Document:

psd8d12d2011ex4d1.htm

 

  

  

  

 

 

PROSPER MARKETPLACE, INC.

 

AMENDMENT TO AMENDED AND RESTATED

 

2005 STOCK PLAN

 

This Amendment (this “Amendment”) to the Amended and Restated Prosper Marketplace, Inc. 2005 Stock Plan (the “Plan”) is made effective as of October 18, 2011.  Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan.

 

WHEREAS, the Company desires to increase the maximum aggregate number of Shares that may be issued under to the Plan from 12,539,664 Shares to 13,539,664 Shares.

 

WHEREAS, this Amendment has received the requisite approval of the Board and the Company’s shareholders.

 

NOW, THEREFORE, the Plan is hereby amended as follows:

 

1.  The first paragraph of Section 3 of the Plan is hereby amended to read in its entirety as follows:

 

3.           Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares that may be subject to Options or Stock Purchase Rights and sold under the Plan is 13,539,664 Shares. The Shares may be authorized but unissued, or reacquired Common Stock.

 

2.  Except as specifically amended hereby, the Plan shall continue in full force and effect and is hereby ratified and affirmed.

 

 

[Remainder of Page Intentionally Left Blank]

 

  

  

  

 

IN WITNESS WHEREOF, this Amendment has been executed as of the date first set forth above.

 

 

	 	PROSPER MARKETPLACE, INC. 	 
	
By:   

	
/s/ Christian A. Larsen

	  
	  	
Christian A. Larsen

	  
	  	
President and Chief Executive Officer

 

 

 

 

  

  

  

 

AMENDED AND RESTATED

 

PROSPER MARKETPLACE, INC.

 

2005 STOCK PLAN

 

This Amended and Restated Prosper Marketplace, Inc. 2005 Stock Plan (the “Plan”), is approved by the Board (as defined below) as of December 1, 2010.

 

WHEREAS, the Board  adopted that certain 2005 Stock Plan (the “Original Plan”) on March 22, 2005;

 

WHEREAS, the Board now desires to amend and restate the Original Plan;

 

WHEREAS, Section 15 of the Original Plan provides that the Board may at any time amend the Plan, and that the Board shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

 

NOW, THEREFORE, in consideration of the foregoing and of the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Board hereby agrees to amend and restate the Original Plan in its entirety to read as follows:

 

1. Purposes of the Plan. The purposes of this Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants and to promote the success of the Company’s business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant. Stock Purchase Rights may also be granted under the Plan.

 

2. Definitions. As used herein, the following definitions shall apply:

 

(a) “Administrator” means the Board or any of its Committees as shall be administering the Plan in accordance with Section 4 hereof.

 

(b) “Applicable Laws” means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any other country or jurisdiction where Options or Stock Purchase Rights are granted under the Plan.

 

(c) “Board” means the Board of Directors of the Company.

 

(d) “Change in Control” means the occurrence of any of the following events:

 

(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities, except that any change in the beneficial ownership of the securities of the Company as a result of a private financing of the Company that is approved by the Board, shall not be deemed to be a Change in Control; or

  

  

  

 

(ii) The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; or

 

(iii) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

 

(e) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference to any successor or amended section of the Code.

 

(f) “Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof.

 

(g) “Common Stock” means the Common Stock of the Company.

 

(h) “Company” means Prosper Marketplace, Inc. a Delaware corporation.

 

(i) “Consultant” means any person who is engaged by the Company or any Parent or Subsidiary to render consulting or advisory services to such entity.

 

(j) “Director” means a member of the Board.

 

(k) “Disability” means permanent and total disability as defined in Section 22(e)(3) of the Code.

 

(l) “Employee” means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

 

(m) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(n) “Exchange Program” means a program under which (a) outstanding Options are surrendered or cancelled in exchange for Options of the same type (which may have lower exercise prices and different terms), Options of a different type, and/or cash, and/or (b) the exercise price of an outstanding Option is reduced. The terms and conditions of any Exchange Program will be determined by the Administrator in its sole discretion.

  

  

  

 

(o) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

 

(i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

 

(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination; or

 

(iii) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator;

 

provided that in the case of subsections (ii) and (iii), Fair Market Value shall be determined in accordance with the requirements of Treasury Regulation §§ 1.409A-1(b)(5)(iv)(B).

 

(p) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

 

(q) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

 

(r) “Option” means a stock option granted pursuant to the Plan.

 

(s) “Option Agreement” means a written or electronic agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan.

 

(t) “Optioned Stock” means the Common Stock subject to an Option or a Stock Purchase Right.

 

(u) “Optionee” means the holder of an outstanding Option or Stock Purchase Right granted under the Plan.

 

(v) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

 

(w) “Plan” means this 2005 Stock Plan.

 

(x) “Restricted Stock” means Shares issued pursuant to a Stock Purchase Right or Shares of restricted stock issued pursuant to an Option.

  

  

  

 

(y) “Restricted Stock Purchase Agreement” means a written or electronic agreement between the Company and the Optionee evidencing the terms and restrictions applying to Shares purchased under a Stock Purchase Right. The Restricted Stock Purchase Agreement is subject to the terms and conditions of the Plan and the notice of grant.

 

(z) “Securities Act” means the Securities Act of 1933, as amended.

 

(aa)  “Service Provider” means an Employee, Director or Consultant.

 

(bb) “Share” means a share of the Common Stock, as adjusted in accordance with Section 13 below.

 

(cc) “Stock Purchase Right” means a right to purchase Common Stock pursuant to Section 11 below.

 

(dd) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.

 

3. Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares that may be subject to Options and Stock Purchase Rights granted or sold under the Plan is 8,988,789 Shares. The Shares may be authorized but unissued, or reacquired Common Stock.

 

If an Option or Stock Purchase Right expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Exchange Program, the unpurchased Shares that were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated). However, Shares that have actually been issued under the Plan, upon exercise of either an Option or Stock Purchase Right, shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if unvested Shares of Restricted Stock are repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan.

 

4. Administration of the Plan.

 

(a) Administrator. The Plan shall be administered by the Board or a Committee appointed by the Board, which Committee shall be constituted to comply with Applicable Laws.

 

(b) Powers of the Administrator. Subject to the provisions of the Plan and, in the case of a Committee, the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, the Administrator shall have the authority in its discretion:

 

(i) to determine the Fair Market Value;

 

(ii) to select the Service Providers to whom Options and Stock Purchase Rights may from time to time be granted hereunder;

  

  

  

 

(iii) to determine the number of Shares to be covered by each such award granted hereunder;

 

(iv) to approve forms of agreement for use under the Plan;

 

(v) to determine the terms and conditions of any Option or Stock Purchase Right granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options or Stock Purchase Rights may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option or Stock Purchase Right or the Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

 

(vi) to institute an Exchange Program;

 

(vii) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws;

 

(viii) to allow Optionees to satisfy withholding tax obligations in accordance with Section 16(c); and

 

(ix) to construe and interpret the terms of the Plan and Options granted pursuant to the Plan.

 

(c) Effect of Administrator’s Decision. All decisions, determinations and interpretations of the Administrator shall be final and binding on all Optionees.

 

5. Eligibility.  Nonstatutory Stock Options and Stock Purchase Rights may be granted to Service Providers who provide direct services to the Company or a Subsidiary of the Company.  Incentive Stock Options may be granted only to Employees.

 

6. Limitations.

 

(a) Incentive Stock Option Limit. Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted.

 

(b) At-Will Employment. Neither the Plan nor any Option or Stock Purchase Right shall confer upon any Optionee any right with respect to continuing the Optionee’s relationship as a Service Provider with the Company, nor shall it interfere in any way with his or her right or the Company’s right to terminate such relationship at any time, with or without cause, and with or without notice.

  

  

  

 

7. Term of Plan. The Plan shall become effective on the date on which it is adopted by the Board.  No Option or Stock Purchase Right shall be granted under the Plan after the expiration of ten (10) years from the earlier of (a) the date on which the Plan is adopted by the Board or (b) the date on which the Plan is approved by the Company’s stockholders, but Options or Stock Purchase Rights previously granted may extend beyond such date in accordance with their terms.

 

8. Term of Option. The term of each Option shall be stated in the Option Agreement; provided, however, that the term shall be no more than ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option granted to an Optionee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Option Agreement.

 

9. Option Exercise Price and Consideration.

 

(a) Exercise Price. The per share exercise price for the Shares to be issued upon exercise of an Option shall be such price as is determined by the Administrator, but shall be subject to the following:

 

(i) In the case of an Incentive Stock Option

 

(A) granted to an Employee who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant.

 

(B) granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

 

(ii) In the case of a Nonstatutory Stock Option, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

 

(iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above in accordance with and pursuant to a transaction described in Section 424 of the Code.

 

(b) Forms of Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant). Such consideration may consist of, without limitation, (1) cash, (2) check, (3) promissory note, (4) other Shares, provided Shares acquired directly from the Company (x) have been owned by the Optionee, and not subject to a substantial risk of forfeiture, for more than six months on the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised, (5) consideration received by

 

the Company under a cashless exercise program implemented by the Company in connection with the Plan, or (6) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company.

  

  

  

 

10. Exercise of Option.

 

(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder shall be exercisable according to the terms hereof at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement. An Option may not be exercised for a fraction of a Share. Except in the case of Options granted to officers, Directors and Consultants, Options shall become exercisable at a rate of no less than 20% per year over five (5) years from the date the Options are granted.

 

An Option shall be deemed exercised when the Company receives (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee.  Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13 of the Plan.

 

Exercise of an Option in any manner shall result in a decrease in the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

 

(b) Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service Provider, such Optionee may exercise his or her Option within thirty (30) days of termination, or such longer period of time as specified in the Option Agreement, to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of the Option as set forth in the Option Agreement). Unless the Administrator provides otherwise, if on the date of termination the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

 

(c) Disability of Optionee. If an Optionee ceases to be a Service Provider as a result of the Optionee’s Disability, the Optionee may exercise his or her Option within six (6) months of termination, or such longer period of time as specified in the Option Agreement, to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). Unless the Administrator provides otherwise, if on the date of termination the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

  

  

  

 

 

(d) Death of Optionee. If an Optionee dies while a Service Provider, the Option may be exercised within six (6) months following Optionee’s death, or such longer period of time as specified in the Option Agreement, to the extent that the Option is vested on the date of death (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement) by the Optionee’s designated beneficiary, provided such beneficiary has been designated prior to Optionee’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Optionee, then such Option may be exercised by the personal representative of the Optionee’s estate or by the person(s) to whom the Option is transferred pursuant to the Optionee’s will or in accordance with the laws of descent and distribution. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

 

(e) Leaves of Absence.

 

(i) Unless the Administrator provides otherwise, vesting of Options granted hereunder to officers and Directors shall be suspended during any unpaid leave of absence.

 

(ii) A Service Provider shall not cease to be an Employee in the case of (A) any leave of absence approved by the Company or (B) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor.

 

(iii) For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three (3) months following the 91st day of such leave, any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option.

 

 

  

  

  

 

11. Stock Purchase Rights.

 

(a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in addition to, or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing or electronically of the terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, and the time within which such person must accept such offer. The terms of the offer shall comply in all respects with Section 260.140.42 of Title 10 of the California Code of Regulations. The offer shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator.

 

(b) Repurchase Option. Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable within 90 days of the voluntary or involuntary termination of the purchaser’s service with the Company for any reason (including death or disability). Unless the Administrator provides otherwise, the purchase price for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at such rate as the Administrator may determine. Except with respect to Shares purchased by officers, Directors and Consultants, the repurchase option shall in no case lapse at a rate of less than 20% per year over five (5) years from the date of purchase.

 

(c) Other Provisions. The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion.

 

(d) Rights as a Stockholder. Once the Stock Purchase Right is exercised, the purchaser shall have rights equivalent to those of a stockholder and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 13 of the Plan.

 

12. Limited Transferability of Options and Stock Purchase Rights. Unless determined otherwise by the Administrator, Options and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or the laws of descent and distribution, and may be exercised during the lifetime of the Optionee, only by the Optionee. If the Administrator in its sole discretion makes an Option or Stock Purchase Right transferable, such Option or Stock Purchase Right may only be transferred (i) by will, (ii) by the laws of descent and distribution, or (iii) to family members (within the meaning of Rule 701 of the Securities Act) through gifts or domestic relations orders, as permitted by Rule 701 of the Securities Act; provided that any such transfers of Incentive Stock Options to family members shall be made only to the extent permitted under Section 422 of the Code.

  

  

  

 

13. Adjustments; Dissolution or Liquidation; Merger or Change in Control.

 

(a) Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, may (in its sole discretion) adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Option or Stock Purchase Right; provided, however, that the Administrator shall make such adjustments to the extent required by Section 25102(o) of the California Corporations Code, each adjustment with respect to Nonstatutory Stock Options shall satisfy the requirements of Treasury Regulation § 1.409A-1(b)(5)(v)(D) and each adjustment with respect to Incentive Stock Options shall satisfy the requirements of Treasury Regulation § 1.424-1.

 

(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Optionee as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Option or Stock Purchase Right will terminate immediately prior to the consummation of such proposed action.

 

(c) Merger or Change in Control. In the event of a merger of the Company with or into another corporation, or a Change in Control, each outstanding Option and Stock Purchase Right shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation in a merger or Change in Control refuses to assume or substitute for the Option or Stock Purchase Right, then the Optionee shall fully vest in and have the right to exercise the Option or Stock Purchase Right as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option or Stock Purchase Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or Change in Control, the Administrator shall notify the Optionee in writing or electronically that the Option or Stock Purchase Right shall be fully exercisable for a period of time as determined by the Administrator, and the Option or Stock Purchase Right shall terminate upon expiration of such period. For the purposes of this paragraph, the Option or Stock Purchase Right shall be considered assumed if, following the merger or Change in Control, the option or right confers the right to purchase or receive, for each Share subject to the Option or Stock Purchase Right immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option or Stock Purchase Right, for each Share subject to the Option or Stock Purchase Right, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of common stock in the merger or Change in Control.  Any substitution or assumption shall comply with the requirements of Treasury Regulation § 1.409A-1(b)(5)(v)(D) (with respect to Nonstatutory Stock Options) and Treasury Regulation § 1.424-1 (with respect to Incentive Stock Options).

  

  

  

 

14. Time of Granting Options and Stock Purchase Rights. The date of grant for any Option or Stock Purchase Right shall be the date on which the Company completes the corporate action necessary to create such Option or Stock Purchase Right.  Notice of the determination shall be given to each Service Provider to whom an Option or Stock Purchase Right is so granted within a reasonable time after the date of such grant.

 

15. Amendment and Termination of the Plan.

 

(a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.

 

(b) Stockholder Approval. The Board shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

 

(c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination.

 

16. Conditions Upon Issuance of Shares.

 

(a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option or Stock Purchase Right unless the exercise of such Option or Stock Purchase Right and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.

 

(b) Investment Representations. As a condition to the exercise of an Option or Stock Purchase Right, the Administrator may require the person exercising such Option or Stock Purchase Right to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

 

(c) Withholding.  All Options and Stock Purchase Rights shall be subject to all applicable federal, state, and local or other income and employment tax withholding.  At the discretion of the Administrator, such withholding obligations may be satisfied through any combination of withholding of Shares, additional withholding on salary or wages, or payment by the person exercising such Option or Stock Purchase Right of the required withholding amount.

 

The withholding obligations shall be satisfied before the issuance of any Shares on exercise or release from forfeiture of Restricted Stock.  Regardless of the amount withheld, the person receiving Shares under the Plan shall be required to pay all income and employment taxes attributable to the transfer of such Shares.

 

17. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

 

18. Reservation of Shares. The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

 

19. Stockholder Approval. The Plan shall be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted. Such stockholder approval shall be obtained in the degree and manner required under Applicable Laws.

 

20. Information to Optionees. The Company shall provide to each Optionee and to each individual who acquires Shares pursuant to the Plan, not less frequently than annually during the period such Optionee has one or more Options or Stock Purchase Rights outstanding, and, in the case of an individual who acquires Shares pursuant to the Plan, during the period such individual owns such Shares, copies of annual financial statements. The Company shall not be required to provide such statements to key employees whose duties in connection with the Company assure their access to equivalent information.exh10_8.htm

 

 

 

Exhibit 10.8

 

EXECUTION VERSION

 

INDENTURE

 

between

 

LEAF RECEIVABLES FUNDING 7, LLC,

 

as Issuer,

 

U.S. BANK NATIONAL ASSOCIATION,

as Trustee and Custodian

 

Equipment Contract Backed Notes, Series 2011-2, Class A-1A,

Equipment Contract Backed Notes, Series 2011-2, Class A-1B,

Equipment Contract Backed Notes, Series 2011-2, Class A-2,

Equipment Contract Backed Notes, Series 2011-2, Class B,

Equipment Contract Backed Notes, Series 2011-2, Class C,

Equipment Contract Backed Notes, Series 2011-2, Class D,

Equipment Contract Backed Notes, Series 2011-2, Class E-1

and

Equipment Contract Backed Notes, Series 2011-2, Class E-2

 

 

 

Dated as of September 7, 2011

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

 

	  	
PAGE

	
ARTICLE I DEFINITIONS

	
2

	 	 	 	 
	  	
Section 1.01

	
Definitions

	
2

	  	
Section 1.02

	
Certain Rules of Construction

	
2

	 	 
	
ARTICLE II NOTE FORM

	
2

	 	 	 	 
	  	
Section 2.01

	
Form Generally

	
2

	  	
Section 2.02

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

	
2

	  	
Section 2.03

	
Denomination

	
5

	  	
Section 2.04

	
Execution, Authentication, Delivery and Dating

	
5

	  	
Section 2.05

	
Issuance of Definitive Notes

	
5

	  	
Section 2.06

	
Registration, Registration of Transfer and Exchange

	
5

	  	
Section 2.07

	
Mutilated, Destroyed, Lost or Stolen Note

	
5

	  	
Section 2.08

	
Payment of Principal and Interest; Rights Preserved

	
12

	  	
Section 2.09

	
Persons Deemed Owner

	
13

	  	
Section 2.10

	
Cancellation

	
14

	  	
Section 2.11

	
Notices to Security Depository

	
14

	  	
Section 2.12

	
Tax Treatment; Withholding Taxes

	
14

	 	 
	
ARTICLE III INITIAL, SUBSTITUTE AND ADDITIONAL CONTRACTS

	
15

	 	 	 	 
	  	
Section 3.01

	
Conditions Precedent to the Acquisition of Initial, Substitute and Additional Contracts

	
15

	 	 
	
ARTICLE IV ISSUANCE OF NOTES; CERTAIN ISSUER OBLIGATIONS

	
17

	 	 	 	 
	  	
Section 4.01

	
Conditions to Issuance of Notes

	
17

	  	
Section 4.02

	
Security for Notes

	
20

	  	
Section 4.03

	
Review of Contract Files

	
21

	  	
Section 4.04

	
Defective Contracts

	
22

	  	
Section 4.05

	
Reserved

	
23

	  	
Section 4.06

	
Administration of the Contract Assets

	
23

	  	
Section 4.07

	
Releases

	
23

	 	 
	
ARTICLE V SATISFACTION AND DISCHARGE

	
25

	 	 	 	 
	  	
Section 5.01

	
Satisfaction and Discharge of Indenture

	
25

	 	 
	
ARTICLE VI DEFAULTS AND REMEDIES

	
25

	 	 	 	 
	  	
Section 6.01

	
Events of Default

	
25

	  	
Section 6.02

	
Acceleration of Maturity; Rescission and Annulment

	
26

	  	
Section 6.03

	
Collection of Indebtedness and Suits for Enforcement by Trustee

	
27

 

 

 

  

i

  

 

 

	  	
Section 6.04

	
Remedies

	
28

	  	
Section 6.05

	
Optional Preservation of Collateral

	
28

	  	
Section 6.06

	
Trustee May File Proofs of Claim

	
29

	  	
Section 6.07

	
Trustee May Enforce Claims Without Possession of Notes

	
30

	  	
Section 6.08

	
Application of Money Collected

	
30

	  	
Section 6.09

	
Limitation on Suits

	
30

	  	
Section 6.10

	
Unconditional Right of the Noteholders to Receive Principal and Interest

	
31

	  	
Section 6.11

	
Restoration of Rights and Remedies

	
31

	  	
Section 6.12

	
Rights and Remedies Cumulative

	
31

	  	
Section 6.13

	
Delay or Omission Not Waiver

	
31

	  	
Section 6.14

	
Control by Control Party

	
31

	  	
Section 6.15

	
Waiver of Certain Events by the Control Party

	
32

	  	
Section 6.16

	
Additional Rights of Subordinate Noteholders

	
32

	  	
Section 6.17

	
Waiver of Stay or Extension Laws

	
34

	  	
Section 6.18

	
Sale of Collateral

	
34

	  	
Section 6.19

	
Action on Notes

	
36

	 	 
	
ARTICLE VII THE TRUSTEE

	
36

	 	 	 	 
	  	
Section 7.01

	
Certain Duties and Immunities

	
36

	  	
Section 7.02

	
Notice of Default and Other Events

	
38

	  	
Section 7.03

	
Certain Rights of Trustee

	
38

	  	
Section 7.04

	
Not Responsible for Recitals or Issuance of Notes

	
40

	  	
Section 7.05

	
May Hold Notes

	
41

	  	
Section 7.06

	
Money Held in Trust; Collateral

	
41

	  	
Section 7.07

	
Compensation and Reimbursement

	
41

	  	
Section 7.08

	
Corporate Trustee Required; Eligibility

	
42

	  	
Section 7.09

	
Resignation and Removal; Appointment of Successor

	
42

	  	
Section 7.10

	
Acceptance of Appointment by Successor

	
44

	  	
Section 7.11

	
Merger, Conversion, Consolidation or Succession to Business of Trustee

	
44

	  	
Section 7.12

	
Co-Trustees and Separate Trustees

	
44

	  	
Section 7.13

	
Maintenance of Office or Agency; Initial Appointment of Payment Agent

	
46

	  	
Section 7.14

	
Appointment of Authenticating Agent

	
46

	  	
Section 7.15

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

	
47

	  	
Section 7.16

	
Rights with Respect to the Servicer and Back-up Servicer

	
48

	  	
Section 7.17

	
Representations and Warranties of the Trustee

	
48

	 	 
	
ARTICLE VIII THE CUSTODIAN

	
50

	 	 	 	 
	  	
Section 8.01

	
Appointment of Custodian

	
50

	  	
Section 8.02

	
Removal of Custodian

	
50

	  	
Section 8.03

	
Termination by Custodian

	
50

	  	
Section 8.04

	
Limitations on the Custodian’s Responsibilities

	
51

	  	
Section 8.05

	
Limitation on Liability

	
52

  

ii

  

 

 

	  	
Section 8.06

	
Custodian Obligations Regarding Genuineness of Documents

	
53

	  	
Section 8.07

	
Force Majeure

	
53

	 	 
	
ARTICLE IX THE CLASS A INSURANCE POLICY

	
53

	 	 	 	 
	  	
Section 9.01

	
Claims Under Class A Insurance Policy.

	
53

	  	
Section 9.02

	
Preference Claims Under Class A Insurance Policy.

	
54

	  	
Section 9.03

	
Collateral and Trust Accounts Held for Benefit of the Class A Note Insurer

	
56

	  	
Section 9.04

	
Preservation of the Class A Note Insurer’s Rights

	
56

	  	
Section 9.05

	
Pending Litigation

	
56

	  	
Section 9.06

	
Class A Note Insurer’s Rights

	
56

	  	
Section 9.07

	
Notices to the Class A Note Insurer

	
58

	  	
Section 9.08

	
Surrender of Class A Insurance Policy

	
58

	 	 
	
ARTICLE X SUPPLEMENTAL INDENTURES

	
58

	 	 	 	 
	  	
Section 10.01

	
Supplemental Indentures without Consent of the Noteholders

	
58

	  	
Section 10.02

	
Supplemental Indentures with Consent of the Noteholders

	
59

	  	
Section 10.03

	
Execution of Supplemental Indentures

	
60

	  	
Section 10.04

	
Effect of Supplemental Indentures

	
60

	  	
Section 10.05

	
Reference in Notes to Supplemental Indentures

	
61

	  	
Section 10.06

	
Amendments Affecting the Class A Note Insurer; Consent of Note Insurer

	
61

	  	
Section 10.07

	
Back-Up Servicer Consent

	
61

	  	
Section 10.08

	
Amendments to the Lockbox Intercreditor Agreement

	
61

	 	 
	
ARTICLE XI REDEMPTIONS AND PREPAYMENTS OF NOTES

	
61

	 	 	 	 
	  	
Section 11.01

	
Redemptions of Notes

	
61

	  	
Section 11.02

	
Redemption Procedures

	
62

	  	
Section 11.03

	
Notice of Redemption to Noteholders

	
63

	  	
Section 11.04

	
Amounts Payable on Redemption Date

	
63

	  	
Section 11.05

	
Release of Contract Assets in Connection with Redemptions

	
64

	  	
Section 11.06

	
Auction of Collateral

	
64

	 	 
	
ARTICLE XII REPRESENTATIONS, WARRANTIES AND COVENANTS

	
65

	 	 	 	 
	  	
Section 12.01

	
Representations and Warranties

	
65

	  	
Section 12.02

	
Covenants

	
71

	 	 
	
ARTICLE XIII ACCOUNTS AND ACCOUNTINGS

	
77

	 	 	 	 
	  	
Section 13.01

	
Collection of Money

	
77

	  	
Section 13.02

	
Establishment of Trust Accounts

	
77

	  	
Section 13.03

	
Collection Account

	
79

	  	
Section 13.04

	
Reserve Account

	
84

  

iii

  

 

 

	  	
Section 13.05

	
Servicer Transition Account

	
85

	  	
Section 13.06

	
Prefunding Account

	
85

	  	
Section 13.07

	
Capitalized Interest Account

	
86

	  	
Section 13.08

	
Reports to the Noteholders

	
86

	  	
Section 13.09

	
Monthly Servicing Reports

	
87

	 	 
	
ARTICLE XIV PROVISIONS OF GENERAL APPLICATION

	
87

	 	 	 	 
	  	
Section 14.01

	
General Provisions

	
87

	  	
Section 14.02

	
Acts of Noteholders

	
87

	  	
Section 14.03

	
Notices

	
88

	  	
Section 14.04

	
Notices to Noteholders; Waiver

	
88

	  	
Section 14.05

	
Successors and Assigns

	
89

	  	
Section 14.06

	
Severability; No Waiver

	
89

	  	
Section 14.07

	
Benefits of Indenture Limited to Parties and Express Third Party Beneficiaries

	
89

	  	
Section 14.08

	
Legal Holidays

	
90

	  	
Section 14.09

	
Governing Law; Waiver of Jury Trial; Consent to Jurisdiction

	
90

	  	
Section 14.10

	
Counterparts; Entire Agreement

	
90

	  	
Section 14.11

	
Notifications

	
91

	  	
Section 14.12

	
No Petition

	
91

	  	
Section 14.13

	
Assignment

	
91

	  	  	  	  
	
Schedule I

	
Contract Schedule

	  
	
Schedule II

	
Definitions Annex

	  

  

iv

  

 

	
  

	
EXHIBITS

 

	
A-1

	
Form of Global Class A-1A Note

	  
	
A-2

	
Form of Definitive Class A-1A Note

	  
	
A-3

	
Form of Global Class A-1B Note

	  
	
A-4

	
Form of Definitive Class A-1B Note

	  
	
A-3

	
Form of Global Class A-2 Note

	  
	
A-4

	
Form of Definitive Class A-2 Note

	  
	
B-1

	
Form of Global Class B Note

	  
	
B-2

	
Form of Definitive Class B Note

	  
	
C-1

	
Form of Global Class C Note

	  
	
C-2

	
Form of Definitive Class C Note

	  
	
D-1

	
Form of Global Class D Note

	  
	
D-2

	
Form of Definitive Class D Note

	  
	
E-1

	
Form of Global Class E-1 Note

	  
	
E-2

	
Form of Definitive Class E-1 Note

	  
	
E-3

	
Form of Global Class E-2 Note

	  
	
E-4

	
Form of Definitive Class E-2 Note

	  
	
F-1

	
Form of Request for Release

	  
	
F-2

	
Form of Return of Documents to Custodian

	  
	
G

	
Form of Custodian and Trustee Certificate

	  
	
H

	
Form of Release Agreement Re:  Existing Indebtedness

	  
	
I

	
Form of Investor Certificate

	  
	
J

	
Form of Transfer Certificate

	  

 

 

v

 

 

This Indenture, dated as of September 7, 2011 (as amended, supplemented or modified from time to time, this “Indenture”), is entered into between LEAF RECEIVABLES FUNDING 7, LLC, a Delaware limited liability company, as Issuer and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as Trustee and as Custodian.

 

 

PRELIMINARY STATEMENT

 

The Issuer has duly authorized the execution and delivery of this Indenture to provide for the issuance of its Equipment Contract Backed Notes, Series 2011-2 (the “Notes”), issuable as provided in this Indenture.  All covenants and agreements made by the Issuer herein are for the benefit and security of the Noteholders and the Class A Note Insurer.  The Issuer and the Custodian are entering into this Indenture, and the Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

 

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

 

 

GRANTING CLAUSE

 

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

 

 

 

 

 

 

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

 

ARTICLE I

DEFINITIONS

 

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

 

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

 

ARTICLE II

NOTE FORM

 

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

 

Section 2.02                      Multiple Classes of Notes; Form for Each Class; Rights of Each Class.  This Indenture provides for the issuance by the Issuer of eight classes of Notes, the Class A-1A Notes, the Class A-1B Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, 

 

 

 

- 2 -

 

 

the Class E-1 Notes and the Class E-2 Notes.  Each Note shall bear upon its face the designation of the Class to which it belongs.  Each Class A-1A Note issued in the form of a Global Note shall be in the form of Exhibit A-1 attached hereto, and each Class A-1A Note issued in the form of a Definitive Note shall be in the form of Exhibit A-2 attached hereto. Each Class A-1B Note issued in the form of a Global Note shall be in the form of Exhibit A-3 attached hereto, and each Class A-1B Note issued in the form of a Definitive Note shall be in the form of Exhibit A-4 attached hereto. Each Class A-2 Note issued in the form of a Global Note shall be in the form of Exhibit A-5 attached hereto, and each Class A-2 Note issued in the form of a Definitive Note shall be in the form of Exhibit A-6 attached hereto. Each Class B Note issued in the form of a Global Note shall be in the form of Exhibit B-1 attached hereto, and each Class B Note issued in the form of a Definitive Note shall be in the form of Exhibit B-2 attached hereto. Each Class C Note issued in the form of a Global Note shall be in the form of Exhibit C-1 attached hereto, and each Class C Note issued in the form of a Definitive Note shall be in the form of Exhibit C-2 attached hereto. Each Class D Note issued in the form of a Global Note shall be in the form of Exhibit D-1 attached hereto, and each Class D Note issued in the form of a Definitive Note shall be in the form of Exhibit D-2 attached hereto. Each Class E-1 Note issued in the form of a Global Note shall be in the form of Exhibit E-1 attached hereto, and each Class E-1 Note issued in the form of a Definitive Note shall be in the form of Exhibit E-2 attached hereto. Each Class E-2 Note issued in the form of a Global Note shall be in the form of Exhibit E-3 attached hereto, and each Class E-2 Note issued in the form of a Definitive Note shall be in the form of Exhibit E-4 attached hereto. All Notes in the same Class shall be in substantially identical form except for differences in registration information and denomination and such other variations as may be permitted by this Indenture.

 

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

 

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

 

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

 

  

- 3 -

  

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  

- 4 -

  

 

(d)           Each Note issued under this Indenture shall be in all respects equally and ratably secured with each other Note by the Collateral Granted by the Issuer hereunder.  Each Note shall be entitled to the benefits hereof, without preference, priority or distinction on account of the actual time or times of authentication and delivery, all in accordance with the terms and provisions of this Indenture.  Notwithstanding the foregoing, all cash amounts shall be applied by the Trustee in accordance with Section 13.03(c) and the other the express provisions hereof.

 

Section 2.03                      Denomination.  The Initial Note Balance of the Class A-1A Notes that may be authenticated and delivered under this Indenture is $15,000,000, the Initial Note Balance of the Class A-1B Notes that may be authenticated and delivered under this Indenture is $5,000,000, the Initial Note Balance of the Class A-2 Notes that may be authenticated and delivered under this Indenture is $61,995,000, the Initial Note Balance of the Class B Notes that may be authenticated and delivered under this Indenture is $5,403,000, the Initial Note Balance of the Class C Notes that may be authenticated and delivered under this Indenture is $6,907,000, the Initial Note Balance of the Class D Notes that may be authenticated and delivered under this Indenture is $3,119,000, the Initial Note Balance of the Class E-1 Notes that may be authenticated and delivered under this Indenture is $4,234,000 and the Initial Note Balance of the Class E-2 Notes that may be authenticated and delivered under this Indenture is $3,342,000, except for Notes of the same Class authenticated and delivered upon registration of transfer, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.06, 2.08 or 10.05.  The Notes shall be issuable only as registered Notes without coupons in the denominations of at least $100,000 with respect to any Note and multiples of $1,000 for any amount in excess thereof; provided that the foregoing shall not restrict or prevent the transfer, in accordance with Sections 2.06 and 2.07, of any “stub” Note with a remaining Outstanding Note Balance of less than $100,000 with respect to any Note.

 

Section 2.04                      Execution, Authentication, Delivery and Dating.  The Notes shall be executed on behalf of the Issuer by the manual or facsimile signature of one of its authorized officers.  Notes bearing the manual or facsimile signatures of individuals who were at any time authorized officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices subsequent to the authentication or delivery of such Notes.

 

Each Note shall be dated as of the date of its authentication.  No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Trustee upon receipt of an Issuer Order or by any Authenticating Agent by the manual signature of one of its authorized officers, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

 

Section 2.05                      Issuance of Definitive Notes.  If Book-Entry Notes have been issued with respect to any Class and (a) the Issuer advises the Trustee that the Security Depository is no longer willing or able to discharge properly its responsibilities with respect to such Class and the Trustee or the Issuer is unable to locate a qualified successor,  (b) the Issuer at its option elects to terminate the book-entry system through DTC, or (c) after the occurrence of an Event of Default, Noteholders of not less than 50% of the Outstanding Note Balance of Notes of any Class advise the Trustee and DTC that it is no longer in the best interests of such Class to have the Notes of such Class in book-entry form, then upon surrender to the Trustee of any such Notes by the Security Depository, accompanied by registration instructions from the Security Depository for registration of Definitive Notes, the Issuer shall execute and the Trustee shall authenticate and the Note Registrar shall deliver such Definitive Notes to the applicable Noteholders.  Neither the Issuer nor the Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. The Trustee shall recognize the Holders of such Definitive Notes as Noteholders hereunder.

 

  

- 5 -

  

 

Section 2.06                      Registration, Registration of Transfer and Exchange.

 

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

 

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

 

(c)           With respect to any Definitive Note, at the option of the Noteholder thereof, Notes may be exchanged for other Notes of any authorized denominations (together with any “stub note” reflecting the remaining Outstanding Note Balance of such Note(s) that is less than the minimum authorized denomination), Outstanding Note Balance and Stated Maturity Date, upon surrender of the Notes to be exchanged at the Corporate Trust Office.  Whenever any Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee or its agents shall authenticate and deliver, the Notes which the Noteholder making the exchange is entitled to receive.

 

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

 

  

- 6 -

  

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(ii)           It understands that the Notes have not been registered under, and were transferred to it in a transaction not involving any public offering within the meaning of, the Securities Act, and that if in the future it decides to re-offer, resell, pledge or otherwise transfer such Notes it will do so only in accordance with applicable state securities laws and pursuant to Rule 144A to a Person whom the seller reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A, purchasing for its own account or for the account of a QIB, whom the holder has informed that such re-offer, resale, pledge or other transfer is being made in reliance on Rule 144A or to the Issuer pursuant to the terms of the Indenture.

 

 

  

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

 

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

 

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

 

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

 

(vii)           (A) It is not (and for so long as it holds any Notes or an interest therein will not be), and is not acting on behalf of (and for so long as it holds any Notes or an interest herein will not be acting on behalf of), an “employee benefit plan” as defined in Section 3(3) of ERISA that is subject to Title I of ERISA, a plan described in Section 4975(e)(1) of the Code or an entity which is deemed to hold the assets of any such plan (“Plan Assets”) pursuant to 29 C.F.R. Section 2510.3-101 as modified by Section 3(42) of ERISA (the “Plan Asset Regulation”) (each a “Benefit Plan Investor”), (B) in the case of a Class A-1A Note, Class A-1B Note, Class A-2 Note, Class B Note, Class C Note, Class D Note or Class E-1 Note, (i) its acquisition and continued holding of such Note will be covered by a statutory exemption or a prohibited transaction class exemption issued by the United States Department of Labor, (ii) at the time of acquisition such Notes are rated at least investment grade and (iii) it believes that such Notes are properly treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulations and agrees to so treat such Notes or (C) in the case of a Class A-1A Note, Class A-1B Note, Class A-2 Note, Class B Note, Class C Note, Class D Note or Class E-1 Note, it has provided the Trustee with an opinion of counsel, which opinion of counsel will not be at the expense of the Trustee, the Issuer, the Servicer, the Class A Note Insurer or the Initial Purchaser, which opines that the purchase, holding and transfer of such Note or interest therein is permissible under applicable law, will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Trustee, the Issuer, the Servicer or the Initial Purchaser to any obligation in addition to those undertaken herein.

 

  

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

 

(ix)           [Reserved];

 

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

 

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

 

For Rule 144A Global Notes Only:  Unless this Note is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the transferor of such Note or its agent for registration of transfer, exchange or payment, and any Note issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or the use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

 

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

  

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WILL NOT BE), AND IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS THIS SECURITY OR AN INTEREST HEREIN WILL NOT BE ACTING ON BEHALF OF), AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR AN ENTITY WHICH IS DEEMED TO HOLD THE ASSETS OF ANY SUCH PLAN (“PLAN ASSETS”) PURSUANT TO 29 C.F.R. SECTION 2510.3-101 AS MODIFIED BY SECTION 3(42) OF ERISA (THE “PLAN ASSET REGULATION”) (EACH A “BENEFIT PLAN INVESTOR”), (B) IN THE CASE OF A CLASS A-1A NOTE, CLASS A-1B NOTE, CLASS A-2 NOTE, A CLASS B NOTE, A CLASS C NOTE, CLASS D NOTE OR A CLASS E-1 NOTE (I) ITS PURCHASE AND OWNERSHIP OF THIS SECURITY WILL BE COVERED BY A PROHIBITED TRANSACTION CLASS EXEMPTION ISSUED BY THE UNITED STATES DEPARTMENT OF LABOR, (II) AT THE TIME OF ACQUISITION SUCH NOTES ARE RATED AT LEAST INVESTMENT GRADE AND (III) IT BELIEVES THAT SUCH NOTES ARE PROPERLY TREATED AS INDEBTEDNESS

WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET REGULATIONS AND AGREES TO SO TREAT SUCH NOTES  OR (C) IN THE CASE OF A CLASS A-1A NOTE, CLASS A-1B NOTE, CLASS A-2 NOTE, A CLASS B NOTE, A CLASS C NOTE, A CLASS D NOTE OR A CLASS E-1 NOTE, IT HAS PROVIDED THE TRUSTEE WITH AN OPINION OF COUNSEL, WHICH OPINION OF COUNSEL WILL NOT BE AT THE EXPENSE OF THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER, OR THE INITIAL PURCHASER, WHICH OPINES THAT THE PURCHASE, HOLDING AND TRANSFER OF SUCH NOTE OR INTEREST THEREIN IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE INDENTURE. THE NOTES OR ANY BENEFICIAL INTEREST HEREIN MAY BE TRANSFERRED ONLY IN PERMITTED DENOMINATIONS SPECIFIED IN THE INDENTURE.  ACCORDINGLY, AN INVESTOR IN THIS NOTE MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

 

 

  

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(xii)           It acknowledges that the Issuer, the Servicer, the Initial Purchaser and others will rely on the truth and accuracy of the foregoing acknowledgments, representations and agreements, and agrees that if any of the foregoing acknowledgments, representations and agreements deemed to have been made by it are no longer accurate, it shall promptly notify the Issuer, the Servicer and the Initial Purchaser.

 

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

 

Section 2.07                      Mutilated, Destroyed, Lost or Stolen Note. (a) If (i) any mutilated Note is surrendered to the Trustee or the Issuer, or the Trustee and the Issuer receive evidence to their reasonable satisfaction of the destruction, loss or theft of any Note, and (ii) in the case of a destroyed, lost, or stolen Note, there is delivered to the Trustee and the Issuer such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Trustee and the Issuer that such Note has been acquired by a bona fide purchaser and provided that the requirements of Section 8-405 of the UCC are satisfied, the Issuer shall execute and, upon a written request therefor by the Trustee and the Issuer shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of the same Class, tenor and Outstanding Note Balance, bearing a number not contemporaneously outstanding. If, after the delivery of such new Note, a bona fide purchaser of the original Note in lieu of which such new Note was issued presents such original Note for payment, the Trustee and the Issuer shall be entitled to recover such new Note from the Person to whom it was delivered or any Person taking title there from, except a bona fide purchaser, and the Trustee and the Issuer shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Trustee and the Issuer, in connection therewith. If any such mutilated, destroyed, lost or stolen Note shall have become or shall be about to become due and payable in full, or shall have been called for redemption in full, instead of issuing a new Note, the Issuer may pay such Note without surrender thereof, except that any mutilated Note shall be surrendered.

 

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

 

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

 

 

  

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The provisions of this Section 2.07 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

 

Section 2.08                      Payment of Principal and Interest; Rights Preserved.

