twelve month period,
plus any unpaid liabilities of such Person and its ERISA Affiliates arising as a result of
any Plan Events occurring at any other time, exceeds $1,000,000.




25











 





     “Potential Event of Default” means any event or condition which with the giving
of notice or passage of time, or both, would constitute an Event of Default or a Series Event of
Default.



     “Power of Attorney” shall mean an irrevocable power of attorney executed by a Claimant
in favor of the Seller or any other Person with full power of substitution (which Person has
irrevocably appointed the Seller as its substitute), in each case, with full power of substitution
at the election of the Seller, pursuant to a Settlement Purchase Agreement, authorizing the Seller
(or any such substitute therefor) to act for and on behalf of the Claimant in connection with the
enforcement of such Claimant’s Settlement.



     “Premium” shall have the meaning, with reference to any Series, specified in the
Supplement.



     “Principal Balance” shall mean, with respect to any Series 2010-1 Note at any time,
the outstanding principal balance of such Series 2010-1 Note at such time; provided, that
the Principal Balance of any Series 2010-1 Note shall only be reduced upon distribution of any
amounts on account of the principal thereof to or for the benefit of the Series 2010-1 Noteholder
thereof on a Payment Date, and the Principal Balance of any Series 2010-1 Note shall be reinstated
to the extent any such distribution (or any portion thereof) is rescinded or returned or such
Series 2010-1 Noteholder is required to return or disgorge or returns or disgorges any such
distribution (or any portion thereof) previously made to it.



     “Principal Terms” shall mean: (a) the name or designation; (b) the Series Receivables
and other Series Trust Assets; (c) the initial and maximum principal amount (or method for
calculating such amounts); (d) the Note Rate (or method for the determination thereof); (e) the
payment date or dates and the date or dates from which interest shall accrue; (f) the method for
allocating Collections to Series 2010-1 Noteholders; (g) the designation of any Series Accounts and
the terms governing the operation of any such Series Accounts; and (h) certain of the terms on
which the Series 2010-1 Notes may be exchanged for other Series 2010-1 Notes, repurchased by the
Issuer or remarketed to other investors.



     “Qualified Assignee” shall mean the Person to which the obligations to make payments
under a Settlement have been assigned pursuant to a Qualified Assignment.



     “Qualified Assignment” shall mean an assignment of the obligations to make payments
under a Settlement which satisfies Section 130(c) of the Code.



     “Qualified Institutional Buyer” shall have the meaning specified in Rule 144A under
the Securities Act.



     “Receivable” shall mean any Settlement Receivable or Annuity Receivable.



     “Record Date” shall have the meaning specified in the Supplement.



     “Records” means all Settlement Purchase Agreements and Annuity Purchase Agreements and
other documents, books, records and other information (including without limitation, computer
programs, tapes, discs, punch cards, data processing software and related property and



26









 







rights) maintained with respect to the Receivables and the related Claimants or Individual
Annuity Sellers.



     “Regulation S Global Note” shall mean (i) initially, with respect to such Series
2010-1 Note, a Temporary Regulation S Global Note and (ii) thereafter, a Permanent Regulation S
Global Note, each representing Euroclear/Clearstream Global Notes, in fully-registered form.



     “Regulation S Note” shall mean any temporary or permanent Series 2010-1 Note sold in
an offshore transaction to a non-U.S. person in accordance with Rule 903 or Rule 904 of Regulation
S of the Securities Act.



     “Regulation S Transfer Certificate” shall mean a certificate substantially in the form
of Exhibit I hereto.



     “Rehabilitated” with respect to any Series Receivable, shall have the meaning
specified in the applicable Supplement, or if no such meaning is so specified, shall mean the cure
of the circumstances that rendered such Series Receivable a Defaulted Receivable, which cure must
consist of, without limitation, either (i) with respect to any Defaulted Receivable, receipt by the
Issuer, the Master Servicer, or the Trustee, of written confirmation from the related Obligor or
Annuity Provider that subsequent Scheduled Payments with respect to such Receivable shall
henceforth be made to the Issuer or (ii) (a) with respect to any Defaulted Receivable described in
clause (d) or clause (e) of the definition of “Defaulted Receivable” receipt by the Issuer, the
Master Servicer or Trustee, of three consecutive Scheduled Payments related to such Receivable on
or before the 90th day after the respective scheduled due dates therefor, and (b) with respect to
any other Defaulted Receivable, the receipt by the Issuer, or the Master Servicer, or the Trustee,
of two consecutive Scheduled Payments related to such Receivable on or before the 90th day after
the respective scheduled due dates therefor; provided, that no Series Receivable may be
Rehabilitated more than two times.



     “Rehabilitated Receivable” shall mean any Receivable that was a Defaulted Receivable
but which has been Rehabilitated.



     “Related Property” means, with respect to any Receivable of any Series, (i) all of the
rights of the Trustee under this Agreement and the Back-up Servicing Agreement to the extent
relating to such Series, and (ii) all of the Issuer’s rights, title, interests, remedies, powers
and privileges (a) in the case of a Settlement Receivable, under the Settlement Purchase Agreement
pursuant to which such Receivable was purchased by the Seller and, if applicable, under the related
Power of Attorney, (b) in the case of an Annuity Receivable, under the Annuity Purchase Agreement
pursuant to which the Seller purchased such Annuity Receivable, (c) to and in all security
interests or other Liens and property subject thereto from time to time securing payment of such
Receivable, if any, whether pursuant to the Settlement Purchase Agreement related to such
Receivable in the case of a Settlement Receivable, the Annuity Purchase Agreement in the case of an
Annuity Receivable or otherwise, (d) under or pursuant to the Issuer Purchase Agreement, (d) under
this Agreement and the Back-up Servicing Agreement, (e) to and in all Annuity Lock-Box Accounts,
Annuity Lock-Boxes, Settlement Lock-Box Accounts, Settlement Lock-Boxes, Series Payment Account,
Series Reserve Account, Series Collection Account and all other Series Accounts into which any
Collections are deposited or concentrated; all monies



27









 







and other items of payment therein; all monies and other items of payment relating on deposit
from time to time in the Master Collection Account to the extent constituting Collections of Trust
Assets; and all Eligible Investments purchased with any such amounts and any investment income with
respect thereto, (f) under any interest rate hedging instruments or agreements entered into by the
Issuer or the Seller, (g) under other agreements or arrangements of whatever character (including
guaranties, letters of credit, letter of credit rights, supporting obligations, annuity contracts
(including Annuity Contracts) or other credit support) from time to time supporting or securing
payment of such Receivables whether pursuant to any related Settlement Agreement, Assignment,
Annuity Contract, the Settlement Purchase Agreement, the Annuity Purchase Agreement or any other
agreement related to such Receivable, (h) under all UCC financing statements filed by the Issuer
against the Seller (in each case, to the extent relating to such Series), (i) under all UCC
financing statements filed by the Seller against the related Individual Annuity Seller or by the
Issuer against the Seller, and in any case related to such Receivable in the case of an Annuity
Receivable, (j) to and in all Records and all other instruments and rights relating to such
Receivable, (k) to and in any other property designated as such pursuant to the Supplement, and (l)
to and in all products and proceeds of any of the foregoing.



     “Reportable Event” shall mean any of the events set forth in Section 4043 of ERISA.



     “Requirements of Law” shall mean any law, treaty, rule or regulation, or final
determination of an arbitrator or Governmental Authority, and, when used with respect to any
Person, the certificate of incorporation and by-laws or other organizational or governing documents
of such Person.



     “Responsible Officer” shall mean, (i) when used with respect to the Trustee or the
Collateral Trustee, any officer within the corporate trust department (or any successor department
or group) of the Trustee or the Collateral Trustee, as applicable, including any managing director,
vice president, assistant vice president, secretary, assistant secretary, treasurer, assistant
treasurer, trust officer or any other officer of such Person customarily performing functions
similar to those performed by the persons who at the time shall be such officers, respectively, or
to whom any corporate trust matter is referred because of such officer’s knowledge of and
familiarity with the particular subject and (ii) when used with respect to any other Person, any
president, vice president, chief financial officer, chief operating officer, treasurer or any other
officer of such Person customarily performing functions similar to those performed by the Persons
who at the time shall be such officers (including, without limitation, any officer identified in
the notice address set forth for such Person in Section 13.05).



     “Restricted Period” shall mean in the case of the Regulation S Global Notes, the
period from the Closing Date through the 40th day thereafter.



     “Rule 144A Transfer Certificate” shall mean a certificate substantially in the form of
Exhibit H hereto.



     “Sale”, “Sell” and “Sold” shall have the meaning specified in
Section 6.03(b).



28









 





     “S&P” shall mean Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business, or its successor.



     “Scheduled Payments” shall mean, (i) when used with respect to any Settlement, those
payments from time to time required to be paid by the Obligor or by a Settlement Annuity Provider
on behalf of the Obligor, to the Claimant pursuant to the terms of the related Settlement
Agreement, (ii) when used with respect to a Settlement Receivable, those payments described in the
foregoing clause (i) (or portions thereof), the rights to receive which have been transferred to
the Issuer, (iii) when used with respect to an Assignable Annuity Contract, those payments from
time to time required to be paid by the Assignable Annuity Provider to the Individual Annuity
Seller pursuant to the terms of such Assignable Annuity Contract and (iv) when used with respect to
an Annuity Receivable, those payments described in the foregoing clause (iii) (or portions
thereof), the rights to receive which have been transferred to the Issuer.



     “Secured Parties” shall have the meaning as shall be specified in the Supplement.



     “Securities Act” shall mean the Securities Act of 1933, as amended, from time to time.



     “Seller” shall mean Washington Square Financial, LLC, a Georgia limited liability
company.



     “Series” shall mean the Series 2010-1 Notes established pursuant to the Supplement.



     “Series 2010-1 Note” shall mean any one of the $50,000,000 8.39% Fixed Rate Asset
Backed Variable Funding Notes, Series 2010-1 Notes executed by the Issuer, authenticated by the
Trustee, and delivered by or on behalf of the Issuer pursuant hereto and the Supplement, in
substantially the form attached to the Supplement.



     “Series 2010-1 Noteholder” shall mean the Person in whose name a Series 2010-1 Note is
registered in the Note Register.



     “Series Accounts” shall mean the Series Collection Account, the Series Reserve
Account, the Series Payment Account, the Series Investment Proceeds Account and the Series Holdback
Account, together with the Master Collection Account to the extent of any Collections of the Series
Receivables or the Related Property relating thereto.



     “Series Collection Account” shall mean the segregated bank account established and
designated as such pursuant to Section 4.03(a), and identified in the Supplement as the
“Series Collection Account”.



     “Series Determination Date” shall have the meaning specified in the Supplement.



     “Series Event of Default” shall have the meaning specified in the Supplement.



     “Series Investment Proceeds Account” shall mean the segregated bank account
established and designated as such pursuant to Section 4.03(a), and identified in the
Supplement as the “Series Investment Proceeds Account”.



29









 





     “Series Payment Account” shall mean the segregated bank account established and
designated as such pursuant to Section 4.03(a), and identified in the Supplement as the
“Series Payment Account”.



     “Series Receivables” shall mean those Receivables specified on a List of Receivables
in which the Issuer has granted a security interest to the Trustee pursuant to the Supplement for
the benefit of, inter alia, the 2010-1 Noteholders.



     “Series Reserve Account” shall mean the segregated bank account established and
designated as such pursuant to Section 4.03(a), and identified in the Supplement as the
“Series Reserve Account”.



     “Service Transfer” shall have the meaning specified in Section 10.01.



     “Series Trust Assets” shall have the meaning specified in the Supplement.



     “Servicer Advance” shall have the meaning set forth in Section 3.09.



     “Servicer Default” shall mean the occurrence of any of the following:




     (a) (x) any failure by the Master Servicer to remit any Collections received by it in
accordance with Section 3.04(b) of this Agreement or (y) any failure (other than as
described in clause (x) above) by the Master Servicer to make any allocation of any
payment or to make any payment, transfer or deposit or, if applicable, to give instructions
or notice to the Trustee or the Collateral Trustee to make such payment, transfer or
deposit, in either case, required to be made under the Supplement, this Agreement or any of
the other Operative Documents on or before the date occurring five (5) Business Days after
the date such payment, transfer or deposit or such instruction or notice is required to be
made or given, as the case may be;




     (b) the assignment by the Master Servicer of its duties under this Agreement or under
the Supplement other than as permitted by Section 8.02;




     (c) subject to paragraphs (a) and (b) above, any failure by the Master
Servicer duly to observe or perform in any respect any covenant or agreement by it under
this Agreement, the Supplement or any of the other Operative Documents, which failure (i)
continues unremedied for thirty (30) days after the earlier of (x) the date upon which a
Responsible Officer of such breaching party obtained actual knowledge of such failure and
(y) the date upon which written notice of such failure shall have been given to the Master
Servicer by the Collateral Trustee, the Trustee, the Back-up Servicer, any Series 2010-1
Noteholder or the Control Party, and (ii) has or could reasonably be expected to have a
Material Adverse Effect with respect to the Master Servicer or the Issuer;




     (d) any representation, warranty or certification made or deemed to have been made by
the Master Servicer under or in connection with this Agreement, the Supplement or any of the
other Operative Documents shall prove to have been incorrect in any respect when made or
deemed to have been made or remade, which incorrectness (i) continues unremedied for thirty
(30) days after the earlier of (x) the date upon which a Responsible



30









 







Officer of such breaching party obtained actual knowledge of such failure and (y) the
date upon which written notice of such incorrectness shall have been given to the Master
Servicer by the Collateral Trustee, the Trustee, the Back-up Servicer, any Series 2010-1
Noteholder or the Control Party, and (ii) has or could reasonably be expected to have a
Material Adverse Effect with respect to the Master Servicer or the Issuer;




     (e) the Master Servicer shall become the subject of an Insolvency Event;




     (f) an Event of Default occurs;




     (g) the termination of the Master Servicer as servicer for any securitization in
respect of which an Affiliated Entity is the issuer; or




     (h) a Material Adverse Effect with respect to the Master Servicer.



     “Servicing Officer” shall mean, with respect to the Master Servicer, any officer or
other employee of the Master Servicer or other agent of the Master Servicer who in any case is
involved in, or responsible for, the administration and servicing of the Series Receivables and
whose name appears on a list of Servicing Officers furnished to the Trustee by the Master Servicer,
as such list may from time to time be amended.



     “Settlement” shall mean the Scheduled Payments due or to become due under and in
connection with, and all of the Claimant’s other rights (but no obligations or liabilities) under,
a Settlement Agreement, including payments under any Settlement Annuity Contract purchased by any
Obligor to fund its contractual obligations under such Settlement Agreement.



     “Settlement Agreement” shall mean a settlement agreement entered into between a
Claimant and a Settlement Counterparty evidencing, among other things, the contractual indebtedness
of the Settlement Counterparty to such Claimant and the right of the Claimant to receive future
payments thereunder as compensation.



     “Settlement Annuity Contract” shall mean an annuity contract issued to fund the
obligations of an Obligor under a Settlement Agreement.



     “Settlement Annuity Provider” means, with respect to any Settlement and a related
Settlement Annuity Contract, the insurance company that issued and is obligated under such
Settlement Annuity Contract.



     “Settlement Counterparty” shall mean the Person that entered into, and was originally
obligated to make Scheduled Payments under, a Settlement Agreement with a Claimant.



     “Settlement Lock-Box” shall mean any post office box identified as a “Settlement
Lock-Box” on Schedule III into which Collections are received.



     “Settlement Lock-Box Account” shall have the meaning specified in Section
4.02(b).



     “Settlement Lock-Box Bank” shall have the meaning specified in Section
4.02(b).



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     “Settlement Lock-Boxes” shall have the meaning specified in Section 4.02(b).



     “Settlement Package” shall mean, with respect to any Settlement Receivable, the
following items: (i) a copy of the Transfer Order approving the transfer of the Settlement
Receivable from the Claimant to the Seller; (ii) a copy of the Settlement Purchase Agreement
documenting terms of the Seller’s purchase of the Settlement Receivable from the Claimant; (iii) a
copy of the Settlement Agreement, or a copy of the Stipulation, or a copy of the Uniform Qualified
Assignment, or a similar document evidencing a Settlement has occurred; (iv) evidence that an
annuity has been issued; (v) UCC search reports and credit reports against the Claimant and, if the
Claimant is not the seller of the Settlement or the Settlement Receivable to the Seller, the seller
of such Settlement Receivable (provided, that in the case where the seller of the Settlement
Receivable was deceased or the subject of a bankruptcy proceeding, a credit report shall not be
required); (vi) to the extent provided, a form completed by the Claimant (or such other seller of
such Settlement Receivable) either waiving or acknowledging receipt of professional advice, or if
professional advice is received, the Claimant’s (or such other seller’s) professional advisor may
either complete a form or provide a letter stating that they provided professional advice; and
(vii) if applicable, the original Power of Attorney related to such Settlement Receivable in favor
of the Seller or any other Person (which Person has irrevocably appointed the Seller as its
substitute), in each case with full power of substitution by the Seller.



     “Settlement Purchase Agreement” shall mean any agreement substantially in the form of
Exhibit A hereto entered into between a Claimant and the Seller pursuant to which the
Claimant sells, assigns and conveys to the Seller all or a portion of the Claimant’s right, title
and interest in certain payments which such Claimant is to receive under a Settlement Agreement.



     “Settlement Receivable” shall mean all rights (a) to certain Scheduled Payments (or
portions thereof) due or to become due in connection with a Settlement Agreement and (b) all other
rights (but not obligations or liabilities), in any case which are purchased by the Seller from a
Claimant pursuant to a Settlement Purchase Agreement, including, without limitation, all rights to
receive such periodic Scheduled Payments from any Assignee pursuant to an Assignment and all rights
to receive any payments under any Settlement Annuity Contract purchased by any Obligor (or its
assignee) to fund its payment obligations under such Settlement Agreement, whether such Scheduled
Payments (or such portions thereof) or other rights constitute accounts, general intangibles
(including, without limitation, payment intangibles), investment property, intangible or tangible
chattel paper (including, without limitation, electronic chattel paper), instruments, documents,
securities, cash, supporting obligations or any other kind of property, and “Settlement
Receivables” shall mean all such Receivables. Notwithstanding the foregoing, the term
“Settlement Receivable” shall not include any Scheduled Payments due prior to the applicable
Cut-Off Date for such Receivable.



     “Special Record Date” shall have the meaning specified in the Supplement.



     “Specified Insolvency Default” shall have the meaning set forth in clause (i) of
Section 9.01(a) hereto.



     “Specified Series Reserve Balance” shall have the meaning specified in the Supplement.



32









 





     “Split Payment” shall mean, with respect to any Settlement Purchase Agreement or
Annuity Purchase Agreement pursuant to which the Claimant or any Individual Annuity Seller has
reserved an interest (which interest shall solely be in the form of an independent claim against
the Seller for payment to such Person of certain amounts upon, and to the extent of, receipt by the
Seller of the Scheduled Payments sold (or portions of which have been sold) by the Claimant or
Individual Annuity Seller to the Seller pursuant to such Settlement Purchase Agreement or Annuity
Purchase Agreement), the amount of each such payment obligation so reserved and payable by the
Seller to such Claimant from time to time pursuant to (and in accordance with) such Settlement
Purchase Agreement or Annuity Purchase Agreement and the Credit Policy Manual.



     “Stipulation” shall mean an agreement between the Seller and an insurance carrier
evidencing that an annuity exists that was issued pursuant to a personal injury settlement.



     “Successor Servicer” shall have the meaning specified in Section 10.02(a).



     “Successor Servicing Fee Rate” shall mean 0.125%.



     “Supplement” shall mean that certain Series 2010-1 Supplement to the Master Trust
Indenture, dated as of the Closing Date, among the Issuer, the Master Servicer, the Trustee and the
Collateral Trustee, as the same may be amended, restated, supplemented or otherwise modified from
time to time.



     “Tax Opinion” shall mean, with respect to any action, an Opinion of Counsel who is not
an employee of any Affiliated Entity to the effect that, (i) for federal income tax purposes (a)
such action will not adversely affect the Tax Opinion Characterization of the Series 2010-1 Notes,
(b) such action will not cause a taxable event to any Series 2010-1 Noteholder (other than the
parties to such action) and (c) without limiting the applicability of clauses (a), and
(b) of this definition, in the case of the original issuance of Series 2010-1 Notes
hereunder, the Series 2010-1 Notes will be properly characterized in accordance with the Tax
Opinion Characterization and (ii) for federal income tax purposes, following any such action, the
Issuer will not be treated as an association (or publicly traded partnership) taxable as a
corporation.



     “Tax Opinion Characterization” shall mean, with respect to the Series 2010-1 Notes,
the characterization of such Series 2010-1 Notes as debt of the Issuer for Federal income tax
purposes.



     “Temporary Regulation S Global Note” shall mean a Regulation S Note held by the Common
Depository representing Euroclear/Clearstream Global Notes during the Restricted Period.



     “Termination Notice” shall have the meaning specified in Section 10.01.



     “Transfer Date” shall have the meaning specified in Section 6.10.



     “Transfer Order” shall mean a final, non-appealable written order of a court of
competent jurisdiction in the applicable Approved State evidencing such court’s approval of a
transfer of some or all of a Claimant’s rights under a Settlement to the Seller which transfer has
been made



33









 







in accordance with such state’s Transfer Statute, which order is binding with respect to such
Claimant and each of the Notice Parties and with respect to which the period during which such
order could be appealed by any Notice Party has expired.



     “Transfer Statute” shall mean any statute which has been enacted in any state, as such
statute shall be amended from time to time, and which authorizes, subject to compliance therewith,
the transfer of a Settlement (or a portion thereof) by the original payee thereunder to a
transferee.



     “Trust Assets” shall have the meaning specified in the Recitals.



     “Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as in effect on the
Closing Date.



     “Trustee” shall mean Wilmington Trust Company, not in its individual capacity, but
solely in its capacity as trustee on behalf of the Series 2010-1 Noteholders, or its successor in
interest, or any successor trustee appointed as herein provided.



     “Trustee Fee” shall mean, for any Payment Date, the “Trustee Fee” specified in the
Supplement.



     “Trustee’s Account” shall have the meaning specified in Section 4.04.



     “UCC” shall mean the Uniform Commercial Code, as amended from time to time, as in
effect in any applicable jurisdiction.



     “U.S. Dollars” or “Dollars” means dollars of the United States of America.



     “U.S. Global Notes” shall mean the U.S. Notes delivered in book-entry form through the
facilities of the Common Depository.



     “U.S. Note” shall mean any Series 2010-1 Note sold by the Issuer to an initial Series
2010-1 Noteholder pursuant to the exemption from registration provided by Section 4(2) of the
Securities Act and subsequently sold by such initial Series 2010-1 Noteholder to any Series 2010-1
Noteholder on or after the Closing Date pursuant to Rule 144A under the Securities Act.



     “Worker’s Compensation Receivable” means a Settlement Receivable arising in connection
with the settlement of a claim brought by a Claimant employee (or an heir or other legal
beneficiary of an employee) against such employee’s Settlement Counterparty employer pursuant to a
worker’s compensation statute for damages resulting from injury or sickness sustained or contracted
in the course of such employee’s employment.



     SECTION 1.02. Other Definitional Provisions.



     (a) All terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise defined therein.



34









 





     (b) As used herein and in any certificate or other document made or delivered pursuant hereto
or thereto, accounting terms not defined in this Agreement, and accounting terms partly defined in
this Agreement to the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles or regulatory accounting principles, as applicable, as in
effect in the United States. To the extent that the definitions of accounting terms herein are
inconsistent with the meanings of such terms under generally accepted accounting principles or
regulatory accounting principles as in effect in the applicable jurisdiction, the definitions
contained herein shall control.



     (c) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement; and Section, Schedule and Exhibit references contained in this Agreement are references
to Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the
term “including” means “including without limitation”.



     SECTION 1.03. Acts of Series 2010-1 Noteholders.



     (a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by any Series 2010-1 Noteholders, or a specified
percentage or number of Series 2010-1 Noteholders, may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Series 2010-1 Noteholders, in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered to the Trustee or
the Collateral Trustee, as herein provided, 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 Series 2010-1 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
11.02 and Section 14.02, as applicable) conclusive in favor of the Trustee, the
Collateral Trustee and/or the Issuer, as applicable, if made in the manner provided in this
Section.



     (b) The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by an acknowledgment of a notary public
or other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof. Where such execution
is by a signer acting in a capacity other than such signer’s individual capacity, such certificate
or affidavit shall also constitute sufficient proof of the signer’s authority. The fact and date
of the execution of any such instrument or writing, or the authority of the person executing the
same, may also be proved in any other manner which the Trustee or the Collateral Trustee, as
applicable, deems sufficient.



     (c) The ownership of the Series 2010-1 Notes shall be proved by the Note Register.



     (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of any
Series 2010-1 Noteholder or the Series 2010-1 Noteholders shall bind every future holder of the
same Series 2010-1 Note or Series 2010-1 Notes and the holder of any Series 2010-



35









 




1 Note issued upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, suffered or omitted to be done by the Trustee, the Collateral
Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such
Series 2010-1 Note.




     SECTION 1.04. Conflict with Trust Indenture Act. None of the Series 2010-1 Notes
issued under this Indenture are intended to be registered under the Securities Act and this
Indenture is not intended to be qualified under the Trust Indenture Act. If, notwithstanding such
intent, this Indenture at any time becomes or is required to become qualified under the Trust
Indenture Act and any provision hereof limits, qualifies or conflicts with the duties imposed by
any of Sections 310 through 317, inclusive, of the Trust Indenture Act through the operation of
Section 318(c) thereof, such imposed duties shall control.



     SECTION 1.05. Benefits of Indenture. Nothing in this Indenture or in the Series
2010-1 Notes, express or implied, shall give to any Person (other than the Series 2010-1
Noteholders and the other Secured Parties identified in the Supplement) any benefit or any legal or
equitable right, remedy or claim under this Indenture.



     SECTION 1.06. Incorporation of Recitals. The Recitals of the Issuer set forth above
in this Indenture are hereby incorporated by this reference hereto as if, and to the same extent
that, such Recitals were contained in the body of this Indenture.



     SECTION 1.07. Conditions Precedent to the Effectiveness of this Agreement. The
effectiveness of this Agreement is subject to (i) the receipt by the Trustee of executed
counterparts to this Agreement from the Initial Master Servicer, the Issuer, the Trustee and the
Collateral Trustee; and (ii) the satisfaction of each of the conditions to issuance of the Series
2010-1 Notes set forth in Section 5.01 of the Supplement.



ARTICLE II

GRANT OF SECURITY INTEREST IN RECEIVABLES;

ORIGINAL ISSUANCE OF SERIES 2010-1 NOTES




     SECTION 2.01. Grant of Security Interest in Assets; No Assumption of Obligations Related
to Receivables; Certain Matters Regarding the Grant.



     (a) Pursuant to the Supplement and in accordance with the Granting Clause hereof, the Issuer
shall from time to time grant, convey, transfer, assign and deliver, in each case, to the Trustee,
its successors and assigns and its or their assigns forever, to have and to hold in trust for the
benefit of the Series 2010-1 Noteholders of the Series 2010-1 Notes issued pursuant to the
Supplement, a first priority security interest in the Series Trust Assets.



     (b) Other than the obligation of the Master Servicer and/or the Collateral Trustee to remit
Split Payments to Claimants pursuant hereto, the grant described in the Granting Clause shall not
be deemed to constitute, nor is it intended to result in, a creation or an assumption by the
Trustee or any Series 2010-1 Noteholder of any obligation of any Claimant, Individual Annuity
Seller, the Seller, the Issuer or any other Person in connection with the Receivables or under any
Operative Document, including, without limitation, any obligation to any Claimant or Individual
Annuity Seller. Each such grant shall be made to the Trustee on behalf of the Series



36









 







2010-1
Noteholders, and each reference in this Agreement to such grant shall be construed accordingly.



     (c) In connection with the grant to the Trustee as described in the Granting Clause, the
Issuer agrees to record and file from time to time, at its own expense, financing statements and
other documents (and amendments thereto, assignments thereof and continuation statements, when
applicable) with respect to the Receivables and the other Trust Assets now existing and hereafter
created meeting the requirements of the UCC and other applicable Requirements of Law in such manner
and in such jurisdictions as are necessary to perfect, and maintain the perfection and priority of,
the security interests granted hereunder and the ownership interests of the Issuer in the
Receivables and the other Trust Assets purchased from the Seller, and to deliver a file-stamped
copy of each such financing statement or other document or other evidence of such filing to the
Trustee on or prior to the Closing Date or, with respect to any security interest granted hereunder
on a date other than the Closing Date or, in the case of any financing statement, continuation
statement or other document filed by or on behalf of the Issuer after the Closing Date, promptly
after the filing thereof. While the Trustee shall be under no obligation whatsoever to file such
financing statements, documents, amendments, assignments or continuation statements, or to make any
other filing under the UCC in connection with the grant to the Trustee as described in the Granting
Clause, the Issuer hereby authorizes the Trustee, within the meaning of Section 9-509 of the UCC,
to take, at the Issuer’s expense, and at the direction of the Issuer or the Control Party, all
actions necessary to maintain the perfection and priority of the liens and security interests
granted under this Agreement, including, without limitation, the filing of any financing statement
related to the applicable Trust Assets without the Issuer’s signature or further authorization.
The Issuer acknowledges and agrees that any such financing statement may include a collateral
description to the effect that the collateral covered by such financing statement includes all of
the assets of Issuer.



     (d) In connection with the grant to the Trustee as described in the Granting Clause, the
Issuer further agrees, at its own expense, on or prior to the Closing Date, the applicable Advance
Date or any other date on which Receivables are pledged by the Issuer under the Supplement to
indicate in its files that the Receivables which are the subject of any such grant of a security
interest in the Supplement have been pledged to the Trustee in accordance with this Agreement for
the benefit of the Series 2010-1 Noteholders.



     (e) In connection with the grant to the Trustee of the security interest pursuant to the
Supplement, the Master Servicer shall, on behalf of the Issuer, on or prior to the Closing Date,
the applicable Advance Date or any other date on which Receivables are pledged by the Issuer under
the Supplement mark or cause to be marked, the master data processing records of the Seller
evidencing the Receivables identifying the Receivables that have been sold or contributed
to the Issuer pursuant to the Issuer Purchase Agreement and indicating that a security
interest in such Receivables has been further granted to the Trustee pursuant to the Supplement.



     SECTION 2.02. Acceptance by Trustee. The Trustee hereby acknowledges its acceptance
on behalf of the Series 2010-1 Noteholders of the security interest in all of the Trust Assets and
declares that it shall maintain such security interest, upon the trust herein set forth, for the
benefit of the Series 2010-1 Noteholders.



37









 





     SECTION 2.03. General Representations and Warranties of the Issuer. The Issuer hereby
represents and warrants as of the date hereof and on each date hereafter until the satisfaction and
discharge of this Indenture pursuant to Section 12.01, that:



     (a) Organization and Good Standing. The exact legal name of the Issuer is Imperial
Settlements Financing 2010, LLC. The Issuer is a limited liability company duly organized, validly
existing and in good standing under the laws of the state of Georgia. The Issuer’s organizational
identification number is 10058074. The Issuer has full power and authority to own its properties
and conduct its business as presently owned or conducted, and to execute, deliver and perform its
obligations under the Operative Documents, and to execute and deliver to the Trustee pursuant
hereto the Series 2010-1 Notes.



     (b) Due Qualification. The Issuer is duly qualified to do business and is in good
standing as a foreign limited liability company, and has obtained all necessary licenses and
approvals, in each jurisdiction in which failure to so qualify or to obtain such licenses and
approvals has, or could reasonably be expected to have, a Material Adverse Effect.



     (c) Due Authorization; Conflicts. The execution, delivery and performance by the
Issuer of the Operative Documents are within the Issuer’s powers, have been duly authorized by all
necessary company and member action, and do not contravene (i) the Issuer’s Organizational
Documents, (ii) any Requirements of Law binding on, or affecting, the Issuer and the violation of
which has, or could reasonably be expected to have, a Material Adverse Effect, or (iii) any
agreement, contract, indenture, mortgage, or other instrument, document or agreement to which the
Issuer or any of its assets are subject or may be effected.



     (d) Consents. No authorization or approval or other action by, and no notice to or
registration of or filing with, any Governmental Authority or other regulatory body is required to
be made or obtained by the Issuer or the Seller for the due execution, delivery and performance by
the Issuer, or to insure the legality, validity, binding effect or enforceability, of the Operative
Documents, except for the filing of UCC financing statements against the Seller and the Issuer in
respect of the transactions contemplated herein all of which that need to be filed to perfect the
ownership interest of the Issuer and the security interest of the Trustee, respectively, in the
Trust Assets (as comprised as of the date of each making or remaking of this representation and
warranty), have been so made (or delivered to the Trustee in form suitable for filing).



     (e) Enforceability. Each of the Operative Documents to which the Issuer is a party is
and will be the legal, valid and binding obligation of the Issuer enforceable against the Issuer in
accordance with its respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors’ rights generally or general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).



     (f) Proceedings. Except as disclosed in writing to the Trustee and the Collateral
Trustee, there are no judgments or other judicial or administrative orders outstanding against the
Issuer nor is there any pending or, to the best of the Issuer’s knowledge, threatened action or
proceeding affecting the Issuer before any court, governmental agency or arbitrator.



38









 





     (g) Compliance with Laws, Etc. The Issuer is not in violation of any Requirements of
Law applicable to it or any of its properties or any indenture, lease, loan or other agreement to
which it is a party or by which it or its assets, including without limitation the Receivables, may
be bound or affected, the violation of which, in any of the foregoing cases, would have, or could
reasonably be expected to have, a Material Adverse Effect.



     (h) Margin Regulations. The Issuer will not use any of the proceeds that it receives
pursuant hereto or the Supplement for any purpose which will conflict with or contravene any of
Regulations T, U or X promulgated by the Federal Reserve Board from time to time.



     (i) Locations. The principal place of business and chief executive office of the
Issuer are located at the address of the Issuer set forth in Section 13.05, and the offices
where the Issuer keeps all of its records relating to the Receivables are located at the addresses
set forth on Schedule II hereto, or, in each case, at such other locations notified to the
Trustee in accordance with Section 2.04(e).



     (j) Lock-Box Banks. The names and addresses of all the Applicable Lock-Box Banks, and
the account numbers of all Settlement Lock-Box Accounts and the related Settlement Lock-Boxes
serviced by such Applicable Lock-Box Banks, are in each case specified in Schedule III
hereto or have been notified to the Trustee, and all action required to be taken with respect to
the foregoing pursuant to Sections 3.04 and 4.02 has been taken. The Applicable
Lock-Box Banks are the only institutions holding any deposit accounts or servicing any lockboxes
for the receipt of Scheduled Payments in respect of the Receivables. All Annuity Providers or
other Obligors, as applicable, have been directed to make payments on the Receivables, or the
Annuity Contracts relating thereto, as applicable, to (i) in the case of payments in respect of
Annuity Receivables, an Annuity Lock-Box covered by a Lock-Box Notice, the Master Collection
Account or the Series Collection Account and (ii) in the case of payments made in respect of
Settlement Receivables, a Settlement Lock-Box covered by an Lock-Box Notice, the Master Collection
Account or Series Collection Account, and in each case such instructions are in full force and
effect.



