Document:

Exhibit 10.2

 

COMPENSATION AND BENEFITS ASSURANCE AGREEMENT

 

This COMPENSATION AND BENEFITS ASSURANCE AGREEMENT (this “Agreement”) is made, entered into, and is effective as of this 2nd day of May, 2017 (the “Effective Date”), by and between OLD SECOND BANCORP, INC. (hereinafter referred to as the “Company”) and Brad Adams (hereinafter referred to as the “Executive”).

 

WHEREAS, the Company desires to employ the Executive as its Chief Financial Officer and the Executive desires to be so employed; and

 

WHEREAS, the Company recognizes that circumstances may arise in which a Change in Control may occur, thereby causing uncertainty of employment without regard to the competence or past contributions of the Executive, which uncertainty may result in the loss of valuable services of the Executive, and the parties wish to provide reasonable security to the Executive against changes in the employment relationship in the event of a Change in Control.

 

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration including, but not limited to, the Executive’s continuing employment and the Executive’s receipt of an equity incentive award under the Company’s 2014 Equity Incentive Plan, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

 

Section 1.                                          Term of Agreement

 

This Agreement will commence on the Effective Date and shall continue in effect until the first anniversary of the Effective Date (the “Initial Term”).

 

The term of this Agreement automatically shall be extended for one additional year at the end of the Initial Term, and then again after each successive one-year period thereafter (each such one-year period following the Initial Term a “Successive Period”).  However, either party may terminate this Agreement at the end of the Initial Term, or at the end of any Successive Period thereafter, by giving the other party written notice of intent not to renew delivered at least ninety (90) calendar days prior to the end of such Initial Term or Successive Period.  Except as otherwise provided, if such notice is properly delivered by either party, this Agreement, along with all corresponding rights, duties, and covenants, shall automatically expire at the end of the Initial Term or Successive Period then in progress.

 

In the event that a Change in Control (as defined in Paragraph 2.4 below) of the Company occurs during the Initial Term or any Successive Period, upon the effective date of such Change in Control, the term of this Agreement shall automatically and irrevocably be renewed for a period of twenty-four (24) full calendar months from the effective date of such Change in Control (such 24-month period being hereinafter referred to as the “Extended Period”).  This Agreement shall thereafter automatically terminate following the Extended Period.  Further, this Agreement shall be assigned to, and shall be assumed by, the purchaser in such Change in Control, as further provided in Section 4 herein.

 

Section 2.                                          Severance Benefits

 

2.1.                            Right to Severance Benefits.  The Executive shall be entitled to receive from the Company Severance Benefits as described in Paragraph 2.3, subject to reduction as described in Section 3 herein, if during the term of this Agreement there has been a Change in Control of the Company and if, within the Extended Period, the Executive’s employment shall end as a result of a Qualifying Termination 

 

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(as defined in Paragraph 2.2 below).  The Severance Benefits described in Paragraphs 2.3(a) and 2.3(b) herein shall be paid in cash to the Executive in a single lump sum as soon as practicable following the Qualifying Termination, but in no event later than thirty (30) calendar days from such date.  Notwithstanding the foregoing, Severance Benefits which become due pursuant to the circumstances described in Paragraph 4.1 shall be paid immediately.

 

2.2.                            Qualifying Termination.  The occurrence of any one or more of the following events (each, a “Qualifying Termination”) shall trigger the payment of Severance Benefits to the Executive:

 

(a)                                 The involuntary termination of the Executive’s employment without Cause (as defined in Paragraph 2.6 below) either within the six (6) month period preceding a Change in Control or within the Extended Period; and

 

(b)                                 The Executive’s voluntary termination of employment for Good Reason (as defined in Paragraph 2.5 below) within the Extended Period.

 

A Qualifying Termination shall not include a termination of the Executive’s employment by reason of death, disability, the Executive’s voluntary termination without Good Reason, or the involuntary termination of the Executive’s employment for Cause.  Notwithstanding the foregoing, either of the events described in Paragraphs 2.2(a) or 2.2(b) must constitute a “separation from service” as determined under Treas. Reg. Section 1.409A-1(h) in order to be a Qualifying Termination.

 

2.3.                            Description of Severance Benefits.  In the event that the Executive becomes entitled to receive Severance Benefits, as provided in Paragraphs 2.1 and 2.2 above, the Company shall, within the time limits stated in Paragraph 2.1, pay, or cause to be paid, to the Executive and provide, or cause to be provided, the Executive with the following:

 

(a)                                 A lump-sum cash amount equal to the Executive’s unpaid Base Salary, accrued vacation pay, unreimbursed business expenses, and all other items earned by and owed to the Executive through and including the date of the Qualifying Termination.  Such payment shall constitute full satisfaction for these amounts owed to the Executive.

 

(b)                                 A lump-sum cash amount equal to two (2) multiplied by the sum of (i) the greater of the Executive’s annual rate of Base Salary in effect upon the date of the Qualifying Termination, or the Executive’s annual rate of Base Salary in effect immediately prior to the occurrence of the Change in Control; and (ii) Executive’s Bonus Amount.

 

(c)                                  Immediate 100% vesting of all stock options and any other awards which had been provided to the Executive by the Company or any of its subsidiaries under any incentive compensation plan.

 

(d)                                 At the exact same cost to the Executive, and at the same coverage level as in effect as of the Executive’s date of Qualifying Termination (subject to changes in coverage levels applicable to all employees generally), a continuation of the Executive’s (and the Executive’s eligible dependents’) health insurance coverage for a period of time following the Qualifying Termination equal to the shorter of (i) twenty-four (24) months or (ii) the maximum period allowed pursuant to any one or more of the provisions of Treas. Reg. Section 1.409A-1(b)(9)(v) which would be exempt from the definition of “deferred compensation” thereunder (the “benefit continuation period”); provided, however, that such continuation of health insurance coverage shall be provided only to the extent that it does not result in any additional tax or other penalty being imposed on the Company by reason of the provision of such continuation coverage causing a violation of Section 2716 of the Public Health Service Act during a period of time Section 2716 is enforced by the Internal Revenue Service through Code Section 4980D.  The applicable COBRA health insurance benefit continuation period shall begin at the end of this benefit

 

 

continuation period.  The providing of health insurance benefits by the Company shall be discontinued prior to the end of the benefit continuation period in the event that the Executive subsequently becomes covered under the health insurance coverage of a subsequent employer which does not contain any exclusion or limitation with respect to any preexisting condition of the Executive or the Executive’s eligible dependents.  For purposes of enforcing this offset provision, the Executive shall have the duty to inform the Company as to the terms and conditions of any subsequent employment and the corresponding benefits earned from such employment.  The Executive shall provide, or cause to provide, to the Company in writing correct, complete, and timely information concerning the same.

 

(e)                                  The Executive shall be entitled to receive standard outplacement services from a nationally recognized outplacement firm of the Executive’s selection, for a period of up to one (1) year from the Executive’s date of Qualifying Termination.  However, such service shall be at the Company’s expense to a maximum amount not to exceed twenty thousand dollars ($20,000).

 

2.4.                            Definition of “Change in Control.”  “Change in Control” of the Company means, and shall be deemed to have occurred upon, the first to occur of any of the following events:

 

(a)                                 Any Person other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the beneficial owner (within the meaning of Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing thirty-three percent (33%) or more of the total voting power represented by the Company’s then outstanding voting securities; or

 

(b)                                 During any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new Director whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the Directors then still in office who either were Directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

 

(c)                                  Consummation of:  (i) a merger or consolidation to which the Company is a party if the stockholders before such merger or consolidation do not, as a result of such merger or consolidation, own, directly or indirectly, more than sixty-seven percent (67%) of the combined voting power of the then outstanding voting securities of the entity resulting from such merger or consolidation in substantially the same proportion as their ownership of the combined voting power of the Company’s voting securities outstanding immediately before such merger or consolidation; or (ii) a complete liquidation or dissolution or an agreement for the sale or other disposition of all or substantially all of the Company’s assets.

 

However, in no event shall a Change in Control be deemed to have occurred, with respect to the Executive if the Executive is part of a purchasing group which consummates the Change-in-Control transaction.  The Executive shall be deemed “part of a purchasing group” for purposes of the preceding sentence if the Executive is a equity Executive in the purchase company or group (except for (i) passive ownership of less than two percent (2%) of the stock of the purchasing company; or (ii) ownership of equity participation in the purchasing company or group which is otherwise not significant, as determined prior to the Change in Control by a majority of the non-employee continuing Directors).

 

2.5.                            Definition of “Good Reason.”  “Good Reason” shall mean, without the Executive’s express written consent, the occurrence of any one or more of the following within the Extended Period:

 

 

(a)                                 A material reduction or alteration in the nature or status of the Executive’s authorities, duties or responsibilities from those in effect as of ninety (90) calendar days prior to the Change in Control.

 

(b)                                 The requirement that the Executive be based at a location in excess of twenty-five (25) miles from the location of the Executive’s principal job location or office immediately prior to the Change in Control; except for required travel for business to an extent consistent with the Executive’s then present business travel obligations.