 

(a)           For each applicable Interest Accrual Period, the Notes of each Class shall accrue interest on the Outstanding Note Balance thereof at the Note Rate applicable to such Class; provided however, that with respect to the Subordinated Notes and on each Payment Date, interest shall be deemed not to have accrued during the previous Interest Accrual Period on an amount equal to the Impairment of such Class of Subordinated Notes. Notwithstanding the foregoing, if, on any subsequent Payment Date and with respect to each Class of Subordinated Notes, no Impairment is allocated to such Class of Subordinated Notes, all Deferred Interest for such Class of Subordinated Notes shall be deemed to have accrued during the immediately preceding Interest Accrual Period and be payable on such Payment Date as Note Current Interest. All interest accrued hereunder on the Notes of each Class shall be calculated on the basis of a three-hundred-sixty (360)-day year comprised of twelve 30-day months. All interest accrued hereunder on the Notes of each Class shall accrue through the day preceding the Stated Maturity Date for such Class and, to the extent that the payment of such interest shall be legally enforceable, (except with respect to Deferred Interest) on any overdue payment of interest at the Note Rate from the date such interest becomes due and payable (giving effect to any applicable grace periods herein) until fully paid. All accrued interest shall be due and payable in arrears on each Payment Date and shall be paid by the Trustee to the Noteholders in accordance with Section 13.03.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

(b)           The principal of each Note shall be payable on each Payment Date beginning on the Initial Payment Date unless such Note becomes due and payable at an earlier date by declaration of acceleration in accordance with Article VI or call for redemption in accordance with Article XI.  The installment of principal due on the Class A-1A Notes on any Payment Date shall, to the extent of Available Funds in accordance with Section 13.03 on such Payment Date, be paid as set forth in Section 13.03(c)(xiii) or Section 13.03(d)(xiii), as applicable. The installment of principal due on the Class A-1B Notes on any Payment Date shall, to the extent of Available Funds in accordance with Section 13.03 on such Payment Date, be paid as set forth in Section 13.03(c)(xiii) or Section 13.03(d)(xiv), as applicable. The installment of principal due on the Class A-2 Notes on any Payment Date shall, to the extent of Available Funds in accordance with Section 13.03 on such Payment Date, be paid as set forth in Section 13.03(c)(xiii) or Section 13.03(d)(xv), as applicable. The installment of principal due on the Class B Notes on any Payment Date shall, to the extent of Available Funds in accordance with Section 13.03 on such Payment Date, be paid as set forth in Section 13.03(c)(xv) or Section 13.03(d)(xvii), as applicable. The installment of principal due on the Class C Notes on any Payment Date shall, to the extent of Available Funds in accordance with Section 13.03 on such Payment Date, be paid as set forth in Section 13.03(c)(xvi) or Section 13.03(d)(xviii), as applicable. The installment of principal due on the Class D Notes on any Payment Date shall, to the extent of Available Funds in accordance with Section 13.03 on such Payment Date, be paid as set forth in Section 13.03(c)(xvii) or Section 13.03(d)(xix), as applicable. The installment of principal due on the Class E-1 Notes on any Payment Date shall, to the extent of Available Funds in accordance with Section 13.03 on such Payment Date, be paid as set forth in Section 13.03(c)(xviii) or Section 

 

  

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13.03(d)(xx), as applicable.  The installment of principal due on the Class E-2 Notes on any Payment Date shall, to the extent of Available Funds in accordance with Section 13.03 on such Payment Date, be paid as set forth in Section 13.03(c)(xix) or Section 13.03(d)(xxi), as applicable.  In each foregoing case, installments of principal shall be paid no later than the applicable Stated Maturity Date. The Outstanding Note Balance of any Note (together with interest thereon and all other amounts due and payable hereunder or in respect of the Notes) shall be due and payable in full on the Stated Maturity Date for such Note.  All reductions in the Outstanding Note Balance of a Note effected by payment of such installments of principal shall be binding upon all future Noteholders of such Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal shall be payable to Noteholders in the same Class on a pro rata basis based upon the relative Outstanding Note Balance of the Notes in such Class as of the related date of determination; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

(c)           The principal of and interest on the Notes, and other amounts payable to the Noteholders under Section 13.03, are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Person whose name appears as the Registered Holder of such Note on the Note Register at the address of such Person as it appears on the Note Register or, at the option of any Noteholder, by wire transfer in immediately available funds to the account specified in writing to the Trustee by such Registered Holder at least five (5) Business Days prior to the Record Date for the Payment Date on which wire transfers will commence, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.  All payments on the Notes shall be paid without any requirement of presentment.  The Issuer shall notify the Person in whose name a Note is registered at the close of business on the Record Date immediately preceding the Payment Date on which the Issuer expects that the final installment of principal of such Note will be paid.  Such notice shall be mailed no later than the tenth (10th) day prior to such Payment Date and shall specify the place where such Note may be surrendered.  Funds representing any such checks returned undeliverable shall be held in accordance with Section 7.15.  Each Noteholder shall promptly surrender its Note to the Trustee at the Corporate Trust Office or in the case of mutilated, destroyed, lost or stolen Notes, as provided in Section 2.07, upon payment of the final installment of principal of such Note.

 

Section 2.09                      Persons Deemed Owner.  Prior to due presentment for registration of transfer of any Note, the Issuer, the Trustee, the Note Registrar, the Class A Note Insurer, the Paying Agent and any agent of any of the foregoing shall treat the Person in whose name any Note is registered in the Note Register as the owner of such Note for the purpose of receiving payments of principal and interest on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Issuer, the Trustee, the Note Registrar, the Class A Note Insurer, the Paying Agent or any agent of the foregoing shall be affected by notice to the contrary.

 

 

  

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Section 2.10                      Cancellation.  All Notes surrendered to the Trustee for payment, registration of transfer or exchange (including Notes surrendered to any Person other than the Trustee which shall be delivered to the Trustee) shall be promptly canceled by the Trustee.  No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section 2.11, except as expressly permitted by this Indenture.  All canceled Notes held by the Trustee shall be disposed of by the Trustee in accordance with its standard practice.

 

Section 2.11                      Notices to Security Depository. Whenever any notice or other communication is required to be given to Noteholders of any Class with respect to which Book-Entry Notes have been issued, unless and until Definitive Notes shall have been issued to the related Noteholders, the Trustee shall give all such notices and communications to the applicable Security Depository.

 

Section 2.12                      Tax Treatment; Withholding Taxes.

 

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

 

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

 

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

 

  

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ARTICLE III

INITIAL, SUBSTITUTE AND ADDITIONAL CONTRACTS

 

Section 3.01                      Conditions Precedent to the Acquisition of Initial, Substitute and Additional Contracts.  Each acquisition by the Issuer of an Initial Contract, Substitute Contract or Additional Contract from the Transferor on any Acquisition Date is subject to, in addition to the conditions specified in Section 3.04 of the Servicing Agreement, in the case of Substitute Contracts, and Section 13.06 hereof, in the case of Additional Contracts, satisfaction of the following conditions precedent on or prior to the relevant date specified below:

 

(a)           By 10:00 am (New York time) on the Business Day prior to any proposed Acquisition Date, the Transferor shall have delivered to the Issuer, the Trustee, the Custodian, the Back-up Servicer and the Class A Note Insurer (A) a draft Transfer Certificate substantially in the form set forth on Exhibit J attached hereto (the “Transfer Certificate”), (B) a draft Contract Schedule (in the case of the Initial Contracts) or otherwise an Amendment to the Contract Schedule containing the information required to be provided with respect to the Initial Contracts, Substitute Contracts and/or Additional Contracts and related Contract Assets to be acquired by the Issuer on such Acquisition Date, as specified in the definition of Contract Schedule, (C) if applicable, a draft of the Release Agreement relating to any Existing Indebtedness, and (D) a draft Assignment Agreement with respect to each Initial Contract, Substitute Contract and Additional Contract to be acquired by the Issuer on such Acquisition Date.

 

(b)           By 10:00 am (New York time) on the Business Day prior to any proposed Acquisition Date of any Substitute Contracts, the Issuer shall have delivered or shall have caused to be delivered to the Custodian, the original Contracts to be substituted as described in the proposed Amendment to the Contract Schedule and the related Contract Files.

 

(c)           By 11:00 am (New York time) on the proposed Acquisition Date, the Transferor shall cause to be delivered the final executed Assignment Agreement, Contract Schedule (in the case of the Initial Contracts) or otherwise an Amendment to the Contract Schedule, and Release Agreement (if applicable) along with a final executed Transfer Certificate, in each case, such document or certificate containing changes from the draft document delivered pursuant to Section 3.01(a) above, if any, reflecting corrections or deletions of exceptions noted in the draft Contract Schedule (in the case of the Initial Contracts) or otherwise draft Amendment to the Contract Schedule resulting from the Custodian’s review of the related Initial Contracts, Substitute Contracts and Additional Contracts and the Contract Files related thereto pursuant to Section 4.03(b).  The Transfer Certificate shall confirm that (A) each Initial Contract, Substitute Contract or Additional Contract, as applicable, is a Contract that satisfies each of the representations and warranties set forth in Clause (3) or (4) of the related Assignment Agreement, (B) all applicable filings required under Sections 4.01(a)(v) and 4.02 have been made or are in effect, (C) no Event of Default or Cumulative Net Loss Trigger Event shall exist prior to or after giving effect to the acquisition of such Initial Contracts, Substitute Contracts and/or Additional Contracts, (D) the Overconcentration Test and any additional overconcentration tests specified in the Insurance Agreement after giving effect to the acquisition of such Contract have been satisfied and (E) all other conditions to the acquisition of Substitute Contracts or Additional Contracts, as applicable, specified in this Section 3.01 and Section 3.04(b) of the Servicing Agreement (in the case of Substitute Contracts) and Section 13.06 hereof (in the case of Additional Contracts) have been satisfied.

 

 

  

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(d)           Not later than the tenth (10th) Business Day after the related Acquisition Date, the Custodian shall deliver to the Issuer, the Trustee, the Servicer and the Class A Note Insurer, an executed Custodian Certificate and Exception Report, resulting from the Custodian’s review of the Initial Contracts, Substitute Contracts or Additional Contracts, as applicable. In accordance with Section 4.04(a), each Contract identified as having exceptions in such Exception Report shall be subject to a Warranty Event unless the exceptions are waived by the Control Party or corrected within thirty (30) days of the date of delivery of that Exception Report.

 

A document or certificate described in clause (a), (b), (c) or (d) above shall be regarded as timely delivered if it is delivered by fax (with written confirmation of transmission) as of the applicable time described above; provided that, the originally executed copy shall be delivered by the applicable party promptly thereafter.

 

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

 

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

 

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

 

(h)           In addition to the conditions specified above, at no time may the sum of (1) the aggregate Discounted Contract Balance of Substitute Contracts (as measured on their respective Cut-Off Dates) and (2) the aggregate Discounted Contract Balance of Contracts (as measured on their respective Cut-Off Dates) repurchased by the Transferor, but excluding Contracts repurchased pursuant to Warranty Events pursuant to Section 6.1(a) of the Purchase and Contribution Agreement or Section 3.09 of the Servicing Agreement, exceed 9.00% of the aggregate Discounted Contract Balance of all Initial Contracts (as measured on the Initial Cut-Off Date) and the aggregate Discounted Contract Balance of all Additional Contracts (as measured on their respective Cut-Off Dates). The Trustee and Custodian shall have no duty to monitor the limit set forth in this Section 3.01(h).

 

 

  

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(i)           With respect to any Substitute Contracts, as of the related Cut-Off Date, the Substitute Contracts then being transferred have a Discounted Contract Balance that is not less than the Discounted Contract Balance of the Contracts being replaced, and the last remaining Scheduled Payment date under such Substitute Contracts shall not be later than the latest Stated Maturity Date for the Notes and such Substitute Contracts do not have remaining terms which would materially extend the life of the Notes.

 

 

 

ARTICLE IV

ISSUANCE OF NOTES; CERTAIN ISSUER OBLIGATIONS

 

 

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

 

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

 

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

 

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

 

(iii)           certified copies of requests for information or copies (or a similar search report certified by a party acceptable to the Control Party and the Initial Purchaser), dated a date reasonably near to the Closing Date (no earlier than ten (10) days prior to the Closing Date), listing all effective tax and judgment liens and financing statements which name the Seller or the Transferor as debtor and which are filed in the jurisdictions in which the statement referred to in clause (v)(1) below (in the case of the Seller) or (v)(2)  (in the case of the Transferor) were or are to be filed, together with copies of such tax and judgment liens and financing statements (none of which, other than financing statement naming the party under the Transaction Documents to which transfers (including grants of security interests) thereunder purport to have been made, shall cover any of the property purported to be conveyed thereunder unless such financing statements are to be released prior to or on the Closing Date);

 

 

  

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(iv)           certified copies of requests for information or copies (or a similar search report certified by a party acceptable to the Control Party’s and the Initial Purchaser’s counsel), dated a date reasonably near to the Closing Date (no earlier than ten (10) days prior to the Closing Date), listing all effective tax and judgment liens and financing statements which name Issuer (under its present name and any previous name) as debtor and which are filed in the jurisdictions in which the statement referred to in clause (v)(1) below was or is to be filed, together with copies of such tax and judgment liens and financing statements (none of which, other than financing statements naming the party under the Transaction Documents to which transfers (including grants of security interests) thereunder purport to have been made, shall cover any of the property purported to be conveyed thereunder unless such financing statements are to be released prior to or on the Closing Date);

 

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

 

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

 

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

 

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

 

(4)           UCC-3 financing statement releases evidencing the release of all Liens related to the Existing Indebtedness relating to the Initial Contracts;

 

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

 

(vi)           a fully executed original counterpart of each Assignment Agreement related to the initial Contract Assets, the Purchase and Contribution Agreement, the Purchase and Sale Agreement, the Indemnification Agreement, the Premium Letter, the Insurance Agreement, this Indenture, the Servicing Agreement, the Securities Account Control Agreement and the Note Purchase Agreement shall have been received by the Initial Purchaser, the Class A Note Insurer or their respective agents;

 

 

  

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(vii)           a copy of the fully executed Lockbox Intercreditor Agreement and the Joinder to Lockbox Intercreditor Agreement shall have been received by the Initial Purchaser, the Class A Note Insurer or their respective agents;

 

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

 

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

 

(x)           confirmation (A) that the Rating Agencies have issued rating letters confirming ratings for the Notes as set forth in the Offering Circular and (B) from the Class A Note Insurer that it or its agents have received all rating letters or other rating confirmations as it may reasonably require;

 

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

 

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

 

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

 

 

  

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

 

(xv)           issuance of the Class A Insurance Policy and delivery of the one and only original of the same to the Trustee, with a receipt thereof delivered to the Initial Purchaser;

 

(xvi)           Reserved;

 

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

 

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

 

Section 4.02                      Security for Notes.

 

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

 

 

  

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

 

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

 

Section 4.03                      Review of Contract Files.

 

(a)           On or prior to the Closing Date and each Acquisition Date, the Issuer shall cause to be delivered to the Custodian the documents comprising the Contract Files for the Contracts to be acquired on such date; provided that the Contract Files delivered on the Closing Date or any Acquisition Date shall be subject to review and correction as described below in this Section 4.03 and Section 4.04.  Each Contract and the folder containing other Contract Files documents for such Contract shall be clearly marked with a LEAF Contract Number, which LEAF Contract Number shall be used by the Issuer, the Trustee and the Custodian to identify such Contract on the Contract Schedule.

 

(b)           Within ten (10) Business Days of the Closing Date and each Acquisition Date, for each Initial Contract, Additional Contract and Substitute Contract, as applicable, the Custodian will review the Contract Files related to each such Initial Contract or Additional Contract and Substitute Contract, as applicable, and shall perform such reviews as are sufficient to enable it to confirm the items required to be certified by it in the Custodian Certificate in the form attached hereto as Exhibit G.  By execution and delivery of any such Custodian Certificates, the Custodian shall evidence completion of such review and confirmation.  The Custodian shall include in an Exception Report, if any, delivered in accordance with Section 3.01(d) any failure of a document to correspond to the information on the initial Contract Schedule (in the case of the Initial Contracts) or the Amendment to the Contract Schedule (in the case of Additional Contracts and Substitute Contracts) or the absence of any one or more of the documents comprising the Contract Files for such Contract.

 

(c)           If any Contracts or Contract Assets to be pledged to the Trustee are Contracts or Contract Assets that at any time were subject to a Lien in favor of a Person that has held a Lien thereon, concurrently with the delivery of the related Transferor Certificate pursuant to Section 3.01, the Issuer shall have delivered to (x) the Custodian (with a copy to the Class A Note Insurer and the Trustee) a facsimile copy or an original executed Release Agreement from each Person that has held a Lien on the applicable Contract and/or Contract Assets, together with the certification in the Officer’s Certificate that each such Release Agreement constitutes a release of such Person’s security interest in each such Contract and/or Contract Asset (and the other Collateral related thereto), and (y) the Custodian (with a copy to the Class A Note Insurer and the Trustee) the original UCC partial or full release relating to the Release Agreement described in clause (x) above.

 

  

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

 

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

 

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

 

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

 

Section 4.04                      Defective Contracts.

 

 

  

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      (a)           Check-in Procedures. If, upon its examination of any Contract File in accordance with Section 4.03 hereof, the Custodian determines that such Contract File does not satisfy the requirements described in Section 4.03(b), or is unable to confirm that such requirements have been met, the Custodian shall promptly notify the Servicer, the Transferor and the Class A Note Insurer by telephone or fax.  If the Transferor does not satisfy the Custodian in accordance with the foregoing sentence prior to the tenth (10th) Business Day after any applicable Acquisition Date, the Custodian shall return on such tenth (10th) Business Day the applicable Contract and related files to the Transferor, or as otherwise directed by the Transferor. Any such returned Contracts and related files shall be subject to a Warranty Event unless the exceptions are waived by the Control Party or corrected within thirty (30) days of the date of the delivery of the related Exception Report.

 

(b)           Warranty Repurchases. If a Responsible Officer of the Trustee, or if another party to any of the Transaction Documents, notifies the Servicer, the Transferor, the Back-up Servicer and the Issuer of the existence of any Warranty Event, the Servicer (pursuant to the Servicing Agreement) or the Transferor (pursuant to the Purchase and Contribution Agreement) shall (i) cure the breach(es) which caused the Warranty Event in all material respects or (ii) repurchase such Contract and related Contract Assets at the Contract Repurchase Price as required in accordance with Section 6.1(a) of the Purchase and Contribution Agreement, or substitute (if the Servicer) for such Contract a Substitute Contract as required in accordance with Section 3.09 of the Servicing Agreement.  If any such Contract is repurchased by the Transferor pursuant to the Purchase and Contribution Agreement or by the Servicer pursuant to the Servicing Agreement, and the Trustee has received a written request in the form attached hereto as Exhibit F-1 relating thereto, the Trustee shall, upon receipt of the applicable Contract Repurchase Price, but subject to Section 4.07 hereof, return the affected Contract and related files to the Issuer (or, if the Issuer so requests, directly to the Servicer or the Transferor, as the case may be), release its interest therein and in the related Contract Assets, and such items shall no longer constitute a Contract or Contract Asset hereunder and shall be released from the Lien of this Indenture.

 

Section 4.05                      Reserved.

 

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

 

Section 4.07                      Releases.

 

  

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

 

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

 

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

 

  

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ARTICLE V

SATISFACTION AND DISCHARGE

 

Section 5.01                      Satisfaction and Discharge of Indenture.

 

(a)           Following (i) payment in full of (A) all of the Notes, (B) all amounts due to the Class A Note Insurer under the Insurance Agreement, (C) the fees and charges and reimbursements of the Trustee, the Back-up Servicer, the Class A Note Insurer, the Transferor, the Custodian and the Noteholders and (D) all other obligations of the Issuer under this Indenture and the other Transaction Documents, (ii) receipt by the Class A Note Insurer of the original Class A Insurance Policy surrendered to it by the Trustee, and (iii) a written request by the Issuer to the Trustee to terminate this Indenture and release the Collateral, accompanied by a written direction from the Control Party, if the Class A Note Insurer is the Control Party, that the Trustee is authorized to discharge and terminate this Indenture and release the Collateral, this Indenture shall be discharged and terminated and the lien of this Indenture on the Collateral thereupon shall be released.  All Contract Files shall then include an Officer’s Certificate from the Issuer, stating that all conditions precedent provided for herein relating to the satisfaction and discharge of this Indenture with respect to the Notes have been complied with.

 

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

 

ARTICLE VI

DEFAULTS AND REMEDIES

 

Section 6.01                      Events of Default.

 

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

 

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

 

 

  

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(b)           the Issuer, Servicer or the Transferor shall fail to perform or observe any covenant with respect to it set forth in any Transaction Document, and in each case such failure shall remain unremedied for (i) five (5) Business Days in the event of any breach of the reporting covenants set forth in Section 13.08 (other than Section 13.08(a) relating to the Trustee) and (ii) otherwise, thirty (30) Business Days after the earlier of (x) actual knowledge thereof by such Person or (y) receipt by such Person of written notice thereof;

 

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

 

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

 

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

 

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

 

(g)           any Class A-1A Note, Class A-1B Note, Class A-2 Note, Class B Note, Class C Note, Class D Note or Class E-1 Note shall cease to constitute debt for federal income tax purposes, as evidenced by a written determination by the Internal Revenue Service; or

 

(h)           an Event of Servicing Termination has occurred and the Back-up Servicer has declined to assume the obligations of the Servicer, and the Control Party, after good faith efforts, is unable to appoint a satisfactory successor Servicer within sixty (60) days of the Back-up Servicer declining such assumption; or

 

(i)           any draw shall occur on the Class A Insurance Policy.

 

Section 6.02                      Acceleration of Maturity; Rescission and Annulment. If an Event of Default exists, then, unless waived pursuant to Section 6.15 hereof, and in every such case, the Trustee may, subject to the consent of the Control Party, and shall, at the written direction of the Control Party, declare the Aggregate Outstanding Note Balance to be immediately due and payable, by notice given in writing to the Issuer and upon any such declaration, such principal and all accrued interest under the Notes shall become immediately due and payable without any presentment, demand, protest or other notice of any kind (except such notices as shall be expressly required by the provisions of this Indenture), all of which are hereby expressly waived by the Issuer; provided, that if such Event of Default consists of an Insolvency Event with respect to the Issuer, then all such principal and accrued interest shall be automatically due and payable without the need for any such notice or further action by any Person.

 

  

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

 

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

 

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

 

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

 

(3)           all overdue Class A Note Insurer Premium together with interest thereon and any unpaid Reimbursement Amounts; and

 

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

 

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

 

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

 

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

 

(a)           The Issuer covenants that, if an Event of Default shall occur and the Notes have been declared due and payable and such declaration has not been rescinded and annulled, the Issuer will pay to the Trustee, for the benefit of the Noteholders, the whole amount then due and payable on the Notes for principal and interest (with interest upon the overdue principal and overdue interest at the rate provided herein), any and all amounts due and payable to the Noteholders, the Transferor, the Class A Note Insurer, the Back-up Servicer, the Custodian, the Paying Agent and the Trustee and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of each of the Trustee, the Class A Note Insurer, the Paying Agent and the Noteholders and their respective agents and counsel.

 

  

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

 

(c)           If an Event of Default exists, the Trustee shall, at the written direction of the Control Party, proceed to protect and enforce the rights of the Noteholders, the Class A Note Insurer and the Paying Agent by such appropriate Proceedings as the Trustee, at the written direction of the Control Party, shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

 

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

 

(a)           institute Proceedings for the collection of all amounts remaining unpaid on the Notes or under this Indenture or the other Transaction Documents, including, without limitation, the Reimbursement Amount, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuer and the Collateral the monies adjudged due;

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 6.05                      Optional Preservation of Collateral.  If an Event of Default exists, the Trustee shall, upon written request from the Control Party, elect, by giving written notice of such election to the Issuer, to take possession of and retain the Collateral intact, collect or cause the

 

 

  

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

 

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

 

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

 

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

 

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

 

(d)           to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any receiver, assignee, trustee, liquidator, or sequestrator (or other similar official) in any such judicial Proceeding is hereby authorized by the Noteholders, the Class A Note Insurer and the Paying Agent to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to each such Person, to pay to the Trustee or such Person any amount due to it for the reasonable compensation, expenses, disbursements and advances of each of the Trustee and such other Person, their agents and counsel, and any other amounts due the Trustee under Section 7.07 or under the Insurance Agreement.

 

  

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

 

Section 6.07                      Trustee May Enforce Claims Without Possession of Notes.

 

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

 

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

 

Section 6.08                      Application of Money Collected.  If the Notes have been declared due and payable following an Event of Default and such declaration has not been rescinded or annulled, any money collected by the Trustee with respect to the Notes, the Class A Note Insurer and the other Transaction Documents pursuant to this Article VI or otherwise and any other money that may be held thereafter by the Trustee as security for the Notes, the Class A Note Insurer and the other Transaction Documents shall be applied in the order set forth in Section 13.03 on the earlier of the next Payment Date and such dates as the Trustee may (or shall, at the direction of the Control Party) designate for the release of such funds, to the same extent as if such date were a Payment Date.  Additionally, in the event any Class A Notes are accelerated due to an Event of Default, the Class A Note Insurer shall have the right (in addition to the obligation to pay Note Insurance Guaranteed Payments on the Class A Notes in accordance with the Class A Insurance Policy), but not the obligation, to make payments under the Class A Insurance Policy or otherwise of principal due on such Class A Notes, in whole or in part, on any Payment Date or Payment Dates following such acceleration as the Class A Note Insurer, in its sole discretion, shall elect.

 

Section 6.09                      Limitation on Suits.  So long as no Class A Note Insurer Default shall have occurred and be continuing, no Noteholder shall have any right to institute (or to cooperate in the institution of) any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder; provided that nothing in this Section 6.09 shall inhibit the right of any Noteholder to file a proof of claim in any suit or Proceeding instituted by someone other than such Noteholder.  Nothing in this Section 6.09 shall inhibit the right of the Class A Note Insurer to institute suit or any Proceeding for the enforcement of this Indenture.

 

 

  

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Section 6.10                      Unconditional Right of the Noteholders to Receive Principal and Interest.  Notwithstanding any other provision in this Indenture, each Noteholder shall have the right, which is absolute and unconditional, to receive payment of the principal and interest on such Note on the dates on which such principal and interest becomes due and payable and, subject to Section 6.09, to institute any Proceeding for the enforcement of any such payment, subject to the priority of payments set forth in Section 13.03(c) and/or (d), as applicable, and such right shall not be impaired without the consent of such Noteholder.

 

Section 6.11                      Restoration of Rights and Remedies.  If the Trustee, the Class A Note Insurer or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee, the Class A Note Insurer or to such Noteholder, then, and in every case, the Issuer, the Trustee, the Class A Note Insurer and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee, the Class A Note Insurer and the Noteholders shall continue as though no such Proceeding had been instituted.

 

Section 6.12                      Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of Section 2.07, no right or remedy herein conferred upon or reserved to the Trustee, the Class A Note Insurer or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 6.13                      Delay or Omission Not Waiver.  No delay or omission of the Trustee, the Class A Note Insurer or of any Noteholder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or any acquiescence therein.  Every right and remedy given by this Article VI or by law to the Trustee, the Class A Note Insurer or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee, the Class A Note Insurer or the Noteholders, as the case may be.

 

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

 

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

 

 

  

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

 

For purposes of the foregoing provisions and any other provisions in this Indenture permitting the Trustee to require an indemnity before taking actions, the Trustee agrees that an unsecured indeminity from a Noteholder or the Class A Note Insurer, so long as such party has an unsecured debt rating of at least BBBB by Moody's and Baa2 by S & P, shall be deemed satisfactory.

 

Section 6.15                      Waiver of Certain Events by the Control Party.

 

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

 

(i)           an Event of Default in the payment of interest on any Note when due or principal not paid at the Stated Maturity Date, except that the Class A Note Insurer, so long as it is the Control Party, shall be allowed to waive any Event of Default arising on account of non-payment of interest on or principal of any Class A Note that in either case has been paid by the Class A Note Insurer;

 

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

 

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

 

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

 

Section 6.16                      Additional Rights of Subordinate Noteholders.  At any time during the period from the first to occur of (i) the commencement of an Insolvency Event or any other insolvency proceeding with respect to the Issuer, (ii) the acceleration of the Class A Notes pursuant to Section 6.02 or (iii) the commencement of the foreclosure of any Collateral under this Article VI following the occurrence of an Event of Default, and without prejudice to any other rights of the Holders of the Class B Notes under the Transaction Documents, any one or more Holders of the Class B Notes (other than any Holder which is a LEAF Party or Affiliate thereof) shall initially have the sole right to deliver written notice, which notice shall be sent to the Trustee and the Class A Note Insurer (the “Class A Buyout Notice”) electing to purchase (without recourse, warranty or representation (other than that the Holders of such Class A Notes own such Class A Notes free and clear of any Liens created or granted by the Holder of such Class A Notes)) the entire (but not less than the entire) aggregate amount of Outstanding Class A Notes (and all associated rights, titles, claims and privileges associated therewith, excluding rights under the Class A Insurance Policy) for an amount (the “Class A Buyout Price”) equal to the sum of (i) the Outstanding Note Balance of, and accrued but unpaid interest on, the Class A Notes (excluding therefrom any premium or penalty otherwise payable) and (ii) all accrued and unpaid Reimbursement Amounts and Class A Note Insurer Premiums owing to the Class A Note Insurer.  Following any such payment, the Class A Insurance Policy shall be surrendered by the Trustee to the Class A Note Insurer for cancellation, and upon such payment, surrender of the Class A Insurance Policy and receipt by the Class A Note Insurer of an acknowledgement signed by the Trustee and the purchasing Holder(s) of the Notes that the Class A Note Insurer has no further liabilities under the Class A Insurance Policy or the Indenture, the Class A Note Insurer shall no longer be the Control Party. The Trustee agrees that it shall give to the Holders of the Class B Notes, Class C Notes, Class D Notes, Class E-1 Notes and Class E-2 Notes written notice of the events described in clauses (i), (ii), and (iii) of this Section 6.16 promptly upon its receiving notice of such event or a Responsible Officer of the Trustee having actual knowledge thereof (such date of notice, the “Default Notice Date”).

 

  

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

 

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

 

If no Holder of the Class D Notes exercises its rights to purchase the Class A Notes for the Class A Buyout Price within ten (10) Business Days of the Default Notice Date, then, without prejudice to any other rights of the Holders of the Class E-1 Notes under the Transaction Documents, any one or more Holders of the Class E-1 Notes (other than any Holder which is a LEAF Party or Affiliate thereof) shall then have the sole right to deliver the Class A Buyout Notice, which notice shall be sent to the Trustee and the Class A Note Insurer electing to purchase (without recourse, warranty or representation (other than that the Holders of such Class A Notes own such Class A Notes free and clear of any Liens created or granted by the Holder of such Class A Notes)) the entire (but not less than the entire) aggregate amount of Outstanding Class A Notes (and all associated rights, titles, claims and privileges associated therewith, excluding rights under the Class A Insurance Policy) for the Class A Buyout Price.

 

 

  

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If no Holder of the Class E-1 Notes exercises its rights to purchase the Class A Notes for the Class A Buyout Price within ten (10) Business Days of the Default Notice Date, then, without prejudice to any other rights of the Holders of the Class E-2 Notes under the Transaction Documents, any one or more Holders of the Class E-2 Notes (other than any Holder which is a LEAF Party or Affiliate thereof) shall then have the sole right to deliver the Class A Buyout Notice, which notice shall be sent to the Trustee and the Class A Note Insurer electing to purchase (without recourse, warranty or representation (other than that the Holders of such Class A Notes own such Class A Notes free and clear of any Liens created or granted by the Holder of such Class A Notes)) the entire (but not less than the entire) aggregate amount of Outstanding Class A Notes (and all associated rights, titles, claims and privileges associated therewith, excluding rights under the Class A Insurance Policy) for the Class A Buyout Price.

 

The purchase of the Class A Notes pursuant to this Section shall close no later than the date specified in the operative Class A Buyout Notice. The Class A Buyout Price shall be remitted by wire transfer in immediately available federal funds to the Trustee.  Interest shall be calculated to but excluding the Business Day on which such purchase shall occur if the Class A Buyout Price is wired to the Trustee prior to 11:00 am New York time and interest shall be calculated to and including such Business Day if the Class A Buyout Price is wired to the Trustee, later than 11:00 am New York time. For the avoidance of doubt, the right of any Class of Noteholders to purchase the Class A Notes pursuant to this Section shall be extinguished at the close of business on the tenth Business Day following the Default Notice Date if no exercise has occurred on or before such date.

 

Section 6.17                      Waiver of Stay or Extension Laws.  The Issuer covenants (to the extent that it may lawfully do so) that it will not, at any time, insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

Section 6.18                      Sale of Collateral.

 

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

 

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

 

  

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            (i)           the Control Party consents to or directs such Sale or liquidation (which consent or direction may be given regardless of the proceeds to be derived from such Sale or liquidation); or

 

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

 

(c)           The Class A Note Insurer and/or any Noteholder may bid for and acquire any portion of the Collateral in connection with a Sale thereof.  After the Trustee has received each offer to purchase all or any portion of the Collateral, the Trustee shall notify the Class A Note Insurer, each Class B Noteholder, Class C Noteholder, Class D Noteholder, Class E-1 Noteholder and Class E-2 Noteholder of the highest offer (the date of such notification, the “Collateral Purchase Notice Date”), and the Class A Note Insurer or any one or more Class B Noteholders will initially have the right, within ten (10) Business Days of the Collateral Purchase Notice Date, to purchase (not later than five (5) Business Days after delivery of written notice to the Trustee and the Class A Note Insurer of exercise of each right to purchase) the Collateral at the highest price offered therefor. If neither the Class A Note Insurer nor any Holder of the Class B Notes exercises its rights to purchase the Collateral within ten (10) Business Days of the Collateral Purchase Notice Date, the Trustee shall notify each Class C Noteholder of the highest offer and any one or more Class C Noteholders will then have the right to purchase (not later than five Business Days after delivery of written notice to the Trustee of exercise of each right to purchase) the Collateral at the highest price offered therefor. If no Holder of the Class C Notes exercises its rights to purchase the Collateral within ten (10) Business Days of the Collateral Purchase Notice Date, the Trustee shall notify each Class D Noteholder of the highest offer and any one or more Class D Noteholders will then have the right to purchase (not later than five Business Days after delivery of written notice to the Trustee of exercise of each right to purchase) the Collateral at the highest price offered therefor. If no Holder of the Class D Notes exercises its rights to purchase the Collateral within ten (10) Business Days of the Collateral Purchase Notice Date, the Trustee shall notify each Class E-1 Noteholder of the highest offer and any one or more Class E-1 Noteholders will then have the right to purchase (not later than five Business Days after delivery of written notice to the Trustee of exercise of each right to purchase) the Collateral at the highest price offered therefor.  If no Holder of the Class E-1 Notes exercises its rights to purchase the Collateral within ten (10) Business Days of the Collateral Purchase Notice Date, the Trustee shall notify each Class E-2 Noteholder of the highest offer and any one or more Class E-2 Noteholders will then have the right to purchase (not later than five Business Days after delivery of written notice to the Trustee of exercise of each right to purchase) the Collateral at the highest price offered therefor. If no such Noteholder has exercised its option to purchase the Collateral within ten (10) Business Days of the Collateral Purchase Notice Date, those options shall terminate and be of no further force and effect, and the Trustee may proceed to sell the Collateral to the highest offeree in accordance with the terms of this Indenture. If a Noteholder or the Class A Note Insurer submits the highest bid, in lieu of paying cash therefor, such bidder may make settlement for the purchase price by crediting against the purchase price that portion of the net proceeds of such Sale to which such bidder would be entitled, after deducting the reasonable costs, charges and expenses (including reasonable attorneys’ fees and expenses) incurred by such Noteholder or the Class A Note Insurer in connection with such Sale. The Notes need not be produced in order to complete any such Sale, or in order for the net proceeds of such Sale to be credited against the Notes.  The Class A Note Insurer or the Noteholders may hold, lease, operate, manage or otherwise deal with any property so acquired in any manner permitted by law.

 

 

  

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(d)           The Trustee shall execute and deliver an appropriate instrument of conveyance provided to it by the Servicer transferring its interest in any portion of the Collateral in connection with a Sale thereof.  In addition, the Trustee is hereby irrevocably appointed the agent and attorney-in-fact with full irrevocable power and authority in the place and stead of the Issuer and in the name of the Issuer or in its own name, from time to time, from and after the occurrence of an Event of Default for the purpose of exercising the rights and remedies of the Trustee hereunder and, to take any and all action and to execute and deliver any and all documents and instruments which may be necessary or desirable to accomplish the foregoing, including without limitation, to transfer and convey its interest in any portion of the Collateral in connection with a Sale thereof, and to take all action necessary to effect such Sale.  No purchaser or transferee at such a sale shall be bound to ascertain the Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any monies.

 

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

 

Section 6.19                      Action on Notes.  The Trustee’s right to seek and recover judgment on the Notes or under this Indenture or the other Transaction Documents shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture or the other Transaction Documents.  Neither the lien of this Indenture nor any rights or remedies of the Trustee, the Class A Note Insurer or the Noteholders shall be impaired by the recovery of any judgment by the Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Collateral or upon any of the assets of the Issuer.

 

 

ARTICLE VII

THE TRUSTEE

 

 

Section 7.01                      Certain Duties and Immunities.

 

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

 

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

 

(ii)           in the absence of bad faith or negligence on its part, the Trustee may conclusively rely as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions, which by any provision hereof are specifically required to be furnished to the Trustee, such certificate or opinion shall cite the applicable provision and the Trustee shall be under a duty to examine the same and to determine whether or not they conform to the requirements of this Indenture.

 

  

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(b)           So long as any Event of Default or Event of Servicing Termination exists, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and shall use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs, and nothing contained herein shall relieve the Trustee of such obligations.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

  

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

 

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

 

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

 

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

 

(k)           The Trustee shall not have any verbal discussions or provide information to any Rating Agency regarding the transactions contemplated by this Indenture without prior notice to the Issuer to ensure compliance with Rule 17g-5 under the Securities Exchange Act of 1934 (“Rule 17g-5”) and the timely posting of information on any website maintained by the Issuer in order to comply with Rule 17g-5.  The Trustee agrees to provide all information or documents required to be delivered by it to each Rating Agency pursuant to the Transaction Documents to the Issuer for posting on its Rule 17g-5 compliant website, and shall confirm with the Issuer that these documents have been posted on the website, prior to providing or otherwise making available such information or documents to such Rating Agency or any third party.  The Trustee shall delay the posting of information or documents to the Trustee’s website or any other disclosure of such information or documents until the confirmation from the Issuer has been received, unless otherwise instructed by the Issuer.

 

Section 7.02                      Notice of Default and Other Events

 

.  Promptly upon the existence of any Default or Event of Default or Event of Servicing Termination known to the Trustee (within the meaning of Section 7.01(e)), the Trustee shall transmit by telephonic or facsimile communication confirmed by mail to the Class A Note Insurer and all Noteholders, as their names and addresses appear in the Insurance Agreement and the Note Register, notice of such event hereunder known to the Trustee.

 

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

  

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

 

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

 

Section 7.04                      Not Responsible for Recitals or Issuance of Notes.

 

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

 

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

 

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

 

 

  

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

 

Section 7.06                      Money Held in Trust; Collateral.  Money and investments held in trust by the Trustee or any Paying Agent hereunder shall be held in one or more segregated, trust accounts (which shall be Eligible Accounts), in the name of the Trustee on behalf of the Secured Parties at the Corporate Trust Office, which accounts shall bear a designation clearly indicating that the funds deposited therein are held for the benefit of the Secured Parties.  The Trustee or any Paying Agent shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Issuer or otherwise specifically provided herein (in such case subject to the provisions of Section 13.03). The Trustee shall hold the Collateral and the Contract Files for the benefit of the Noteholders and the Class A Note Insurer, and all references in this Indenture and in the Note to the benefit of the Noteholders of the Notes shall be deemed to include the Class A Note Insurer, so long as the Class A Insurance Policy has not been surrendered and no Class A Note Insurer Default has occurred and is continuing.

 

Section 7.07                      Compensation and Reimbursement.  The Issuer agrees:

 

(a)           Solely from amounts distributed from the Collection Account pursuant to Section 13.03, to:  (i) pay the Trustee monthly its fee for all services rendered by it hereunder as Trustee, in the amount of the Trustee Fee (which compensation shall not otherwise be limited by any provision of law in regard to the compensation of a trustee of an express trust), (ii) pay the Custodian monthly its fee for all services rendered by it hereunder as Custodian, in the amount of the Custodian Fee and (iii) pay to the Back-up Servicer its fee for all services rendered by it hereunder and under the Servicing Agreement as Back-up Servicer, in the amount of the Back-up Servicer Fee, in each case in accordance with the priorities set forth in Section 13.03;

 

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

 

(c)           to indemnify and hold harmless the Trustee, the Custodian, the Securities Intermediary, the Back-up Servicer and their respective officers, directors, employees, representatives and agents from and against, and reimburse for, any loss, claim, obligation, action, suit liability, expense, penalty, stamp or other similar tax, reasonable costs and expenses (including reasonable attorneys’ and agents’ fees and expenses) damage or injury (to person, property or natural resources) of any kind and nature sustained or suffered by the Trustee, the Custodian, the Securities Intermediary and the Back-up Servicer by reason of any acts or omissions (or alleged acts or omissions) of the Trustee, the Custodian, the Securities Intermediary or the Back-up Servicer under the Transaction Documents or arising directly or indirectly out of the activities of the Issuer or any of the transactions contemplated hereby (including any violation of any applicable laws by the Issuer as a result of the transactions contemplated by this Indenture) or the participation by the Trustee, the Custodian, the Securities Intermediary and the Back-up Servicer in the transactions contemplated by the Transaction Documents, including any judgment, award, settlement, reasonable attorneys’ fees and other expenses incurred in connection with the defense of any actual or threatened action, proceeding or claim; provided that, the Issuer shall not indemnify the Trustee, the

 

 

  

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Custodian, the Securities Intermediary or the Back-up Servicer if such loss, liability, expense, damage or injury is due to the Trustee’s, the Custodian’s, the Securities Intermediary’s or the Back-up Servicer’s negligence or willful misconduct, willful misfeasance or bad faith in the performance of duties; provided, further, that all amounts payable in respect of such indemnity shall be payable by the Issuer solely from the amounts distributed pursuant to Section 13.03 or released from the Lien of this Indenture.  The provisions of this indemnity shall run directly to and be enforceable by an injured person subject to the limitations hereof and the provisions of this Section 7.07 shall survive the termination of this Indenture or the earlier resignation or removal of the Trustee, the Custodian, the Securities Intermediary or the Back-up Servicer.