     (k) ERISA Matters. Except as set forth on Schedule IV, neither the Issuer nor any of
its ERISA Affiliates has maintained or participated in any Plan or Multiemployer Plan during the
past six (6) years. With respect to any such Plan and/or Multiemployer Plan, (i) such Plan and/or
Multiemployer Plan complied and complies in all material respects with all applicable Requirements
of Law, (ii) no Reportable Event has occurred with respect to any such Plan and/or Multiemployer
Plan, (iii) no such Plan or Multiemployer Plan has been terminated, and (iv) no
funding deficiency has occurred in respect of any such Plan or Multiemployer Plan, except, in
each case, where the occurrence of any of the foregoing could not be reasonably expected to result
in liability to the Issuer in excess of the Plan Liability Threshold or result in a Lien against
the Trust Assets (or any portion thereof). With respect to any such Plan or Multiemployer Plan
that is intended to qualify for special tax treatment under Sections 401(a) or 403(a) of the Code,
such Plan or Multiemployer Plan is in compliance with the applicable requirements of the Code for
such qualifications.



     (l) Taxes. The Issuer has filed all federal, state and local tax returns which it is
required by law to file and has paid all taxes, assessments and other governmental charges due in



39









 







respect of its respective returns, except to the extent that any such taxes, assessments or other
governmental charges are being contested in good faith and as to which the Issuer has set aside on
its books adequate reserves.



     (m) Other Agreements. Other than the Operative Documents, the Issuer is not a party
to any material lease, contract, agreement, understanding or commitment of any kind which, if
breached, has, or could reasonably be expected to directly or indirectly have, a Material Adverse
Effect.



     (n) Accuracy of Information. Each certificate, information, exhibit, financial
statement, document, book, record, report or disclosure furnished by the Issuer to the Trustee, the
Collateral Trustee, the Master Servicer, the Back-up Servicer or any Series 2010-1 Noteholder
(other than an Affiliated Entity) is accurate in all material respects and contains no untrue
statement of a material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading.



     (o) Investment Company Act Matters. The Issuer is not an “investment company” or a
company “controlled” by an “investment company” within the meaning of the Investment Company Act.



     (p) Title to Property. The Issuer, at the time of the grant of a security interest in
favor of the Trustee, owns good and marketable title to the Receivables free and clear of any Lien,
claim or encumbrance of any Person (other than Permitted Liens).



     (q) Tradenames. The Issuer has no tradenames, fictitious names, assumed names or
“doing business as” names and since its formation, the Issuer has not been the subject of any
merger or other corporate reorganization that resulted in a change of name, identity or corporate
structure.



     (r) Subsidiaries. The Issuer has no subsidiaries.



     (s) Solvency. After giving effect to the initial “Purchase” under the Issuer Purchase
Agreement on the Closing Date, and after giving effect to the issuance of Series 2010-1 Notes
hereunder and each Purchase under the Issuer Purchase Agreement related to an Advance made on each
Advance Date, the Issuer (i) is (or was) not “insolvent” (as such term is defined in §101(31)(A) of
the Bankruptcy Code), (ii) is (or was) able to pay its debts as they come due, and (iii) does (or
did) not have unreasonably small capital for the business in which it is (or was) engaged.



     (t) Valid Transfer and Valid Grant. The Issuer Purchase Agreement creates a valid
sale, transfer and assignment to the Issuer of all right, title and interest of the Seller in and
to all Receivables and Related Property conveyed to the Issuer thereunder. This Agreement creates
a valid and continuing security interest (as defined in the UCC) in the Issuer’s interest in the
Receivables and Trust Assets in favor of the Trustee on behalf of the Series 2010-1 Noteholders,
which security interest is prior to all other Liens and is enforceable as such against the Issuer’s
creditors.



40









 





     (u) No Claim or Interest. Except as otherwise provided in this Agreement or the
Supplement, neither the Issuer nor any Person claiming through or under the Issuer has any claim to
or interest in the Deposit Accounts.



     (v) Offering of Series 2010-1 Notes. The Issuer has not taken or caused to be taken,
and has no knowledge that any other Person has taken, any action which would subject the issuance
or sale of any Series 2010-1 Note to the provisions of Section 5 of the Securities Act or to the
qualification provisions of any securities or Blue Sky law of any applicable jurisdiction.



     (w) Transfer of Receivables. The Issuer has given reasonably equivalent value to the
Seller in consideration for the transfer to the Issuer by the Seller of the Receivables and Related
Property pursuant to the Issuer Purchase Agreement, and no such transfer has been made for or on
account of an antecedent debt owed by the Seller to the Issuer.



     (x) Policies and Procedures. No change has been made to the Credit Policy Manual,
except such change as would be permitted under Section 2.06(g).



     (y) Pro-Forma Balance Sheet. The pro-forma balance sheets of the Issuer as of the
Closing Date certified by the Chief Financial Officer of the Issuer, copies of which have been
provided to the Trustee, present fairly the financial condition of the Issuer on a pro-forma basis
as of such date after giving effect to the transactions contemplated under the Operative Documents
to take place on such date.



     (z) Affiliated Entities. PFSC is not an Affiliated Entity.



     The representations and warranties made pursuant to this Section 2.03 shall survive
the making thereof. Upon discovery by the Issuer, the Master Servicer, the Collateral Trustee or
the Trustee of a breach of any of the foregoing representations and warranties which breach has, or
could reasonably be expected to have, a Material Adverse Effect, the party discovering such breach
shall give prompt written notice to the other parties. The Trustee’s and the Collateral Trustee’s
obligations in respect of any such breach are limited as provided in Section 11.02 and
Section 14.02, respectively.



     SECTION 2.04. Affirmative Covenants of the Issuer. The Issuer hereby covenants that,
until the satisfaction and discharge of this Indenture pursuant to Section 12.01:



     (a) Compliance with Law. The Issuer will comply in all respects with all Requirements
of Law applicable to the Issuer, its business and properties and the Trust Assets.



     (b) Preservation of Existence. The Issuer will preserve and maintain its existence,
rights, franchises and privileges as a limited liability company in the jurisdiction of its
organization, and qualify and remain qualified in good standing as a foreign limited liability
company in each jurisdiction where the failure to maintain such qualification has, or could
reasonably be expected to have, a Material Adverse Effect.



     (c) Inspection of Books and Records. The Collateral Trustee, the Control Party (or,
if such Control Party is a designated percentage of the Series 2010-1 Noteholders for any Series, a
representative of such Control Party), and independent accountants appointed by, or other agents



41









 







of, any of the foregoing, shall have the right, upon reasonable prior written notice to the Issuer
and at the Issuer’s expense, to visit the Issuer to (i) discuss the affairs, finances and accounts
of the Issuer with, and to be advised as to the same by, its officers, and (ii) to examine the
books of account and records of the Issuer, and to make or be provided with copies and extracts
therefrom, all at such reasonable times and intervals and to such reasonable extent during regular
business hours as the Collateral Trustee, such Control Party (or designated representative
thereof), or such accountants or agents appointed by any of the foregoing, as applicable, may
desire; provided, however, that, so long as no Event of Default or OC Shortfall has
occurred and is continuing, the Issuer shall not be obligated to pay for more than one (1) such
inspection during any twelve month period; provided, further, however,
that, after the occurrence and during the continuation of any OC Shortfall or Event of Default,
such Control Party shall have the right to conduct an unlimited number of inspections of the type
described in this clause (c) at the Issuer’s expense.



     (d) Keeping of Records and Books of Account. The Issuer itself or through its agents
will (i) keep proper books of record and account, which shall be maintained or caused to be
maintained by the Issuer and shall be separate and apart from those of any Affiliated Entity, in
which full and correct entries shall be made of all financial transactions and the assets and
business of the Issuer in accordance with generally accepted accounting principles consistently
applied, and (ii) maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing the Receivables in the event of the
destruction of the originals thereof) and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of all Receivables (including,
without limitation, records adequate to permit the daily identification of all Collections of and
adjustments to each existing Receivable).



     (e) Location of Records. The Issuer will keep its principal place of business and
chief executive office at the address of the Issuer referred to in Section 2.03(i) and
shall keep the other offices where it keeps the books, records and documents regarding the Trust
Assets at the addresses of the Issuer referred to on Schedule II, or, in either case, upon
30 days’ prior written notice to the Trustee, at any other location within the United States.



     (f) Maintenance of Separate Independent Manager or Member. The Issuer will maintain
at least one independent manager or member, which otherwise is not (or at any time during the last
five years has not been) a direct, indirect or beneficial officer, general partner, member,
director, employee, affiliate, associate, creditor, customer or supplier of any of the Affiliated
Entities (unless acting as such in an independent capacity), nor a direct, indirect or beneficial
owner of the outstanding equity interest (including, limited partnership interests or limited
liability company interest) of any of the Affiliated Entities (any such Person also being
an “Affiliated Entity” for the purposes of this Section 2.04(f)), nor a
relative of any of the foregoing, nor a trustee in bankruptcy for any of the foregoing.



     (g) Issuer Purchase Agreement. The Issuer will at its expense timely perform and
comply with all provisions, covenants and other promises required to be observed by it under the
Issuer Purchase Agreement, maintain each such agreement in full force and effect, enforce each such
agreement in accordance with its terms, and, at the request of the Trustee or the Collateral
Trustee, take such action or make to the Seller such reasonable demands and requests for



42









 







information and reports or for action as the Trustee or the Collateral Trustee may request to the
extent that the Issuer is entitled to do the same thereunder.



     (h) Payment of Taxes, Etc. The Issuer will pay promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or any Trust Asset, or in respect of
its income or profits therefrom, and any and all claims of any kind (including, without limitation,
claims for labor, materials and supplies), except where such tax, assessment, charge or levy is
being contested in good faith and by proper proceedings and adequate reserves have been set up and
are being maintained in respect thereof on the Issuer’s books and records.



     (i) Reporting Requirements.



          (i) The Issuer will furnish, or cause to be furnished, to the Collateral Trustee and each
Series 2010-1 Noteholder:




          (1) as soon as available and in any event within one hundred and twenty (120) days after the
end of each fiscal year of Imperial Holdings, Imperial and Seller, a copy of the audited
consolidated financial statements for such year for each of Imperial Holdings, Imperial and Seller,
containing financial statements for such year certified in a manner acceptable to the Collateral
Trustee by independent public accountants acceptable to the Collateral Trustee;




          (2) as soon as available and in any event within forty-five (45) days after the end of each
fiscal quarter of Imperial Holdings, Imperial and Seller, the unaudited consolidated and
consolidating balance sheets and income statements for such fiscal quarter for each of Imperial
Holdings, Imperial and Seller;




          (3) on or before April 30 of each calendar year, beginning with April 30, 2011, for so long as
PFSC shall be the Master Servicer, PFSC shall cause, at Issuer’s expense, a firm of nationally
recognized independent public accountants to furnish a report to the Collateral Trustee and each
Series 2010-1 Noteholder containing such firm’s conclusions with respect to an examination of
certain information relating to PFSC’s compliance with its servicing obligations hereunder, in a
form and substance to be agreed upon by PFSC and the Collateral Trustee;




          (4) on or before April 30 of each calendar year, beginning with April 30, 2011, for so long as
PFSC shall be the Master Servicer, PFSC shall cause, at Issuer’s expense, a firm of nationally
recognized independent public accountants to furnish a report to the Collateral Trustee and each
Series 2010-1 Noteholder containing such firm’s conclusions with respect to an examination of the
calculations of amounts set forth in certain of PFSC’s reports delivered hereunder during the prior
calendar year and PFSC’s source records for such amounts, in a form and substance to be agreed upon
by PFSC and the Collateral Trustee;




          (5) (A) promptly, and in any event within five Business Days, after becoming aware of the
occurrence of each Event of Default, Potential Event of Default, Series Event of Default, and
Servicer Default, the statement of the chief financial officer or chief accounting officer of the
Issuer setting forth details of such occurrence or event and the action which the Issuer has taken
and proposes to take with respect thereto, and (B) as soon as possible and in any event within five
Business Days after obtaining knowledge thereof, notice of any other event,


43









 








development or
information which has, or is reasonably likely to have, a Material Adverse Effect with respect to
the Series 2010-1 Notes;




          (6) promptly, and in any event within five Business Days, after the Issuer’s receipt thereof,
copies of all notices, requests, and other documents (excluding regular periodic reports) delivered
or received by the Issuer under or in connection with the Issuer Purchase Agreement; and




          (7) promptly, and in any event within five Business Days, after the Issuer acquires knowledge
of the occurrence of any event described in the definition of “Plan Event” (as determined without
giving effect to any limitations as to materiality or dollar thresholds contained in such
definition), written notice of such Plan Event.




     Audited and unaudited financial statements required pursuant to clauses (1)-(6) above will set
forth in comparative form the corresponding figures for the most recent year-end or comparable
period for which audited or unaudited financial statements were prepared. Audited financial
statements shall be prepared and presented in accordance with, and provide all necessary disclosure
(including footnote disclosure) required by, GAAP and shall be accompanied by a certificate signed
by the chief financial officer and controller of Imperial Holdings or Imperial, as applicable,
stating that (i) such financial statements present fairly the financial condition of Imperial
Holdings or Imperial, as applicable, and (ii) such financial statements have been prepared in
accordance with GAAP consistently applied.



          (ii) Promptly following any request therefor by the Trustee, the Collateral Trustee or the
Control Party, the Issuer will furnish to the Trustee, the Collateral Trustee and the Series 2010-1
Noteholders, as applicable, such information, documents, records or reports respecting the Series
Receivables, the other Series Trust Assets relating thereto or the condition or operations,
financial or otherwise, of the Issuer as the Trustee, the Collateral Trustee, the Control Party or
any such Series 2010-1 Noteholder may from time to time reasonably request.




     (j) Acquisition of Receivables from the Seller. With respect to each Receivable
acquired by the Issuer from the Seller, the Issuer shall (a) acquire such Receivable pursuant to
and in accordance with the terms of the Issuer Purchase Agreement, (b) take all action necessary to
perfect, protect and more fully evidence the Issuer’s ownership of such Receivable, including,
without limitation, (1) filing and maintaining effective financing statements and continuations
thereof (Forms UCC-1 and UCC-3) against the Seller in all necessary or appropriate filing offices,
and filing continuation statements, amendments or assignments with respect thereto in such filing
offices and (2) executing or causing to be executed such other instruments or notices (other than
to the Claimant, the Assignee or the Annuity Provider) as may be necessary or appropriate and (c)
take all additional action that the Trustee or the Control Party may reasonably
request to perfect, protect and more fully evidence the respective interests of the parties to
this Agreement and the Series 2010-1 Noteholders in the applicable Receivables.



     (k) Collections. In the event that the Issuer or any other Affiliated Entity receives
any Collections, the Issuer agrees to hold, or cause such Affiliated Entity to hold, all such
Collections in trust and to deposit, or cause such Affiliated Entity to deposit, such Collections
(i) in the case of Collections in respect of Annuity Receivables, to an Annuity Lock-Box, the
Master



44









 







or the Series Collection Account and (ii) in the case of all other Collections, to the
Settlement Lock-Box, the Master Collection Account or the Series Collection Account, in each case,
as soon as practicable, but in no event later than two Business Days after its receipt thereof.



     (l) ERISA. The Issuer will not maintain any Plans in its own name or otherwise agree
to make contributions to any Plan. The Issuer shall not allow any Plan maintained by any of its
ERISA Affiliates to incur any “accumulated funding deficiency” (within the meaning of Section 302
of ERISA or Section 412 of the Code), whether or not waived. Each ERISA Affiliate of the Issuer
shall timely make all contributions required by it to be made by it to any Plans and/or
Multiemployer Plans to which contributions are or shall be required to be made by such ERISA
Affiliate, and no event requiring notice to the PBGC under Section 302(f) of ERISA shall occur with
respect to any such Plan, in any case, that could reasonably be expected to result, directly or
indirectly, in any Lien being imposed on the property of the Issuer or the payment of any amount in
excess of the Plan Liability Threshold to avoid such Lien. No Plan Event with respect to the
Issuer or any of its ERISA Affiliates shall occur that could reasonably be expected to result,
directly or indirectly, in any Lien being imposed on the property of the Issuer or the payment of
any amount in excess of the Plan Liability Threshold.



     (m) Accounting for Transfers. To the fullest extent permitted by applicable
accounting principals, the Issuer shall treat the transfers and conveyances of the Receivables by
the Seller to it pursuant to the Issuer Purchase Agreement as sales and absolute transfers thereof
for all tax and accounting purposes.



     (n) Fidelity Insurance. The Issuer shall maintain, at its own expense, a fidelity
insurance policy, with broad coverage with responsible companies on all officers, employees or
other persons acting on behalf of the Issuer in any capacity with regard to the Receivables to
handle documents and papers related thereto. Any such fidelity insurance shall protect and insure
the Issuer against losses, including forgery, theft, embezzlement, and fraud, and shall be
maintained in an amount of at least $10,000,000 or such lower amount as the Control Party may in
its commercially reasonable credit judgment designate to the Issuer from time to time, and in a
form acceptable to the Control Party in its commercially reasonable judgment. No provision of this
Section 2.04(o) requiring such fidelity insurance shall diminish or relieve the Issuer from
its duties and obligations as set forth in this Agreement or any of the other Operative Documents.
The Issuer shall be deemed to have complied with this provision if one of its respective Affiliates
has such fidelity policy coverage and, by the terms of such fidelity policy, the coverage afforded
thereunder extends to the Issuer. Upon the request of the Trustee or the Control Party, the Issuer
shall cause to be delivered to the Trustee or such Control Party, as applicable, a certificate
evidencing coverage under such fidelity policy. Any such insurance policy shall contain a
provision or endorsement providing that such policy may not be canceled or modified without ten
(10) days’ prior written notice to the Trustee.



     (o) Confidentiality of Settlement Agreements. The Issuer, and its officers, directors
and employees shall keep, and shall cause to be kept, strictly confidential all terms of all
Settlement Agreements, including, without limitation, the name of the Settlement Counterparties
related thereto and the nature of the injury to the Claimant, and shall not copy or disclose such
terms in any manner whatsoever, in whole or in part, except (i) to the Back-up Servicer in
accordance with the Back-up Servicing Agreement, (ii) to the Master Servicer to the extent



45









 







necessary to service the Receivables in accordance with the terms hereof and the Supplement, (iii)
to the Trustee, the Collateral Trustee and the Series 2010-1 Noteholders solely to the extent
required to enforce their respective rights hereunder and under the Supplement and (iv) as required
by applicable Requirements of Law; provided that the Issuer may in any event disclose in
its sole discretion the terms of any Settlement Agreement so long as (A) all references therein to
the Settlement Counterparties related thereto and the nature of the Claimant’s injury shall be
stricken from such disclosure, and (B) such recipient shall agree to the terms of confidentiality
contained in this Section 2.04(p).



     (p) Compliance Certifications. In connection with the delivery by the Master Servicer
of each Monthly Report, a Responsible Officer of the Issuer will make on behalf of the Issuer any
certifications designated to be made by the Issuer on the form of Monthly Report attached as an
exhibit to the Supplement.



     (q) Separate Existence. The Issuer shall take such actions as are necessary on its
part to ensure that the facts and assumptions set forth in any Opinion of Counsel issued by counsel
for the Issuer in connection with the issuance of the Series 2010-1 Notes and relating to
substantive consolidation issues, and in any certificates accompanying any such Opinion of Counsel,
remain true and correct in all material respects at all times.



     (r) Repurchase of Receivables. To the extent that any representation or warranty of
the Seller under the Issuer Purchase Agreement with respect to any Series Receivable, or, to the
extent that any representation or warranty in any certificate delivered by Imperial Holdings for,
and on behalf of, Seller (in its capacity as a sole shareholder, member or manager of the Seller),
in any case with respect to any Series Receivable and in connection with any of the opinions of
counsel delivered on the Closing Date, was in any case incorrect in any material respect when made
or deemed made, the Issuer shall in any case within five Business Days after learning thereof,
cause the Seller to (x) convey to the Issuer, in exchange for such affected Series Receivable, one
or more different Eligible Receivables (1) to be described on a List of Receivables delivered to
the Trustee, (2) having a Discounted Receivables Balance approximately equal to (but not less than)
that of the Receivable being so replaced (provided that for purposes of this clause, the Discounted
Receivables Balance of such Series Receivable being so replaced shall be calculated by treating any
past due Scheduled Payments thereon as if such payments were due on the date of such calculation
and the Discounted Receivables Balance of the replacement Series Receivable shall be calculated
without giving effect to any past due Scheduled Payments owing thereon) and (3) the Settlement
Annuity Provider(s) and/or Obligor(s), as applicable, related thereto shall have a rating of at
least “Baa3” from Moody’s, “BBB-” from S&P or “B+” from A.M. Best (or any successor thereto) and/or
(y) repurchase, in cash delivered to the Series Collection Account for such Series, such affected
Series Receivable from the Issuer for an amount equal to the Discounted Receivables Balance (as
calculated by treating any past due Scheduled Payments thereon as if such payments were due on the
date of
such calculation) of such Series Receivable, whereupon, in any case, (a) the Series Receivable
being replaced or repurchased shall cease to be a “Series Receivable” and, in the case of
clause (x), any such new Receivable shall become a “Series Receivable” (it being agreed
that the incorrectness of any such representation or warranty, and the obligations of the Seller
pursuant to this clause (s) resulting therefrom, shall in each case, be determined without
giving effect to any limitation on the “knowledge,” “best of knowledge” or other similar limitation
on the knowledge



46









 







of the Seller, or Imperial Holdings, as applicable, contained in any such
representation or warranty) and (b) the Trustee shall release the Issuer’s interest in such
affected Series Receivable from the lien of the Trustee effected pursuant to the Granting Clause
and pursuant to the Supplement (and shall, at the Issuer’s expense, execute and deliver to the
Issuer all necessary UCC releases and other releases in respect thereof).



     SECTION 2.05. Representations and Warranties of the Issuer Relating to the Series Trust
Assets, Liens and Security Interests. The Issuer hereby represents and warrants to the Trustee
and each of the Series 2010-1 Noteholders, as of the Closing Date (or, with respect to any
Receivable that is not a Series Receivable on such Closing Date, on the applicable Advance Date or
such later date as such Receivable shall become a “Series Receivable” in accordance with the terms
of this Agreement and the Supplement), that, with respect to itself and/or with respect to each
such Series Receivable constituting a Settlement Receivable:



     (i) With respect to itself and/or with respect to each such Series Receivable constituting a
Settlement Receivable with respect to such Series:



     (a) Such Series Receivable is an Eligible Settlement Receivable.



     (b) Such Series Receivable is the legal, valid and binding obligation of each Obligor related
thereto, which obligation is, in each case, enforceable against each such Person in accordance with
its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors’ rights generally, now or
hereafter in effect, and except as such enforceability may be limited by general principles of
equity.



     (c) Such Series Receivable has not, nor has any document in the related Settlement Package,
been satisfied, subordinated or rescinded.



     (d) Such Series Receivable is unrelated to any Settlement Annuity Provider which on the
Closing Date (or, with respect to any Receivable that is not a Series Receivable on the Closing for
such Series on the applicable Advance Date or such later date as such Receivable became a “Series
Receivable” in accordance with the terms of this Agreement and the Supplement) is, or Claimant
which as of the applicable Cut-Off Date was the subject of an Insolvency Event (as determined
without giving effect to the thirty (30) day grace period for involuntary proceedings), unless,
with respect to a Claimant which was the subject of such an event, the bankruptcy court having
jurisdiction over such Claimant had approved the sale of such Series Receivable to the Seller.



     (e) The Scheduled Payments with respect to the Settlement Agreement that is related to such
Series Receivable have no related guaranty, letter of credit providing support therefor, or
collateral security therefor, other than any guaranty, letter of credit, letter-of-credit rights,
supporting obligations or collateral security that has been assigned by the Claimant to Seller and
by the Seller to the Issuer.



     (f) The Settlement Annuity Contract relating to such Series Receivable has been duly
authorized and issued and constitutes the legal, valid and binding obligation of the Settlement
Annuity Provider and is not subject to defense, rescission, reduction, set-off or other defenses.



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     (g) The Settlement Agreement under which such Series Receivable arises has been duly executed
by all parties thereto and constitutes the legal, valid and binding obligation of such parties
(except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors’ rights generally or general
principals of equity (regardless of whether such enforcement is considered in a proceeding in
equity or at law)) and is not subject to defense, rescission, reduction, set-off or other defenses;
provided that only such portion of such Receivable which is subject to such defense, rescission,
reduction, set-off or other defense shall be deemed to violate this clause (g).



     (h) Neither the Settlement Annuity Contract, if any, relating to such Series Receivable nor
the Settlement Agreement under which such Series Receivable arises contravenes in any material
respect any Requirements of Law applicable thereto.



     (i) Neither the transfer of such Series Receivable from the Seller to the Issuer, nor the
grant of a security interest in such Series Receivable to the Trustee for the benefit of the
Secured Parties, would cause an Event of Default or a Potential Event of Default to occur.



     (j) No effective financing statement or other instrument similar in effect that covers all or
part of such Series Receivable or any other Series Trust Assets relating thereto is on file in any
recording office except (A) to the extent relating to such Series Receivable, such as may be filed
(i) in favor of the Seller in accordance with the Settlement Purchase Agreement, (ii) by the Issuer
against the Seller pursuant to the Issuer Purchase Agreement (and which shall be assigned to the
Trustee), (iii) in favor of the Trustee, in accordance with this Agreement and the Supplement and
(vi) relating to any Permitted Lien, and (B) filings in respect of which duly executed UCC-3
termination statements or releases effective to terminate such filing against the Trust Assets
shall have been delivered to the Trustee.



     (k) The Issuer has complied with all registration and licensing requirements in each state in
which it is required to be specially registered or licensed as a purchaser of such Series
Receivable.



     (l) As of the Closing Date, the applicable Advance Date or such other date or such later date
as such Receivable became a “Series Receivable” in accordance with the terms of this Agreement and
the Supplement, unless otherwise permitted under the Operative Documents, no Person other than the
Issuer or, if Split Payments arise from such Series Receivable, the related Claimant, shall have
any interest therein or a right thereto.



     (m) This Agreement and the Supplement create a valid and continuing security interest (as
defined in the UCC) in such Series Receivable (and any other Series Trust Assets relating thereto)
in favor of the Trustee on behalf of the Secured Parties which security interest is prior to all
other Liens and security interests and is enforceable as such against the Issuer’s creditors.



     (n) The Issuer has received all consents and approvals required by the terms of such Series
Receivable to the pledge of such Series Receivable under the Supplement to the Trustee on behalf of
the Secured Parties.



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     (o) The Issuer has caused or will have caused on or prior to the Closing Date the filing of
all appropriate financing statements in the proper filing office in the appropriate jurisdictions
under applicable Requirements of Law in order to perfect the security interest in such Series
Receivable (and any other Series Trust Assets related thereto) granted to the Trustee on behalf of
the Secured Parties. Other than the security interest granted to the Trustee on behalf of such
Secured Parties under the Supplement and this Agreement, the Issuer has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed such Series Receivable (or any other
Series Trust Assets related thereto). The Issuer has not authorized the filing and is not aware of
any financing statements against the Issuer that include a description of such Series Receivable
(or any other Series Trust Assets related thereto) other than any financing statement (i) relating
to the security interest granted to the Trustee on behalf of the Secured Parties, (ii) that has
been terminated or (iii) relating to a Permitted Lien. The Issuer is not aware of any judgment or
tax lien filings against it.



     (p) Any Transfer Order that has been issued with respect to a transfer of such Series
Receivable evidences the binding obligation of the related Obligor to make the related Scheduled
Payments to the Seller.



     (q) The assignment of the related Claimant’s right to receive payments under such Series
Receivable does not contravene or conflict with any applicable Requirements of Law or any
contractual or other restriction, limitation or encumbrance, which, in any case, would materially
impair the enforceability of such assignment as against the creditors or any debtor-in-possession,
bankruptcy trustee, receiver or other similar Person of or for such Claimant.



     (r) The Seller has delivered a letter, together with the Transfer Order, to either the
Settlement Annuity Provider or, if none, the Obligor with respect to such Series Receivable
directing such Settlement Annuity Provider or Obligor to make all Scheduled Payments with respect
to Series Receivable to the Seller.



     (ii) With respect to each such Series Receivable constituting an Annuity Receivable with
respect to such Series, such Series Receivable is an Eligible Annuity Receivable.



     The representations and warranties made pursuant to this Section 2.05 as of the
Closing Date for each Series (or, with respect to any Receivable that is not a Series Receivable
with respect to such Series on the Closing Date, on the applicable Advance Date or such other date
as such Receivable shall become a “Series Receivable” in accordance with the terms of this
Agreement and the Supplement) shall survive such Closing Date (or, with respect to any
Receivable that is not a Series Receivable on the Closing Date, such Advance Date or other
date as such Receivable shall become a “Series Receivable” in accordance with the terms of this
Agreement and the Supplement). Upon discovery by the Issuer, the Master Servicer, the Back-up
Servicer, the Collateral Trustee or the Trustee of a breach of any of the foregoing representations
and warranties, the party discovering such breach shall give prompt written notice to the other
parties hereto. The Trustee’s and the Collateral Trustee’s obligations in respect of any such
breach are limited as provided in Article XI and Article XIV, respectively, of this Agreement.



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     SECTION 2.06. Negative Covenants of the Issuer. The Issuer hereby further covenants
that, until the satisfaction and discharge of this Indenture pursuant to Section 12.01:



     (a) No Liens. Other than (a) certain Liens created pursuant to the Operative
Documents (all of which Liens have been assigned to the Trustee and/or Collateral Trustee pursuant
hereto), (b) the security interest granted pursuant to the Granting Clause and (c) any other
Permitted Liens, the Issuer will not sell, pledge, assign or transfer to any Person, or grant,
create, incur, assume or suffer to exist any Lien on, any Trust Asset, whether now existing or
hereafter created, or any interest therein, and the Issuer shall defend the Issuer’s right, title
and interest in and to, and the Trustee’s security interest in and to, the Trust Assets, whether
now existing or hereafter created, against all claims of third parties claiming through or under
the Issuer.



     (b) Activities of the Issuer. The Issuer will not engage in, enter into or be a party
to any business, activity or transaction of any kind other than the businesses, activities and
transactions authorized in its Organizational Documents as in effect as of the Closing Date, or as
otherwise amended with the prior written consent of the Trustee and the Control Party.



     (c) Indebtedness. Except for any Permitted Liens and except as contemplated herein
(including the Supplement hereto) with respect to any Advances under the Series 2010-1 Notes, the
Issuer will not create, incur or assume any Indebtedness or enter into any other securitization
transaction or any other off-balance sheet financing arrangement.



     (d) Guarantees. The Issuer will not become or remain liable, directly or
contingently, in connection with any Indebtedness or other liability of any other Person, whether
by guarantee, endorsement (other than endorsements of negotiable instruments for deposit or
collection in the ordinary course of business), agreement to purchase or repurchase, agreement to
supply or advance funds, or otherwise.



     (e) Investments. The Issuer will not make or suffer to exist any loans or advances
to, or extend any credit to, or make any investments (by way of transfer of property, contributions
to capital, purchase of stock or securities or evidences of indebtedness, acquisition of the
business or assets, or otherwise) in, any Affiliate or any other Person except for (i) purchases of
assets permitted pursuant to the Issuer’s Organizational Documents and (ii) loans, advances,
extensions, investments and contributions incurred in the ordinary course of business and not
exceeding $25,000 in the aggregate at any one time outstanding.



     (f) Extension or Amendment of Receivables. Except as permitted by Section
3.01(d) with respect to the Master Servicer, the Issuer will not extend, amend or otherwise
modify (or consent to, or fail to object to, any such extension, amendment or modification by the
Seller or the Master Servicer) the terms of any Receivable or rescind or cancel, or permit the
rescission or cancellation of, any Receivable except:



          (i) as permitted under the Supplement; and




          (ii) as ordered by a court of competent jurisdiction or other Governmental Authority.




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     (g) Change in Credit Policy Manual. The Issuer will not make, or consent or fail to
object to, any change in the Credit Policy Manual which change could be reasonably likely to
impair or delay the collectability of any Receivable or result in a deterioration in the
creditworthiness of the Obligors generally.



     (h) Deposits to Applicable Lock-Boxes, the Master Collection Account and the Series
Collection Account. The Issuer will not deposit or otherwise credit, or cause to be so
deposited or credited, or consent or fail to object to any such deposit or credit, to any
Applicable Lock-Box Account, any Applicable Lock-Box, the Master Collection Account, cash or cash
proceeds other than Collections of Receivables and other Trust Assets; provided, that to the extent
any such other funds are so deposited on any date, it shall not constitute a breach of this
Section 2.06(h) if such other funds are removed from such Applicable Lock-Box or such
account within two Business Days after such amounts were so deposited in such account. The Issuer
will not deposit or otherwise credit, or cause to be so deposited or credited, or consent or fail
to object to any such deposit or credit, to the Series Collection Account cash or cash proceeds
other than Collections of the Series Receivables and other Series Trust Assets; provided,
that to the extent that any such other funds are so deposited, it shall not constitute a breach of
this Section 2.06(h) if such funds are removed from such account within two Business Days
after so deposited in such account.



     (i) Receivables Not To Be Evidenced by Promissory Notes. The Issuer will take no
action to cause any Receivable to be evidenced by any “instrument” (as defined in the UCC of the
jurisdiction the law of which governs the perfection of the interest in such Receivable created
hereunder), except in connection with its enforcement, in which event the Issuer shall deliver such
instrument to the Trustee, for the benefit of the Series 2010-1 Noteholders, as required pursuant
to Section 2.01.



     (j) Change in Name or Jurisdiction of Organization. The Issuer will not (i) make any
change to its name or principal place of business or use any tradenames, fictitious names, assumed
names or “doing business as” names unless, at least thirty (30) days prior to the effective date of
any such name change, change in principal place of business, or use, the Issuer delivers to the
Trustee such financing statements (Forms UCC-1 and UCC-3) and such other documents or instruments
executed by the Issuer as shall be necessary to maintain the perfection of the Trustee’s ownership
or security interest in the Trust Assets free and clear of all other Liens other than Permitted
Liens or which the Trustee or the Control Party may reasonably request to reflect such change or
(ii) change its jurisdiction of organization unless the Trustee shall have
received from the Issuer, prior to such change, (A) those items described in clause (i)
hereof, and (B) prior to the effective date thereof, an Opinion of Counsel, in form and substance
reasonably satisfactory to the Trustee, as to such organization and the Issuer’s valid existence
and good standing and as to the matters referred to in Section 2.03(e).