 

(c)                                  A material reduction of the Executive’s Compensation and/or other benefits or perquisites in effect on the Effective Date, or as the same shall be increased from time to time; provided, however, that a change to, or replacement of, an existing benefit or perquisite will not give rise to a “Good Reason” if such change or replacement is implemented with respect to all employees generally.

 

(d)                                 The Company, or any successor company, commits a material breach of any provision of this Agreement including, but not limited to the Company failing to obtain the assumption of, or the successor company refusing to assume the obligations of this Agreement pursuant to Paragraph 4.1 herein within the Extended Period.

 

Notwithstanding the foregoing, none of the conditions described in Paragraphs (a) through (d) of this Paragraph 2.5 shall constitute Good Reason unless the Executive first provides notice of the occurrence of one of the foregoing conditions to the Company within ninety (90) days of the initial occurrence of the condition, and the Company then fails to remedy the condition within thirty (30) days of receiving such notice.  The Executive’s right to terminate employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness.  The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason herein.

 

2.6.                            Definition of “Cause.”  “Cause” shall mean the occurrence of any one or more of the following:

 

(a)                                 A demonstrably willful and deliberate act or failure to act by the Executive (other than as a result of incapacity due to physical or mental illness) which is committed in bad faith, without reasonable belief that such action or inaction is in the best interests of the Company, which causes actual material financial injury to the Company, or any of its subsidiaries, and which act or inaction is not remedied within fifteen (15) business days of written notice from the Company or the subsidiary for which the Executive works; or

 

(b)                                 The Executive’s conviction for committing an act of fraud, embezzlement, theft, or any other act constituting a felony involving moral turpitude which causes material harm, financial or otherwise, to the Company or any of its subsidiaries.

 

2.7.                            Other Defined Terms.  The following terms shall have the meanings set forth below:

 

(a)                                 “Base Salary” means, at any time, the then-regular annual rate of pay which the Executive is receiving as salary, excluding amounts: (i) designated by the Company as payment toward reimbursement of expenses; of (ii) received under incentive or other bonus plans, regardless of whether or not the amounts are deferred.

 

(b)                                 “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

 

 

(c)                                  “Bonus Amount” means the average of the annual cash bonuses paid to the Executive for the three (3) calendar years immediately preceding the year in which the Qualifying Termination occurs, including cash bonuses that are deferred pursuant to any deferral election by Executive under a tax-qualified or non-qualified retirement or deferral plan maintained by the Company, or any of its subsidiaries.

 

(d)                                 “Code” means the Internal Revenue Code of 1986, as amended.

 

(e)                                  “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.

 

(f)                                   “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof.

 

Section 3.                                          Excise Tax Limitation.

 

In the event that any amounts payable to the Executive under this Agreement or otherwise would (a) constitute “parachute payments” within the meaning of Code Section 280G, and (b) but for this Section 3, be subject to the excise tax imposed by Code Section 4999, then such payments shall be reduced in a manner determined by the Company (by the minimum possible amounts) that is consistent with the requirements of Section 409A until no amount payable to the Executive will be subject to the excise tax under Code Section 4999.

 

Section 4.                                          Successors and Assignments

 

4.1.                            Successors.  The Company will require any successor (whether via a Change in Control, direct or indirect, by purchase, merger, consolidation, or otherwise) of the Company to expressly assume and agree to perform the obligations under this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

 

Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall, as of the date immediately preceding the date of a Change in Control, automatically give the Executive Good Reason to collect, immediately, full benefits hereunder as a Qualifying Termination.

 

4.2.                            Assignment by Executive.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees.  If an Executive should die while any amount is still payable to the Executive hereunder, had the Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee, or if there is no such designee, to the Executive’s estate.

 

An Executive’s rights hereunder shall not otherwise be assignable.

 

Section 5.                                          Restrictive Covenants

 

5.1.                            Confidentiality.  The Executive acknowledges that the nature of the Executive’s employment shall require that the Company produce and allow the Executive access to records, data, trade secrets and information that are not available to the public regarding the Company and its subsidiaries (“Confidential Information”).  The Executive shall hold in confidence and, except as provided below, not directly or indirectly disclose any Confidential Information to third parties unless: (i) disclosure becomes reasonably necessary in connection with the Executive’s performance of the 

 

 

Executive’s duties of employment with the Company or its subsidiaries; (ii) the Confidential Information lawfully becomes available to the public from other sources; (iii) the Executive is authorized in writing by the Company to disclose the Confidential Information; or (iv) the Executive is required to make disclosure of the Confidential Information by law or pursuant to the authority of any administrative agency or judicial body.

 

The Executive acknowledges and agrees that, notwithstanding any provisions in this Agreement or any Company policy applicable to the unauthorized use or disclosure of trade secrets, the Executive is hereby notified that, pursuant to the Defend Trade Secrets Act of 2016 (Pub. Law 114-153), the Executive shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made (i) in confidence to a Federal, State, municipal or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law.  The Executive also may not be held so liable for such disclosures made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  In addition, individuals who file a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.  Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b).  Nothing in this Agreement shall be construed to authorize, or limit liability for, an act that is otherwise prohibited by law, such as the unlawful access of material by unauthorized means.

 

All Confidential Information and other records, files, documents, and other materials or copies thereof relating to the business of the Company or any of its subsidiaries that the Executive prepares or uses shall be the sole property of the Company.  The Executive’s access to and use of the Company’s computer systems, networks and equipment, and all of the Company information contained therein, shall be restricted to legitimate business purposes on behalf of the Company; any other access to or use of such systems, network and equipment is without authorization and is prohibited.  The restrictions contained in this Paragraph 5.1 shall extend to any personal computers or other electronic devices of the Executive that are used for business purposes relating to the Company.  The Executive shall not transfer any Company information to any personal computer or other electronic device that is not otherwise used for any business purpose relating to the Company.  The Executive shall promptly return all originals and copies of Confidential Information and other records, files, documents and other materials to the Company if the Executive’s employment with the Company is terminated for any reason.

 

The Executive acknowledges and agrees that nothing contained in this Agreement limits the Executive’s ability to file, pursuant to any applicable whistleblower statute or program (each, a “Whistleblower Program”), a charge or complaint with any federal, state, municipal or local governmental agency or commission (“Government Agencies”).  The Executive further understands that this Agreement does not limit the Executive’s ability to communicate or cooperate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing information, without notice to the Company.  This Agreement also does not limit the Executive’s right to receive financial incentive pursuant to a Whistleblower Program for information provided to any Government Agencies.

 

5.2.                            Non-Solicitation.  As an essential ingredient and in consideration of the Executive’s employment by the Company and the Executive’s opportunity to participate in the Company’s 2014 Equity Incentive Plan or another equity incentive plan maintained by the Company, the Executive shall not, during the Executive’s employment with the Company or any of its subsidiaries and for a period of one (1) year after termination of the Executive’s employment with the Company (and its subsidiaries) for any reason (the “Restrictive Period”) and regardless of when such termination of employment occurs, do any of the following (the “Restrictive Covenant”): directly or indirectly, for the Executive or any bank, 

 

 

savings and loan association, credit union or similar financial institution (a “Financial Institution”): (i) induce or attempt to induce any officer of the Company or any of its subsidiaries, or any employee who previously reported to the Executive, to leave the employ of the Company or any of its subsidiaries; (ii) in any way interfere with the relationship between the Company or any of its subsidiaries and any such officer or employee; (iii) employ, or otherwise engage as an employee, independent contractor or otherwise, any such officer or employee; or (iv) induce or attempt to induce any customer, supplier, licensee or business relation of the Company or any of its subsidiaries to cease doing business with the Company or any of its subsidiaries or in any way interfere with the relationship between the Company or any of its subsidiaries and any of their respective customers, suppliers, licensees or business relations where the Executive had personal contact with, or has accessed Confidential Information in the preceding twelve (12) months with respect to, such customers, suppliers, licensees or business relations.  Notwithstanding the foregoing, any party identified on Schedule A hereto shall be excluded from the scope of the Restrictive Covenant.

 

5.3.                            Acknowledgment of Covenants.  The parties hereto acknowledge that the Executive’s services are of a special, extraordinary, and intellectual character which gives him unique value, and that the business of the Company and its subsidiaries is highly competitive, and that violation of any of the covenants provided in this Section 5 would cause immediate, immeasurable, and irreparable harm, loss and damage to the Company not adequately compensable by a monetary award.  The Executive acknowledges that the time and scope of activity restrained by the provisions of this Section 5 are reasonable and do not impose a greater restraint than is necessary to protect the goodwill of the Company’s business.  The Executive further acknowledges that he and the Company have negotiated and bargained for the terms of this Agreement and that the Executive has received adequate consideration for entering into the Agreement, including without limitation, the Executive’s employment by the Company and the Executive’s opportunity to participate in 2014 Equity Incentive Plan and any other equity incentive plan or other similar plan maintained by the Company.  In the event of any such breach or threatened breach by the Executive of any one or more of such covenants, the Company shall be entitled to such equitable and injunctive relief as may be available to restrain the Executive from violating the provisions hereof.  Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available at law or in equity for such breach or threatened breach, including the recovery of damages and the immediate termination of the employment of the Executive hereunder.