 

 

(d)           The Trustee hereby acknowledges and agrees that if the Servicer and/or the Issuer fails to pay the amounts set forth in this Section 7.07, the Trustee will continue to perform its obligations under this Indenture, regardless of the Servicer and/or the Issuer’s failure to pay such amounts, until the appointment of a successor Trustee reasonably satisfactory to the Control Party in accordance with Section 7.09 of this Indenture; provided, however, that in such event, the Trustee shall continue to be entitled to be paid all accrued amounts due it pursuant to this Section 7.07 from amounts payable pursuant to Section 13.03.

 

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

 

Section 7.09                      Resignation and Removal; Appointment of Successor.

 

 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  

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

 

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

 

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

 

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

 

Section 7.12                      Co-Trustees and Separate Trustees.

 

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

 

 

  

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

 

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

 

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

 

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

 

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

 

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

 

 

  

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

 

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

 

Section 7.14                      Appointment of Authenticating Agent.  The Trustee may at its expense appoint an Authenticating Agent or Authenticating Agents with respect to the Notes which shall be authorized to act on behalf of the Trustee to authenticate Notes issued upon original issue or upon exchange, registration of transfer or pursuant to Sections 2.06 and 2.07, and Notes so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder.  Wherever reference is made in this Indenture to the authentication and delivery of Notes by the Trustee or the Trustee certificate of authentication or the delivery of Notes to the Trustee for authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent and delivery of the Notes to the Authenticating Agent on behalf of the Trustee.  Each Authenticating Agent shall be acceptable to the Issuer (whose acceptance shall not be unreasonably withheld or delayed) and shall at all times be a corporation having a combined capital and surplus of not less than the equivalent of $50,000,000 and subject to supervision or examination by federal or state authority or the equivalent foreign authority, in the case of an Authenticating Agent who is not organized and doing business under the laws of the United States of America, any state thereof or the District of Columbia.  If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

 

Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of such Authenticating Agent, shall continue to be an Authenticating Agent without the execution or filing of any paper or any further act on the part of the Trustee or such Authenticating Agent, provided that such corporation shall be otherwise eligible under this Section.

 

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee, the Class A Note Insurer and to the Issuer.  The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating 

 

  

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Agent, the Noteholders, the Class A Note Insurer and to the Issuer.  Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Issuer (whose acceptance shall not be unreasonably withheld or delayed) and, after the occurrence of an Event of Default, the Control Party, and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Noteholders, if any, with respect to which such Authenticating Agent will serve, as their names and addresses appear in the Note Register.  Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent.  No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

 

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

 

 

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

 

 

	 	
U.S. Bank National Association, as Trustee

	 	  	
By:                       

	 	  	
As Authenticating Agent

	 	  
	 	  	
By:              

	 	  	
Authorized Officer

	 	  	  

 

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

 

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

 

(a)           hold all sums held by it for the payment of principal or interest on Notes in trust in an Eligible Account in the name of the Trustee on behalf of the Issuer at the Corporate Trust Office, which account shall bear a designation clearly indicating that the funds deposited therein are held for the benefit of the Secured Parties, until such sums shall be paid to such Persons or otherwise disposed of as provided in Section 13.03;

 

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

 

  

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

 

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Issuer Order direct any Paying Agent to pay, to the Trustee all sums held in trust by such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

 

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

 

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

 

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

 

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

 

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

 

  

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

 

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

 

(e)           No Violation. The execution and delivery of this Indenture and each other Transaction Document to which the Trustee is a party, the performance of the transactions contemplated thereby and the fulfillment of the terms thereof (including the authentication of the Notes), will not conflict with or violate, in any material respects, any requirements of law applicable to the Trustee.

 

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

 

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

 

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

 

 

  

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(i)           Class A Insurance Policy Held in Trust.  The Trustee shall, and hereby agrees that it will, hold the Class A Insurance Policy in trust and will hold any proceeds of any claim on the Class A Insurance Policy in trust solely for the use and benefit of the Class A Noteholders.

 

ARTICLE VIII

THE CUSTODIAN

 

Section 8.01                      Appointment of Custodian.  Subject to the terms and conditions hereof, the Issuer hereby revocably appoints the Custodian, and the Custodian hereby accepts such appointment and agrees to act as Custodian on behalf of the Secured Parties to maintain exclusive custody of the Contract Files in order to perfect the ownership interest of the Issuer in the Contracts and the security interest of the Secured Parties in the Contracts and the other items in the Contract Files and any and all proceeds of the foregoing; provided that from and after the release or discharge of the Secured Parties’ lien in and to the Contracts and the other items in the Contract Files and any and all proceeds of the foregoing, the Custodian shall serve as exclusive agent and custodian of the Issuer with respect to the Contract Files.

 

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

 

Section 8.03                      Termination by Custodian. The Custodian may terminate its obligations under this Indenture upon at least sixty (60) days notice to the Servicer, the Issuer, the Noteholders and the Class A Note Insurer; provided, no termination shall be effective until appointment of a successor acceptable to the Issuer or the Control Party.  In the event of such termination, the Issuer shall promptly appoint a successor custodian acceptable to the Control

 

 

  

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Party or, after the occurrence of an Event of Default, solely the Control Party may appoint a successor custodian.  The payment of such successor custodian’s fees and expenses with respect to each Contract and related Contract Files shall be solely the responsibility of the Issuer.  Upon such appointment, the Custodian shall promptly transfer to the successor custodian, as directed, all Contracts and related Contract Files being held under this Indenture.  The Custodian may petition a court of competent jurisdiction to appoint a successor hereunder if no successor is appointed within such sixty (60) day notice period.

 

Section 8.04                      Limitations on the Custodian’s Responsibilities.

 

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

 

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

 

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

 

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

 

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

 

  

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

 

(g)           The Custodian may consult with counsel selected by the Custodian with regard to legal questions arising out of or in connection with this Indenture, and the written opinion of such counsel shall be full and complete authorization and protection in respect of any action reasonably taken, omitted or suffered by the Custodian in good faith and in accordance therewith.

 

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

 

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

 

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

 

(k)           For purposes of the foregoing provisions and any other provisions in this Indenture permitting the Custodian to require an indemnity before taking any actions, the Custodian agrees that an unsecured indemnity from a Noteholder or the Class A Note Insurer, so long as such party has an unsecured debt rating of at least BBB by Moody’s and Baa2 by S&P, shall be deemed satisfactory.

 

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

 

  

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

 

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

 

 

ARTICLE IX

THE CLASS A INSURANCE POLICY

 

 

Section 9.01                      Claims Under Class A Insurance Policy.

 

(a)           Upon receipt of and based on the Monthly Servicing Report, the Trustee shall, prior to each Payment Date, determine the Note Insurance Guaranteed Payment for the related Payment Date.  If the Note Insurance Guaranteed Payment for such Payment Date is greater than zero, the Trustee shall, not later than the third Business Day preceding such Payment Date, furnish to the Class A Note Insurer a completed Notice (as defined in (b) below) in the amount of the Note Insurance Guaranteed Payment claimed under the Class A Insurance Policy.  Amounts paid by the Class A Note Insurer pursuant to a claim submitted under this Section shall be deposited by the Trustee into the Collection Account for payment to Class A Noteholders on the related Distribution Date.

 

(b)           Any notice and certificate delivered by the Trustee to the Class A Note Insurer in the form attached as Exhibit A to the Class A Insurance Policy pursuant to subsection (a) shall specify the Note Insurance Guaranteed Payment claimed under the Class A Insurance Policy and shall constitute a “Notice of Claim” under the Class A Insurance Policy.  In accordance with the provisions of the Class A Insurance Policy, the Class A Note Insurer is required to pay to the Trustee the Note Insurance Guaranteed Payment properly claimed thereunder by 12:00 noon, New York time, on the later of (i) the third Business Day following receipt on a Business Day of the Notice, and (ii) the Payment Date.  Any payment made by the Class A Note Insurer under the Class A Insurance Policy shall be applied solely to the payment of the Note Insurance Guaranteed Payment, and for no other purpose.

 

(c)           The Trustee shall deposit the Note Insurance Guaranteed Payment in the Collection Account upon receipt of such Note Insurance Guaranteed Payment from the Class A Note Insurer for distribution on the Payment Date to the Class A Noteholders in accordance with Section 13.03.

 

 

  

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(d)           The Trustee shall (i) receive as attorney-in-fact of each Class A Noteholder, any Note Insurance Guaranteed Payment from the Class A Note Insurer and (ii) deposit the same into the Collection Account pursuant to Sections 9.01(c) and 13.03 for distribution to the Class A Noteholders.  Any and all Note Insurance Guaranteed Payments disbursed by the Trustee from claims made under the Class A Insurance Policy shall not be considered payment by the Issuer with respect to such Class A Notes, and shall not discharge the obligations of the Issuer with respect thereto.  The Class A Note Insurer shall, to the extent it makes any payment with respect to the Class A Notes, become subrogated to the rights of the recipients of such payments to the extent of such payments.  Subject to and conditioned upon any payment with respect to the Class A Notes by or on behalf of the Class A Note Insurer, the Trustee shall assign to the Class A Note Insurer all rights to the payment of interest or principal with respect to the Class A Notes which are then due for payment to the extent of all payments made by the Class A Note Insurer and the Class A Note Insurer may exercise any option, vote, right, power or the like with respect to the Class A Notes to the extent that it has made payment pursuant to the Class A Insurance Policy.  To evidence such subrogation, the Note Registrar shall note the Class A Note Insurer’s rights as subrogee upon the register of the Class A Noteholders upon receipt from the Class A Note Insurer of proof of payment by the Class A Note Insurer of any amounts due in respect of the Class A Notes on the Final Payment Date. The foregoing subrogation shall in all cases be subject to the rights of the Class A Noteholders to receive all Note Insurance Guaranteed Payments in respect of the Class A Notes.

 

(e)           The Trustee shall keep a complete and accurate record of all funds deposited by the Trustee on behalf of the Class A Note Insurer into the Collection Account with respect to the Class A Insurance Policy and the allocation of such funds to payment of interest and principal in respect of any Class A Note.  The Class A Note Insurer shall have the right to inspect such records at reasonable times upon one Business Day’s prior notice to the Trustee.

 

(f)           The Trustee shall be entitled to enforce on behalf of the Class A Noteholders the obligations of the Class A Note Insurer under the Class A Insurance Policy, and acknowledges on behalf of the holders of the Subordinated Notes that the Class A Insurance Policy is solely for the benefit of the the Class A Noteholders and no holder of any Subordinated Note will have any rights to receive payments under the Class A Insurance Policy.  Notwithstanding any other provision of this Indenture or any Transaction Document, the Class A Noteholders are not entitled to institute proceedings directly against the Class A Note Insurer.

 

Section 9.02                      Preference Claims Under Class A Insurance Policy.

 

(a)           In the event that the Trustee has received a certified copy of a Final Order that all or a portion of any amount insured under the Class A Insurance Policy has been avoided in whole or in part as a preference payment under applicable bankruptcy law, the Trustee shall so notify the Class A Note Insurer, shall comply with the provisions of the Class A Insurance Policy to obtain payment by the Class A Note Insurer of such avoided payment, and shall, at the time it provides notice to the Class A Note Insurer, notify Holders of the Class A Notes by mail that, in the event that any Class A Noteholder’s payment is so recoverable, such Noteholder will be entitled to payment pursuant to the terms of the Class A Insurance Policy.  The Trustee shall furnish to the Class A Note Insurer its records evidencing the payments of principal of and interest on Class A Notes, if any, which have been made by the Trustee and subsequently

 

 

  

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recovered from a Class A Noteholder, and the dates on which such payments were made.  Pursuant to the terms of the Class A Insurance Policy, the Class A Note Insurer will make such payment on behalf of the Noteholder to the receiver, conservator, debtor-in-possession or trustee in bankruptcy named in the Final Order and not to the Trustee or any Class A Noteholder directly (unless a Noteholder has previously paid such payment to the receiver, conservator, debtor-in-possession or Trustee in bankruptcy, in which case the Class A Note Insurer will make such payment to the Trustee for distribution to such Noteholder upon proof of such payment reasonably satisfactory to the Class A Note Insurer).

 

(b)           The Trustee shall promptly notify the Class A Note Insurer of any proceeding or the institution of any action (of which a Responsible Officer of the Trustee has actual knowledge) seeking a Preference Amount.  In accordance with the provisions of the Class A Insurance Policy, the Class A Note Insurer is required to pay an amount equal to each such Preference Amount on the later of (A) the date when due to be paid pursuant to a Final Order or (B) the first to occur of (i) the fourth (4th) Business Day following receipt by the Class A Note Insurer on a Business Day of (w) a certified copy of a Final Order, (x) an assignment, in form reasonably satisfactory to the Class A Note Insurer, irrevocably assigning to the Class A Note Insurer all rights and claims of the Trustee and/or such Class A Noteholder relating to or arising under such Preference Amount and constituting an appropriate instrument, in form satisfactory to the Class A Note Insurer, appointing the Class A Note Insurer as the agent of the Trustee and/or such Class A Noteholder in respect of such Preference Amount, including without limitation in any legal proceeding related to such Preference Amount, (y) a Notice appropriately completed and executed by the Trustee or such Class A Noteholder, as the case may be, and (z) a certificate of such Class A Noteholder that the Final Order has been entered and is not subject to any stay or (ii) the date of receipt by the Class A Note Insurer from the Trustee of the items referred to in clauses (w), (x), (y) and (z) above if, at least four (4) Business Days prior to such date of receipt, the Class A Note Insurer shall have received written notice from the Trustee that such items were to be delivered on such date and such date was specified in such notice.  Such payment shall be made to the receiver, conservator, debtor-in-possession or trustee in bankruptcy named in a Final Order and not to the Trustee or Class A Noteholder directly (unless the Class A Noteholder has previously paid such amount to such receiver, conservator, debtor-in-possession or trustee in bankruptcy named in such Final Order, in which case payment shall be made to the Trustee for distribution to the Class A Noteholder upon delivery of proof of such payment reasonably satisfactory to the Class A Note Insurer).  In connection with the foregoing, the Class A Note Insurer will have the rights provided pursuant to this Indenture and the Insurance Agreement. Notwithstanding the foregoing, in no event shall the Class A Note Insurer be (i) required to make any payment under the Class A Insurance Policy in respect of any Preference Amount to the extent such Preference Amount is comprised of amounts previously paid by the Class A Note Insurer, or (ii) obligated to make any payment in respect of any Preference Amount, which payment represents a payment of the principal amount of any Class A Notes, prior to the time the Class A Note Insurer otherwise would have been required to make a payment in respect of such principal, in which case the Class A Note Insurer shall pay the balance of the Preference Amount when such amount otherwise would have been required to be paid hereunder.

 

(c)           Each Class A Noteholder, by its purchase of Class A Notes, and the Trustee hereby agree that the Class A Note Insurer may at any time during the continuation of any proceeding relating to a Preference Amount direct all matters relating to such Preference

 

  

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Amount, including, without limitation, (i) the direction of any appeal of any order relating to any Preference Amount and (ii) the posting of any surety, supersedeas or performance bond pending any such appeal at the expense of the Class A Note Insurer, but subject to reimbursement as provided in the Insurance Agreement.  In addition, and without limitation of the foregoing, the Class A Note Insurer shall be subrogated to, and each Class A Noteholder and the Trustee hereby delegate and assign, to the fullest extent permitted by law, the rights of the Trustee and each Class A Noteholder in the conduct of any proceeding with respect to a Preference Amount, including, without limitation, all rights of any party to an adversary proceeding action with respect to any court order issued in connection with any such Preference Amount.

 

Section 9.03                      Collateral and Trust Accounts Held for Benefit of the Class A Note Insurer.  The Trustee shall hold the Collateral for the benefit of the Secured Parties and all references in this Indenture and in the Class A Notes to the benefit of Class A Noteholders shall be deemed to include the Class A Note Insurer. 

 

Section 9.04                      Preservation of the Class A Note Insurer’s Rights.  Upon its becoming aware of the occurrence of a Default, an Event of Default or an Event of Servicing Termination, the Trustee shall promptly notify the Class A Note Insurer of such Default, Event of Default or Event of Servicing Termination pursuant to Section 7.02 of this Indenture.  The Trustee, the Issuer and the Servicer shall cooperate in all respects with any reasonable request by the Class A Note Insurer for action to preserve or enforce the Class A Note Insurer’s rights or interests under this Indenture without limiting the rights or affecting the interests of the Class A Noteholders as otherwise set forth herein.

 

Section 9.05                      Pending Litigation.  The Trustee hereby agrees to provide the Class A Note Insurer prompt notice of any action, proceeding or investigation of which it has actual knowledge that names the Issuer, Trustee or Servicer as a party that could adversely affect the interest of the Class A Noteholders.

 

Section 9.06                      Class A Note Insurer’s Rights.

 

(a)           For so long as no Class A Note Insurer Default has occurred and is continuing, each Class A Noteholder agrees that the Class A Note Insurer shall be treated by the Issuer, the Servicer, the Back-up Servicer and the Trustee, as if the Class A Note Insurer were the Class A Noteholders for the purpose (and solely for the purpose) of the giving of any consent, the making of any direction or the exercise of any voting or other control rights otherwise given to the Class A Noteholders hereunder and the Class A Noteholders shall only exercise such rights with the prior written consent of the Class A Note Insurer.

 

(b)           The Trustee, the Issuer, the Servicer and the Back-up Servicer shall cooperate in all respects with any reasonable request by the Class A Note Insurer for action to preserve or enforce the Class A Note Insurer’s rights or interests under this Indenture without limiting the rights or affecting the interests of the Class A Noteholders as otherwise set forth herein.

 

      (c)           The Trustee acknowledges that (i) to the extent the Class A Note Insurer makes payments under the Class A Insurance Policy, the Class A Note Insurer shall become the holder of the Class A Notes (and with respect thereto the Class A Notes shall remain outstanding and shall not be (and shall not be deemed to have been) redeemed, retired or otherwise terminated) and right to payment of principal thereto or interest thereon, and shall be fully subrogated to all rights, title and interest of the Trustee and such Class A Noteholders thereunder, including the right to receive payments in respect of the Class A 

 

  

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Notes, and (ii) the Class A Note Insurer shall be paid such principal and interest but only from the sources and in the manner provided herein and in the Insurance Agreement and the Class A Insurance Policy for the payment of such principal and interest.

 

(d)           The Trustee and each Class A Noteholder, as applicable, shall, so long as it is indemnified to its satisfaction, cooperate in all respects with any reasonable written request by the Class A Note Insurer for action to preserve or enforce the Class A Note Insurer’s rights, remedies and interest under the Class A Notes, this Indenture, the Class A Insurance Policy, the Insurance Agreement and the Premium Letter or any related servicing arrangements or otherwise, including, without limitation, a request to take any one or more of the following actions:

 

(i)           institute or participate in any suit, action or other proceedings, including for the collection of all amounts then payable on the Class A Notes, or under this Indenture in respect of the Class A Notes and all amounts payable under the Insurance Agreement, the Class A Insurance Policy and the Premium Letter, enforce any judgment obtained and collect from the Trustee (if applicable) monies adjudged due;

 

(ii)           transfer to the Class A Note Insurer, via absolute legal assignments (a) the Class A Notes and (b) the Trustee’s or such Class A Noteholder’s rights with respect to any Insured Amount which may form the basis of a claim hereunder;

 

(iii)           sell or cause to be sold the Collateral or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law;

 

(iv)           institute proceedings from time to time to enforce the Class A Note Insurer’s rights and remedies under this Indenture, the Insurance Agreement, the Class A Insurance Policy and the Premium Letter; and

 

(v)           exercise any remedies of a secured party under the applicable UCC and take any other appropriate action to protect and enforce the rights and remedies of the Class A Note Insurer hereunder;

 

provided, however, action shall be taken pursuant to this Section 9.06 by the Trustee to preserve the Class A Note Insurer’s rights or interest under this Indenture or the Insurance Agreement or the Class A Insurance Policy or the Premium Letter only to the extent such action is available to the Noteholders of the Class A Notes or the Class A Note Insurer under other provisions of this Indenture, the Insurance Agreement, the Class A Insurance Policy and the Premium Letter.

 

    (e)           From and after the time that no Class A Notes are Outstanding and no Class A Note Insurer Premiums or Reimbursement Amounts are owing to the Class A Note Insurer, notwithstanding any lack of specific language to that effect, each provision of the Transaction Documents requiring the consent or notification of, or providing notices to, the Class A Note Insurer shall not be applicable.

 

 

  

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Section 9.07                      Notices to the Class A Note Insurer.  All notices, statements, reports, certificates, lists or opinions required by this Indenture to be sent to the parties hereto, the Rating Agencies or the Noteholders shall also be sent, at the same time such statements, reports, certificates, lists or opinions are otherwise sent, by overnight delivery, fax or email to the Class A Note Insurer.

 

Section 9.08                      Surrender of Class A Insurance Policy.  The Trustee shall surrender the Class A Insurance Policy to the Class A Note Insurer for cancellation upon the expiration of such policy in accordance with the terms thereof.

 

 

ARTICLE X

SUPPLEMENTAL INDENTURES

 

Section 10.01                                Supplemental Indentures without Consent of the Noteholders.

 

(a)           The Issuer, the Trustee and the Custodian, without the consent of the Holders of any Notes but with the consent of the Control Party may, at any time and from time to time, enter into one or more amendments to this Indenture or indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes, provided that (x) any such amendment or supplemental indenture, as evidenced by an opinion of counsel if requested by the Trustee, the Class A Note Insurer or the Control Party, will not have an adverse effect on the rights or interests of the Holders or the Class A Note Insurer, (y) each Rating Agency has confirmed, in writing, that the ratings on the Notes will not be lowered (without regard to the Class A Insurance Policy) as a result of or in connection with any such amendment, and (z) any such amendment does not modify this Indenture in a manner requiring the consent of all affected Noteholders as described in Section 10.02 hereof:

 

(i)           to better assure, convey and confirm unto the Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject additional property to the Lien of this Indenture; or

 

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

 

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

 

(iv)           to add to the covenants of, and the conditions, limitations and restrictions to be observed by, the Issuer, for the benefit of the holders of all Notes and the Class A Note Insurer or to surrender any right or power conferred upon the Issuer in this Indenture; or

 

  

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

 

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

 

(b)           The Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee’s own rights, duties, indemnities, liabilities or immunities under this Indenture or otherwise.

 

(c)           Promptly after the execution by the Issuer, the Custodian and the Trustee of any supplemental indenture pursuant to this Section, the Issuer shall make available (in the manner described in Section 7.01(k)) to each Rating Agency and furnish to each Noteholder and the Class A Note Insurer a copy of such supplemental indenture.

 

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

 

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

 

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

 

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

 

 

  

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

 

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

 

(f)           alter (i) the priority of payments set forth in Section 13.03(c) or Section 13.03(d) or (ii) any defined term used therein, in either event so as to alter the priority of payments in a manner that is detrimental to such affected Noteholders (and the Class A Note Insurer, if applicable); or

 

(g)           subject to the rights of the Control Party to waive enforcement of any Event of Default, modify Sections 6.01(a) or 6.01(b) or any defined term used therein so as to eliminate any such Event of Default or to remove the provisions relating to the acceleration of the Notes.

 

The Trustee is hereby authorized to join in the execution of any such amendment or supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into any such amendment or supplemental indenture that affects in any adverse respect the Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise.

 

Promptly after the execution by the Issuer, the Servicer, the Class A Note Insurer, so long as it is the Control Party, and the Trustee (and all Noteholders if required to approve such amendment or supplement) of any supplemental indenture pursuant to this Section, the Issuer shall mail to each Rating Agency, the Back-up Servicer, the Class A Note Insurer and each Noteholder a copy of such supplemental indenture.

 

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

 

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

 

 

  

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      Section 10.05                                Reference in Notes to Supplemental Indentures.  Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and if required by the Issuer shall, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture.  If the Issuer shall so determine, new Notes so modified as to conform, in the opinion of the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Trustee in exchange for Outstanding Notes.

 

Section 10.06                                Amendments Affecting the Class A Note Insurer; Consent of Note Insurer.  Notwithstanding any of the other provisions of this Indenture, none of the Issuer, the Servicer, the Back-up Servicer, the Trustee or the Custodian shall enter into any amendment or supplement to this Indenture that would (i) adversely affect or diminish the rights of the Class A Note Insurer, or the benefits accorded to the Class A Note Insurer, under the Insurance Agreement, the Premium Letter, this Indenture (including the priority of payments set forth in Section 13.03) or any other Transaction Document, or (ii) adversely affect or expand the obligations of the Class A Note Insurer under the Insurance Agreement, the Premium Letter and the Class A Insurance Policy, without the consent of the Class A Note Insurer.

 

Section 10.07                                Back-Up Servicer Consent. Notwithstanding any other provision to the contrary, for so long as there is a Back-Up Servicer, the Issuer, the Indenture Trustee and the Custodian shall not, without the consent of the Back-Up Servicer (such consent not to be unreasonably withheld), make, execute, acknowledge or deliver amendments to this Indenture or enter into any supplemental indentures hereto or thereto or otherwise waive or amend any provision of this Indenture if such action will have, or it is expected may have, a material adverse effect on the Back-Up Servicer or any successor Servicer.

 

Section 10.08                                Amendments to the Lockbox Intercreditor Agreement.  The Trustee shall not enter into any material amendment, modification, supplement, consent or waiver of the Lockbox Intercreditor Agreement without the satisfaction of the Rating Agency Condition and the written consent of the Class A Note Insurer for so long as it is the Control Party.

 

 

ARTICLE XI

REDEMPTIONS AND PREPAYMENTS OF NOTES

 

Section 11.01                                Redemptions of Notes.

 

(a)           Auction Call and Optional Redemption.  (I) If there is a successful Auction in accordance with Section 11.06, the Trustee shall apply the proceeds of the Auction to redeem, in whole but not in part, all Outstanding Notes prior to the Stated Maturity Date (the “Auction Call Redemption”) and (II) if the Auction is completed and is not successful in accordance with Section 11.06 or if no Auction is conducted due to the conditions in the first sentence of Section 11.06 not being satisfied, the Issuer shall have the right, subject to the terms hereof, to redeem, in whole but not in part, all Outstanding Notes on the Redemption Date fixed in accordance therewith on any Payment Date on which the Aggregate Outstanding Note Balance, after giving effect to the payments made on such Payment Date, is less than or equal to ten percent (10%) of the Aggregate Initial Note Balance issued under this Indenture (an “Optional Redemption”). In connection with the Auction Call Redemption, the Trustee shall set the Redemption Date as a

 

 

  

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 Payment Date in accordance with Section 11.06. In connection with an Optional Redemption, the Issuer shall set the Redemption Date as a future Payment Date.  Installments of interest and principal due on or prior to the Redemption Date shall continue to be payable to the Holders of the Notes called for redemption as of the relevant Record Dates according to their terms and the provisions of Section 2.09 hereof.

 

(b)           Mandatory Redemptions. In the event that any funds are released from the Reserve Account, the Prefunding Account and/or the Capitalized Interest Account to the Collection Account to be allocated as Available Funds then, unless an Event of Default or Cumulative Net Loss Trigger has occurred and is continuing (in which event such Available Funds will be allocated as provided in Section 13.03(d)), the Notes shall be mandatorily redeemable, without notice, in the amount of the funds so released, in each case in accordance with the provisions of Section 13.04, 13.06 and 13.07.

 

Section 11.02                                Redemption Procedures.  In connection with any redemption pursuant to Section 11.01(a) hereof:

 

	 	
(a)

	
in the case of an Optional Redemption, the Issuer shall, at least 15 days prior to the Redemption Date, notify the Trustee and the Holders of the Notes in writing of the Optional Redemption and, in the case of an Auction Call Redemption, the Trustee shall, as soon as reasonably practicable after the Auction and, in any event, prior to the Redemption Date, notify the Holders of the Notes in writing of the Auction Call Redemption;

 

	 	
(b)

	
in the case of an Optional Redemption, the Issuer and, in the case of the Auction Call Redemption, the Winning Bidder, shall deposit in the Collection Account on the Business Day immediately preceding the Redemption Date at least the amounts described in Section 11.02(c);

 

	 	
(c)

	
in the case of an Optional Redemption, the Issuer shall deliver an Issuer Order directing the Trustee to and the Trustee shall, and, in the case of the Auction Call Redemption, the Trustee shall (without any Issuer Order), make payment on the Redemption Date of the sum of (A) the Redemption Price plus, (B) fees, expenses and other reimbursable amounts owing to the Noteholders, the Class A Note Insurer, the Transferor, the Trustee (including any expenses related to the Auction Call Redemption), the Securities Intermediary, the Custodian, the Back-up Servicer and the Servicer under the Transaction Documents; and

 

	 	
(d)

	
upon delivery to the Trustee, the Noteholders, the Class A Note Insurer (so long as it is the Control Party), the Custodian, the Paying Agent, and the Back-up Servicer of such documents and an Officer’s Certificate from the Servicer satisfactory to the Control Party certifying that (1) the amounts required to be deposited into the Collection Account shall have been deposited, (2) the requirements of this Article XI have been satisfied and (3) the Class A Insurance Policy has been returned to the Class A Note Insurer, the Trustee shall release its interest in the entire Collateral as provided in Section 11.05.

 

 

  

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      Section 11.03                                Notice of Redemption to Noteholders. In the case of an Optional Redemption, upon receipt of the Optional Redemption notice set forth in Section 11.02(a), the Trustee shall provide notice thereof with a copy of such notice of redemption pursuant to Section 11.01 by first class mail or courier delivery, dispatched no later than five (5) Business Days following the date on which such notice was provided to each Noteholder (at its address in the Note Register) and to the Class A Note Insurer (at its address set forth herein) (so long as it is the Control Party). In the case of the Auction Call Redemption, the Trustee shall, as soon as reasonably practicable, award to the Winning Bidder at the Auction and, in any event, prior to the Redemption Date, provide notice thereof by first class mail or courier delivery to each Noteholder (at its address in the Note Register).

 

All notices of redemption shall state:

 

(a)           the Redemption Date;

 

(b)           the amount that will be deposited in the Collection Account, which shall be at least the sum of (A) the Redemption Price plus (B) all other amounts that are payable to the Noteholders, the Class A Note Insurer, the Trustee (including any expenses related to the Auction Call Redemption), the Transferor, the Custodian, the Back-up Servicer, and the Servicer under the Transaction Documents on the Redemption Date;

 

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

 

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

 

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

 

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

 

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

 

Section 11.04                                Amounts Payable on Redemption Date.  Notice of redemption having been given to Noteholders as provided in Section 11.03, such Notes shall, on the Redemption Date, become due and payable at the Redemption Price, and on such Redemption Date (unless the Issuer, in the case of an Optional Redemption or the Winning Bidder, in the case of an Auction Call Redemption, shall default in the payment of such Redemption Price), all of the Outstanding Notes shall cease to bear interest.  On the Redemption Date:  (A) each Noteholder shall be paid such Noteholder’s applicable share of the Redemption Price by the Paying Agent on behalf of the Issuer upon presentation and surrender of their respective Notes at the office or agency specified in Section 7.13; and (B) each other Person to whom monies are owed under Section 11.02(b) shall be paid all amounts owing to such Person from the amounts deposited in the Collection Account in accordance with Section 11.03(b); provided, that no redemption may be effectuated unless, concurrently with the redemption occurring under this Article XI, all amounts due under this clause (B) shall be paid in full from funds on deposit in the Collection

 

 

  

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Account.  If the Holder of any Note called for redemption shall not be so paid, then the principal shall, until paid, bear interest from the Redemption Date at the applicable Note Rate and the redemption of such Note(s) shall be canceled, the Paying Agent shall return the related portion of the Redemption Price to the Issuer or other Person providing the funds for payment, and such Notes shall be payable on the Stated Maturity Date or earlier to the extent otherwise provided herein.  All amounts payable on the Redemption Date shall be paid in accordance with this Section 11.04, without regard to the priority of distribution provisions contained in Section 13.03.

 

Section 11.05                                Release of Contract Assets in Connection with Redemptions.

 

(a)           In connection with the redemptions permitted under this Article XI, the Trustee shall release its Lien on the Contracts and the related Contract Assets, upon (I) the deposit of the amounts set forth in Section 11.03(b) into the Collection Account and (II) the Issuer’s delivery to the Trustee and the Custodian of an Officer’s Certificate, (1) identifying the Contracts and the related Equipment to be released, (2) requesting the release thereof, (3) setting forth the amount deposited in the Collection Account with respect thereto, (4) certifying that the amount deposited in the Collection Account is at least equal to the Redemption Price and all other amounts required to be paid in connection with a redemption under this Article XI, and (5) certifying that all other conditions precedent set forth in the Transaction Documents relating to such release have been satisfied.

 

(b)           Upon release of the Trustee’s Lien on the Contracts in accordance with Section 11.05(a), the Custodian shall deliver to the Issuer, in the case of an Optional Redemption, or to the Winning Bidder, in the case of the Auction Call Redemption, the Contracts and all related Contract Assets described in the Issuer’s Officer’s Certificate.

 

Section 11.06                                Auction of Collateral

 

.  The Trustee shall conduct one and only one auction (the “Auction”) of all of the Collateral commencing promptly after the Payment Date (the “Auction Trigger Payment Date”), if any, on which the Aggregate Outstanding Note Balance, after giving effect to the payments made on such Payment Date, is less than or equal to $15,750,000) (i.e., fifteen percent (15%) of the Aggregate Initial Note Balance issued under this Indenture) in order to redeem, in whole but not in part, all Outstanding Notes prior to the Stated Maturity Date and in accordance with this Article XI; provided that the Auction shall not be deemed successful and no Auction Call Redemption shall occur unless the conditions set forth in this Section 11.06 are satisfied. Any LEAF Party or Affiliate thereof may, but shall not be required to, bid at the Auction. The method, manner, time, place and terms of the Auction shall be fixed by the Trustee and shall be commercially reasonable, providing reasonable opportunity for any prospective bidder to conduct a due diligence review of the Collateral. The Auction shall be conducted via public advertisement and shall not be a private auction. The Trustee, on behalf of the Issuer, shall sell and transfer all of the Collateral, without representation, warranty or recourse, to the highest qualifying bidder (the “Winning Bidder”) for the Collateral at the Auction on the Business Day immediately preceding the Redemption Date, which shall be the second Payment Date immediately following the Auction Trigger Payment Date, but only if:

 

	 	
(1)

	
there are at least two bona-fide bids at the Auction from Persons that are not an Originator, the Transferor or an Affiliate of either of them;

 

 

  

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(2)

	
the highest bid at the Auction is an amount in cash equal to or greater than the sum of (A) the Redemption Price and (B) all fees, expenses and other reimbursable amounts owing to the Noteholders, the Class A Note Insurer, the Transferor, the Trustee (including any expenses related to the Auction Call Redemption), the Securities Intermediary, the Custodian, the Back-up Servicer and the Servicer under the Transaction Documents; and

 

	 	
(3)

	
the Winning Bidder has entered into a written agreement with the Issuer and the Trustee that obligates such highest bidder to purchase all of the Collateral at the highest bid, with the closing of such purchase (and full payment in immediately available funds to the Collection Account) to occur on the Business Day immediately preceding the Redemption Date.

 

If a Noteholder is the Winning Bidder, in lieu of paying cash therefor, such bidder may make settlement for the purchase price by crediting against the purchase price that portion of the net proceeds of such Auction to which such Winning Bidder would be entitled, after deducting the reasonable costs, charges and expenses (including reasonable attorneys’ fees and expenses) incurred by such Noteholder in connection with such Auction and the closing of the purchase of the Collateral. If no qualifying bid is received before the seventh Business Day immediately preceding the Redemption Date, or if the Winning Bidder shall fail to close the purchase of the Collateral as aforesaid, then no Auction sale shall occur. For the avoidance of doubt, the Trustee shall conduct only one Auction.

 

 

ARTICLE XII

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

 

Section 12.01                                Representations and Warranties.

 

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

 

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

 

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

 

 

  

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

 

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

 

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

 

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

 

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

 

(h)           Transfer and Assignment.  Upon the delivery by or on behalf of the Issuer to the Trustee of the Contracts and the filing of the financing statements described in Sections 4.01(a)(v) and 4.02(b), the Trustee, for the benefit of the Secured Parties, shall have a first priority perfected security interest in the Issuer’s interest in the Contracts and Receivables and

 

  

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the proceeds thereof and that portion of the Collateral in which a security interest may be perfected by possession or the filing of a financing statement, in each case, under the UCC, limited to the extent set forth in Section 9-315 of the UCC as in effect in the applicable jurisdiction; provided that none of the Servicer, the Transferor and the Issuer shall be required to file or record assignments of any UCC-1 financing statements or other lien recordings made against an Obligor.  All filings (including UCC filings) as are necessary in any jurisdiction to perfect the security interest of the Trustee in the Collateral, including the transfer of the Contracts and any other payments to become due thereunder, have been made.

 

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

 

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

 

(k)           The Contract Assets.  The rights of the Issuer with respect to the representations and warranties that are made by the Transferor in the Purchase and Contribution Agreement and each Assignment Agreement and by the Servicer in the Servicing Agreement, as of each Acquisition Date have been assigned by the Issuer to the Trustee pursuant to the terms hereof, and the Issuer is not aware of any inaccuracy in any such representations and warranties except for such inaccuracies as have been provided in writing to the Trustee and the Class A Note Insurer.

 

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

 

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

 

 

  

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

 

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

 

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

 

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

 

(r)           Rating Agency Perfection Requirements as to Collateral.

 

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

 

(2)           All of the Contracts included in the Collateral constitute “tangible chattel paper” or “instruments” within the meaning of the UCC.  The Issuer has transferred to the Trustee the Contract Files, and, other than the stamp, if any, in favor of a prior lender that signed a Release Agreement related to a Contract, none of the tangible chattel paper in such Contract Files has any marks or notations indicating that it has been pledged, assigned or otherwise conveyed to any Person other than in favor of the Issuer or the Trustee.  The Equipment related to each Contract constitutes 

 

 

  

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either “equipment” for purposes of section 9-102(33) of the UCC or “inventory” for purposes of section 9-102(48) of the UCC; provided however, notwithstanding the foregoing, Contracts representing an amount less than or equal to 5.0% of the Discounted Pool Balance may relate to Equipment that does not constitute “equipment” for purposes of section 9-102(33) of the UCC or “inventory” for purposes of section 9-102(48) of the UCC.

 

(3)           The Issuer has caused (and will instruct the Servicer to cause), the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest granted in the Collateral to the Trustee hereunder.  Each such financing statement will contain a statement that a “purchase of, or security interest in, any collateral described in this financing statement will violate the rights of the Trustee.”

 

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

 

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

 

 

  

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

 

(7)           Notwithstanding any other provision of this Indenture or any other Transaction Document, the representations contained in this Section 12.01(r) shall be continuing and remain in full force and effect, without waiver, until the date on which the Notes have been paid in full, all amounts owed to the Class A Note Insurer have been paid in full, the Insurance Agreement has been terminated and the Class A Insurance Policy has been returned to the Class A Note Insurer for cancellation.

 

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

 

(9)           On or prior to each Acquisition Date hereunder, the Issuer shall take all steps required under applicable law in order to grant to the Trustee a first priority perfected security interest in the Conveyed Assets related thereto being sold to the Issuer on such Acquisition Date (provided that the foregoing shall not require the Issuer to file any financing statements against any Obligor with respect to Equipment which had an original purchase price of less than (x) $25,000 in a secured loan or finance lease that provides for a $1 purchase option or (y) $50,000 in a Contract that provides for a “fair market” purchase option) and, from time to time thereafter, the Issuer shall take all such actions as may be required by applicable law (or deemed desirable by the Trustee) to fully preserve, maintain and protect the Issuer’s ownership interest in, and the Trustee’s first priority perfected security interest in, the Conveyed Assets related thereto (provided that the foregoing shall not require the Issuer to file any financing statements against any Obligor with respect to Equipment which had an original purchase price of less than (x) $25,000 in a secured loan or finance lease that provides for a $1 purchase option or (y) $50,000 in a Contract that provides for a “fair market” purchase option) which have been sold to the Issuer on such Acquisition Date.

 

(10)           No creditor of the Issuer, other than the Trustee and each respective Obligor, has in its possession any equipment or inventory that comprise part of the Collateral.

 

    (s)           Existing Contracts.  As to each Initial Contract and the related Contract Assets, as of the Closing Date:  (i) the information set forth in the Contract Schedule with respect to such Contract is true and correct; (ii) except as otherwise described on an Exception Report delivered in connection with the acquisition of such Contract, (A) immediately prior to such Contract’s 

 

  

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Acquisition Date, the Servicer (or a custodian designated to hold such Contracts on the Servicer’s behalf) had possession of the related Contract Files; (B) each of such documents required to be signed by the Obligor was signed by the Obligor in the appropriate spaces; and (C) the complete Contract File for such Contract was delivered to the Custodian; and (iv) as of the date that such Contract was acquired, the Servicer used no selection procedures that identified the Contracts or other Contract Assets being acquired on such date as being less desirable or valuable than other comparable equipment leases or loans owned by the Transferor.

 

Section 12.02                                Covenants.  The Issuer hereby makes the following covenants for the benefit of the Secured Parties and on which the Trustee relies in accepting the Collateral in trust and in authenticating the Notes and the Class A Note Insurer relies in issuing the Class A Insurance Policy.