     (k) Issuer Purchase Agreement. The Issuer will not (i) cancel or terminate the Issuer
Purchase Agreement or consent to or accept any cancellation or termination thereof, (ii) amend or
otherwise modify any term or condition of the Issuer Purchase Agreement or give any consent, waiver
or approval thereunder, (iii) waive any default under or breach of the Issuer Purchase Agreement or
(iv) take any other action under the Issuer Purchase Agreement not required by the terms thereof to
the extent that it could reasonably be expected to impair the



51









 







value of any Trust Asset or the
rights or interests of the Issuer thereunder or of the Trustee or any Series 2010-1 Noteholders
hereunder or thereunder. Notwithstanding the foregoing, the Issuer may amend, waive or otherwise
modify the Issuer Purchase Agreement if such amendment, waiver or modification is made in
accordance with Section 13.01 hereof and the amendment provisions of the Supplement.



     (l) Organizational Documents. Except as permitted by Section 2.06(j) or, if
such amendment could reasonably be expected to result in a Material Adverse Effect, as consented to
by the Control Party, the Issuer will not amend any of its Organizational Documents.



     (m) Maintenance of Separate Existence. The Issuer shall take all reasonable steps to
continue its identity as a separate legal entity and to make it apparent to third Persons that it
is an entity with assets and liabilities distinct from those of PFSC, the Seller, the other
Affiliated Entities or any other Person, and that it is not a division of any of the Affiliated
Entities or any other Person. In that regard, and without limiting the foregoing in any manner,
the Issuer shall:



          (1) maintain its limited liability company existence and make independent decisions with
respect to its daily operations and business affairs and, other than decisions of its managing
member pursuant to the terms of the limited liability company agreement of the Issuer, not be
controlled in making such decisions by any other Affiliated Entity or any other Person;




          (2) maintain at least one independent manager or member which otherwise is not (or at any time
during the last five (5) years has not been) a direct, indirect or beneficial officer, general
partner, member, director, employee, affiliate, associate, creditor, customer or supplier of any of
the Affiliated Entities (unless acting as such in an independent capacity), nor a direct, indirect
or beneficial owner of the outstanding equity interest (including, limited partnership interests or
limited liability company interest) of any of the Affiliated Entities, nor a relative of any of the
foregoing, nor a trustee in bankruptcy for any of the foregoing;




          (3) maintain separate and clearly delineated office space owned by it or evidenced by a
written lease or sublease (even if located in an office owned or leased by, or shared with, another
Affiliated Entity);




          (4) maintain its assets in a manner which facilitates their identification and segregation
from those of any of the other Affiliated Entities;




          (5) maintain a separate telephone number which will be answered only in its own name and
separate stationery and other business forms;




          (6) conduct all intercompany transactions with the other Affiliated Entities on terms which
the Issuer reasonably believes to be on an arm’s-length basis;




          (7) not guarantee any obligation of any of the other Affiliated Entities or any other Person,
nor have any of its obligations guaranteed by any other Affiliated Entity, or hold itself out as
responsible for the debts of any other Affiliated Entity or for the decisions or actions with
respect to the business and affairs of any other Affiliated Entity or any other Person, nor seek or
obtain credit or incur any obligation to any third-party based upon the creditworthiness or assets
of any other Affiliated Entity or any other Person;




52









 








          (8) except as expressly otherwise permitted hereunder or under any of the other Operative
Documents, not permit the commingling or pooling of its funds or other assets with the assets of
any other Affiliated Entity;




          (9) maintain separate deposit and other bank accounts to which no other Affiliated Entity
(other than as the Master Servicer) has any access;




          (10) maintain financial records which are separate from those of the other Affiliated
Entities;




          (11) compensate (either directly or through reimbursement of its allocable share of any shared
expenses) all employees, consultants and agents, and Affiliated Entities, to the extent applicable,
for services provided to the Issuer by such employees, consultants and agents or Affiliated
Entities, in each case, from the Issuer’s own funds;




          (12) have agreed with each of the other relevant Affiliated Entities to allocate among
themselves shared overhead and corporate operating services and expenses which are not reflected in
the Master Servicing Fee (including without limitation the services of shared employees,
consultants and agents and reasonable legal and auditing expenses) on the basis of actual use or
the value of services rendered, and otherwise on a basis reasonably related to actual use or the
value of services rendered;




          (13) pay for its own account for accounting and payroll services, rent, lease and other
expenses (or its allocable share of any such amounts provided by one or more other Affiliated
Entities) and not have such operating expenses (or the Issuer’s allocable share thereof) paid by
any of the Affiliated Entities, provided, that the Seller shall be permitted to pay the initial
organizational expenses of the Issuer;




          (14) maintain adequate capitalization in light of its business and purpose;




          (15) conduct all of its business (whether in writing or orally) solely in its own name through
its duly authorized officers, employees and agents;




          (16) not make or declare any dividends or other distributions of cash or property to the
holders of its equity securities or make redemptions or repurchases of its equity
securities, in either case, on a periodic basis any more frequently than monthly or otherwise,
in certain other irregular cases, in accordance with appropriate corporate formalities and
consistent with sound business judgment; and all such distributions, redemptions or repurchases
shall only be permitted to be made hereunder out of Available Issuer Funds and only to the extent
that it is not violative of any applicable Requirements of Law and no Event of Default or Potential
Event of Default then exists or would result therefrom;




          (17) maintain at least one employee (which employee may be shared with an Affiliate pursuant
to a written agreement allocating the compensation and other remuneration and benefits for such
employee as among such parties) in charge of day-to-day operations of the Issuer;




53









 








          (18) otherwise practice and adhere to corporate formalities such as complying with its
Organizational Documents and member and manager resolutions, the holding of regularly scheduled
meetings of members and managers, and maintaining complete and correct books and records and
minutes of meetings and other proceedings of its members and managers; and




          (19) not fail to maintain all policies and procedures or take or continue to take all actions
necessary or appropriate to ensure that all factual assumptions set forth in those certain Opinions
of Counsel of the Issuer delivered on the Closing Date concluding that sales of Receivables made
pursuant to the Issuer Purchase Agreement would constitute true sales and that the Issuer would not
be substantively consolidated with the Seller following the occurrence of an Insolvency Event with
respect to any such Person.




     (n) Merger and Other Transactions. The Issuer will not (i) enter into any transaction
of merger or consolidation, or convey or otherwise dispose of any portion of its assets (except as
contemplated herein) to any Person or Person(s), (ii) terminate, liquidate or dissolve itself (or
suffer any termination, liquidation or dissolution), (iii) acquire any Person, or (iv) appoint any
Person other than the Seller or an Affiliate of the Seller to be the manager or controlling
co-manager of the Issuer.



     (o) Transactions with Affiliates. The Issuer will not enter into, or be a party to,
any transaction with any of its Affiliates, except (i) the transactions contemplated hereby, by the
Issuer Purchase Agreement and (ii) any other transactions (including, without limitation, the lease
of office space or computer equipment or software by the Issuer from an Affiliate and the sharing
of employees and employee resources and benefits) (A) in the ordinary course of business or as
otherwise permitted hereunder, (B) pursuant to the reasonable requirements and purposes of the
Issuer’s business, (C) upon fair and reasonable terms (and, to the extent material, pursuant to
written agreements) that are consistent with market terms for any such transaction (including any
financing arrangements entered into pursuant to Section 2.06(e)(ii)), and (D) not
inconsistent with the factual assumptions set forth in the opinion letters referred to in
clause (19) of Section 2.06(m).



     (p) Change in Applicable Lock-Box Accounts and Instructions to Obligors. The Issuer
will not add or terminate any institution as an Applicable Lock-Box Bank or add, terminate or
substitute any Applicable Lock-Box Account or any Applicable Lock-Box from
those listed in Schedule III hereto, except as otherwise permitted pursuant to
Section 4.02 or Section 4.03. The Issuer will not instruct any Obligor or Annuity
Provider to remit Collections to any Person, address or account other than (i) in the case of
Collections in respect of Annuity Receivables constituting Series Receivables, to an Annuity
Lock-Box, the Master Collection Account or the applicable Series Collection Account and (ii) in the
case of all other Collections, to the Settlement Lock-Box, the Master Collection Account or the
Series Collection Account.



     (q) Classification Election. The Issuer will not elect to be classified as an
association taxable as a corporation for federal, state, local or other income tax purposes.



     (r) Activities of the Issuer. The Issuer will not acquire any property with the
intent to realize a gain arising from market value changes, or otherwise engage in, enter into or
be a party



54









 







to any business, activity or transaction of any kind, or fail to take any action, which
would cause the Issuer to fail to satisfy the requirements of Rule 3a-7 promulgated under the
Investment Company Act.



ARTICLE III

ADMINISTRATION AND SERVICING OF RECEIVABLES




     SECTION 3.01. Acceptance of Appointment and Other Matters Relating to the Master
Servicer.



     (a) PFSC agrees to act as the Initial Master Servicer under this Agreement (subject to
Article X) and shall act and be appointed as such under the Supplement without any further
action hereunder or thereunder (subject to Article X). The Series 2010-1 Noteholders, by
their acceptance of the Series 2010-1 Notes, consent to PFSC so acting as Master Servicer under
this Agreement and the Supplement.



     (b) Each of the Trustee and the Issuer hereby appoints as its agent, for the benefit of the
Series 2010-1 Noteholders, separately, the Person appointed by the Trustee, at the direction of the
Control Party, or, in accordance with Section 3.01(a), deemed appointed to act as Master
Servicer with respect to the Supplement (subject to Article X) to enforce the Trustee’s and
the Issuer’s respective rights and interests in, to and under the Receivables and the other Series
Trust Assets; and, in connection therewith, the Master Servicer shall take or cause to be taken all
such actions as may be necessary or advisable to collect each Receivable from time to time, all in
accordance with applicable Requirements of Law, with reasonable care and diligence, and in
accordance with the Credit Policy Manual. The Master Servicer shall exercise the same care and
apply the same policies with respect to the collection, administration and servicing of the
Receivables and other Trust Assets that it would exercise and apply if it owned such Receivables
and other Trust Assets.



     (c) The Master Servicer shall have full power and authority, acting alone or through any party
properly designated by it hereunder, to do any and all things in connection with such servicing and
administration which it may deem necessary or desirable, subject to the limitations set forth
herein and in the Supplement. Without limiting the generality of the foregoing and subject to
Section 10.01, the Master Servicer or its designee is hereby authorized and empowered, and
except in the case of clause (vi) below, shall be obligated, to (i) subject to the
last sentence of Section 3.05(a) and the terms of the Supplement, to withdraw, or
instruct the Collateral Trustee in writing to withdraw, from the Issuer Split Payment Account, the
amounts owing to the applicable Claimants and Individual Annuity Sellers in respect of Split
Payments, on the Series Receivables, and, in accordance with Section 4.02(a), to remit or
cause the Collateral Trustee to remit such amounts to such Claimants and Individual Annuity
Sellers, such instructions to also be set forth in the Daily Reports to be delivered to the Trustee
and the Collateral Trustee in accordance with Section 3.05(a), (ii) subject to, and in
accordance with, the terms of the Supplement, administer the Series Accounts, and (iii) to
subcontract at the Master Servicer’s expense with any other Person, with the prior consent of the
Control Party, for servicing, administering or collecting, in whole or in part, the Receivables
whereupon such other Person with which the Master Servicer so subcontracts shall be entitled such
rights and powers of the Master Servicer hereunder as may be delegated to it; provided,
however, that the Master




55












 




Servicer shall remain fully liable for the performance of the
duties and obligations of the Master Servicer pursuant to the terms hereof. The Trustee shall
execute any documents furnished by the Master Servicer which are necessary or appropriate to enable
the Master Servicer to carry out its servicing and administrative duties hereunder and which are
acceptable in form and substance to the Trustee.




     (d) No Master Servicer shall extend the maturity, adjust the Discounted Receivables Balance,
or otherwise modify the terms of any Receivable, except (i) as permitted pursuant to Section
2.06(f), (ii) as permitted pursuant to the Supplement and (iii) unless otherwise provided in
the Supplement, to the extent no Servicer Default, Event of Default or Series Event of Default with
respect to any affected Series has occurred and is outstanding, the Master Servicer shall be
permitted to adjust the Discounted Receivables Balance of, or extend the time of payment for, any
Defaulted Receivable, all as it may deem appropriate to maximize the Collections thereon and all in
accordance with its ordinary business practices; provided, that except as otherwise
provided herein, such Receivable shall remain a Defaulted Receivable hereunder notwithstanding such
adjustments or modifications unless and until the same shall be Rehabilitated.



     SECTION 3.02. Servicing Compensation. As full compensation for its servicing
activities hereunder, and as reimbursement for any expense incurred by it in connection therewith,
the Master Servicer shall be entitled to receive the Master Servicing Fee. Notwithstanding the
foregoing, the Master Servicer shall also be entitled to receive all reasonable and necessary
out-of-pocket expenses paid or incurred by the Master Servicer to fulfill its obligations under
this Agreement.



     SECTION 3.03. Representations and Warranties of the Master Servicer. The Master
Servicer hereby makes, and each Successor Servicer by acceptance of its appointment hereunder shall
make, the following representations and warranties as of the date hereof or, if later, the date of
its appointment as a Master Servicer (and shall be deemed to remake such representations and
warranties on each day hereafter or thereafter during which such Person is acting as such):



     (a) Organization and Good Standing. Such Master Servicer is a corporation, limited
liability company or partnership duly organized, validly existing and in good standing under the
applicable laws of its jurisdiction of formation and has full power and authority to own its
properties and conduct its business as such properties are presently owned and as such business is
presently conducted, and to execute, deliver and perform its obligations under the Operative
Documents to which it is a party or by which it is bound.



     (b) Due Qualification. Such Master Servicer is duly qualified to do business and is
in good standing as a foreign corporation, limited liability company or partnership (or is exempt
from such requirements), and has obtained all necessary licenses and approvals, in each
jurisdiction in which failure to so qualify or to obtain such licenses or approvals has, or could
reasonably be expected to have, a Material Adverse Effect.



     (c) Due Authorization. Such Master Servicer’s execution, delivery and performance of
the Operative Documents to which it is a party or by which it is bound have been duly



56









 







authorized by
all necessary corporate, limited liability company or partnership, as applicable, and shareholder,
member or partner, as applicable, actions on the part of such Master Servicer.



     (d) Binding Obligation. Each of the Operative Documents to which it is a party or by
which it is bound constitutes a legal, valid and binding obligation of such Master Servicer
enforceable against it in accordance with its terms except as such enforceability may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’
rights generally, and except as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).



     (e) No Conflict. The Master Servicer’s execution and delivery of the Operative
Documents and the performance of the transactions contemplated by the Operative Documents to which
it is a party or by which it is bound, and fulfillment of the terms hereof and thereof applicable
to it, do not conflict with or violate any Requirements of Law applicable to the Master Servicer,
or conflict with, result in any breach of any of the enforceable terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under, any indenture,
contract, agreement, mortgage, deed of trust or other instrument to which the Master Servicer is a
party or by which it or its properties are bound.



     (f) No Proceedings. There are no proceedings or investigations pending or, to the
best of the Master Servicer’s knowledge, threatened against it before any Governmental Authority
(i) asserting the illegality, invalidity or unenforceability, or seeking any determination or
ruling that would affect the legality, binding effect, validity or enforceability, of any of the
Operative Documents to which it is a party or by which it is bound, (ii) seeking to prevent the
consummation of any of the transactions contemplated by any of the Operative Documents to which it
is a party or by which it is bound, or (iii) seeking any determination or ruling that is reasonably
likely to have a Material Adverse Effect.



     (g) No Consents. No authorization, consent, license, order or approval of or
registration or declaration with any Governmental Authority is required to be obtained, effected or
given by the Master Servicer in connection with the execution and delivery by it of any of the
Operative Documents or the performance by it of its obligations under the Operative Documents
to which it is a party or by which it is bound.



     (h) Information. Each certificate, information, exhibit, financial statement,
document, book or record or report furnished by the Master Servicer to the Trustee, the Collateral
Trustee, the Issuer or any Series 2010-1 Noteholder in connection with this Agreement is accurate
in all material respects as of its date, and no such document contains any material misstatement of
fact or omits to state a material fact or any fact necessary to make the statements contained
therein not materially misleading as of its date.



     The representations and warranties made pursuant to this Section 3.03 shall survive
the date of the making thereof. Upon a discovery by the Issuer, such Master Servicer or the Trustee
of a breach of any of the foregoing representations and warranties which breach has, or could
reasonably be expected to have, a Material Adverse Effect, the party discovering such breach shall
give prompt written notice to the other parties. The Trustee’s obligations in respect of any such
breach are limited as provided in Section 11.02.



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     SECTION 3.04. Covenants of the Master Servicer. From the Closing Date until the
earlier of (a) the date of the satisfaction and discharge of this Indenture and (b) the Maturity
Date of the Series 2010-1 Notes, the Master Servicer hereby covenants, and each Successor Servicer
by its acceptance of its appointment hereunder shall be deemed to covenant, that:



     (a) Change in Accounts. The Master Servicer will not (i) terminate or substitute the
Series Collection Account except as required pursuant to Section 4.02 or (ii) add or
terminate any institution as an Applicable Lock-Box Bank or terminate or substitute any Applicable
Lock-Box Account or any Applicable Lock-Boxes from those listed in Schedule III hereto,
except as otherwise permitted pursuant to Section 4.02 or Section 4.03. The Master
Servicer shall not instruct any Annuity Provider or Obligor to remit, or consent to any applicable
Claimant’s, Annuity Provider’s or Obligor’s instructions to remit or remittance of, Collections to
any Person, address or account other than (i) in the case of payments in respect of Annuity
Receivables, an Annuity Lock-Box covered by a Lock-Box Notice, the Master Collection Account or the
Series Collection Account and (ii) in the case of payments made in respect of Settlement
Receivables, the Settlement Lock-Box covered by a Lock-Box Notice, the Master Collection Account or
the Series Collection Account



     (b) Collections. In the event that the Master Servicer or any Affiliate thereof
receives any Collections relating to any Receivables, the Master Servicer agrees to hold, or cause
such Affiliate to hold, all such Collections in trust and to deposit, or cause such Affiliate to
deposit, such Collections (i) in the case of Collections in respect of Annuity Receivables, to an
Annuity Lock-Box covered by a Lock-Box Notice, the Master Collection Account or the Series
Collection Account and (ii) in the case of all other Collections, to the Settlement Lock-Box
covered by a Lock-Box Notice, the Master Collection Account or the Series Collection Account, in
each case, as soon as practicable, but in no event later than two (2) Business Days after its
receipt thereof.



     (c) Preservation of Existence; Compliance with Requirements of Law.



          (i) Except as permitted pursuant to Section 8.02, the Master Servicer will preserve
and maintain its corporate or other existence, rights, franchises and privileges in the
jurisdiction of its organization, and qualify and remain qualified in good standing as a foreign
corporation or other type of organization, as applicable, in each jurisdiction where the failure to
maintain such qualification could reasonably be expected to have a Material Adverse Effect.




          (ii) The Master Servicer will duly satisfy all obligations on its part to be fulfilled under
or in connection with each Series Receivable, will maintain in effect all qualifications required
under Requirements of Law in order properly to service such Series Receivable and will comply with
all other Requirements of Law in connection with servicing such Series Receivable.




     (d) Extension or Amendment of Receivables. Except as permitted pursuant to
Sections 2.06(f) and 3.01(d), the Master Servicer will not extend, amend or
otherwise modify (or consent or fail to object to any such extension, amendment or modification by
the Seller, the Seller or the Issuer of) the terms of any then existing Receivable.



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     (e) Protection of Series 2010-1 Noteholders’ Rights. Except as expressly permitted
hereunder or under the Supplement, the Master Servicer will not take any action which could
reasonably be expected to impair the rights of any of the Series 2010-1 Noteholders in any
Receivable or Trust Asset.



     (f) Deposits to Applicable Lock-Box Accounts, Applicable Lock-Boxes, the Master Collection
Account and the Series Collection Account. The Master Servicer will not deposit or otherwise
credit, or cause to be so deposited or credited, or consent or fail to object to any such deposit
or credit, to any Applicable Lock-Box Account, any Applicable Lock-Box or the Master Collection
Account cash or cash proceeds other than Collections of Receivables and other Trust Assets;
provided that to the extent that any such other funds are so deposited on any date, it shall not
constitute a breach of this Section 3.04(f) if such other funds are removed from such
Applicable Lock-Box or such account within two (2) Business Days after such amounts were so
deposited in such account. The Master Servicer will not deposit or otherwise credit, or cause to
be so deposited or credited, or consent or fail to object to any such deposit or credit, to the
Series Collection Account cash or cash proceeds other than Collections of the Series Receivables
and other Series Trust Assets; provided that to the extent that any such other funds are so
deposited, it shall not constitute a breach of this Section 3.04(f) if such funds are
removed from such account within two (2) Business Days after so deposited in such account.



     (g) Receivables Not To Be Evidenced by Promissory Notes. The Master Servicer will not
take any action to cause any Receivable to be evidenced by any “instrument” (as defined in the UCC
of the State the law of which governs the perfection of the interest in such Receivable created
hereunder), except in connection with its enforcement, in which event the Master Servicer shall
deliver such instrument to the Trustee as required pursuant to Section 2.01.



     (h) Reporting Requirements.



          (i) The Master Servicer will furnish to the Trustee, the Collateral Trustee and each Series
2010-1 Noteholder:




          (1) promptly, and in any event within five (5) Business Days, after becoming aware thereof,
notice of the occurrence of any Event of Default, Potential Event of Default, Servicer Default or
event that, with the giving of notice or lapse of time or both, would constitute a Servicer
Default, and, in the case of such a Servicer Default or incipient Servicer Default, the statement
of the chief financial officer or president of such Master Servicer setting forth details of such
occurrence or event and the action which such Master Servicer has taken and proposes to take with
respect thereto; and




          (2) as soon as possible and in any event within two (2) Business Days after acquiring
knowledge thereof, notice of the occurrence of any Material Adverse Effect.




          (ii) Promptly following any request therefor by the Trustee, the Collateral Trustee or the
Control Party, the Master Servicer will furnish or cause to be furnished to the Trustee, the
Collateral Trustee or the Series 2010-1 Noteholders, as applicable, such information, documents,
records or reports respecting the Series Receivables, the other Series Trust Assets relating
thereto or the condition or operations, financial or otherwise, of the Issuer as the Trustee,


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 the
Collateral Trustee,  the Control Party or any such Series 2010-1 Noteholder may from time to time
reasonably request.




     (i) Inspection of Books and Records. The Trustee, the Collateral Trustee and/or the
Control Party (or if such Control Party is a designated percentage of the Series 2010-1
Noteholders, a representative of such Control Party), independent accountants appointed by, or
other agents of, any of the foregoing, and the Issuer shall have the right, upon reasonable prior
written notice to the Master Servicer and at the Issuer’s expense, to visit the Master Servicer to
(1) discuss the affairs, finances and accounts of the Master Servicer (as they relate to the Master
Servicer’s obligations under this Agreement and the other Operative Documents) with, and to be
advised as to the same by, its officers, and (2) examine the books of account and records of the
Master Servicer as they relate to the Trust Assets and to make or be provided with copies and
extracts therefrom, all at such reasonable times and intervals and to such reasonable extent during
regular business hours of the Master Servicer as the Trustee, the Collateral Trustee, such
designated representative of the Control Party or such accountants or agents appointed by any of
the foregoing, as applicable, may desire.



     (j) Fidelity Insurance. The Master Servicer shall maintain, at its own expense (x)
all insurance required by federal and state law, including worker’s compensation insurance; (y)
errors and omissions insurance in an amount of at least $3,000,000; and (z) employee theft and
dishonesty insurance in an amount of at least $1,000,000. No provision of this Section
3.04(j) requiring such fidelity insurance shall diminish or relieve the Master Servicer from
its duties and obligations as set forth in this Agreement or any of the other Operative Documents.
The Master Servicer shall be deemed to have complied with this provision if one of its respective
Affiliates has such fidelity policy coverage and, by the terms of such fidelity policy, the
coverage afforded thereunder extends to the Master Servicer. Upon the request of the Trustee or
the Control Party,
the Issuer shall cause to be delivered to the Trustee or the Control Party, as applicable, a
certification evidencing coverage under such fidelity policy.



     (k) Transactions With the Issuer. The Master Servicer shall at all times deal with
the Issuer in a manner consistent with Section 2.06(m).



     (l) Compliance Certifications. In connection with the delivery of each Monthly
Report, a Servicing Officer of the Master Servicer will certify on behalf of the Master Servicer to
the Trustee for the benefit of the Series 2010-1 Noteholders as to the contents of such Monthly
Report, the form of such certification to be set forth on the form of Monthly Report attached as
Exhibit F hereto.



     (m) Business Day Notification. The Master Servicer shall provide written notice to
the Trustee and the Collateral Trustee listing all days (other than any Saturday or Sunday) on
which national banking associations or state banking institutions in New York are authorized or
obligated by law, executive order or governmental decree to be closed, and the Master Servicer
shall promptly notify the Trustee and the Collateral Trustee of any modifications to such listing.



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     SECTION 3.05. Reports and Records.



     (a) Daily Report. By 1:00 p.m. (New York City time) on each Business Day, the Master
Servicer shall deliver to the Trustee and the Collateral Trustee a Daily Report for the Series (A)
specifying the amounts of any Split Payments related to the Series and any Collections relating to
the Trust Assets received in the Master Collection Account on the preceding Business Day, the
Applicable Lock-Box and/or Applicable Lock-Box Account to which such amounts were initially
deposited, and the Series Receivables or Split Payments, as applicable, to which such amounts
relate, (B) directing the Collateral Trustee to (1) transfer to the Series Collection Account those
amounts deposited in the Master Collection Account in respect of Collections relating to the Trust
Assets and (2) transfer to the Issuer Split Payment Account those amounts deposited in the Master
Collection Account owing as Split Payments to Claimants and Individual Annuity Sellers, and (C) if
a Servicer Default shall have occurred and is continuing, directing the Collateral Trustee to
withdraw from the Issuer Split Payment Account and remit to the applicable Claimants and Individual
Annuity Sellers funds on deposit in the Issuer Split Payment Account owing in respect of Split
Payments.



     (b) Monthly Report. By 3:00 p.m. (New York City time) on each Series Determination
Date preceding the applicable Payment Date, the Master Servicer shall deliver to the Collateral
Trustee, the Trustee, the Paying Agent and the Series 2010-1 Noteholders a Monthly Report for the
Series (including in electronic format or via secure web-access) in respect of the immediately
preceding Collection Period. The Collateral Trustee and the Collateral Trustee shall be entitled
to conclusively rely upon each such Monthly Report and the information contained therein.



     (c) Monthly Reconciliations. On or prior to the 20th day of each month
(or, if such day is not a Business Day, on the immediately succeeding Business Day), the Master
Servicer shall deliver, or cause to be delivered, to the Trustee, the Collateral Trustee and the
Series 2010-1 Noteholders the certificate prepared by the Back-up Servicer pursuant to Exhibit A of
the Back-up Servicing Agreement, which certificate certifies that the Back-up Servicer has
verified all payment information received pursuant to Exhibit A of the Back-up Servicing Agreement
during the preceding calendar month. If the Master Servicer shall not have received such
certificate from the Back-up Servicer on or prior to the 10th day of each month, the
Master Servicer shall contact the Back-up Servicer and shall cause such certificate to be delivered
to the Master Servicer promptly, so that the Master Servicer is able to meet the delivery
obligations set forth in the first sentence of this subsection.



     (d) Limited Trustee Obligation. Except as otherwise specified in the Supplement, the
Trustee shall have no obligation in respect of any Daily Report or Monthly Report received by it
pursuant to this Section 3.05 other than to file and maintain a record of such reports in a
manner consistent with the standard of care with which it shall perform its duties hereunder as set
forth in Section 11.01.



     SECTION 3.06. Servicing Report of Independent Public Accountants.



     (a) On or before April 30th of each calendar year, beginning with April 30, 2011,
the Master Servicer shall cause a firm of nationally recognized independent public accountants (who



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may also render other services to the Master Servicer or the Issuer) to furnish a report (addressed
to the Issuer, the Trustee, the Collateral Trustee, the Master Servicer and each Series 2010-1
Noteholder) to the Issuer, the Trustee, the Collateral Trustee, the Master Servicer and each Series
2010-1 Noteholder to the effect that they have examined certain documents and records relating to
the servicing of Receivables under this Agreement and the Supplement, compared the information
contained in the Master Servicer’s reports delivered pursuant to Section 3.05(b) during the
period covered by such report with such documents and records and that, on the basis of such
examination, such accountants are of the opinion that the servicing has been conducted in
compliance with the terms and conditions as set forth in Articles III and IV and
Section 8.06 of this Agreement and the applicable provisions of the Supplement, except for
such exceptions as they believe to be immaterial and such other exceptions as shall be set forth in
such statement.



     (b) On or before April 30th of each calendar year, beginning with April 30, 2011, the Master
Servicer shall cause a firm of nationally recognized independent public accountants (who may also
render other services to the Master Servicer or the Issuer) to furnish a report (addressed to the
Issuer, the Trustee, the Collateral Trustee, the Master Servicer and each Series 2010-1 Noteholder)
to the Issuer, the Trustee, the Collateral Trustee, the Master Servicer and each Series 2010-1
Noteholder to the effect that they have compared the mathematical calculations of each amount set
forth in the Master Servicer’s reports delivered pursuant to Section 3.05(b) during the
prior calendar year with the Master Servicer’s computer reports which were the source of such
amounts and that on the basis of such comparison, such accountants are of the opinion that such
amounts are in agreement, except for such exceptions as they believe to be immaterial and such
other exceptions as shall be set forth in such statement.



     SECTION
3.07. Reserved.



     SECTION
3.08. Adjustments.
If the Master Servicer makes a mistake with respect to the amount of any Collection, Split
Payment or payment and deposits, pays or causes to be deposited or paid, an amount that is less
than or more than the actual amount thereof, the Master Servicer shall appropriately adjust the
amounts subsequently deposited into the Series Collection Account, Series Reserve Account, Series
Payment Account or Issuer Split Payment Account or paid out to reflect such mistake and account for
such adjustment in the Daily Reports for the date of such adjustment. Any Receivable in respect of
which a dishonored check is received shall be deemed not to have been paid.



     SECTION 3.09. Reserved.



ARTICLE IV

RIGHTS OF SERIES 2010-1 NOTEHOLDERS AND

ALLOCATION AND APPLICATION OF COLLECTIONS




     SECTION 4.01. Rights of Series 2010-1 Noteholders. The Series 2010-1 Notes shall
represent debt of the Issuer secured by the Series Trust Assets and shall entitle the holders
thereof to receive, to the extent necessary to make the required payments with respect to the
Series 2010-1 Notes at the times and in the amounts specified in the Supplement, the portion of
Collections of the Series Receivables allocable to the Series 2010-1 Noteholders pursuant to this



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Agreement and the Supplement from funds on deposit in the Series Collection Account and funds on
deposit in any Series Account.



     SECTION 4.02. Establishment of the Master Collection Account and the Applicable Lock-Box
Accounts; Establishment of the Issuer Split Payment Account.



     (a) The Issuer has established prior to the Closing Date and shall maintain or cause to be
maintained, in the name of the Trustee, and on behalf of the Secured Parties, with an Eligible
Institution (x) a segregated non-interest bearing account accessible by the Collateral Trustee
(such account being the “Master Collection Account” and such institution holding such
account being the “Master Collection Account Bank”), such account bearing a designation
clearly indicating that the funds deposited therein are held in the name of the Trustee for the
benefit of the Secured Parties and (y) for the benefit of the Issuer, shall establish or cause to
be established on or prior to the Closing Date and shall maintain or cause to be maintained in the
name of the Collateral Trustee, with an Eligible Institution a segregated non-interest bearing
account accessible by the Collateral Trustee (such account being the “Issuer Split Payment
Account”), such account bearing a designation clearly indicating that the funds deposited
therein as described below are held for the benefit of the Issuer. All Collections of Receivables
that are deposited into Applicable Lock-Box Accounts shall be remitted to the Master Collection
Account on a daily basis. The Collateral Trustee shall possess all right, title and interest in
and to all funds from time to time on deposit in the Master Collection Account and in all proceeds
thereof. The Master Collection Account shall be under the sole dominion and control of the
Collateral Trustee, for the benefit of the Secured Parties; provided, however,
that, pursuant to the authority granted to the Master Servicer in Section 3.01, the Master
Servicer shall have the
power with respect to the amounts from time to time on deposit in the Issuer Split Payment
Account, (i) so long as no Servicer Default shall have occurred and be continuing, to withdraw
money from the Issuer Split Payment Account, or (ii) if a Servicer Default shall have occurred and
is continuing, to instruct the Collateral Trustee in writing to withdraw money from the Issuer
Split Payment Account, and, in each case, to remit or cause the Collateral Trustee to remit such
amounts so withdrawn to the applicable Claimants and Individual Annuity Sellers entitled thereto in
accordance with the terms of the relevant Settlement Purchase Agreements and Annuity Purchase
Agreements, as applicable, (but, in no event, later than two (2) Business Days after the withdrawal
of such funds from the Issuer Split Payment Account). Except as expressly provided in this
Agreement, the Master Servicer shall not have any claim or any right of setoff or banker’s lien
against, or any right to otherwise deduct from, any funds held in the Master Collection Account for
any amount owed to it by the Trustee, the Collateral Trustee, the Issuer, any Series 2010-1
Noteholder or any Claimant or any Individual Annuity Seller.



     If, at any time, the institution holding the Master Collection Account ceases to be an
Eligible Institution, the Issuer, for the benefit of the Secured Parties, shall (immediately if
such institution is Wilmington Trust Company or within sixty (60) days with respect to any other
institution) establish a new Master Collection Account in accordance with this Agreement meeting
the conditions specified above with an Eligible Institution, transfer any cash and/or any
investments held in the existing Master Collection Account or with respect thereto to such new
Master Collection Account and provide written notice to the Collateral Trustee referring to such
new Master Collection Account. From the date such new Master Collection Account is



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established, it
shall be considered the “Master Collection Account” for all purposes of this Agreement and the
other Operative Documents.



     If, at any time, the institution holding the Issuer Split Payment Account ceases to be an
Eligible Institution, the Issuer shall within sixty (60) days establish a new Issuer Split Payment
Account meeting the conditions specified above with an Eligible Institution, transfer any cash held
therein to such new Issuer Split Payment Account. From the date such new Issuer Split Payment
Account is established, it shall be the “Issuer Split Payment Account” for all purposes of this
Agreement and the other Operative Documents.



     Funds on deposit in the Master Collection Account that are related to the Trust Assets and
Split Payments shall, at the directions of the Master Servicer in accordance with the information
set forth on the respective Daily Reports, be transferred to the Series Collection Account and
Issuer Split Payment Account, respectively, within one (1) Business Day after receipt of any
Collections in the Master Collection Account. Except as otherwise provided herein, funds on
deposit in the Master Collection Account shall not be invested.



     The Master Servicer shall, or shall cause, the funds on deposit in the Issuer Split Payment
Account to be remitted to the applicable Claimant or Individual Annuity Seller in accordance with
the terms of the applicable Settlement Purchase Agreement or Annuity Purchase Agreement.