 

Section 6.                                          Miscellaneous

 

6.1.                            Administration.

 

(a)                                 Administration.  This Agreement shall be administered by the Board of Directors of the Company, or by a Committee of the Board consisting of Board members designated by the Board (the “Compensation Committee”).  The Compensation Committee (with the approval of the Board, if the Board is not the Compensation Committee) is authorized to interpret this Agreement, to prescribe and rescind rules and regulations, and to make all other determinations necessary or advisable for the administration of this Agreement.  In fulfilling its administrative duties hereunder, the Compensation Committee may rely on outside counsel, independent accountants, or other consultants to render advice or assistance.

 

(b)                                 Claims Procedure.  If the Executive believes that he is being denied a benefit to which he is entitled under the Agreement, he may file a written request for such benefit with the Company, setting forth his claim.  Upon receipt of the claim, the Company shall advise the Executive that a reply will be forthcoming within 15 days and shall, in fact, deliver such reply with such period.  The Company may, however, extend the reply period for an additional fifteen (15) days for reasonable cause.  If the claim is denied in whole or in part, the Company shall adopt a written opinion, using language calculated to be understood by the Executive, setting forth:

 

 

(i)                                     The specific reason or reasons for such denied;

 

(ii)                                  The specific reference to pertinent provisions of this Agreement on which such denial is based;

 

(iii)                               A description of any additional material or information necessary for the Executive to perfect his claim and an explanation why such material or such information is necessary;

 

(iv)                              Appropriate information as to the steps to be taken if the Executive wishes to submit the claim for review; and

 

(v)                                 The time limits for requesting the review under (c) below.

 

(c)                                  Request for Claim Decision Review.  Within thirty (30) days after receipt by the Executive of the written opinion described above, the Executive may request in writing that the President of the Company review the description of the Company.  Such request must be addressed to the President of the Company, at its then principal place of business.  The Executive of his duly authorized representative may, but need not, review the pertinent documents and submit issues and comments in writing for consideration by the Company.  If the Executive does not request a review of the Company’s determination by the President of the Company within such 30-day period, he shall be barred and estopped from challenging the Company’s determination.  Within thirty (30) days after the President’s receipt of a request for review, he will review the Company’s determination.  After considering all materials presented by the Executive, the President will render a written opinion, written in a manner calculated to be understood by the Executive, setting forth specific reasons for the decision and containing specific references to the pertinent provisions of this Agreement on which the decision is based.

 

6.2.                            Notices.  Any notice required to be delivered to the Company, the Compensation Committee or the President of the Company by the Executive hereunder shall be properly delivered to the Company when personally delivered to (including by a reputable overnight courier), or actually received through the U.S. mail, postage prepaid, by:

 

Old Second Bancorp, Inc.

37 South River Street

Aurora, IL 60506

 

Any notice required to be delivered to the Executive by the Company, the Compensation Committee or the President of the Company hereunder shall be properly delivered to the Executive when personally delivered to (including by a reputable overnight courier), or actually received through the U.S. mail, postage prepaid, by the Executive at his last known address as reflected on the books and records of the Company.

 

Section 7.                                          Contractual Rights and Legal Remedies

 

7.1.                            Contractual Rights to Benefits.   This Agreement establishes in the Executive a right to the benefits to which the Executive is entitled hereunder.  However, except as expressly stated herein, nothing herein contained shall require or be deemed to require, or prohibit or be deemed to prohibit, the Company to segregate, earmark, or otherwise set aside any funds or other assets, in trust or otherwise, to provide for any payments to be made or required hereunder.

 

7.2.                            Legal Fees and Expenses.  The Company shall pay all legal fees, costs of litigation, prejudgment interest, and other expenses which are incurred in good faith by the Executive as a result of the Company’s refusal to provide the Severance Benefits to which the Executive becomes entitled under 

 

 

this Agreement; provided that any such reimbursement to Executive must be made in compliance with any applicable provisions of Section 409A of the Code and Treas. Reg. Section 1.409A-3(i)(1)(iv).

 

7.3.                            Arbitration.  The Executive shall have the sole right and option to elect (in lieu of litigation) to have any dispute or controversy arising under or in connection with this Agreement settled by arbitration, conducted before a panel of three (3) arbitrators sitting in a location selected by the Executive within fifty (50) miles from the location of his or her job with the Company, in accordance with the rules of the American Arbitration Association then in effect.  The Executive’s election to arbitrate, as herein provided, and the decision of the arbitrators in that proceeding, shall be binding on the Company and Executive.

 

Judgment may be entered on the award of the arbitrator in any court having jurisdiction.  All expenses of such arbitration, including the fees and expenses of the counsel for the Executive, shall be borne by the Company.

 

7.4.                            Unfunded Agreement.  This Agreement is intended to be an unfunded general asset promise for a select, highly compensated member of the Company’s management and, therefore, is intended to be exempt from the substantive provisions of the Employee Retirement Income Security Act of 1974 as amended.

 

7.5.                            Exclusivity of Benefits.  Unless specifically provided herein, neither the provisions of this Agreement nor the benefits provided hereunder shall reduce any amounts otherwise payable, or in any way diminish the Executive’s rights as an employee of the Company, whether existing now or hereafter, under any compensation and/or benefit plans (qualified or nonqualified), programs, policies, or practices provided by the Company, for which the Executive may qualify.

 

Vested benefits or other amounts which the Executive is otherwise entitled to receive under any plan, policy, practice, or program of the Company, at or subsequent to the Executive’s date of Qualifying Termination, shall be payable in accordance with such plan, policy, practice, or program except as expressly modified by this Agreement.

 

7.6.                            Includable Compensation.  Severance Benefits provided hereunder shall not be considered “includable compensation” for purposes of determining the Executive’s benefits under any other plan or program of the Company.

 

7.7.                            Deferred Compensation.  If any amount or benefit provided hereunder would be considered “deferred compensation” as defined under Code Section 409A and the regulations and guidance issued thereunder (“Deferred Compensation”), the Company reserves the absolute right (including the right to delegate such right) to unilaterally amend this Agreement, without the consent of the Executive, to avoid the application of, or to maintain compliance with, Code Section 409A.  Any amendment by the Company to this Agreement pursuant to this Paragraph 7.7 shall maintain, to the extent practicable, the original intent of the applicable provision without violating Code Section 409A.  Any discretionary authority retained by the Company pursuant to the terms of this Agreement shall not be applicable to any amount or benefit which is determined to constitute Deferred Compensation, if such discretionary authority would contravene Code Section 409A.  In addition, notwithstanding anything contained herein to the contrary, if at the time of a termination of employment Executive is a “specified employee” as defined in Code Section 409A, and the regulations and guidance thereunder in effect at the time of such termination, and then only as and to the extent required by such provisions, the date of payment of any payments otherwise provided hereunder shall be delayed for a period of up to six (6) months following the date of termination.

 

7.8.                            Employment Status.  Nothing herein contained shall be deemed to create an employment agreement between the Company and the Executive providing for the employment of the 

 

 

Executive by either the Company or any of its subsidiaries for any fixed period of time.  The Executive’s employment is terminable at will by the Company, or one of its subsidiaries, or the Executive and each shall have the right to terminate the Executive’s employment at any time, with or without Cause, subject to the Company’s obligation to provide Severance Benefits as required hereunder.

 

In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, nor shall the amount of any payment hereunder be reduced by any compensation earned by the Executive as a result of employment by another employer, other than as provided in Paragraph 2.3(d) herein.

 

7.9.                            Entire Agreement.  This Agreement represents the entire agreement between the parties with respect to the subject matter hereof, and supersedes all prior discussion, negotiations, and agreements concerning the subject matter hereof, including, but not limited to, any prior severance agreement made between the Executive and the Company.

 

7.10.                     Tax Withholding.  The Company shall withhold from any amounts payable under this Agreement all federal, state, city, or other taxes as legally required to be withheld.

 

7.11.                     Waiver of Rights.  Except as otherwise provided herein, the Executive’s acceptance of Severance Benefits, the Gross-Up Payment (if applicable), and any other payments required hereunder shall be deemed to be a waiver of all rights and claims of the Executive against the company pertaining to any matters arising under this Agreement.

 

7.12.                     Severability.  In the event any provision of the Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.

 

7.13.                     Applicable Law.  To the extent not preempted by the laws of the United States, the laws of the State of Illinois shall be the controlling law in all matters relating to the Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of the Effective Date.

 

	
OLD SECOND BANCORP, INC.
    	