 

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

 

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

 

 

  

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

 

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

 

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

 

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

 

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

 

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

 

  

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(i)           Separateness Covenants.  The Issuer shall respect and appropriately document the separate and independent nature of its activities, as compared with those of any other Person, take all reasonable steps to continue its identity as a separate legal entity, and make it apparent to Persons that the Issuer is an entity with assets and liabilities distinct from those of any other Person.  Without limiting the foregoing, and notwithstanding anything to the contrary contained in this Indenture, the Issuer (i) shall (A) maintain its books and records separate from the books and records of any other entity, (B) maintain separate bank accounts and no funds of the Issuer shall be commingled with funds of any other entity except as otherwise permitted in the Lockbox Intercreditor Agreement, (C) keep in full effect its existence, rights, privileges, licenses and franchises as a limited liability company under the laws of Delaware, (D) cause its officers to act independently and in its interests, (E) cause its managing member to duly authorize all of its limited liability company actions, (F) cause it to have an independent director or manager as set forth in Section 12.01(j), (G) observe all company procedures required by its organizational documents and applicable laws; and (ii) shall not (A) dissolve or liquidate in whole or in part, (B) own any subsidiary or lend or advance any moneys to, or make an investment in, any Person, (C) except as provided in the Transaction Documents, incur any debt in connection with or make any capital expenditures, (D)(1) commence any case, proceeding or other action under any existing or future bankruptcy, insolvency or similar law seeking to have an order for relief entered with respect to it, or seeking reorganization, arrangement, adjustment, wind-up, liquidation, dissolution, composition or other relief with respect to it or its debts, (2) seek appointment of a receiver, trustee, custodian or other similar official for it or any part of its assets, (3) make a general assignment for the benefit of creditors, or (4) take any action in furtherance of, or consenting or acquiescing in, any of the foregoing, (E) make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or its capability of doing so, or otherwise), endorse or otherwise become contingently liable (directly or indirectly) for the obligations of, or own or purchase any stock, obligations or securities of or any other interest in, or make any capital contribution to, any other Person, (F) merge or consolidate with any other Person, (G) engage in any other action that detracts from whether the separate legal identity of the Issuer will be respected, including (1) holding itself out as or permitting itself to be held out as being liable for the debts of any other Person or (2) acting other than in its name and through its duly authorized officers or agents, (H) create, incur, assume, or in any manner become liable in respect of any indebtedness other than the Notes, expenses associated with the Closing Date, trade payables and expense accruals incurred in the ordinary course of business which are incidental to its permitted activities, and as provided in or under the Transaction Documents, (I) sponsor or contribute, or contract to or incur any other obligation to contribute to any Plans, or (J) enter into or become party to any agreements or instruments other than the Transaction Documents or any documents or instruments executed pursuant thereto and in connection therewith.  The Issuer will not hold itself out, or permit itself to be held out, as having agreed to pay or as being liable for the debts of the Transferor and the Issuer will not engage in any transactions with the Transferor, except as expressly contemplated by the Transaction Documents and on an arm’s-length basis.  The Issuer will not hold the Transferor out to third parties as other than an entity with assets and liabilities distinct from the Issuer.  The Issuer will not act in any other manner that could foreseeably mislead others with respect to the Issuer’s separate identity.  

 

  

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Failure of the Issuer or the Transferor on behalf of the Issuer to comply with any of the foregoing covenants shall not affect the status of the Issuer as a separate legal entity or the limited liability of the Transferor. So long as any Notes remain Outstanding or any other amounts are owed under the Transaction Documents, the Issuer shall not amend its organizational documents without the prior written consent of the Control Party and, if any Class A Obligations remain outstanding, the Class A Note Insurer and prior written notice to each Rating Agency and the Trustee.  The Issuer shall not make any investment in any Person through the direct or indirect holding of securities or otherwise other than in Eligible Investments.  The Issuer shall not declare or pay any dividends, except out of funds released to it under Section 13.03.  The Issuer will not have any of its indebtedness guaranteed by the Transferor or any Affiliate of the Transferor. The Issuer will cause any financial statements consolidated with those of the Transferor to state that the Issuer is a separate entity with its own separate creditors who, in any liquidation of the Issuer, will be entitled to be satisfied out of the Issuer’s assets prior to any value in the Issuer becoming available to the Issuer’s equity holders. Without the prior written consent of the Control Party, the Issuer will not, nor will it permit or allow others to, amend, modify, terminate or waive any provision of any Contract Assets, except to the extent otherwise expressly permissible under the Transaction Documents.  Notwithstanding the foregoing, the Servicer may, without the prior written consent of the Control Party, waive any assumption fees, late payment charges, charges for checks returned for insufficient funds, or other fees which may be collected in the ordinary course of servicing the Contracts.  The Issuer shall take such actions as the Trustee (at the direction of the Control Party) shall request to enforce the Issuer’s rights under the Contracts, and, at any time during which a Default shall have occurred and be continuing, shall take such actions as are necessary to enable the Trustee (at the direction of the Control Party) to exercise such rights in the Trustee’s own name.  On or before June 15 of each year, so long as any of the Notes are Outstanding, the Issuer shall furnish to the Trustee and each Noteholder, an Officer’s Certificate confirming that the Issuer is in compliance with its obligations under this Section 12.02(i).

 

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

 

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

 

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

 

  

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

 

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

 

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

 

(p)           [Reserved.]

 

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

 

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

 

 

  

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

 

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

 

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

 

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

 

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

 

  

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ARTICLE XIII

ACCOUNTS AND ACCOUNTINGS

 

Section 13.01                                Collection of Money.  Except as otherwise expressly provided herein, the Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Trustee pursuant to this Indenture.  The Trustee shall, upon request from the Servicer, provide the Servicer with sufficient information regarding the amount of collections with respect to the Contract Assets and the other Collateral received by the Trustee in any accounts held in the name of the Trustee to permit the Servicer to perform its duties under the Servicing Agreement.  The Trustee shall hold all such money and property so received by it as part of the Collateral and shall apply it as provided in this Indenture.  If any Contract becomes a Defaulted Contract, the Trustee, upon the request of the Issuer or the Servicer, may, and upon the request of the Control Party shall, take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings.  Any such action shall be without prejudice to any right to deem a Contract a “Defaulted Contract” for purposes of the Transaction Documents and to claim a Default or Event of Default under this Indenture and to proceed thereafter as provided in Article VI.

 

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

 

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

 

  

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

 

(d)           Any proceeds, payments, income or other gain from investments in Eligible Investments made in respect of funds in or credited to the Trust Accounts, as outlined in (c) above, shall be credited to the respective Trust Account from which such funds were derived.  The Trustee shall not be liable for any loss incurred on any funds invested in Eligible Investments pursuant to the provisions of this Section (other than losses from nonpayment of investments in obligations of U.S. Bank National Association issued in its individual capacity).  In no event shall the Trustee be liable for the selection of investments or for losses incurred as a result of the liquidation of any investment prior to its Stated Maturity Date or for the failure of any appropriate Person to provide timely written investment direction.

 

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

 

 

  

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accompanied by any other documents required by the documents governing such security to effect the transfer of the registration thereof to the Securities Intermediary.  The Trust Accounts shall be under the sole dominion and control (as defined in Section 8-106 of the UCC) of the Trustee, and the Issuer shall have no right to close, make withdrawals from, or give disbursement directions with respect to, or receive distributions from, (A) the Collection Account or the Reserve Account, except in accordance with Section 13.03, (B) with respect to the Servicer Transition Account, except in accordance with Section 13.05 and (C) with respect to the Prefunding Account and the Capitalized Interest Account, except in accordance with Sections 13.06 and 13.07, respectively.

 

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

 

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

 

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

 

 

  

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(c)           On each Payment Date, so long as no Event of Default or Cumulative Net Loss Trigger Event has occurred and is continuing, the Trustee shall (subject to the provisions of Section 13.04, 13.06 and 13.07 and Section 11.01(a) with respect to any such funds constituting Available Funds released from the Reserve Account, the Prefunding Account and/or the Capitalized Interest Account) make the following payments from the Available Funds then on deposit in the Collection Account (after required deposits therein from the Reserve Account and the Servicer Transition Account) in the following order of priority (to the extent funds are available therefor):

 

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

 

(ii)           to the Servicer, the Servicer Fee (including any accrued and unpaid amounts owing to a predecessor Servicer) then due to such person, together with any accrued and unpaid Servicer Fees owed to such person from prior Collection Periods;

 

(iii)           (a) to the Servicer, any Servicing Charges and (b) to the Servicer (including any accrued and unpaid amounts owing to a predecessor Servicer), any unreimbursed Collection Costs incurred by such person;

 

(iv)           to the Trustee, the Custodian and the Back-up Servicer, the Trustee Fees and out-of-pocket expenses, Custodian Fees and out-of-pocket expenses and Back-up Servicer Fees and out-of-pocket expenses (which includes out-of-pocket expenses due to any successor Servicer) then due, together with any unpaid Trustee Fees and out-of-pocket expenses, Custodian Fees and out-of-pocket expenses and Back-up Servicer Fees and out-of-pocket expenses from prior Collection Periods (subject to certain limitations set forth herein), and, solely from funds from the Servicer Transition Account, any unpaid Transition Costs in an amount not to exceed in the aggregate $150,000;

 

(v)           to the Class A Noteholders, pro rata among the Holders of the Class A-1A Notes, the Class A-1B Notes and the Class A-2 Notes, the total amount of Note Interest due and payable to such Classes of Notes;

 

(vi)           to the Class A Note Insurer, any accrued and unpaid Class A Note Insurer Premium at the Base Premium Rate;

 

(vii)           to the Class A Note Insurer, any Reimbursement Amounts then due and owing to the Class A Note Insurer in respect of Note Interest on the Class A Notes;

 

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

 

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

 

(x)           to the Class D Noteholders, the total amount of Note Interest due and payable to such Class of Notes;

 

 

  

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(xi)           to the Class E-1 Noteholders, the total amount of Note Interest due and payable to such Class of Notes;

 

(xii)           to the Class E-2 Noteholders, the total amount of Note Interest due and payable to such Class of Notes;

 

(xiii)           to the Holders of the Class A Notes, the Principal Payment Amount (to the extent and up to the amount of the remaining Available Funds), sequentially, to the Holders of the Class A-1A Notes, in reduction of principal until the Outstanding Note Balance of the Class A-1A Notes has been reduced to zero, then, to the Holders of the Class A-1B Notes, in reduction of principal until the Outstanding Note Balance of the Class A-1B Notes has been reduced to zero, and then to the Holders of the Class A-2 Notes, in reduction of principal until the Outstanding Note Balance of the Class A-2 Notes has been reduced to zero;

 

(xiv)           to the Class A Note Insurer, any other Reimbursement Amounts owing under the Insurance Agreement;

 

(xv)           to the Holders of the Class B Notes, the amount equal to the Principal Payment Amount (to the extent and up to the amount of the remaining Available Funds) less the amount needed to reduce the Outstanding Note Balance of the Class A Notes to zero, in reduction of principal until the Outstanding Note Balance of the Class B Notes has been reduced to zero;

 

(xvi)           to the Holders of the Class C Notes, the amount equal to the Principal Payment Amount (to the extent and up to the amount of the remaining Available Funds) less the amount needed to reduce the Outstanding Note Balance of each of the Class A Notes and the Class B Notes to zero, in reduction of principal until the Outstanding Note Balance of the Class C Notes has been reduced to zero;

 

(xvii)           to the Holders of the Class D Notes, the amount equal to the Principal Payment Amount (to the extent and up to the amount of the remaining Available Funds) less the amount needed to reduce the Outstanding Note Balance of each of the Class A Notes, the Class B Notes, and the Class C Notes to zero, in reduction of principal until the Outstanding Note Balance of the Class D Notes has been reduced to zero;

 

(xviii)           to the Holders of the Class E-1 Notes, the amount equal to the Principal Payment Amount (to the extent and up to the amount of the remaining Available Funds) less the amount needed to reduce the Outstanding Note Balance of each of the Class A Notes, the Class B Notes, the Class C Notes, and the Class D Notes to zero, in reduction of principal until the Outstanding Note Balance of the Class E-1 Notes has been reduced to zero;

 

(xix)           to the Holders of the Class E-2 Notes, the amount equal to the Principal Payment Amount (to the extent and up to the amount of the remaining Available Funds) less the amount needed to reduce the Outstanding Note Balance of each of the Class A Notes, the Class B Notes, the Class C Notes, and the Class D Notes to zero, in reduction of principal until the Outstanding Note Balance of the Class E-2 Notes has been reduced to zero;

 

 

  

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(xx)           to the Trustee (on its own behalf and on behalf of the respective Noteholders), Securities Intermediary, Custodian and Back-up Servicer, any indemnification payments and other amounts owed by the Issuer;

 

(xxi)           if the amount on deposit in the Reserve Account is less than the Target Required Reserve Account Amount, to the Reserve Account the lesser of any remaining Available Funds and that insufficiency; and

 

(xxii)           to the Issuer, any remaining Available Funds; provided, however, if either the Cumulative Net Loss Percentage or the Three-Month Rolling Average Delinquency Ratio is greater than 75% of the then applicable cumulative net loss trigger level or the Three-Month Rolling Average Delinquency Trigger Level, respectively, then such excess amount shall not be released to the Issuer but shall be applied on such Payment Date to pay principal on the senior most outstanding Class of Notes.

 

(d)           On each Payment Date, so long as an Event of Default or Cumulative Net Loss Trigger Event has occurred and is continuing, the Trustee shall make the following payments from the Available Funds then on deposit in the Collection Account (after required deposits therein from the Reserve Account and the Servicer Transition Account) in the following order of priority (to the extent funds are available therefor):

 

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

 

(ii)           to the Servicer, the Servicer Fee (including any accrued and unpaid amounts owing to a predecessor Servicer) then due to such person, together with any accrued and unpaid Servicer Fees owed to such person from prior Collection Periods;

 

(iii)           (a) to the Servicer, any Servicing Charges and (b) to the Servicer (including any accrued and unpaid amounts owing to a predecessor Servicer), any unreimbursed Collection Costs incurred by such person;

 

(iv)           to the Trustee, the Custodian and the Back-up Servicer, the Trustee Fees and out-of-pocket expenses, Custodian Fees and out-of-pocket expenses and Back-up Servicer Fees and out-of-pocket expenses (which includes out-of-pocket expenses due to any successor Servicer) then due, together with any unpaid Trustee Fees and out-of-pocket expenses, Custodian Fees and out-of-pocket expenses and Back-up Servicer Fees and out-of-pocket expenses from prior Collection Periods (subject to certain limitations set forth herein), and, solely from funds from the Servicer Transition Account, any unpaid Transition Costs in an amount not to exceed in the aggregate $150,000;

 

(v)           to the Class A Noteholders, pro rata among the Holders of the Class A-1A Notes, the Class A-1B Notes and the Class A-2 Notes, the total amount of Note Interest due and payable to such Classes of Notes;

 

 

  

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(vi)           to the Class A Note Insurer, any accrued and unpaid Class A Note Insurer Premium at the Base Premium Rate;

 

(vii)           to the Class A Note Insurer, any Reimbursement Amounts then due and owing to the Class A Note Insurer in respect of Note Interest on the Class A Notes;

 

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

 

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

 

(x)           to the Class D Noteholders, the total amount of Note Interest due and payable to such Class of Notes;

 

(xi)           to the Class E-1 Noteholders, the total amount of Note Interest due and payable to such Class of Notes;

 

(xii)           to the Class E-2 Noteholders, the total amount of Note Interest due and payable to such Class of Notes;

 

(xiii)           to the Class A-1A Noteholders, in reduction of principal until the Outstanding Note Balance of the Class A-1A Notes has been reduced to zero;

 

(xiv)           to the Class A-1B Noteholders, in reduction of principal until the Outstanding Note Balance of the Class A-1B Notes has been reduced to zero;

 

(xv)           to the Class A-2 Noteholders, in reduction of principal until the Outstanding Note Balance of the Class A-2 Notes has been reduced to zero;

 

(xvi)           to the Class A Note Insurer, any other Reimbursement Amounts owing under the Insurance Agreement;

 

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

 

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

 

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

 

(xx)           to the Class E-1 Noteholders, in reduction or principal until the Outstanding Note Balance of the Class E-1 Notes has been reduced to zero;

 

(xxi)           to the Class E-2 Noteholders, in reduction or principal until the Outstanding Note Balance of the Class E-2 Notes has been reduced to zero;

 

 

  

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(xxii)           to the Class A Note Insurer, the balance of any accrued and unpaid Class A Note Insurer Premium;

 

(xxiii)           to the Trustee (on its own behalf and on behalf of the respective Noteholders), Securities Intermediary, Custodian and Back-up Servicer, any indemnification payments and other amounts owed by the Issuer; and

 

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

 

(e)           On the related Redemption Date, the Trustee shall withdraw the sum of the applicable Redemption Price from the Collection Account, and the Paying Agent shall remit the Redemption Price to the applicable Noteholders in accordance with Section 11.04.

 

Section 13.04                                Reserve Account.  (a) On the Closing Date, the Issuer shall deposit, or cause to be deposited, into the Reserve Account an amount equal to 1.50% of the Initial Discounted Pool Balance (the “Initial Required Reserve Account Deposit”). On each Acquisition Date on which an Additional Contract is purchased by the Issuer, the Issuer shall deposit, or cause to be deposited, into the Reserve Account an amount equal to 1.50% of the sum of (a) the related Discounted Contract Balances and (b) the discounted Residual Receipts (assuming (1) such Residual Receipts are received six months from the end of the related Contract term, (2) the collection rate for Residual Receipts is equal to 30% of the Issuer’s related Booked Residual on the related residual payment date and (3) a discount rate of 5.00% per annum), into the Reserve Account (each such deposit, a “Additional Required Reserve Account Deposit”), subject to maximum aggregate reserve account deposits of $1,671,087.53.  If on any Payment Date when Available Funds are to be paid in accordance with Section 13.03(c), the amount on deposit in the Reserve Account is less than the sum of the Initial Required Reserve Account Deposit and the aggregate Additional Required Reserve Account Deposits (that sum, the “Target Required Reserve Account Amount”), then all Available Funds remaining in the Collection Account, after payment of amounts pursuant to clauses (i) through (xx) of Section 13.03(c), up to the amount of that insufficiency, shall be deposited into the Reserve Account pursuant to Section 13.03(c)(xxi) before any Available Funds are released to the Issuer.

 

(b)           If on any Payment Date, (i) amounts on deposit in the Collection Account are insufficient to reduce the Aggregate Outstanding Note Balance to an amount lower than or equal to the Discounted Pool Balance, plus amounts then on deposit in the Prefunding Account, after applying clauses (i) through (xix) of Section 13.03(c) or clauses (i) through (xxi) of Section 13.03(d), as applicable, (ii) (x) amounts on deposit in the Collection Account are insufficient to pay all Note Interest on the Class A Notes or (y) after the Class A Notes have been paid in full and the Class A Note Insurer Premium and all Reimbursement Amounts owed to the Class A Note Insurer have been repaid, amounts on deposit in the Collection Account are insufficient to pay Note Interest on any other Class of Notes or (iii) amounts on deposit in the Reserve Account are greater than or equal to the Aggregate Outstanding Note Balance, then the Trustee will withdraw from the Reserve Account, to the extent of funds on deposit in the Reserve Account, in the case of clauses (i) and (ii) above, the amount of such insufficiency or, in the case of clause (iii) above, all funds therein and deposit such withdrawn amounts into the Collection Account to be distributed to pay (in the case of clause (ii) above) Note Interest or (in the case of clauses (i) and (iii) above) to repay the Outstanding Note Balances in accordance with the order of priorities

 

 

  

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set forth in Section 13.03(c) or Section 13.03(d), as applicable.  In additional to the foregoing, if an Event of Default has occurred and is continuing, the Control Party will have the right to direct the Trustee to release amounts on deposit in the Reserve Account and to deposit those amounts into the Collection Account to be allocated as Available Funds.  Upon the occurrence of any Event of Default that results in acceleration of the Notes and is not waived or cured on or before the next Payment Date, all funds maintained in the Reserve Account shall, if the Control Party so directs, be transferred to the Collection Account by the Trustee to be used as Available Funds in accordance with Section 13.03(d).  On the latest Stated Maturity Date for any Class of Notes, and at the option of the Issuer in connection with the redemption pursuant to Article XI, any remaining funds on deposit in the Reserve Account shall be deposited in the Collection Account to be used as Available Funds and distributed in accordance with Section 13.03(c) or 13.03(d), as applicable.

 

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

 

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

 

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

 

Section 13.06                                Prefunding Account.  On the Closing Date, $2,604,445.35 of the cash proceeds from the sale of the Notes will be deposited to the Prefunding Account. During the Prefunding Period, the Issuer is authorized to use amounts in the Prefunding Account to acquire Additional Contracts from the Transferor and the Transferor’s interest in the related Equipment pursuant to the Purchase and Contribution Agreement, provided that (1) such Contracts are Eligible Contracts as of the related Acquisition Date (except as permitted pursuant to Section 4.04(a)), (2) no Event of Default or Cumulative Net Loss Trigger Event has occurred and is continuing, (3) the Overconcentration Test would be satisfied immediately after the Issuer acquires the proposed Additional Contracts on the related Acquisition Date, and (4) the Control Party has consented in writing to such acquisition. Upon the earlier of (a) the third Payment Date and (b) the occurrence of any Event of Default that results in acceleration of the Notes and is not waived or cured on or before the next Payment Date, all amounts on deposit in the Prefunding Account (after giving effect to any transfers of funds on deposit therein to the Reserve Account or to the Transferor in consideration for Additional Contracts in accordance with the terms hereof) will be withdrawn by the Trustee, to the extent of funds on deposit therein, and distributed to the Class A Noteholders, Class B Noteholders, Class C Noteholders, Class D Noteholders, Class E-1 Noteholders and Class E-2 Noteholders, pro rata based upon their respective Outstanding Note Balances, in reduction of principal, and without regard to the priority of payments set forth in Section 13.03(c) or Section 13.03(d).

 

 

  

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Section 13.07                                Capitalized Interest Account. On the Closing Date, $28,185.00 of the cash proceeds from the sale of the Notes will be deposited to the Capitalized Interest Account.  On each of the first two Payment Dates, amounts from the Capitalized Interest Account shall be deposited into the Collection Account by the Trustee in an amount equal to accrued interest at 5.00% per annum (calculated on the basis of the actual number of days elapsed in a three-hundred-sixty (360)-day year) on the amount in the Prefunding Account on the Closing Date (for the calculation of capitalized interest due on the first Payment Date) and on the first Payment Date (for the calculation of capitalized interest due on the second Payment Date). After all of the funds in the Prefunding Account have been applied, any amounts in the Capitalized Interest Account that have not been deposited into the Collection Account shall be paid directly to the Issuer.  Upon the earlier of (a) the third Payment Date and (b) the occurrence of any Event of Default that results in acceleration of the Notes and is not waived or cured on or before the next Payment Date, all amounts on deposit in the Capitalized Interest Account will be withdrawn by the Trustee, to the extent of funds on deposit therein, and distributed to the Class A Noteholders, Class B Noteholders, Class C Noteholders, Class D Noteholders, Class E-1 Noteholders and Class E-2 Noteholders, pro rata based upon their respective Outstanding Note Balances, in reduction of principal, and without regard to the priority of payments set forth in Section 13.03(c) or Section 13.03(d).

 

Section 13.08                                Reports to the Noteholders. (a) On each Payment Date, the Trustee will make available to each Noteholder and the Class A Note Insurer the Monthly Servicing Report.

 

The Trustee will make the Monthly Servicing Report available to the Noteholders and the Class A Note Insurer, via the Trustee’s Internet website, and, with the consent or at the direction of the Issuer, such other information regarding the Notes and/or the Contracts as the Trustee may have in its possession, including but not limited to the Transaction Documents, but only with the use of a password provided by the Trustee or its agent to such Person.  The Trustee will make no representation or warranties as to the accuracy or completeness of such documents and will assume no responsibility for the contents thereof.

 

The Trustee’s Internet website initially shall be located at www.usbank.com/abs or at such other address as shall be specified by the Trustee from time to time in writing to the Noteholders and the Class A Note Insurer. Noteholders with questions may direct them to the Trustee’s bondholder services group at (800) 934-6802.  In connection with providing access to the Trustee’s Internet website, the Trustee may require registration and the acceptance of a disclaimer.  The Trustee shall not be liable for errors in the dissemination of information in accordance with this Indenture.

 

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

 

(b)           At least annually, or as otherwise required by law, the Servicer shall prepare or cause to be prepared, and the Trustee shall distribute to the Noteholders and the Class A Note

Insurer, any 1099 form, or other tax information or statements as are required by applicable tax law.

 

  

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Section 13.09                                Monthly Servicing Reports.  No later than the close of business on each Reporting Date, the Servicer shall deliver the Monthly Servicing Report to the Trustee, the Back-up Servicer and each Rating Agency.  No later than 12:00 noon (New York time) on the following Verification Date, the Back-up Servicer shall perform its obligations and duties set forth in Section 4.05 of the Servicing Agreement and shall notify the Issuer, the Trustee, the Noteholders and the Control Party of any discrepancies therein or the need for any additional information to complete such verification, and the Servicer shall promptly re-issue a revised Monthly Servicing Report addressing such discrepancies and such information request which revised Monthly Servicing Report shall supersede the prior report for purposes of making the distributions described in Section 13.03. The Monthly Servicing Report shall include the information specified in the form of Monthly Servicing Report attached to the Servicing Agreement, as such form may be modified from time to time with the consent of the Servicer, the Back-up Servicer, the Control Party.

 

 

ARTICLE XIV

PROVISIONS OF GENERAL APPLICATION

 

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

 

Section 14.02                                Acts of Noteholders.

 

(a)           Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee, and, where it is hereby expressly required, to the Issuer.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 7.01) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section.

 

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

 

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

 

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

 

 

  

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

 

(a)           to the Trustee at 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107, facsimile number 651-495-8090, Attention:  LEAF Receivables Funding 7, LLC, Equipment Contract Backed Notes, Series 2011-2;

 

(b)           to the Custodian at 1133 Rankin Street, EP-MN-TMZD, St. Paul, MN 55116 facsimile number:  651-695-6102, Attention:  LEAF Receivables Funding 7, LLC, Equipment Contract Backed Notes, Series 2011-2;

 

(c)           to the Servicer at 2005 Market Street, 14th Floor, Philadelphia, PA 19103, facsimile number:  215-640-6363, Attention:  Miles Herman;

 

(d)           to the Issuer at 110 S. Poplar Street, Suite 101, Wilmington, Delaware 19801, facsimile number:  215-640-6363, Attention:  Miles Herman;

 

(e)           to the Transferor at 110 S. Poplar Street, Suite 101, Wilmington, Delaware 19801, facsimile number:  215-640-6363, Attention:  Miles Herman;

 

(f)           to the Back-up Servicer at EP-MN-WS3D, 60 Livingston Avenue, St. Paul, Minnesota 55107, facsimile: (651) 495-8090, Attention: LEAF Receivables Funding 7, LLC, Equipment Contract Backed Notes, Series 2011-2;

 

(g)           to DBRS, Inc. at 140 Broadway, 35th Floor, New York, NY 10005, facsimile number: 212-806-3201, Attention: Chuck Weilamann, Re: LEAF Receivables Funding 7, LLC, Equipment Contract Backed Notes, Series 2011-2;

 

(h)           to Moody’s, at Moody’s Investors Service, Inc., 7 World Trade Center, 250 Greenwich Street, New York, NY, 10007, Attention: Michael Labuskes, facsimile number:  212-298-6919; or

 

(i)           To the Class A Note Insurer, at 31 West 52nd Street, New York, New York 10019, facsimile number: (212) 581-3268, confirmation number:  (212) 974-0100, Attention: Risk Management Department, Re: LEAF Receivables Funding 7, LLC, Policy No. 93091.

 

Section 14.04                                Notices to Noteholders; Waiver.  Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and faxed (with written confirmation of receipt from each addressee), mailed by registered mail, overnight bonded courier or delivered personally to each Noteholder affected by such event, at its address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice.  In any case in which notice to Noteholders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice which is mailed in the manner herein provided shall conclusively be presumed to have been duly given.

 

 

  

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

 

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

 

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

 

Section 14.06                                Severability; No Waiver.  Subject to clause (b) below, if any one or more of the covenants, agreements, provisions or terms of this Indenture shall be for any reason whatsoever held invalid, then such covenant(s), agreement(s), provision(s) or term(s) shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Indenture and shall in no way affect the validity or enforceability of the other provisions of this Indenture or of the Notes or the rights of the Noteholders thereof or the rights of the Class A Note Insurer.

 

           Notwithstanding the foregoing, the parties hereto acknowledge and agree to and with each  other (and also agree with and for the benefit of the Class A Note Insurer) that: (i) although the Insurance Agreement, the Servicing Agreement, this Indenture and the other Transaction Documents are separate documents, they are intended to be parts of an integrated transaction, (ii) this paragraph is fundamental to their understanding of this Indenture, (iii) the Class A Note Insurer would not have agreed to enter into the Insurance Agreement (without which the transactions contemplated by this Indenture would not have been entered into) without the benefit of and reliance upon all cross-default provisions contained herein and in any of the Transactions Documents contemplated hereby; (iv) the rights, privileges, obligations and liabilities of such parties and the Class A Note Insurer have been set forth in separate agreements for administrative convenience only and (v) it would be inequitable for any such party to enjoy the benefits of this Indenture without also meeting its obligations under all the Transaction Documents, whether such obligations are set forth in this Indenture or any other such Transaction Document.

 

Section 14.07                                Benefits of Indenture Limited to Parties and Express Third Party Beneficiaries. The Class A Note Insurer and its successors and assigns shall be an acknowledging party to the applicable provisions of this Indenture solely for the purposes of benefiting from the right to enforce any right, remedy or claim conferred, given or granted to it hereunder and not for 

 

  

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the purpose of assuming any obligation hereunder.  To the extent that this Indenture confers upon or gives or grants to the Class A Note Insurer any right, remedy or claim under or by reason of this Indenture, the Class A Note Insurer may (but shall not be obligated to) enforce any such right, remedy or claim conferred, given or granted to it hereunder. Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto, the Noteholders, the Class A Note Insurer and their respective successors and permitted assigns, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 14.08                                Legal Holidays. In any case in which the date of any Payment Date, or the Stated Maturity Date of any Note shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment of principal or interest need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of any such Stated Maturity Date or Payment Date.

 

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

 

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

 

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

 

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

 

Section 14.10                                Counterparts; Entire Agreement. This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.  Delivery by fax of an executed counterpart of a signature page to this Indenture shall be as effective as delivery of the original executed counterpart.  This Indenture, together with the exhibits hereto and the other written Transaction Documents referenced herein, sets forth the entire agreement among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.

 

 

  

- 90 -

  

 

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

 

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

 

Section 14.13                                Assignment.

 

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

 

 

  

- 91 -

  

 

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

 

	 	
LEAF Receivables Funding 7, LLC,

as Issuer

	 	  
	 	
By:                                                                              

	 	
Name:                                                                                                      

	 	
Title:                                                                                                      

	
 

 

	  
	 	
U.S. Bank National Association,

as Trustee

	 	  
	 	
By:                                                                                                            

	 	
Name:                                                                                                 

	 	
Title:                                                                                                           

	
 

 

	  
	 	
U.S. Bank National Association,

as Custodian

	 	  
	 	
By:                                                                                 

	 	
Name:                                                                                    

	 	
Title:                                                                                    

 

 

Indenture

 

 

  

- 92 -

  

 

SCHEDULE I

 

CLOSING DATE CONTRACT SCHEDULE

 

[See attached.]

 

Sched. I-I

 

  

  

  

 

 

EXECUTION VERSION

 

Exhibit A-1

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

GLOBAL CLASS A-1A NOTE

 

[For Rule 144A Book-Entry Notes Only]

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRANSFEROR OF SUCH NOTE (THE “TRANSFEROR”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR THE USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

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

 

 

  

  

  

 

 

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

 

 

[The remaining pages for this Class A-1A Note follow starting on the next page.

The remainder of this page is intentionally left blank.]

 

 

  

Exhibit A-1-2

  

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS A-1A NOTE

 

 

No. ______

Up to $15,000,000

 

Stated Maturity Date:  _______ __, 20__

 

Dated: ____________ __, 20__

 

REGISTERED OWNER: ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed FIFTEEN MILLION DOLLARS ($15,00,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class A-1A Note shall represent such of the Outstanding Class A-1A Notes as are specified herein, and represents the aggregate amount of Outstanding Class A-1A Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class A-1A Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class A-1A Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class A-1A Notes specified in the Indenture (calculated in accordance with the Indenture).  The Interest Accrual Period for each Payment Date is the period commencing on and including the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual

 

 

  

Exhibit A-1-3

  

Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class A-1A Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the last Business Day preceding such Payment Date.

 

This Class A-1A Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

This Class A-1A Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person, except that certain payments on this Class A-1A Note are guaranteed, and are entitled to the benefits of, the financial guaranty insurance policy issued by Assured Guaranty Corp. (the “Class A Note Insurer”), pursuant to which the Class A Note Insurer has unconditionally guaranteed payment to the Class A-1A Noteholders of interest with respect to each Payment Date and of principal at its Stated Maturity Date, as more fully set forth in the Indenture and the Class A Insurance Policy. Neither the Class A-1A Notes nor the Contract Assets are insured by any governmental agency.

 

 

  

Exhibit A-1-4

  

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class A-1A Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class A-1A Note and any other Class A-1A Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture.  If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Class A-1A Notes may be exchanged, and their transfer may be registered, by the Class A-1A Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class A-1A Notes.  Upon exchange or registration of such transfer, a new registered Class A-1A Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class A-1A Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

 

  

Exhibit A-1-5

  

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

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

 

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

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Exhibit A-1-6

  

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

This is one of the Class A-1A Notes described in the within-mentioned Indenture.

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

  

Exhibit A-1-7

  

 

 

Exhibit A-2

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

DEFINITIVE CLASS A-1A NOTE

 

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES (1) THAT THIS NOTE MAY BE RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (“QIB”) WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT, OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB AND TO WHOM NOTICE IS GIVEN THAT RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR TO THE ISSUER PURSUANT TO THE TERMS OF THE INDENTURE, AND (2) THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TO BE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  THE INDENTURE RELATING TO THIS NOTE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN IN VIOLATION OF THE FOREGOING.  EACH TRANSFEREE ACCEPTING AN OWNERSHIP INTEREST IN THIS NOTE IS DEEMED TO REPRESENT TO THE ISSUER AND THE SERVICER THAT IT IS EITHER A QIB PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.  EACH HOLDER HEREOF IS DEEMED TO REPRESENT AND WARRANT EITHER (A) THAT IT IS NOT (AND FOR SO LONG AS IT HOLDS THIS NOTE OR AN INTEREST HEREIN WILL NOT BE), AND IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS THIS SECURITY OR AN INTEREST HEREIN WILL NOT BE ACTING ON BEHALF OF), AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR AN ENTITY WHICH IS DEEMED TO HOLD THE ASSETS OF ANY SUCH PLAN (“PLAN ASSETS”) PURSUANT TO 29 C.F.R. SECTION 2510.3-101 AS MODIFIED BY SECTION 3(42) OF ERISA (THE “PLAN ASSET REGULATION”) (EACH A “BENEFIT PLAN INVESTOR”), OR (B) (I) ITS PURCHASE AND OWNERSHIP OF THIS SECURITY WILL BE COVERED BY A PROHIBITED TRANSACTION CLASS EXEMPTION ISSUED BY THE UNITED STATES DEPARTMENT OF LABOR, (II) AT THE TIME OF ACQUISITION THE NOTES ARE RATED AT LEAST INVESTMENT GRADE, AND (III) IT BELIEVES THAT THE NOTES ARE PROPERLY TREATED AS INDEBTEDNESS WITHOUT

 

 

Exhibit A-3-1

 

 

 

 

SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET REGULATIONS AND AGREES TO SO TREAT SUCH NOTES, OR (C) IT HAS PROVIDED THE TRUSTEE WITH AN OPINION OF COUNSEL, WHICH OPINION OF COUNSEL WILL NOT BE AT THE EXPENSE OF THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER, WHICH OPINES THAT THE PURCHASE, HOLDING, AND TRANSFER OF SUCH NOTE OR INTEREST THEREIN IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE INDENTURE.  THE NOTES OR ANY BENEFICIAL INTEREST HEREIN MAY BE TRANSFERRED ONLY IN PERMITTED DENOMINATIONS SPECIFIED IN THE INDENTURE.  ACCORDINGLY, AN INVESTOR IN THIS NOTE MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

OWING TO THE PROVISIONS FOR THE PAYMENT OF PRINCIPAL CONTAINED HEREIN, THE OUTSTANDING NOTE BALANCE OF THIS NOTE MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  ANYONE PURCHASING THIS NOTE SHOULD CONFIRM THE OUTSTANDING NOTE BALANCE HEREOF BY INQUIRY OF THE TRUSTEE.

 

 

[The remaining pages for this Class A-1A Note follow starting on the next page.

The remainder of this page is intentionally left blank.]

 

 

 

Exhibit A-2-2

 

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS A-1A NOTE

 

 

No. ______

Up to $15,000,000

 

Stated Maturity Date: _______ __, 20__

 

Dated: ____________ __, 20__

 

REGISTERED OWNER: ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed FIFTEEN MILLION DOLLARS ($15,000,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class A-1A Note shall represent such of the Outstanding Class A-1A Notes as are specified herein, and represents the aggregate amount of Outstanding Class A-1A Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class A-1A Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class A-1A Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class A-1A Notes specified in the Indenture (calculated in accordance with the Indenture).  The Interest Accrual Period for each Payment Date is the period commencing on and including the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual

 

 

 

Exhibit A-2-3

 

 

Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class A-1A Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the close of business on the last Business Day of the month prior to such Payment Date.

 

This Class A-1A Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

This Class A-1A Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person, , except that certain payments on this Class A-1A Note are guaranteed, and are entitled to the benefits of, the financial guaranty insurance policy issued by Assured Guaranty Corp. (the “Class A Note Insurer”), pursuant to which the Class A Note Insurer has unconditionally guaranteed payment to the Class A-1A Noteholders of interest with respect to each Payment Date and of principal at its Stated Maturity

 

 

 

Exhibit A-2-4

 

 

Date, as more fully set forth in the Indenture and the Class A Insurance Policy. Neither the Class A-1A Notes nor the Contract Assets are insured by any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class A-1A Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class A-1A Note and any other Class A-1A Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture. If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The final payment on any Definitive Note shall be made only upon presentation and surrender of the Note at the Corporate Trust Office of the Trustee.

 

The Class A-1A Notes may be exchanged, and their transfer may be registered, by the Class A-1A Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class A-1A Notes.  Upon exchange or registration of such transfer, a new registered Class A-1A Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class A-1A Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of 

 

 

 

Exhibit A-2-5

 

 

America maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the 

 

 

Exhibit A-2-6

 

 

principal of and interest on this Note at the times, place, and rate, and in the coin or currency, herein prescribed.

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

[The remainder of page is intentionally left blank.]

 

 

 

Exhibit A-2-7

 

 

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

This is one of the Class A-1A Notes described in the within-mentioned Indenture.

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

Exhibit A-2-8

 

 

[Form of Assignment]

 

For Value Received, the undersigned hereby sells, assigns, and transfers unto

 

(Please insert Social Security or

Taxpayer Identification number

of Assignee)

 

_______________________________

_______________________________

 

______________________________________________________________________________

(Please Print or Typewrite Name and Address of Assignee)

 

______________________________________________________________________________

the within Note, and all rights thereunder, and hereby does irrevocably constitute and appoint

 

_____________________________________________________________________________, 

as attorney, to transfer the within Note on the books kept for registration thereof, with full power

of substitution in the premises.

 

 

Date:___________________

 

 

____________________________________

Notice:  The signature to this assignment 

must correspond with the name as it appears 

upon the face of the within Note in every 

particular, without alteration or enlargement 

or any change whatever.

 

 

Exhibit A-2-9

 

 

SNR Denton Draft 10/24/11

 

Exhibit A-3

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

GLOBAL CLASS A-1B NOTE

 

[For Rule 144A Book-Entry Notes Only]

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRANSFEROR OF SUCH NOTE (THE “TRANSFEROR”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR THE USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

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

 

 

 

Exhibit A-3-1

 

 

 

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

 

 

[The remaining pages for this Class A-1B Note follow starting on the next page.

The remainder of this page is intentionally left blank.]

 

 

 

Exhibit A-3-2

 

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS A-1B NOTE

 

 

No. ______ 

Up to $5,000,000

 

Stated Maturity Date:  _______ __, 20__

 

Dated: ____________ __, 20__

 

REGISTERED OWNER: ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed FIVE MILLION DOLLARS ($5,000,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class A-1B Note shall represent such of the Outstanding Class A-1B Notes as are specified herein, and represents the aggregate amount of Outstanding Class A-1B Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class A-1B Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class A-1B Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class A-1B Notes specified in the Indenture (calculated in accordance with the Indenture).  The Interest Accrual Period for each Payment Date is the period commencing on and including the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual

 

 

 

Exhibit A-3-3

 

 

Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class A-1B Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the last Business Day preceding such Payment Date.

 

THIS CLASS A-1B NOTE IS SUBORDINATE IN RIGHT OF PAYMENT OF PRINCIPAL TO THE CLASS A-1A NOTES TO THE EXTENT AND AS MORE FULLY DESCRIBED IN THE INDENTURE.