     (b) The Seller has, prior to the execution and delivery of this Agreement, established (or
caused an Affiliated Entity to establish), and from time to time hereafter (in accordance with the
requirements of Section 3.04(a)) may establish (i) Settlement Lock-Box Accounts (each such
account, a “Settlement Lock-Box Account”) and Settlement Lock-Boxes (each such lock-box, a
“Settlement Lock-Box”) with one or more depository institutions maintained in the name of the
Trustee for the benefit of the Secured Parties (each such institution holding such an lock-box
account being a “Settlement Lock-Box Bank”) into which all Collections received by such
Settlement Lock-Box Bank (as holder of the related Settlement Lock-Box or the recipient of payments
by electronic funds transfers) in respect of Settlement Receivables are to be deposited by such
Settlement Lock-Box Bank by the close of business on each Business Day received, or on the next
Business Day if not received on a Business Day, or by the Master Servicer, the Issuer or the
Seller, as applicable, within one Business Day after such Person’s receipt thereof and (ii) Annuity
Lock-Box Accounts (each such account, an “Annuity Lock-Box Account”) and Annuity Lock-Boxes (each
such lock-box, an “Annuity Lock-Box”) with one or more depository institutions maintained for the
benefit of the Secured Parties (each such institution holding such a lock-box being an “Annuity
Lock-Box Bank”) into which all Collections received by such Annuity Lock-Box Bank (as holder of
the Annuity Lock-Box or the recipient of payments by electronic funds transfers) in respect of
Annuity Receivables are to be deposited by such Annuity Lock-Box Bank by the close of business on
each Business Day received, or on the next Business Day if not received on a Business Day, or by
the Master Servicer, the Issuer or the Seller, as applicable, within two Business Days after such
Person’s receipt thereof. The name and location of each Settlement Lock-Box and Annuity Lock-Box
is set forth on Schedule III attached hereto.



     (c) Each Settlement Lock-Box Account, and each Annuity Lock-Box Account, and the related
Settlement Lock-Box and Annuity Lock-Box is subject to the applicable letter



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attached as Exhibit
B-2 hereto (the “Lock-Box Notice”) which has been delivered to the Settlement Lock-Box
Bank, the Annuity Lock-Box Bank and the Collateral Trustee. Pursuant to the applicable Lock-Box
Notice, each Settlement Lock-Box and Annuity Lock-Box will have been assigned by the owners thereof
to the Collateral Trustee, for the benefit of the Secured Parties. Neither the Master Servicer,
the Seller nor the Issuer shall establish any institution as a Settlement Lock-Box Bank or an
Annuity Lock-Box Bank or substitute any Settlement Lock-Box Account or any Settlement Lock-Box or
Annuity Lock-Box Account or Annuity Lock-Box from those listed in Schedule III hereto
unless (i) the Master Control Party has provided prior written consent to such additional or
substituted Settlement Lock-Box Account or Settlement Lock-Box or Annuity Lock-Box Account or
Annuity Lock-Box and (ii) the Seller, the Issuer, and the applicable Settlement Lock-Box Bank or
Annuity Lock-Box Bank shall execute and deliver to the Trustee on or prior to the date upon which
Collections of the Series Receivables have been directed to be made to any such new Settlement
Lock-Box Account or Settlement Lock-Box or Annuity Lock-Box Account or Annuity Lock-Box, as
applicable, (1) a Lock-Box Notice substantially similar to the form attached as Exhibit B
hereto with respect to each such Settlement Lock-Box Account and any related Settlement Lock-Box or
Annuity Lock-Box Account and any related Annuity Lock-Box or (2) if such Settlement Lock-Box Bank
or Annuity Lock-Box Bank has previously executed a Lock-Box Notice, an amendment thereto.



     SECTION 4.03. Series Accounts.



     (a) On or prior to the Closing Date, the Issuer shall establish and maintain with an Eligible
Institution, in the name of the Trustee, on behalf of the Secured Parties, the following segregated
bank accounts:



          (i) a non-interest bearing account to be identified as the “Series 2010-1 Collection Account
for Imperial Settlements Financing 2010, LLC” (the “Series Collection Account”);




          (ii) a non-interest bearing account to be identified as the “Series 2010-1 Reserve Account for
Imperial Settlements Financing 2010, LLC” (the “Series Reserve Account”);




          (iii) a non-interest bearing account to be identified as the “Series 2010-1 Payment Account
for Imperial Settlements Financing 2010, LLC” (the “Series Payment Account”);




          (iv) a non-interest bearing account to be identified as the “Series 2010-1 Investment Proceeds
Account” for Imperial Settlements Financing 2010, LLC (the “Series Investment Proceeds
Account”); and




          (v) a non-interest bearing account to be identified as the “Series 2010-1 Holdback Account for
Imperial Settlements Financing 2010, LLC” (the “Series Holdback Account”).




     Wilmington Trust Company hereby agrees to act as “Securities Intermediary” in respect of each
of the Series Accounts. The Securities Intermediary hereby expressly covenants that at all times
prior to the satisfaction and discharge of this Agreement in accordance with the terms



65









 







hereof: (i)
all matters relating to the Series Accounts shall be governed by the laws of the State of New York
and that for purposes of Article 8 of the New York UCC the State of New York is the Securities
Intermediary’s jurisdiction; (ii) all property, including all cash and all Eligible Investments,
held by the Securities Intermediary on behalf of the Trustee in the Series Accounts shall be
treated as “financial assets” under and as defined in Article 8 of the New York UCC; (iii) the
Securities Intermediary will treat the Trustee as entitled to exercise the rights comprising the
investments or other financial assets credited to the Series Accounts and will at all times
identify the Trustee on the Securities Intermediary’s records as the person having a security
entitlement against the Securities Intermediary; (iv) the financial assets credited to the Series
Accounts shall not be registered in the name of, payable to the order of, or specially indorsed to
Wilmington Trust Company except in its capacity as Securities Intermediary; (v) the Securities
Intermediary will in the ordinary course of its business maintain securities accounts for others
and will be acting in that capacity as Securities Intermediary hereunder; and (vi) the Securities
Intermediary will not comply with entitlement orders originated by any Person other than the
Trustee with respect to the investments or financial assets held in the Series Accounts;
provided, the Trustee hereby directs the Securities Intermediary, which direction shall be
revocable by the Trustee at any time, to (x) comply with the instructions of the Collateral Trustee
(acting at the direction of the Master Servicer) with respect to Eligible Investments to the extent
such instructions are expressly contemplated hereby and (y) comply with the instructions of the
Master Servicer (or, during the continuance of a Servicer Default, the Collateral Trustee (acting
at the direction of the Master Servicer) with respect to any Series Holdback Account to the extent
such instructions are expressly contemplated by the Supplement.



     (b) Out of the proceeds of the issuance and sale of the Series 2010-1 Notes and each Advance
thereunder, the Issuer and/or the Master Servicer shall instruct the Trustee and the Collateral
Trustee, prior to making any payments thereof to the Issuer, to deposit to the Series Reserve
Account an amount equal to the Specified Series Reserve Balance as of the Closing Date or related
Advance Date, as applicable.



     (c) At the written direction of the Issuer (which may be a standing order), funds on deposit
in the Series Collection Account, the Series Reserve Account and the Series Investment Proceeds
Account shall be invested by the Collateral Trustee in Eligible Investments selected by the Issuer
(or, if not so instructed, then held by the Trustee on deposit in such account). All such Eligible
Investments shall be held by the Collateral Trustee in the name or for the benefit of the Trustee
for the benefit of the Secured Parties. All interest and other investment earnings (net of losses
and investment expenses, the “Investment Proceeds”) on funds on deposit in the Series
Accounts and all cash and other items on deposit in the Trustee’s Account, to the extent such cash,
other items and Eligible Investments therein are held by the Collateral Trustee or the Trustee for
the benefit of the Secured Parties, shall upon receipt thereof be deposited in the Series
Investment Proceeds Account and be distributed therefrom in accordance with the Supplement.
Neither funds deposited in the Series Payment Account nor funds deposited to any other Series
Account on the Business Day prior to a Payment Date shall be required to be invested overnight.
Any direction by the Issuer to invest funds on deposit in any applicable Series Account in
accordance with this Section shall be in writing (which may be a standing instruction) and shall
certify that the requested investment is an Eligible Investment which matures (and the proceeds of
which are distributable to the Collateral Trustee for deposit into the applicable Series Account)
no later than the Business Day immediately preceding the next



66









 







Payment Date (or any such earlier
date specified in the Supplement as the latest date on which such Eligible Investment shall
mature). The Collateral Trustee shall have no obligation to invest and reinvest any cash held in
the applicable Series Account in the absence of timely and specific written investment direction
from the Issuer. In no event shall the Collateral Trustee be liable for the failure to be provided
with timely written investment directions, the selection of investments or for investment losses
incurred thereon by reason of investment performance, liquidation prior to stated maturity or
otherwise.



     (d) If, at any time, the institution holding any Series Account ceases to be an Eligible
Institution, the Issuer, for the benefit of the Secured Parties, shall within thirty (30) days
establish a new such Series Account meeting the conditions specified in Section 4.03(a)
with an Eligible Institution, transfer any cash and/or any investment held in such existing Series
Account or with respect thereto to such new Series Account. From the date such new Series Account
is established, it shall constitute such Series Account for all purposes hereunder.



     SECTION 4.04. Establishment of the Trustee’s Account. On or prior to the Closing
Date, the Trustee shall establish and maintain or cause to be established and maintained in the
name of the Trustee, on behalf of the Series 2010-1 Noteholders, with an Eligible Institution, a
special account (the “Trustee’s Account”) for deposits by the Issuer or the Master Servicer
pursuant to the terms of the Supplement. The Trustee’s Account shall initially be account number
098074-005 established and maintained with
Wilmington Trust Company, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Capital Markets.



     If, at any time, the institution holding the Trustee’s Account ceases to be an Eligible
Institution, the Trustee shall (immediately if such institution is Wilmington Trust Company or
within sixty (60) days with respect to any other institution) establish a new Trustee’s Account
with an Eligible Institution, transfer any cash and/or any investments held therein or with respect
thereto to such new Trustee’s Account. From the date such new Trustee’s Account is established, it
shall be the “Trustee’s Account.”



     SECTION 4.05. Other Payments. Indemnification payments and other amounts not
constituting Collections received by the Trustee from time to time, if any, shall be paid by the
Trustee to the intended beneficiary of such payment or amount in accordance with the written
instructions of the Person remitting the relevant payment or amount to the Trustee, and in the
event that such Person shall fail to identify the intended beneficiary or to provide the Trustee
with written payment instructions, the Trustee shall hold such payment or amount in the Trustee’s
Account until such Person or the Master Servicer shall have provided the Trustee and the Collateral
Trustee with the necessary information to make a distribution thereof.



ARTICLE V

DISTRIBUTIONS AND REPORTS TO SERIES 2010-1 NOTEHOLDERS




     (a) Distributions. Distributions shall be made to Series 2010-1 Noteholders and
certain other Persons, as set forth in the Supplement.



     (b) Reports. Reports shall be provided to Series 2010-1 Noteholders and certain other
Persons as set forth in this Agreement and in the Supplement.



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     (c) Tax Forms. In addition to such other reports that are required to be furnished to
each Series 2010-1 Noteholder under this Agreement and under the Supplement, for 2010 and each
calendar year thereafter, not later than January 31 or such other date as may from time to time be
required under the Code, the Collateral Trustee, or the Paying Agent on its behalf, shall furnish
to each Person that was a Series 2010-1 Noteholder during the preceding Fiscal Year a Form 1099 (or
such other form(s) as may be applicable pursuant to the Code from time to time) setting forth the
aggregate amounts paid to such Series 2010-1 Noteholder in respect of the Series 2010-1 Notes
during such Fiscal Year, together with such other customary information related to the Series
2010-1 Notes as may be necessary to enable such Persons to prepare their federal income tax
returns.



ARTICLE VI

THE SERIES 2010-1 NOTES




     SECTION 6.01. The Series 2010-1 Notes.



     (a) The Series 2010-1 Notes Generally. The Series 2010-1 Notes shall be issued in
fully registered form and shall be in substantially the form of the exhibits with respect thereto
attached to the Supplement and shall, upon receipt of an Order to such effect executed by the
Issuer, be authenticated and delivered by the Trustee to the Persons designated in such Order as
provided in Section 6.02. Series 2010-1 Notes shall be issued pursuant to the terms of the
Supplement. Each Series 2010-1 Note shall be executed by manual or facsimile signature on behalf
of the Issuer by a Responsible Officer. Series 2010-1 Notes bearing the manual or facsimile
signature of the individual who was, at the time when such signature was affixed, a Responsible
Officer authorized to sign on behalf of the Issuer shall not be rendered invalid, notwithstanding
that such individual thereafter ceased to be a Responsible Officer so authorized. Series 2010-1
Notes shall be issued in U.S. dollars and in minimum denominations of $500,000, and in integral
multiples of $1,000 in excess thereof. No Series 2010-1 Notes shall be entitled to any benefit
under this Agreement or the Supplement or be valid for any purpose, unless there appears on such
Series 2010-1 Note a certificate of authentication in substantially the form provided for herein
executed by or on behalf of the Trustee by a Responsible Officer of the Trustee, and such
certificate upon any Series 2010-1 Note shall be conclusive evidence, and the only evidence, that
such Series 2010-1 Note has been duly authenticated and delivered hereunder. All Series 2010-1
Notes shall be dated the date of their authentication.



     (b) U.S. Global Notes. Beneficial interests in U.S. Global Notes sold or to be sold
in the United States or to U.S. Persons under Rule 144A of the Securities Act shall be represented
by one or more permanent U.S. Global Notes in the form and substance substantially similar to those
U.S. Global Notes attached to the Supplement as exhibits thereto. U.S. Global Notes shall be
marked with a legend indicating that investors in such Series 2010-1 Notes must be Qualified
Institutional Buyers. U.S. Global Notes shall be held by the Collateral Trustee as custodian for
the Common Depository on behalf of the Series 2010-1 Noteholders whose interests are evidenced by
such U.S. Global Notes. U.S. Global Notes shall be duly executed by the Issuer and authenticated
by or on behalf of the Trustee as provided herein.



     (c) Euroclear/Clearstream Global Notes. Euroclear/Clearstream Global Notes shall be
issued in the form of Regulation S Global Notes. The Regulation S Global Notes shall be



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deposited
with the Collateral Trustee as custodian for the Common Depository and registered in the name of a
nominee for the Common Depository, for credit to the respective accounts of Euroclear and
Clearstream and for further credit to the accounts of the owners of beneficial interests in such
Series 2010-1 Notes (or to such other accounts as they may direct) at Euroclear or at Clearstream.
During the Restricted Period, the Euroclear/Clearstream Global Notes shall be represented by the
Temporary Regulation S Global Notes. A beneficial interest in a Temporary Regulation S Global Note
may only be transferred to a non-U.S. Person in an “offshore transaction” (within the meaning of
Regulation S under the Securities Act). Upon the later of (i) the receipt of a Regulation S
Transfer Certificate by the Note Registrar and Transfer Agent from the owner of the beneficial
interest in a Temporary Regulation S Global Note and (ii) the expiration of the Restricted Period
related to such Temporary Regulation S Global Note, a beneficial interest in such Temporary
Regulation S Global Note may be exchanged for a beneficial interest in a Permanent Regulation S
Global Note in an amount equal to the principal amount of such beneficial interest in such
Temporary Regulation S Global Note. Regulation S Global Notes shall be marked with a legend
indicating that investors in such Series 2010-1 Notes must constitute Persons allowed to purchase
such Series 2010-1 Notes under Regulation S of the Securities Act. Regulation S Global Notes shall
be duly executed by the Issuer and authenticated by or on behalf of the Trustee as herein provided.



     (d) Definitive Notes. Definitive Notes shall only be issued to investors under the
terms and conditions of Sections 6.03(c) and (d). No initial issuance of Series
2010-1 Notes under the Supplement shall involve the issuance of Definitive Notes.



     (e) Certificated Notes. Interests in Series 2010-1 Notes sold or to be sold to
Institutional Accredited Investors or Affiliated Entities that are not Qualified Institutional
Buyers will be issued in the form of permanent certificated Series 2010-1 Notes in registered form.



     SECTION 6.02. Authentication of Series 2010-1 Notes. In accordance with any Order
directing the Trustee to do so, the Trustee shall, subject to the conditions set forth in
Section 6.09(c), authenticate and deliver the Series 2010-1 Notes of each Series to the
Persons specified in such Order against payment to the Issuer of the purchase price therefor. The
Trustee’s form of authentication on all Series 2010-1 Notes shall be in substantially the following
form:



     This is one of the Series 2010-1 Notes referred to in the within-mentioned Indenture.



	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Officer 	 
	 	 	 	 
	 




     provided, that, if at any time the Trustee shall appoint an authenticating agent for
any of the Series 2010-1 Notes pursuant to Section 6.08, the Series 2010-1 Notes may bear,
in the place of the Trustee’s certificate of authentication, an alternate certificate of
authentication which shall be in substantially the following form:



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     This is one of the Series 2010-1 Notes referred to in the within-mentioned Indenture.



	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Trustee

 	 
	 	By:  	 	 
	 	 	as Authenticating Agent 	 
	 	 	 
	 	By:  	
 	 
	 	 	Authorized Officer 	 
	 	 	 	 




     SECTION 6.03. Transfer and Exchange of Series 2010-1 Notes.



     (a) Generally. The Collateral Trustee shall cause to be kept at the Collateral
Trustee Office to be maintained in accordance with the provisions of Section 14.11 a
register (the “Note Register”) in which, subject to such reasonable regulations as it may
prescribe, a transfer agent and registrar (which may be the Collateral Trustee) (the “Note
Registrar and Transfer Agent”)
shall provide for the registration of the Series 2010-1 Notes and of transfers and exchanges
of the Series 2010-1 Notes as herein provided. The Note Registrar and Transfer Agent shall
initially be the Collateral Trustee. The Collateral Trustee (or, if the Collateral Trustee is then
acting as Note Registrar and Transfer Agent, the Control Party) may at any time revoke the
appointment of and remove any Person serving as Note Registrar and Transfer Agent if the Collateral
Trustee (or Control Party, as applicable) determines in its sole discretion that such Person failed
to perform its obligations under this Agreement in any material respect. Any Person serving as
Note Registrar and Transfer Agent shall be permitted to resign as Note Registrar and Transfer Agent
upon 30 days’ written notice to the Issuer, the Collateral Trustee and the Master Servicer;
provided, however, that such resignation shall not be effective and such Person
shall continue to perform its duties as Note Registrar and Transfer Agent until the Collateral
Trustee (or Control Party, as applicable) has appointed a successor Note Registrar and Transfer
Agent reasonably acceptable to the Issuer and the Person so appointed has given the Issuer and the
Collateral Trustee written notice that it accepts the appointment.



     Subject to the restrictions herein and in the applicable Series 2010-1 Note, upon surrender
for registration of transfer of any Series 2010-1 Note at any office or agency of the Note
Registrar and Transfer Agent maintained for such purpose, the Issuer shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or transferees, one or
more new Series 2010-1 Notes (of the same Series and principal amount).



     Subject to the terms and conditions of this Article VI and the Supplement, Series
2010-1 Notes may be exchanged for other Series 2010-1 Notes (of the same Series) of authorized
denominations of the same aggregate principal amount, upon surrender of the Series 2010-1 Notes to
be exchanged at any such office or agency. Whenever any Series 2010-1 Notes are so surrendered for
exchange, the Issuer shall execute, and the Trustee shall authenticate and deliver, the Series
2010-1 Notes which the Series 2010-1 Noteholder making the exchange is entitled to receive.



70









 





     In addition to the other restrictions on transfer set forth herein, in the Supplement or in
any applicable Series 2010-1 Note, every Series 2010-1 Note presented or surrendered for
registration of transfer or exchange shall be accompanied by a written instrument of transfer in a
form satisfactory to the Trustee and the Note Registrar and Transfer Agent duly executed by the
Series 2010-1 Noteholder thereof or his attorney-in-fact duly authorized in writing.



     Each Series 2010-1 Note shall be registered at all times as herein provided, and any transfer
or exchange of such Series 2010-1 Note will be valid for purposes hereunder only upon registration
of such transfer or exchange by the Note Registrar and Transfer Agent as provided herein.



     No service charge shall be made for any registration of transfer or exchange of any Series
2010-1 Note, but the Note Registrar and Transfer Agent may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any such transfer or
exchange.



     All Series 2010-1 Notes surrendered for registration of transfer or exchange, or for payment,
shall be canceled and disposed of in a manner satisfactory to the Trustee.



     (b) Limitations on the Initial Issuance and Sales or Transfers of Series 2010-1 Notes.
Each purchaser of a Series 2010-1 Note on the Closing Date and any other purchaser of a Series
2010-1 Note (whether purchasing a Certificated Note or purchasing beneficial interests in a U.S.
Global Note or a Regulation S Global Note) after such Closing Date, will be required to acknowledge
that the Series 2010-1 Notes purchased by it have not been and will not be registered under the
Securities Act or under any state’s securities laws.



     No Series 2010-1 Note may be sold or transferred (including, without limitation, by pledge or
hypothecation) unless such sale or transfer is exempt from the registration requirements of the
Securities Act and is exempt under applicable state securities laws. No Series 2010-1 Note may be
offered, sold or delivered until 40 days after its date of issue, within the United States or to,
or for the benefit of, U.S. Persons (as defined under Regulation S of the Securities Act), except
to (i) Qualified Institutional Buyers (in each case, for itself or for the account of another
Qualified Institutional Buyer) in accordance with Rule 144A of the Securities Act, (ii) Affiliated
Entities; provided that the Collateral Trustee shall be entitled to request and
receive a favorable Opinion of Counsel of the type described in Section 6.09(c)(v) prior to
the consummation of any such sale or transfer or (iii) Institutional Accredited Investors that
have, prior to their purchase of any Series 2010-1 Notes (which shall be Certificated Notes),
delivered to the Collateral Trustee, the Issuer, the Holder of such Series 2010-1 Note and the Note
Registrar and Transfer Agent a signed letter in the form of Exhibit C (if such sale is on
the Closing Date) or Exhibit D (if such sale is after the Closing Date), as applicable,
and, in each case, is not acquiring the Series 2010-1 Notes for distribution in violation of the
Securities Act and is acquiring the Series 2010-1 Notes for its own account or for the account of
an Institutional Accredited Investor. The Series 2010-1 Notes may be sold or resold, as the case
may be, to non-U.S. Persons in offshore transactions in reliance on Regulation S under the
Securities Act. None of the Issuer, the Trustee or any other person shall be required to register
the Series 2010-1 Notes under the Securities Act or any state securities laws. The Trustee shall
be entitled to rely conclusively on any certificates provided and deemed representations made by
transferees of



71









 







interests in Series 2010-1 Notes, and shall be entitled to presume conclusively the
continuing accuracy thereof from time to time, in each case without further inquiry or
investigation.



     Notwithstanding anything to the contrary in this Indenture, (i) no transfer of a Series 2010-1
Note may be made if such transfer would require registration of the Issuer under the Investment
Company Act and (ii) in the event that the Issuer, in consultation with counsel, determines at any
time that an entity’s holding of Series 2010-1 Notes may require the Issuer to register as an
“investment company” under the Investment Company Act, the Issuer will so notify such entity and
the Issuer will require such entity to transfer its Series 2010-1 Notes to such other entities as
may be agreed upon by the Issuer and such entity in accordance with the minimum denominations
relating to the Series 2010-1 Notes. The Note Registrar and Transfer Agent will maintain at its
expense an office or offices or agency or agencies where Series 2010-1 Notes may be surrendered for
registration of transfer or exchange.



     Without limiting in any way the restrictions on transfers of interests in any Series of Series
2010-1 Notes in this Article VI, prior to (x) the date that is one year (or such shorter period of
time as permitted by Rule 144 under the Securities Act) after the later of the date of the original
issuance and the last date on which the Issuer or any of the Issuer’s affiliates was the
owner of any Series 2010-1 Notes of such Series (or any predecessor thereto) and (y) such
later date, if any, as may be required by any subsequent change in applicable law:



          (i) no U.S. Note or any beneficial interest therein may be sold, transferred or otherwise
disposed of (any such sale, transfer or other disposition, as defined for purposes of this Section,
being called a “Sale”, with “Sell” and “Sold” having correlative meanings),
unless such Sale is made only in the United States of America and such Sale is not to an
“affiliate” (as defined in Rule 144 under the Securities Act) and is made to a transferee (A)(1)
that the Holder of such Series 2010-1 Note reasonably believes (x) is a Qualified Institutional
Buyer purchasing such Series 2010-1 Note for its own account or for the account of another Person
that is a Qualified Institutional Buyer in a transaction exempt from the registration requirements
of the Securities Act pursuant to Rule 144A thereunder and (y) is aware that the proposed Sale is
being made in reliance on Rule 144A under the Securities Act and pursuant to an available exemption
from the registration requirements of applicable state securities laws and (2) that has delivered a
Rule 144A Transfer Certificate to the Holder of such Series 2010-1 Note, the Collateral Trustee,
the Issuer and the Note Registrar and the Transfer Agent or (B)(1) that the Holder of such Series
2010-1 Note reasonably believes (x) is an Institutional Accredited Investor acquiring such Series
2010-1 Note for its own account or for the account of another Institutional Accredited Investor for
investment and (y) not with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act and (2) that has, prior to the date of such transfer, delivered to
the Holder of such Series 2010-1 Note, the Collateral Trustee, the Issuer and the Note Registrar
and Transfer Agent, a signed letter in form of Exhibit C or Exhibit D, as
applicable, to this Agreement; and




          (ii) none of the Regulation S Notes or any beneficial interest therein may be sold,
transferred or otherwise disposed of (any such sale, transfer or other disposition, as defined for
purposes of this Section, being called a “Sale”, with “Sell” and “Sold”
having correlative meanings), unless such Sale is made only outside of the United States of America
pursuant to Rule 903 or Rule 904 of Regulation S, with such Series 2010-1 Notes initially being
issued in the


72









 







form of beneficial interests in Temporary Regulation S Global Notes. Such beneficial
interests may be exchanged for beneficial interests in a Permanent Regulation S Global Note
pursuant to Section 6.01(c).




     Regardless of whether such Sale occurs under clauses (i) or (ii) above, the Note Registrar and
Transfer Agent shall have received, prior to the date of any such proposed Sale, a written
instrument of Sale executed by the transferring Series 2010-1 Noteholder and the Collateral
Trustee.



     Without limiting in any way Section 6.09, Section 6.10 or any other Section of
this Agreement, the following restrictions shall apply to all Sales of the Series 2010-1 Notes
(whether such Sale is the initial issuance on the Closing Date or a subsequent sale on any other
date):




     (i) Series 2010-1 Notes shall bear a legend regarding the restrictions on transfer as
set forth herein and the Supplement in substantially the form set forth in the form of the
applicable exhibits to the Supplement.




     (ii) Except as otherwise provided in the Supplement, the Series 2010-1 Notes,
including, without limitation, beneficial interests in any U.S. Global Note or Regulation S
Global Note, shall not be Sold to any Person that is, and each purchaser by its purchase of
any Series 2010-1 Notes shall be deemed to have represented and covenanted that it is not,
and that it is not acquiring such Series 2010-1 Notes for or on behalf of, and will not
transfer such Series 2010-1 Notes to, any “employee benefit plan” as defined in Section 3(3)
of ERISA, or any “plan” as defined in Section 4975 of the Code, except that such purchase
for or on behalf of an “employee benefit plan” or “plan” shall be permitted to the extent
such Series 2010-1 Notes are considered indebtedness for purposes of ERISA and:




     (A) to the extent such purchase is made by or on behalf of a bank collective
investment fund maintained by the purchaser in which no plan (together with any
other plans maintained by the same employer or employee organization) has an
interest in excess of ten percent (10%) of the total assets in such collective
investment fund, and the other applicable conditions of Prohibited Transaction Class
Exemption 91-38 issued by the Department of Labor are satisfied;




     (B) to the extent such purchase is made by or on behalf of an insurance company
pooled separate account maintained by the purchaser in which, at any time while the
applicable Series 2010-1 Notes are outstanding, no plan (together with any other
plans maintained by the same employer or employee organization) has an interest in
excess of ten percent (10%) of the total of all assets in such pooled separate
account, and the other applicable conditions of Prohibited Transaction Class
Exemption 90-1 issued by the Department of Labor are satisfied;




     (C) to the extent such purchase is made on behalf of a plan by (1) an
investment adviser registered under the Investment Advisers Act of 1940, as amended
(the “1940 Act”), that had total client assets under its management and



73









 







control, as of the last day of its most recent fiscal year, in excess of $85.0
million ($50.0 million prior to the last day of the investment adviser’s first
fiscal year beginning on or after August 23, 2005) and had stockholders’ or
partners’ equity in excess of $1.0 million ($750,000 prior to the last day of the
investment adviser’s first fiscal year beginning on or after August 23, 2005), as
shown in its most recent balance sheet prepared in accordance with generally
accepted accounting principles, or (2) a bank as defined in Section 202(a)(2) of the
1940 Act with equity capital in excess of $1.0 million as of the last day of its
most recent fiscal year, or (3) a savings and loan association, the accounts of
which are insured by the Federal Savings and Loan Insurance Corporation, that has
been granted trust powers by the appropriate state or federal authority, and which
has, as of the last day of its most recent fiscal year, equity capital or net worth
in excess of $1.0 million, or (4) an insurance company which is qualified under the
laws of more than one state to manage, acquire or dispose of any assets of a pension
or welfare plan, which insurance company has as of the last of its most recent
fiscal year, net worth in excess of $1.0 million and which is subject to supervision
and examination by a State authority having supervision over
insurance companies and, in any case, such investment adviser, bank, savings
and loan association or insurance company is otherwise a qualified professional
asset manager, as such term is used in Prohibited Transaction Class Exemption 84-14
issued by the Department of Labor, and the assets of such plan when combined with
the assets of other plans established or maintained by the same employer (or
affiliate thereof) or employee organization and managed by such investment adviser,
bank, savings and loan association or insurance company, do not represent more than
twenty percent (20%) of the total client assets managed by such investment adviser,
bank, savings and loan association or insurance company at the time of the
transaction, and the other applicable conditions of such exemption are otherwise
satisfied;




     (D) to the extent such plan is not subject to the provisions of Title I of
ERISA or Section 4975 of the Code, or in the case of a governmental or church plan,
is not subject to any federal or state law that is substantially similar to Section
406 of ERISA or Section 4975 of the Code;




     (E) to the extent such purchase is made by or on behalf of an insurance company
using the assets of its general account, the reserves and liabilities for the
general account contracts held by or on behalf of any plan, together with any other
plans maintained by the same employer (or its affiliates) or employee organization,
do not exceed ten percent (10%) of the total reserves and liabilities of the
insurance company general account (exclusive of separate account liabilities), plus
surplus as set forth in the National Association of Insurance Commissioners Annual
Statement filed with the state of domicile of the insurer, in accordance with
Prohibited Transaction Class Exemption 95-60, and the other applicable conditions of
such exemption and otherwise satisfied;




     (F) the extent such purchase is made by an in-house asset manager within the
meaning of Part IV(a) of Prohibited Transaction Class Exemption 96-



74









 







23, such manager
has made or properly authorized the decision for such plan to purchase the
applicable Series 2010-1 Notes, under circumstances such that Prohibited Transaction
Class Exemption 96-23 is applicable to the purchase and holding of such Series
2010-1 Notes; or




     (G) to the extent such purchase will not otherwise give rise to a transaction
described in Section 406 of ERISA, Section 4975(c)(1) of the Code or any other
federal or state law that is substantially similar to Section 406 of ERISA or
Section 4975(c)(1) of the Code for which a statutory or administrative exemption is
unavailable.




     (iii) Each Holder of any Series 2010-1 Notes, including, without limitation, owners of
beneficial interests in U.S. Global Notes and Regulation S Global Notes, will notify any
prospective purchaser, pledgee or other transferee of such Series 2010-1 Notes from such
Holder of the transfer restrictions referred to in this Section 6.03(b) and in
Section 6.10, and in the Supplement.



     The Issuer shall make available to any selling Holder of U.S. Notes, including, without
limitation, any seller of a beneficial interest in a U.S. Global Note, and any prospective
transferee of such U.S. Notes, if such sale is being made pursuant to Rule 144A of the Securities
Act or Rule 501 of the Securities Act, such information as is required under Rule 144A(d)(4) or
Rule 501, as applicable, under the Securities Act in connection with the resale of any such Series
2010-1 Notes promptly after the same is requested. The Issuer shall make available to any selling
Holder of Regulation S Notes, including, without limitation, any seller of a beneficial interest in
a Regulation S Global Note, and any prospective transferee of such Regulation S Notes, such
information as is required under Regulation S under the Securities Act in connection with the
resale of any such Series 2010-1 Notes promptly after the same is requested.



     Notwithstanding anything contained herein to the contrary (and subject to any additional
restrictions set forth in the Supplement), (i) no Issuer Interest Holder (including the Issuer) may
transfer any interest in the Issuer Interest with respect to any Series except (A) for fair
consideration (as determined in the reasonable judgment of such assigning Issuer Interest Holder)
and (B) upon not less than five (5) Business Days’ prior written notice to each Series 2010-1
Noteholder of the Series 2010-1 Notes and (ii) the Issuer may not transfer any interest in the
Issuer Interest unless it shall have delivered to each such Series 2010-1 Noteholder a new Opinion
of Counsel in form and substance reasonably satisfactory to each such Series 2010-1 Noteholder
confirming that the sale of the Series Settlement Receivables with by the Seller to the Issuer
constitutes an absolute transfer of such Receivables after giving effect to any such transfer of an
Issuer Interest. On or prior to the effectiveness of any transfer by any Issuer Interest Holder of
all or a portion of its interest in the Issuer Interest with respect to any Series, such assigning
Issuer Interest Holder shall deliver to the Trustee and the Collateral Trustee notice of such
assignment and of its and its assignee’s respective percentage interests in the Issuer Interest
(after giving effect to such assignment).



     Each investor in a Regulation S Note shall acknowledge, prior to its investment therein, that
such Series 2010-1 Note shall initially be represented by a Temporary Regulation S Global Note and
that transfers thereof or any interests or participations therein are restricted as described



75









 






in
this Agreement and the Supplement. Each Temporary Regulation S Global Note shall bear a legend to
the following effect unless the Issuer determines otherwise, consistent with applicable law:




THIS REGULATION S GLOBAL NOTE IS A TEMPORARY REGULATION S GLOBAL NOTE FOR PURPOSES OF
REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS
TEMPORARY GLOBAL NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS
PERMITTED UNDER THE INDENTURE DESCRIBED BELOW.




PRIOR TO THE EXPIRATION OF THE 40-DAY ‘DISTRIBUTION COMPLIANCE PERIOD’ (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”)), THIS NOTE OR ANY
BENEFICIAL INTEREST OR PARTICIPATION HEREIN MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON
WITHIN THE MEANING OF REGULATION S, EXCEPT TO A PERSON REASONABLY BELIEVED TO BE A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”)) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, OR OTHERWISE IN ACCORDANCE WITH REGULATION S AND SUBJECT TO
THE ISSUER’S AND THE COLLATERAL TRUSTEE’S RIGHT PRIOR TO ANY SUCH TRANSFER TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO
THE ISSUER AND THE COLLATERAL TRUSTEE.