 
    	
BRAD ADAMS
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ James L. Eccher
    	
 
    	
/s/ Brad Adams
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Its:
    	
Chief Executive Officer
    	
 
    	
Date:
    	
 
    
	
 
    	
 
    	
 
    
	
Date: April 21,   2017EX-4.1

 Exhibit 4.1 
  

 
 DISCOVER CARD EXECUTION NOTE TRUST

 Issuer 
 and 

U.S. BANK NATIONAL ASSOCIATION 

Indenture Trustee 
 CLASS A(2017-3) TERMS DOCUMENT 
 Dated as of April 25, 2017 

to 
 SECOND AMENDED AND RESTATED
INDENTURE SUPPLEMENT 
 Dated as of December 22, 2015 

for the DiscoverSeries Notes 
 to

 AMENDED AND RESTATED INDENTURE 

Dated as of December 22, 2015 
  

 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	ARTICLE I	 
	DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	 
			
	 Section 1.01
	 	 Definitions
	  	 	1	 
	 Section 1.02
	 	 Representations and Warranties of Issuer
	  	 	7	 
	 Section 1.03
	 	 Representations and Warranties of Indenture Trustee
	  	 	8	 
	 Section 1.04
	 	 Limitations on Liability
	  	 	8	 
	 Section 1.05
	 	 Governing Law
	  	 	9	 
	 Section 1.06
	 	 Counterparts
	  	 	9	 
	 Section 1.07
	 	 Ratification of Indenture and Indenture Supplement
	  	 	9	 
	
	ARTICLE II	 
	THE CLASS A(2017-3) NOTES	 
			
	 Section 2.01
	 	 Creation and Designation
	  	 	9	 
	 Section 2.02
	 	 Adjustments to Required Subordinated Percentages and Amount
	  	 	9	 
	 Section 2.03
	 	 Interest Payment
	  	 	9	 
	 Section 2.04
	 	 Notification of LIBOR
	  	 	10	 
	 Section 2.05
	 	 Payments of Interest and Principal
	  	 	10	 
	 Section 2.06
	 	 Form of Delivery of Class A(2017-3) Notes;
Depository; Denominations
	  	 	10	 
	 Section 2.07
	 	 Delivery and Payment for the Class A(2017-3)
Notes
	  	 	11	 
	 Section 2.08
	 	 Targeted Deposits to the Accumulation Reserve Account
	  	 	11	 
	 Section 2.09
	 	 Additional Issuances of Notes
	  	 	11	 
	 Section 2.10
	 	 Designation of Additional Amounts to Be Included in the Excess Spread Amount for the
DiscoverSeries Notes
	  	 	12	 
	 Section 2.11
	 	 Variable Accumulation Period
	  	 	12	 
	 Section 2.12
	 	 Seller’s Interest to Be Included in the Monthly Statement
	  	 	13	 
	 Section 2.13
	 	 Duties of the Indenture Trustee
	  	 	13	 
			
	 EXHIBIT A
	 	 FORM OF CLASS A(2017-3) NOTE
	  			

  
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 THIS CLASS A(2017-3) TERMS DOCUMENT (this “Terms
Document”), by and between DISCOVER CARD EXECUTION NOTE TRUST, a statutory trust created under the laws of the State of Delaware (the “Issuer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized
and existing under the laws of the United States of America, as Indenture Trustee (the “Indenture Trustee”), is made and entered into as of April 25, 2017. 

Pursuant to this Terms Document, the Issuer shall create a new Tranche of Class A Notes of the DiscoverSeries and shall specify the
principal terms thereof. 
 ARTICLE I 

Definitions and Other Provisions of General Application 

Section 1.01    Definitions. For all purposes of this Terms Document, except as otherwise expressly provided
or unless the context otherwise requires: 
 (1)    the terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular; 
 (2)    all other terms used herein which are defined
in the Indenture Supplement or the Indenture, either directly or by reference therein, have the meanings assigned to them therein; 

(3)    all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally
accepted accounting principles and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder means such accounting principles as are
generally accepted in the United States of America at the date of such computation; 
 (4)    all references in this
Terms Document to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this Terms Document; the words “herein,” “hereof” and
“hereunder” and other words of similar import refer to this Terms Document as a whole and not to any particular Article, Section or other subdivision; 

(5)    in the event that any term or provision contained herein shall conflict with or be inconsistent with any term or
provision contained in the Indenture Supplement or the Indenture, the terms and provisions of this Terms Document shall be controlling, but solely with respect to the Class A(2017-3) Notes; 

(6)    each capitalized term defined herein shall relate only to the
Class A(2017-3) Notes and no other Tranche of Notes issued by the Issuer; 

(7)    “including” and words of similar import will be deemed to be followed by “without limitation”;
and 

 (8)    for purposes of determining any amount or making any calculation
hereunder, such amount or calculation, (x) if specified to be as of the first day of any Due Period, shall (a) include any Notes issued during such Due Period as if such Notes had been outstanding on the first day of such Due Period and
(b) give effect to any payments, deposits or other allocations made on the Distribution Date related to the prior Due Period and (y) if specified to be as of the close of business on the last day of any Due Period shall give effect to any
payments, deposits or other allocations made on the related Distribution Date. 
 “Accumulation Amount” means
$29,166,666.67; provided, however, if the commencement of the Accumulation Period is delayed in accordance with Section 2.11 hereof, the Accumulation Amount shall be determined in accordance with the definition of
“Accumulation Amount” in the Indenture Supplement. 
 “Accumulation Commencement Date” means April 1, 2019,
or such later date as the Calculation Agent on behalf of the Issuer determines in accordance with Section 2.11 hereof. 

“Accumulation Period” has the meaning set forth in the Indenture Supplement. 

“Accumulation Period Length” means 12 months; provided, however, if the commencement of the Accumulation Period
is delayed in accordance with Section 2.11 hereof, the Accumulation Period Length shall be determined in accordance with the definition of “Accumulation Period Length” in the Indenture Supplement. 

“Accumulation Reserve Funding Period” shall not apply if the Calculation Agent on behalf of the Issuer notifies the Indenture
Trustee that it expects the Accumulation Period Length to be adjusted to one (1) month, and otherwise shall mean a period commencing on the first Distribution Date on which a condition in the right column of the following table was in effect on
the immediately preceding Distribution Date, if such Distribution Date is a Distribution Date described in the corresponding left column of the following table, and ending on the Distribution Date immediately preceding the earlier to occur of: 

(x)    the Expected Maturity Date for the Class A(2017-3) Notes and 

(y)    the Principal Payment Date on which the Outstanding Dollar Principal Amount of the
Class A(2017-3) Notes is paid in full. 
  

			
	Distribution Date:	  	Condition:
	(a) The Distribution Date occurring three (3) calendar months prior to the first scheduled Distribution
Date of the Accumulation Period (as adjusted in accordance with Section 2.11 hereof) and any following Distribution Date	  	No condition.
	 	 
	(b) The Distribution Date occurring four (4) calendar months prior to the first scheduled Distribution
Date of the Accumulation Period (as adjusted in accordance with Section 2.11 hereof) and any following Distribution Date	  	The three-month rolling average Excess Spread Percentage is less than 4%.

  
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	(c) The Distribution Date occurring six (6) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with
Section 2.11 hereof) and any following Distribution Date	  	The three-month rolling average Excess Spread Percentage is less than 3%.
	 	 
	(d) The Distribution Date occurring twelve (12) calendar months prior to the first scheduled Distribution
Date of the Accumulation Period (as adjusted in accordance with Section 2.11 hereof) and any following Distribution Date	  	The three-month rolling average Excess Spread Percentage is less than 2%.

 provided, however, if at any point the Accumulation Reserve Funding Period has not commenced because no
condition requiring funding has occurred or the Calculation Agent has determined that the Accumulation Period Length will be shortened to one (1) month, and subsequently a condition requiring funding occurs and the Calculation Agent determines
that the Accumulation Period Length will not be so shortened, the Accumulation Reserve Funding Period shall commence on the following Distribution Date. 

“Class A(2017-3) Adverse Event” means the occurrence of any of the
following: (a) an Early Redemption Event with respect to the Class A(2017-3) Notes or (b) an Event of Default and acceleration of the Class A(2017-3)
Notes; provided, however, that if the only such event to have occurred is an Excess Spread Early Redemption Event for which an Excess Spread Early Redemption Cure has occurred, a
Class A(2017-3) Adverse Event shall not be treated as continuing from and after the date of such cure. 

“Class A(2017-3) Note” means any Note, in the form set forth in
Exhibit A hereto, designated therein as a Class A(2017-3) Note and duly executed and authenticated in accordance with the Indenture. 

“Class A(2017-3) Noteholder” means a Person in whose name a Class A(2017-3) Note is registered in the Note Register. 
 “Class A(2017-3) Termination Date” means the earliest to occur of (a) the Principal Payment Date on which the Outstanding Dollar Principal Amount of the
Class A(2017-3) Notes is paid in full, (b) the Legal Maturity Date and (c) the date on which the Indenture is discharged and satisfied pursuant to Article VI thereof. 

“Excess Spread Percentage” for any Distribution Date means a fraction, the numerator of which is the Excess Spread Amount for
such Distribution Date multiplied by 12 and the denominator of which is the sum of the Nominal Liquidation Amounts of all Tranches of DiscoverSeries Notes as of the first day of the related Due Period. 