 

This Class A-1B Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

This Class A-1B Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person, except that certain payments on this Class A-1B Note are guaranteed, and are entitled to the benefits of, the financial guaranty insurance policy issued by Assured Guaranty Corp. (the “Class A Note Insurer”), pursuant to 

 

 

 

Exhibit A-3-4

 

  

 

which the Class A Note Insurer has unconditionally guaranteed payment to the Class A-1B Noteholders of interest with respect to each Payment Date and of principal at its Stated Maturity Date, as more fully set forth in the Indenture and the Class A Insurance Policy. Neither the Class A-1B Notes nor the Contract Assets are insured by any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class A-1B Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class A-1B Note and any other Class A-1B Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture.  If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Class A-1B Notes may be exchanged, and their transfer may be registered, by the Class A-1B Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class A-1B Notes.  Upon exchange or registration of such transfer, a new registered Class A-1B Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class A-1B Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrument 

 

 

Exhibit A-3-5

 

 

of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

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

 

 

Exhibit A-3-6

 

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

[The remainder of page is intentionally left blank.]

 

 

 

Exhibit A-3-7

 

 

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

This is one of the Class A-1B Notes described in the within-mentioned Indenture.

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

Exhibit A-3-8

 

 

Exhibit A-4

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

DEFINITIVE CLASS A-1B NOTE

 

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES (1) THAT THIS NOTE MAY BE RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (“QIB”) WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT, OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB AND TO WHOM NOTICE IS GIVEN THAT RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR TO THE ISSUER PURSUANT TO THE TERMS OF THE INDENTURE, AND (2) THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TO BE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  THE INDENTURE RELATING TO THIS NOTE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN IN VIOLATION OF THE FOREGOING.  EACH TRANSFEREE ACCEPTING AN OWNERSHIP INTEREST IN THIS NOTE IS DEEMED TO REPRESENT TO THE ISSUER AND THE SERVICER THAT IT IS EITHER A QIB PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.  EACH HOLDER HEREOF IS DEEMED TO REPRESENT AND WARRANT EITHER (A) THAT IT IS NOT (AND FOR SO LONG AS IT HOLDS THIS NOTE OR AN INTEREST HEREIN WILL NOT BE), AND IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS THIS SECURITY OR AN INTEREST HEREIN WILL NOT BE ACTING ON BEHALF OF), AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR AN ENTITY WHICH IS DEEMED TO HOLD THE ASSETS OF ANY SUCH PLAN (“PLAN ASSETS”) PURSUANT TO 29 C.F.R. SECTION 2510.3-101 AS MODIFIED BY SECTION 3(42) OF ERISA (THE “PLAN ASSET REGULATION”) (EACH A “BENEFIT PLAN INVESTOR”), OR (B) (I) ITS PURCHASE AND OWNERSHIP OF THIS SECURITY WILL BE COVERED BY A PROHIBITED TRANSACTION CLASS EXEMPTION ISSUED BY THE UNITED STATES DEPARTMENT OF LABOR, (II) AT THE TIME OF ACQUISITION THE NOTES ARE RATED AT LEAST INVESTMENT GRADE, AND (III) IT BELIEVES THAT THE NOTES ARE PROPERLY TREATED AS INDEBTEDNESS WITHOUT

 

 

Exhibit A-4-1

 

 

 

SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET REGULATIONS AND AGREES TO SO TREAT SUCH NOTES, OR (C) IT HAS PROVIDED THE TRUSTEE WITH AN OPINION OF COUNSEL, WHICH OPINION OF COUNSEL WILL NOT BE AT THE EXPENSE OF THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER, WHICH OPINES THAT THE PURCHASE, HOLDING, AND TRANSFER OF SUCH NOTE OR INTEREST THEREIN IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE INDENTURE.  THE NOTES OR ANY BENEFICIAL INTEREST HEREIN MAY BE TRANSFERRED ONLY IN PERMITTED DENOMINATIONS SPECIFIED IN THE INDENTURE.  ACCORDINGLY, AN INVESTOR IN THIS NOTE MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

OWING TO THE PROVISIONS FOR THE PAYMENT OF PRINCIPAL CONTAINED HEREIN, THE OUTSTANDING NOTE BALANCE OF THIS NOTE MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  ANYONE PURCHASING THIS NOTE SHOULD CONFIRM THE OUTSTANDING NOTE BALANCE HEREOF BY INQUIRY OF THE TRUSTEE.

 

 

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Exhibit A-4-2

 

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS A-1B NOTE

 

 

No. ______ 

Up to $5,000,000

 

Stated Maturity Date: _______ __, 20__

 

Dated: ____________ __, 20__

 

REGISTERED OWNER: ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed FIVE MILLION DOLLARS ($5,000,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class A-1B Note shall represent such of the Outstanding Class A-1B Notes as are specified herein, and represents the aggregate amount of Outstanding Class A-1B Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class A-1B Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class A-1B Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class A-1B Notes specified in the Indenture (calculated in accordance with the Indenture).  The Interest Accrual Period for each Payment Date is the period commencing on and including the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual

 

 

 

Exhibit A-4-3

 

 

Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class A-1B Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the close of business on the last Business Day of the month prior to such Payment Date.

 

THIS CLASS A-1B NOTE IS SUBORDINATE IN RIGHT OF PAYMENT OF PRINCIPAL TO THE CLASS A-1A NOTES TO THE EXTENT AND AS MORE FULLY DESCRIBED IN THE INDENTURE.

 

This Class A-1B Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

This Class A-1B Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person, , except that certain payments on this Class A-1B Note are guaranteed, and are entitled to the benefits of, the financial guaranty 

 

 

 

Exhibit A-4-4

 

 

insurance policy issued by Assured Guaranty Corp. (the “Class A Note Insurer”), pursuant to which the Class A Note Insurer has unconditionally guaranteed payment to the Class A-1B Noteholders of interest with respect to each Payment Date and of principal at its Stated Maturity Date, as more fully set forth in the Indenture and the Class A Insurance Policy. Neither the Class A-1B Notes nor the Contract Assets are insured by any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class A-1B Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class A-1B Note and any other Class A-1B Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture. If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The final payment on any Definitive Note shall be made only upon presentation and surrender of the Note at the Corporate Trust Office of the Trustee.

 

The Class A-1B Notes may be exchanged, and their transfer may be registered, by the Class A-1B Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class A-1B Notes.  Upon exchange or registration of such transfer, a new registered Class A-1B Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class A-1B Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

 

 

Exhibit A-4-5

 

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted hereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

 

Exhibit A-4-6

 

 

 

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

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

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Exhibit A-4-7

 

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

This is one of the Class A-1B Notes described in the within-mentioned Indenture.

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

 

Exhibit A-4-8

 

[Form of Assignment]

 

For Value Received, the undersigned hereby sells, assigns, and transfers unto

 

(Please insert Social Security or

Taxpayer Identification number

of Assignee)

 

_______________________________

_______________________________

 

______________________________________________________________________________

(Please Print or Typewrite Name and Address of Assignee)

 

______________________________________________________________________________

the within Note, and all rights thereunder, and hereby does irrevocably constitute and appoint

 

_____________________________________________________________________________, 

as attorney, to transfer the within Note on the books kept for registration thereof, with full power

of substitution in the premises.

 

 

Date:___________________

 

____________________________________

Notice:  The signature to this assignment 

must correspond with the name as it appears 

upon the face of the within Note in every 

particular, without alteration or enlargement 

or any change whatever.

 

 

Exhibit A-4-9

 

 

Exhibit a-5

to Indenture

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

GLOBAL CLASS A-2 NOTE

 

[For Rule 144A Book-Entry Notes]

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRANSFEROR OF SUCH NOTE (THE “TRANSFEROR”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR THE USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES (1) THAT THIS NOTE MAY BE RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (“QIB”) WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT, OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB AND TO WHOM NOTICE IS GIVEN THAT RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR TO THE ISSUER PURSUANT TO THE TERMS OF THE INDENTURE, AND (2) THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TO BE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  THE INDENTURE RELATING TO THIS NOTE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN IN VIOLATION OF THE FOREGOING.  EACH TRANSFEREE ACCEPTING A BENEFICIAL INTEREST IN THIS NOTE IS DEEMED TO REPRESENT TO THE ISSUER AND THE SERVICER THAT IT IS EITHER A QIB PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.  EACH HOLDER HEREOF IS DEEMED TO REPRESENT AND WARRANT EITHER (A) THAT IT IS NOT (AND FOR SO LONG AS IT HOLDS THIS NOTE OR AN INTEREST HEREIN WILL NOT BE), AND IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS THIS SECURITY OR AN INTEREST HEREIN WILL NOT BE ACTING ON BEHALF OF), AN “EMPLOYEE BENEFIT PLAN” AS DEFINED

 

 

 

Exhibit A-5-1

 

 

 

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

 

 

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Exhibit A-5-2

 

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS A-2 NOTE

 

 

No. ______ 

Up to $61,995,000

 

 

Stated Maturity Date: _______ __, 20__

 

Dated: ________ __, 20__

 

REGISTERED OWNER:  ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed SIXTY-ONE MILLION NINE HUNDRED AND NINETY-FIVE THOUSAND DOLLARS ($61,995,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class A-2 Note shall represent such of the Outstanding Class A-2 Notes as are specified herein, and represents the aggregate amount of Outstanding Class A-2 Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class A-2 Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class A-2 Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class A-2 Notes specified in the Indenture (calculated in accordance with the Indenture).

 

 

Exhibit A-5-1

 

 

The Interest Accrual Period for each Payment Date is the period commencing on and including the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class A-2 Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the last Business Day preceding such Payment Date.

 

THIS CLASS A-2 NOTE IS SUBORDINATE IN RIGHT OF PAYMENT OF PRINCIPAL TO THE CLASS A-1A NOTES AND THE CLASS A-1B NOTES TO THE EXTENT AND AS MORE FULLY DESCRIBED IN THE INDENTURE.

 

This Class A-2 Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

 

Exhibit A-5-2

 

 

 

This Class A-2 Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person, except that certain payments on this Class A-2 Note are guaranteed, and are entitled to the benefits of, the financial guaranty insurance policy issued by Assured Guaranty Corp. (the “Class A Note Insurer”), pursuant to which the Class A Note Insurer has unconditionally guaranteed payment to the Class A-2 Noteholders of interest with respect to each Payment Date and of principal at its Stated Maturity Date, as more fully set forth in the Indenture and the Class A Insurance Policy. Neither the Class A-2 Notes nor the Contract Assets are insured by any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class A-2 Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class A-2 Note and any other Class A-2 Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture.  If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Class A-2 Notes may be exchanged, and their transfer may be registered, by the Class A-2 Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class A-2 Notes.  Upon exchange or registration of such transfer, a new registered Class A-2 Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class A-2 Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

 

 

Exhibit A-5-3

 

 

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

 

Exhibit A-5-4

 

 

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

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

[The remainder of page is intentionally left blank.]

 

 

 

 

Exhibit A-5-5

 

 

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

This is one of the Class A-2 Notes described in the within-mentioned Indenture.

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

Exhibit A-5-6

 

 

Exhibit A-6

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

DEFINITIVE CLASS A-2 NOTE

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES (1) THAT THIS NOTE MAY BE RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (“QIB”) WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT, OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB AND TO WHOM NOTICE IS GIVEN THAT RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR TO THE ISSUER PURSUANT TO THE TERMS OF THE INDENTURE, AND (2) THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TO BE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  THE INDENTURE RELATING TO THIS NOTE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN IN VIOLATION OF THE FOREGOING.  EACH TRANSFEREE ACCEPTING AN OWNERSHIP INTEREST IN THIS NOTE IS DEEMED TO REPRESENT TO THE ISSUER AND THE SERVICER THAT IT IS EITHER A QIB PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.  EACH HOLDER HEREOF IS DEEMED TO REPRESENT AND WARRANT EITHER (A) THAT IT IS NOT (AND FOR SO LONG AS IT HOLDS THIS NOTE OR AN INTEREST HEREIN WILL NOT BE), AND IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS THIS SECURITY OR AN INTEREST HEREIN WILL NOT BE ACTING ON BEHALF OF), AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR AN ENTITY WHICH IS DEEMED TO HOLD THE ASSETS OF ANY SUCH PLAN (“PLAN ASSETS”) PURSUANT TO 29 C.F.R. SECTION 2510.3-101 AS MODIFIED BY SECTION 3(42) OF ERISA (THE “PLAN ASSET REGULATION”) (EACH A “BENEFIT PLAN INVESTOR”), OR (B) (I) ITS PURCHASE AND OWNERSHIP OF THIS SECURITY WILL BE COVERED BY A PROHIBITED TRANSACTION CLASS EXEMPTION ISSUED BY THE UNITED STATES DEPARTMENT OF LABOR, (II) AT THE TIME OF ACQUISITION THE NOTES ARE RATED AT LEAST INVESTMENT GRADE, AND (III) IT BELIEVES THAT THE NOTES ARE PROPERLY TREATED AS INDEBTEDNESS WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET

 

 

 

Exhibit A-6-1

 

REGULATIONS AND AGREES TO SO TREAT SUCH NOTES, OR (C) IT HAS PROVIDED THE TRUSTEE WITH AN OPINION OF COUNSEL, WHICH OPINION OF COUNSEL WILL NOT BE AT THE EXPENSE OF THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER, WHICH OPINES THAT THE PURCHASE, HOLDING, AND TRANSFER OF SUCH NOTE OR INTEREST THEREIN IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE INDENTURE.  THE NOTES OR ANY BENEFICIAL INTEREST HEREIN MAY BE TRANSFERRED ONLY IN PERMITTED DENOMINATIONS SPECIFIED IN THE INDENTURE.  ACCORDINGLY, AN INVESTOR IN THIS NOTE MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

OWING TO THE PROVISIONS FOR THE PAYMENT OF PRINCIPAL CONTAINED HEREIN, THE OUTSTANDING NOTE BALANCE OF THIS NOTE MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  ANYONE PURCHASING THIS NOTE SHOULD CONFIRM THE OUTSTANDING NOTE BALANCE HEREOF BY INQUIRY OF THE TRUSTEE.

 

 

[The remaining pages for this Class A-2 Note follow starting on the next page.

The remainder of this page is intentionally left blank.]

 

 

 

Exhibit A-6-2

 

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS A-2 NOTE

 

 

No. ______ 

Up to $61,995,000

 

 

Stated Maturity Date: _______ __, 20__

 

Dated: ________ __, 20__

 

REGISTERED OWNER:  ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed SIXTY-ONE MILLION NINE HUNDRED AND NINETY-FIVE THOUSAND DOLLARS ($61,995,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class A-2 Note shall represent such of the Outstanding Class A-2 Notes as are specified herein, and represents the aggregate amount of Outstanding Class A-2 Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class A-2 Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class A-2 Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class A-2 Notes specified in the Indenture (calculated in accordance with the Indenture).  The Interest Accrual Period for each Payment Date is the period commencing on and including

 

 

 

Exhibit A-6-3

 

 

the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class A-2 Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the close of business on the last Business Day of the month prior to such Payment Date.

 

THIS CLASS A-2 NOTE IS SUBORDINATE IN RIGHT OF PAYMENT OF PRINCIPAL TO THE CLASS A-1A NOTES AND THE CLASS A-1B NOTES TO THE EXTENT AND AS MORE FULLY DESCRIBED IN THE INDENTURE.

 

This Class A-2 Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

 

Exhibit A-6-4

 

 

 

This Class A-2 Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person, except that certain payments on this Class A-2 Note are guaranteed, and are entitled to the benefits of, the financial guaranty insurance policy issued by Assured Guaranty Corp., (the “Class A Note Insurer”), pursuant to which the Class A Note Insurer has unconditionally guaranteed payment to the Class A-2 Noteholders of interest with respect to each Payment Date and of principal at its Stated Maturity Date, as more fully set forth in the Indenture and the Class A Insurance Policy. Neither the Class A-2 Notes nor the Contract Assets are insured by any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class A-2 Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class A-2 Note and any other Class A-2 Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture. If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The final payment on any Definitive Note shall be made only upon presentation and surrender of the Note at the Corporate Trust Office of the Trustee.

 

The Class A-2 Notes may be exchanged, and their transfer may be registered, by the Class A-2 Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class A-2 Notes.  Upon exchange or registration of such transfer, a new registered Class A-2 Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class A-2 Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

 

 

Exhibit A-6-5

 

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

 

Exhibit A-6-6

 

 

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

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

[The remainder of page is intentionally left blank.]

 

 

 

Exhibit A-6-7

 

 

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

This is one of the Class A-2 Notes described in the within-mentioned Indenture.

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

Exhibit A-6-8

 

 

[Form of Assignment]

 

For Value Received, the undersigned hereby sells, assigns, and transfers unto

 

(Please insert Social Security or

Taxpayer Identification number

of Assignee)

 

_______________________________

_______________________________

 

______________________________________________________________________________

(Please Print or Typewrite Name and Address of Assignee)

 

______________________________________________________________________________

the within Note, and all rights thereunder, and hereby does irrevocably constitute and appoint

 

_____________________________________________________________________________, 

as attorney, to transfer the within Note on the books kept for registration thereof, with full power 

of substitution in the premises.

 

 

 

Date:___________________

 

____________________________________

Notice:  The signature to this assignment 

must correspond with the name as it appears 

upon the face of the within Note in every 

particular, without alteration or enlargement 

or any change whatever.

 

 

Exhibit A-6-9

 

Exhibit B-1

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

GLOBAL CLASS B NOTE

 

 

[For Rule 144A Book-Entry Notes]

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRANSFEROR OF SUCH NOTE (THE “TRANSFEROR”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR THE USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

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

 

 

 

Exhibit B-1-1

 

 

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

 

 

[The remaining pages for this Class B Note follow starting on the next page.

The remainder of this page is intentionally left blank.]

 

 

Exhibit B-1-2

 

 

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS B NOTE

 

 

No. ______ 

Up to $5,403,000

 

 

Stated Maturity Date: _______ __, 20__

 

Dated: ________ __, 20__

 

REGISTERED OWNER:  ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed FIVE MILLION FOUR HUNDRED AND THREE THOUSAND DOLLARS ($5,403,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class B Note shall represent such of the Outstanding Class B Notes as are specified herein, and represents the aggregate amount of Outstanding Class B Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class B Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class B Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class B Notes specified in the Indenture (calculated in accordance with the Indenture).

 

 

Exhibit B-1-3

 

 

 

The Interest Accrual Period for each Payment Date is the period commencing on and including the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class B Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the last Business Day preceding such Payment Date.

 

THIS CLASS B NOTE IS SUBORDINATE IN RIGHT OF PAYMENT TO THE CLASS A-1A NOTES, THE CLASS A-1B NOTES, AND THE CLASS A-2 NOTES TO THE EXTENT AND AS MORE FULLY DESCRIBED IN THE INDENTURE.

 

This Class B Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

 

Exhibit B-1-4

 

 

This Class B Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person.  Neither the Class B Notes nor the Contract Assets are insured by any Person or any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class B Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class B Note and any other Class B Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture.  If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Class B Notes may be exchanged, and their transfer may be registered, by the Class B Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class B Notes.  Upon exchange or registration of such transfer, a new registered Class B Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class B Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

 

Exhibit B-1-5

 

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

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

 

 

 

Exhibit B-1-6

 

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

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Exhibit B-1-7

 

 

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

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

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

Exhibit B-1-8

 

 

Exhibit B-2

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

DEFINITIVE CLASS B NOTE

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES (1) THAT THIS NOTE MAY BE RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (“QIB”) WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT, OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB AND TO WHOM NOTICE IS GIVEN THAT RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR TO THE ISSUER PURSUANT TO THE TERMS OF THE INDENTURE, AND (2) THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TO BE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  THE INDENTURE RELATING TO THIS NOTE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN IN VIOLATION OF THE FOREGOING.  EACH TRANSFEREE ACCEPTING AN OWNERSHIP INTEREST IN THIS NOTE IS DEEMED TO REPRESENT TO THE ISSUER AND THE SERVICER THAT IT IS EITHER A QIB PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.  EACH HOLDER HEREOF IS DEEMED TO REPRESENT AND WARRANT EITHER (A) THAT IT IS NOT (AND FOR SO LONG AS IT HOLDS THIS NOTE OR AN INTEREST HEREIN WILL NOT BE), AND IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS THIS SECURITY OR AN INTEREST HEREIN WILL NOT BE ACTING ON BEHALF OF), AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR AN ENTITY WHICH IS DEEMED TO HOLD THE ASSETS OF ANY SUCH PLAN (“PLAN ASSETS”) PURSUANT TO 29 C.F.R. SECTION 2510.3-101 AS MODIFIED BY SECTION 3(42) OF ERISA (THE “PLAN ASSET REGULATION”) (EACH A “BENEFIT PLAN INVESTOR”), OR (B) (I) ITS PURCHASE AND OWNERSHIP OF THIS SECURITY WILL BE COVERED BY A PROHIBITED TRANSACTION CLASS EXEMPTION ISSUED BY THE UNITED STATES DEPARTMENT OF LABOR, (II) AT THE TIME OF ACQUISITION THE NOTES ARE RATED AT LEAST INVESTMENT GRADE, AND (III) IT BELIEVES THAT THE NOTES ARE PROPERLY TREATED AS INDEBTEDNESS WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET

 

 

 

Exhibit B-2-1

 

 

REGULATIONS AND AGREES TO SO TREAT SUCH NOTES, OR (C) IT HAS PROVIDED THE TRUSTEE WITH AN OPINION OF COUNSEL, WHICH OPINION OF COUNSEL WILL NOT BE AT THE EXPENSE OF THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER, WHICH OPINES THAT THE PURCHASE, HOLDING, AND TRANSFER OF SUCH NOTE OR INTEREST THEREIN IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE INDENTURE.  THE NOTES OR ANY BENEFICIAL INTEREST HEREIN MAY BE TRANSFERRED ONLY IN PERMITTED DENOMINATIONS SPECIFIED IN THE INDENTURE.  ACCORDINGLY, AN INVESTOR IN THIS NOTE MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

OWING TO THE PROVISIONS FOR THE PAYMENT OF PRINCIPAL CONTAINED HEREIN, THE OUTSTANDING NOTE BALANCE OF THIS NOTE MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  ANYONE PURCHASING THIS NOTE SHOULD CONFIRM THE OUTSTANDING NOTE BALANCE HEREOF BY INQUIRY OF THE TRUSTEE.

 

 

[The remaining pages for this Class B Note follow starting on the next page.

The remainder of this page is intentionally left blank.]

 

 

 

Exhibit B-2-2

 

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS B NOTE

 

 

No. ______

Up to $5,403,000

 

 

Stated Maturity Date: _______ __, 20__

 

Dated: ________ __, 20__

 

REGISTERED OWNER:  ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed FIVE MILLION FOUR HUNDRED AND THREE THOUSAND DOLLARS ($5,403,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class B Note shall represent such of the Outstanding Class B Notes as are specified herein, and represents the aggregate amount of Outstanding Class B Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class B Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class B Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class B Notes specified in the Indenture (calculated in accordance with the Indenture).  The Interest Accrual Period for each Payment Date is the period commencing on and including

 

 

 

Exhibit B-2-3

 

the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class B Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the close of business on the last Business Day of the month prior to such Payment Date.

 

THIS CLASS B NOTE IS SUBORDINATE IN RIGHT OF PAYMENT TO THE CLASS A-1A NOTES, THE CLASS A-1B NOTES, AND THE CLASS A-2 NOTES TO THE EXTENT AND AS MORE FULLY DESCRIBED IN THE INDENTURE.

 

This Class B Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

 

 

Exhibit B-2-4

 

 

This Class B Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person.  Neither the Class B Notes nor the Contract Assets are insured by any Person or any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class B Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class B Note and any other Class B Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture. If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The final payment on any Definitive Note shall be made only upon presentation and surrender of the Note at the Corporate Trust Office of the Trustee.

 

The Class B Notes may be exchanged, and their transfer may be registered, by the Class B Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class B Notes.  Upon exchange or registration of such transfer, a new registered Class B Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class B Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

 

 

Exhibit B-2-5

 

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

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

 

 

Exhibit B-2-6

 

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

[The remainder of page is intentionally left blank.]

 

 

 

Exhibit B-2-7

 

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

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

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

 

Exhibit B-2-8

 

 

[Form of Assignment]

 

For Value Received, the undersigned hereby sells, assigns, and transfers unto

 

(Please insert Social Security or

Taxpayer Identification number

of Assignee)

 

_______________________________

_______________________________

 

______________________________________________________________________________

(Please Print or Typewrite Name and Address of Assignee)

 

______________________________________________________________________________

the within Note, and all rights thereunder, and hereby does irrevocably constitute and appoint

 

_____________________________________________________________________________, 

as attorney, to transfer the within Note on the books kept for registration thereof, with full power

of substitution in the premises.

 

 

Date:___________________

 

____________________________________

Notice:  The signature to this assignment 

must correspond with the name as it appears 

upon the face of the within Note in every 

particular, without alteration or enlargement 

or any change whatever.

 

 

 

Exhibit B-2-9

 

 

Exhibit C-1

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

GLOBAL CLASS C NOTE

 

 

[For Rule 144A Book-Entry Notes]

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRANSFEROR OF SUCH NOTE (THE “TRANSFEROR”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR THE USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

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

 

 

Exhibit C-1-1

 

 

 

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

 

 

 

[The remaining pages for this Class C Note follow starting on the next page.

The remainder of this page is intentionally left blank.]

 

 

 

Exhibit C-1-2

 

 

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS C NOTE

 

 

No. ______ 

Up to $6,907,000

 

 

Stated Maturity Date: _______ __, 20__

 

Dated: ________ __, 20__

 

REGISTERED OWNER:  ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed SIX MILLION NINE HUNDRED AND SEVEN THOUSAND DOLLARS ($6,907,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class C Note shall represent such of the Outstanding Class C Notes as are specified herein, and represents the aggregate amount of Outstanding Class C Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class C Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class C Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class C Notes specified in the Indenture (calculated in accordance with the Indenture).

 

 

 

Exhibit C-1-3

 

 

The Interest Accrual Period for each Payment Date is the period commencing on and including the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class C Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the last Business Day preceding such Payment Date.

 

THIS CLASS C NOTE IS SUBORDINATE IN RIGHT OF PAYMENT TO THE CLASS A-1A NOTES, THE CLASS A-1B NOTES, THE CLASS A-2 NOTES, AND THE CLASS B NOTES TO THE EXTENT AND AS MORE FULLY DESCRIBED IN THE INDENTURE.

 

This Class C Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

 

 

Exhibit C-1-4

 

 

This Class C Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person.  Neither the Class C Notes nor the Contract Assets are insured by any Person or any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class C Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class C Note and any other Class C Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture.  If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Class C Notes may be exchanged, and their transfer may be registered, by the Class C Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class C Notes.  Upon exchange or registration of such transfer, a new registered Class C Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class C Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrumentof transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

 

 

Exhibit C-1-5

 

 

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the

principal of and interest on this Note at the times, place, and rate, and in the coin or currency, herein prescribed.

 

 

 

Exhibit C-1-6

 

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

[The remainder of page is intentionally left blank.]

 

 

 

Exhibit C-1-7

 

 

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

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

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

 

Exhibit C-1-8

 

 

Exhibit C-2

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

DEFINITIVE CLASS C NOTE

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES (1) THAT THIS NOTE MAY BE RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (“QIB”) WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT, OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB AND TO WHOM NOTICE IS GIVEN THAT RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR TO THE ISSUER PURSUANT TO THE TERMS OF THE INDENTURE, AND (2) THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TO BE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  THE INDENTURE RELATING TO THIS NOTE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN IN VIOLATION OF THE FOREGOING.  EACH TRANSFEREE ACCEPTING AN OWNERSHIP INTEREST IN THIS NOTE IS DEEMED TO REPRESENT TO THE ISSUER AND THE SERVICER THAT IT IS EITHER A QIB PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.  EACH HOLDER HEREOF IS DEEMED TO REPRESENT AND WARRANT EITHER (A) THAT IT IS NOT (AND FOR SO LONG AS IT HOLDS THIS NOTE OR AN INTEREST HEREIN WILL NOT BE), AND IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS THIS SECURITY OR AN INTEREST HEREIN WILL NOT BE ACTING ON BEHALF OF), AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR AN ENTITY WHICH IS DEEMED TO HOLD THE ASSETS OF ANY SUCH PLAN (“PLAN ASSETS”) PURSUANT TO 29 C.F.R. SECTION 2510.3-101 AS MODIFIED BY SECTION 3(42) OF ERISA (THE “PLAN ASSET REGULATION”) (EACH A “BENEFIT PLAN INVESTOR”), OR (B) (I) ITS PURCHASE AND OWNERSHIP OF THIS SECURITY WILL BE COVERED BY A PROHIBITED TRANSACTION CLASS EXEMPTION ISSUED BY THE UNITED STATES DEPARTMENT OF LABOR, (II) AT THE TIME OF ACQUISITION THE NOTES ARE RATED AT LEAST INVESTMENT GRADE, AND (III) IT BELIEVES THAT THE NOTES ARE PROPERLY TREATED AS INDEBTEDNESS WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET

 

 

 

Exhibit C-2-1

 

 

REGULATIONS AND AGREES TO SO TREAT SUCH NOTES, OR (C) IT HAS PROVIDED THE TRUSTEE WITH AN OPINION OF COUNSEL, WHICH OPINION OF COUNSEL WILL NOT BE AT THE EXPENSE OF THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER, WHICH OPINES THAT THE PURCHASE, HOLDING, AND TRANSFER OF SUCH NOTE OR INTEREST THEREIN IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE INDENTURE.  THE NOTES OR ANY BENEFICIAL INTEREST HEREIN MAY BE TRANSFERRED ONLY IN PERMITTED DENOMINATIONS SPECIFIED IN THE INDENTURE.  ACCORDINGLY, AN INVESTOR IN THIS NOTE MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

OWING TO THE PROVISIONS FOR THE PAYMENT OF PRINCIPAL CONTAINED HEREIN, THE OUTSTANDING NOTE BALANCE OF THIS NOTE MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  ANYONE PURCHASING THIS NOTE SHOULD CONFIRM THE OUTSTANDING NOTE BALANCE HEREOF BY INQUIRY OF THE TRUSTEE.

 

 

[The remaining pages for this Class C Note follow starting on the next page.

The remainder of this page is intentionally left blank.]

 

 

 

Exhibit C-2-2

 

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS C NOTE

 

 

No. ______

Up to $6,907,000

 

 

Stated Maturity Date: _______ __, 20__

 

Dated: ________ __, 20__

 

REGISTERED OWNER:  ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed SIX MILLION NINE HUNDRED AND SEVEN THOUSAND DOLLARS ($6,907,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class C Note shall represent such of the Outstanding Class C Notes as are specified herein, and represents the aggregate amount of Outstanding Class C Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class C Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class C Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class C Notes specified in the Indenture (calculated in accordance with the Indenture).  The Interest Accrual Period for each Payment Date is the period commencing on and including

 

 

 

Exhibit C-2-3

 

 

the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class C Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the close of business on the last Business Day of the month prior to such Payment Date.

 

THIS CLASS C NOTE IS SUBORDINATE IN RIGHT OF PAYMENT TO THE CLASS A-1A NOTES, THE CLASS A-1B NOTES, THE CLASS A-2 NOTES, AND THE CLASS B NOTES TO THE EXTENT AND AS MORE FULLY DESCRIBED IN THE INDENTURE.

 

This Class C Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

 

Exhibit C-2-4

 

 

 

This Class C Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person.  Neither the Class C Notes nor the Contract Assets are insured by any Person or any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class C Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class C Note and any other Class C Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture. If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The final payment on any Definitive Note shall be made only upon presentation and surrender of the Note at the Corporate Trust Office of the Trustee.

 

The Class C Notes may be exchanged, and their transfer may be registered, by the Class C Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class C Notes.  Upon exchange or registration of such transfer, a new registered Class C Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class C Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

 

Exhibit C-2-5

 

 

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

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

 

 

Exhibit C-2-6

 

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

[The remainder of page is intentionally left blank.]

 

 

 

Exhibit C-2-7

 

 

 

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

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

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

Exhibit C-2-8

 

 

[Form of Assignment]

 

For Value Received, the undersigned hereby sells, assigns, and transfers unto

 

(Please insert Social Security or

Taxpayer Identification number

of Assignee)

 

_______________________________

_______________________________

 

______________________________________________________________________________

(Please Print or Typewrite Name and Address of Assignee)

 

______________________________________________________________________________

the within Note, and all rights thereunder, and hereby does irrevocably constitute and appoint

 

_____________________________________________________________________________, 

as attorney, to transfer the within Note on the books kept for registration thereof, with full power 

of substitution in the premises.

 

 

Date:___________________

 

____________________________________

Notice:  The signature to this assignment

must correspond with the name as it appears

upon the face of the within Note in every

particular, without alteration or enlargement

or any change whatever.

 

 

 

 

Exhibit C-2-9

 

Exhibit D-1

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

GLOBAL CLASS D NOTE

 

 

[For Rule 144A Book-Entry Notes]

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRANSFEROR OF SUCH NOTE (THE “TRANSFEROR”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR THE USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

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

 

 

Exhibit D-1-1

 

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

 

 

 

[The remaining pages for this Class D Note follow starting on the next page.

The remainder of this page is intentionally left blank.]

 

 

Exhibit D-1-2

 

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS D NOTE

 

 

No. ______

Up to $3,119,000

 

 

Stated Maturity Date: _______ __, 20__

 

Dated: ________ __, 20__

 

REGISTERED OWNER:  ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed THREE MILLION ONE HUNDRED NINETEEN THOUSAND DOLLARS ($3,119,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class D Note shall represent such of the Outstanding Class D Notes as are specified herein, and represents the aggregate amount of Outstanding Class D Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class D Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class D Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class D Notes specified in the Indenture (calculated in accordance with the Indenture).

 

 

 

Exhibit D-1-3

 

 

The Interest Accrual Period for each Payment Date is the period commencing on and including the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class D Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the last Business Day preceding such Payment Date.

 

THIS CLASS D NOTE IS SUBORDINATE IN RIGHT OF PAYMENT TO THE CLASS A-1A NOTES, THE CLASS A-1B NOTES, THE CLASS A-2 NOTES, THE CLASS B NOTES, AND THE CLASS C NOTES TO THE EXTENT AND AS MORE FULLY DESCRIBED IN THE INDENTURE.

 

This Class D Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

 

 

Exhibit D-1-4

 

 

This Class D Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person.  Neither the Class D Notes nor the Contract Assets are insured by any Person or any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class D Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class D Note and any other Class D Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture.  If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Class D Notes may be exchanged, and their transfer may be registered, by the Class D Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class D Notes.  Upon exchange or registration of such transfer, a new registered Class D Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class D Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

 

Exhibit D-1-5

 

 

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

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

 

 

 

Exhibit D-1-6

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

[The remainder of page is intentionally left blank.]

 

 

 

Exhibit D-1-7

 

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

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

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

Exhibit D-1-8

 

 

Exhibit D-2

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

DEFINITIVE CLASS D NOTE

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES (1) THAT THIS NOTE MAY BE RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (“QIB”) WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT, OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB AND TO WHOM NOTICE IS GIVEN THAT RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR TO THE ISSUER PURSUANT TO THE TERMS OF THE INDENTURE, AND (2) THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TO BE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  THE INDENTURE RELATING TO THIS NOTE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN IN VIOLATION OF THE FOREGOING.  EACH TRANSFEREE ACCEPTING AN OWNERSHIP INTEREST IN THIS NOTE IS DEEMED TO REPRESENT TO THE ISSUER AND THE SERVICER THAT IT IS EITHER A QIB PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.  EACH HOLDER HEREOF IS DEEMED TO REPRESENT AND WARRANT EITHER (A) THAT IT IS NOT (AND FOR SO LONG AS IT HOLDS THIS NOTE OR AN INTEREST HEREIN WILL NOT BE), AND IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS THIS SECURITY OR AN INTEREST HEREIN WILL NOT BE ACTING ON BEHALF OF), AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR AN ENTITY WHICH IS DEEMED TO HOLD THE ASSETS OF ANY SUCH PLAN (“PLAN ASSETS”) PURSUANT TO 29 C.F.R. SECTION 2510.3-101 AS MODIFIED BY SECTION 3(42) OF ERISA (THE “PLAN ASSET REGULATION”) (EACH A “BENEFIT PLAN INVESTOR”), OR (B) (I) ITS PURCHASE AND OWNERSHIP OF THIS SECURITY WILL BE COVERED BY A PROHIBITED TRANSACTION CLASS EXEMPTION ISSUED BY THE UNITED STATES DEPARTMENT OF LABOR, (II) AT THE TIME OF ACQUISITION THE NOTES ARE RATED AT LEAST INVESTMENT GRADE, AND (III) IT BELIEVES THAT THE NOTES ARE PROPERLY TREATED AS INDEBTEDNESS WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET

 

 

 

Exhibit D-2-1

 

REGULATIONS AND AGREES TO SO TREAT SUCH NOTES, OR (C) IT HAS PROVIDED THE TRUSTEE WITH AN OPINION OF COUNSEL, WHICH OPINION OF COUNSEL WILL NOT BE AT THE EXPENSE OF THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER, WHICH OPINES THAT THE PURCHASE, HOLDING, AND TRANSFER OF SUCH NOTE OR INTEREST THEREIN IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE INDENTURE.  THE NOTES OR ANY BENEFICIAL INTEREST HEREIN MAY BE TRANSFERRED ONLY IN PERMITTED DENOMINATIONS SPECIFIED IN THE INDENTURE.  ACCORDINGLY, AN INVESTOR IN THIS NOTE MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

OWING TO THE PROVISIONS FOR THE PAYMENT OF PRINCIPAL CONTAINED HEREIN, THE OUTSTANDING NOTE BALANCE OF THIS NOTE MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  ANYONE PURCHASING THIS NOTE SHOULD CONFIRM THE OUTSTANDING NOTE BALANCE HEREOF BY INQUIRY OF THE TRUSTEE.

 

 

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Exhibit D-2-2

 

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS D NOTE

 

 

No. ______

Up to $3,119,000

 

 

Stated Maturity Date: _______ __, 20__

 

Dated: ________ __, 20__

 

REGISTERED OWNER:  ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed THREE MILLION ONE HUNDRED NINETEEN THOUSAND DOLLARS ($3,119,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class D Note shall represent such of the Outstanding Class D Notes as are specified herein, and represents the aggregate amount of Outstanding Class D Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class D Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class D Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class D Notes specified in the Indenture (calculated in accordance with the Indenture).  The Interest Accrual Period for each Payment Date is the period commencing on and including

 

 

 

Exhibit D-2-3

 

 

the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class D Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the close of business on the last Business Day of the month prior to such Payment Date.

 

THIS CLASS D NOTE IS SUBORDINATE IN RIGHT OF PAYMENT TO THE CLASS A-1A NOTES, THE CLASS A-1B NOTES, THE CLASS A-2 NOTES, THE CLASS B NOTES, AND THE CLASS C NOTES TO THE EXTENT AND AS MORE FULLY DESCRIBED IN THE INDENTURE.

 

This Class D Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

 

Exhibit D-2-4

 

 

This Class D Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person.  Neither the Class D Notes nor the Contract Assets are insured by any Person or any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class D Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class D Note and any other Class D Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture. If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The final payment on any Definitive Note shall be made only upon presentation and surrender of the Note at the Corporate Trust Office of the Trustee.

 

The Class D Notes may be exchanged, and their transfer may be registered, by the Class D Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class D Notes.  Upon exchange or registration of such transfer, a new registered Class D Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class D Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

 

Exhibit D-2-5

 

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

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

 

 

Exhibit D-2-6

 

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

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Exhibit D-2-7

 

 

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

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

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

Exhibit D-2-8

 

 

[Form of Assignment]

 

For Value Received, the undersigned hereby sells, assigns, and transfers unto

 

(Please insert Social Security or

Taxpayer Identification number

of Assignee)

 

_______________________________

_______________________________

 

______________________________________________________________________________

(Please Print or Typewrite Name and Address of Assignee)

 

______________________________________________________________________________

the within Note, and all rights thereunder, and hereby does irrevocably constitute and appoint

 

_____________________________________________________________________________, 

as attorney, to transfer the within Note on the books kept for registration thereof, with full power 

of substitution in the premises.

 

 

Date:___________________

 

____________________________________

Notice:  The signature to this assignment 

must correspond with the name as it appears

upon the face of the within Note in every

particular, without alteration or enlargement

or any change whatever.

 

 

 

 

Exhibit D-2-9

 

 

Exhibit E-1

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

GLOBAL CLASS E-1 NOTE

 

 

[For Rule 144A Book-Entry Notes]

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRANSFEROR OF SUCH NOTE (THE “TRANSFEROR”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR THE USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

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

 

 

Exhibit E-1-1

 

 

 

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

 

 

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Exhibit E-1-2

 

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS E-1 NOTE

 

 

No. ______

Up to $4,234,000

 

 

Stated Maturity Date: _______ __, 20__

 

Dated: ________ __, 20__

 

REGISTERED OWNER:  ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed FOUR MILLION TWO HUNDRED THIRTY-FOUR THOUSAND DOLLARS ($4,234,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class E-1 Note shall represent such of the Outstanding Class E-1 Notes as are specified herein, and represents the aggregate amount of Outstanding Class E-1 Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class E-1 Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class E-1 Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class E-1 Notes specified in the Indenture (calculated in accordance with the Indenture).

 

 

 

Exhibit E-1-3

 

 

The Interest Accrual Period for each Payment Date is the period commencing on and including the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class E-1 Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the last Business Day preceding such Payment Date.

 

THIS CLASS E-1 NOTE IS SUBORDINATE IN RIGHT OF PAYMENT TO THE CLASS A-1A NOTES, THE CLASS A-1B NOTES, THE CLASS A-2 NOTES, THE CLASS B NOTES, THE CLASS C NOTES, AND THE CLASS D NOTES TO THE EXTENT AND AS MORE FULLY DESCRIBED IN THE INDENTURE.

 

This Class E-1 Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

 

 

Exhibit E-1-4

 

 

 

This Class E-1 Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person.  Neither the Class E-1 Notes nor the Contract Assets are insured by any Person or any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class E-1 Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class E-1 Note and any other Class E-1 Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture.  If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Class E-1 Notes may be exchanged, and their transfer may be registered, by the Class E-1 Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class E-1 Notes.  Upon exchange or registration of such transfer, a new registered Class E-1 Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class E-1 Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

 

 

Exhibit E-1-5

 

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

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

 

 

 

Exhibit E-1-6

 

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

[The remainder of page is intentionally left blank.]