THIS NOTE (OR A BENEFICIAL INTEREST HEREIN) MAY NOT BE TRANSFERRED UNLESS, AFTER GIVING
EFFECT TO THE TRANSFER, THE TRANSFEREE IS HOLDING A PRINCIPAL AMOUNT WHICH IS EQUAL TO
$500,000 OR INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF.



     Holders of beneficial interests in Temporary Regulation S Global Notes may not receive
distributions in respect thereof or exchange such interests for interests in Permanent Regulation S
Global Notes unless such distribution or exchange complies with the terms of Section
6.01(c).



     (c) Definitive Notes. No interest in a U.S. Global Note or a Regulation S Global Note
shall be converted into or otherwise exchanged for a Definitive Note unless (i) the Common
Depository, Euroclear or Clearstream (or its nominee), as applicable, or the Issuer advises the
Trustee and the Collateral Trustee in writing that the Common Depository, Euroclear or Clearstream,
as applicable, is no longer willing, qualified or able to discharge properly its responsibilities
as depository with respect to U.S. Global Notes or Regulation S Global Notes, as applicable, and
the Issuer is unable to locate a qualified successor, (ii) the Issuer, at its sole option, elects
to terminate a book entry system through the Common Depository, Euroclear or Clearstream, as
applicable, or (iii) after the occurrence of a Series Event of Default, Series 2010-1 Noteholders
owning U.S. Global Notes or Regulation S Global Notes, as applicable, representing sixty-six and
two-thirds percent of the Aggregate Principal Balance of such U.S.



76









 







Global Notes or the Regulation S
Global Notes, as applicable, advise the Trustee and the Collateral Trustee in writing that the
continuation of a book entry system through the Common Depository, Euroclear or Clearstream (or a
successor thereto), as applicable, is no longer in the best interests of the Series 2010-1
Noteholders. Upon the occurrence of any of the foregoing events, the Collateral Trustee shall
notify, through the Common Depository, Euroclear or Clearstream, as applicable, all Common
Depository, Euroclear or Clearstream participants who have ownership of U.S. Global Notes or
Regulation S Global Notes, as applicable, as indicated in the records of the Common Depository,
Euroclear or Clearstream, as applicable, of the occurrence of such event and the availability
through the Common Depository, Euroclear or Clearstream, as applicable, of Definitive Notes in
exchange for such Global Notes. No interest in a Definitive Note shall be converted into or
otherwise exchanged for a U.S. Global Note or a Regulation S Global Note or any interest therein.



     (d) Exchange/Conversion of U.S. Global Notes and Regulation S Global Notes to Definitive
Notes. Any holder of a beneficial interest in a U.S. Global Note or Regulation S Global Note
that is entitled, pursuant to Section 6.03(c), to receive a Definitive Note evidencing its
investment in Series 2010-1 Notes may effect the issuance of such Definitive Note in its favor
only if: (i) the Common Depository, Euroclear, Clearstream or the Issuer, as applicable,
instructs the Note Registrar and Transfer Agent to issue such Definitive Note in an amount equal to
the corresponding beneficial interest in the U.S. Global Note or Regulation S Global Note, as
applicable and (ii) the Common Depository, Euroclear, Clearstream or the Issuer, as applicable,
confirms that the principal amount of the corresponding U.S. Global Note or Regulation S Global
Note, as applicable, has been decreased by such amount. Upon satisfaction of the foregoing
conditions, the Note Registrar and Transfer Agent shall record such conversion or exchange in the
Note Register, and the Issuer shall deliver to the person specified in such instructions a duly
authenticated Definitive Note in a principal amount equal to the amount specified in the
instructions received pursuant to clause (i) above.



     (e) Exchange of Interest in Regulation S Global Note for Interest in U.S. Global Note.
If a holder of a beneficial interest in a Regulation S Global Note wishes to transfer all or a part
of its interest in such Regulation S Global Note to a Person who wishes to take delivery thereof in
the form of a beneficial interest in a U.S. Global Note, such holder may, subject to the terms
hereof and the rules and procedures of Euroclear, Clearstream or the Common Depository, as the case
may be, exchange or cause the exchange of such interest for an equivalent beneficial interest in a
U.S. Global Note of the same Series. Upon receipt by the Note Registrar and Transfer Agent of (i)
instructions from Euroclear, Clearstream or the Common Depository, as the case may be, directing
the Note Registrar and Transfer Agent to cause such U.S. Global Note to be increased by an amount
equal to such beneficial interest in such Regulation S Global Note but not less than the minimum
denomination applicable to the Series 2010-1 Notes, and (ii) a Rule 144A Transfer Certificate from
such prospective transferee, then Euroclear, Clearstream or the Note Registrar and Transfer Agent,
as the case may be, will instruct the Common Depository to reduce such Regulation S Global Note by
the aggregate principal amount of the interest in such Regulation S Global Note to be transferred
and increase the U.S. Global Note specified in such instructions by an amount equal to such
reduction in such principal amount of the Regulation S Global Note.



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     (f) Exchange of Interest in U.S. Global Note for Interest in Regulation S Global Note.
If a holder of a beneficial interest in a U.S. Global Note wishes to transfer all or a part of its
interest in such U.S. Global Note to a Person who wishes to take delivery thereof in the form of a
beneficial interest in a Regulation S Global Note, such holder may, subject to the terms hereof and
the rules and procedures of Euroclear, Clearstream, or the Common Depository, as the case may be,
exchange or cause the exchange of such interest for an equivalent beneficial interest in a
Regulation S Global Note of the same Series. Upon receipt by the Note Registrar and Transfer Agent
of (i) instructions from Euroclear, Clearstream, or the Common Depository, as the case may be,
directing the Note Registrar and Transfer Agent to cause such Regulation S Global Note to be
increased by an amount equal to such beneficial interest in such Regulation S Global Note but not
less than the minimum denomination applicable to the related Series of Series 2010-1 Notes to be
exchanged, and (ii) a Regulation S Transfer Certificate from such prospective transferee, then
Euroclear, Clearstream or the Note Registrar and Transfer Agent, as the case may be, will instruct
the Common Depository to reduce such U.S. Global Note to be transferred and increase the Regulation
S Global Note specified in such instructions by an amount equal to such reduction in the principal
amount of the U.S. Global Note.



     (g) Global Note Transfers. Transfers between participants in the Common Depository
will be effected in the ordinary way in accordance with their respective rules and operating
procedures; provided that any transfer to a prospective transferee shall only be made upon receipt
by the Note Registrar and the Transfer Agent from such prospective transferee of a Rule 144A
Transfer Certificate (in the case of a transfer pursuant to Rule 144A of the Securities Act) or
Regulation S Transfer Certificate (in the case of a transfer pursuant to Regulation S of the
Securities Act).



     SECTION 6.04. Mutilated, Destroyed, Lost or Stolen Series 2010-1 Notes. If (a) any
mutilated Series 2010-1 Note is surrendered to the Note Registrar and Transfer Agent, or the Note
Registrar and Transfer Agent receives evidence to its satisfaction of the destruction, loss or
theft of any Series 2010-1 Note; provided that a written statement of such destruction, loss or
theft from any institutional Series 2010-1 Noteholder having a net worth at least equal to
$5,000,000 shall constitute satisfactory evidence thereof, and (b) there is delivered to the Note
Registrar and Transfer Agent, the Trustee and the Issuer such indemnity as may be required by them
to save each of them harmless, then, in the absence of notice to the Note Registrar and Transfer
Agent, the Trustee or the Issuer that such Series 2010-1 Note has been acquired by a bona fide
purchaser, the Issuer shall execute, and upon the request of the Issuer, the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Series 2010-1 Note, a new Series 2010-1 Note of like Series, tenor and fractional undivided
interest in such Series. In connection with the issuance of any new Series 2010-1 Note under this
Section 6.04, the Trustee or the Note Registrar and Transfer Agent may require the payment
by the Series 2010-1 Noteholder of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto. Any duplicate Series 2010-1 Note issued pursuant to this
Section 6.04 shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all Series 2010-1 Notes of the same Series that are duly issued
hereunder, as if originally issued, whether or not the lost, stolen or destroyed Series 2010-1 Note
shall be found at any time.



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     SECTION 6.05. Persons Deemed Owners; Deemed Representations by Series 2010-1
Noteholders.



     (a) At all times prior to due presentation of a Series 2010-1 Note for registration of
transfer, the Issuer, the Trustee, the Paying Agent, the Note Registrar and Transfer Agent and any
agent of any of them shall treat the Person in whose name any Series 2010-1 Note is registered as
the owner of such Series 2010-1 Note for all purposes whatsoever (such determination to be made for
purposes of distributions pursuant to the terms hereof and of the Supplement as of the applicable
Series Determination Date for the Series 2010-1 Notes), and neither the Issuer, the Trustee, the
Paying Agent, the Note Registrar and Transfer Agent nor any agent of any of them shall be affected
by any notice to the contrary. Notwithstanding the foregoing, in determining whether the requisite
Series 2010-1 Noteholders have given any request, demand, authorization, direction, notice, consent
or waiver hereunder, including without limitation authorizing or consenting to any amendment or
waiver pursuant to Section 13.01, and, if applicable, the Supplement, Series 2010-1 Notes
owned by any Affiliated Entity shall be disregarded and deemed not to be outstanding, except that,
in determining whether the Issuer, the Collateral Trustee, the Paying Agent, the Note Registrar and
Transfer Agent and the Trustee
shall be protected in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Series 2010-1 Notes as to which the Note Registrar and Transfer Agent have
actual knowledge of such ownership shall be so disregarded. Series 2010-1 Notes so owned which
have been pledged in good faith shall not be disregarded and may be regarded as outstanding if the
pledgee establishes to the satisfaction of the Issuer and the Trustee the pledgee’s right to so act
with respect to such Series 2010-1 Notes and that the pledgee is not an Affiliated Entity.



     (b) Each Person who invests in the Series 2010-1 Notes will be deemed to have represented and
agreed, in addition to those investor representations and warranties set forth herein, in the
Supplement and in any Rule 144A Transfer Certificate or Regulation S Transfer Certificate furnished
by such Person (and, with respect to an Institutional Accredited Investor, in the letter executed
thereby in the form of Exhibit C or Exhibit D), as follows:



          (i) Neither the Issuer nor any affiliate thereof is acting as a fiduciary or financial or
investment advisor for such Person;




          (ii) Such Person is (A) a Qualified Institutional Buyer, (B) an Institutional Accredited
Investor, (C) not a U.S. person under Regulation S of the Securities Act or (D) an Affiliated
Entity;




          (iii) With respect to Regulation S Global Notes, such Person is purchasing such Series 2010-1
Notes in an “offshore transaction” that is not subject to the registration requirements of the
Securities Act pursuant to Regulation S thereunder;




          (iv) Such Person is not a participant-directed employee plan, such as a 401(K) plan;




          (v) With respect to U.S. Global Notes, such Person is a Qualified Institutional Buyer acting
for its own account or for the account of another Qualified Institutional Buyer;





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          (vi) Such Person was not formed for the specific purpose of investing in the Issuer or the
Series 2010-1 Notes; and




          (vii) Such Person, if the transferor of a Series 2010-1 Note, shall notify the related
transferee of the foregoing prior to its purchase of a Series 2010-1 Note.




     SECTION 6.06. Appointment of Paying Agent. The Paying Agent shall make distributions
to Series 2010-1 Noteholders, the Master Servicer, the Back-up Servicer, the Trustee and the
Collateral Trustee, from the Series Payment Account pursuant to the terms of the Supplement and
shall report the amounts of such distributions to the Trustee. So long as any
Euroclear/Clearstream Global Notes remain outstanding, the Issuer shall cause the Paying Agent to
maintain at least one office in Europe. Any Paying Agent shall have the power, revocable by the
Issuer, to withdraw funds from the Series Collection Account, and the Series Payment Account, in
each case, for the purpose of making the distributions referred to above. The Issuer may revoke
such power and remove the Paying Agent if the Issuer determines in its sole discretion that the
Paying Agent shall have
failed to perform its obligations under this Agreement in any material respect. The Paying
Agent shall initially be the Collateral Trustee. In the event that the Collateral Trustee shall no
longer be the Paying Agent, the Issuer shall appoint a successor to act as Paying Agent (which
shall be a bank or trust company). The Collateral Trustee shall cause each successor Paying Agent
or additional Paying Agent to execute and deliver to the Trustee an instrument in which such
successor or additional Paying Agent shall agree with the Trustee that, as Paying Agent, such
successor or additional Paying Agent will hold all sums, if any, held by it for payment to the
Series 2010-1 Noteholders, the Master Servicer, the Back-up Servicer, the Trustee and the
Collateral Trustee in trust for the benefit of the Persons entitled to payment thereof, until such
sums shall be paid to such Persons. The Paying Agent shall return all funds remaining unclaimed
for six months or more to the Trustee. The Trustee shall retain such unclaimed amounts solely for
the account of the affected Series 2010-1 Noteholder in the Series Collection Account until the
Maturity Date would otherwise have occurred but for such unclaimed payments by the Series 2010-1
Noteholders at which time such unclaimed funds will be distributed to the Issuer and the affected
Series 2010-1 Noteholder shall look solely to the Issuer for reimbursement thereof. Upon removal
of a Paying Agent, such Paying Agent shall also return all funds in its possession to the Trustee.
In the event a Paying Agent resigns or is removed, such Paying Agent shall continue to act as the
Paying Agent until receipt of written notice that the Issuer has appointed a successor.



     The Trustee agrees to pay any Paying Agent which the Issuer from time to time may appoint
reasonable compensation for such Paying Agent’s services under this Section 6.06, which fee
shall be payable by the Trustee out of the Trustee Fee payable to it in accordance with the
Supplement.



     The provisions of Sections 14.01, 14.02, 14.03 and 14.04 shall
apply to the Collateral Trustee also in its role as Paying Agent, for so long as the Collateral
Trustee shall act as Paying Agent.



     SECTION 6.07. Access to List of Series 2010-1 Noteholders’ Names and Addresses. The
Collateral Trustee will furnish or cause to be furnished by the Note Registrar and Transfer Agent a
list of names and addresses of the Series 2010-1 Noteholders (i) to the Paying



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Agent, not more than
five Business Days after each Record Date, (ii) to the Paying Agent, not more than five days after
each Special Record Date and (iii) to the Master Servicer, any Series 2010-1 Noteholder, the
Issuer, the Trustee or the Paying Agent, within five Business Days after receipt by the Collateral
Trustee of a written request therefor from the Master Servicer, the Issuer, such Series 2010-1
Noteholder, the Trustee or the Paying Agent, respectively; provided, however, that
so long as the Paying Agent is the Note Registrar and Transfer Agent, no such list shall be
required to be furnished pursuant to clauses (i) and (ii) above.



     Every Series 2010-1 Noteholder, by receiving and holding a Series 2010-1 Note, agrees that
none of the Collateral Trustee, the Trustee, the Note Registrar and Transfer Agent, the Issuer, the
Master Servicer, the Back-up Servicer, the Seller or any of their respective agents, shall be held
accountable by reason of the disclosure of any such information as to the names and addresses of
the Series 2010-1 Noteholders hereunder, regardless of the sources from which such information was
derived.



     SECTION 6.08. Authenticating Agent.



     (a) The Trustee may appoint one or more authenticating agents with respect to the Series
2010-1 Notes which shall be authorized to act on behalf of the Trustee in authenticating such
Series 2010-1 Notes in connection with the issuance, execution, delivery, registration of transfer,
exchange or repayment of such Series 2010-1 Notes. Whenever reference is made in this Agreement to
the authentication of any Series 2010-1 Notes by the Trustee or the Trustee’s certificate of
authentication, such reference shall be deemed to include authentication on behalf of the Trustee
by an authenticating agent and a certificate of authentication executed on behalf of the Trustee by
an authenticating agent. Each authenticating agent must be acceptable to the Trustee and the
Issuer.



     (b) Any institution succeeding to the corporate agency business of an authenticating agent
shall continue to be an authenticating agent without the execution or filing of any power or any
further act on the part of the Trustee or such authenticating agent.



     (c) An authenticating agent may at any time resign by giving written notice of resignation to
the Trustee and to the Issuer. The Trustee or the Issuer may at any time terminate the agency of
an authenticating agent by giving notice of termination to such authenticating agent and to the
Issuer (in the case of such termination by the Trustee) or the Trustee (in the case of such
Termination by the Issuer). Upon receiving such a notice of resignation or upon such a
termination, or in case at any time an authenticating agent shall cease to be acceptable to the
Trustee or the Issuer, the Trustee may promptly appoint a successor authenticating agent. Any
successor authenticating agent upon acceptance of its appointment hereunder shall become vested
with all the rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an authenticating agent.



     (d) The Issuer agrees to pay to each authenticating agent from time to time reasonable
compensation for its services under this Section 6.08 pursuant to the Supplement;
provided, that, if at any time the Collateral Trustee is acting as authenticating
agent, such compensation shall be paid out of the Trustee Fee payable to the Trustee.



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     (e) The provisions of Sections 11.01, 11.02 and 11.03 shall be
applicable to any authenticating agent.



     SECTION 6.09. Issuance of the Series 2010-1 Notes.



     (a) The Issuer may issue Series 2010-1 Notes pursuant to the Supplement. The Series 2010-1
Notes shall be equally and ratably entitled as provided herein to the benefits of this Agreement
without preference, priority or distinction, all in accordance with the terms and provisions of
this Agreement and the Supplement.



     (b) On or before the Closing Date, the parties hereto will execute and deliver the Supplement
which will specify the Principal Terms of the Series 2010-1 Notes. The terms of the Supplement may
modify or amend the terms of this Agreement solely as applied to Series 2010-1.



     (c) The obligation of the Trustee to authenticate the Series 2010-1 Notes and to execute and
deliver the Supplement is subject to the satisfaction of the following conditions:



          (i) on or before the Business Day immediately preceding the Closing Date, the Issuer shall
have given the Trustee and the Master Servicer, an Order requesting such authentication of Series
2010-1 Notes and setting forth the proposed Closing Date and delivery instructions if the Series
2010-1 Notes are not to be delivered to the Issuer;




          (ii) the Issuer shall have delivered to the Trustee and the Collateral Trustee the Supplement,
in form and substance satisfactory to the Trustee, executed by each party hereto other than the
Trustee;




          (iii) the Issuer shall have delivered to the Collateral Trustee Series 2010-1 Notes, in form
and substance satisfactory to the Trustee, executed by the Issuer;




          (iv) such issuance will not result in the occurrence of an Event of Default, a Potential Event
of Default, a Series Event of Default, or any event that, with the giving of notice or lapse of
time or both, would constitute such a Series Event of Default, and the Issuer shall have delivered
to the Trustee and the Collateral Trustee an Officer’s Certificate, dated the Closing Date (upon
which the Trustee and the Collateral Trustee may conclusively rely), to the effect that such
issuance will not result in the occurrence of any such Event of Default, Potential Event of
Default, Series Event of Default or other event and will not result in the occurrence of any such
Event of Default, Potential Event of Default, Series Event of Default or other event at any time in
the future;




          (v) the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that
the issuance of the Series 2010-1 Notes (A) has been, or need not be, registered under the
Securities Act (unless the Issuer has elected, in its sole discretion and at its sole expense, to
register such Series 2010-1 Notes), (B) will not result in the Issuer becoming subject to
registration as an investment company under the Investment Company Act and (C) will not require
this Agreement or the Supplement to be qualified under the Trust Indenture Act of 1939, as amended;




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          (vi) the Issuer shall have delivered to the Trustee a Tax Opinion, dated the Closing Date,
with respect to such issuance;




          (vii) the Issuer shall have satisfied such other conditions to the issuance of the Series
2010-1 Notes as are specified in the Supplement as evidenced in an Officer’s Certificate provided
by the Issuer to the Trustee; and




          (viii) the Issuer shall have delivered to the Trustee fully executed copies of the note
purchase agreement(s), if any, pursuant to which initial investors in the Series 2010-1 Notes
acquired their interests therein.




     Upon satisfaction of the above conditions, the Trustee shall execute the Supplement and, upon
receipt of, and in accordance with the terms of, an Order to do so, shall authenticate and deliver
the Series 2010-1 Notes to the Persons specified in such Order against receipt of payment by the
Issuer of the purchase price for such Series 2010-1 Notes.



     SECTION 6.10. Transfer of Series 2010-1 Notes. The obligation of the Trustee to
authenticate and issue any Series 2010-1 Note to any transferee pursuant to any written instrument
of transfer or other direction to do so received by the Trustee pursuant to Section 6.03
shall be subject to the satisfaction of the following conditions on or prior to the proposed date
of such transfer (the “Transfer Date”):



          (i) the Note Registrar and Transfer Agent shall be satisfied with respect to those conditions
set forth in Sections 6.03 and 6.05 governing transfers or exchanges of interests
in U.S. Global Notes and Regulation S Global Notes or, with respect to Definitive Notes or
Certificated Notes, shall have received a written instrument of transfer of the subject Series
2010-1 Notes executed by the transferring Series 2010-1 Noteholder (or its attorney-in-fact, duly
authorized), and the original Series 2010-1 Notes which are the subject of such transfer;




          (ii) the Issuer, with respect to transfers of Definitive Notes, shall have delivered to the
Trustee a Tax Opinion from counsel of the Issuer or the transferring or transferee Series 2010-1
Noteholder, dated as of the Transfer Date, with respect to such transfer;




          (iii) the Issuer, with respect to transfers of Definitive Notes or Certificated Notes, shall
have delivered to the Note Registrar fully executed copies of those agreements, documents or
instruments delivered by the transferees of such Series 2010-1 Notes which contain the applicable
representations and warranties required to be made by such transferees pursuant to Section
6.03; and




          (iv) the Issuer shall have satisfied such other conditions to the transfer thereof as may be
specified in the Supplement.




     Notwithstanding anything contained herein or in the Supplement to the contrary, no Series
2010-1 Notes may be transferred to any Person in respect of which the purchase or holding thereof
would constitute a “prohibited transaction” under ERISA or Section 4975 of the Code, and each
prospective transferee shall be required to represent and warrant that it is not such a Person
prior to the transfer of any such Series 2010-1 Note to it and to the extent any such
representation and warranty is incorrect such transfer shall be rescinded and deemed not to have



83









 







occurred; provided that the Trustee shall have no duty to perform any independent investigation
with respect to any representation or warranty by a prospective purchaser as to the matters set
forth in this sentence.



     Upon satisfaction of the above conditions, the Trustee, if required under the terms of this
Article VI, shall authenticate and deliver the Series 2010-1 Notes so transferred to the Persons so
designated in the written order of transfer (and shall destroy the earlier Series 2010-1 Notes
surrendered to it for transfer) and shall deliver a copy of such order of transfer to the Note
Registrar and Transfer Agent, and the Note Registrar and Transfer Agent shall register such
transfer in the Note Register.



     SECTION 6.11. Provisions Relating to the Regulation S Global Notes.



     (a) Each of the Persons shown in the records of Euroclear and Clearstream as the holder of a
Euroclear/Clearstream Global Note must look solely to Euroclear or Clearstream (as
the case may be) for such Person’s share of each payment by the Issuer to the holder of the
applicable Regulation S Global Note and in relation to all other rights arising under such
Regulation S Global Note, subject to and in accordance with the respective rules and procedures of
Euroclear and Clearstream. Save as aforesaid, such Persons shall have no claim directly against
the Issuer in respect of payments due on any Euroclear/Clearstream Global Notes for so long as such
Series 2010-1 Notes are represented by the Regulation S Global Notes, and such obligations of the
Issuer will be discharged by payment to the respective holders of such Regulation S Global Notes in
respect of each amount so paid. Unless and until Definitive Notes have been issued to Series
2010-1 Noteholders pursuant to Section 6.03:



          (i) the provisions of this Section 6.11 shall be in full force and effect;




          (ii) the Note Registrar and Transfer Agent, the Paying Agent, the Collateral Trustee and the
Trustee shall be entitled to deal with Euroclear and Clearstream for all purposes of this Indenture
(including the distribution of principal of and interest on the Series 2010-1 Notes and the giving
of instructions or directions hereunder) as the sole holder of the Euroclear/Clearstream Global
Notes, and shall have no obligation to the beneficial owners thereof;




          (iii) the rights of the beneficial owners of the Regulation S Global Notes shall be exercised
only through Euroclear or Clearstream and shall be limited to those established by law and
agreements between such beneficial owners, Euroclear, Clearstream and/or participants therein.
Unless and until Definitive Notes are issued pursuant to Section 6.03, Euroclear and
Clearstream will make book-entry transfers among each of its participants and receive and transmit
distributions of principal of and interest on the Euroclear/Clearstream Global Notes to such
participants; and




          (iv) whenever this Indenture requires or permits actions to be taken based upon instructions
or directions of holders of Series 2010-1 Notes evidencing a specified percentage, Euroclear and/or
Clearstream shall be deemed to represent such percentage only to the extent that it has received
instructions to such effect from participants owning or representing, respectively, such required
percentage and has delivered such instructions to the applicable


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Person required or permitted to
take such action. The Note Registrar may set a record date for the purpose of determining the
identity of holders of Euroclear/Clearstream Global Notes entitled to vote or to consent to any
action by vote as provided in this Indenture.




     (b) With respect to the Holders of Regulation S Global Notes, whenever a notice or other
communication to the Series 2010-1 Noteholders is required under this Indenture, unless and until
Definitive Notes shall have been issued to beneficial owners pursuant to Section 6.03, the
Collateral Trustee (individually or on behalf of the Trustee) shall give all such notices and
communications specified herein to be given to Series 2010-1 Noteholders to Euroclear and
Clearstream and shall have no further obligation to such Holders.



     (c) The Issuer, in the case of each Euroclear Security, shall cause (i) Euroclear to make
appropriate entries on its books transferring each such Euroclear Security to the applicable
depository’s client securities account at Euroclear (the “Euroclear Account”) and to send a
confirmation to such depository that Euroclear is holding such Euroclear Security for the account
of such depository, (ii) such depository to continuously credit by book-entry such Euroclear
Security to the account of the applicable custodian for such account, and, if required by the UCC,
to send a confirmation to such custiodian that such depository is holding such Euroclear Security
for the account of such custodian, (iii) such custodian to continuously credit by book entry such
Euroclear Security to the such account, and (iv) such Euroclear Security to be continuously
registered to Euroclear.



     (d) The Issuer, in the case of each Clearstream Security, shall cause (i) Clearstream to make
appropriate entries on its books transferring each such Clearstream Security to the applicable
depository’s client securities account at Clearstream (the “Clearstream Account”) and to
send a confirmation to such depository that Clearstream is holding such Clearstream Security for
the account of such depository, (ii) such depository to continuously credit by book-entry such
Clearstream Security to the account of the custodian for such account, and, if required by the UCC,
to send a confirmation to such custodian that such depository is holding such Clearstream Security
for the account of the such custodian, (iii) such Custodian to continuously credit by book entry
such Clearstream Security to such account, and (iv) such Clearstream Security to be continuously
registered to Clearstream.



ARTICLE VII

OTHER MATTERS RELATING TO THE ISSUER




     SECTION 7.01. Obligations Not Assignable. The obligations of the Issuer hereunder
shall not be assignable nor shall any Person succeed to the obligations of the Issuer hereunder.



     SECTION 7.02. Limitations on Liability. None of the members, managers, officers,
employees, agents, or holders of limited liability company interests of or in the Issuer, past,
present or future, shall be under any liability to the Trustee, the Series 2010-1 Noteholders or
any other Person for any action taken or for refraining from the taking of any action in such
capacities or otherwise pursuant to this Agreement or for any obligation or covenant under this
Agreement, it being understood that, with respect to the Issuer, this Agreement and the obligations
created hereunder shall be, to the fullest extent permitted under applicable law, solely the
limited liability company obligations of the Issuer. The Issuer and any member, manager,



85









 







officer,
employee, agent, or holder of a limited liability company interest of or in the Issuer may rely in
good faith on any document of any kind prima facie properly executed and submitted by any Person
(other than the Issuer or any Affiliate thereof) respecting any matters arising hereunder.



     SECTION 7.03. Indemnification by the Issuer. Without limiting any other rights which
any of the Indemnified Parties may have hereunder or under applicable law, but without duplication,
the Issuer hereby agrees to indemnify each of the Indemnified Parties from and against any and all
damages, losses, claims, judgments, liabilities and related costs and expenses, including
reasonable attorneys’ fees and disbursements, awarded against or incurred by any Indemnified Party
(A) as are specified in Section 11.04(b) or in the Supplement, and subject to the
limitations set forth herein and therein,
or (B) relating to or resulting from or in connection with the transactions contemplated
herein and the Operative Documents, including, without limitation, any of the following (all of the
foregoing being called the “Issuer Indemnified Losses”), other than any such Issuer
Indemnified Loss (x) constituting recourse for Receivables which are uncollectible for credit
reasons or (y) which arise solely from the gross negligence or willful misconduct of the affected
Indemnified Party:



          (i) the pledge by the Issuer to the Trustee of any Series Receivable which was not at the time
of such transfer an Eligible Receivable;




          (ii) reliance on any representation or warranty made in writing by the Issuer or the Seller
(or any of their respective officers) under or in connection with this Agreement, the Supplement,
any “Issuer Transfer Report” (as defined in the Issuer Purchase Agreement) or any Monthly Report,
or reliance on any other information or report delivered by the Issuer or by the Master Servicer
with respect to the Issuer (to the extent based on information provided by the Issuer) pursuant
hereto, which shall have been false, incorrect or materially misleading in any respect when made;
it being agreed that the incorrectness of any such representation or warranty or the determination
that any such representation or warranty was materially misleading, and the indemnification
obligations of the Issuer pursuant to this clause (ii) resulting therefrom, shall in each
case, be determined without giving effect to any limitation on the “knowledge,” “best of knowledge”
or other similar limitation on the knowledge of the Issuer contained in any such representation or
warranty;




          (iii) the failure by the Issuer to comply with (x) any term, provision or covenant contained
in this Agreement, the Supplement, any of the other Operative Documents or any agreement executed
in connection with any of the foregoing or (y) any applicable Requirements of Law with respect to
any Receivable, the related Settlement Purchase Agreement, Annuity Purchase Agreement or the
Related Property, or the nonconformity of any Series Receivable, the related Settlement Purchase
Agreement, Annuity Purchase Agreement or the Related Property relating thereto with any such
applicable Requirements of Law;




          (iv) the failure to vest and maintain vested in the Trustee, or to transfer to the Trustee, a
first priority perfected ownership or security interest in, the Series Receivables and the
associated Related Property, free and clear of any Lien (other than Permitted Liens);




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          (v) the failure to file, or any delay in filing, financing statements or other similar
instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with
respect to any Series Receivables and the associated Related Security, whether at the time of the
transfer thereof to the Issuer or otherwise;




          (vi) the failure by the Issuer to be duly qualified to do business, to be in good standing or
to have filed appropriate fictitious or assumed name registration documents in any jurisdiction in
which such failure has, or could be reasonably expected to have, a Material Adverse Effect;




          (vii) the failure of the Issuer to pay when due any sales taxes or other governmental fees or
charges imposed in connection with the purchase of any Series Receivables by it pursuant to the
Issuer Purchase Agreement;




          (viii) the failure of the Issuer or any of its agents, employees or representatives to remit
any Collections or other amounts received by it in respect of the Series in accordance with the
terms of this Agreement and the Supplement;




          (ix) any Issuer Indemnified Loss resulting from an assignment by a Claimant, the Seller or the
Issuer of the rights to Scheduled Payments (or any portion thereof) under a Settlement Purchase
Agreement in contravention of an anti-assignment provision in such Settlement Agreement or any
federal or state statute, regulation or judicial precedent that prohibits the transfer of the
rights to such Scheduled Payments (or any portion thereof) if such anti-assignment provision
nullifies or otherwise invalidates the assignment; provided, however, that no
amount shall be paid in satisfaction of such an Issuer Indemnified Loss until a court with
appropriate jurisdiction has issued a final non-appealable order holding that such anti-assignment
clause is valid;




          (x) any Issuer Indemnified Loss arising in connection with a Series Receivable, the underlying
Settlement Agreement related to which was not the subject of a Qualified Assignment, to the extent
such Issuer Indemnified Loss would not have been incurred had such Settlement Agreement been the
subject of a Qualified Assignment (without regard to whether there may have been a different
Annuity Provider had there been a Qualified Assignment and disregarding any rights against any
Person which would have been an Assignee had there been a Qualified Assignment); and




          (xi) any Issuer Indemnified Loss of the Trustee or Collateral Trustee by reason of its
participation in the transactions contemplated hereby, other than those arising from its own gross
negligence or willful misconduct.




     Subject to Section 13.18, any Issuer Indemnified Losses payable by the Issuer under
this Section 7.03 shall be paid by the Issuer to the requesting Indemnified Party within
five (5) Business Days following such Indemnified Party’s written demand therefor, setting forth in
reasonable detail the basis for such demand. The agreements of the Issuer contained in this
Section 7.03 shall survive the Maturity Date of the Series and the termination of the
Supplement. In addition, in no event shall Issuer Indemnified Losses include any consequential,
special or



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punitive damages. The provisions of this Section 7.03 shall survive the
termination of this Agreement.



     SECTION 7.04. Net Worth of the Issuer. From the Closing Date until the Maturity Date
for the Series, the Issuer shall be solvent, maintain a net worth sufficient to carry on its
business as then conducted and pay its debts as they generally become due.



     SECTION 7.05. Non-Payment of Settlement Receivables Due to Change in Law.
Without limiting any other rights which the Trustee or any Series 2010-1 Noteholder or any
Affiliate of any of the foregoing may have hereunder or under applicable Requirements of Law, but
without duplication, if any payment on a Settlement Annuity Contract related to any Series
Receivable for any Series is not made when due, and the applicable Settlement Annuity Provider
shall identify any statute or regulation enacted or promulgated after the Closing Date as the sole
reason for its refusal to make such payment, then, within ninety (90) days after learning of any
such circumstance, the Issuer may, in its sole discretion, commence litigation, and diligently
pursue such litigation in good faith, to require such payment.



ARTICLE VIII

OTHER MATTERS RELATING TO THE MASTER SERVICER




     SECTION 8.01. Liability of the Master Servicer. The Master Servicer shall be liable
under this Agreement and the Supplement to the extent of the obligations and other duties agreed to
or undertaken by it in its capacity as Master Servicer.



     SECTION 8.02. Merger or Consolidation of, or Assumption of the Obligations of, the Master
Servicer. The Master Servicer shall not consolidate with or merge into any other Person or
convey or transfer its properties and assets substantially as an entirety to any Person unless:



     (a) (i) the Person formed by such consolidation or into which the Master Servicer is merged or
the Person which acquires by conveyance or transfer the properties and assets of the Master
Servicer substantially as an entirety shall be, if the Master Servicer is not the surviving entity,
a corporation, limited partnership or limited liability company organized and existing under the
laws of the United States of America or any State or the District of Columbia, and such entity
shall have expressly assumed, by an agreement supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, the performance of every covenant and
obligation of the Master Servicer hereunder and the Supplement; (ii) if the Master Servicer is an
Affiliated Entity, the surviving entity of such merger or conveyance or transfer of property and
assets is a consolidated subsidiary of Imperial Holdings; (iii) the Master Servicer shall have
delivered to the Trustee an Officer’s Certificate in form reasonably satisfactory to the Trustee
stating that such consolidation, merger, conveyance or transfer complies with this Section
8.02 and that all conditions precedent herein provided for relating to such transaction have
been complied with; and (iv) immediately prior to, and after giving effect to such transaction, no
Event of Default, Potential Event of Default, Series Event of Default or Servicer Default exists or
would exist; and



     (b) the corporation, limited partnership or limited liability company formed by such
consolidation or into which the Master Servicer is merged or which acquires by conveyance or



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transfer the properties and assets of the Master Servicer substantially as an entirety shall have
all licenses and approvals of Governmental Authorities required to service the Series Receivables
for the Series 2010-1 Notes, except to the extent the failure to have any such license does not
have, and could not reasonably be expected to have, a Material Adverse Effect.