  
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 “Expected Maturity Date” means April 15, 2020. 

“Indenture” means the Amended and Restated Indenture, dated as of December 22, 2015, between the Issuer and Indenture
Trustee, as such agreement may be further amended, supplemented, restated, amended and restated, replaced or otherwise modified from time to time. 

“Indenture Supplement” means the Second Amended and Restated Indenture Supplement, dated as of December 22, 2015, for
the DiscoverSeries Notes, between the Issuer and the Indenture Trustee, as the same may be further amended, supplemented, restated, amended and restated, replaced or otherwise modified from time to time. 

“Initial Dollar Principal Amount” means $350,000,000, or such higher amount as is specified in any Notice of Additional
Issuance under Section 2.09 hereof. 
 “Interest Accrual Period” means, with respect to any Interest Payment Date, the
period from and including the previous Interest Payment Date (or, in the case of the first Interest Payment Date for any Class A(2017-3) Note, from and including the applicable Issuance Date) to but
excluding such Interest Payment Date. 
 “Interest Payment Date” means the fifteenth day of each month commencing in May
2017, or if such fifteenth day is not a Business Day, the next succeeding Business Day. 
 “Issuance Date” means
April 25, 2017, with respect to all Class A(2017-3) Notes issued on the date hereof and, with respect to any additional Class A(2017-3) Notes issued
pursuant to Section 2.09 hereof, any Issuance Date specified in the Notice of Additional Issuance delivered thereunder. 

“Legal Maturity Date” means October 17, 2022. 

“LIBOR” means, with respect to any LIBOR Determination Date, the rate for deposits in United States dollars with a duration
comparable to the relevant Interest Accrual Period which appears on Reuters Screen LIBOR01 as of 11:00 a.m., London time, on such day. If such rate does not appear on Reuters Screen LIBOR01, the rate will be determined by the Indenture Trustee on
the basis of the rates at which deposits in United States dollars are offered by major banks in the London interbank market, selected by the Calculation Agent by written notice to the Indenture Trustee, at approximately 11:00 a.m., London time, on
such day to prime banks in the London interbank market with a duration comparable to the relevant Interest Accrual Period commencing on that day. The Indenture Trustee will request the principal London office of four banks selected by the
Calculation Agent to provide a quotation of its rate. If at least two such quotations are provided, the rate will be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for that day will be the
arithmetic mean of the rates quoted by four major banks in New York City, selected by the Calculation Agent, at approximately 11:00 a.m., New York City time, on that day for loans in United States dollars to leading European banks with a duration
comparable to the relevant Interest Accrual Period commencing on that day. If LIBOR with respect to a LIBOR Determination Date is not determined pursuant to the foregoing, LIBOR with respect to such LIBOR Determination Date will be LIBOR with
respect to the immediately prior LIBOR Determination Date. 

  
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 “LIBOR Business Day,” if applicable, shall mean a day other than a Saturday or a
Sunday on which banking institutions in both the City of London, England and in New York, New York are not required or authorized by law to be closed. 

“LIBOR Determination Date” means the second LIBOR Business Day immediately preceding the commencement of an Interest Accrual
Period. 
 “Note Interest Rate” means, for any Interest Accrual Period, LIBOR + 0.23% per annum, calculated on the basis of
the actual number of days elapsed and a 360-day year; provided, that if the sum of LIBOR + 0.23% for such Interest Accrual Period is less than 0.00%, then the Note Interest Rate for such Interest Accrual
Period will be deemed to be 0.00%. 
 “Notice of Additional Issuance” has the meaning set forth in Section 2.09
hereof. 
 “Regulation RR” means Regulation RR (Credit Risk Retention) promulgated by the Securities and Exchange
Commission to implement the credit risk retention requirements of Section 15G of the Securities Exchange Act. 
 “Required Daily
Deposit Target Finance Charge Amount” means, for any day in a Due Period, an amount equal to the Class A Tranche Interest Allocation for the related Distribution Date; provided, however, that for purposes of determining
the Required Daily Deposit Target Finance Charge Amount on any day on which the Class A Tranche Interest Allocation cannot be determined because the LIBOR Determination Date for the applicable Interest Accrual Period has not yet occurred, the
Required Daily Deposit Target Finance Charge Amount shall be the Class A Tranche Interest Allocation determined based on a pro forma calculation made on the assumption that LIBOR will be LIBOR for the applicable period determined on the first
day of such calendar month, multiplied by 1.25. 
 “Required Daily Deposit Target Principal Amount” means, for any
day in a Due Period, (i) if such Due Period is in the Accumulation Period for the Class A(2017-3) Notes, the Accumulation Amount, (ii) if such day is on or after the occurrence and during the
continuance of a Class A(2017-3) Adverse Event, the Nominal Liquidation Amount of the Class A(2017-3) Notes and (iii) in all other circumstances, zero.

 “Required Subordinated Amount of Class B Notes” means, for the
Class A(2017-3) Notes for any date of determination, an amount equal to the product of 

(a)    the Required Subordinated Percentage of Class B Notes for such
Class A(2017-3) Notes on such date of determination; and 
 (b)    the
Nominal Liquidation Amount of such Class A(2017-3) Notes on such date of determination; 
 provided,
however, that for any date of determination on or after the occurrence and during the continuation of a Class A(2017-3) Adverse Event, the Required Subordinated Amount of Class B Notes for the
Class A(2017-3) Notes will be the greater of 
 (x)    the amount
determined above for such date of determination; and 

  
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 (y)    the amount determined above for the date immediately prior to the date
on which such Class A(2017-3) Adverse Event shall have occurred. 
 “Required
Subordinated Amount of Class C Notes” means, for the Class A(2017-3) Notes for any date of determination, an amount equal to the product of 

(a)    the Required Subordinated Percentage of Class C Notes for such
Class A(2017-3) Notes on such date of determination; and 
 (b)    the
Nominal Liquidation Amount of such Class A(2017-3) Notes on such date of determination; 
 provided,
however, that for any date of determination on or after the occurrence and during the continuation of a Class A(2017-3) Adverse Event, the Required Subordinated Amount of Class C Notes for the
Class A(2017-3) Notes will be the greater of 
 (x)    the amount
determined above for such date of determination; and 
 (y)    the amount determined above for the date immediately
prior to the date on which such Class A(2017-3) Adverse Event shall have occurred. 

“Required Subordinated Amount of Class D Notes” means, for the
Class A(2017-3) Notes for any date of determination, an amount equal to the product of 

(a)    the Required Subordinated Percentage of Class D Notes for such
Class A(2017-3) Notes on such date of determination; and 
 (b)    the
Nominal Liquidation Amount of such Class A(2017-3) Notes on such date of determination; 
 provided,
however, that for any date of determination on or after the occurrence and during the continuation of a Class A(2017-3) Adverse Event, the Required Subordinated Amount of Class D Notes for
the Class A(2017-3) Notes will be the greater of 
 (x)    the amount
determined above for such date of determination; and 
 (y)    the amount determined above for the date immediately
prior to the date on which the Class A(2017-3) Adverse Event shall have occurred. 

“Required Subordinated Percentage of Class B Notes” means, for the
Class A(2017-3) Notes, 6.96202532%, subject to adjustment in accordance with Section 2.02. 

“Required Subordinated Percentage of Class C Notes” means, for the
Class A(2017-3) Notes, 8.86075950%, subject to adjustment in accordance with Section 2.02. 

“Required Subordinated Percentage of Class D Notes” means, for the
Class A(2017-3) Notes, 10.75949368%, subject to adjustment in accordance with Section 2.02. 

  
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 “Reuters Screen LIBOR01” means the display page currently so designated on the
Reuters Screen (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices). 

“Seller’s Interest” means, at any time, a “seller’s interest” as defined in, and calculated in accordance
with, Regulation RR. 
 “Seller’s Interest Measurement Date” means the last day of each calendar month. 

“Specified Rating” means, for the Class A(2017-3) Notes, Aaa(sf) with respect to
Moody’s, AAA(sf) with respect to Standard & Poor’s and AAAsf with respect to Fitch. 
 “Stated Principal
Amount” means $350,000,000 or such higher amount as is specified in any Notice of Additional Issuance under Section 2.09. 

“Targeted Accumulation Reserve Subaccount Deposit” means, with respect to any Distribution Date during the Accumulation
Reserve Funding Period, an amount equal to (i) 0.5% of the Outstanding Dollar Principal Amount of the Class A(2017-3) Notes as of the close of business on the last day of the related Due Period or
(ii) any other amount designated by the Calculation Agent on behalf of the Issuer. 