 

 

 

Exhibit E-1-7

 

 

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

This is one of the Class E-1 Notes described in the within-mentioned Indenture.

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

Exhibit E-1-8

 

 

Exhibit E-2

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

DEFINITIVE CLASS E-1 NOTE

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES (1) THAT THIS NOTE MAY BE RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (“QIB”) WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT, OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB AND TO WHOM NOTICE IS GIVEN THAT RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR TO THE ISSUER PURSUANT TO THE TERMS OF THE INDENTURE, AND (2) THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TO BE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  THE INDENTURE RELATING TO THIS NOTE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN IN VIOLATION OF THE FOREGOING.  EACH TRANSFEREE ACCEPTING AN OWNERSHIP INTEREST IN THIS NOTE IS DEEMED TO REPRESENT TO THE ISSUER AND THE SERVICER THAT IT IS EITHER A QIB PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.  EACH HOLDER HEREOF IS DEEMED TO REPRESENT AND WARRANT EITHER (A) THAT IT IS NOT (AND FOR SO LONG AS IT HOLDS THIS NOTE OR AN INTEREST HEREIN WILL NOT BE), AND IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS THIS SECURITY OR AN INTEREST HEREIN WILL NOT BE ACTING ON BEHALF OF), AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR AN ENTITY WHICH IS DEEMED TO HOLD THE ASSETS OF ANY SUCH PLAN (“PLAN ASSETS”) PURSUANT TO 29 C.F.R. SECTION 2510.3-101 AS MODIFIED BY SECTION 3(42) OF ERISA (THE “PLAN ASSET REGULATION”) (EACH A “BENEFIT PLAN INVESTOR”), OR (B) (I) ITS PURCHASE AND OWNERSHIP OF THIS SECURITY WILL BE COVERED BY A PROHIBITED TRANSACTION CLASS EXEMPTION ISSUED BY THE UNITED STATES DEPARTMENT OF LABOR, (II) AT THE TIME OF ACQUISITION THE NOTES ARE RATED AT LEAST INVESTMENT GRADE, AND (III) IT BELIEVES THAT THE NOTES ARE PROPERLY TREATED AS INDEBTEDNESS WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET

 

 

Exhibit E-2-1

 

 

 

REGULATIONS AND AGREES TO SO TREAT SUCH NOTES, OR (C) IT HAS PROVIDED THE TRUSTEE WITH AN OPINION OF COUNSEL, WHICH OPINION OF COUNSEL WILL NOT BE AT THE EXPENSE OF THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER, WHICH OPINES THAT THE PURCHASE, HOLDING, AND TRANSFER OF SUCH NOTE OR INTEREST THEREIN IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE TRUSTEE, THE ISSUER, THE SERVICER, THE CLASS A NOTE INSURER OR THE INITIAL PURCHASER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE INDENTURE.  THE NOTES OR ANY BENEFICIAL INTEREST HEREIN MAY BE TRANSFERRED ONLY IN PERMITTED DENOMINATIONS SPECIFIED IN THE INDENTURE.  ACCORDINGLY, AN INVESTOR IN THIS NOTE MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

OWING TO THE PROVISIONS FOR THE PAYMENT OF PRINCIPAL CONTAINED HEREIN, THE OUTSTANDING NOTE BALANCE OF THIS NOTE MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  ANYONE PURCHASING THIS NOTE SHOULD CONFIRM THE OUTSTANDING NOTE BALANCE HEREOF BY INQUIRY OF THE TRUSTEE.

 

 

[The remaining pages for this Class E-1 Note follow starting on the next page.

The remainder of this page is intentionally left blank.]

 

 

 

 

Exhibit E-2-2

 

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS E-1 NOTE

 

 

No. ______

Up to $4,234,000

 

 

Stated Maturity Date: _______ __, 20__

 

Dated: ________ __, 20__

 

REGISTERED OWNER:  ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed FOUR MILLION TWO HUNDRED THIRTY-FOUR THOUSAND DOLLARS ($4,234,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class E-1 Note shall represent such of the Outstanding Class E-1 Notes as are specified herein, and represents the aggregate amount of Outstanding Class E-1 Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class E-1 Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class E-1 Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class E-1 Notes specified in the Indenture (calculated in accordance with the Indenture).  The Interest Accrual Period for each Payment Date is the period commencing on and including

 

 

Exhibit E-2-3

 

 

the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class E-1 Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the close of business on the last Business Day of the month prior to such Payment Date.

 

THIS CLASS E-1 NOTE IS SUBORDINATE IN RIGHT OF PAYMENT TO THE CLASS A-1A NOTES, THE CLASS A-1B NOTES, THE CLASS A-2 NOTES, THE CLASS B NOTES, THE CLASS C NOTES, AND THE CLASS D NOTES TO THE EXTENT AND AS MORE FULLY DESCRIBED IN THE INDENTURE.

 

This Class E-1 Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

 

Exhibit E-2-4

 

 

 

This Class E-1 Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person.  Neither the Class E-1 Notes nor the Contract Assets are insured by any Person or any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class E-1 Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class E-1 Note and any other Class E-1 Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture. If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The final payment on any Definitive Note shall be made only upon presentation and surrender of the Note at the Corporate Trust Office of the Trustee.

 

The Class E-1 Notes may be exchanged, and their transfer may be registered, by the Class E-1 Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class E-1 Notes.  Upon exchange or registration of such transfer, a new registered Class E-1 Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class E-1 Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

 

Exhibit E-2-5

 

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

 

 

Exhibit E-2-6

 

 

 

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

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

[The remainder of page is intentionally left blank.]

 

 

 

Exhibit E-2-7

 

 

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

This is one of the Class E-1 Notes described in the within-mentioned Indenture.

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

 

Exhibit E-2-8

 

 

[Form of Assignment]

 

For Value Received, the undersigned hereby sells, assigns, and transfers unto

 

(Please insert Social Security or

Taxpayer Identification number 

of Assignee)

 

_______________________________

_______________________________

 

 

______________________________________________________________________________

(Please Print or Typewrite Name and Address of Assignee)

 

 

______________________________________________________________________________

the within Note, and all rights thereunder, and hereby does irrevocably constitute and appoint

 

 

_____________________________________________________________________________, 

as attorney, to transfer the within Note on the books kept for registration thereof, with full power 

of substitution in the premises.

 

 

Date:___________________

 

____________________________________

Notice:  The signature to this assignment

 must correspond with the name as it appears

upon the face of the within Note in every

 particular, without alteration or enlargement

or any change whatever.

 

 

 

Exhibit E-2-9

 

 

Exhibit E-3

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

GLOBAL CLASS E-2 NOTE

 

 

[For Rule 144A Book-Entry Notes]

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRANSFEROR OF SUCH NOTE (THE “TRANSFEROR”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR THE USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

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

 

 

 

Exhibit E-3-1

 

 

AS IT HOLDS THIS NOTE OR AN INTEREST HEREIN WILL NOT BE), AND IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS THIS SECURITY OR AN INTEREST HEREIN WILL NOT BE ACTING ON BEHALF OF), AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR AN ENTITY WHICH IS DEEMED TO HOLD THE ASSETS OF ANY SUCH PLAN (“PLAN ASSETS”) PURSUANT TO 29 C.F.R. SECTION 2510.3-101 AS MODIFIED BY SECTION 3(42) OF ERISA (THE “PLAN ASSET REGULATION”).  THE NOTES OR ANY BENEFICIAL INTEREST HEREIN MAY BE TRANSFERRED ONLY IN PERMITTED DENOMINATIONS SPECIFIED IN THE INDENTURE.  ACCORDINGLY, AN INVESTOR IN THIS NOTE MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

 

[The remaining pages for this Class E-2 Note follow starting on the next page.

The remainder of this page is intentionally left blank.]

 

 

 

Exhibit E-3-2

 

 

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS E-2 NOTE

 

 

No. ______

Up to $3,342,000

 

 

Stated Maturity Date: _______ __, 20__

 

Dated: ________ __, 20__

 

REGISTERED OWNER:  ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed THREE MILLION THREE HUNDRED FORTY-TWO THOUSAND  DOLLARS ($3,342,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class E-2 Note shall represent such of the Outstanding Class E-2 Notes as are specified herein, and represents the aggregate amount of Outstanding Class E-2 Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class E-2 Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class E-2 Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class E-2 Notes specified in the Indenture (calculated in accordance with the Indenture).

 

 

Exhibit E-3-3

 

 

 

The Interest Accrual Period for each Payment Date is the period commencing on and including the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class E-2 Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the last Business Day preceding such Payment Date.

 

THIS CLASS E-2 NOTE IS SUBORDINATE IN RIGHT OF PAYMENT TO THE CLASS A-1A NOTES, THE CLASS A-1B NOTES, THE CLASS A-2 NOTES, THE CLASS B NOTES, THE CLASS C NOTES, THE CLASS D NOTES AND THE CLASS E-1 NOTES TO THE EXTENT AND AS MORE FULLY DESCRIBED IN THE INDENTURE.

 

This Class E-2 Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

  

Exhibit E-3-4

  

 

This Class E-2 Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person.  Neither the Class E-2 Notes nor the Contract Assets are insured by any Person or any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class E-2 Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class E-2 Note and any other Class E-2 Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture.  If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Class E-2 Notes may be exchanged, and their transfer may be registered, by the Class E-2 Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class E-2 Notes.  Upon exchange or registration of such transfer, a new registered Class E-2 Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class E-2 Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

  

Exhibit E-3-5

  

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

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

 

  

Exhibit E-3-6

  

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

[The remainder of page is intentionally left blank.]

 

 

 

  

Exhibit E-3-7

  

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

This is one of the Class E-2 Notes described in the within-mentioned Indenture.

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

  

Exhibit E-3-8

  

Exhibit E-2

to Indenture

 

FORM OF LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

DEFINITIVE CLASS E-2 NOTE

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES (1) THAT THIS NOTE MAY BE RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (“QIB”) WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT, OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB AND TO WHOM NOTICE IS GIVEN THAT RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A AND IS A U.S. PERSON (“U.S. PERSON”) WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR TO THE ISSUER PURSUANT TO THE TERMS OF THE INDENTURE, AND (2) THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TO BE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  THE INDENTURE RELATING TO THIS NOTE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN IN VIOLATION OF THE FOREGOING.  EACH TRANSFEREE ACCEPTING AN OWNERSHIP INTEREST IN THIS NOTE IS DEEMED TO REPRESENT TO THE ISSUER AND THE SERVICER THAT IT IS EITHER A QIB PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB AND IS A U.S. PERSON.  EACH HOLDER HEREOF IS DEEMED TO REPRESENT AND WARRANT THAT IT IS NOT (AND FOR SO LONG AS IT HOLDS THIS NOTE OR AN INTEREST HEREIN WILL NOT BE), AND IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS THIS SECURITY OR AN INTEREST HEREIN WILL NOT BE ACTING ON BEHALF OF), AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR AN ENTITY WHICH IS DEEMED TO HOLD THE ASSETS OF ANY SUCH PLAN (“PLAN ASSETS”) PURSUANT TO 29 C.F.R. SECTION 2510.3-101 AS MODIFIED BY SECTION 3(42) OF ERISA (THE “PLAN ASSET REGULATION”).  THE NOTES OR ANY BENEFICIAL INTEREST HEREIN MAY BE TRANSFERRED ONLY IN PERMITTED DENOMINATIONS SPECIFIED IN THE INDENTURE.  ACCORDINGLY, AN INVESTOR IN THIS NOTE MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

  

Exhibit E-4-1

  

 

OWING TO THE PROVISIONS FOR THE PAYMENT OF PRINCIPAL CONTAINED HEREIN, THE OUTSTANDING NOTE BALANCE OF THIS NOTE MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  ANYONE PURCHASING THIS NOTE SHOULD CONFIRM THE OUTSTANDING NOTE BALANCE HEREOF BY INQUIRY OF THE TRUSTEE.

 

 

[The remaining pages for this Class E-2 Note follow starting on the next page.

The remainder of this page is intentionally left blank.]

 

 

  

Exhibit E-4-2

  

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2

CLASS E-2 NOTE

 

 

No. ______

Up to $3,342,000

 

 

Stated Maturity Date: _______ __, 20__

 

Dated: ________ __, 20__

 

REGISTERED OWNER:  ____________________________

 

LEAF Receivables Funding 7, LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to the Registered Owner on or before the Stated Maturity Date the principal sum in an amount not to exceed THREE MILLION THREE HUNDRED FORTY-TWO THOUSAND  DOLLARS ($3,342,000) less all principal paid with respect thereto, and to pay monthly in arrears all accrued interest and other amounts due with respect to this Note, as further provided in the Indenture.  Accrued interest, principal, and other amounts due with respect to this Note shall be paid on each Payment Date.

 

This Note is duly authorized by the Issuer pursuant to the Indenture, and is designated as its Equipment Contract Backed Notes, Series 2011-2 (herein called the “Notes”) issued and to be issued under the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Reference is made to the Indenture for a statement of the respective rights thereunder of the Issuer, the Trustee, and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.  Each capitalized term used and not otherwise defined herein shall have the meaning assigned to it in the Indenture.

 

Each Class E-2 Note shall represent such of the Outstanding Class E-2 Notes as are specified herein, and represents the aggregate amount of Outstanding Class E-2 Notes from time to time endorsed hereon by the Trustee, or by the Note Registrar at the direction of the Trustee, and the aggregate amount of Outstanding Class E-2 Notes represented hereby may, from time to time, be reduced or increased to represent exchanges and redemptions.

 

Interest shall accrue on the Outstanding Note Balance of the Class E-2 Notes as of the first day of the applicable Interest Accrual Period and (to the greatest extent legally enforceable) on any overdue payment of interest from the date such interest became due and payable (giving effect to any applicable grace periods provided in the Indenture) until fully paid, at the Note Rate for the Class E-2 Notes specified in the Indenture (calculated in accordance with the Indenture).  The Interest Accrual Period for each Payment Date is the period commencing on and including

 

 

  

Exhibit E-4-3

  

 

the immediately preceding Payment Date and ending on and including the day immediately preceding such Payment Date; provided that, in the case of the first Interest Accrual Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.  All accrued interest shall be due and payable in arrears on each Payment Date.  In making any interest payment, if the interest calculation with respect to a Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

 

Installments of principal shall be paid on this Note beginning on the Initial Payment Date and ending no later than the Stated Maturity Date specified above unless the Notes become due and payable at an earlier date by declaration of acceleration in accordance with Article VI of the Indenture or call for redemption in accordance with Article XI of the Indenture.  Each installment of principal due on any Payment Date (other than the Stated Maturity Date) shall be paid from amounts on deposit in the Collection Account to the applicable Holders in reduction of principal until the Outstanding Note Balance of each Class has been reduced to zero, in each case in accordance with the priorities set forth in the Indenture for such Payment Date.  All unpaid principal on any Note (together with interest thereon and all other amounts due and payable under the Indenture or in respect of the Notes) shall be due and payable in full on its Stated Maturity Date.  All reductions in the principal amount of this Note effected by payments of principal shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  Principal payable on the Class E-2 Notes shall be payable in accordance with the Indenture; provided that, if as a result of such proration a portion of such principal would be less than $0.01, then such payment shall be decreased to the nearest whole cent, and such portion shall be applied to the next succeeding principal payment.

 

The principal and interest payable on this Note are payable, through the Paying Agent on behalf of the Issuer, by check mailed by first-class mail to the Registered Holder of this Note, at the address of the Registered Holder as it appears in the Note Register or, at the option of the Noteholder by wire transfer in accordance with the terms of the Indenture.  The Record Date for any Payment Date shall be the close of business on the last Business Day of the month prior to such Payment Date.

 

THIS CLASS E-2 NOTE IS SUBORDINATE IN RIGHT OF PAYMENT TO THE CLASS A-1A NOTES, THE CLASS A-1B NOTES, THE CLASS A-2 NOTES, THE CLASS B NOTES, THE CLASS C NOTES, THE CLASS D NOTES, AND THE CLASS E-1 NOTES TO THE EXTENT AND AS MORE FULLY DESCRIBED IN THE INDENTURE.

 

This Class E-2 Note does not purport to summarize the Indenture completely, and reference is made to the Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties, and immunities of the Issuer.  Copies of the Indenture and all amendments thereto will be provided to any Noteholder, at its expense, upon a written request to the Trustee at U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107.

 

  

Exhibit E-4-4

  

 

This Class E-2 Note represents asset-backed debt secured solely by assets of the Issuer, and is not an interest in, or obligation of, any other Person.  Neither the Class E-2 Notes nor the Contract Assets are insured by any Person or any governmental agency.

 

The Notes are secured by certain Contract Assets, and the other assets comprising the Collateral, all as described in the Indenture.  The Collateral secures the Class E-2 Notes issued under the Indenture equally and ratably without prejudice, priority, or distinction between any Class E-2 Note and any other Class E-2 Note by reason of time of issue or otherwise, and also secures the payment of certain other amounts and certain other obligations as described in the Indenture.

 

Unless earlier declared due and payable by reason of an Event of Default, the Notes are payable only at the time and in the manner provided in the Indenture, and are not redeemable or prepayable at the option of the Issuer before such time, except that the Notes shall be redeemable at the option of the Issuer in whole but not in part on any Payment Date on which the Aggregate Outstanding Note Balance (after taking into account payments made on such Payment Date) is less than 10% of the Aggregate Initial Note Balance at the applicable Redemption Price plus any fees due under the Indenture. If an Event of Default shall occur and be continuing, the principal of all the Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

 

The final payment on any Definitive Note shall be made only upon presentation and surrender of the Note at the Corporate Trust Office of the Trustee.

 

The Class E-2 Notes may be exchanged, and their transfer may be registered, by the Class E-2 Noteholders in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Trustee only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of the Class E-2 Notes.  Upon exchange or registration of such transfer, a new registered Class E-2 Note or Notes evidencing the same Outstanding Note Balance will be executed in exchange therefor.

 

Each Person who has or who acquires any Ownership Interest in a Class E-2 Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture, and shall be deemed to make any and all representations and warranties contained in Article II of the Indenture.

 

Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, the Note Registrar, the Paying Agent, and any agent of the Issuer, the Trustee, the Note Registrar, or the Paying Agent shall treat the Person in whose name this Note is registered in the Note Register as the owner hereof for the purpose of receiving payment as provided in the Indenture and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuer, the Trustee, the Note Registrar, the Paying Agent, nor any such agent shall be affected by notice to the contrary.

 

 

  

Exhibit E-4-5

  

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register of the Issuer upon surrender of this Note for registration of transfer at the office of the Note Registrar in the United States of America maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Note Registrar and duly executed by the holder hereof or his attorney duly authorized in writing and complying with all transfer requirements contained in the Indenture.  Thereupon, one or more new Notes of the same Stated Maturity Date of authorized denominations and for the same initial aggregate principal amount will be issued to the designated transferees.

 

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 Noteholders under the Indenture at any time, with the prior written consent of the Control Party and the Servicer, by the Issuer, the Custodian, and the Trustee.  The Indenture also contains provisions permitting the Control Party and the Noteholders to agree to certain modifications or actions and 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 Control Party shall be conclusive and binding upon all Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange or in lieu thereof whether or not notation of such consent or waiver is made upon this Note.

 

The Notes are issuable only in registered form without coupons, in such authorized denominations as provided in the Indenture, and subject to certain limitations therein set forth.

 

The Issuer has structured the transaction contemplated by the Indenture and the Notes with the intention that the Notes will qualify under applicable tax law as indebtedness of the Issuer.  The Issuer, the Trustee, and each Noteholder, by acceptance of its Note, agree to treat the Notes as indebtedness of the Issuer for all tax purposes.

 

During the term of the Indenture and for one year and one day after payment in full of all of the obligations of the Issuer under the Transaction Documents, none of the parties to the Indenture or any Affiliate thereof or any Noteholder will file any involuntary petition against the Issuer or otherwise institute, or cooperate with or encourage any other Person to file or otherwise institute, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or any other proceedings under federal or state bankruptcy or similar law against or concerning the Issuer; provided that if such proceeding shall have commenced, nothing herein shall preclude any Noteholder from filing a proof of claim in any such proceeding in accordance with the Indenture.

 

This Note and the Indenture shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein, except to the extent that the perfection or effect of perfection of the security interests granted thereunder are governed by the laws of a jurisdiction other than the State of New York, and without regard to principles of conflict of laws of the State of New York that would permit or require the application of the law of any other jurisdiction.

 

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

 

  

Exhibit E-4-6

  

 

The Issuer hereby waives diligence, presentment, demand, protest, and notice of any kind whatsoever.  The non-exercise by the holder of this Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

 

[The remainder of page is intentionally left blank.]

 

 

  

Exhibit E-4-7

  

 

 

IN WITNESS WHEREOF, LEAF Receivables Funding 7, LLC, has caused this instrument to be signed, manually, by its authorized officer, as of the date set forth below.

 

LEAF RECEIVABLES FUNDING 7, LLC

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

 

This is one of the Class E-2 Notes described in the within-mentioned Indenture.

 

 

 

Dated: ____________ ___, 2011

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

	
By:

	
______________________________

 

Authorized Signatory

 

 

 

  

Exhibit E-4-8

  

 

[Form of Assignment]

 

For Value Received, the undersigned hereby sells, assigns, and transfers unto

 

(Please insert Social Security or

Taxpayer Identification number

of Assignee)

 

_______________________________

_______________________________

 

 

______________________________________________________________________________

(Please Print or Typewrite Name and Address of Assignee)

 

 

______________________________________________________________________________

the within Note, and all rights thereunder, and hereby does irrevocably constitute and appoint

 

_____________________________________________________________________________, 

as attorney, to transfer the within Note on the books kept for registration thereof, with full power

of substitution in the premises.

 

 

Date:___________________

 

____________________________________

Notice:  The signature to this assignment 

must correspond with the name as it appears

upon the face of the within Note in every 

particular, without alteration or enlargement 

or any change whatever.

 

 

 

  

Exhibit E-4-9

  

 

Exhibit F-1

to Indenture

FORM OF

REQUEST FOR RELEASE

 

	
U.S. Bank National Association, as Trustee

60 Livingston Avenue, EP-MN-WS3D

St. Paul, Minnesota 55107

Telecopier No.: 651-495-8090

Attention:  LEAF Receivables Funding 7,

                LLC, Equipment Contract Backed

                Notes, Series 2011-2

 

	
U.S. Bank National Association (“U.S. Bank”), 

as Custodian

1133 Rankin Street, EP-MN-TMZD

St. Paul, Minnesota 55116

Telecopier No.: 651-695-6102

Attention:  LEAF Receivables Funding 7, 

                 LLC, Equipment Contract Backed

                 Notes, Series 2011-2

 

	
  

	
Re:

	
Indenture, dated as of September 7, 2011 (the “Indenture”), between LEAF Receivables Funding 7, LLC (the “Issuer”), and U.S. Bank National Association, as trustee (the “Trustee”) and as custodian (the “Custodian”)

 

 

In connection with the administration of the Contracts held by U.S. Bank National Association as the Custodian for the Trustee, we request the release of the Contract described in Schedule I, for the reason indicated.  Capitalized words and phrases used herein shall have the respective meanings assigned to them in the Indenture.

 

Reason for Requesting Documents (check one)

 

	
  

	
___

	
1.

	
Contract has become a Defaulted Contract

 

	
  

	
___

	
2.

	
A Warranty Event has occurred with respect to such Contract (Transferor purchase is required under Section 6.1 of the Purchase and Contribution Agreement)

 

	
  

	
___

	
3.

	
Such Contract is an Early Termination Contract

 

	
  

	
___

	
4.

	
Collection of Insurance Proceeds that have been deposited into the Collection Account

 

	
  

	
___

	
5.

	
Temporary Release to Servicer in accordance with Section 4.07(c) of the Indenture countersigned by the Servicer with the consent of the Control Party attached hereto

 

 

If Item 1, 2, 3 or 4 above is checked, the Issuer requests the release of the Lien of the Trustee on such Contract and related Contract Assets and the release of the related Contract Files.  If Item 5 has been checked, the Issuer and the Servicer (i) request the temporary release of the Contract Files related to such Contract to the Servicer for servicing purposes only, and

 

 

  

Exhibit F-1-1

  

 

acknowledge that the Servicer will hold such temporarily released contracts as bailee of the Custodian, and (ii) acknowledge that the Custodian’s release of the Contract and any related documentation does not, for any purpose whatsoever, release or discharge the lien on such Contract.

 

If Item 2 or 4 above is checked, and the Contract Repurchase Price is being delivered together with this Request for Release: (A) the Issuer certifies that (i) attached hereto as Schedule I is a list identifying the Contract and the related Contract Assets to be released; (ii) after giving effect to such release, no Default, Event of Default, or Event of Servicing Termination exists or will exist; and (iii) all other conditions precedent set forth in the Transaction Documents relating to such release have been satisfied; and (B) the Transferor certifies that (i) $_________ has been deposited into the Collection Account with respect thereto, and such amount constitutes the Contract Repurchase Price relating to such Contract and the related Contract Assets, and (ii) after giving effect to such release, no Default, Event of Default or Event, of Servicing Termination exists or will exist.

 

If Item 1, 2, or 3 above is checked, and a Substitute Contract and the related Contract Assets are being delivered together with this Request for Release: (A) the Issuer certifies that (i) attached hereto as Schedule I is a list identifying the Contract and the related Contract Assets to be released; (ii) attached hereto as Schedule II is a list identifying the Substitute Contract and the related Contract Assets that have been delivered to the Custodian in connection herewith and which are hereby substituted for the Contract and the related Contract Assets on Schedule I in accordance with the Transaction Documents; (iii) after giving effect to such release, no Default, Event of Default or Cumulative Net Loss Trigger Event exists or will exist, (iv) the Overconcentration Test and any additional overconcentration tests specified in the Insurance Agreement after giving effect to such release have been satisfied, (v) all other conditions precedent set forth in the Transaction Documents relating to such release have been satisfied; and (vi) all Contract Files related to the Substitute Contract has been delivered to the Custodian; and (B) the Transferor certifies that after giving effect to such release, no Default, Event of Default, or Event of Servicing Termination exists or will exist.

 

If Item 1, 2, or 3 above is checked, the Issuer and the Transferor each hereby certify that the aggregate Discounted Contract Balances of Defaulted Contracts, Delinquent Contracts, and Early Termination Contracts that have been replaced with a Substitute Contract on a cumulative basis from the Closing Date, including after giving effect to the Contract released hereby, does not exceed 9.00% of the Initial Discounted Pool Balance.

 

If Item 1, 2, 3 or 4 above is checked, and if all or part of the Contract File was previously released to the Servicer pursuant to Item 5, please release to the Issuer the Servicer’s previous receipt on file with you, as well as any additional documents in your possession relating to the above specified Contract.

 

  

Exhibit F-1-2

  

 

If Item 5 above is checked, the Servicer hereby acknowledges that the Contract is the property of the Issuer and has been pledged to U.S. Bank National Association, as Trustee for the benefit of the Noteholders.  Attached to this Request for Release is the written consent of the Control Party to the temporary release, for servicing purposes, of the Contract and related Contract File, to the Servicer.  The Servicer agrees to return the Contract to the Custodian promptly upon the earlier of (x) the Control Party’s instruction to return a Contract to the Custodian and (y) the need therefor no longer existing; provided that if an Event of Default has occurred, the Servicer shall forthwith return to the Custodian each Contract temporarily delivered pursuant to Section 4.07 of the Indenture.

 

 

  

Exhibit F-1-3

  

 

 

 

IN WITNESS WHEREOF, the Issuer, the Servicer, and the Transferor have caused this Request for Release to be duly executed by their respective duly authorized officers as of ______ __, 20__.

 

LEAF Receivables Funding 7, LLC, as Issuer

 

By:                                            

Print Name:                        

Title:                                   

Date:                                 

 

 

LEAF Commercial Capital, Inc., as Servicer

 

By:                                            

Print Name:                        

Title:                                   

Date:                                 

 

                                      

 

LEAF Capital Funding, LLC, as Transferor

 

By:                                            

Print Name:                        

Title:                                   

Date:                                 

 

                                                                   

 

  

Exhibit F-1-4

  

Schedule I

to Request for Release

 

 

Contract Assets to be released from Lien of Indenture

 

 

  

Exhibit F-1-5

  

 

Schedule II

to Request for Release

 

 

Substituted Contracts

 

 

  

Exhibit F-1-6

  

 

 

Exhibit F-2

to Indenture

FORM OF

RETURN OF DOCUMENTS TO CUSTODIAN

 

____________ __, 20__

 

 

U.S. Bank National Association (“U.S. Bank”)

1133 Rankin Street

St. Paul, Minnesota  55116

Attention:  LEAF Receivables Funding 7, LLC,

Equipment Contract Backed Notes, Series 2011-2

 

	
Re:

	
Indenture, dated as of September 7, 2011 (the “Indenture”), between LEAF Receivables Funding 7, LLC (the “Issuer”), and U.S. Bank National Association, as trustee (the “Trustee”) and as custodian (the “Custodian”)

 

Ladies and Gentlemen:

 

In accordance with Section 4.07(c) of the Indenture, enclosed please find the Contract Files for the Contract(s) described below:

 

Obligors Name, Address, and Zip Code:

LEAF Contract Number:

 

Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Indenture.

 

LEAF COMMERCIAL CAPITAL, INC.,

as Servicer

 

 

By:                     

Name:

Title:

RECEIPT ACKNOWLEDGED:

 

U.S. BANK NATIONAL ASSOCIATION,

as Custodian

 

By:       ____________________

Name:

Title:

Date:

 

 

  

Exhibit F-2-1

  

 

Exhibit G

to Indenture

 

FORM OF CUSTODIAN AND TRUSTEE CERTIFICATE

(pursuant to Section 4.03(b) of the Indenture)

 

	
LEAF Receivables Funding 7, LLC, as Issuer

2005 Market Street, 14th Floor

Philadelphia, Pennsylvania 19103

Attention:  Miles Herman

 

	  
	
U.S. Bank National Association, as Trustee

60 Livingston Avenue, EP-MN-WS3D

St. Paul, Minnesota 55107

	
U.S. Bank National Association, as Custodian

1133 Rankin Street, EP-MN-TMZD

St. Paul, Minnesota 55116

 

	
  

	
Re:

	
Indenture, dated as of September 7, 2011 (the “Indenture”), between LEAF Receivables Funding 7, LLC (the “Issuer”), and U.S. Bank National Association, as trustee (the “Trustee”) and as custodian (the “Custodian”)

 

Ladies and Gentlemen:

 

1.           This Certificate (and the attached Exception Report, if applicable) is delivered pursuant to Section 4.03(b) (and Section 3.01(d)) of the Indenture.  Each capitalized term used and not otherwise defined herein has the meaning assigned thereto in the Indenture.

 

2.           The Custodian hereby certifies that:

 

(a)           it is holding each Contract listed on the Contract Schedule attached hereto as Schedule I (each a “Subject Contract” and, collectively, the “Subject Contracts”) as Custodian for the benefit of the Secured Parties;

 

(b)           except as otherwise noted, it has received and reviewed each item listed below for each Subject Contract:

 

(i)           copies of all UCC financing statements required to be filed to perfect the security interest in the related Equipment and the Related Security related thereto (except with respect to a Contract related to Equipment that had an original equipment cost at origination of less than (A) if such Contract is a secured loan or finance lease that provides for a $1 purchase option, $25,000, or (B) if such Contract provides for a “fair market value” purchase option, $50,000);

 

(ii)                for such Contract the original equipment cost at origination of which equals or exceeds $100,000, a certificate or otherevidence of insurance indicating insurance payable to the Originator or an affiliate;

 

  

Exhibit G-1

  

(iii)                for such Contract an original equipment cost at origination of which equals or exceeds $50,000, a certificate from the Obligor confirming its acceptance and delivery of the Equipment or any other document of similar import (for example, a delivery & acceptance certificate, a lease commencement authorization, a customer acknowledgement, a lease commencement and funding agreement, a commencement addendum, an installation certificate, an authorization to disburse advances, a commencement authorization, a telephone verification, or a pay proceeds letter, or such confirmation of acceptance and delivery is embedded on a lease schedule, lease document or shipping ticket); and

 

(iv)                the one and only executed original counterpart of such Contract in the Servicer’s possession, or a machine copy thereof certified by an officer of the Servicer that such copy is a true and complete copy thereof;

 

(c)           based on its examination of the Contract Files, the LEAF Contract Number with respect to each Subject Contract accurately reflects the information on the Contract Schedule attached hereto as Schedule I.

 

(d)           each Subject Contract does not contain any notations on its face that purport to evidence any encumbrances or restrictions on transfer other than the stamp, if any, in favor of a prior lender which has signed a Release Agreement.

 

3.           The Trustee hereby certifies that, with respect to all Contracts in the aggregate, it has received a copy of the Contract Schedule and an executed Assignment Agreement and executed Release Agreement related thereto.

 

[Signatures on Following Page]

 

  

Exhibit G-2

  

 

IN WITNESS WHEREOF, the Custodian and Trustee have caused this Custodian and Trustee Certificate to be executed by its duly authorized officer this ____ day of _____________, 20__.

 

 

U.S. BANK NATIONAL ASSOCIATION,

as Custodian and Trustee

 

 

By:______________________________

Name:

Title:

 

 

The undersigned, LEAF Receivables Funding 7, LLC, as the Issuer, hereby directs the Trustee to attach the Contract Schedule attached hereto as Schedule I to the Indenture as Schedule I thereto, with such Contract Schedule constituting the Contract Schedule, as contemplated by the Indenture and the other Transaction Documents, as of the Acquisition Date.

 

LEAF RECEIVABLES FUNDING 7, LLC, as Issuer

 

 

By:_____________________________

Name:

Title:

 

  

Exhibit G-3

  

 

Schedule I

to Custodian and Trustee Certificate

 

[Amendment to Contract Schedule, with any exceptions noted]

 

 

  

Exhibit G-4

  

Exhibit A

to Custodian and Trustee Certificate

 

[Exception Report]

 

  

Exhibit G-5

  

Exhibit H

to Indenture

 

[FORM OF PAYOFF LETTER]

 

 

[To be provided]

 

 

  

Exhibit H-1

  

Exhibit I

to Indenture

FORM OF INVESTMENT LETTER

 

LEAF RECEIVABLES FUNDING 7, LLC

EQUIPMENT CONTRACT BACKED NOTES, SERIES 2011-2 (THE “NOTES”)

 

 

LEAF Receivables Funding 7, LLC (the “Issuer”)

2005 Market Street, 14th Floor

Philadelphia, Pennsylvania 19103

Attention:  Miles Herman

 

U.S. Bank National Association (the “Trustee”)

60 Livingston Avenue, EP-MN-WS3D

St. Paul, Minnesota 55107

Attention:  LEAF Receivables Funding 7, LLC,

Equipment Contract Backed Notes,

Series 2011-2

 

Ladies and Gentlemen:

 

Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Indenture, dated as of September 7, 2011 (as amended, modified, or supplemented from time to time, the “Indenture”), between the Issuer and U.S. Bank National Association, as Trustee and Custodian.  Each capitalized term used and not otherwise defined herein has the meaning assigned thereto in the Indenture.

 

In connection with the purchase of the Note, the undersigned hereby represents and warrants on behalf of the Purchaser named below (the “Purchaser”) as follows:

 

1.           I am an officer of the Purchaser familiar with its financial affairs and authorized to make the representations set forth in, and execute, this letter.

 

2.           I am familiar with the provisions of Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended (the “1933 Act”).

 

a.           The transaction meets the requirements of Rule 144A and the Purchaser is a “qualified institutional buyer,” as defined in Rule 144A.

 

b.           The Purchaser is aware that the Issuer may rely on the exemption from the registration requirements of the 1933 Act provided by Rule 144A.

 

c.           The Purchaser acknowledges that the Purchaser has (i) received such information regarding the Issuer’s Equipment Contract Backed Notes, Series 2011-2 [Class A-1/ Class A-2/Class B/Class C/Class D/Class E-1/Class E-2] (the “Notes”) as the Purchaser may require pursuant to Rule 144A or (ii) the Purchaser has determined not to request such information.

 

  

Exhibit I-1

  

3.           The Purchaser is acquiring the Notes for its own account or the account of its affiliated entities for the purpose of investment or resale under Rule 144A and not with a view to the distribution thereof.  Furthermore, if the Purchaser is purchasing Class E-2 Notes, the Purchaser is a U.S. person (“U.S. Person”) within the meaning of Regulation S under the 1933 Act.

 

4.           The Purchaser understands that the Notes have not been and may never be registered under the 1933 Act or the securities laws of any state, that it is the expressed intent of the Issuer that the Notes are being issued only in transactions not involving any public offering within the meaning of the 1933 Act, and that the Notes will bear a legend substantially as set forth in the form of the Note attached to the Indenture.

 

5.           The Purchaser has no present intention of selling, negotiating, or otherwise disposing of the Notes; provided, however, that it is understood that the disposition of the Purchaser’s property shall at all times be and remain within its control and without prejudice, however, to its right at all times to sell or otherwise dispose of all or any part of the Notes in accordance with the Indenture under a registration statement under the 1933 Act, or under an exemption from such registration available under the 1933 Act.

 

6.           The Purchaser understands that the Notes were transferred to it in a transaction not involving any public offering within the meaning of the Securities Act, and that if it decides to re-offer, resell, pledge, or otherwise transfer such Notes, it will do so only in accordance with applicable state securities laws and pursuant to Rule 144A to a Person whom the seller reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A, purchasing for its own account or for the account of a QIB, whom the holder has informed that such re-offer, resale, pledge, or other transfer is being made in reliance on Rule 144A or to the Issuer pursuant to the terms of the Indenture.  Furthermore, if the Purchaser decides to re-offer, resell, pledge, or otherwise transfer any Class E-2 Notes, it will do so only to a U.S. Person.

 

7.           Either (i) It is not (and for so long as it holds any Notes or an interest therein will not be), and is not acting on behalf of (and for so long as it holds any Notes or an interest herein will not be acting on behalf of), an “employee benefit plan” as defined in Section 3(3) of ERISA that is subject to Title I of ERISA, a plan described in Section 4975(e)(1) of the Code or an entity which is deemed to hold the assets of any such plan (“Plan Assets”) pursuant to 29 C.F.R. Section 2510.3-101 (the “Plan Asset Regulation”) [yes/no], (ii)(A) in the case of a Class A-1A Note, a Class A-1B Note, a Class A-2 Note, a Class B Note, a Class C Note, Class D Note or a Class E-1 Note, its purchase and ownership of the security will be covered by a prohibited transaction class exemption issued by the United States Department of Labor, (B) at the time of acquisition the notes are rated at least investment grade, and (C) it believes that the notes are properly treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulation and agrees to so treat such Notes [yes/no], or (iii) it has provided the Trustee with an opinion of counsel, which opinion of counsel will not be at the expense of the Trustee, the Issuer, the Servicer, the Class A Note Insurer or the Initial Purchaser which opines that the purchase, holding, and transferring of such Note or interest therein is permissible under applicable law, will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code, and will not subject the Trustee, the Issuer, the Servicer, the Class A Note Insurer or the Initial Purchaser to any obligation in addition to those undertaken in the Indenture [yes/no].

 

 

  

Exhibit I-2

  

 

8.           The Purchaser has provided to the Trustee an accurate, complete, and duly executed United States Internal Revenue Service Form W-8BEN or W-9 (or successor applicable form) or such other document required or reasonably requested by the Trustee for purposes of establishing the Purchaser’s exemption from United States withholding tax and backup withholding tax.

 

9.           The Purchaser agrees that (a) any sale, pledge, or other transfer of a Note (or any interest therein) made in violation of the transfer restrictions contained in the Indenture, or made based upon false or inaccurate representations made by the Transferee or a transferee to the Issuer, will be void and of no force or effect and (b) none of the Issuer, the Trustee, and the Note Registrar has any obligation to recognize any sale, pledge, or other transfer of a Note (or any interest therein) made in violation of any such transfer restriction or made based upon any such false or inaccurate representation.

 

The representations and warranties contained herein shall be binding upon the heirs, executors, administrators, and other successors of the undersigned.  If there is more than one signatory hereto, the obligations, representations, warranties, and agreements of the undersigned are made jointly and severally.

 

 

Executed at ________________________, _____________________, this _____ day of _______________, 20__.

 

 

________________________________                                                                           ______________________________

Purchaser’s Name and Title (Print)                                                                                       Signature of Purchaser

 

_________________________________

Address of Purchaser

 

_________________________________

Purchaser’s Taxpayer Identification or

   Social Security Number

 

 

  

Exhibit I-3

  

 

Exhibit J

to Indenture

 

FORM OF TRANSFER CERTIFICATE

(pursuant to 3.01(d) of Indenture)

 

	
U.S. Bank National Association, as Trustee

60 Livingston Avenue, EP-MN-WS3D

St. Paul, Minnesota 55107

Attention:  LEAF Receivables Funding 7,

                 LLC, Equipment Contract Backed

                 Notes, Series 2011-2

	  

 

	
  

	
Re:

	
Indenture, dated as of September 7, 2011 (the “Indenture”), between LEAF Receivables Funding 7, LLC (the “Issuer”), and U.S. Bank National Association, as trustee (the “Trustee”) and as custodian (the “Custodian”)

 

Ladies and Gentlemen:

 

1.           This Transfer Certificate is being delivered pursuant to Section 3.01(d) of the Indenture.  Each capitalized term used and not otherwise defined herein has the meaning assigned thereto in the Indenture.

 

2,           Attached hereto as Schedule I is the Amendment to Contract Schedule identifying each of the [Substitute Contracts] [Additional Contracts] (collectively, the “Subject Contracts”) subject to this Transfer Certificate.

 

3.           Attached as Schedule II is the Contract Schedule as of the date hereof, as amended by the Amendment to Contract Schedule, along with any deletions authorized by a release signed by the Trustee.

 

	
  

	
4.