     SECTION 8.03. Limitations on Liability. None of the members, managers, officers,
directors, partners, employees, agents, shareholders, or holders of limited liability company
interests, as applicable, of or in the Master Servicer, past, present or future, shall be under any
liability to the Issuer, the Trustee, the Series 2010-1 Noteholders or any other Person for any
action taken or for refraining from the taking of any action in such capacities or otherwise
pursuant to this Agreement or for any obligation or covenant under this Agreement, it being
understood that, with respect to the Master Servicer, this Agreement and the obligations created
hereunder shall be, to the fullest extent permitted under applicable Requirements of Law, solely
the corporate, partnership or limited liability company, as applicable, obligations of the Master
Servicer. The Master Servicer and any member, manager, officer, director, partner, employee,
agent, shareholder or holder of limited liability company interest of or in the Master Servicer may
rely in good faith on any document of any kind prima facie properly executed and submitted by any
Person (other than any Affiliate thereof) respecting any matters arising hereunder. The Master
Servicer shall not be under any obligation to appear in, prosecute or defend any legal action which
is not incidental to its duties as Master Servicer in accordance with this Agreement and which in
its reasonable judgment may involve it in any material expense or liability.



     SECTION 8.04. Indemnification by Master Servicer. The Master Servicer, if an
Affiliated Entity, shall indemnify and hold harmless each Indemnified Party from and against any
and all claims, losses and liabilities (including reasonable attorneys’ fees and any claims, losses
and liabilities in connection with the enforcement of any indemnity or other claims hereunder
against the Master Servicer) (all of the foregoing being collectively referred to as the
“Master Servicer Indemnified Losses”) suffered or sustained by reason of any breach by the
Master Servicer of its representations and warranties or obligations under this Agreement or any
other Operative Document, or the Supplement (it being agreed that the breach of any such
representation or warranty by the Master Servicer (to the extent it is an Affiliated Entity), and
the indemnification obligations of the Master Servicer (if an Affiliated Entity) resulting
therefrom, shall in each case, be determined without giving effect to any limitation on the
“knowledge,” “best of knowledge” or other similar limitation on the knowledge of the Master
Servicer (if an Affiliated Entity) contained in any such representation or warranty). The
foregoing, however, excludes, (a) Master Servicer Indemnified Losses to the extent resulting from
willful misconduct, bad faith, gross negligence, the reckless disregard by such Indemnified Party
of any of his, her or its obligations and duties, (b) recourse (except as otherwise specifically
provided in this Agreement or the Supplement) for uncollectible Receivables or (c) any net income
taxes or franchise taxes imposed with respect to net income (or any interest or penalties with
respect thereto) incurred by such Indemnified Party arising out of or as a result of this
Agreement, the Supplement or the interest conveyed hereunder or thereunder in Trust Assets or in
respect of any Receivable or the Issuer Purchase Agreement. In addition, in no event shall “Master
Servicer Indemnified Losses” include any consequential, special or punitive damages.
Indemnification pursuant to this Section 8.04 shall not be payable from the Trust Assets.
The agreement contained in this Section 8.04 shall survive the collection of all
Receivables, the termination of



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this Agreement and the Supplement and the payment of all amounts
otherwise due hereunder and under the Supplement.



     SECTION 8.05. Master Servicer Not to Resign. The Master Servicer shall not resign
from the obligations and duties imposed on it hereby and under the Supplement except upon
determination that (a) its performance of its duties hereunder and thereunder is no longer
permissible under applicable Requirements of Law and (b) there is no reasonable action which such
Master Servicer could take to make its performance of its duties hereunder permissible under
applicable Requirements of Law. Any determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Counsel who is not an employee of the Master Servicer
or any Affiliate of the Master Servicer with respect to clause (a) above, delivered to, and in form
reasonably satisfactory to, the Trustee. No resignation shall become effective until a Successor
Servicer shall have assumed the responsibilities and obligations of the Master Servicer in
accordance with Section 10.02 hereof.



     SECTION 8.06. Examination of Records. The Master Servicer shall not indicate in its
records that the Issuer has granted to the Trustee, for the benefit of the Series 2010-1
Noteholders of the Series secured thereby, a security interest in the Series Receivables and other
Series Trust Assets, for which it acts in such capacity pursuant to this Agreement and the
Supplement.



     SECTION 8.07 Miscellaneous. Notwithstanding anything contained herein to the
contrary:



     (a) Master Servicer shall not be responsible for any failure to perform any of its obligations
hereunder (not will it be responsible for any unavailability of funds credited to any account) if
such performance is prevented, hindered or delayed by a Force Majeure Event;



     (b) Master Servicer shall have no responsibility or liability for investment losses on
Eligible Investments;



     (c) Master Servicer shall not be required to monitor the performance of any party to this
Agreement or the other Operative Documents, including, without limitation, the Back-Up Servicer or
act as a guarantor of the Back-Up Servicer’s performance.



ARTICLE IX

EVENTS OF DEFAULT




     SECTION 9.01. Events of Default. If any one of the following events shall occur:



     (a) (i) an Insolvency Event shall occur with respect to the Issuer (such event, with respect
to any such entity, a “Specified Insolvency Default”); or (ii) an Insolvency Event shall
occur with respect to the Seller; or



     (b) any Master Servicer (if an Affiliated Entity), the Seller or the Issuer shall become, or
be controlled by, an entity that is subject to the registration requirements of the Investment
Company Act; or



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     (c) the Issuer shall become an association taxable as a corporation for federal income tax
purposes or shall become a publicly traded partnership within the meaning of Section 7704 of the
Code; or



     (d) any Series Event of Default set forth in the Supplement;



     then, subject to applicable Requirements of Law, in the case of any event described in
clauses (a), (b) or (c), an Event of Default shall occur with respect to
the Series without any notice or other action on the part of the Trustee or the Control Party
immediately upon the occurrence of such event, and, in the case of any Series Event of Default, the
Supplement shall set forth provisions which shall determine whether such Series Event of Default
shall constitute an Event of Default for the Series and, if so, such Series Event of Default shall
give rise to an Event of Default for the Series.



     The Collateral Trustee, upon the actual receipt of written notice by any of its Responsible
Officers of the occurrence of any event described in clauses (a), (b) or
(c) or of any Series Event of Default, shall promptly notify the Trustee. The Trustee,
upon the actual receipt of written notice by any of its Responsible Officers of the occurrence of
any such event, shall promptly (if such notice is received from a Person other than the Collateral
Trustee) notify the Collateral Trustee and the Control Party of such occurrence.



     SECTION 9.02. Additional Rights Upon the Occurrence of any Event of Default. Upon the
occurrence and during the continuance of any Event of Default, in addition to all other rights and
remedies under this Agreement, the Supplement or otherwise and all other rights and remedies
provided under the UCC of all applicable jurisdictions and other applicable Requirements of Law
(which rights shall be cumulative):



     (a) The Trustee may, and shall upon the direction of the Control Party, in the case of an
Event of Default described in Section 9.01(a), (b), (c) or (d),
exercise any and all rights and remedies of the Issuer under or in connection with the Issuer
Purchase Agreement, including, without limitation, any and all rights of the Issuer to demand or
otherwise require payment of any amount under, or performance of any provision of, the Issuer
Purchase Agreement or, to the extent assigned to it under the Issuer Purchase Agreement, any other
Operative Document.



     (b) (i) Upon the occurrence and continuation of a Specified Insolvency Default, all amounts
owing under the Series 2010-1 Notes shall automatically become due and payable without any action
or notice on the part of the Series 2010-1 Noteholders, the Control Party or the Trustee. Upon the
occurrence and continuation of any Event of Default other than a Specified Insolvency Default, the
Trustee in its discretion may, or if so requested in writing by the Control Party, shall, declare
all principal and interest and other amounts owing under the Series 2010-1 Notes to be immediately
due and payable.



          (ii) Upon the occurrence and continuation of any Event of Default, the Trustee may sell or
otherwise liquidate the related Series Trust Assets, in whole or in part, on any date or dates
following such Event of Default; provided, however, that the Trustee may not sell
or otherwise liquidate any Series Trust Assets following an Event of Default unless:







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     (A) such Event of Default is a Specified Payment Default and the Control Party
has consented to such sale or liquidation; or




     (B) such Event of Default is a Specified Insolvency Default; or




     (C) Holders of seventy-five percent (75%) of the Aggregate Principal Balance of
the Series 2010-1 Notes (exclusive of any Series 2010-1 Notes held by an Affiliated
Entity) consent thereto; or




     (D) the proceeds of such sale or liquidation distributable to the Holders of
the Series 2010-1 Notes will be sufficient to discharge in full all amounts of
interest and principal then due and unpaid to such Series 2010-1 Noteholders; or




     (E) (x) the Trustee determines that such Series Trust Assets will not continue
to provide sufficient funds for the payment of principal of and interest on the
Series 2010-1 Notes as they would have become due if such Series 2010-1 Notes had
not been accelerated, (y) the Trustee provides notice to each Series 2010-1
Noteholder and (z) the Majority Series 2010-1 Noteholders consent thereto.



     At any time after the Trustee is directed by the Control Party to sell or otherwise liquidate
the applicable Series Trust Assets pursuant to this Section 9.02(b)(ii) following an Event
of Default, the Trustee may or, at the written direction of the Control Party, shall, make the
determination described in clause of this Section 9.02(b)(ii)(E)(x); provided, that
in no event shall any such written direction be made more than one time during any ninety (90) day
period, and the Trustee shall have no obligation, liability or duty to act in connection with any
additional written directions made during such ninety (90) day period.



     In determining the sufficiency or insufficiency with respect to clauses (ii)(D) or (ii)(E)(x)
of this Section 9.02(b), the Trustee may, but need not, obtain and rely (and shall be fully
protected in relying) upon an opinion of an independent investment banking or independent
accounting firm of national reputation. The Issuer shall be obligated to reimburse the Trustee for
any costs or expenses incurred by the Trustee in connection with such opinion pursuant to
Section 11.04.



     (c) The Trustee shall have any other additional rights with respect to the Series and/or
Series Trust Assets as shall be set forth in the Supplement.



     SECTION 9.03. Certain Specific Rights Upon the Occurrence of an Insolvency Event. If
an Insolvency Event with respect to the Issuer occurs, all rights hereunder or under the Supplement
to transfer, substitute or exchange any Receivables included in the Trust Assets shall cease, and
the Issuer shall promptly give notice of such event to the Trustee and the Collateral Trustee, and
the Collateral Trustee shall promptly forward such notice to the Series 2010-1 Noteholders and the
Master Servicer.



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ARTICLE X

SERVICER DEFAULTS




     SECTION 10.01. Servicer Defaults. Upon the occurrence of a Servicer Default, and for
so long as such Servicer Default shall not have been remedied or waived, the Trustee, at the
direction of the Control Party, by notice then given in writing to the Master Servicer (such notice
being a “Termination Notice”), shall terminate all of the rights and obligations of the
Master Servicer as servicer under this Agreement and the Supplement with respect to which such
notice was so given. The Trustee shall not be deemed to have knowledge of a Servicer Default with
respect to any Series until a Responsible Officer has received written notice thereof.



     After receipt by the Master Servicer of a Termination Notice, and on the date that a Successor
Servicer shall have been appointed by the Trustee pursuant to Section 10.02, all authority
and power of the Master Servicer under this Agreement and the Supplement shall pass to and be
vested in such Successor Servicer (a “Service Transfer”); and, without limitation, the
Trustee is hereby authorized, empowered and instructed (upon the failure of the Master Servicer to
cooperate), at the direction of the Control Party, to execute and deliver, on behalf of the Master
Servicer, as attorney-in-fact or otherwise, all documents and other instruments upon the failure of
the Master Servicer to execute or deliver such documents or instruments, and to do and accomplish
all other acts or things necessary or appropriate to effect the purposes of such Service Transfer.
The Master Servicer hereby agrees to cooperate, at its expense, with the Trustee, such Successor
Servicer and any designated subcontractor of such Successor Servicer in (i) effecting the
termination of the responsibilities and rights of the Master Servicer to conduct servicing
hereunder and under the Supplement, including, without limitation, the transfer to such Successor
Servicer or such subcontractor of all authority of the Master Servicer to service the Receivables
as provided under this Agreement and the Supplement, including all authority over all Collections
which shall on the date of such Service Transfer be held by the Master Servicer for deposit to any
Settlement Lock-Box Account, the Master Collection Account, the Series Collection Account, the
Series Payment Account, the Series Reserve Account, the Trustee’s Account or the Issuer’s Account,
for payment to any Claimant in respect of any Split Payment, or which have been deposited by the
Master Servicer to any Settlement Lock-Box Account, the Master Collection Account, the Series
Collection Account, the Series Payment Account, the Series Reserve Account or any other account, or
which shall thereafter be received with respect to the Receivables, and (ii) assisting the
Successor Servicer and any designated subcontractor of such Successor Servicer. The Master
Servicer shall, at its expense, as soon as practicable, and in any event within three Business Days
of such Service Transfer, (A) assemble such documents, instruments and other records (including
computer tapes and disks), which evidence the affected Series Receivables and the other Series
Trust Assets, and which are necessary or desirable to collect the affected Series Receivables, and
shall make the same available to the Successor Servicer or the Trustee or its designee at a place
selected by the Successor Servicer or the Trustee or its designee and in such form as the Successor
Servicer or the Trustee or its designee may reasonably request, and (B) segregate all cash, checks
and other instruments received by it from time to time constituting Collections of Receivables and
Split Payments in a manner acceptable to the Successor Servicer and the Trustee, and, promptly upon
receipt, remit all such cash, checks and instruments to the Successor Servicer or the Trustee or
its designee.



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     SECTION 10.02. Appointment of Successor.



     (a) On and after the receipt by the Master Servicer of a Termination Notice pursuant to
Section 10.01 or upon a resignation by the Master Servicer pursuant to Section
8.05, the Master Servicer shall continue to perform all servicing functions under this
Agreement and the Supplement, until (i) in the case of any such receipt, the date specified in such
Termination Notice or otherwise specified by the Trustee, at the direction of the Control Party, in
writing or, if no such date is specified in such Termination Notice or otherwise specified by the
Trustee, until a date mutually agreed upon by the Master Servicer and the Trustee, at the direction
of the Control Party, and (ii) in the case of any such resignation, until a Successor Servicer
shall have assumed the responsibilities and obligations of the Master Servicer pursuant to this
Section 10.02. The Trustee, at the direction of the Control Party, shall as promptly as
possible after the giving of a Termination Notice or such a resignation appoint an Eligible Master
Servicer in accordance with Section 10.02(c) as a successor servicer (the “Successor
Servicer”), and such Successor Servicer shall accept its appointment by a written assumption in
a form acceptable to the Trustee.



     (b) Upon its appointment, the Successor Servicer shall be the successor in all respects to the
terminated or resigning Master Servicer with respect to servicing functions for the Series formerly
serviced by such terminated or resigning Master Servicer under this Agreement and the Supplement
and shall be subject to all the responsibilities, duties and liabilities relating thereto placed on
the Master Servicer by the terms and provisions hereof and thereof accruing from and after the
effective date of such appointment. From and after such appointment, all references in this
Agreement and the Supplement to the Master Servicer shall be deemed to refer to such Successor
Servicer (except for references to a resigning Master Servicer in Section 10.02(a) and
elsewhere as the context plainly otherwise requires).



     (c) In connection with any Termination Notice or resignation by the Master Servicer, the
Trustee shall, at the direction of the Control Party, review any bids which it obtains from
Eligible Master Servicers and appoint an Eligible Master Servicer submitting such a bid as
Successor Servicer for servicing compensation not in excess of the Master Servicing Fee initially
payable to PFSC as Master Servicer, it being understood and agreed that the Trustee, at the
direction of the Control Party, shall be permitted to appoint an Eligible Master Servicer
reasonably acceptable to the Issuer submitting the lowest bid as among all such acceptable Eligible
Master Servicers (such bid not to exceed one hundred twenty percent (120%) of such Eligible Master
Servicer’s actual reasonable out-of-pocket costs and expenses). Notwithstanding anything else
herein to the contrary, in no event shall the Trustee be liable for any servicing fee or for any
differential in the amount of the servicing fee paid hereunder and the amount necessary to induce
any Successor Servicer to act as successor Master Servicer under this Agreement and the
transactions set forth or provided for herein. No Successor Servicer shall have any liabilities
for the acts, omissions, representations or warranties of any predecessor Servicer.



     (d) Upon the appointment of any Successor Servicer with respect to the Series pursuant to
Section 10.02(a), such Successor Servicer will, within ninety (90) days after such
appointment, (i) assume in writing (delivered to each of the Trustee and the Back-up Servicer) the
rights and obligations of PFSC, if any, with respect to the Series under the Back-up Servicing



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Agreement or (ii) in the event it is unable to successfully negotiate the terms of such
assumption after exercising commercially reasonably efforts to do so, appoint a replacement Back-up
Servicer (which successor Back-up Servicer must be consented to by the Control Party) that assumes
the duties of the Back-up Servicer under the Back-up Servicing Agreement.



     (e) All authority and power granted to any Successor Servicer under this Agreement shall
automatically terminate upon the earliest of (x) the satisfaction and discharge of this Indenture
and (y) the payment in full in cash of all amounts owing to any Persons (other than the Affiliated
Entities) hereunder and under the Supplement, and shall pass to and be vested in the Issuer (or its
designee) (subject to the proviso to Section 12.01) and, without limitation, the
Issuer is hereby authorized and empowered to execute and deliver, on behalf of such Successor
Servicer, as attorney-in-fact or otherwise, all documents and other instruments, and to do and
accomplish all other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. Each Successor Servicer agrees to cooperate with the Issuer (or its
designee) in effecting the termination of the responsibilities and rights of such Successor
Servicer to conduct servicing of the Receivables. Each Successor Servicer shall transfer its
electronic records relating to such Series Receivables (and any such electronic records held by any
agent thereof) to the Issuer (or its designee) in such electronic form as the Issuer (or its
designee) may reasonably request and such Successor Servicer (and any agent thereof) shall transfer
all other records, correspondence and documents to the Issuer (or its designee) in the manner and
at such times as the Issuer (or its designee) shall reasonably request.



     (f) The Control Party may waive any Servicer Default by the Master Servicer; provided,
however, that any Servicer Default resulting from failure to make a payment or deposit
hereunder shall not be waived. Upon any such waiver of a Servicer Default, such Servicer Default
shall cease to exist and any Servicer Default arising therefrom shall be deemed to be remedied
hereunder. No such waiver shall extend to any subsequent or other Servicer Default or impair any
other right consequent thereto.



     SECTION 10.03. Notification to Series 2010-1 Noteholders. Promptly and in any event
within one Business Day after the Issuer or the Master Servicer becomes aware of any Servicer
Default with respect to the Master Servicer, the Issuer or the Master Servicer, as applicable,
shall give written notice thereof to a Responsible Officer of each of the Collateral Trustee, the
Trustee and the Series 2010-1 Noteholders. Upon any termination or appointment of a Successor
Servicer pursuant to this Article X, the Trustee shall give prompt notice thereof to the
Collateral Trustee, and the Collateral Trustee shall give prompt written notice thereof to the
Issuer and the Series 2010-1 Noteholders.



ARTICLE XI

THE TRUSTEE




     SECTION 11.01. Duties of Trustee.



     (a) The Trustee undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement and each other Operative Document to which it is a party, and no implied
duties shall be read against the Trustee. Without limiting the foregoing,
following the occurrence of an Event of Default, the Trustee shall exercise the rights and
powers




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vested in the Trustee by this Agreement and the Supplement and use the same degree of care
and skill in the exercise of such rights and powers as is set forth herein, except to the extent
that such standard of care requires the exercise of greater care and skill than a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.




     Other than as provided herein or in any other Operative Document, neither the Trustee nor any
of its directors, officers, agents or employees shall be liable for any action or omission to act
hereunder or under any other Operative Document except for its or their own negligence or lack of
good faith or willful misconduct. Anything in this Agreement to the contrary notwithstanding, in
no event shall the Trustee be liable for special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the Trustee has been advised
of the likelihood of such loss or damage.



     (b) The Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports,
documents, orders or other instruments furnished to the Trustee which are specifically required to
be furnished pursuant to any provision of this Agreement or any other Operative Document, shall
examine them to determine whether they substantially conform on their face to the requirements of
this Agreement or such other Operative Document (without any duty of inquiry or investigation as to
the facts stated therein). The Trustee shall give prompt written notice to the Series 2010-1
Noteholders of any lack of conformity discovered by the Trustee of any such instrument to the
applicable requirements of this Agreement or such other Operative Document.



     (c) Subject to Section 11.01(a), no provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own negligent failure to act
or its own willful misconduct; provided, however, that:



          (i) the Trustee shall not be personally liable for an error of judgment made in good faith by
a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;




          (ii) the Trustee shall not be personally liable with respect to any action taken, suffered or
omitted to be taken by it in good faith in accordance with the direction of the Control Party (to
the extent the Trustee is authorized or directed to rely on the directions of any such
constituency) relating to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this
Agreement or any other Operative Document; and




          (iii) the Trustee shall not be charged with knowledge of any Event of Default, any Series
Event of Default or any Servicer Default unless in any case a Responsible Officer of the Trustee
obtains actual knowledge of such failure or a Responsible Officer of the Trustee receives written
notice of such failure.




     (d) The Trustee shall not be required to expend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties hereunder or under any other Operative
Document or in the exercise of any of its rights or powers, if there is reasonable
ground for believing that the repayment of such funds and/or adequate indemnity (and, to the



96









 







extent requested by the Trustee, advancement of funds) against such risk or liability is not
assured to it, and none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any obligations of the
Master Servicer under this Agreement or the Supplement.



     (e) Except for actions expressly authorized by this Agreement or the Supplement, the Trustee
shall take no action reasonably likely to impair the interests of the Trustee or the Series 2010-1
Noteholders in any Trust Asset now existing or hereafter created or the value of any Trust Asset
now existing or hereafter created.



     (f) Except as expressly provided in this Agreement or the Supplement, the Trustee shall have
no right (i) to release its lien (for the benefit of the Series 2010-1 Noteholders) on any Series
Trust Assets, (ii) to accept any substitute obligation for any Series Trust Asset, (iii) to add any
other investment, obligation or security for the benefit of any Series, or (iv) to withdraw any
Series Trust Asset.



     (g) The Trustee shall have no responsibility or liability for investment losses on Eligible
Investments.



     (h) The Trustee shall have no obligation to invest or reinvest any cash held in the Series
Collection Account, the Series Reserve Account or any other account established pursuant to the
Supplement.



     (i) The Trustee hereby agrees to comply with the written instructions of the Control Party in
the exercise of the Trustee’s rights and obligations under the Back-up Servicing Agreement,
including, without limitation, any decision to (i) waive any “Back-up Servicer Default” or other
default by the Back-up Servicer thereunder or to terminate the Back-up Servicing Agreement upon any
such occurrence, (ii) request the delivery of any Settlement Package to the Trustee (copies of
which documents shall, at the request of the Control Party, be delivered by the Trustee to the
Control Party) or (iii) request access to the facilities and record-keeping systems of the Back-up
Servicer in order to perform an audit of the Back-up Servicer (which audit shall be conducted by
the employees or agents of the Control Party); provided, that the Trustee may in its own
discretion seek reimbursement under the Back-up Servicing Agreement for any indemnities or expenses
owed to the Trustee pursuant to the terms thereof.



     (j) The Trustee is hereby authorized and empowered, without the need for further action on the
part of any Person, to execute, deliver and perform its obligations under the Operative Documents
to which it is or will become a party.



     SECTION 11.02. Certain Matters Affecting the Trustee. Except as otherwise provided in Section
11.01:



     (a) the Trustee may rely on and shall be protected in acting on, or in refraining from acting
in accord with, any resolution, Officer’s Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have been signed or presented
to
it pursuant to this Agreement or any other Operative Document by the proper party or parties;
provided, however, that the Trustee may not so rely and shall not be so protected
in the event that



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it has been negligent in ignoring relevant facts of which it has actual knowledge
or in ascertaining the relevant facts pursuant to Section 11.02(d);



     (b) the Trustee may consult with counsel and any advice or opinion of counsel shall be full
and complete authorization and protection in respect of any action taken or suffered or omitted by
it hereunder or under any other Operative Document in good faith and in accordance with such advice
or opinion of counsel;



     (c) the Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Agreement or any other Operative Document, or to institute, conduct or defend any
litigation hereunder or thereunder or in relation hereto or thereto, at the request, order or
direction of any of the Series 2010-1 Noteholders (or any constituent portion thereof authorized to
give any such directions to the Trustee), pursuant to the provisions of this Agreement or any other
Operative Document, unless such Series 2010-1 Noteholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby;



     (d) the Trustee shall not be bound to make any investigation into the facts of matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, approval, bond or other paper or document presented to it pursuant to this
Agreement or any other Operative Document, unless requested in writing to do so by the Control
Party, and any such investigation required or permitted to be made by the Trustee shall be limited
to the Trustee’s receipt of an Officer’s Certificate or Opinion of Counsel with respect to such
investigation;



     (e) the Trustee may execute any of its powers or perform any of its duties hereunder or under
any other Operative Document either directly or by or through agents, attorneys, nominees or
custodians, and the Trustee shall not be responsible for any misconduct or negligence on the part
of any such agent (including, without limitation, the Master Servicer, the Back-up Servicer or any
Successor Servicer), attorney, nominee or custodian appointed with due care by it;
provided, however, that the Trustee may not, without the written consent of the
Control Party, appoint or subcontract with any Person that is an Affiliate of any other party
hereto for any such purpose;



     (f) except as may be required by Section 11.01(b), the Trustee shall not be required
to make any initial or periodic examination of any documents or records related to the Receivables
or the Issuer for the purpose of establishing the presence or absence of defects, the compliance by
the Issuer with its representations and warranties or for any other purpose;



     (g) nothing in this Agreement shall be construed to require the Trustee to monitor the
performance of any other party hereto or to the Back-up Servicing Agreement, including without
limitation, the Master Servicer and the Back-up Servicer or act as a guarantor of the Master
Servicer’s or the Back-up Servicer’s performance;



     (h) the Trustee in its individual capacity or otherwise may engage in any business, lending or
other transactions or activities in the ordinary course of its business with any of the Affiliated
Entities, and shall be entitled to exercise all of its rights, powers and remedies in



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connection therewith to the same extent as if the Trustee were not acting as the Trustee hereunder and without
any duty to account to the Series 2010-1 Noteholders therefor;



     (i) any reference in this Agreement or the Supplement to the knowledge of the Trustee with
regard to any matter shall be construed to mean the actual knowledge of any Responsible Officer of
the Trustee’s corporate trust department with respect to such matter;



     (j) in the event that any information transmitted electronically, including without
limitation, through the use of electronic mail or internet or intranet web sites, by the Trustee
pursuant to this Agreement, is untimely, inaccurate or incomplete, to the extent that such
untimeliness, inaccuracy or incompleteness results from systems, software or hardware that are not
owned, leased by or licensed to the Trustee, the parties hereto acknowledge and agree that the
Trustee shall have no liability hereunder in connection with such information transmitted
electronically. The parties hereto further acknowledge that any systems, software or hardware
utilized in posting or retrieving any such information is utilized on an “as is” basis without
representation or warranty as to the intended uses of such systems, software or hardware; and



     (k) the Trustee will not be responsible for any failure to perform any of its obligations
hereunder or under any other Operative Document (nor will it be responsible for any unavailability
of funds credited to any account) if such performance is prevented, hindered or delayed by a Force
Majeure Event.



     SECTION 11.03. Trustee Not Liable for Recitals in Series 2010-1 Notes. The Trustee assumes no
responsibility for the correctness of the recitals contained herein, in the Supplement and/or in
the Series 2010-1 Notes (other than the certificate of authentication on the Series 2010-1 Notes
executed by it). Except as set forth in Section 11.14, the Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the Series 2010-1 Notes
(other than the certificate of authentication on the Series 2010-1 Notes) or of any Receivable or
related document. The Trustee shall not be accountable for the use or application by the Issuer of
any of the Series 2010-1 Notes, or for the use or application of any proceeds of the Series 2010-1
Notes paid to the Issuer in respect of the Series 2010-1 Notes, the Receivables deposited in or
withdrawn from any Settlement Lock-Box Account, the Master Collection Account, the Series
Collection Account, the Series Payment Account, the Series Reserve Account, the Issuer’s Account,
the Trustee’s Account or any other account hereafter established to effectuate the transactions
contemplated by and in accordance with the terms of this Agreement and the Supplement. Without
limiting the generality of the foregoing, the Trustee shall have no responsibility or liability for
the content or adequacy of any private placement memorandum or any other offering document.



     SECTION 11.04. Compensation; Trustee’s Expenses; Indemnification.



     (a) As full compensation for its services hereunder with respect to any Series, the Trustee
shall be entitled to receive, solely out of Collections of Trust Assets and, to the extent
provided in the Supplement, and subject to the priority of payments set forth in the
Supplement, the Trustee Fee.



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     (b) Expenses; Indemnification. The Issuer will pay or reimburse the Trustee upon its
request for, and will, within thirty (30) days of demand and submission of evidence of such
expenses or other liabilities, indemnify and hold the Trustee and its officers, directors,
employees and agents harmless against, all reasonable out-of-pocket expenses (including fees and
expenses of legal counsel), disbursements, costs, demands, claims, and liabilities incurred or made
by (including in connection with the enforcement of any indemnity or other claims against the
Issuer) or against the Trustee in respect of the Series in accordance with any of the provisions of
this Agreement or any other Operative Document or in connection with any amendment hereto or
thereto or by reason of its participation in the transactions contemplated hereby or thereby
(including, in all such cases, the reasonable fees and expenses of its agents, any co-Trustee and
counsel), except any such expense, disbursement or liability as may arise from the Trustee’s own
gross negligence, willful misconduct or bad faith and except as provided in the following sentence.
The terms of this Section 11.04 shall survive the termination of this Agreement or the
earlier resignation or removal of the Trustee. If the Trustee is named as a defendant in any
litigation or other proceedings in respect of which the Issuer would have indemnification
obligations hereunder, the Trustee shall promptly notify the Issuer of the same and afford it (and
the Master Servicer on its behalf) an opportunity to participate in, and (at their expense) direct
the conduct of, any such proceedings. No settlement of any such proceedings shall be agreed by the
Trustee without the consent (which shall not be unreasonably withheld) of the Issuer.



     SECTION 11.05. Eligibility Requirements for Trustee. The Trustee hereunder shall at all times be an
Eligible Institution. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining authority, then,
for the purpose of this Section 11.05, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be an Eligible Institution
in accordance with the provisions of this Section 11.05, the Trustee shall resign
immediately in the manner and with the effect specified in Section 11.06.



     SECTION 11.06. Resignation or Removal of Trustee.



     (a) The Trustee may at any time resign and be discharged from the trust hereby created by
giving prior written notice thereof to the Issuer, the Series 2010-1 Noteholders, the Master
Servicer and the Collateral Trustee. Upon receiving such notice of resignation, the Issuer shall
promptly appoint a successor trustee acceptable to the Control Party by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and have accepted
appointment within thirty (30) days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of a successor
trustee.



     (b) If at any time the Trustee shall cease to be an Eligible Institution in accordance with
Section 11.05 hereof and shall fail to resign after written request therefor by the Master
Servicer, the Issuer or the Control Party, or if at any time the Trustee shall be legally unable to
act, or shall be adjudged a bankrupt or insolvent, or if a receiver or a trustee for it or for its
property shall be appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the



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Issuer shall remove the Trustee and promptly appoint a successor trustee acceptable to the Control
Party by written instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee.



     (c) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant
to any of the provisions of this Section 11.06 shall not become effective until acceptance
of appointment by the successor trustee as provided in Section 11.07 hereof.



     SECTION 11.07. Successor Trustee.



     (a) Any successor trustee appointed as provided in Section 11.06 shall execute,
acknowledge and deliver to the Issuer, to the Master Servicer and to its predecessor Trustee an
instrument accepting such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations
of its predecessor hereunder, with like effect as if originally named as Trustee herein. The
predecessor Trustee shall deliver to the successor trustee all documents or copies thereof and
statements held by it hereunder; and the Issuer and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor trustee all such rights, powers, duties and
obligations.



     (b) No successor trustee shall accept appointment as provided in this Section 11.07
unless at the time of such acceptance such successor trustee shall be an Eligible Institution in
accordance with Section 11.05 hereof.



     (c) Upon acceptance of appointment by a successor trustee as provided in this Section
11.07, such successor trustee shall mail notice of such succession hereunder to the Collateral
Trustee and all Series 2010-1 Noteholders.



     SECTION 11.08. Merger or Consolidation of Trustee. Any Person into which the Trustee may be merged
or converted or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person succeeding to all
or substantially all of the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such Person shall be an Eligible Institution in accordance with
Section 11.05, without the execution or filing of any paper or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding.



     SECTION 11.09. Appointment of Co-Trustee or Separate Trustee.



     (a) Notwithstanding any other provisions of this Agreement, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the Trust Assets may at the
time be located, the Trustee shall have the power and may execute and deliver all instruments to
appoint one or more persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust Assets, and to vest in such Person or Persons, in such
capacity and for the benefit of the Series 2010-1 Noteholders, such title to the Trust Assets, or
any part thereof, and, subject to the other provisions of this Section 11.09, such



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powers, duties, obligations, rights and trusts as the Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 11.05 and no notice to Series 2010-1 Noteholders of the
appointment of any co-trustee or separate trustee shall be required under Section 11.07
hereof.



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



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




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




     (c) Any notice, request or other writing given to the Trustee shall be deemed to have been
given to each of the then separate trustees and co-trustees, as effectively as if given to each of
them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article XI. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Trustee or separately, as may be provided
therein, subject to all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or affording protection to,
the Trustee. Every such instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer.



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



     SECTION 11.10. Trustee May Enforce Claims Without Possession of Series 2010-1 Notes. All rights of
action and claims under this Agreement or the Series 2010-1 Notes may be prosecuted and enforced by
the Trustee without the possession of any of the Series 2010-1 Notes or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought
in its own name as Trustee. Any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the affected Series 2010-1 Noteholders, in respect of which
such judgment has been obtained.



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     SECTION 11.11. Suits for Enforcement.