Section 1.02    Representations and Warranties of Issuer. The Issuer represents and warrants that: 

(a)    the Issuer has been duly formed and is validly existing as a statutory trust in good standing under the laws of the
State of Delaware, and has full power and authority to execute and deliver this Terms Document and to perform the terms and provisions hereof; 

(b)    the execution, delivery and performance of this Terms Document by the Issuer have been duly authorized by all
necessary limited liability company and statutory trust proceedings of the Beneficiary and the Owner Trustee, do not require any approval or consent of any governmental agency or authority and do not and will not conflict with any material provision
of the Certificate of Trust or the Trust Agreement of the Issuer; 
 (c)    this Terms Document is the valid, binding
and enforceable obligation of the Issuer, except as the same may be limited by receivership, insolvency, reorganization, moratorium or other laws relating to the enforcement of creditors’ rights generally or by general equity principles; 

(d)    to the best of the Issuer’s knowledge, this Terms Document will not conflict with any law or governmental
regulation or court decree applicable to it; 
 (e)    the Issuer is not required to be registered under the Investment
Company Act; 
 (f)    all information heretofore furnished by the Issuer in writing to the Indenture Trustee for
purposes of or in connection with this Terms Document or any transaction contemplated hereby is, and all such information hereafter furnished by the Issuer in writing to the Indenture Trustee will be, true and accurate in every material respect or
based on reasonable estimates on the date as of which such information is stated or certified; and 

  
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 (g)    to the best knowledge of the Issuer, there are no proceedings or
investigations pending against the Issuer before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over the Issuer (i) asserting the invalidity of this Terms Document,
(ii) seeking to prevent the consummation of any of the transactions contemplated by this Terms Document or (iii) seeking any determination or ruling which in the Issuer’s judgment would materially and adversely affect the performance
by the Issuer of its obligations under this Terms Document or the validity or enforceability of this Terms Document. 

Section 1.03    Representations and Warranties of Indenture Trustee. The Indenture Trustee represents and
warrants and any successor trustee shall represent and warrant that: 
 (a)    the Indenture Trustee is organized,
existing and in good standing under the laws of the United States of America; 
 (b)    the Indenture Trustee has full
power, authority and right to execute, deliver and perform this Terms Document, and has taken all necessary action to authorize the execution, delivery and performance by it of this Terms Document; and 

(c)    this Terms Document has been duly executed and delivered by the Indenture Trustee. 

Section 1.04    Limitations on Liability. 

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

(b)    None of the Indenture Trustee, the Owner Trustee, the Calculation Agent, the Beneficiary, the Depositor, any Master
Servicer or any Servicer or any of their respective officers, directors, employees, incorporators or agents will have any liability with respect to this Terms Document, and recourse may be had solely to the Collateral pledged to secure these Class A(2017-3) Notes under the Indenture, the Indenture Supplement and this Terms Document. 

  
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 Section 1.05    Governing Law. THIS TERMS DOCUMENT WILL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATION LAW, WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISIONS THAT WOULD RESULT IN
THE APPLICATION OF THE LAWS OF ANY OTHER STATE. 
 Section 1.06    Counterparts. This Terms Document may be
executed in any number of counterparts, each of which when so executed will be deemed to be an original, but all such counterparts will together constitute but one and the same instrument. 

Section 1.07    Ratification of Indenture and Indenture Supplement. As supplemented by this Terms Document,
each of the Indenture and the Indenture Supplement is in all respects ratified and confirmed and the Indenture as supplemented by the Indenture Supplement and this Terms Document shall be read, taken and construed as one and the same instrument.

 ARTICLE II 
 The Class A(2017-3) Notes 
 Section 2.01    Creation and Designation.
There is hereby created a Tranche of Class A Notes to be issued pursuant to this Terms Document, the Indenture and the Indenture Supplement to be known as the “DiscoverSeries Class A(2017-3)
Notes.” 
 Section 2.02    Adjustments to Required Subordinated Percentages and Amount. 

(a)    On any date, the Issuer may, at the direction of the Beneficiary, change the Required Subordinated Percentage of
Class B Notes, the Required Subordinated Percentage of Class C Notes or the Required Subordinated Percentage of Class D Notes, in each case for the Class A(2017-3) Notes, without the
consent of any Noteholders; provided that the Issuer has received written confirmation from each applicable Note Rating Agency that the change in such percentage will not result in a Ratings Effect for any Tranche of Outstanding
DiscoverSeries Notes. 
 (b)    On any date, the Issuer may, at the direction of the Beneficiary, replace all or a
portion of the Required Subordinated Amount of Class B Notes, the Required Subordinated Amount of Class C Notes or the Required Subordinated Amount of Class D Notes, in each case for the
Class A(2017-3) Notes with a different form of credit enhancement (including, without limitation, a cash collateral account, a letter of credit, a reserve account, a surety bond, an insurance policy or a
collateral interest, or any combination thereof) and may add such definitions and other terms and make such additional amendments to this Terms Document as shall be necessary for such replacement without the consent of any Noteholders, provided
that the Issuer has received written confirmation from each applicable Note Rating Agency that such replacement and such other amendments will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes. 

Section 2.03    Interest Payment. For each Interest Payment Date the amount of interest due with respect to
the Class A(2017-3) Notes shall be an amount equal to 

  
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	 	(i)	(A) a fraction, the numerator of which is the actual number of days in the related Interest Accrual Period and the denominator of which is 360, times 

 

	 	(B)	the Note Interest Rate in effect with respect to such related Interest Accrual Period, times 

  

	 	(ii)	the Outstanding Dollar Principal Amount of the Class A(2017-3) Notes determined as of the first date of such related Interest Accrual Period, 

plus any Class A Tranche Interest Allocation Shortfall for such Class A(2017-3) Notes for the
immediately preceding Distribution Date, together with interest thereon at the Note Interest Rate in effect with respect to such related Interest Accrual Period, calculated on the basis of the actual number of days in the related Interest Accrual
Period and a 360-day year. 
 Section 2.04    Notification of LIBOR.
On each LIBOR Determination Date, the Indenture Trustee shall send to the Issuer, the Beneficiary, each applicable Master Servicer and any stock exchange on which the Class A(2017-3) Notes are then listed
(if the rules of such exchange so require), by facsimile transmission or electronic transmission, notification of LIBOR for the following Interest Accrual Period. 

Section 2.05    Payments of Interest and Principal. 

(a)    The Issuer will cause interest to be paid on each Interest Payment Date and principal to be paid on the Expected
Maturity Date; provided, however, that it shall not be an Event of Default if principal is not paid in full on such Expected Maturity Date unless funds for such payment have been allocated in accordance with Section 3.01 of the
Indenture Supplement; and provided, further, that if a Class A(2017-3) Adverse Event has occurred and is continuing, principal will instead be payable in monthly installments on each
Principal Payment Date for the Class A(2017-3) Notes in accordance with Sections 3.01 and 3.05 of the Indenture Supplement. All payments of interest and principal on the
Class A(2017-3) Notes shall be made as set forth in Section 1102 of the Indenture. 

(b)    The right of the Class A(2017-3) Noteholders to receive payments from
the Issuer will terminate on the Class A(2017-3) Termination Date. 

(c)    All payments of principal, interest or other amounts to the
Class A(2017-3) Noteholders will be made pro rata based on the Stated Principal Amount of their Class A(2017-3) Notes. 

Section 2.06    Form of Delivery of Class A(2017-3)
Notes; Depository; Denominations. 
 (a)    The Class A(2017-3) Notes
shall be delivered in the form of a Global Note which shall be a Registered Note as provided in Section 204 of the Indenture. The form of the Class A(2017-3) Notes is attached hereto as Exhibit A.

  
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 (b)    The Depository for the
Class A(2017-3) Notes shall be The Depository Trust Company, and the Class A(2017-3) Notes shall initially be registered in the name of Cede & Co.,
its nominee. 
 (c)    The Class A(2017-3) Notes will be issued in minimum
denominations of $100,000 and integral multiples of $1,000 in excess of that amount. 
 Section 2.07    Delivery
and Payment for the Class A(2017-3) Notes. The Issuer shall execute and deliver the Class A(2017-3) Notes to the Indenture Trustee for
authentication, and the Indenture Trustee shall deliver the Class A(2017-3) Notes when authenticated, each in accordance with Sections 203 and 303 of the Indenture. 

Section 2.08    Targeted Deposits to the Accumulation Reserve Account. The deposit targeted to be made to the
Accumulation Reserve Subaccount for the Class A(2017-3) Notes for any Due Period during the Accumulation Reserve Funding Period will be an amount equal to the Targeted Accumulation Reserve Subaccount
Deposit minus any amount on deposit in the Accumulation Reserve Subaccount for the Class A(2017-3) Notes. 