	
The Transferor hereby represents and warrants that:

 

	
  

	
(i)

	
This Transfer Certificate has been duly authorized, executed, and delivered by the Transferor;

 

	
  

	
(ii)

	
Each Subject Contract satisfies each of the representations and warranties set forth in paragraph (3) or (4) of the related Assignment Agreement;

 

	
  

	
(iii)

	
All applicable filings required under Section 4.01(a)(v) and 4.02 of the Indenture have been made or are in effect;

 

	
  

	
(iv)

	
No Event of Default or Cumulative Net Loss Trigger Event exists prior to or will exist after giving effect to the acquisition of the Subject Contracts;

 

 

  

Exhibit J-1

  

 

 

	
  

	
(vii)

	
The Overconcentration Test and any additional overconcentration tests specified in the Insurance Agreement after giving effect to the acquisition of the Subject Contracts have been satisfied; and

 

	
  

	
(viii)

	
All other conditions to the acquisition by the Issuer of each Subject Contract applicable to it and specified in Section 3.01 of the Indenture, Section 3.04(b) of the Servicing Agreement (in the case of Substitute Contracts).

 

 

 

[The signature page follows.  The remainder of this page is intentionally left blank.]

 

 

  

Exhibit J-2

  

 

 

IN WITNESS WHEREOF, the Transferor has caused this Transfer Certificate to be executed by its duly authorized officer this _____ day of _________________, 20__.

 

LEAF CAPITAL FUNDING, LLC

 

 

	
  

	
By:

	
__________________________________

	
  

	
Name:

	
__________________________________

	
  

	
Title:

	
__________________________________

 

 

Exhibit J-3

 

 

 

 

  

  

  

 

 

SCHEDULE II

 

DEFINITIONS ANNEX

 

[See attached.]

 

 

 

Sched. II-I

 

 

  

  

  

 

Execution Version

SCHEDULE II

TO INDENTURE

 

DEFINITIONS ANNEX

 

 

 

“Acquisition Date”:  With respect to a Substitute Contract or Additional Contract, the date on which such Substitute Contract or Additional Contract is acquired by the Issuer pursuant to the Indenture, and for each Initial Contract, the Closing Date.

 

“Act”:  With respect to any Noteholder, the meaning set forth in Section 14.02 of the Indenture.

 

“Additional Amount”:  Means, with respect to any Payment Date, (1) if the Overcollateralization Percentage is greater than or equal to 2%, an amount equal to zero or (2) if the Overcollateralization Percentage is less than 2%, the amount necessary to reduce the Aggregate Outstanding Note Balance, sequentially as set forth in Section 13.03(c) of the Indenture, so that the Overcollateralization Percentage will equal 2% after giving effect to that Additional Amount.

 

“Additional Contracts”:  Means those Contracts purchased by the Issuer, and pledged to the Trustee, with the amounts on deposit in the Prefunding Account.

 

“Additional Required Reserve Account Deposit”:  Has the meaning assigned to it in Section 13.04(a) of the Indenture.

 

“Advance Payment”: With respect to a Contract and a Collection Period, any Scheduled Payment or portion thereof made by or on behalf of an Obligor and received by the Servicer during such Collection Period, which Scheduled Payment or portion thereof does not become due until a subsequent Collection Period.  Prepayments are not “Advance Payments.”

 

“Affiliate”:  With respect to any specified Person, any other Person, directly or indirectly, controlling or controlled by or under common control with such specified Person.  For the purposes of this definition, “control,” when used with respect to any specified Person, means the power (a) to vote ten percent (10%) or more of the securities or interests (on a fully diluted basis) having ordinary voting power for the directors, managers or managing partners (or their equivalent) of such Person or (b) to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Aggregate Initial Note Balance”: The sum of the Initial Note Balances for all Classes of Notes.

 

“Aggregate Outstanding Note Balance”: The sum of the Outstanding Note Balances for all Classes of Notes.

 

  

  

  

 

“Amendment to the Contract Schedule”:  The list of Contracts, including all information set forth in the definition of “Contract Schedule”, amending the Contract Schedule pursuant to any substitution, modification or other acquisition of Contracts in accordance with the terms of the Transaction Documents.

 

 “Assignment Agreement”:  Means (a) the Assignment Agreement, dated as of September 7, 2011, between LEAF Capital Funding, LLC and the Issuer and (b) each other Assignment Agreement delivered pursuant to the Purchase and Contribution Agreement.

 

“Auction”:  Is as defined in Section 11.06 of the Indenture.

 

“Auction Call Redemption”:  Is as defined in Section 11.01 of the Indenture.

 

“Auction Trigger Payment Date”:  Is as defined in Section 11.06 of the Indenture.

 

“Authenticating Agent”:  Any entity appointed by the Trustee pursuant to Section 7.14 of the Indenture.

 

“Available Funds”: With respect to any Payment Date, (a) any payments on the Contracts (including Servicing Charges) received during the related Collection Period, (b) proceeds of any Servicer Advances made with respect to such Payment Date for delinquent Scheduled Payments, no later than immediately prior to such Payment Date, (c) all Recoveries, Insurance Proceeds, Residual Receipts and other amounts received with respect to the Contracts or Equipment, (d) payments made by the Transferor or the Servicer, as the case may be, to repurchase contracts affected by breaches of representations and warranties regarding the Contracts, or Delinquent Contracts or Defaulted Contracts and (e) any deposits from the Servicer Transition Account, the Reserve Account, the Capitalized Interest Account, and, to the extent applicable, the Prefunding Account and the Servicer Transition Account, each in accordance with the Indenture.

 

“Back-up Servicer”:  Means U.S. Bank National Association, a national banking association, acting in the capacity of Back-up Servicer or as successor Servicer; and at such time, if any, that a successor Person shall have become the “Back-up Servicer” pursuant to the applicable provisions of the Servicing Agreement, the term “Back-up Servicer” shall also mean such successor Person.

 

“Back-up Servicer Default”:  An occurrence of any of the following:

 

(a)           Any failure on the part of the Back-up Servicer to duly observe or perform any covenants or agreements of the Back-up Servicer set forth in any Transaction Document or if any representation or warranty of the Back-up Servicer set forth in Section 7.01 of the Servicing Agreement or in any other Transaction Document shall prove to be incorrect, in any material respect, which failure or breach continues unremedied for a period of thirty (30) Business Days after the earlier of the date on which the Back-up Servicer becomes aware of such failure or breach or the date on which written notice of such failure or breach, requiring the situation giving rise to such breach or non-conformity to be remedied, shall have been given to the Back-up Servicer by the Issuer, the Trustee, or the Control Party; or

 

 

  

- 2 -

  

 

(b)           Any negligence or willful misconduct of the Back-up Servicer related to the Transaction Documents that results, or could reasonably be expected to result, in a material loss or damage to the Issuer, the Transferor, the Servicer, the Trustee, the Class A Note Insurer, any Noteholder or the Collateral; or

 

(c)           A conviction of the Back-up Servicer or any of its officers of a felony or of any crime involving fraud in the discharge of fiduciary duties or the servicing of assets that could reasonably be expected to have a material adverse effect on the performance of the Back-up Servicer’s duties under the Transaction Documents; or

 

(d)           The entry of a decree or order for relief by a court having jurisdiction in respect of the Back-up Servicer or a petition shall be filed against the Back-up Servicer in an involuntary case under any federal bankruptcy laws, as now or hereafter in effect, or any other present or future federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official for the Back-up Servicer or for any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Back-up Servicer and the continuance of any such decree or order unstayed and in effect for a period of sixty (60) consecutive days; or

 

(e)           The commencement by the Back-up Servicer of a voluntary case under any federal bankruptcy laws, as now or hereafter in effect, or any other present or future federal or state bankruptcy, insolvency, reorganization or similar law, or the consent by the Back-up Servicer to the appointment of or taking possession by a conservator, receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official in any insolvency, readjustment of debt, marshaling of assets and liabilities, bankruptcy or similar proceedings of or related to the Back-up Servicer or related to a substantial part of its property, or the making by the Back-up Servicer of an assignment for the benefit of creditors, or the failure by the Back-up Servicer generally to pay its debts as such debts become due or if the Back-up Servicer shall admit in writing its inability to pay its debts as they become due, or the taking of corporate action by the Back-up Servicer in furtherance of any of the foregoing.

 

“Back-up Servicer Fee”:  The monthly fee payable on each Payment Date to the Back-up Servicer in consideration for its performance of its duties as Back-up Servicer in an amount equal to the greater of (i) one twelfth (1/12th) of the product of the aggregate Discounted Pool Balance as of the Payment Date occurring immediately prior to the related Collection Period (or, in the case of the Initial Payment Date, the Initial Cut-Off Date) and the Back-up Servicer Fee Rate, and (ii) $3,000.00.

 

“Back-up Servicer Fee Rate”:  0.065% per annum.

 

“Back-up Servicer Fee Schedule”:  That certain “Schedule of Fees as Backup Servicer” relating to the LEAF Receivables Funding 7, LLC, Equipment Contract Backed Notes, 2011-2, dated as of September 29, 2011.

 

“Bankruptcy Code”: The United States Bankruptcy Code, Title 11 of the United States Code, as amended from time to time, and any successor statute.

 

 

  

- 3 -

  

 

“Base Premium Rate”:   Means 0.70% per annum.

 

“Booked Residual”:  With respect to any Contract on any date of determination, the residual value of the Equipment subject to such Contract, as reflected in LEAF Commercial Capital, Inc.’s (or an Affiliate’s) servicing system on the date such Contract was booked on LEAF Commercial Capital, Inc.’s (or an Affiliate’s) servicing system.

 

“Book-Entry Notes”:  Notes registered in the name of a Security Depository or its nominee as described in Section 2.02(b) of the Indenture.

 

“Business Day”:  Any day other than (i) a Saturday or Sunday, or (ii) a day on which banking institutions in New York City, the city in which the Servicer is located or the city in which the corporate trust office of the Trustee is located are authorized or obligated by law or executive order to be closed.

 

“Calculation Date”:  Means, unless the context requires otherwise, the close of business on the last day of a Collection Period.

 

“Capitalized Interest Account”:  The trust account created and maintained pursuant to Section 13.02 of the Indenture; provided, that in no event shall the Capitalized Interest Account be other than an Eligible Account.

 

“Class”:  With respect to the Notes, the designation of either Class A-1A, Class A-1B, Class A-2, Class B, Class C, Class D, Class E-1 or Class E-2, with the specific senior or subordinated rights related to such designation as are identified in the Indenture.

 

“Class A Buyout Notice”:  Has the meaning assigned in Section 6.16 of the Indenture.

 

“Class A Buyout Price”:  Has the meaning assigned in Section 6.16 of the Indenture.

 

“Class A Insurance Policy”:  Means the financial guaranty insurance policy issued by the Class A Note Insurer solely with respect to the Class A Notes and having policy number 93091.

 

“Class A Note Insurer”:  Assured Guaranty Corp., a Maryland domiciled insurance company.

 

“Class A Note Insurer Default”:  The occurrence and continuance of any one or more of the following events:

 

(a)           the failure by the Class A Note Insurer to make a payment under the Class A Insurance Policy in accordance with its terms and such failure shall have continued for two (2) Business Days after the date due;

 

(b)           the Class A Note Insurer shall (A) file a petition or commences a case or proceeding under any provision or chapter of the Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, liquidation or reorganization, (B) make a general assignment for the benefit of its creditors, or (C) have an order for relief entered against it under the Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, liquidation or reorganization, which is final and non-appealable; or

 

 

  

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(c)           a court of competent jurisdiction, the New York Department of Insurance or any other competent regulatory authority shall have entered a final and non-appealable order, judgment or decree (i) appointing a custodian, trustee, agent or receiver for the Class A Note Insurer or for all or any material portion of its property or (ii) authorizing the taking of possession by a custodian, trustee, agent or receiver of the Class A Note Insurer (or the taking of possession of all or any material portion of the property of the Class A Note Insurer).

 

“Class A Note Insurer Premium”:  For any Payment Date, the “Premium Amount” as defined in, and payable at the Base Premium Rate plus, if an Event of Default has occurred and is continuing, at the Default Premium Rate, to the Class A Note Insurer under, the Premium Letter.

 

“Class A Noteholder”:  A Holder of any Class A Notes.

 

“Class A Notes”: Means the Class A-1A Notes, the Class A-1B Notes and the Class A-2 Notes.

 

“Class A Obligations”:  Means (i) all amounts owed to the Class A Noteholders and the Class A Note Insurer under the Transaction Documents and (ii) the obligation to surrender the Class A Insurance Policy for cancellation upon payment of the amounts described in the foregoing clause (i); provided that, for purposes of any provision in any Transaction Document that requires the consent of the Class A Note Insurer when Class A Obligations remain outstanding, if the Class A Insurance Policy has been cancelled pursuant to, and in compliance with the provisions of, Section 6.16 of the Indenture, for purposes of such provision, no Class A Obligations shall be considered outstanding with respect to the Class A Note Insurer.

 

“Class A Scheduled Payments”:  (a) for any Payment Date an amount equal to interest accrued on the Class A Notes during the related Interest Accrual Period at the applicable Note Rate; (b) on the Stated Maturity Date for the Class A-1A Notes, an amount equal to the Outstanding Note Balance of all outstanding Class A-1A Notes as of the opening of business on such Payment Date; (c) on the Stated Maturity Date for the Class A-1B Notes, an amount equal to the Outstanding Note Balance of all outstanding Class A-1B Notes as of the opening of business on such Payment Date; and (d) on Stated Maturity Date for the Class A-2 Notes, an amount equal to the Outstanding Note Balance of all outstanding Class A-2 Notes as of the opening of business on such Payment Date.  Class A Scheduled Payments do not include payments which become due on an accelerated basis as a result of (i) a default by the Issuer, (ii) an election by the Issuer to pay principal on an accelerated basis, (iii) the acceleration of the maturity of the Class A Notes or the occurrence of an Event of Default or any other default under the Indenture or the Insurance Agreement, (iv) any mandatory or optional redemption or (v) any other cause, unless the Class A Note Insurer elects, in its sole discretion, to pay in whole or in part such principal due upon acceleration, together with any accrued interest to the date of acceleration (in which event Class A Scheduled Payments shall include such accelerated payments as, when and to the extent so elected by the Class A Note Insurer).  In the event the 

 

  

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Class A Note Insurer does not so elect, following any acceleration of the Class A Notes, the Class A Insurance Policy will continue to guarantee Class A Scheduled Payments due on the Class A Notes in accordance with its original terms.  Class A Scheduled Payments will not include:  (x) any portion of the Class A Note Interest due to Class A Noteholders because the appropriate notice and certificate for payment in proper form was not timely received by the Class A Note Insurer; (y) any portion of the Class A Note Interest due to Class A Noteholders representing interest on any past due Class A Note Interest to the extent such interest accrues from and after the date that the Class A Note Insurer has paid such past due Class A Note Interest; and (z) any payment of redemption price to be paid in respect of the Class A Notes unless the Class A Note Insurer elects, in its sole discretion, to pay any such amount in whole or in part.  Class A Scheduled Payments also do not include any amounts owed to the Issuer, the Transferor, the Servicer, or any Affiliate of the Issuer, the Transferor, or the Servicer.  Class A Scheduled Payments shall not include any amounts due in respect of the Class A Notes attributable to any increase in interest rate, penalty or other sum payable by the Issuer by reason of (i) any default or event of default in respect of the Class A Scheduled Payments due on the Class A Notes, or (ii) any deterioration of the creditworthiness of the Issuer, nor will Class A Scheduled Payments include, nor will coverage be provided under the Class A Insurance Policy in respect of, any taxes, withholding or other charge imposed by any governmental authority due in connection with the payment of any Class A Scheduled Payment to a Class A Noteholder.  Class A Scheduled Payments do not include payments of principal or interest on the Class A Notes which payments have been received by the Trustee for payment thereof in accordance with the Indenture or under the Class A Insurance Policy but which have not been paid to any Class A Noteholders as a result of the insolvency, misconduct or negligence of the Trustee.

 

“Class A-1 Noteholder”:  A Holder of Class A-1 Notes.

 

“Class A-1 Notes”:  Means the Class A-1A Notes and the Class A-1B Notes.

 

“Class A-1A Noteholder”:  A Holder of Class A-1A Notes.

 

“Class A-1A Notes”:  The Equipment Contract Backed Notes, Series 2011-2, Class A-1A issued by LEAF Receivables Funding 7, LLC pursuant to the Indenture, with an Initial Note Balance of $15,000,000.

 

“Class A-1B Noteholder”:  A Holder of Class A-1B Notes.

 

“Class A-1B Notes”:  The Equipment Contract Backed Notes, Series 2011-2, Class A-1B issued by LEAF Receivables Funding 7, LLC pursuant to the Indenture, with an Initial Note Balance of $5,000,000.

 

“Class A-2 Noteholder”:  A Holder of Class A-2 Notes.

 

“Class A-2 Notes”:  The Equipment Contract Backed Notes, Series 2011-2, Class A-2 issued by LEAF Receivables Funding 7, LLC pursuant to the Indenture, with an Initial Note Balance of $61,995,000.

 

“Class B Noteholder”:  A Holder of Class B Notes.

 

 

  

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“Class B Notes”:  The Equipment Contract Backed Notes, Series 2011-2, Class B issued by LEAF Receivables Funding 7, LLC pursuant to the Indenture, with an Initial Note Balance of $5,403,000.

 

“Class C Noteholder”:  A Holder of Class C Notes.

 

“Class C Notes”:  The Equipment Contract Backed Notes, Series 2011-2, Class C issued by LEAF Receivables Funding 7, LLC pursuant to the Indenture, with an Initial Note Balance of $6,907,000.

 

“Class D Noteholder”:  A Holder of Class D Notes.

 

“Class D Notes”:  The Equipment Contract Backed Notes, Series 2011-2, Class D issued by LEAF Receivables Funding 7, LLC pursuant to the Indenture, with an Initial Note Balance of $3,119,000.

 

“Class E Noteholder”: A Holder of Class E Notes.

 

“Class E Notes”:  Means the Class E-1 Notes and the Class E-2 Notes.

 

“Class E-1 Notes”:  The Equipment Contract Backed Notes, Series 2011-2, Class E-1 issued by LEAF Receivables Funding 7, LLC pursuant to the Indenture, with an Initial Note Balance of $4,234,000.

 

“Class E-2 Notes”:  The Equipment Contract Backed Notes, Series 2011-2, Class E-2 issued by LEAF Receivables Funding 7, LLC pursuant to the Indenture, with an Initial Note Balance of $3,342,000.

 

“Closing Date”:  October 28, 2011.

 

“Code”:  The Internal Revenue Code of 1986, as amended.

 

“Co-Trustee”:  Has the meaning set forth in Section 7.12 of the Indenture.

 

“Collateral”:  Has the meaning set forth in the Granting Clause of the Indenture.

 

“Collateral Purchase Notice Date”:  Has the meaning assigned in Section 6.18(c) of the Indenture.

 

“Collection Account”:  The segregated trust accounts and any related sub-accounts created and maintained pursuant to Section 13.02 of the Indenture; provided that in no event shall the Collection Account be other than an Eligible Account.

 

“Collection Costs”:  With respect to any Contract and subject to the Servicer’s standard of care set forth in Section 3.02 of the Servicing Agreement, reasonable out-of-pocket costs and expenses incurred by the Servicer (including reasonable attorney’s fees and out-of-pocket expenses) and payable to Persons other than Affiliates of the Servicer in connection with the realization, attempted realization or enforcement of rights and remedies upon such Contract and as further described in Section 3.08 of the Servicing Agreement. For the avoidance of doubt, any Collection Costs applied to reduce Recoveries shall, to the extent of such reductions, be deemed to have been reimbursed and are no longer outstanding.

 

 

  

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

 

“Collections”:  As of any determination date, the sum of all amounts collected during a Collection Period (including Advance Payments which are due during such Collection Period but were collected by the Servicer during the preceding Collection Period) under or in respect of the Contract Assets, including, without limitation, all amounts consisting of Scheduled Payments, Contract Repurchase Prices, Guaranty Amounts, Insurance Proceeds and other Recoveries and Residual Receipts, but excluding any amounts consisting of Security Deposits.

 

“Contract”:  As of any date of determination, a lease (including the master lease, if applicable), a loan, a leveraged lease loan, conditional sale or similar equipment finance contract conveyed on an Acquisition Date by the Transferor to the Issuer pursuant to the Purchase and Contribution Agreement and pledged to the Trustee in accordance with the Transaction Documents and including any substitutions therefor; provided that, from and after the date that such Contract is repurchased, substituted or released from the lien of the Indenture, each in accordance with the requirements of the Transaction Documents, such Contract shall no longer constitute a “Contract”.

 

“Contract Assets”:  Collectively, as of any date of determination, (a) each Contract that is listed on the Contract Schedule from time to time, (b) all Receivables related thereto, (c) the interest of the Issuer in the Equipment related thereto, (d) the related Contract Files, (e) all other Related Security, and (f) any and all income and proceeds of the foregoing.

 

“Contract File”:  With respect to each Contract, the following documentation (unless otherwise permitted by the Control Party): (a) the one and only executed original counterpart of such Contract (bearing the original signature of an employee of the relevant Originator, or if the contract was not originated by the relevant Originator, the originator thereof, together with an original or facsimile copy of the signature of the lessee) in the Servicer’s possession, or if the LEAF Parties are not in possession of such original, a machine copy thereof certified by an officer of the Servicer or the relevant Originator that such copy is a true and complete copy thereof; (b) copies of all UCC financing statements required to be filed to perfect the security interest in the related Equipment and the Related Security related thereto (except with respect to a Contract related to Equipment that had an original equipment cost at origination of less than (A) if such Contract is a secured loan or finance lease that provides for a $1 purchase option, $25,000, or (B) if such Contract provides for a “fair market value” purchase option, $50,000); and (c) copies of any additional documents (other than Servicing Documents) that the Servicer keeps on file with respect to such Contract, including copies of an Insurance Policy, if any, evidence of insurance, if any, and any other copies of documents evidencing or related to any Insurance Policy with respect to such Contract.

 

  

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“Contract Repurchase Price”:  Means, with respect to any Contract repurchased by the Transferor pursuant to the Purchase and Contribution Agreement or by the Servicer pursuant to the Servicing Agreement or removed from the Collateral by the Issuer pursuant to the Indenture, the sum of (a) the Discounted Contract Balance (computed without giving effect to clause (c) of the definition of Discounted Contract Balance and without duplication of amounts) of the related Contract on the date of determination on or immediately preceding the date when the Contract is removed or repurchased, plus (b) the product of (i) 30% and (ii) the discounted Booked Residual relating to such Contract (computed using a discount rate of 5.00% per annum and assuming such Booked Residual is received six months from the end of such Contract term), minus (c) the sum of (i) the Discounted Contract Balance of any Contract provided in substitution therefor plus (ii) the product of (i) the Booked Residual relating to such Contract, (ii) 30% and (iii) a discount rate of 5.00% per annum (assuming such Booked Residual is received six months from the end of such Contract term).

 

“Contract Schedule”:  The list of Contracts that are the subject of the transactions contemplated by the Transaction Documents, which list shall include (a) those Contracts listed on the Assignment Agreement delivered on the Closing Date and attached to the Indenture as Schedule I plus (b) any Contracts listed on an Amendment to the Contract Schedule as a result of the addition of any Substitute Contract or Additional Contract listed on any Assignment Agreement delivered after the Closing Date, less (c) any Contracts deleted as a result of a repurchase, substitution therefor, or release thereof pursuant to the Transaction Documents.  The Contract Schedule shall include with respect to each Contract:  (A) the LEAF Contract Number; (B) the name of the Obligor; (C) the State of the Obligor’s billing address; (D) the Discounted Contract Balance as of the related Cut-Off Date; (E) whether such Contract is a Delinquent Contract; (F) the remaining term; and (G) the original cost of the Equipment (but the Custodian need not verify such original cost).  The Contract Schedule shall also include with respect to each Substitute Contract:  (A) the LEAF Contract Number of the Contract being replaced and (B) the Discounted Contract Balance of the Contract being replaced as of the related Cut-Off Date.  The Contract Schedule kept by the Trustee at its Corporate Trust Office shall be the definitive Contract Schedule for all purposes of the Indenture, absent manifest error (in which case the Contract Schedule shall be all schedules attached to any Officer’s Certificate delivered by the Servicer or the Issuer, to the Trustee relating to the Contract Schedule).

 

“Control Party”: Means (a) so long as any Class A Notes are outstanding or any Class A Note Insurer Premiums or Reimbursement Amounts owing to the Class A Note Insurer remain unsatisfied, (i) unless a Class A Note Insurer Default has occurred and is continuing, the Class A Note Insurer, or (ii) during the continuation of a Class A Note Insurer Default, the Class A Noteholders representing 66-2/3% of the Outstanding Note Balance of the Class A Notes, (b) after the Class A Notes have been paid in full and all accrued and unpaid Class A Note Insurer Premiums and Reimbursement Amounts owing to the Class A Note Insurer have been paid in full and for so long as any Class B Notes remain outstanding, the Class B Noteholders representing 66-2/3% of the Outstanding Note Balance of the Class B Notes, (c) after the Class A Notes and the Class B Notes have been paid in full and all accrued and unpaid Class A Note Insurer Premiums and Reimbursement Amounts owing to the Class A Note Insurer have been paid in full and for so long as any Class C Notes remain outstanding, the Class C Noteholders representing 66-2/3% of the Outstanding Note Balance of the Class C Notes, (d) after the Class A Notes, the Class B Notes, and the Class C Notes have been paid in full and all accrued and unpaid Class A Note Insurer Premiums and Reimbursement Amounts owing to the Class A Note Insurer have been paid in full and for so long as any Class D Notes remain outstanding, the Class D Noteholders representing 66-2/3% of the Outstanding Note Balance of the Class D Notes, (e) after the Class A Notes, the Class B Notes, the Class C 

 

  

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Notes, and the Class D Notes have been paid in full and all accrued and unpaid Class A Note Insurer Premiums and Reimbursement Amounts owing to the Class A Note Insurer have been paid in full and for so long as any Class E-1 Notes remain outstanding, the Class E-1 Noteholders representing 66-2/3% of the Outstanding Note Balance of the Class E-1 Notes, or (f) after the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes and the Class E-1 Notes have been paid in full and all accrued and unpaid Class A Note Insurer Premiums and Reimbursement Amounts owing to the Class A Note Insurer have been paid in full and for so long as any Class E-2 Notes remain outstanding, the Class E-2 Noteholders representing 66-2/3% of the Outstanding Note Balance of the Class E-2 Notes.

 

 

“Conveyed Assets”: Has the meaning set forth in Section 2.1(a) of the Purchase and Contribution Agreement.

 

“Corporate Trust Office”:  The designated corporate trust office of the Trustee located, at the time of the execution of the Indenture at 60 Livingston Avenue, EP-MN-WS3D, St. Paul, MN 55107, Attention: LEAF Receivables Funding 7, LLC, Equipment Contract Backed Notes, or at such other address as the Trustee may designate from time to time by notice to the parties to the Transaction Documents, or the principal corporate trust office of any permitted successor Trustee under the Indenture.

 

“Credit and Collection Policies”:  Means collectively, the written collection and servicing policies of the Servicer and the Servicer’s Underwriting Guidelines, as in effect on the Closing Date, copies of each of which were delivered to the Back-up Servicer and the Class A Note Insurer prior to the Closing Date, as amended with prior written consent of the Control Party (in the case of material amendments) from time to time in accordance with Section 3.01(c)(ix) of the Servicing Agreement; provided that, if LEAF Commercial Capital, Inc. (or an Affiliate) is not the Servicer, the term “Credit and Collection Policies” shall mean the written collection and servicing procedures of such successor Servicer (which shall, at all times, be the standard industry credit and collection practice used by servicing companies of comparable size and experience in connection with loans and leases of the type transferred or pledged under the Indenture).

 

“Cumulative Net Loss Trigger Event”:  Has the meaning set forth in Section 6.01(a)(ix) of the Servicing Agreement.

 

“Cumulative Net Loss Percentage”:  Means, with respect to any Collection Period, the percentage equivalent of a fraction, (i) the numerator of which is the excess of (a) the Discounted Contract Balance (immediately prior to becoming a Defaulted Contract) of all Contracts that became Defaulted Contracts during such Collection Period and all prior Collection Periods and remain Defaulted Contracts over (b) the aggregate amount of all Recoveries collected by the Servicer with respect to such Defaulted Contracts and (ii) the denominator of which is the sum of the Discounted Contract Balances of the Initial Contracts as of the Initial Cut-Off Date and of the Additional Contracts as of their respective Cut-Off Dates.

 

 

  

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“Custodian”:  Initially means U.S. Bank National Association, or such other party as is appointed in accordance with Article VIII of the Indenture to act as custodian to receive, inventory and maintain possession of the Contract Files in accordance with the requirements of the Indenture.

 

“Custodian Certificate”:  The certificate, substantially in the form of Exhibit G attached to the Indenture, delivered by the Custodian to the Trustee and the Issuer pursuant to Section 4.03 of the Indenture.

 

“Custodian Fee”:  Means the monthly fee payable on each Payment Date to the Custodian in an amount equal to the greater of (i) $60.00 and (ii) the actual per file fees, based on the Custodian’s schedule of fees then in effect, incurred during the related Collection Period with respect to activities involving the Contract Assets during such Collection Period, as further described in the Custodian Fee Schedule.

 

“Custodian Fee Schedule”:  That certain “Schedule of Fees as Custodian” relating to the LEAF Receivables Funding 7, LLC, Equipment Contract Backed Notes, 2011-2, dated as of September 29, 2011.

 

“Cut-Off Date”:  Means, with respect to the Initial Contracts, the Initial Cut-Off Date, and with respect to each Substitute Contract and Additional Contract, the close of business on the last day of the calendar month immediately preceding the calendar month in which such Substitute Contract or Additional Contract is pledged to the Trustee.

 

“DBRS”:  DBRS, Inc.

 

“Default”:  Any occurrence or circumstance which with notice or the lapse of time or both would become an Event of Default, unless any such particular occurrence or circumstance is waived as a “Default” in writing in accordance with the provisions of the Indenture; provided that, unless and until any such waiver is given, a “Default” shall be deemed to exist for all purposes under the Transaction Documents, even if the occurrence or circumstance giving rise to such Default is no longer continuing or has been cured.

 

“Default Notice Date”:  Has the meaning set forth in Section 6.16 of the Indenture.

 

“Default Premium Rate”:  Has the meaning set forth in the Premium Letter.

 

“Defaulted Contract”:  Any Contract:  (a) as to which an Insolvency Event has occurred with respect to the Obligor where the related lease has been rejected in the Obligor’s bankruptcy proceedings, (b) all or any portion of which has been or should have been, in accordance with the Credit and Collection Policies, written off on the Servicer's books as uncollectible, or (c) as to which more than 10% of a Scheduled Payment remains unpaid for 181 days or more from the original due date for such payment, without regard to any Servicer Advance, provided that a Contract shall no longer be a Defaulted Contract for any purpose of the Transaction Documents, upon the cure of the condition or event which caused it to be a Defaulted Contract.

 

 

  

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“Deferred Interest”:  Has the meaning set forth in the definition of Note Current Interest.

 

“Definitive Notes”:  Has the meaning set forth in Section 2.02(c) of the Indenture.

 

“Delinquent Contract”:  Any Contract (a) as to which more than 10% of a Scheduled Payment was not received by the Servicer within sixty-one (61) days after the original due date for such Scheduled Payment, without regard to any Servicer Advance and (b) that is not a Defaulted Contract.

 

“Delinquency Ratio”: Means, with respect to any Determination Date, the quotient, expressed as a percentage, of (a) the aggregate Discounted Contract Balances of all Delinquent Contracts determined as of the end of the related Collection Period, divided by (b) the aggregate Discounted Contract Balances of all Contracts as of the last day of the related Collection Period.

 

“Determination Date”:  With respect to any Payment Date, a date which is the eleventh day of the calendar month in which such Payment Date occurs, or if such day is not a Business Day, the immediately preceding Business Day.

 

“Discount Rate”:  5.00% per annum.

 

“Discounted Contract Balance”: Means, with respect to any Contract, on any date of determination, the sum of the present value of all of the payments becoming or remaining due under such Contract after the end of the prior Collection Period, discounted monthly at the Discount Rate assuming (a) Scheduled Payments are due on the last day of each Collection Period in which a Scheduled Payment is due; (b) Scheduled Payments are discounted on a monthly basis using a 30-day month and a 360-day year; and (c) Scheduled Payments are discounted to the last day of the Collection Period prior to the Determination Date; provided, however, that the Discounted Contract Balance of any Defaulted Contract, Contract with respect to which a prepayment in full has been made, Disposed Contract or Contract purchased by the Transferor pursuant to the Purchase and Contribution Agreement shall be equal to zero.

 

“Discounted Pool Balance”:  Means, as determined on any date of determination, the sum of (a) the Discounted Contract Balances of all Contracts and (b) the discounted Residual Receipts of all Contracts (assuming (1) such Residual Receipts are received six months from the end of the related Contract term, (2) the collection rate for Residual Receipts is equal to 30% of the Issuer’s related Booked Residual on the related residual payment date and (3) a discount rate of 5.00% per annum).

 

In connection with all calculations required to be made pursuant to the Transaction Documents with respect to the determination of the Discounted Pool Balance on any determination date, the discounted Residual Receipts for each Contract shall be calculated assuming: (a) the Residual Receipts are discounted on a monthly basis using a 30-day month and a 360-day year and (b) the Residual Receipts are discounted to the last day of the Collection Period prior to the determination date.

 

 

  

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“Disposed Contract”:  Means, with respect to any Collection Period, a Contract (other than a Defaulted Contract) for which either (a) all Scheduled Payments and Residual Receipts with respect to such Contract have been received or (b) its initial term has expired and the residual value of the related Equipment has been determined to be zero by the Servicer in accordance with the Servicer’s customary servicing procedures; provided, however, that if four successive months have elapsed after the expiration of the initial term without the Servicer receiving all Scheduled Payments and any payment towards Residual Receipts with respect to such Contract, such Contract shall be deemed to be a Disposed Contract. Once a Contract is a Disposed Contract, it shall be released to the initial Servicer, or if the initial Servicer is no longer the Servicer, to the Issuer; provided, however, that in the event that any payment in respect of a Disposed Contract (including Residual Receipts) is received, such payment shall constitute Collections belonging to the Issuer and continue to be forwarded to the Collection Account.

 

“DTC”:  Means The Depository Trust Company, a New York corporation and its successors and assigns.

 

“Due Date”:  With respect to each Contract, each date on which a Scheduled Payment is due thereunder.

 

“Early Termination Contract”:  Any Contract with respect to which the Servicer, in accordance with the Servicing Agreement, has allowed the Obligor to prepay or terminate early for any reason including, but not limited to, trade-in, upgrade, or declaration of obsolescence or surplus status relating to any of the related Equipment.

 

           “EBITDA”:  For LEAF Commercial Capital, Inc. and its consolidated subsidiaries, for any applicable period, without duplication for any item set forth below, the sum of net income, plus, to the extent deducted in determining net income, the sum of amounts attributable to (a) Interest Expense, (b) income tax expense, (c) depreciation, (d) amortization and (e) interest on subordinated debt and plus or minus any mark-to-market gains or losses.

 

“Electronic Ledger”:  Means the electronic master record of the Contracts.

 

“Eligible Account”:  A segregated trust account or accounts maintained with the corporate trust department of a federal or state-chartered depository institution or trust company whose long-term unsecured debt obligations are rated at least AA- by S & P, at least Aa3 by Moody’s and at least AA(low) by DBRS (if rated by DBRS) and which has a minimum capital and surplus of not less than $100,000,000.

 

“Eligible Contract”:  Means, as of the applicable Acquisition Date, a Contract that satisfies the representations and warranties set forth in the Purchase and Contribution Agreement and in the Servicing Agreement.

 

“Eligible Investments”:  Any and all of the following:

 

(a)           direct obligations of, and obligations fully guaranteed by, the United States of America or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America;

 

  

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(b)           (i) demand and time deposits in, certificates of deposit of, banker’s acceptances issued by or federal funds sold by any depository institution or trust company (including the Trustee or its agent acting in their respective commercial capacities) incorporated under the laws of the United States of America or any State thereof and subject to supervision and examination by federal and/or state authorities, provided that, at the time of such investment or contractual commitment providing for such investment, such depository institution or trust company has a short term unsecured debt rating in the highest available rating categories of each of S & P, Fitch, and each Rating Agency (if rated by such Rating Agency) or such lower rating as to which the Rating Agency Condition is satisfied, provided further that each such investment has an original maturity of no more than two hundred seventy (270) days, and (ii) such demand or time deposit or deposits are fully insured by the Federal Deposit Insurance Corporation;

 

(c)           if the Class A Notes are paid in full and no Reimbursement Amounts are then owing to the Class A Note Insurer, repurchase obligations with a term not to exceed thirty (30) days with respect to any security described in clause (a) above and entered into with a depository institution or trust company (acting as a principal) rated in the highest available short term rating category by S & P, Fitch and each Rating Agency (if rated by such Rating Agency) at the time of such investment; provided that collateral transferred pursuant to such repurchase obligation must be of the type described in clause (a) above and must (i) be valued weekly at current market price plus accrued interest, (ii) pursuant to such valuation, equal, at all times, one hundred five percent (105%) of the cash transferred by the Trustee in exchange for such collateral and (iii) be delivered to the Trustee or, if the Trustee is supplying the collateral, an agent for the Trustee, in such a manner as to accomplish perfection of a security interest in the collateral by possession of certificated securities;

 

(d)           commercial paper having an original maturity of less than two hundred seventy (270) days and issued by any corporation incorporated under the laws of the United States of America or any State thereof which is unaffiliated with any LEAF Party and has a short term unsecured debt rating in the highest available rating category of each of S & P, Fitch and each Rating Agency (if rated by such Rating Agency) at the time of such investment;

 

(e)           if the Class A Notes are paid in full and no Reimbursement Amounts are then owing to the Class A Note Insurer, a guaranteed investment contract rated in the highest available rating category by each of S & P, Fitch and each Rating Agency (if rated by such Rating Agency) or issued by an insurance company or other corporation having a long term unsecured debt rating in the highest available rating category of each of S & P, Fitch and each Rating Agency (if rated by such Rating Agency) at the time of such investment; and

 

(f)           money market funds having ratings in the highest available rating categories of each of S & P, Fitch and each Rating Agency (if rated by such Rating Agency) at the time of such investment (which shall include money market funds for which the Trustee or an Affiliate thereof is an advisor); any such money market funds which provide for demand withdrawals being conclusively deemed to satisfy any maturity requirement for Eligible Investments set forth in the Indenture.

 

 

  

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The Trustee may purchase from or sell to itself or an affiliate, as principal or agent, the Eligible Investments listed above.  All Eligible Investments shall be made in the name of the Trustee for the benefit of the Secured Parties and no such Eligible Investments shall mature later than the Business Day preceding the next following Payment Date as required under Section 13.02(c) of the Indenture.

 

“Equipment”:  The equipment and other personal property (tangible or intangible) of the type contemplated by the Credit and Collection Policies and that is being financed under a Contract.

 

“Equity Interest”:  The one and only equity membership interest in the Issuer, entitling the owner thereof to one hundred percent (100%) of the capital, profits, losses and distributions in and from the Issuer, and one hundred percent (100%) of voting rights of an equity member.

 

“ERISA”:  The Employee Retirement Income Security Act of 1974, as amended or any successor statute thereto.

 

“ERISA Affiliate”:  Means any entity, whether or not incorporated, that, together with the Seller, is a member of any group of organizations described in Section 414(b), (c), (m) or (o) of the Code.

 

“Event of Default”:  Has the meaning set forth in Section 6.01 of the Indenture.

 

“Event of Servicing Termination”:  Has the meaning set forth in Section 6.01(a) of the Servicing Agreement.

 

“Exception Report”:  Any report by the Custodian identifying exceptions regarding Contract Assets and, if applicable, attached as an exhibit to the Custodian Certificate.

 

“Existing Indebtedness”:  Any indebtedness identified in an Assignment Agreement that is secured in whole or in part by Contract Assets being acquired by the Issuer, and paid off or otherwise released, as of the related Acquisition Date.

 

“Final Due Date”:  With respect to each Contract, the final Due Date thereunder.

 

“Final Order”:  Means a final order of a court exercising proper jurisdiction in an insolvency proceeding with respect to which the appeal period has expired without an appeal having been filed.

 

“Fiscal Quarter”:  Each quarter of each fiscal year, which shall be the three (3) months ended March 31, June 30, September 30 and December 31, unless the Servicer has otherwise notified the Trustee, the Back-up Servicer and the Control Party in writing prior to a change in its fiscal year.

 

“Fitch”: Means Fitch, Inc. and its successors in interest.

 

 

  

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“GAAP”:  Generally accepted accounting principles as in effect in the United States as may be in place from time to time, applied on a consistent basis.

 

“Global Notes”:  Means the Rule 144A Global Note, beneficial ownership and transfers of which shall be made through book entries by the Security Depository.

 

“Governmental Authority”:  Means any nation or government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over any LEAF Party or any of its properties.

 

“Grant”:  To grant, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of set-off against, deposit, set over and confirm.  A Grant in any collateral comprising the Collateral or of any instrument shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim, collect, receive and receipt for payments in respect of the Contract Assets, or any other payment due thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring proceedings in the name of the granting party or otherwise, and generally to do and receive anything which the granting party is or may be entitled to do or receive thereunder or with respect thereto.

 

“Guaranty Amounts”:  Any amounts paid by a guarantor (who is an Obligor) of a particular Contract.