     (a) If a Servicer Default shall occur and be continuing, the Trustee shall, at the direction
of the Control Party, or may, in its discretion, in either case subject to the provisions of
Sections 11.01 and 11.12, proceed to protect and enforce its rights and the rights
of the Series 2010-1 Noteholders under this Agreement and the Supplement by suit, action or
proceeding in equity or at law or otherwise, whether for the specific performance of any covenant
or agreement contained in this Agreement or the Supplement or in aid of the execution of any power
granted in this Agreement or the Supplement or for the enforcement of any other legal, equitable or
other remedy as the Trustee, being advised by counsel, shall deem most effectual to protect and
enforce any of the rights of the Trustee or such Series 2010-1 Noteholders.



     (b) Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent
to or accept or adopt on behalf of any Series 2010-1 Noteholder any plan of reorganization,
arrangement, adjustment or composition affecting the Series 2010-1 Notes or the rights of any
Series 2010-1 Noteholder, or to authorize the Trustee to vote in respect of the claim of any Series
2010-1 Noteholder in any such proceeding.



     SECTION 11.12. Rights of Series 2010-1 Noteholders to Direct Trustee. The Trustee will perform its
duties as Trustee hereunder and under each other Operative Document to which it is a party
(including, without limitation, the exercise of any trust, power or remedy conferred on or
available to the Trustee hereunder and under the Supplement) at the direction of the Control Party;
provided, however, that if any provision of this Agreement or the Supplement
imposes a duty on the Trustee and requires the approval or other action of Series 2010-1
Noteholders holding a specified percentage of the Aggregate Principal Balance of the Series 2010-1
Notes, then the Trustee shall perform such duty with respect to the Series only at the direction of
the same percentage of Series 2010-1 Noteholders as is specified in such provision;
provided further, however, that subject to Section 11.01, the
Trustee shall have the right to decline to follow any such direction if the Trustee after being
advised by counsel determines that the action so directed may not lawfully be taken, or if the
Trustee in good faith shall, by a Responsible Officer or Responsible Officers of the Trustee,
determine that the proceedings so directed would be illegal or be unduly prejudicial to the rights
of the Series 2010-1 Noteholders not parties to such direction; and, provided,
further, that nothing in this Agreement shall impair the right of the Trustee to take any
action deemed proper by the Trustee and which is not inconsistent with such direction of any such
constituency of Series 2010-1 Noteholders.



     SECTION 11.13. Representations and Warranties of Trustee. The Trustee represents and warrants as of
the Closing Date that:



     (a) the Trustee is duly organized and validly existing as a banking corporation under the
laws of Delaware;



     (b) the Trustee has full power, authority and right to execute, deliver and perform this
Agreement, and has taken all necessary action to authorize the execution, delivery and performance
by it of this Agreement and each other Operative Document to which it is a party; and



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     (c) each of this Agreement and each other Operative Document to which it is a party has been
duly executed and delivered by the Trustee and constitutes a legal, valid and binding obligation of
the Trustee enforceable against it in accordance with its terms except as such enforceability may
be limited by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors’ rights generally, and except as such enforceability may be limited by general principles
of equity (whether considered in a suit at law or in equity).



     SECTION 11.14. Maintenance of Office or Agency. The Trustee will maintain at its expense in
Wilmington, Delaware, an office or agency where notices and demands to or upon the Trustee in
respect of the Series 2010-1 Notes and this Agreement may be served. The Trustee initially
designates its office located at Rodney Square North, 1100 N. Market Street, Wilmington, Delaware
19890, Attention: Corporate Capital Markets, as such office. The Trustee will give prompt written
notice to the Collateral Trustee, the Master Servicer and to all Series 2010-1 Noteholders of any
change in the location of such office.



     SECTION 11.15. Trustee May Own Series 2010-1 Notes. The Trustee in its individual or any other
capacity may become the Holder or beneficial owner of any Series 2010-1 Note with the same rights
as it would have if it were not the Trustee hereunder; provided, however, that, in
addition to any other limitations specified in the Supplement with respect to the Series 2010-1
Notes, the Trustee agrees that it will not in its individual capacity become the Holder or
beneficial owner of more than 331/3% of the Aggregate Principal Balance of the Series 2010-1 Notes.



     SECTION 11.16 Rights of Trustee in Capacity of Paying Agent, Securities Intermediary,
Note Registrar or Transfer Agent. In the event that the Trustee is also acting in the capacity
of Paying Agent, Securities Intermediary, Note Registrar or Transfer Agent hereunder, the rights,
protections, immunities or indemnities afforded to the Trustee pursuant to this Indenture shall
also be afforded to the Trustee in its capacity as Paying Agent, Securities Intermediary, Note
Registrar or Transfer Agent, to the extent not inconsistent with Section 4.03 of this Indenture,
Article 8 of the UCC and federal regulations.



ARTICLE XII

SATISFACTION AND DISCHARGE




     SECTION 12.01. Satisfaction and Discharge of the Indenture. The Indenture and the respective
obligations and responsibilities of the Issuer, the Collateral Trustee, the Master Servicer and the
Trustee created hereby (other than the obligation of the Trustee to make payments to Series 2010-1
Noteholders as hereinafter set forth) shall terminate, except with respect to the duties described
in Sections 7.03, 8.04, 11.04, 12.02(b), 13.06(a),
13.10 and 13.13 upon the earlier to occur of (i) at the option of the Issuer
exercisable by an Order to the Trustee to such effect, any day following the Maturity Date of the
Series 2010-1 Notes, and (ii) such earlier time as all outstanding Series 2010-1 Notes theretofore
authenticated and issued hereunder have been delivered (other than any Series 2010-1 Notes which
shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in
Section 6.02) to the Trustee for cancellation and the Issuer shall have paid all sums
required to be paid hereunder and under the Series 2010-1 Notes; provided, however,
that if, at any time after the payment that would have otherwise resulted in the satisfaction and
discharge of this Indenture



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and such obligations, such payment is rescinded or must otherwise be
returned for any reason, effective upon such rescission or return such satisfaction and discharge
of this Indenture and such obligations shall automatically be deemed never to have occurred and the
Indenture and such obligations shall be deemed to be in full force and effect.



     SECTION 12.02. Final Distribution.



     (a) The Issuer shall give the Trustee, the Collateral Trustee and each Series 2010-1
Noteholder at least twenty days’ prior written notice of the date on which (i) the Indenture is
expected to be satisfied and discharged in accordance with Section 12.01 and (ii) the final
payment on the Series 2010-1 Notes will be made. Not later than five Business Days after the
Collateral Trustee shall receive such notice, the Collateral Trustee shall mail notice to the
Series 2010-1 Noteholders specifying (w) the date upon which such final payment will be made, (x)
the amount of any such final payment, (y) if applicable, that the Payment Date otherwise applicable
to such final payment is not applicable and (z) that following such payment, all outstanding Series
2010-1 Notes shall be deemed canceled. The Collateral Trustee shall give such notice to the Note
Registrar and Transfer Agent and the Paying Agent at the time such notice is given to the Series
2010-1 Noteholders. Each Series 2010-1 Noteholder shall cause the redelivery of its Series 2010-1
Note to the Trustee prior to receipt of the final distribution and on or prior to the date on which
the Indenture is satisfied and discharged. Each such Series 2010-1 Note shall be delivered to the
Trustee marked “cancelled” or “paid in full.” In the event any such Series 2010-1 Note is lost or
otherwise unavailable, the holder of such Series 2010-1 Note may deliver a lost note affidavit to
the Trustee in lieu of such Series 2010-1 Note.



     (b) Notwithstanding the Issuer’s delivery to the Collateral Trustee, or the Collateral
Trustee’s delivery to the Series 2010-1 Noteholders, of the notices required under Section
12.02(a), all funds then on deposit in the Series Collection Account, the Series Payment
Account, the Series Reserve Account or the Trustee’s Account shall continue to be held in trust
for the benefit of the applicable Series 2010-1 Noteholders, and the Paying Agent, the Collateral
Trustee or the Trustee shall pay such funds to such Series 2010-1 Noteholders and to all other
applicable
parties on the date specified in such notice, subject to the priorities set forth in the
Supplement (as if such distribution occurred on an applicable Payment Date).



     SECTION 12.03. Release of Liens. Upon irrevocable payment of all amounts due under the Series 2010-1
Notes and all unpaid fees and expenses of the parties hereto and any other secured party designated
in the Supplement, the Trustee, at the written request of the Issuer, shall release (and shall, at
the expense of the Issuer, execute and deliver to the Issuer all necessary UCC releases and other
releases in respect thereof) the Series Trust Assets securing the Series 2010-1 Notes from the lien
of the Trustee effected pursuant to the Granting Clause hereof and pursuant to the Supplement.



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ARTICLE XIII

MISCELLANEOUS PROVISIONS




     SECTION 13.01. Amendment; Waiver of Default Events.



     (a) Supplements and Amendments to Indenture Without Consent of Series 2010-1
Noteholders. This Agreement and the Supplement may be amended from time to time by the Master
Servicer (to the extent such consent is required in accordance with the first proviso of
this sentence) and/or the Collateral Trustee (to the extent such consent is required in accordance
with the final proviso of this sentence), the Issuer and the Trustee to:



          (1) cure any ambiguity or to correct or supplement any provision herein which may be
inconsistent with any other provision herein, but only if such action shall not adversely affect
the interests of any Series 2010-1 Noteholder (other than an Affiliated Entity); or




          (2) comply with the requirements of the Securities and Exchange Commission in order to effect
or maintain the qualification of this Indenture under the Trust Indenture Act if and to the extent
such compliance is required by applicable law;




     provided, that the Master Servicer’s consent shall not be required with respect to any
such amendment which does not modify any of their respective obligations, duties, rights or
benefits hereunder or under any of the other Operative Documents; provided,
further, that the consent of the Collateral Trustee shall not be required with respect to
any such amendment which does not modify any of its respective obligations, duties, rights or
benefits hereunder or under any of the other Operative Documents. The Trustee may require an
Officer’s Certificate from the Issuer and an Opinion of Counsel from outside counsel of the Issuer,
in each case, with respect to an amendment entered into pursuant to this Section 13.01(a)
concerning the effect of any such action.



     (b) Supplements and Amendments to Indenture With Consent of Series 2010-1 Noteholders
and/or Control Party. This Agreement and the Supplement may be amended or any term or
provision thereof waived from time to time by (x) the Master Servicer and the Collateral Trustee
(in each case to the extent such consent to any such amendment would be required pursuant to the
first sentence of Section 13.01(a)) and (y) the Issuer for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Series 2010-1 Noteholders; provided,
however, that no such amendment or waiver shall (i) reduce in any manner the amount
of, or delay the timing of, allocations, payments or distributions to be made to any Series 2010-1
Noteholder without the consent of such Series 2010-1 Noteholder in respect of the relevant Series
2010-1 Notes, (ii) change the definition of or the manner of calculating any Series 2010-1
Noteholder’s interest in any Series 2010-1 Note or any Series Trust Assets without the consent of
each affected Series 2010-1 Noteholder in respect of the relevant Series 2010-1 Notes, (iii) modify
the foregoing consent requirements with respect to any amendment or waiver so as to eliminate the
requirement that each affected Series 2010-1 Noteholder shall have consented to such amendment,
without the consent of each Series 2010-1 Noteholder, (iv) cause any adverse tax effect for any
Series 2010-1 Noteholder without the consent of each affected Series 2010-1 Noteholder in respect
of the relevant Series 2010-1 Notes, (v) release all or any material portion



106









 







of the Series Trust
Assets without the consent of each Series 2010-1 Noteholder or (vi) reduce the Specified Series
Reserve Balance for the Series without the consent of each Series 2010-1 Noteholder. The Trustee
shall require an Officer’s Certificate and an Opinion of Counsel (which counsel shall not be an
employee of any Affiliated Entity) with respect to an amendment entered into pursuant to this
Section 13.01(b) concerning compliance with the requirements of this Agreement.



     (c) Notwithstanding anything to the contrary in Sections 13.01(a) and
13.01(b), neither this Agreement nor the Supplement shall be amended in violation of any
restrictions or limitations set forth in the Supplement.



     (d) Promptly after the execution of any such amendment or waiver, the Issuer shall furnish a
copy of such amendment or waiver to each party hereto and each Series 2010-1 Noteholder.



     (e) It shall not be necessary for the consent of Series 2010-1 Noteholders under this
Section 13.01 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization of the execution thereof by Series 2010-1 Noteholders
shall be subject to such reasonable requirements as the Trustee may prescribe.



     (f) The Supplement executed in accordance with the provisions of Section 6.09 shall
not be considered an amendment to this Agreement for the purposes of this Section.



     (g) Prior to the execution of any amendment to this Agreement or the Supplement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel of outside counsel to the Issuer
stating that the execution of such amendment is authorized or permitted by this Agreement or the
Supplement, as the case may be, and that all conditions precedent to such amendment have been
satisfied. The Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Trustee’s own rights, duties or immunities under this Agreement, the Supplement or
otherwise.



     SECTION 13.02. Protection of Right, Title and Interest to Trust Assets.



     (a) The Issuer shall cause this Agreement, all amendments hereto and all financing statements
and continuation statements and any other necessary documents covering the Issuer’s
ownership and the Trustee’s security interest, for the benefit of the Series 2010-1
Noteholders, in and to the Trust Assets to be promptly recorded, registered and filed, and at all
times to be kept recorded, registered and filed, all in such manner and in such places as may be
required by applicable Requirements of Law to preserve and protect fully the right, title and
interest of the Issuer, the Series 2010-1 Noteholders and the Trustee hereunder in and to all Trust
Assets. The Issuer shall deliver to the Trustee and each Series 2010-1 Noteholder file-stamped
copies of, or filing receipts for, each document recorded, registered or filed by it as required
above, promptly following such recording, registration or filing.



     (b) Within thirty (30) days after the Issuer makes any change in its name, identity or
corporate structure which would make any financing statement or continuation statement filed in
accordance with the terms of this Agreement seriously misleading within the meaning of



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Sections 9-503(a), 9-504 and 9-507 (or any comparable provision) of the UCC as in effect in the jurisdiction
the law of which governs the perfection of the interest in the Trust Assets created hereunder or
under the Supplement, the Issuer shall give the Trustee and each Series 2010-1 Noteholder notice of
such change and shall file such financing statements or amendments as may be necessary to continue
the perfection of the Issuer’s ownership interest and the Trustee’s security interest, as
contemplated by Section 2.01 hereof for the benefit of the Series 2010-1 Noteholders, in
the Trust Assets and the proceeds thereof.



     (c) The Issuer and the Master Servicer will give the Trustee and each Series 2010-1 Noteholder
prompt written notice of any relocation of any office from which it services Receivables (or any
portion thereof) or keeps records concerning the Receivables (or any portion thereof) or of its
principal executive office. The Issuer and the Master Servicer will at all times maintain each
office from which it services Receivables and its principal executive offices within the United
States of America.



     SECTION 13.03. Limitation on Rights of Series 2010-1 Noteholders. No Series 2010-1 Noteholder shall
have any right by virtue of any provisions of this Agreement to file or otherwise institute any
suit, action or proceeding in equity or at law upon or under or with respect to this Agreement or
the Supplement, unless such Series 2010-1 Noteholder, and unless the Control Party if affected
thereby (which, if such action, suit or proceeding relates to this Agreement, shall be deemed to
affect the Control Party) shall have made, a written request to the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to
be incurred therein or thereby, and the Trustee, for 30 days after such request and offer of
indemnity, shall have failed to file or otherwise refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted, by each Series 2010-1
Noteholder with every other Series 2010-1 Noteholder and the Trustee, that no one or more Series
2010-1 Noteholders shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement or the Supplement to affect, disturb or prejudice
the rights of the holders of any of the Series 2010-1 Notes, or to obtain or seek to obtain
priority over or preference to any such Series 2010-1 Noteholder, or to enforce any right under
this Agreement or the Supplement, except in the manner herein and therein provided and for the
equal, ratable and common benefit of all Series 2010-1 Noteholders affected thereby. For the
protection and
enforcement of the provisions of this Section 13.03, each and every Series 2010-1
Noteholder and the Trustee shall be entitled to such relief as can be given either at law or in
equity.



     SECTION 13.04. Governing Law; Jurisdiction; Consent to Service of Process.



     (a) Governing Law. THOSE TERMS, CONDITIONS, AND PROVISIONS OF THIS AGREEMENT RELATING
TO THE ATTACHMENT, PERFECTION AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS IN THE TRUST
ASSETS GRANTED BY THE ISSUER IN FAVOR OF THE TRUSTEE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAW PROVISIONS) OF THE STATE OF
GEORGIA. ALL OTHER TERMS, CONDITIONS AND PROVISIONS OF THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING



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SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT
OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS) OF THE STATE OF NEW YORK.



     (b) Jurisdiction. Each of the parties hereto and to the Supplement hereby irrevocably
and unconditionally submits to the nonexclusive jurisdiction of any New York State court sitting in
the borough of Manhattan or Federal court of the United States of America sitting in the Southern
District of New York, and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or proceeding may be heard and
determined in such New York State court sitting in the borough of Manhattan or, to the extent
permitted by law, in such Federal court sitting in the Southern District of New York. Each of the
parties hereto and to the Supplement agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.



     (c) Consent to Service of Process. Each party to this Agreement and to the Supplement
irrevocably consents to service of process in the manner provided for notices in Section
13.05. Nothing in this Agreement will affect the right of any party to this Agreement or to
any Supplement to serve process in any other manner permitted by law.



     SECTION 13.05. Notices; Payments.



     (a) All demands, notices, instructions, directions, requests, authorizations and
communications (collectively, “Notices”) under this Agreement shall be in writing and shall
be deemed to have been duly given (x) upon delivery, if personally delivered, (y) three Business
Days after being deposited in the mails, postage paid, if mailed by registered mail, return receipt
requested, or (z) one Business Day after being sent for next Business Day delivery by national
overnight courier service, in each case, to (i) in the case of the Issuer, 191 Peachtree Street NE,
Suite 3300, Atlanta, GA 30303, Attention: President, (ii) in the case of the Master Servicer (if
the Master Servicer is the Initial Master Servicer), PFSC Financial Servicing Company, 2121 SW
Broadway, #200, Portland, OR 97201, Attention: President, (iii) in the case of the Collateral
Trustee, the Paying Agent, the Note Registrar and the Transfer Agent, Wilmington Trust Company,
1100 N. Market Street, Wilmington, DE 19890, Attn: Corporate Capital Markets, and
(iv) in the case of the Trustee, 1100 N. Market Street, Wilmington, DE 19890, Attn: Corporate
Capital Markets, with a copy to the Collateral Trustee at its address set forth in (iii) above; or,
as to each party, such other address as shall be designated by such party in a written notice to
each other party. If the Master Servicer is not the Initial Master Servicer, notices shall be
given to the Master Servicer at the address designated by it to the Initial Master Servicer.



     (b) Any Notice required or permitted to be mailed to a Series 2010-1 Noteholder shall be given
by first-class mail, postage prepaid or overnight delivery at the address of such Series 2010-1
Noteholder as shown in the Note Register. Notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not the Series 2010-1
Noteholder receives such notice.



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     SECTION 13.06. Assignment of the Issuer Purchase Agreement; Substitution Under the
Powers of Attorney.



     (a) In addition to and without limitation of any security interest granted by the Issuer to
the Trustee in any Series Trust Assets, in order to secure, equally and ratably, and without
prejudice, priority and distinction, the payment of the Issuer’s obligations to the Series 2010-1
Noteholders hereunder and pursuant to the Supplement, the Issuer hereby grants to the Trustee, for
the benefit of the Series 2010-1 Noteholders, a security interest in all of the Issuer’s right and
title to and interest in the Issuer Purchase Agreement. In addition, at any time and without
limitation of the rights of the Trustee set forth in Section 9.02, the Trustee shall have
the right to exercise and enforce, or to direct the Issuer to exercise and enforce, for the benefit
of the Series 2010-1 Noteholders (or any of them), the Issuer’s rights and remedies under the
Issuer Purchase Agreement (including, without limitation, the right to give or withhold any and all
consents, requests, notices, directions, approvals, demands, extensions or waivers under or with
respect to such agreements), upon the failure of the Issuer to do so, but in no event shall there
be any obligation on the part of the Trustee, any Series 2010-1 Noteholder or any of their
respective Affiliates to perform any of the obligations of the Issuer under any such agreement.
The Trustee shall enforce or refrain from enforcing any of the Issuer’s rights and remedies under
such agreements to the extent so instructed by the Control Party.



     (b) The Issuer also hereby substitutes the Trustee in place of the Issuer under any and all
Powers of Attorney in accordance with the power of substitution provided in each of the Powers of
Attorney whereupon the Trustee shall have all of the Issuer’s rights, title, interests and powers
under each such Power of Attorney.



     (c) The grant to the Trustee of any security interest pursuant to this Section 13.06
shall terminate upon the satisfaction and discharge of this Indenture in accordance with
Section 12.01.



     SECTION 13.07. Severability of Provisions. If any one or more of the covenants, agreements,
provisions or terms of this Agreement shall for any reason whatsoever be held to be invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no way affect the
validity or enforceability of
the other covenants, agreements, provisions or terms of this Agreement or of the Series 2010-1
Notes or rights of the Series 2010-1 Noteholders.



     SECTION 13.08. Assignment. Notwithstanding anything to the contrary contained herein or in the
Supplement, (i) this Agreement may not be assigned by the Issuer and (ii) except as provided in
Section 8.02, this Agreement may not be assigned by the Master Servicer without the prior
written consent of the Control Party.



     SECTION 13.09. Further Assurances. The Issuer agrees to do and perform, from time to time, any and
all acts and to execute any and all further instruments and documents required or reasonably
requested by the Trustee at the direction of the Control Party more fully to effect the purposes of
this Agreement (including without limitation Section 13.06 hereof) or the Supplement,
including, without limitation, the perfection of all security interests granted hereby, including
the execution of any financing statements or continuation statements relating to the



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Receivables
(or any portion thereof) for filing under the provisions of the UCC of any applicable jurisdiction.
To the fullest extent permitted by applicable law, the Issuer hereby irrevocably grants to the
Trustee an irrevocable power of attorney, with full power of substitution, coupled with an
interest, to take such action, and/or to sign and file in the name of the Issuer, or in its own
name, such documents, agreements, instruments and financing statements and amendments thereto, in
any case as the Control Party deem(s) necessary to accomplish the purposes set forth in the
preceding paragraph.



     SECTION 13.10. Nonpetition Covenant. Notwithstanding any prior termination of this Agreement, the
Master Servicer, the Collateral Trustee, the Trustee, the Issuer and by its acceptance of a Series
2010-1 Note each Series 2010-1 Noteholder hereby agrees that it shall not, prior to the date which
is two years and one day after the satisfaction and discharge of this Agreement, acquiesce,
petition or otherwise invoke or cause the Issuer or the Seller to invoke the process of any
Governmental Authority for the purpose of commencing or sustaining a case against the Issuer or the
Seller under any Federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or
the Seller or any substantial part of its property or ordering the winding-up or liquidation of the
affairs of the Issuer or the Seller.



     SECTION 13.11. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on
the part of any Person, any right, remedy, power or privilege hereunder or under the Supplement
shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege under this Agreement or under the Supplement preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges provided herein or in the Supplement are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.



     SECTION 13.12. Counterparts. This Agreement may be executed in two or more counterparts and by
different parties on separate counterparts, each of which shall be an original, but all of which
together shall constitute one and the same instrument.



     SECTION 13.13. Third-Party Beneficiaries. This Agreement will inure to the benefit of and be binding
upon the parties hereto, the Series 2010-1 Noteholders and their respective successors and
permitted assigns. Except as otherwise provided in this Agreement, no other person will have any
right or obligation hereunder.



     SECTION 13.14. Actions by Series 2010-1 Noteholders.



     (a) Wherever in this Agreement a provision is made that an action may be taken or a Notice
given by Series 2010-1 Noteholders, such action or Notice may be taken or given by any Series
2010-1 Noteholder, unless such provision requires a specific percentage of Series 2010-1
Noteholders.



     (b) Any Notice, consent, waiver or other act by the Holder of a Series 2010-1 Note shall bind
such Holder and every subsequent Holder of such Series 2010-1 Note and of any Series 2010-1 Note
issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done or omitted to be done by the Trustee or the Master



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Servicer in reliance
thereon, whether or not notation of such action is made upon such Series 2010-1 Note.



     SECTION 13.15. Merger and Integration. Except as specifically stated otherwise herein, this
Agreement sets forth the entire understanding of the parties relating to the subject matter hereof,
and all prior understandings, written or oral, are superseded by this Agreement. This Agreement
may not be modified, amended, waived or supplemented except as provided herein.



     SECTION 13.16. Headings. The headings herein are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.



     SECTION 13.17. Tax and Usury Treatment. The Issuer, the Initial Master Servicer, the Trustee and the
Collateral Trustee have entered into this Agreement, and the Series 2010-1 Notes will be issued to
and acquired by the Series 2010-1 Noteholders, with the intention that, for federal, state and
local income and franchise tax and usury law purposes, the Series 2010-1 Notes be treated as debt
of the Issuer secured by the Trust Assets, and the Issuer will not be treated as an association (or
publicly traded partnership) taxable as a corporation. The Issuer, the Initial Master Servicer,
the Collateral Trustee and the Trustee, by entering into this Agreement, and each Series 2010-1
Noteholder, by the acceptance of its Series 2010-1 Note, agree to treat and report the Series
2010-1 Notes as debt for federal, state and local income and franchise tax and usury law purposes,
unless and until required to do otherwise by a relevant taxing or judicial authority. The Issuer
shall not elect (or cause or permit an election to be made) to be taxed for federal income tax
purposes as a corporation or an association taxable as a corporation.



     SECTION 13.18. Liability of the Issuer. Notwithstanding any provision to the contrary in this
Agreement or the Supplement, indemnification payments and other amounts described herein as payable
by the Issuer hereunder (including, without limitation, amounts payable pursuant to Section
7.03) shall be payable only from Available Issuer Funds (and, as a result, may be payable from
any allocable Trust Asset only if, to the extent that, and after such Trust Asset shall have been
distributed to the Issuer in accordance with the terms of this Agreement and the Supplement
hereto). Unless and until sufficient Available Issuer Funds become available to pay any such
amount in accordance with the immediately preceding sentence, such indemnification payments and
other amounts shall not be due and payable until a year and a day after the Maturity Date for the
Series 2010-1 Notes.



     SECTION 13.19. Offers to Purchase Series 2010-1 Notes. The Issuer shall not, and shall cause all of
its Affiliates not to, make any offers to purchase the Series 2010-1 Notes from any Series 2010-1
Noteholder without making the same offer to all Series 2010-1 Noteholders on a pro rata basis.



ARTICLE XIV

THE COLLATERAL TRUSTEE




     SECTION 14.01. Duties of Collateral Trustee.



     (a) The Issuer hereby appoints, and the Collateral Trustee hereby undertakes, to perform such
duties and only such duties as are specifically set forth in this Agreement and each



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other
Operative Document to which it is a party, and no implied duties shall be read against the
Collateral Trustee. The Collateral Trustee shall have no fiduciary obligation to the Series 2010-1
Noteholders or the Trustee. However, the Series 2010-1 Noteholders and the Trustee are
beneficiaries of the obligations of the Collateral Trustee hereunder, and the Trustee shall have
the right to enforce the obligations of the Collateral Trustee specifically set forth herein and in
each other Operative Document to which it is a party directly against the Collateral Trustee.



     Other than as provided herein or in any other Operative Document, neither the Collateral
Trustee nor any of its directors, officers, agents or employees shall be liable for any action or
omission to act hereunder or under any other Operative Document except for its or their own
negligence or lack of good faith or willful misconduct. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Collateral Trustee be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited to lost profits),
even if the Collateral Trustee has been advised of the likelihood of such loss or damage.



     (b) The Collateral Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the Collateral Trustee
which are specifically required to be furnished pursuant to any provision of this Agreement or
any other Operative Document, shall examine them to determine whether they substantially conform on
their face to the requirements of this Agreement or such other Operative Document (without any duty
of inquiry or investigation as to the facts stated therein). The Collateral Trustee shall give
prompt written notice to the Series 2010-1 Noteholders of any lack of conformity discovered by the
Collateral Trustee of any such instrument to the applicable requirements of this Agreement or such
other Operative Document.



     (c) Subject to Section 14.01(a), no provision of this Agreement shall be construed to
relieve the Collateral Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:



          (i) the Collateral Trustee shall not be personally liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Collateral Trustee, unless it
shall be proved that the Collateral Trustee was negligent in ascertaining the pertinent facts; and




          (ii) the Collateral Trustee shall not be charged with knowledge of any Event of Default, any
Series Event of Default or any Servicer Default unless in any case a Responsible Officer of the
Collateral Trustee obtains actual knowledge of such failure or a Responsible Officer of the
Collateral Trustee receives written notice of such failure.




     (d) The Collateral Trustee shall not be required to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties hereunder or under any other
Operative Document or in the exercise of any of its rights or powers, if there is reasonable ground
for believing that the repayment of such funds and/or adequate indemnity (and, to the extent
requested by the Collateral Trustee, advancement of funds) against such risk or liability is not
assured to it, and none of the provisions contained in this Agreement shall in any event require
the Collateral Trustee to perform, or be responsible for the manner of performance of, any
obligations of the Master Servicer under this Agreement or the Supplement.



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     (e) Except for actions expressly authorized by this Agreement or the Supplement, the
Collateral Trustee shall take no action reasonably likely to impair the interests of the Collateral
Trustee or the Series 2010-1 Noteholders in any Trust Asset now existing or hereafter created or
the value of any Trust Asset now existing or hereafter created.



     (f) In the event that the Paying Agent, the Authenticating Agent or the Note Registrar and
Transfer Agent (in each case, if other than the Collateral Trustee) shall fail to perform any
obligation, duty or agreement in the manner or on the day required to be performed by the Paying
Agent, the Authenticating Agent or the Note Registrar and Transfer Agent, as the case may be, under
this Agreement or under the Supplement, the Collateral Trustee shall be obligated, promptly upon
the obtaining of actual knowledge thereof by a Responsible Officer of the Collateral Trustee, to
perform such obligation, duty or agreement in the manner so required.



     (g) The Collateral Trustee shall have no responsibility or liability for investment losses on
Eligible Investments.



     (h) The Collateral Trustee shall have no obligation to invest or reinvest any cash held in the
Series Collection Account, the Series Reserve Account or any other account established pursuant to
the Supplement hereto in the absence of timely and specific written investment direction from the
Issuer. In no event shall the Collateral Trustee be liable for the selection of investments or for
investment losses incurred thereon. The Collateral Trustee shall have no liability in respect of
losses incurred as a result of the liquidation of any investment prior to its stated maturity or
the failure of the Issuer to provide timely written investment direction.



     (i) The Collateral Trustee hereby agrees to comply with the written instructions of the
Control Party in the exercise of the Collateral Trustee’s rights and obligations under the Back-up
Servicing Agreement, including, without limitation, any decision to (i) waive any “Back-up Servicer
Default” or other default by the Back-up Servicer thereunder or to terminate the Back-up Servicing
Agreement with respect to the applicable Series upon any such occurrence, (ii) request the delivery
of any Settlement Package or Annuity Package to the Collateral Trustee (copies of which documents
shall, at the request of the Control Party, be delivered by the Collateral Trustee to the Control
Party) or (iii) request access to the facilities and record-keeping systems of the Back-up Servicer
in order to perform an audit of the Back-up Servicer (which audit shall be conducted by the
employees or agents of the Control Party); provided, that the Collateral Trustee may in its
own discretion seek reimbursement under the Back-up Servicing Agreement for any indemnities or
expenses owed to the Collateral Trustee pursuant to the terms thereof.



     SECTION 14.02. Certain Matters Affecting the Collateral Trustee. Except as otherwise provided in
Section 14.01:



     (a) the Collateral Trustee may conclusively rely on and shall be fully protected in acting on,
or in refraining from acting in accord with, any resolution, Officer’s Certificate, certificate of
auditors or any other certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it to be genuine and to have
been signed or presented to it pursuant to this Agreement or any other Operative Document by the
proper party or parties; provided, however, that the Collateral Trustee may not



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so rely and shall not be so protected in the event that it has been negligent in ignoring relevant
facts of which it has actual knowledge or in ascertaining the relevant facts pursuant to
Section 14.02(d);



     (b) the Collateral Trustee may consult with counsel and any advice or opinion of counsel shall
be full and complete authorization and protection in respect of any action taken or suffered or
omitted by it hereunder or under any other Operative Document in good faith and in accordance with
such advice or opinion of counsel;



     (c) any reference in this Agreement or the Supplement to the knowledge of the Collateral
Trustee with regard to any matter shall be construed to mean the actual knowledge of any
Responsible Officer of the Collateral Trustee’s corporate trust department with respect to such
matter;



     (d) the Collateral Trustee shall not be bound to make any investigation into the facts of
matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, approval, bond or other paper or document presented to it
pursuant to this Agreement or any other Operative Document, unless requested in writing so to do by
the Issuer or the Control Party;



     (e) the Collateral Trustee may execute any of its powers or perform any of its duties
hereunder or under any other Operative Document either directly or by or through agents, attorneys,
nominees or custodians, and the Collateral Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent (including, without limitation, the Master Servicer, the
Back-up Servicer or any Successor Servicer), attorney, nominee or custodian appointed with due care
by it;



     (f) except as may be required by Section 14.01(b), the Collateral Trustee shall not be
required to make any initial or periodic examination of any documents or records related to the
Receivables or the Issuer for the purpose of establishing the presence or absence of defects, the
compliance by the Issuer with its representations and warranties or for any other purpose;



     (g) nothing in this Agreement shall be construed to require the Collateral Trustee to monitor
the performance of any other party hereto or to the Back-up Servicing Agreement, including without
limitation, the Master Servicer and the Back-up Servicer or act as a guarantor of the Master
Servicer’s or the Back-up Servicer’s performance;



     (h) the Collateral Trustee in its individual capacity or otherwise may engage in any business,
lending or other transactions or activities in the ordinary course of its business with any of the
Affiliated Entities, and shall be entitled to exercise all of its rights, powers and remedies in
connection therewith to the same extent as if the Collateral Trustee were not acting as the
Collateral Trustee hereunder and without any duty to account to the Series 2010-1 Noteholders
therefor;



     (i) in the event that any information transmitted electronically, including without
limitation, through the use of electronic mail or internet or intranet web sites, by the Collateral
Trustee pursuant to this Agreement, is untimely, inaccurate or incomplete, to the extent that such
untimeliness, inaccuracy or incompleteness results from systems, software or hardware that are



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not owned, leased by or licensed to the Collateral Trustee, the parties hereto acknowledge and agree
that the Collateral Trustee shall have no liability hereunder in connection with such information
transmitted electronically. The parties hereto further acknowledge that any systems, software or
hardware utilized in posting or retrieving any such information is utilized on an “as is” basis
without representation or warranty as to the intended uses of such systems, software or hardware;



     (j) the Collateral Trustee will not be responsible for any failure to perform any of its
obligations hereunder or under any other Operative Document (nor will it be responsible for any
unavailability of funds credited to any account) if such performance is prevented, hindered or
delayed by a Force Majeure Event; and



     (k) whenever the Collateral Trustee is unable to decide between alternative courses of action
permitted or required by the terms of this Agreement, or in the event that the Collateral Trustee
is unsure as to the application of any provision of this Agreement or any such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any other applicable
provision, or in the event that this Agreement permits any determination by the Collateral Trustee
or is silent or is incomplete as to the course of action that the Collateral Trustee is required to
take with respect to a particular set of facts, the Collateral Trustee may give written notice (in
such form as shall be appropriate under the circumstances) to the Control Party requesting
instruction as to the course of action to be adopted, and to the extent the Collateral Trustee acts
in good faith in accordance with any written instruction of the Control Party received, the
Collateral Trustee shall not be liable on account of such action to any Person. If the Collateral
Trustee shall not have received appropriate instruction within ten (10) days of such notice (or
within such shorter period of time as reasonably may be specified in such written notice or may be
necessary under the circumstances), or shall have received inconsistent or conflicting instructions
from the Control Party (in which case it shall have so notified the Control Party in writing), it
may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with
this Agreement, as it shall deem to be in the best interests of the Control Party and shall have no
liability to any Person for such action or inaction.