Section 2.09    Additional Issuances of Notes. Subject to clauses (ii), (iii), (iv) and (v) of
Section 2.02 and Section 2.03 of the Indenture Supplement, the Issuer may issue additional Class A(2017-3) Notes, so long as the following conditions precedent are satisfied: 

(a)    the Issuer shall have given the Indenture Trustee written notice of such issuance of additional Class A(2017-3) Notes (the “Notice of Additional Issuance”) at least one (1) Business Day in advance of the Issuance Date thereof, which notice shall include: 

 

	 	(i)	the Issuance Date of such additional Class A(2017-3) Notes; 

  

	 	(ii)	the amount of such additional Class A(2017-3) Notes being offered and the resulting Initial Dollar Principal Amount and Stated Principal Amount of Class A(2017-3) Notes; 

  

	 	(iii)	the date from which interest on such additional Class A(2017-3) Notes will accrue (which may be a date prior to the date of issuance thereof); 

 

	 	(iv)	the first Interest Payment Date on which interest will be paid on such additional Class A(2017-3) Notes; and 

 

	 	(v)	any other terms that the Issuer set forth in such notice of issuance of additional Class A(2017-3) Notes to clarify the rights of Holders of such additional Class A(2017-3) Notes or the effect of such issuance of additional Class A(2017-3) Notes on any calculations to be made with respect to the Class A(2017-3) Notes, the Class A Notes or the Issuer. 

 All such terms shall be incorporated
into and form a part of this Terms Document on and after the effective date of such Class A(2017-3) Notes; 

(b)    no Class A(2017-3) Adverse Event has occurred and is continuing; and

  
 11 

 (c)    either (i) the issuance of such additional Class A(2017-3) Notes would be treated as part of the same issue as the outstanding Class A(2017-3) Notes under Treasury Regulation Sections 1.1275-1(f)(1) or 1.1275-2(k) or (ii) such additional Class A(2017-3) Notes are not issued with “original issue
discount” for purposes of Section 1273 of the Code. 
 The Issuer shall not have to satisfy the conditions set forth in
Section 310 of the Indenture in connection with an issuance of additional Class A(2017-3) Notes so long as such conditions were satisfied or waived in connection with the initial issuance of Class A(2017-3) Notes; provided, however, that the Issuer shall have to deliver to the Indenture Trustee a Master Trust Tax Opinion and an Issuer Tax Opinion with respect to such issuance. 

Section 2.10    Designation of Additional Amounts to Be Included in the Excess Spread Amount for the
DiscoverSeries Notes. At any time that any outstanding Series of certificates issued by the Master Trust provides that the Series Principal Collections allocated to such Series will be deposited into the Group Finance Charge Collections
Reallocation Account for the Master Trust to the extent necessary for application to cover shortfalls for other Series issued by the Master Trust, an amount equal to (x) all Series Principal Collections allocated to such Series, multiplied
by (y) a fraction, the numerator of which is the sum of the Nominal Liquidation Amounts for each outstanding Tranche of the DiscoverSeries Notes (including the Class A(2017-3) Notes) and the
denominator of which is (i) the Aggregate Investor Interest for the Master Trust minus (ii) the sum of the Series Investor Interests for all such Series that provide that the Series Principal Collections allocated to such Series
will be so deposited, is hereby designated to be included in the Excess Spread Amount and shall be treated as Series Finance Charge Amounts for the DiscoverSeries. 

Section 2.11    Variable Accumulation Period. Notwithstanding anything to the contrary in Section 4.02 of
the Indenture Supplement, the Calculation Agent on behalf of the Issuer shall, by written notice to the Indenture Trustee, delay the commencement of the Accumulation Period for the Class A(2017-3) Notes
and determine a new Accumulation Commencement Date, subject to the conditions set forth in this Section 2.11; provided, however, that the Accumulation Period shall commence no later than the first day of the Due Period related to
the Expected Maturity Date for the Class A(2017-3) Notes. Any such delay by the Calculation Agent on behalf of the Issuer shall be made no later than the first day of the scheduled Due Period immediately
preceding the first Due Period in the Accumulation Period (after giving effect to any prior delay in the commencement of the Accumulation Period pursuant to this Section 2.11). 

The Calculation Agent on behalf of the Issuer shall cause such delay if the Calculation Agent determines in good faith that each of the
following conditions will be satisfied: (i) the Calculation Agent on behalf of the Issuer delivers to the Indenture Trustee a certificate to the effect that the Calculation Agent on behalf of the Issuer reasonably believes that, based on the
payment rate and the anticipated availability of Series Principal Amounts and Reallocated Principal Amounts, the delay in the commencement of the Accumulation Period for the Class A(2017-3) Notes will not
result in any Tranche of Notes not being paid in full on the relevant Expected Maturity Date (as defined in the applicable Terms Document); (ii) such delay is permitted under the Series 2007-CC Supplement or
any other applicable agreement relating to any Additional Collateral Certificate; and (iii) the Accumulation Amount, the Accumulation Commencement Date and the Accumulation Period Length shall have been adjusted. The

  
 12 

 
Calculation Agent on behalf of the Issuer shall not be required to obtain confirmation from the applicable Note Rating Agencies that such delay in the commencement of the Accumulation Period will
not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes. The Calculation Agent on behalf of the Issuer shall provide written notice to each applicable Note Rating Agency in the event that the commencement of the
Accumulation Period for the Class A(2017-3) Notes is delayed pursuant to this Section 2.11. 

Section 2.12    Seller’s Interest to Be Included in the Monthly Statement. The Issuer shall
cause the Master Servicer to include the amount of the Seller’s Interest as of the Seller’s Interest Measurement Date on each investor certificateholder’s monthly statement delivered pursuant to the Series 2007-CC Supplement. 
 Section 2.13    Duties of the Indenture Trustee.
For the avoidance of doubt, the Indenture Trustee undertakes to perform only such duties as are specifically set forth in the Indenture, the Indenture Supplement, the Pooling and Servicing Agreement, any Series Supplement and this
Agreement and as such shall have no obligation or responsibility to monitor or enforce compliance with Regulation RR, nor shall be liable to any Person for any violation of Regulation RR; provided that nothing in this Section 2.13 shall alter
the Indenture Trustee’s duties, obligations or standard of care as set forth in the Indenture or any Indenture Supplement. 

[Remainder of page intentionally blank; signature page follows] 

  
 13 

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

			
	 DISCOVER CARD EXECUTION NOTE TRUST,

as Issuer

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

Owner Trustee

		
	By:	 	
/s/ Jennifer A. Luce               
                                

		 	Name: Jennifer A. Luce
		 	Title:   Vice President
	
	U.S. BANK NATIONAL ASSOCIATION,
	as Indenture Trustee
		
	By:	 	 /s/ Julia Linian

		 	Name: Julia Linian
		 	Title:   Vice President

  
 [Signature Page to Class
A(2017-3) Terms Document] 

 EXHIBIT A 

FORM OF CLASS A(2017-3) NOTE 

 DISCOVERSERIES CLASS A(2017-3) NOTE 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO
THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN. 
 THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT AT ANY TIME
INSTITUTE AGAINST THE ISSUER, ANY MASTER TRUST OR ANY SPECIAL PURPOSE ENTITY THAT ACTS AS A DEPOSITOR WITH RESPECT TO ANY MASTER TRUST OR THE ISSUER, OR JOIN IN ANY INSTITUTION AGAINST THE ISSUER, ANY MASTER TRUST OR ANY SPECIAL PURPOSE ENTITY THAT
ACTS AS A DEPOSITOR WITH RESPECT TO ANY MASTER TRUST OR THE ISSUER, ANY RECEIVERSHIP, INSOLVENCY, BANKRUPTCY OR SIMILAR PROCEEDINGS, OR OTHER PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR SIMILAR LAW IN CONNECTION WITH ANY
OBLIGATIONS RELATING TO THE NOTES, THE INDENTURE, ANY DERIVATIVE AGREEMENT, ANY SUPPLEMENTAL CREDIT ENHANCEMENT AGREEMENT AND ANY SUPPLEMENTAL LIQUIDITY AGREEMENT. 

THE HOLDER OF THIS NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL INTEREST IN THIS NOTE, BY THE ACQUISITION OF A BENEFICIAL
INTEREST THEREIN, AGREE TO TREAT THE NOTES AS INDEBTEDNESS FOR APPLICABLE FEDERAL, STATE AND LOCAL INCOME AND FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX IMPOSED ON OR MEASURED BY INCOME. 

			
	REGISTERED	 	$[●]*
	No. [●]	 	CUSIP NO. 254683 BY0

 DISCOVER CARD EXECUTION NOTE TRUST 

ONE-MONTH LIBOR + 0.23% 

DISCOVERSERIES CLASS A(2017-3) NOTE 

DISCOVER CARD EXECUTION NOTE TRUST, a statutory trust created under the laws of the State of Delaware (herein referred to as the
“Issuer” or the “Note Issuance Trust”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, subject to the following provisions, a principal sum of $[●] ([●]
dollars) payable on the April 2020 Payment Date (the “Expected Maturity Date”), except as otherwise provided below or in the Indenture or the Indenture Supplement (as defined on the reverse hereof); provided, however,
that the entire unpaid principal amount of this Note shall be due and payable on the October 2022 Payment Date (the “Legal Maturity Date”). Interest will accrue on this Note at the rate of
one-month LIBOR + 0.23% per annum; provided, that if the sum of LIBOR + 0.23% is less than 0.00%, then interest on this Note will be deemed to accrue at a rate of 0.00%, as more specifically set forth in the Class A(2017-3) Terms Document dated as of April 25, 2017 (the “Terms Document”), between the Issuer and U.S. Bank National Association, as Indenture Trustee (the “Indenture
Trustee”, which term includes any successor Indenture Trustee under the Indenture), and shall be due and payable on each Interest Payment Date for the period from and including the previous Interest Payment Date (or, in the case of the
first Interest Payment Date for any Class A(2017-3) Notes, from and including the applicable Issuance Date) to but excluding such Interest Payment Date. Interest will be computed on the actual number of
days elapsed and a 360-day year. Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof. 