 

“Impairment” shall mean, as of each Payment Date (as calculated immediately prior to the distributions pursuant to Section 13.03(c) or Section 13.03(d), as applicable, of the Indenture), an amount, if any, equal to the positive difference of (x) the Aggregate Outstanding Note Balance minus (y) the sum of (i) the Discounted Pool Balance and (ii) amounts on deposit in the Reserve Account, the Prefunding Account and the Capitalized Interest Account. Impairment with respect to each Class of Subordinated Notes as of each Payment Date shall be allocated, first, to the Class E-2 Notes, in an amount equal to the lesser of the Outstanding Note Balance of the Class E-2 Notes and the Impairment, second, to the Class E-1 Notes, in an amount equal to the lesser of the Outstanding Note Balance of the Class E-1 Notes and the Impairment, third, to the Class D Notes, in an amount equal to the lesser of the Outstanding Note Balance of the Class D Notes and the Impairment not yet allocated on such Payment Date, fourth, to the Class C Notes, in an amount equal to the lesser of the Outstanding Note Balance of the Class C Notes and the Impairment not yet allocated on such Payment Date, and fifth, to the Class B Notes, in an amount equal to the lesser of the Outstanding Note Balance of the Class B Notes and the Impairment not yet allocated on such Payment Date. For the avoidance of doubt, no Impairment shall be allocated to the Class A Notes, and the allocation of Impairment to a Class of Subordinated Notes shall be used only for the calculation of Note Current Interest with respect to such Class of Subordinated Notes and shall not reduce the Outstanding Note Balance of such Class of Subordinated Notes.

 

  

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“Indemnification Agreement”: The Indemnification Agreement, dated as of October 28, 2011, among the Class A Note Insurer, the Transferor, the Servicer, the Issuer, and the Initial Purchaser.

 

“Indenture”:  The Indenture, dated as of September 7, 2011, among the Issuer, the Trustee and the Custodian, and any permitted supplements or amendments thereto.

 

“Independent”:  When used with respect to any specified Person means such a Person, who (a) is in fact independent of the Issuer and the Servicer, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer or the Servicer or in any Affiliate thereof, (c) is not connected with the Issuer or the Servicer as an officer, employee, promoter, underwriter, trustee, partner, director, customer, supplier or person performing similar functions, (d) is not a person controlling or under common control with any such stockholder, customer, supplier or other person, and (e) is not a member of the immediate family of any such stockholder, director, officer, employee, customer, supplier or other person.  Whenever it is herein provided that any Independent Person’s opinion or certificate shall be furnished to the Trustee, such Person shall be identified by an Issuer Order, and such opinion or certificate shall state that the signer has read this definition and that the signer is Independent within the meaning hereof.

 

“Independent Accountants”:  Ernst & Young LLP or any other independent certified public accountants of recognized national standing.

 

“Initial Contracts”:  Means those Contracts transferred to the Issuer and pledged to the Trustee on the Closing Date.

 

“Initial Cut-Off Date”:  Means October 1, 2011.

 

“Initial Discounted Pool Balance”:  Means the Discounted Pool Balance as of the Initial Cut-Off Date.

 

“Initial Note Balance”:  Means, with respect to any Class of Notes, the unpaid principal balance of such Class, as applicable, as of the Closing Date.

 

“Initial Payment Date” and “First Payment Date”:  November 15, 2011.

 

“Initial Purchaser”:  Means Guggenheim Securities, LLC.

 

“Initial Required Reserve Account Deposit”:  Has the meaning assigned to it in Section 13.04(a) of the Indenture.

 

“Insolvency Event”:  With respect to a specified Person, shall mean either of the following events: (a) a case or proceeding shall have been commenced against such Person seeking a decree or order in respect of such Person (i) under the Bankruptcy Code, as now constituted or hereafter amended or any other applicable federal, state or foreign bankruptcy, insolvency or other similar law, (ii) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for such Person or of any substantial part of such Person’s 

 

  

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assets, or (iii) ordering the winding-up or liquidation of the affairs of such Person, and such case or proceeding shall remain undismissed or unstayed for sixty (60) days or more or such court shall enter a decree or order granting the relief sought in such case or proceeding; or (b) the commencement by such Person of a voluntary case under the Bankruptcy Code, as now constituted or hereafter amended, or any other applicable federal, state or foreign bankruptcy, insolvency or other similar law, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of such Person for any substantial part of such Person’s assets, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.

 

“Insurance Agreement”:  The Insurance and Indemnity Agreement, dated as of October 28, 2011, among the Class A Note Insurer, the Issuer, the Trustee, the Transferor and the Servicer, as amended, supplemented or otherwise modified from time to time.

 

“Insurance Policy”:  With respect to an item of Equipment and a Contract, any policy of insurance maintained by an Obligor pursuant to such Contract that covers physical damage to the Equipment and general liability (including policies procured by the Servicer on behalf of an Obligor).  For the avoidance of doubt, the Class A Insurance Policy shall not constitute an Insurance Policy.

 

“Insurance Proceeds”:  With respect to an item of Equipment, any amount received during the related Collection Period pursuant to an Insurance Policy issued with respect to the related Contract, net of any costs of collecting such amounts not otherwise reimbursed.

 

“Insurer”:  Any insurance company or other Person providing any Insurance Policy covering Equipment.

 

“Interim Delinquency Ratio”:  Means, with respect to the first three Determination Dates after the Closing Date, the average of the Delinquency Ratios for such Determination Date and each preceding Determination Date which occurred after the Closing Date.

 

“Interest Accrual Period”:  With respect to any Payment Date, (i) with respect to each Class of Notes, the period commencing on and including the immediately preceding Payment Date and ending on and including the day immediately preceding such current Payment Date; provided that, in the case of the first Interest Accrual Period, such Interest Accrual Period shall commence on the Closing Date, and shall end on the day immediately preceding the Initial Payment Date.

 

“Interest Coverage Ratio”:  The ratio of EBITDA to Interest Expense for the related fiscal quarter of LEAF Commercial Capital, Inc. (inclusive of any subsidiaries).

 

“Interest Expense”:  The aggregate interest expense of LEAF Commercial Capital, Inc. and its consolidated subsidiaries (excluding interest on any non-recourse debt), determined in accordance with GAAP, consistently applied, including (without duplication) the portion of 

  

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capitalized lease liabilities allocable to interest expense, plus (or minus) the net amount payable (or receivable) under all hedging agreements, minus the sum of any paid-in-kind interest expenses for the related Interest Accrual Period (but excluding any mark-to-market gain or loss on any swap or other hedge transaction).

 

“Investment Letter”:  Has the meaning set forth in Section 2.06(e)(ii)(B) of the Indenture.

 

“Issuer”:  LEAF Receivables Funding 7, LLC, and its successors and permitted assigns under the Indenture.

 

“Issuer Address”:  LEAF Receivables Funding 7, LLC, 110 S. Poplar Street, Suite 101, Wilmington, Delaware 19801, facsimile number: 215-640-6363, Attention: Miles Herman, or such other address as is notified in writing to the Issuer, the Trustee, Custodian, Back-up Servicer and the Noteholders not less than thirty (30) days prior to the effectiveness of any change thereof.

 

“Issuer Order” and “Issuer Request”:  A written order or request signed by an authorized officer of the Issuer and delivered to the Trustee.

 

“Joinder to Lockbox Intercreditor Agreement”:  The joinder agreement to the Lockbox Intercreditor Agreement pursuant to which the Trustee becomes a party to the Lockbox Intercreditor Agreement.

 

“LEAF Contract Number”:  The number assigned to a Contract by the Servicer, which number is used to identify Contracts and the related Contract Assets for all purposes under the Transaction Documents and the Lockbox Intercreditor Agreement and for all purposes by the Servicer and its Affiliates, including on any Custodian Certificate and any Officer’s Certificate delivered by the Servicer or the Issuer, the Contract Schedule, the Monthly Servicing Report and the Contract Files.

 

“LEAF Entity”:  Means each of the Issuer, the Servicer, the Transferor and LEAF Capital Funding SPE A, LLC.

 

“LEAF Party”:  Means each of the Issuer, each Originator, the Servicer and the Transferor.

 

“Lien”:  Any security interest, lien, charge, pledge, equity or encumbrance of any kind other than Permitted Liens.

 

“Lockbox”:  The post office or other lockbox to which Obligors have been directed to remit payments.

 

“Lockbox Account”:  The deposit account (account number 153910088597) at the Lockbox Bank in the name of “U.S. Bank NA as Securities Intermediary for LEAF Financial and various lenders” or, if the Lockbox Intercreditor Agreement is terminated or LEAF Commercial Capital, Inc. (or an Affiliate) is no longer the Servicer, such other Lockbox Account as is established by the then Servicer with the consent of the Control Party if the Control Party is the Class A Note Insurer, otherwise with notice to the Control Party.

 

  

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“Lockbox Bank”:  Means U.S. Bank National Association and its successor in interest or any successor approved in accordance with the Lockbox Intercreditor Agreement.

 

“Lockbox Intercreditor Agreement”:  The Amended and Restated Lockbox Intercreditor Agreement, dated as of April 18, 2005, among the Lockbox Bank, the Servicer, certain other parties thereto and subsequent parties joined pursuant to the terms thereof (including the Issuer and the Trustee), as amended, supplemented or otherwise modified from time to time.

 

“Monthly Servicing Report”:  The report prepared by the Servicer pursuant to Section 13.07 of the Indenture and Section 4.01 of the Servicing Agreement, substantially in the form of Exhibit A to the Servicing Agreement.

 

“Moody’s”:  Moody’s Investors Service, Inc., and its successors in interest.

 

“No-Pay Contract”:  Means (i) with respect to any Contract the first Scheduled Payment for which precedes the applicable Acquisition Date, that such first Scheduled Payment has not been received within thirty (30) days of the due date of such first payment and (ii) with respect to any other Contract, that the first Scheduled Payment for such Contract has not been received within sixty (60) days of the due date of such first payment.

 

“Noteholder” and “Holder”:  The Person in whose name a Note is registered in the Note Register.

 

“Note Current Interest”:  Means interest accrued during each Interest Accrual Period and payable to the Noteholders of a Class on the related Payment Date; provided however, that with respect to each Class of Subordinated Notes and on each Payment Date, interest shall be deemed not to have accrued during the previous Interest Accrual Period on an amount equal to the Impairment of such Class of Subordinated Notes (such interest that is deemed not to have accrued, “Deferred Interest”). Notwithstanding the foregoing, if, on any subsequent Payment Date and with respect to each Class of Subordinated Notes, no Impairment is allocated to such Class of Notes, all Deferred Interest for such Class of Subordinated Notes shall be deemed to have accrued during the immediately preceding Interest Accrual Period and be payable on such Payment Date as Note Current Interest.

 

“Note Insurance Guaranteed Payment”:  Means any “Insured Amount” as such term is defined in the Class A Insurance Policy.

 

“Note Interest”:  Means, with respect to a Class of Notes and any Payment Date, the sum of the Note Current Interest and any unpaid, overdue interest, if any, for such Class.

 

“Note Owner”:  Means, with respect to a Book-Entry Note, the Person who is the beneficial owner of such Book-Entry Note, as reflected on the books of the Security Depository or on the books of a Person maintaining an account with such Security Depository (directly as a Security Depository Participant or as an indirect participant, in each case in accordance with the rules of such Security Depository) or the Person who is the beneficial owner of such Book-Entry Note, as reflected in the Note Register in accordance with Section 2.06 of the Indenture.

 

 

  

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“Note Percentage”:  Means 90.85%.

 

“Note Purchase Agreement”: Means the Note Purchase Agreement, dated October 25, 2011, among the Transferor, the Issuer and the Initial Purchaser.

 

“Note Rate”:  Means a per annum interest rate for each Class of Notes as set forth in the table below.

 

	
Class A-1A Notes

	
0.40%

	 	 
	
Class A-1B Notes

	
0.50%

	 	 
	
Class A-2 Notes

	
2.40%

	 	 
	
Class B Notes

	
3.80%

	 	 
	
Class C Notes

	
5.00%

	 	 
	
Class D Notes

	
5.00%

	 	 
	
Class E-1 Notes

	
5.50%

	 	 
	
Class E-2 Notes

	
5.50%

 

 

“Note Register” and “Note Registrar”:  Have the respective meanings set forth in Section 2.06 of the Indenture.

 

“Notes”:  Any one or all of the Outstanding Equipment Contract Backed Notes, Series 2011-2, issued by LEAF Receivables Funding 7, LLC pursuant to the Indenture, in an Aggregate Initial Note Balance of $105,000,000, or as the context may require, a specific Class.

 

“Obligor”:  The borrower or lessee under each Contract, including any guarantor of such Contract (other than any guarantor who is the vendor of the Equipment the subject of such Contract or the Person who originated such Contract), and their respective successors and assigns.

 

“Offering Circular”:  The Offering Circular, dated October 28, 2011, relating to the initial offering of the Notes.

 

“Officer’s Certificate”:  A certificate signed by the Chairman of the Board, the President, a Vice President, the Treasurer, the Controller, an Assistant Controller, the Secretary, or any Assistant Secretary of the Person on whose behalf the certificate is delivered, and delivered to the Trustee or the Initial Purchaser, as the case may be.

 

“One-Time Successor Servicer Fee”:  Has the meaning set forth in Section 7.06 of the Servicing Agreement.

 

 

  

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“Opinion of Counsel”:  A written opinion of counsel who may, except as otherwise expressly provided in the Indenture or required by the Control Party, be inside (but only with respect to internal corporate matters) or outside counsel for the Servicer, the Transferor or the Issuer, as applicable, and who shall be reasonably satisfactory to the Control Party and which opinion shall be addressed to the Noteholders, the Class A Note Insurer and/or the Trustee (as required by the applicable terms of the Transaction Documents) and be in form and substance reasonably satisfactory to the Control Party and the Trustee.

 

“Optional Redemption”:  Is as defined in Section 11.01 of the Indenture.

 

“Originator”:  LEAF Capital Funding, LLC, a Delaware limited liability company, or LEAF Funding, Inc., a Delaware corporation.

 

“Outstanding”:  With respect to Notes, as of any date of determination, all Notes theretofore authenticated and delivered under the Indenture except:

 

(a)           Notes previously canceled by the Note Registrar or delivered to the Note Registrar for cancellation;

 

(b)           Notes for whose payment money in the necessary amount has been theretofore irrevocably deposited with the Trustee or any Paying Agent (other than the Issuer) in trust for the Holders of such Notes (provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture or any provision therefor, satisfactory to the Trustee, has been made, in accordance with Article XI of the Indenture); and

 

(c)           Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to the Indenture, unless proof satisfactory to the Trustee is presented that any such Notes are held by a protected purchaser; provided that, for purposes of determining whether the Noteholders of the requisite principal amount of the Outstanding Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes beneficially owned, directly or indirectly, by the Issuer, any other obligor upon the Notes, the Servicer, any Affiliate of the Issuer or of the Servicer or such other obligor shall be disregarded and deemed not to be outstanding; provided further that, in determining whether the Trustee shall be protected in relying on any such request, demand, authorization, direction, notice, consent or waiver, only such Notes as a Responsible Officer of the Trustee knows to be so owned shall be so disregarded.  For purposes of this definition, beneficial ownership shall be determined in accordance with Rule 13d-3 of the Securities and Exchange Commission, promulgated pursuant to the Securities Exchange Act of 1934, as amended.

 

Notwithstanding the foregoing, any Class A Note on which any portion of principal or interest has been paid by the Class A Note Insurer pursuant to the Class A Insurance Policy shall be classified as Outstanding until the Class A Note Insurer has been reimbursed in full therefor in accordance with the Insurance Agreement.

 

“Outstanding Note Balance”:  With respect to any Class of Notes (including, for purposes of accruing interest thereon, any Notes called for redemption but not yet redeemed), the Initial Note Balance of such Class less the sum of all amounts actually distributed in respect of principal for such Class as of such date.

 

 

  

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“Overcollateralization Balance”:  Means, with respect to any Payment Date, an amount equal to the excess, if an, of: (1) the Discounted Pool Balance as of the last day of the related Collection Period over (2) the Aggregate Outstanding Note Balance as of that Payment Date after giving effect to all principal payments to be made on that Payment Date related to the applicable Target Payment to the extent funds are available for distributions on the Notes after paying all amounts required to be paid prior to principal on the Notes on that Payment Date.

 

“Overcollateralization Percentage”:  Means, with respect to any Payment Date, the ratio, expressed as a percentage, of the Overcollateralization Balance to the Initial Discounted Pool Balance.

 

“Overconcentration Test”:  Means a test that is satisfied with respect to the Initial Contracts to be purchased by the Issuer on the Closing Date, or with respect to the Additional Contracts to be purchased by the Issuer on an Acquisition Date if each of the following statements would be true immediately after the purchase by the Issuer of such Initial Contracts or such Additional Contracts, as applicable:

 

	
  

	
(1)

	
The average Discounted Contract Balance of all Contracts (measured as of their respective Cut-Off Dates) does not exceed $30,000.

 

	
  

	
(2)

	
The sum of the Discounted Contract Balances of all Contracts (measured as of their respective Cut-Off Dates) related to any one Obligor does not exceed $850,000.

 

	
  

	
(3)

	
The sum of the Discounted Contract Balances (measured as of their respective Cut-Off Dates) of all Contracts arising from the largest ten (10) Obligors in the aggregate does not exceed 5.00% of the aggregate Discounted Contract Balances (measured as of the Cut-Off Date for each Contract).

 

	
  

	
(4)

	
The weighted average original term of all Contracts (measured as of their respective Cut-Off Dates) does not exceed fifty-three (53) months.

 

	
  

	
(5)

	
The sum of the Discounted Contract Balances of all Contracts (measured as of their respective Cut-Off Dates) with respect to which the related Equipment is located in New York does not exceed 16.00% of the aggregate Discounted Contract Balances (measured as of the Cut-Off Date for each Contract).

 

	
  

	
(6)

	
The sum of the Discounted Contract Balances of all Contracts (measured as of their respective Cut-Off Dates) with respect to which the related Equipment is located in California does not exceed 14.00% of the aggregate Discounted Contract Balances (measured as of the Cut-Off Date for each Contract).

 

	
  

	
(7)

	
The sum of the Discounted Contract Balances of all Contracts (measured as of their respective Cut-Off Dates) with respect to which the related Equipment is located in New Jersey does not exceed 10.00% of the aggregate Discounted Contract Balances (measured as of the Cut-Off Date for each Contract).

 

 

  

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(8)

	
The sum of the Discounted Contract Balances of all Contracts (measured as of their respective Cut-Off Dates) with respect to which the Scheduled Payments are not due on a monthly basis does not exceed 2.50% of the aggregate Discounted Contract Balances (measured as of the Cut-Off Date for each Contract).

 

	
  

	
(9)

	
The weighted average Fair Isaac’s Small Business Scoring Service credit score of the Obligor (measured as of their respective Cut-Off Dates) on all Contracts is at least 203.

 

	
  

	
(10)

	
The sum of the Discounted Contract Balances of all Contracts (measured as of their respective Cut-Off Dates) with respect to which the Equipment is office equipment does not exceed 75.00% of the aggregate Discounted Contract Balances (measured as of the Cut-Off Date for each Contract).

 

	
  

	
(11)

	
The purchase of such Initial Contracts or such Additional Contracts satisfies any other overconcentration test or criteria specified in the Insurance Agreement.

 

“Ownership Interest”:  Means, with respect to any Note, any ownership interest in such Note, including any interest in such Note as the Noteholder thereof and any other interest therein, whether direct or indirect, legal or beneficial.

 

“Paying Agent”:  The Trustee (or any other Person that meets the eligibility standards for the Trustee set forth in Section 7.08 of the Indenture and that is authorized pursuant to Section 7.15 of the Indenture to pay the principal of or interest on any Notes on behalf of the Issuer).

 

“Payment Date”:  The first Payment Date shall be November 15, 2011, and each subsequent Payment Date shall be the 15th day of each month, or if such date is not a Business Day, the business day immediately following such 15th day.

 

“Permitted Liens”:  Means (i) liens created under the Indenture in favor of the Trustee for the benefit of the Secured Parties, (ii) Liens created under the Assignment Agreements in favor of the Issuer, (iii) Liens for taxes not yet due and payable and for which adequate reserves are maintained in accordance with GAAP, (iv) mechanics’ liens filed on any Equipment that attach after the applicable Cut-Off Date and are not yet due and payable and if unpaid would not materially impair the value of such Equipment, (v) mechanics’ liens, property tax liens and other liens arising on the Equipment through an Obligor to the extent the Servicer has determined in good faith in accordance with its Credit and Collection Policies to not make an advance to discharge, and (vi) any Obligor’s right to quiet enjoyment and possession of any Equipment under the applicable Contract.

 

“Person”:  Any individual, corporation, limited liability company, partnership, association, joint-stock company, trust (including any beneficiary thereof), unincorporated organization or other entity or government or any agency or political subdivision thereof.

 

“Plan”:  An “employee benefit plan,” as defined in Section 3(3) of ERISA or a “plan” within the meaning of Section 4975(e)(1) of the Code.

 

 

  

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“Preference Amount”:  Means any Scheduled Payment avoided as a preference payment under any applicable insolvency law and which is guaranteed under the Class A Insurance Policy.

 

“Prefunding Account”:  The trust account created and maintained pursuant to Section 13.02 of the Indenture; provided, that in no event shall the Prefunding Account be other than an Eligible Account.

 

“Prefunding Period”:  Means the period beginning on the Closing Date and ending on the earlier of (a) the day immediately preceding the third Payment Date and (b) the occurrence of an Event of Default that results in acceleration of the Notes and is not waived or cured on or before the next Payment Date.

 

“Preliminary Offering Circular”:  The Preliminary Offering Circular, dated October 25, 2011, relating to the initial offering of the Notes.

 

“Premium Letter”:  The letter agreement, dated as of the date hereof, among the Issuer, the Transferor, the Servicer, the Trustee and the Class A Note Insurer in connection with the Class A Insurance Policy, as amended, supplemented or otherwise modified from time to time.

 

“Prepayment”:  With respect to a Collection Period and a Contract (except a Defaulted Contract), (i) the payment by the related Obligor of all remaining Scheduled Payments due on such Contract or (ii) as defined in the Credit and Collection Policies, so long as such amount is designated by the Obligor as a prepayment and the Servicer has consented to such prepayment. Advance Payments and Residual Receipts are not “Prepayments”.

 

“Prepayment Amount”:  In the event that an Obligor requests an upgrade or trade-in of Equipment under a Contract and the Servicer has agreed to such request, the payment by the Servicer of an amount equal to the sum, without duplication, of (i) the Discounted Contract Balance as of the date of reconveyance, (ii) one month’s interest thereon at the Discount Rate, (iii) the discounted portion of the Booked Residual for such Contract and (iv) any Scheduled Payments due and outstanding under such Contract that have not been paid by the Obligor, all in connection with the removal of such Equipment and the related Contract from the Collateral.

 

“Principal Payment Amount”:  Means, with respect to any Payment Date on which principal is to be paid, the sum of (1) the Target Payment and (2) the Additional Amount.

 

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

 

“Purchase and Contribution Agreement”:  Means the Purchase and Contribution Agreement, dated as of September 7, 2011, between LEAF Capital Funding, LLC, as seller, and the Issuer, as purchaser.

 

“Purchase and Sale Agreement”:  Means the Purchase and Sale Agreement, dated as of September 7, 2011, between LEAF Capital Funding SPE A, LLC, as seller, and LEAF Capital Funding, LLC, as purchaser.

 

 

  

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“Purchase Price”:  Means, with respect to Contracts sold pursuant to any Assignment Agreement, the payment amount identified in Section 1 of such Assignment Agreement.

 

“QIB”:  Means a “qualified institutional buyer” within the meaning of Rule 144A.

 

“Rating Agencies”:  DBRS and Moody’s.

 

“Rating Agency Condition”:  Means, with respect to any action and a Class of Notes, that each Rating Agency which shall have rated such Class shall have been given at least ten (10) Business Days (or such shorter period as is acceptable to such Rating Agency) prior written notice thereof.

 

“Receivable”:  As of any date of determination, all Scheduled Payments and all other income, payments and proceeds of the Contracts (including Guaranty Amounts, Servicing Charges, Insurance Proceeds and other Recoveries or Residual Receipts) that are (1) collected on or after the applicable Cut-Off Date or (2) Advance Payments collected by the Servicer before the applicable Cut-Off Date but due in Collection Periods commencing on and after the applicable Cut-Off Date, and any Recoveries thereon; provided that, from and after the date, if any, on which the related Contract Assets are repurchased in accordance with Section 6.1(a) or Section 6.1(b) of the Purchase and Contribution Agreement or Section 3.09 of the Servicing Agreement, or substituted pursuant to Section 3.04 of the Servicing Agreement, such Receivable shall no longer constitute a “Receivable” for purposes of the Transaction Documents.

 

“Record Date”:  With respect to each Payment Date, at the close of business on the Business Day immediately preceding such Payment Date; provided however, that the Record Date for any Class of Notes issued as a Definitive Note shall be the close of business on the last Business Day of the calendar month immediately preceding the applicable Payment Date.

 

“Recoveries”:  For any Collection Period or portion thereof occurring after the date on which any Contract becomes a Defaulted Contract, all amounts received in respect of a Defaulted Contract, including, without limitation, amounts received in connection with the sale or other disposition of the related Equipment, Insurance Proceeds with respect to the related Equipment, legal judgments and settlements, collection agency efforts, or any other payments made by or on behalf of the related Obligor, as reduced by any reasonable out-of-pocket expenses incurred by the Servicer in enforcing such Contract or in liquidating such Equipment, in connection with such Defaulted Contract; provided, that in no event may Recoveries in respect of a Defaulted Contract be less than zero.

 

“Redemption Date”:  The Payment Date elected pursuant to Section 11.01 of the Indenture for either an Optional Redemption or the Auction Call Redemption or any other Business Day mutually determined by the Issuer, the Noteholders and the Trustee.

 

“Redemption Price”:  With respect to any Note as of the Redemption Date, the Outstanding Note Balance of the Notes, together with interest accrued thereon to the Redemption Date.

 

 

  

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“Registered Holder”:  The Person whose name appears on the Note Register on the applicable Record Date.

 

“Reimbursement Amount”:  Means on any Payment Date, the sum, without duplication, of (i) all Class A Scheduled Payments previously received by the Trustee from the Class A Note Insurer and not previously repaid to the Class A Note Insurer pursuant to the Indenture, plus (ii) interest accrued on each such Class A Scheduled Payments from the date the Trustee received the related amount to, but not including, such Payment Date that has not previously been repaid to the Class A Note Insurer, plus (iii) all amounts then owed by the Issuer to the Class A Note Insurer under the Insurance Agreement, including amounts owing in respect of reimbursements of amounts paid by the Class A Note Insurer under the Class A Insurance Policy, indemnification, or reimbursement of expenses, but excluding the Class A Note Insurer Premium.

 

“Related Security”:  With respect to any Contract, all liens, security interests, guarantees, indemnities, warranties, letters of credit and other agreements securing or supporting payment on any Receivable or relating to any Equipment, including, with respect to any Receivables, any “supporting obligations” (as defined in 9-102 of the UCC) therefor, and all rights with respect to any vendors, dealers or manufacturers of the Equipment or other originators, including those arising under private label leases, all rights under any purchase or vendor agreements relating thereto, and all rights of the relevant Originator and its assignees with respect to the Contracts and related Equipment.

 

“Release Agreement”:  The notice regarding prepayment of Existing Indebtedness and release of related collateral, substantially in the form of Exhibit H attached to the Indenture.

 

“Reporting Date”:  The 11th day of each month or, if such day is not a Business Day, the next succeeding Business Day.

 

“Request for Release”:  The request for release of certain specified Contracts, substantially in the form of Exhibit F-1 attached to the Indenture.

 

“Reserve Account”:  The trust account created and maintained pursuant to Section 13.02 of the Indenture; provided, that in no event shall the Reserve Account be other than an Eligible Account.

 

“Residual Receipts”:  Means, without duplication, (a) all proceeds of the sale of Equipment received by the Servicer at the end of the related Contract, whether to the related Obligor or to a third party, (b) any amounts collected by the Servicer as judgments against an Obligor or others related to the failure of such Obligor to pay any required amounts relating to the Booked Residual under the related Contract or to return the Equipment, (c) all proceeds from renewal payments made for the continued use of the Equipment after the original date of termination of the related Contract plus (d) any amounts not otherwise described above which are received by the Servicer and applied against the Booked Residual of such Contract in accordance with the Servicing Standard, in each case as reduced by any reasonable out-of-pocket expenses incurred by the Servicer in enforcing such Contract or in liquidating such Equipment; provided, that in no event may Residual Receipts in respect of a Contract or any Equipment be less than zero.

 

  

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“Responsible Officer”:  (a) When used with respect to the Trustee or the Back-up Servicer, any officer of the Trustee or the Back-up Servicer, including any Vice President, Assistant Vice President, any Secretary or Assistant Secretary, any trust officer or any other officer of the Trustee or the Back-up Servicer customarily performing functions similar to those performed by any of the above designated officers, and also, with respect to a particular matter, any other officer, to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject and, in each case, having direct responsibility for the administration of the Indenture; and (b) when used with respect to the Servicer (if the Servicer is LEAF Commercial Capital, Inc. or any of its Affiliates) or the Issuer, any of the president, chief financial officer, chief operating officer, chief accounting officer, treasurer or any Vice-President.

 

“Rule 17g-5”:  Is as defined in Section 7.01(k) of the Indenture.

 

“Rule 144A”:  Means the rule designated as “Rule 144A” promulgated by the United States Securities and Exchange Commission under the Securities Act.

 

“Rule 144A Global Note”:  Means the permanent global note, evidencing Notes, in the form of the Notes attached as Exhibits A-1, A-3, A-5, B-1, C-1, D-1, E-1 and E-3 to the Indenture, that is deposited with and registered in the name of the Security Depository or its nominee, representing the Notes sold in reliance on Rule 144A.

 

“Rule 144A Information”:  Has the meaning set forth in Section 12.02(w) of the Indenture.

 

“S & P”:  Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and its successors in interest.

 

“Sale”:  Has the meaning set forth in Section 6.18 of the Indenture.

 

“Scheduled Payment”:  With respect to a Payment Date and a Contract, the periodic scheduled payment of rent or other payments on a monthly, quarterly, semi-annual or annual basis, in arrears or in advance as set forth in the Contract, and due from the Obligor in the related Collection Period, exclusive of any Servicing Charges and Residual Receipts (which Residual Receipts, for the avoidance of doubt, include all payments due after the Final Due Date for a Contract).

 

“Secured Parties”:  Means, collectively, the Noteholders and the Class A Note Insurer.

 

“Securities Account Control Agreement”: Means the Securities Account Control Agreement, dated as of September 7, 2011, by and between the Issuer and the Trustee, as both securities intermediary and trustee.

 

“Securities Act”: The United States Securities Act of 1933, as amended.

 

  

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“Securities Intermediary”: Means U.S. Bank National Association in its capacity as Securities Intermediary pursuant to the Securities Account Control Agreement.

 

“Security Deposit”:  Any amount paid to the Servicer or the relevant Originator and its assigns by an Obligor as a security deposit which has not previously been refunded to such Obligor or applied towards such Obligor’s obligations under such Contract.

 

“Security Depository”:  Initially shall mean DTC, and otherwise shall mean any replacement thereof or successor thereto registered as a “Security Depository” pursuant to Section 17A of the Exchange Act.

 

“Security Depository Participant”:  Means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Security Depository effects book-entry transfers and pledges of securities deposited with the Security Depository.

 

“Seller”:  LEAF Capital Funding SPE A, LLC.

 

“Senior Debt”:  The Aggregate Outstanding Note Balance of LEAF Capital Funding SPE A, LLC less the aggregate Outstanding Note Balance of the Class E-1 Notes and the Class E-2 Notes of LEAF Capital Funding SPE A, LLC plus any other revolving credit facility debt and recourse debt, but excluding any non-recourse term debt. 

 

“Senior Leverage Ratio”  means, as of the last day of any fiscal quarter of LEAF Commercial Capital, Inc. (inclusive of any subsidiaries), the ratio of Senior Debt to Tangible Net Worth, each as of that date.

 

“Servicer”:  The servicer of the Contract Assets, which shall be LEAF Commercial Capital, Inc. (or an Affiliate) until such time, if any, as the Back-up Servicer or other successor Person shall have become the “Servicer” pursuant to the applicable provisions of the Servicing Agreement, whereupon “Servicer” shall mean such successor Person.

 

“Servicer Advance”:  Means, in the event that any Obligor fails to remit the full Scheduled Payment due from it with respect to a Collection Period by the Determination Date related to such Collection Period, an advance, if any, made by the Servicer, at its election and from its own funds, prior to the related Payment Date of an amount equal to such unpaid Scheduled Payment.

 

“Servicer Fee”:  The fee payable on each Payment Date to the Servicer in consideration for the Servicer’s performance of its duties under the Servicing Agreement during the related Collection Period, in an amount equal to the product of (a) one-twelfth (1/12) of the Servicer Fee Rate and (b) the aggregate Discounted Pool Balance as of the Payment Date occurring immediately prior to the related Collection Period (or, in the case of the Initial Payment Date, the Initial Cut–Off Date). If the Back-up Servicer shall become the successor Servicer, the Servicer Fee shall be subject to a minimum of $6,000 per month.

 

“Servicer Fee Rate”:  1.00% per annum; provided, however, if the Back-up Servicer becomes the Servicer, such rate shall be 1.50% per annum.

 

 

  

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“Servicer Financial Statements”:  The financial statements described in Section 4.02(i) of the Servicing Agreement.

 

“Servicer Termination Notice”:  The notice described in Section 6.01 of the Servicing Agreement.

 

“Servicer Transition Account”:  The trust account created and maintained pursuant to Section 13.02 of the Indenture; provided, that in no event shall the Servicer Transition Account be other than an Eligible Account.

 

“Servicing Agreement”:  The Servicing Agreement, dated as of September 7, 2011, among the Servicer, the Transferor, the Issuer, the Trustee and the Back-up Servicer, as amended, supplemented or otherwise modified from time to time.

 

“Servicing Charges”:  Means the sum of (a) any late payment charges paid by an Obligor on a Contract after application of any such charges to amounts then due under such Contract and (b) any other incidental charges, or fees received from an Obligor, including (i) tax payments, insurance premium payments or reimbursements, late charges, documentation fees, extension fees, administrative charges and maintenance premiums and other pass-through items and (ii) prepayment charges paid by an Obligor in connection with a Prepayment.

 

“Servicing Documents”:  Means all servicing records, servicing agreements, servicing rights, pledge agreements and any other collateral pledged or otherwise relating to the Contracts, together with all files, documents, instruments, certificates, correspondence, accounting books and records relating thereto or to the Contract Files.

 

“Servicing Officers”:  Those officers of the Servicer involved in, or responsible for, the administration and servicing of the Contract Assets, as identified on a certificate delivered to the Trustee in accordance with Section 4.01(a)(ix) of the Indenture, as the same may be updated from time to time.

 

“Servicing Standard”:  Has the meaning set forth in Section 3.02 of the Servicing Agreement.

 

“State”:  Any state of the United States of America and, in addition, the District of Columbia.

 

“Stated Maturity Date”:  Means, with respect to a Class of Notes, the Payment Date occurring in the applicable month set forth below.

 

	
Class A-1A Notes

	
October 2012

	 	 
	
Class A-1B Notes

	
October 2012

	 	 
	
Class A-2 Notes

	
April 2016

	 	 
	
Class B Notes

	
March 2019

	 	 
	
Class C Notes

	
March 2019

 

 

  

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Class D Notes

	
March 2019

	 	 
	
Class E-1 Notes

	
March 2019

	 	 
	
Class E-2 Notes

	
March 2019

 

“Substitute Contract”:  A Contract substituted by the Transferor in replacement of one or more Contracts of the Issuer pursuant to the terms and provisions of the Transaction Documents.

 

“Subordinated Notes”:  Means the Class B Notes, the Class C Notes, the Class D Notes, the Class E-1 Notes and the Class E-2 Notes.

 

“Tangible Net Worth”:  The aggregate value of (a) LEAF Commercial Capital, Inc.’s preferred and common stock, plus retained earnings plus paid-in surplus minus treasury stock plus any subordinated debt (including, without duplication, the Class E-1 Notes and the Class E-2 Notes of LEAF Capital Funding SPE A, LLC), any accrued and unpaid dividends on preferred stock less (b) trademarks, goodwill, covenants not to compete and all other assets classified as intangible assets determined on a consolidated basis in accordance with GAAP (but excluding any mark-to-market gain or loss on any swap or other hedge transaction).

 

“Target Investor Principal Amount”:  Means, with respect to any Payment Date, an amount equal to the product of (1) the Note Percentage and (2) the aggregate Discounted Pool Balance as of the last day of the immediately preceding Collection Period.

 

“Target Payment”:  Means, with respect to any Payment Date, an amount necessary to reduce the Aggregate Outstanding Note Balance to the Target Investor Principal Amount.

 

“Target Required Reserve Account Amount”:  Has the meaning assigned to it in Section 13.04(a) of the Indenture.

 

“Tax Lien”:  A lien arising under Section 6321 of the Code.

 

“Three-Month Rolling Average Delinquency Ratio”:  Means, with respect to any Determination Date commencing with the fourth Determination Date after the Closing Date, the average of the Delinquency Ratios for such Determination Date and the two preceding Determination Dates.

 

“Three-Month Rolling Average Delinquency Trigger Level”:  Has the meaning set forth in Section 6.01(a) of the Servicing Agreement.

 

“Transaction Documents”:  The Indenture, the Lockbox Intercreditor Agreement, each Assignment Agreement, the Note Purchase Agreement, the Servicing Agreement, the Purchase and Contribution Agreement, the Notes, the Joinder to Lockbox Intercreditor Agreement, the Securities Account Control Agreement, the Insurance Agreement, the Indemnification Agreement, the Class A Insurance Policy, the Premium Letter and each other document and/or instrument executed pursuant thereto or in connection therewith.

 

 

  

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“Transfer Certificate”:  Has the meaning set forth in Section 3.01(a) of the Indenture.

 

“Transfer Taxes”:  Means any tax, fee or other governmental charge payable to any federal, state or local government in connection with the sale of the Contract Assets to the Issuer pursuant to the Assignment Agreements and the pledge of the Contract Assets by the Issuer to the Trustee pursuant to the Indenture.

 

“Transferor”: Means LEAF Capital Funding, LLC, a Delaware limited liability company.

 

“Transition Costs”:  Means any documented fees and expenses reasonably incurred by a successor Servicer, the Back-up Servicer or the Trustee in connection with a transfer of servicing under the Servicing Agreement, as provided in the Indenture and the Servicing Agreement; provided that the total amount of Transition Costs payable to all such Persons shall not exceed $150,000 in the aggregate.

 

“Trust Accounts”:  Has the meaning set forth in Section 13.02(a) of the Indenture.

 

“Trustee”:  The trustee under the Indenture which, initially, shall be U.S. Bank National Association until such time, if any, as a successor Person shall have become the Trustee pursuant to the applicable provisions of the Indenture, whereupon “Trustee” shall mean such successor Person.

 

“Trustee Fee”:  The monthly fees payable on each Payment Date to the Trustee in consideration for the Trustee’s performance of its duties hereunder, as set forth in the Trustee Fee Schedule.

 

“Trustee Fee Schedule”:  That certain “Schedule of Fees for Services as Trustee, Paying Agent, Registrar and Securities Intermediary” relating to the LEAF Receivables Funding 7, LLC, Equipment Contract Backed Notes, 2011-2, dated as of September 29, 2011.

 

“UCC”:  The Uniform Commercial Code as then in effect in the State of New York, or where the context otherwise requires, the jurisdiction the law of which governs the perfection or priority of any applicable security interest.

 

“Underwriting Guidelines”:  Means the underwriting guidelines of the Servicer as of the Closing Date, copies of which were delivered to the Class A Note Insurer.

 

“United States”:  The United States of America and its territories.

 

“U.S. Person”:  Means (other than for tax purposes) (i) any natural person resident in the United States, (ii) any partnership or corporation organized or incorporated under the laws of the United States, (iii) any estate of which an executor or administrator is a U.S. Person (other than an estate governed by foreign law and of which at least one executor or administrator is a non-U.S. Person who has sole or shared investment discretion with respect to its assets), (iv) any trust of which any trustee is a U.S. Person (other than a trust of which at least one trustee is a non-U.S. Person who has sole or shared investment discretion with respect to its assets and no 

  

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beneficiary of the trust (and no settlor if the trust is revocable) is a U.S. Person), (v) any agency or branch of a foreign entity located in the United States, (vi) any non-discretionary or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person, (vii) any discretionary or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated or (if an individual) resident in the United States (other than such an account held for the benefit or account of a non-U.S. Person), or (viii) any partnership or corporation organized or incorporated under the laws of a foreign jurisdiction and formed by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act (unless it is organized or incorporated, and owned, by accredited investors within the meaning of Rule 501(a) under the Securities Act who are not natural persons, estates or trusts); provided that, the term “U.S. Person” shall not include (A) a branch or agency of a U.S. Person that is located and operating outside the United States for valid business purposes as a locally regulated branch or agency engaged in the banking or insurance business, (B) any employee benefit plan established and administered in accordance with the law, customary practices and documentation of a foreign country, and (C) the international organizations set forth in Section 902(k)(2)(vi) of Regulation S under the Securities Act and any other similar international organizations, and their agencies, affiliates and pension plans.

 

“Vendor”:  Any Equipment manufacturer, distributor, dealer or supplier with whom the Servicer or relevant Originator has a vendor program in effect pursuant to which the Servicer or such Originator acquires or otherwise originates Contracts used to finance equipment manufactured and/or distributed by such vendor and leased or otherwise financed by Obligors under such Contracts.

 

“Verification Date”:  The third Business Day after each Reporting Date, by which time the Back-up Servicer must verify the information contained in the Monthly Servicing Report delivered on such Reporting Date.

 

“Warranty Event”:  With respect to any Contract, (a) any breach of Section 4.1(a) of the Purchase and Contribution Agreement or clauses (3) or (4) of any Assignment Agreement that gives rise to a repurchase obligation under Section 6.1(a) of the Purchase and Contribution Agreement, (b) any breach of Section 2.02 of the Servicing Agreement that gives rise to a repurchase obligation under Section 3.09 of the Servicing Agreement, or (c) the circumstances described in Section 4.04(a) of the Indenture.

 

“Winning Bidder”:  Is as defined in Section 11.06 of the Indenture.

 

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