     SECTION 14.03. Collateral Trustee Not Liable for Recitals in Series 2010-1 Notes. The Collateral
Trustee assumes no responsibility for the correctness of the recitals contained herein, in the
Supplement and/or in the Series 2010-1 Notes (other than the certificate of authentication on the
Series 2010-1 Notes). Except as set forth in Section 14.10, the Collateral Trustee makes
no representations as to the validity or sufficiency of this Agreement or of any Receivable or
related document. The Collateral Trustee shall not be accountable for the use or application by
the Issuer of any of the Series 2010-1 Notes, or for the use or application of any proceeds of the
Series 2010-1 Notes paid to the Issuer in respect of the Series 2010-1 Notes, the Receivables or
deposited in or withdrawn from any Settlement Lock-Box Account, Annuity Lock-Box Account, the
Master Collection Account, the Series Collection Account, the Series Payment Account, the Series
Reserve Account, the Issuer’s Account, the Trustee’s Account or any other account hereafter
established to effectuate the transactions contemplated by and in accordance with the terms of this
Agreement and the Supplement. Without limiting the generality of the foregoing, the Collateral
Trustee shall have no responsibility or liability for the content or adequacy of any private
placement memorandum or any other offering document.



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     SECTION 14.04. Compensation; Collateral Trustee’s Expenses; Indemnification.



     (a) As full compensation for its services hereunder, the Collateral Trustee shall be entitled
to receive, solely out of Collections of Trust Assets and, to the extent provided in the
Supplement, and subject to the priority of payments set forth in the Supplement, the fees
separately agreed between the Issuer and the Collateral Trustee by separate letter agreements or in
the Supplement.



     (b) Expenses; Indemnification. The Issuer will pay or reimburse the Collateral
Trustee upon its request for, and will, within thirty (30) days of demand and submission of
evidence of such expenses or other liabilities, indemnify and hold the Collateral Trustee and its
officers, directors, employees and agents harmless against, all reasonable out-of-pocket
expenses (including fees and expenses of legal counsel), disbursements, costs, demands, claims, and
liabilities incurred or made by or against the Collateral Trustee in respect of such Series in
accordance with any of the provisions of this Agreement or any other Operative Document or in
connection with any amendment hereto or thereto or by reason of its participation in the
transactions contemplated hereby or thereby (including, in all such cases, the reasonable fees and
expenses of its agents, any co-Collateral Trustee and counsel), except any such expense,
disbursement or liability as may arise from the Collateral Trustee’s own gross negligence, willful
misconduct or bad faith and except as provided in the following sentence. The terms of this
Section 14.04 shall survive the termination of this Agreement or the earlier resignation or
removal of the Collateral Trustee. If the Collateral Trustee is named as a defendant in any
litigation or other proceedings in respect of which the Issuer would have indemnification
obligations hereunder, the Collateral Trustee shall promptly notify the Issuer of the same and
afford it an opportunity to participate in, and (at its expense) direct the conduct of, any such
proceedings. No settlement of any such proceedings shall be agreed by the Collateral Trustee
without the consent (which shall not be unreasonably withheld) of the Issuer.



     SECTION 14.05. Eligibility Requirements for Collateral Trustee. The Collateral Trustee hereunder
shall at all times be an Eligible Institution. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then, for the purpose of this Section 14.05, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Collateral Trustee shall cease to
be an Eligible Institution in accordance with the provisions of this Section 14.05, the
Collateral Trustee shall resign immediately in the manner and with the effect specified in
Section 14.06.



     SECTION 14.06. Resignation or Removal of Collateral Trustee.



     (a) The Collateral Trustee may at any time resign from its duties hereunder by giving prior
written notice thereof to the Issuer, the Series 2010-1 Noteholders, the Master Servicer and the
Trustee. Upon receiving such notice of resignation, the Trustee shall, at the direction of the
Control Party, promptly appoint a successor Collateral Trustee acceptable to the Control Party by
written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning
Collateral Trustee and one copy to the successor Collateral Trustee. If no successor Collateral
Trustee shall have been so appointed and have accepted appointment within thirty (30) days after



117









 







the giving of such notice of resignation, the Control Party may appoint a successor Collateral
Trustee, and if no such successor Collateral Trustee shall have been appointed within sixty (60)
days of the giving of notice of such resignation, the resigning Collateral Trustee may petition any
court of competent jurisdiction for the appointment of a successor Collateral Trustee.



     (b) If at any time the Collateral Trustee shall cease to be an Eligible Institution in
accordance with Section 14.05 hereof and shall fail to resign after written request
therefor by the Master Servicer, the Issuer or the Control Party, or if at any time the Collateral
Trustee shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or if a
receiver or a Collateral Trustee for it or for its property shall be appointed, or any public
officer shall take charge or
control of the Collateral Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Trustee shall, at the direction of the
Control Party, remove the Collateral Trustee and promptly appoint a successor Collateral Trustee
acceptable to the Control Party by written instrument, in duplicate, one copy of which instrument
shall be delivered to the Collateral Trustee so removed and one copy to the successor Collateral
Trustee.



     (c) Any resignation or removal of the Collateral Trustee and appointment of a successor
Collateral Trustee pursuant to any of the provisions of this Section 14.06 shall not become
effective until acceptance of appointment by the successor Collateral Trustee as provided in
Section 14.07 hereof.



     SECTION 14.07. Successor Collateral Trustee.



     (a) Any successor Collateral Trustee appointed as provided in Section 14.06 shall
execute, acknowledge and deliver to the Issuer, to the Master Servicer and to its predecessor
Collateral Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Collateral Trustee shall become effective and such
successor Collateral Trustee, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as Collateral Trustee herein. The predecessor Collateral Trustee
shall deliver to the successor Collateral Trustee all documents or copies thereof and statements
held by it hereunder; and the Issuer and the predecessor Collateral Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Collateral Trustee all such rights, powers,
duties and obligations.



     (b) No successor Collateral Trustee shall accept appointment as provided in this Section
14.07 unless at the time of such acceptance such successor Collateral Trustee shall be an
Eligible Institution in accordance with Section 14.05 hereof.



     (c) Upon acceptance of appointment by a successor Collateral Trustee as provided in this
Section 14.07, such successor Collateral Trustee shall mail notice of such succession
hereunder to the Trustee and all Series 2010-1 Noteholders.



     SECTION 14.08. Merger or Consolidation of Collateral Trustee. Any Person into which the Collateral
Trustee may be merged or converted or with which it may be consolidated, or any Person resulting
from any merger, conversion or consolidation to which the Collateral



118









 







Trustee shall be a party, or
any Person succeeding to all or substantially all of the corporate trust business of the Collateral
Trustee, shall be the successor of the Collateral Trustee hereunder, provided such Person shall be
an Eligible Institution in accordance with Section 14.05, without the execution or filing
of any paper or any further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.



     SECTION 14.09. Tax Returns. The Issuer, based on the information provided to it by the Master
Servicer in accordance with the Supplement shall prepare or shall cause to be prepared all tax
information required by
law to be distributed to Series 2010-1 Noteholders and shall deliver such information to the
Collateral Trustee at least twenty (20) Business Days prior to the date it is required by law to be
distributed to such Series 2010-1 Noteholders. The Collateral Trustee, upon written request, will
furnish the Issuer with all such information known to the Collateral Trustee as may be reasonably
required in connection with the preparation of all tax returns of the Issuer.



     SECTION 14.10. Representations and Warranties of Collateral Trustee. The Collateral Trustee
represents and warrants as of the date hereof and as of the Closing Date that:



     (a) the Collateral Trustee is duly organized and validly existing as a banking corporation
under the laws of the State of Delaware;



     (b) the Collateral Trustee has full power, authority and right to execute, deliver and perform
this Agreement, and has taken all necessary action to authorize the execution, delivery and
performance by it of this Agreement and each other Operative Document to which it is a party; and



     (c) each of this Agreement and each other Operative Document to which it is a party has been
duly executed and delivered by the Collateral Trustee and constitutes a legal, valid and binding
obligation of the Collateral Trustee enforceable against it in accordance with its terms except as
such enforceability may be limited by applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors’ rights generally, and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at law or in equity).



     SECTION 14.11. Maintenance of Office or Agency. The Collateral Trustee will maintain at its expense
in Wilmington, Delaware, an office or agency (the “Collateral Trustee Office”) where
notices and demands to or upon the Collateral Trustee in respect of the Series 2010-1 Notes and
this Agreement may be served. The Collateral Trustee initially designates 1100 North Market
Street, Wilmington, DE 19890, Attention: Corporate Capital Markets, as such office. The Collateral
Trustee will give prompt written notice to the Trustee, the Master Servicer and to all Series
2010-1 Noteholders of any change in the location of the Note Register or the Collateral Trustee
Office.



     SECTION 14.12. Collateral Trustee May Own Series 2010-1 Notes. The Collateral Trustee in its
individual or any other capacity may become the Holder or beneficial owner of any Series 2010-1
Note with the same rights as it would have if it were not the Collateral Trustee hereunder.



119









 





     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective officers as of the day and year first above written.



	 	 	 	 	 
	 	

IMPERIAL SETTLEMENTS FINANCING 2010, LLC, as the Issuer

 	 
	 	By:  	

Washington Square Financial, LLC, as its Sole Member
 	 
	 	 	 
	 	By:  	                                      Imperial Holdings, LLC, as its Sole Member
 	 
	 	 	 
	 	By:  	


 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	

PORTFOLIO FINANCIAL SERVICING COMPANY, as the Initial Master
Servicer

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	

WILMINGTON TRUST COMPANY, not individually but solely in its
capacity as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	

WILMINGTON TRUST COMPANY, not in its individual capacity but
solely in its capacity as Collateral Trustee, and, solely for
the purposes of Section 4.03(a), in its capacity as
Securities Intermediary

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 




120









 





SCHEDULE I




Credit Policy Manual



See Attached



 









 





SCHEDULE II




Issuer’s Chief Executive Office and Location of Records



Chief Executive Office



701 Park of Commerce Boulevard, Suite 301

Boca Raton, Florida 33487



Locations of Records



701 Park of Commerce Boulevard, Suite 301

Boca Raton, Florida 33487




 









 





SCHEDULE III




Applicable Lock-Box Banks; Applicable Lock-Box Accounts;

Applicable Lock-Box Numbers



	 	 	 	 	 
	Settlement Lock-Box Accounts	 	Settlement Lock-Box Bank	 	Settlement Lock-Box Number
	Imperial Settlements Financing 2010, LLC

	 	SunTrust Bank
	 	1000114180937
	P.O. Box 116158
	 	 	 	 
	Atlanta, GA 30368-6158
	 	 	 	 
	 
	 	 	 	 
	For Overnight:
	 	 	 	 
	 
	 	 	 	 
	Imperial Settlements Financing 2010, LLC

	 	SunTrust Bank
	 	1000114180937
	Attn: Box Number 116158
	 	 	 	 
	100 South Crest Drive
	 	 	 	 
	Stockbridge, GA 30281
	 	 	 	 






	 	 	 	 	 
	Annuity Lock-Box Accounts	 	Annuity Lock-Box Bank	 	Annuity Lock-Box Number
	Imperial Settlements Financing 2010, LLC

	 	SunTrust Bank
	 	1000089496680
	P.O. Box 102776
	 	 	 	 
	Atlanta, GA 30368-2776
	 	 	 	 
	 
	 	 	 	 
	For Overnight:
	 	 	 	 
	 
	 	 	 	 
	Imperial Settlements Financing 2010, LLC

	 	SunTrust Bank
	 	1000089496680
	Attn: Box Number 102776
	 	 	 	 
	100 South Crest Drive
	 	 	 	 
	Stockbridge, GA 30281
	 	 	 	 






 









 





SCHEDULE IV




ERISA Matters



None



124 









 





EXHIBIT A




Form of Settlement Purchase Agreements



See Attached



 









 





EXHIBIT B




Lock-Box Notices



See Attached



 









 





EXHIBIT C




Form of Letter to be Delivered by Accredited Investors to the Trustee

and Issuer on the Closing Date



Wilmington Trust Company

Rodney Square North

1100 N. Market Street

Wilmington, DE 19890

Attn: Corporate Capital Markets




Imperial Settlements Financing 2010, LLC

191 Peachtree Street NE, Suite 3300

Atlanta, GA 30303

Attn: President




     Re: Series 2010-1 Notes


Ladies and Gentlemen:




     We are delivering this letter in connection with an offering of notes (the “Series 2010-1
Notes”) of Imperial Settlements Financing 2010, LLC, a Georgia limited liability company (the
“Issuer”).



     We hereby confirm that:



          (i) we are an institutional “accredited investor” within the meaning of Rule 501(a)(l), (2),
(3) or (7) under the Securities Act of 1933, as amended (the “Securities Act”) (an
“institutional accredited investor”);




          (ii) any purchase of the Series 2010-1 Notes by us will be for our own account or for the
account of one or more other institutional accredited investors for which we exercise sole
investment discretion;




          (iii) we have such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of purchasing the Series 2010-1 Notes;




          (iv) we are not acquiring the Series 2010-1 Notes with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act; provided that the disposition
of our property and the property of any accounts for which we are acquiring Series 2010-1 Notes
shall remain at all times within our and their control; and




          (v) we acknowledge that we have had access to such financial and other information, and have
been afforded the opportunity to ask such questions of representatives of the Issuer and receive
answers thereto, as we deem necessary in connection with our decision to purchase the Series 2010-1
Notes.







 









 








     We understand that the Series 2010-1 Notes are being offered within the United States in a
transaction not involving any public offering within the meaning of the Securities Act and that the
Series 2010-1 Notes have not been registered under the Securities Act, and we agree, on our own
behalf and on behalf of each account for which we acquire any Series 2010-1 Notes, that if in the
future we decide to offer, resell, pledge or otherwise transfer such Series 2010-1 Notes prior to
(x) the date that is one year (or such shorter period of time as permitted by Rule 144 under the
Securities Act) after the later of the date of the original issuance of the Series 2010-1 Notes and
the last date on which the Issuer or any of the Issuer’s affiliates was the owner of the Series
2010-1 Notes (or any predecessor thereto) and (y) such later date, if any, as may be required by
any subsequent change in applicable law, such Series 2010-1 Notes may be offered, resold, pledged
or otherwise transferred only (i) to the Issuer, (ii) to a person whom we reasonably believe is a
“qualified institutional buyer” (as defined in Rule 144A under the Securities Act) and to whom
notice is given that the transfer is being made in reliance on Rule 144A, (iii) to a person who we
reasonably believe is an institutional accredited investor in a transaction in which the
institutional accredited investor, prior to the transfer, furnishes to the trustee a signed letter
containing certain representations and agreements relating to the restrictions on transfer of the
Series 2010-1 Notes (the form of which letter can be obtained from the trustee for the Series
2010-1 Notes), (iv) outside the United States in a transaction in accordance with Rule 904 under
the Securities Act, (v) pursuant to an effective registration statement under the Securities Act or
(vi) pursuant to an exemption from registration provided by Rule 144 under the Securities Act (if
available), in each case, in accordance with any applicable securities laws of any State of the
United States or any other applicable jurisdiction and subject to the Issuer’s and the Trustee’s
right prior to any such transfer pursuant to clauses (iii) and (vi) to require the delivery of an
opinion of counsel, certifications and/or other information satisfactory to the Issuer and the
Trustee.



     We acknowledge and agree to the terms and conditions of (i) the Master Trust Indenture (the
“Indenture”) among the Issuer, Portfolio Financial Servicing Company, as Master Servicer (“Master
Servicer”) and Wilmington Trust Company, as Trustee and Collateral Trustee (“Trustee”) and (ii) the
Series 2010-1 Supplement (“Supplement”) to and under the Indenture among the Issuer, the Master
Servicer and the Trustee, to the extent applicable to the initial Series 2010-1 Noteholder.



     We acknowledge that you, the Issuer and others will rely upon our confirmations,
acknowledgments and agreements set forth here, and we agree to notify you promptly in writing if
any of our representations or warranties herein eases to be accurate and complete.



     THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.



	 	 	 	 	 	 	 	 
								
	Date:
	 	 	 	 	 	 	
	 

	 	 
	 	 	 	 	
	 

	 	 	 	 	 	(Name of Purchaser)	






 









 





	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:  	 	 
	 




 











 





EXHIBIT D




Form of Letter to be Delivered by Accredited Investors to the Trustee, the Issuer

and the Transferor in Connection with Subsequent Transfers



Wilmington Trust Company

Rodney Square North

1100 N. Market Street

Wilmington, DE 19890

Attn: Corporate Capital Markets




Imperial Settlements Financing 2010, LLC

191 Peachtree Street NE, Suite 3300

Atlanta, GA 30303

Attn: President




     Re: Series 2010-1 Notes (the “Notes”)


Ladies and Gentlemen:




     In
connection with our proposed purchase of $ __________ aggregate principal amount of the
Notes, we confirm that:



     1. We understand that any subsequent transfer of the Notes is subject to certain restrictions
and conditions set forth in the Master Trust Indenture dated as of September 24, 2010 (the
“Indenture”) relating to the Notes and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Notes except in compliance with such restrictions and
conditions and the Securities Act of 1933, amended (the “Securities Act”).



     2. We understand that the offer and sale of the Notes have not been registered under the
Securities Act, and that the Notes may not be offered, sold, pledged or otherwise transferred
except as permitted in the following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we should sell any Notes prior to
(x) the date that is one year (or such shorter period of time as permitted by Rule 144 under the
Securities Act) after the later of the date of the original issuance of the Notes and the last date
on which the Issuer or any of the Issuer’s affiliates was the owner of the Notes (or any
predecessor thereto) and (y) such later date, if any, as may be required by any subsequent change
in applicable law, we will do so only (A) to the Issuer, (B) in accordance with Rule 144A under the
Securities Act to a “qualified institutional buyer” (as defined therein) and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (C) inside the United States to an
institutional “accredited investor” (as defined below) that, prior to such transfer, furnishes (or
has furnished on its behalf by a U.S. broker-dealer) to you and to the Issuer a signed letter
substantially in the form of this letter, (D) outside the United States in accordance with Rule 904
of Regulation S under the Securities Act, (E) pursuant to the exemption from registration provided
by Rule 144 under the Securities Act (if available) or (F) pursuant to an effective registration
statement under the Securities Act, in each case in accordance with any applicable



 









 




securities laws of any State of the United States or any other applicable jurisdiction, and we
further agree to provide to any person purchasing any of the Notes from us a notice advising such
purchaser that resales of the Notes are restricted as stated herein.




     3. We understand that, on any proposed resale of any Notes, we will be required to furnish to
you and the Issuer such certifications, legal opinions and other information as you and the Issuer
may reasonably require to confirm that the proposed sale complies with the foregoing restrictions.
We further understand that the Notes purchased by us will bear a legend to the foregoing effect.



     4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act) and have such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to bear the economic risk of
our or its investment.



     5. We are acquiring the Notes purchased by us for our own account or for one or more accounts
(each of which is an institutional “accredited investor”) as to each of which we exercise sole
investment discretion.



     We acknowledge and agree to the terms and conditions of (i) the Master Trust Indenture (the
“Indenture”) among the Issuer, Portfolio Financial Servicing Company, as Master Servicer (“Master
Servicer”) and Wilmington Trust Company, as Trustee and Collateral Trustee (“Trustee”) and (ii) the
Series 2010-1 Supplement (“Supplement”) to and under the Indenture among the Issuer, the Master
Servicer and the Trustee, to the extent applicable to the Series 2010-1 Noteholder.



     The Trustee, the Issuer and the transferor of the Notes are entitled to rely upon this letter
and are irrevocably authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the matters covered
hereby.



	 	 	 	 	 
	 	Very truly yours,

[Name of Transferee]

 	 
	 	By:  	 	 
	 	 	Authorized Signature 	 
	 	 	 	 



 









 






	 	 	 	 	 



EXHIBIT E




Form of Daily Report



See Attached



 









 





EXHIBIT F




Form of Monthly Report and Compliance Certificate



See Attached



 









 





EXHIBIT G




Model Structured Settlement Statute



See Attached



 









 





EXHIBIT H




Form of Rule 144A Transfer Certificate


[_____], as Note Registrar and Transfer Agent





     Reference is hereby made to the Master Trust Indenture, dated as of September 24, 2010, among
Imperial Settlements Financing 2010, LLC (the “Issuer”), Portfolio Financial Servicing
Company and Wilmington Trust Company (as amended, restated, supplemented or otherwise modified from
time to time, the “Indenture”), as supplemented by the Series 2010-1 Supplement to the
Indenture, dated as of September 24, 2010, among the Issuer, Portfolio Financial Servicing Company
and Wilmington Trust Company (as amended, restated, supplemented or otherwise modified from time to
time, the “Series 2010-1 Supplement” and, collectively with the Indenture, the
“Agreement”). Capitalized terms used but not defined herein are used as defined in the
Agreement.



     The undersigned (the “Transferor”) owns and proposes to transfer the interest[s] in
the [Regulation S Global Note[s]] [and/or] [U.S. Global Note[s]] [and/or] [Definitive Note[s]]
[and/or] [Certificated Note[s]] specified in Annex A hereto (the “Notes”), in the principal
amount[s] specified in Annex A hereto (the “Transfer”), to _____________________ (the
“Transferee”), as further specified in Annex A hereto. In connection with the Transfer,
the Transferor hereby certifies that:



     (a) the Transfer is being effected in accordance with transfer restrictions set forth in the
Agreement and the Notes;



     (b) the Transfer is being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor
hereby further certifies that:




	 	•	 	the Transferee is purchasing the beneficial interest for its own account, or
for one or more accounts with respect to which the Transferee exercises sole
investment discretion; and
	 
	 	•	 	the Transferor reasonably believes that the Transferee and each such account
is a “qualified institutional buyer” within the meaning of Rule 144A.





     Upon consummation of the proposed Transfer in accordance with the terms of the Agreement, the
transferred beneficial interest will be subject to the restrictions on transfer enumerated in the
legends printed on the U.S. Global Notes by which the Transferee shall hold its interest and in the
Agreement and the Securities Act.



 









 





     This certificate and the statements contained herein are made for your benefit.



	 	 	 	 	 	 	 	 	 	 
										
	Dated: 
	 	 	 	 	 	 	 	 	
	 	 	 	 	   	
	 	 	 	 	 	[Transferor]	
	 
	 	 	 	 	 	 	 	 	
	 

	 	 	 	 	By:  	 	 
	 

	 	 	 	 	 	Name:  	 	 	
	 

	 	 	 	 	 	Title:	 	 	
	 

	 	 	 	 	 	 	 
 	






 











 





ANNEX A




     The Transferor owns and proposes to transfer a beneficial interest in the following:



	 	 	 
	Type of Note or beneficial interest to be transferred	 	Principal Amount










 









 








TRANSFEREE CERTIFICATION

FOR SERIES 2010-1 NOTES



This letter relates to the proposed acquisition by the undersigned investor (“you” or the
“Purchaser”) of $[_____] aggregate outstanding principal amount of a Series 2010-1 Note (“Series
2010-1 Note”) of Imperial Settlements Financing 2010, LLC (the “Issuer”) identified on the
signature page of this letter. Terms in this letter in bold and italics have the respective
meanings set forth in Annex A attached hereto.



By signing this letter, you acknowledge receipt of the offering memorandum relating to the offering
of the Series 2010-1 Notes provided by or on behalf of the Issuer, and you represent, warrant and
covenant as follows:




1. Investor certifications



Confirm the following by checking the box below:





	 	o	 	The Purchaser is a qualified institutional
buyer and is aware that the acquisition of the
Notes is being made in reliance on Rule 144A
under the Securities Act.





2. Representations, warranties and covenants




Securities law requirements and transfer restrictions on the Series 2010-1 Notes



You understand that:





	•	 	the Series 2010-1 Notes have not been and will not be registered under the Securities Act,
and, if in the future you decide to offer, resell, pledge or otherwise transfer the Series
2010-1 Notes, you may do so only in the manner described in the Agreement relating to the
offering of the Series 2010-1 Notes, including the requirement for written certifications
	 
	•	 	the Series 2010-1 Notes may be transferred only to a person that is an eligible holder
	 
	•	 	you are not acquiring the Series 2010-1 Notes with a view to the resale, distribution or
other disposition thereof in violation of the Securities Act
	 
	•	 	you must hold and transfer at least the minimum denomination of the Series 2010-1 Notes set
forth in the Agreement relating to the offering of the Series 2010-1 Notes and you must
provide notice of the relevant transfer restrictions to subsequent transferees





Your power and authority to purchase and the enforceability of this letter



You represent that:





	•	 	you have the power and authority to execute this letter and any other document required to
be executed and delivered by you in connection with your purchase of the Series 2010-1 Notes,
and consummate the purchase of the Series 2010-1 Notes
	 
	•	 	the person signing this letter and each document in connection with the purchase of the
Series 2010-1 Notes on behalf of the Purchaser has been duly authorized to execute and deliver
such documents
	 
	•	 	this letter has been duly executed by the Purchaser and constitutes a valid and legally
binding agreement of the Purchaser, enforceable against the Purchaser in accordance with its
terms




 









 










The undersigned purchaser hereby executes this letter as of the date set forth below




	 	 	 	 	 

	 	 	 
	(Print or type name of Purchaser)	 	 
	 
	 	 	 	 
	By: 
	 	 	 	 
	 

	 	 	 
	 	Name:
	 	 
	 	Title:
	 	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Principal amount of Series [_____] Notes to be purchased:	 	 
	 
	 	 	 	 
	 	 	 





 









 






Annex A — Defined Terms



“Agreement” means the Indenture, as supplemented by the Series 2010-1 Supplement to the Indenture,
dated as of September 24, 2010, among Imperial Settlements Financing 2010, LLC, Portfolio Financial
Servicing Company and Wilmington Trust Company, as amended, restated, supplemented or otherwise
modified from time to time.



“eligible holder” means (a) a qualified institutional buyer who purchases such Series 2010-1 Notes
in reliance on the exemption from Securities Act registration provided by Rule 144A thereunder, or
(b) a person that is not a U.S. person and is acquiring the Series 2010-1 Notes in an offshore
transaction in reliance on the exemption from registration provided by Regulation S thereunder or
(c) is an institutional accredited investor that is acquiring the Series 2010-1 Notes for its own
account or for the account of another institutional accredited investor for investment and not with
a view to, or for offer or sale in connection with, any distribution in violation of the Securities
Act.



“Indenture” means that certain Master Trust Indenture, dated as of September 24, 2010, among
Imperial Settlements Financing 2010, LLC, Portfolio Financial Servicing Company and Wilmington
Trust Company, as amended, restated, supplemented or otherwise modified from time to time.



“institutional accredited investor” means an institution that is an “accredited investor” as such
term is defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.



“offshore transaction” has the meaning set forth in Regulation S under the Securities Act.



“qualified institutional buyer” has the meaning set forth in Rule 144A under the Securities Act.



“Securities Act” means the Securities Act of 1933, as amended.



“U.S. person” has the meaning set forth in Regulation S under the Securities Act.








 









 








EXHIBIT I

Form of Regulation S Transfer Certificate



[_____], as Note Registrar and Transfer Agent




     Reference is hereby made to the Master Trust Indenture, dated as of September 24, 2010, among
Imperial Settlements Financing 2010, LLC (the “Issuer”), Portfolio Financial Servicing Company, and
Wilmington Trust Company (as amended, restated, supplemented or otherwise modified from time to
time, the “Indenture”), as supplemented by the Series 2010-1 Supplement to the Indenture, dated as
of September 24, 2010, among the Issuer, Portfolio Financial Servicing Company and Wilmington Trust
Company (as amended, restated, supplemented or otherwise modified from time to time, the “Series
2010-1 Supplement” and, collectively with the Indenture, the “Agreement”). Capitalized terms used
but not defined herein are used as defined in the Agreement.



     The undersigned (the “Transferor”) owns and proposes to transfer the interest[s] in the [U.S.
Global Note[s]] [and/or] [Regulation S Global Note[s]] [and/or] [Definitive Note[s]] [and/or]
[Certificated Note[s]] [and/or] [Temporary Regulation S Global Note[s]] specified in Annex A hereto
(the “Notes”), in the principal amount[s] specified in Annex A hereto (the “Transfer”), to
___________________ (the “Transferee”), as further specified in Annex A hereto. In connection with
the Transfer, the Transferor hereby certifies that:



     (a) the Transfer is being effected in accordance with transfer restrictions set forth in the
Agreement and the Notes;



     (b) the Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904
under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the
Transferor hereby further certifies that:




	 	(i)	 	the Transfer is not being made to a U.S. Person and (x) at the
time the buy order was originated, the Transferee was outside the United States
or such Transferor and any Person acting on its behalf reasonably believed and
believes that the Transferee was outside the United States or (y) the
transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the
United States; and






	 	(ii)	 	no directed selling efforts have been made in contravention of
the requirements of Regulation S under the Securities Act.





     Upon consummation of the proposed transfer in accordance with the terms of the Agreement, the
transferred beneficial interest will be subject to the restrictions on Transfer enumerated in the
legends printed on the Regulation S Note by which the Transferee shall hold its interest and in the
Agreement and the Securities Act.



 









 





     This certificate and the statements contained herein are made for your benefit.




	 	 	 	 	 	 	 	 	 	 
										
	Dated:
	 	 	 	 	 	 	 	 	
	 	 	 	 	 	 	 	
	 	 	 	 	 	 	[Transferor]	
	 
	 	 	 	 	 	 	 	 	
	 

	 	 	 	 	 	By:  	 	 	
	 

	 	 	 	 	 	 	 	
	 

	 	 	 	 	 	 	Name: 	 	
	 

	 	 	 	 	 	 	 	 	
	 

	 	 	 	 	 	 	Title: 	 	
	 

	 	 	 	 	 	 	 	 	





 









 






ANNEX A



The Transferor owns and proposes to transfer a beneficial interest in the following:




	 	 	 
	Type of Note or beneficial interest to be transferred	 	Principal Amount





 









 






TRANSFEREE CERTIFICATION

FOR SERIES 2010-1 NOTES



This letter relates to the proposed acquisition by the undersigned investor (“you” or the
“Purchaser”) of $[_____] aggregate outstanding principal amount of a Series 2010-1 Note (“Series
2010-1 Note”) of Imperial Settlements Financing 2010, LLC (the “Issuer”) identified on the
signature page of this letter. Terms in this letter in bold and italics have the respective
meanings set forth in Annex A attached hereto.



By signing this letter, you acknowledge receipt of the offering memorandum relating to the offering
of the Series 2010-1 Notes provided by or on behalf of the Issuer, and you represent, warrant and
covenant as follows:




1. Investor certifications




     Confirm the following by checking the box below:




	 	o	 	The Purchaser is not a U.S.
Person





2. Representations, warranties and covenants



Securities law requirements and transfer restrictions on the Series 2010-1 Notes



You understand that:





	o	 	the Series 2010-1 Notes have not been and will not be registered under the Securities Act, and, if in the future you decide
to offer, resell, pledge or otherwise transfer the Series 2010-1 Notes, you may do so only in the manner described in the
Agreement relating to the offering of the Series 2010-1 Notes, including the requirement for written certifications
	 
	o	 	the Series 2010-1 Notes may be transferred only to a person that is an eligible holder
	 
	o	 	you are not acquiring the Series 2010-1 Notes with a view to the resale, distribution or other disposition thereof in
violation of the Securities Act
	 
	o	 	you must hold and transfer at least the minimum denomination of the Series 2010-1 Notes set forth in the Agreement relating
to the offering of the Series 2010-1 Notes and you must provide notice of the relevant transfer restrictions to subsequent
transferees




Your power and authority to purchase and the enforceability of this letter



You represent that:





	o	 	you have the power and authority to execute this letter and any other
document required to be executed and delivered by you in connection
with your purchase of the Series 2010-1 Notes, and consummate the
purchase of the Series 2010-1 Notes
	 
	o	 	the person signing this letter and each document in connection with
the purchase of the Series 2010-1 Notes on behalf of the Purchaser has
been duly authorized to execute and deliver such documents
	 
	o	 	this letter has been duly executed by the Purchaser and constitutes a
valid and legally binding agreement of the Purchaser, enforceable
against the Purchaser in accordance with its terms




 









 










The undersigned purchaser hereby executes this letter as of the date set forth below




	 	 	 	 	 

	 	 	 
	(Print or type name of Purchaser)	 	 
	 
	 	 	 	 
	By: 
	 	 	 	 
	 	 	 	 
	 	Name:
	 	 
	 	Title:
	 	 
	 
	 	 	 	 
	Date:
	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Principal amount of Series 2010-1 Notes to be purchased:	 	 
	 
	 	 	 	 
	 	 	 





 









 






Annex A — Defined Terms



“Agreement” means the Indenture, as supplemented by the Series 2010-1 Supplement to the
Indenture, dated as of September 24, 2010, among Imperial Settlements Financing 2010, LLC,
Portfolio Financial Servicing Company and Wilmington Trust Company, as amended, restated,
supplemented or otherwise modified from time to time.



“eligible holder” means (a) a qualified institutional buyer who purchases such Series 2010-1 Notes
in reliance on the exemption from Securities Act registration provided by Rule 144A thereunder, or
(b) a person that is not a U.S. person and is acquiring the Series 2010-1 Notes in an offshore
transaction in reliance on the exemption from registration provided by Regulation S thereunder or
(c) is an institutional accredited investor that is acquiring the Series 2010-1 Notes for its own
account or for the account of another institutional accredited investor for investment and not with
a view to, or for offer or sale in connection with, any distribution in violation of the Securities
Act.



“Indenture” means that certain Master Trust Indenture, dated as of September 24, 2010, among
Imperial Settlements Financing 2010, LLC, Portfolio Financial Servicing Company and Wilmington
Trust Company, as amended, restated, supplemented or otherwise modified from time to time.



“institutional accredited investor” means an institution that is an “accredited investor” as such
term is defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.



“offshore transaction” has the meaning set forth in Regulation S under the Securities Act.



“qualified institutional buyer” has the meaning set forth in Rule 144A under the Securities Act.



“Securities Act” means the Securities Act of 1933, as amended.



“U.S. person” has the meaning set forth in Regulation S under the Securities Act.