The principal and interest may be payable monthly, and may be payable earlier or later than the Expected Maturity Date, following an Event of
Default or while an Early Redemption Event has occurred and is continuing. No principal or interest will be distributed on the Note following the distribution of proceeds of a Receivables Sale. 

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. 
 The Initial Dollar Principal Amount of the
Class A(2017-3) Notes is $350,000,000. 
 Reference is made to the further provisions of this
Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note. 
 Unless the
certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, Indenture Supplement or the Terms Document referred to
on the reverse hereof, or be valid or obligatory for any purpose. 
  

	* 	Denominations of $100,000 and in integral multiples of $1,000 in excess thereof. 

 IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile,
by its Authorized Officer. 
  

			
	 DISCOVER CARD EXECUTION NOTE TRUST,

    as Issuer

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

		
	By:	 	
                     
                                         
                   

		 	Name:
		 	Title:
		
		 	Date:              , 20    

 INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

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

 

			
	 US BANK NATIONAL ASSOCIATION, not in its

    individual capacity, but solely as Indenture

    Trustee

		
	By:	 	
                     
                                         
                   

		 	Name:
		 	Title:
		
		 	Date:              , 20    

 REVERSE OF NOTE 

This Note is one of the Notes of a duly authorized issue of Notes of the Issuer, designated as its
One-Month LIBOR + 0.23% Class A(2017-3) DiscoverSeries Notes (herein called the “Class A(2017-3)
Notes”), all issued under an Amended and Restated Indenture dated as of December 22, 2015 (such Indenture, as may be further amended, restated, amended and restated, supplemented, replaced or otherwise modified from time to time, is
herein called the “Indenture”), as supplemented by a Second Amended and Restated Indenture Supplement for the DiscoverSeries Notes, dated as of December 22, 2015 (such Indenture Supplement, as may be further amended, restated,
amended and restated, supplemented, replaced or otherwise modified from time to time, is herein called the “Indenture Supplement”), between the Issuer and Indenture Trustee, to which Indenture and Indenture Supplement reference is
hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes. The Class A(2017-3) Notes are subject to all terms of the
Indenture, the Indenture Supplement and the Terms Document. All terms used in this Class A(2017-3) Note that are defined in the Indenture, the Indenture Supplement and the Terms Document shall have the
meanings assigned to them in or pursuant to the Indenture, the Indenture Supplement and the Terms Document. 
 The Class B Notes, the
Class C Notes and the Class D Notes of the DiscoverSeries and other tranches of Class A Notes of the DiscoverSeries will also be issued under the Indenture and the Indenture Supplement. 

The Class A(2017-3) Notes are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture and the Indenture Supplement. 
 Principal of the
Class A(2017-3) Notes will be payable on the Expected Maturity Date in an amount described on the face hereof except as otherwise provided in the Indenture or the Indenture Supplement. 

As described above, the entire unpaid principal amount of this Class A(2017-3) Note shall be due
and payable on the Legal Maturity Date. Notwithstanding the foregoing, the entire unpaid principal amount of the Class A(2017-3) Notes shall be due and payable on the date on which an Event of Default
relating to the Class A(2017-3) Notes shall have occurred and be continuing and, except in the event of an insolvency related default, the Indenture Trustee or the Majority Holders of the applicable
Series, Class or Tranche of Outstanding Dollar Principal Amount of the Outstanding Notes have declared the Class A(2017-3) Notes to be immediately due and payable in the manner provided in
Section 702 of the Indenture; provided, however, that such acceleration of the entire unpaid principal amount of the Notes may be rescinded by the Majority Holders of such applicable Series, Class or
Tranche of Notes. 
 On any day occurring on or after the date on which the aggregate Nominal Liquidation Amount of any Tranche of Notes is
reduced to less than 5% of its highest Outstanding Dollar Principal Amount, the Depositor or any Affiliate thereof has the right, but not the obligation, to redeem such Tranche of Notes in whole but not in part, pursuant to
Section 1202 of the Indenture. The redemption price will be an amount equal to the Outstanding Dollar Principal Amount of such Tranche, plus accrued, unpaid and additional interest or principal accreted and unpaid on such
Tranche to but excluding the date of redemption. 

 Subject to the terms and conditions of the Indenture, the Beneficiary, on behalf of the Note
Issuance Trust, may from time to time issue, or direct the Owner Trustee, on behalf of the Note Issuance Trust, to issue, one or more Series, Classes or Tranches of Notes. 

On each Payment Date, the Paying Agent shall distribute to each Holder of Class A(2017-3) Notes
of record on the related Record Date (except for the final distribution with respect to this Class A(2017-3) Note) such Holder’s pro rata share of the amounts held by the Paying Agent that are
allocated and available on such Payment Date to pay interest and principal on the Class A Notes. 
 Payments of interest on this Class A(2017-3) Note due and payable on each Payment Date, together with any installment of principal, if any, to the extent not in full payment of this
Class A(2017-3) Note, shall be made by check mailed to the Person whose name appears as the Registered Holder of this Class A(2017-3) Note on the Note Register
as of the close of business on each Record Date, except that with respect to Class A(2017-3) Notes registered on the Record Date in the name of the nominee of the clearing agency (initially, such nominee
to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on
the Note Register as of the applicable Record Date without requiring that this Class A(2017-3) Note be submitted for notation of payment. Any reduction in the principal amount of this Class A(2017-3) Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this
Class A(2017-3) Note and of any Class A(2017-3) Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not
noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Class A(2017-3) Note on a Payment Date, then
the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed within five days of such Payment Date and the amount
then due and payable shall be payable only upon presentation and surrender of this Class A(2017-3) Note at the Indenture Trustee’s principal Corporate Trust Office or at the office of the Indenture
Trustee’s agent appointed for such purposes located in the City of New York. 
 As provided in the Indenture and subject to certain
limitations set forth therein and as set forth in the first legend on the face hereof, the transfer of this Class A(2017-3) Note may be registered on the Note Register upon surrender of this Class A(2017-3) Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by a commercial bank or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member firm of a national securities exchange, and such other documents as the Indenture Trustee may require, and thereupon one or more new
Class A(2017-3) Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated 

 
transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Class A(2017-3) Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange. 

To the fullest extent permitted by applicable law, each Noteholder or Note Owner, by acceptance of a
Class A(2017-3) Note or, in the case of a Note Owner, a beneficial interest in a Class A(2017-3) Note, covenants and agrees that by accepting the benefits of
the Indenture it will not at any time institute against the Issuer, any Master Trust or any special purpose entity that acts as a depositor with respect to any Master Trust or the Issuer, or join in any institution against the Issuer, any Master
Trust or any special purpose entity that acts as a depositor with respect to any Master Trust or the Issuer of, any receivership, insolvency, bankruptcy or other similar proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture, any Derivative Agreement, any Supplemental Credit Enhancement Agreement and any Supplemental Liquidity Agreement. 

Prior to the due presentment for registration of transfer of this Class A(2017-3) Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Class A(2017-3) Note (as of the day of determination or as of such other date as
may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Class A(2017-3) Note be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary. 
 The Indenture permits, with certain exceptions as therein provided, the amendment thereof
and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing not less than 66 2/3% of the Outstanding
Dollar Principal Amount of each adversely affected Series, Class or Tranche of Notes. The Indenture also contains provisions permitting the Holders of Notes representing specified percentages of the Outstanding Dollar Principal Amount of the
Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Class A(2017-3) Note shall be conclusive and binding upon such Holder and upon all future Holders of this Class A(2017-3) Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Class A(2017-3) Note. The Indenture also permits the Indenture
Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder. 

The term “Issuer” as used in this Class A(2017-3) Note includes any successor to
the Issuer under the Indenture. 
 The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject
to the rights of the Indenture Trustee and the Holders of Notes under the Indenture. 

 The Class A(2017-3) Notes are issuable only in
registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth. 
 THIS CLASS A(2017-3) NOTE AND THE INDENTURE WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATION
LAW, WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER STATE. 
 No
reference herein to the Indenture and no provision of this Class A(2017-3) Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Class A(2017-3) Note at the times, place, and rate, and in the coin or currency herein prescribed. 

No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer or any successor or assign of the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Owner Trustee has no such obligations in its individual capacity). The Holder of this Class A(2017-3) Note by the acceptance hereof agrees that, except as expressly provided
in the Indenture and the Indenture Supplement in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this
Class A(2017-3) Note. 

 ASSIGNMENT 

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

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

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

							
	
Dated:                  
                                         
                                 
	 		 		 	                                     
                                         
                          *
		 		 		 	Signature Guaranteed:

  

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

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